<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[AIM Logo appears Dear Shareholder:
here]
[PHOTO of The Prime Portfolio of Short-Term Investments Co. benefited from stabilizing economic
LETTER 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
TO OUR 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
SHAREHOLDERS APPEARS HERE] the 5.1% annualized rate logged in the fourth quarter of 1994, was a pace most
analysts considered unsustainable.
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, Prime Portfolio maintained its strict
investment discipline and its superior credit quality rating of AAAm, the highest given by Standard & Poor's
Corporation, a widely known credit rating agency. The AAAm rating is historical and is based on an annual
analysis of Prime Portfolio's credit quality and composition, management, and weekly portfolio review. As with
any money market mutual fund, your investment in Prime Portfolio is neither insured nor guaranteed by the U.S.
government, and there can be no assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share.
Prime Portfolio invests in taxable money market instruments with maturities of 60 days or less such as quality
commercial paper and selected repurchase agreement securities. During the reporting period, Prime Portfolio
managers maintained the Fund's weighted average maturity between 13 and 23 days.
As of August 31, 1995, the seven-day yield for the Personal Investment Class of Prime Portfolio was 5.26%, and
the 30-day average yield was 5.27%. Net assets of the Personal Investment Class of Prime Portfolio on that date
were $99.6 million.
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 Personal Investment Class of Prime 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>
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER - 71.82%(a)
BASIC INDUSTRIES - 0.30%
MULTIPLE INDUSTRY - 0.30%
Philip Morris Companies, Inc.
5.75% 10/04/95 $ 12,500 $ 12,434,115
- ----------------------------------------------------------------------
Total Basic Industries 12,434,115
- ----------------------------------------------------------------------
BUSINESS SERVICES - 5.90%
POLLUTION CONTROL SERVICES - 2.15%
Browning-Ferris Industries, Inc.
5.69% 09/08/95 20,000 19,977,872
- ----------------------------------------------------------------------
5.75% 09/15/95 18,000 17,959,750
- ----------------------------------------------------------------------
5.73% 09/18/95 20,000 19,945,883
- ----------------------------------------------------------------------
5.75% 09/19/95 12,700 12,663,487
- ----------------------------------------------------------------------
5.73% 09/22/95 20,000 19,933,150
- ----------------------------------------------------------------------
90,480,142
- ----------------------------------------------------------------------
MISCELLANEOUS - 3.75%
Donnelley (R.R.) & Sons Co.
5.73% 09/22/95 53,000 52,822,848
- ----------------------------------------------------------------------
PHH Corp.
5.75% 09/13/95 47,100 47,009,725
- ----------------------------------------------------------------------
5.75% 10/11/95 58,000 57,629,445
- ----------------------------------------------------------------------
157,462,018
- ----------------------------------------------------------------------
Total Business Services 247,942,160
- ----------------------------------------------------------------------
CAPITAL GOODS - 2.35%
COMPUTERS & OFFICE EQUIPMENT - 1.40%
Xerox Corp.
5.75% 10/04/95 31,025 30,861,472
- ----------------------------------------------------------------------
Xerox Credit Corp.
5.73% 09/19/95 11,000 10,968,485
- ----------------------------------------------------------------------
5.74% 10/05/95 16,981 16,888,944
- ----------------------------------------------------------------------
58,718,901
- ----------------------------------------------------------------------
MACHINERY - 0.95%
Dover Corp.
5.75% 09/11/95 14,000 13,977,639
- ----------------------------------------------------------------------
5.75% 09/25/95 15,000 14,942,500
- ----------------------------------------------------------------------
5.77% 10/02/95 11,191 11,135,396
- ----------------------------------------------------------------------
40,055,535
- ----------------------------------------------------------------------
Total Capital Goods 98,774,436
- ----------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
CONSUMER DURABLES - 2.52%
AUTOMOBILE - 2.52%
Daimler-Benz North America Corp.
5.68% 09/08/95 $ 66,000 $ 65,927,107
- -------------------------------------------------------------------
Toyota Motor Credit Corp.
5.75% 10/06/95 40,000 39,776,389
- -------------------------------------------------------------------
Total Consumer Durables 105,703,496
- -------------------------------------------------------------------
CONSUMER NONDURABLES - 3.32%
HOUSEHOLD PRODUCTS - 3.32%
Colgate-Palmolive Co.
5.70% 09/15/95 61,550 61,413,564
- -------------------------------------------------------------------
5.71% 09/18/95 20,000 19,946,072
- -------------------------------------------------------------------
5.72% 09/20/95 19,500 19,441,132
- -------------------------------------------------------------------
5.72% 09/21/95 38,800 38,676,702
- -------------------------------------------------------------------
Total Consumer Nondurables 139,477,470
- -------------------------------------------------------------------
CONSUMER SERVICES - 2.91%
MISCELLANEOUS - 2.91%
USL Capital Corp.
5.73% 09/07/95 21,000 20,979,945
- -------------------------------------------------------------------
5.74% 09/07/95 21,000 20,979,910
- -------------------------------------------------------------------
5.73% 09/19/95 9,000 8,974,215
- -------------------------------------------------------------------
5.77% 09/21/95 15,500 15,450,314
- -------------------------------------------------------------------
5.73% 10/05/95 31,016 30,848,152
- -------------------------------------------------------------------
5.74% 10/13/95 25,000 24,832,583
- -------------------------------------------------------------------
Total Consumer Services 122,065,119
- -------------------------------------------------------------------
ENERGY - 3.31%
NATURAL GAS - 1.45%
Colonial Pipeline Co.
5.72% 09/12/95 15,000 14,973,783
- -------------------------------------------------------------------
5.72% 09/19/95 13,800 13,760,532
- -------------------------------------------------------------------
5.76% 09/28/95 12,000 11,948,160
- -------------------------------------------------------------------
5.78% 09/29/95 20,100 20,009,639
- -------------------------------------------------------------------
60,692,114
- -------------------------------------------------------------------
OIL & GAS - 1.86%
ARCO Coal Australia Inc.
5.69% 09/12/95 9,501 9,484,482
- -------------------------------------------------------------------
5.70% 09/14/95 12,489 12,463,293
- -------------------------------------------------------------------
5.75% 09/15/95 14,788 14,754,932
- -------------------------------------------------------------------
5.72% 10/10/95 12,507 12,429,498
- -------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
ENERGY--(continued)
OIL & GAS - (CONTINUED)
Mobil Australia Finance Company, Inc.
5.68% 09/01/95 $ 29,088 $ 29,088,000
- ------------------------------------------------------------------------
78,220,205
- ------------------------------------------------------------------------
Total Energy 138,912,319
- ------------------------------------------------------------------------
FINANCIAL - 47.89%
ASSET-BACKED SECURITIES - 22.81%
Asset Securitization Cooperative Corp.
5.70% 09/08/95 55,000 54,939,041
- ------------------------------------------------------------------------
5.72% 09/22/95 10,000 9,966,633
- ------------------------------------------------------------------------
5.72% 10/26/95 55,000 54,519,361
- ------------------------------------------------------------------------
5.71% 10/27/95 30,000 29,733,533
- ------------------------------------------------------------------------
Ciesco, L.P.
5.73% 09/06/95 15,000 14,988,063
- ------------------------------------------------------------------------
5.72% 10/18/95 40,000 39,701,289
- ------------------------------------------------------------------------
Clipper Receivables Corp.
5.77% 09/12/95 50,000 49,911,848
- ------------------------------------------------------------------------
5.77% 09/13/95 28,911 28,855,394
- ------------------------------------------------------------------------
5.77% 09/14/95 17,227 17,191,106
- ------------------------------------------------------------------------
5.77% 09/19/95 57,000 56,835,555
- ------------------------------------------------------------------------
5.77% 09/25/95 19,000 18,926,913
- ------------------------------------------------------------------------
Corporate Asset Funding Co. Inc.
5.73% 09/06/95 32,900 32,873,817
- ------------------------------------------------------------------------
5.74% 09/07/95 25,000 24,976,083
- ------------------------------------------------------------------------
Delaware Funding Corp.
5.72% 09/18/95 16,228 16,184,166
- ------------------------------------------------------------------------
5.76% 09/25/95 12,134 12,087,405
- ------------------------------------------------------------------------
Eiger Capital Corp.
5.75% 09/14/95 27,540 27,482,816
- ------------------------------------------------------------------------
Falcon Asset Securitization Corp.
5.76% 09/11/95 15,325 15,300,480
- ------------------------------------------------------------------------
5.77% 09/20/95 25,000 24,923,868
- ------------------------------------------------------------------------
5.74% 10/04/95 31,425 31,259,653
- ------------------------------------------------------------------------
5.75% 10/04/95 15,050 14,970,674
- ------------------------------------------------------------------------
5.74% 10/12/95 15,825 15,721,548
- ------------------------------------------------------------------------
Matterhorn Capital Corp.
5.75% 09/27/95 31,016 30,887,197
- ------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
FINANCIAL--(continued)
ASSET-BACKED SECURITIES - (CONTINUED)
Preferred Receivables Funding Corp.
5.70% 09/08/95 $ 11,375 $ 11,362,393
- ------------------------------------------------------------------------
5.73% 09/14/95 20,875 20,831,806
- ------------------------------------------------------------------------
5.73% 09/18/95 30,125 30,043,487
- ------------------------------------------------------------------------
5.75% 10/05/95 81,275 80,833,633
- ------------------------------------------------------------------------
5.73% 10/20/95 30,125 29,890,050
- ------------------------------------------------------------------------
Sheffield Receivables Corp.
5.72% 09/06/95 25,800 25,779,503
- ------------------------------------------------------------------------
5.71% 09/12/95 24,700 24,656,905
- ------------------------------------------------------------------------
5.77% 09/13/95 46,000 45,911,528
- ------------------------------------------------------------------------
5.77% 09/14/95 40,000 39,916,656
- ------------------------------------------------------------------------
5.73% 09/19/95 26,900 26,822,931
- ------------------------------------------------------------------------
958,285,335
- ------------------------------------------------------------------------
BUSINESS CREDIT - 4.08%
CIT Group Holdings, Inc.
5.68% 09/06/95 30,000 29,976,333
- ------------------------------------------------------------------------
5.68% 09/07/95 30,000 29,971,600
- ------------------------------------------------------------------------
5.72% 09/21/95 75,000 74,761,667
- ------------------------------------------------------------------------
5.72% 10/20/95 37,000 36,711,934
- ------------------------------------------------------------------------
171,421,534
- ------------------------------------------------------------------------
INSURANCE - 2.33%
MetLife Funding, Inc.
5.72% 09/22/95 50,000 49,833,166
- ------------------------------------------------------------------------
5.74% 10/12/95 48,211 47,895,834
- ------------------------------------------------------------------------
97,729,000
- ------------------------------------------------------------------------
PERSONAL CREDIT - 7.68%
Associates Corp. of North America
5.73% 10/18/95 50,000 49,625,958
- ------------------------------------------------------------------------
5.73% 10/19/95 100,000 99,236,000
- ------------------------------------------------------------------------
AVCO Financial Services, Inc.
5.70% 09/15/95 50,000 49,889,167
- ------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
FINANCIAL - (continued)
PERSONAL CREDIT - (CONTINUED)
Household Finance Corp.
5.75% 10/12/95 $ 50,000 $ 49,672,569
- --------------------------------------------------------------------
5.73% 10/20/95 50,000 49,610,042
- --------------------------------------------------------------------
Student Loan Corp.
5.73% 10/20/95 25,000 24,805,021
- --------------------------------------------------------------------
322,838,757
- --------------------------------------------------------------------
MISCELLANEOUS - 7.10%
Hertz Corp. (The)
5.69% 09/07/95 25,000 24,976,292
- --------------------------------------------------------------------
5.68% 09/08/95 20,000 19,977,911
- --------------------------------------------------------------------
5.70% 09/18/95 81,000 80,781,975
- --------------------------------------------------------------------
5.72% 10/06/95 35,000 34,805,361
- --------------------------------------------------------------------
5.75% 10/13/95 11,500 11,422,854
- --------------------------------------------------------------------
International Lease Finance Corp.
5.70% 09/15/95 19,000 18,957,883
- --------------------------------------------------------------------
5.71% 09/25/95 18,500 18,429,577
- --------------------------------------------------------------------
5.72% 10/05/95 6,570 6,534,507
- --------------------------------------------------------------------
5.72% 10/06/95 38,900 38,683,673
- --------------------------------------------------------------------
5.73% 10/13/95 44,000 43,705,860
- --------------------------------------------------------------------
298,275,893
- --------------------------------------------------------------------
MULTIPLE INDUSTRY - 3.89%
General Electric Capital Corp.
5.74% 09/07/95 23,500 23,477,518
- --------------------------------------------------------------------
5.72% 09/20/95 100,000 99,698,110
- --------------------------------------------------------------------
5.71% 10/06/95 40,500 40,275,169
- --------------------------------------------------------------------
163,450,797
- --------------------------------------------------------------------
Total Financial 2,012,001,316
- --------------------------------------------------------------------
OTHER - 3.32%
DIVERSIFIED - 3.32%
BTR Dunlop Finance Inc.
5.69% 09/12/95 20,424 20,388,491
- --------------------------------------------------------------------
5.73% 09/22/95 23,224 23,146,374
- --------------------------------------------------------------------
5.72% 10/10/95 26,556 26,391,441
- --------------------------------------------------------------------
5.74% 10/13/95 26,759 26,579,804
- --------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
OTHER--(continued)
DIVERSIFIED - (CONTINUED)
Cargill Inc.
5.69% 09/08/95 $ 12,000 $ 11,986,724
- ----------------------------------------------------------------------------
5.70% 09/11/95 16,300 16,274,192
- ----------------------------------------------------------------------------
5.73% 09/22/95 15,000 14,949,863
- ----------------------------------------------------------------------------
Total Other 139,716,889
- ----------------------------------------------------------------------------
Total Commercial Paper 3,017,027,320
- ----------------------------------------------------------------------------
MASTER NOTE AGREEMENTS - 4.06%
Citicorp Securities, Inc.(b)
6.063% 09/13/95 6,000 6,000,000
- ----------------------------------------------------------------------------
Morgan (J.P.) Securities, Inc.(c)
5.988% 10/16/95 87,500 87,500,000
- ----------------------------------------------------------------------------
Morgan Stanley Group, Inc.(d)
5.893% 01/29/96 77,000 77,000,000
- ----------------------------------------------------------------------------
Total Master Note Agreements 170,500,000
- ----------------------------------------------------------------------------
PROMISSORY NOTE AGREEMENTS - 1.78%
Goldman, Sachs & Co.(e)
5.913% 01/29/96 75,000 75,000,000
- ----------------------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 3,262,527,320
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 22.77%(f)
BT Securities Corp.(g)
5.83% -- 50,000 50,000,000
- ----------------------------------------------------------------------------
Daiwa Securities America, Inc.(h)
5.84% 09/01/95 91,528 91,528,472
- ----------------------------------------------------------------------------
Fuji Securities Inc.(i)
5.87% -- 115,000 115,000,000
- ----------------------------------------------------------------------------
Nesbitt Burns Securities, Inc.(j)
5.86% -- 100,000 100,000,000
- ----------------------------------------------------------------------------
Nikko Securities Co., Ltd.(k)
5.87% 09/01/95 200,000 200,000,000
- ----------------------------------------------------------------------------
Nomura Securities Co., Ltd.(l)
5.85% 09/01/95 100,000 100,000,000
- ----------------------------------------------------------------------------
SBC Government Securities, Inc.(m)
5.87% -- 200,000 200,000,000
- ----------------------------------------------------------------------------
UBS Securities Inc.(n)
5.85% -- 100,000 100,000,000
- ----------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
<S> <C>
Total Repurchase Agreements $ 956,528,472
- ---------------------------------------------------------------------
TOTAL INVESTMENTS - 100.43% 4,219,055,792(o)
- ---------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES - (0.43)% (17,975,680)
- ---------------------------------------------------------------------
NET ASSETS - 100% $4,201,080,112
=====================================================================
</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) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon notice to the issuer. Interest rates on master
notes are redetermined periodically. Rate shown is the rate in effect on
August 31, 1995.
(c) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase 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.
(d) 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 Purchase Agreement will become
payable. Interest rates on master notes are redetermined periodically. Rate
shown is the rate in effect on August 31, 1995.
(e) The Portfolio may demand prepayment of Note upon seven calendar days'
notice. Interest rates on promissory notes are redetermined periodically.
Rate shown is the rate in effect on August 31, 1995.
(f) 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% 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.
(g) Open repurchase agreement entered into 02/27/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $95,150,000 U.S. Treasury STRIPS, due 08/15/04 to
08/15/05.
(h) Joint repurchase agreement entered into 08/31/95 with a maturing value of
$209,464,857. Collateralized by $204,224,000 U.S. Treasury obligations, 0%
to 10.75% due 11/30/95 to 05/15/16.
(i) Open joint repurchase agreement entered into 12/12/94; however, either
party may terminate the agreement upon demand. Interest rates are
redetermined daily. Collateralized by $332,491,000 U.S. Treasury
obligations, 0% to 9.25% due 05/15/97 to 02/15/16.
(j) Open joint repurchase agreement entered into 08/16/95; however, either
party may terminate the agreement upon demand. Interest rates are
redetermined daily. Collateralized by $270,681,000 U.S. Treasury STRIPS,
due 11/15/95 to 11/15/21.
(k) Entered into 08/31/95 with a maturing value of $200,032,611. Collateralized
by $271,592,502 U.S. Government agency obligations, 6.583% to 9.50% due
09/01/98 to 08/01/25.
(l) Entered into 08/31/95 with a maturing value of $100,016,250. Collateralized
by $102,805,000 U.S. Government agency obligations, 0% to 8.25% due
10/02/95 to 05/12/05.
(m) Open repurchase agreement entered into 08/16/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $232,765,728 U.S. Government agency obligations, 5.997%
to 9.00% due 11/01/21 to 02/01/31 and $8,000,000 U.S. Treasury Bills due
03/07/96.
(n) Open joint repurchase agreement entered into 08/18/95; however, either
party may terminate the agreement upon demand. Collateralized by
$249,645,000 U.S. Treasury Bills, due 12/14/95 to 01/18/96.
(o) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $3,262,527,320
- ------------------------------------------------------------------------
Repurchase agreements 956,528,472
- ------------------------------------------------------------------------
Interest receivable 1,395,798
- ------------------------------------------------------------------------
Investment for deferred compensation plan 31,965
- ------------------------------------------------------------------------
Other assets 1,351,229
- ------------------------------------------------------------------------
Total assets 4,221,834,784
- ------------------------------------------------------------------------
LIABILITIES:
Dividends payable 20,375,980
- ------------------------------------------------------------------------
Deferred compensation payable 31,965
- ------------------------------------------------------------------------
Accrued advisory fees 213,136
- ------------------------------------------------------------------------
Accrued distribution fees 88,951
- ------------------------------------------------------------------------
Accrued transfer agent fees 5,493
- ------------------------------------------------------------------------
Accrued operating expenses 39,147
- ------------------------------------------------------------------------
Total liabilities 20,754,672
- ------------------------------------------------------------------------
NET ASSETS $4,201,080,112
========================================================================
NET ASSETS:
Institutional Class $3,752,693,248
========================================================================
Private Investment Class $ 154,277,704
========================================================================
Personal Investment Class $ 99,630,235
========================================================================
Cash Management Class $ 194,478,925
========================================================================
NET ASSET VALUE PER SHARE:
Shares outstanding, $0.001 par value per share:
Institutional Class 3,752,704,848
========================================================================
Private Investment Class 154,278,185
========================================================================
Personal Investment Class 99,629,606
========================================================================
Cash Management Class 194,479,527
========================================================================
Net asset value, offering and redemption price per share $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $246,526,258
- -------------------------------------------------------------------
EXPENSES:
Advisory fees 2,567,762
- -------------------------------------------------------------------
Custodian fees 329,212
- -------------------------------------------------------------------
Administrative services fees 250,216
- -------------------------------------------------------------------
Directors' fees and expenses 42,334
- -------------------------------------------------------------------
Transfer agent fees 89,684
- -------------------------------------------------------------------
Registration fees 262,523
- -------------------------------------------------------------------
Distribution fees (Note 2) 795,232
- -------------------------------------------------------------------
Other 348,810
- -------------------------------------------------------------------
Total expenses 4,685,773
- -------------------------------------------------------------------
Less expenses assumed by advisor (50,900)
===================================================================
Net expenses 4,634,873
===================================================================
Net investment income 241,891,385
===================================================================
Net increase in net assets resulting from operations $241,891,385
===================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 241,891,385 $ 155,832,059
- ----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 241,891,385 155,832,059
- ----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (241,891,385) (155,832,059)
- ----------------------------------------------------------------------------
Share transactions-net 86,066,761 (253,692,887)
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets 86,066,761 (253,692,887)
- ----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 4,115,013,351 4,368,706,238
- ----------------------------------------------------------------------------
End of period $4,201,080,112 $4,115,013,351
============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $4,201,092,165 $4,115,025,404
- ----------------------------------------------------------------------------
Undistributed net realized gain (loss) on
sales of investments (12,053) (12,053)
- ----------------------------------------------------------------------------
$4,201,080,112 $4,115,013,351
============================================================================
</TABLE>
See Notes to Financial Statements.
11
<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, the Prime Portfolio, which offers separate classes
of shares, and the Liquid Assets Portfolio. Information presented in these
financial statements pertains only to the Prime Portfolio (the "Portfolio").
The assets, liabilities and operations of each portfolio are accounted for
separately. The Portfolio consists of four different classes of shares: the
Institutional Class, the Private Investment Class, the Personal Investment
Class, and the Cash Management Class.
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 sixty 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.
D. Expenses - Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to more
than one class, e.g., advisory fees, are allocated among them.
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 monthly fee with respect to the Portfolio calculated by applying a
monthly rate, based upon the following annual rates, to the average daily net
assets of the Portfolio:
<TABLE>
<CAPTION>
Net Assets RATE
- -----------------------------------------------------------------------
<S> <C>
First $100 million 0.20%
- -----------------------------------------------------------------------
Over $100 million to $200 million 0.15%
- -----------------------------------------------------------------------
Over $200 million to $300 million 0.10%
- -----------------------------------------------------------------------
Over $300 million to $1.5 billion 0.06%
- -----------------------------------------------------------------------
Over $1.5 billion 0.05%
- -----------------------------------------------------------------------
</TABLE>
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. AIM voluntarily reimbursed
expenses of $14,000 on the Prime Portfolio-Private Investment Class, $13,300 on
the Prime Portfolio-Personal Investment Class and $23,600 on the Prime
Portfolio-Cash Management Class during the year ended August 31, 1995.
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 $154,963 for such services. During the year ended
August 31, 1995, the Fund paid A I M Institutional Fund
12
<PAGE>
Services, Inc. ("AIFS") $143,464 for shareholder and transfer agency services.
Effective July 1, 1995, AIFS became the exclusive transfer agent of the
Portfolio.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Fund, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to the Private
Investment Class, the Personal Investment Class and the Cash Management Class
of the Portfolio. The Plan provides that the Portfolio's Private Investment
Class, the Personal Investment Class and the Cash Management Class may pay up
to a 0.50%, 0.75% and 0.10%, respectively, maximum annual rate of the average
daily net assets attributable to such class. Of this amount, the Fund may pay
an asset-based sales charge to FMC and the Fund may pay a service fee of (a)
0.25% of the average daily net assets of each of the Private Investment Class
and the Personal Investment Class and (b) 0.10% of the average daily net assets
of the Cash Management Class, to selected banks, broker-dealers and other
financial institutions who offer continuing personal shareholder services to
their customers who purchase and own shares of the Private Investment Class,
the Personal Investment Class or the Cash Management Class. Any amounts not
paid as a service fee under such Plan would constitute an asset-based sales
charge. During the year ended August 31, 1995, the Prime Portfolio-Private
Investment Class, the Prime Portfolio-Personal Investment Class and Prime
Portfolio-Cash Management Class accrued $367,522, $413,064 and $14,646,
respectively, for compensation to FMC under the Plan. Certain officers and
directors of the Fund are officers of AIM, FMC and AIFS.
During the year ended August 31, 1995, the Portfolio paid legal fees of $3,247
for services rendered by Reid & Priest as counsel to the Board of Directors. In
September 1994, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel was appointed
as counsel to the Board of Directors. During the year ended August 31, 1995,
the Portfolio paid legal fees of $10,128 for services rendered by that firm as
counsel. A director of the Fund is a member of Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel and was a member of the firm of Reid & Priest prior to
September 1994.
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-SHARE INFORMATION
Changes in shares outstanding during the years ended August 31, 1995 and 1994
were as follows:
<TABLE>
<CAPTION>
1995 1994
-------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 30,516,627,315 $30,516,627,315 33,826,759,958 $33,826,759,958
- -------------------------------------------------------------------------------------------
Private Investment
Class 1,403,913,359 1,403,913,359 120,927,192 120,927,192
- -------------------------------------------------------------------------------------------
Personal Investment
Class 881,857,651 881,857,651 15,823,134 15,823,134
- -------------------------------------------------------------------------------------------
Cash Management Class* 307,521,987 307,521,987 25,113,434 25,113,434
- -------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 3,106,371 3,106,371 527,557 527,557
- -------------------------------------------------------------------------------------------
Private Investment
Class 4,691,704 4,691,704 3,982 3,982
- -------------------------------------------------------------------------------------------
Personal Investment
Class 4,299,720 4,299,720 39,701 39,701
- -------------------------------------------------------------------------------------------
Cash Management Class* 896,094 896,094 5,586 5,586
- -------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (30,847,783,300) (30,847,783,300) (34,096,489,905) (34,096,489,905)
- -------------------------------------------------------------------------------------------
Private Investment
Class (1,285,160,664) (1,285,160,664) (107,954,443) (107,954,443)
- -------------------------------------------------------------------------------------------
Personal Investment
Class (789,592,898) (789,592,898) (13,702,087) (13,702,087)
- -------------------------------------------------------------------------------------------
Cash Management Class* (114,310,578) (114,310,578) (24,746,996) (24,746,996)
- -------------------------------------------------------------------------------------------
Net increase (decrease) 86,066,761 $ 86,066,761 (253,692,887) $ (253,692,887)
===========================================================================================
</TABLE>
* The Prime Portfolio-Cash Management Class commenced operations on June 30,
1994.
13
<PAGE>
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of the Prime
Portfolio-Personal Investment Class outstanding during each of the years in the
four-year period ended August 31, 1995 and the period August 8, 1991 (date
operations commenced) through August 31, 1991.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------- ------ ----- ----- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $1.00 $1.00 $ 1.00
- ---------------------------------- ------- ------ ----- ----- ------
Income from investment operations:
Net investment income 0.05 0.03 0.03 0.04 0.002
================================== ======= ====== ===== ===== ======
Total from investment operations 0.05 0.03 0.03 0.04 0.002
================================== ======= ====== ===== ===== ======
Less distributions:
Dividends from net investment
income (0.05) (0.03) (0.03) (0.04) (0.002)
- ---------------------------------- ------- ------ ----- ----- ------
Net asset value, end of period $ 1.00 $ 1.00 $1.00 $1.00 $ 1.00
================================== ======= ====== ===== ===== ======
Total return 5.27% 3.12% 2.74% 3.94% 5.02%(a)
================================== ======= ====== ===== ===== ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $99,630 $3,065 $904 $727 $270
================================== ======= ====== ===== ===== ======
Ratio of expenses to average net
assets(b) 0.59%(c) 0.58% 0.52% 0.54% 0.80%(a)
================================== ======= ====== ===== ===== ======
Ratio of net investment income to
average net assets(b) 5.23%(c) 3.34% 2.71% 3.75% 5.03%(a)
================================== ======= ====== ===== ===== ======
</TABLE>
(a) Annualized.
(b) After expense reimbursements. The ratios of expenses and net investment
income prior to expense reimbursement are 0.61% and 5.21%, respectively,
for the year ended August 31, 1995, 2.14% and 1.78%, respectively, for the
year ended August 31, 1994 and 2.03% and 1.20%, respectively, for the year
ended August 31, 1993.
(c) Ratios are based on average net assets of $82,612,764.
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Short-Term Investments Co.:
We have audited the accompanying statement of assets and liabilities of the
Prime 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, the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the ten-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
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
Prime Portfolio as of August 31, 1995, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the ten-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
October 6, 1995
15
<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
Karen Dunn Kelley Vice President PRIME PORTFOLIO
J. Abbott Sprague Vice President ------------------------------------------------
P. Michelle Grace Assistant Secretary PERSONAL ANNUAL
Nancy L. Martin Assistant Secretary INVESTMENT REPORT
Ofelia M. Mayo Assistant Secretary CLASS
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>
