<PAGE>
[AIM LOGO APPEARS HERE] Dear Shareholder:
LETTER [PHOTO OF CHARLES T. We are pleased to report that during the six
TO OUR BAUER, CHAIRMAN OF months covered by this report, Short-Term
SHAREHOLDERS THE BOARD OF THE Investments Co. (STIC) Liquid Assets
FUND, APPEARS HERE] Portfolio Institutional Class continued to
capture the attractive yields available in
taxable money market securities.
As of February 29, 1996, the close of the
reporting period, the 30-day average yield for the Institutional
Class was 5.34%, compared to 5.14% for IBC/Donoghue's Money Fund
Averages(TM)-First-Tier Institutions Only and 5.03% for
IBC/Donoghue's Money Fund Averages(TM)-Total Institutions Only.
The Institutional Class's seven-day yield was 5.32%. Net assets
of the Institutional Class of the Portfolio grew from $1.29
billion to $1.51 billion during the reporting period.
STIC Liquid Assets Portfolio maintained its strict investment
discipline, emphasizing superior credit quality in its purchase of
money market securities such as quality commercial paper and
selected repurchase agreement securities. The Portfolio invests
solely in securities rated "First Tier" as defined in Rule 2a-7
under the Investment Company Act of 1940. Its objective is to
provide as high a level of current income as is consistent with
the preservation of capital and liquidity.
Financial markets were favorable during the first half of the
reporting period. Inflation seemed thoroughly tamed while economic
growth was a robust 3.6% during the third quarter of 1995.
However, late in 1995, signs of economic weakness began to emerge,
including contraction in industrial production and declines in the
index of leading economic indicators. These were sufficient to
prompt the Federal Reserve Board to lower short-term interest
rates twice, first in December 1995 and again at the end of
January 1996.
At the close of the reporting period, the near-term prognosis
was for slow-to-moderate economic growth coupled with low
inflation. Such conditions could put additional downward pressure
on interest rates, and many believe further rate cuts may be
necessary. However, in testimony before Congress late in February,
Federal Reserve Board Chairman Alan Greenspan described the
economy as "basically on track for sustained growth," leaving open
the possibility that interest rates could remain unchanged. The
relatively short weighted average maturity of STIC Liquid Assets
Portfolio enables it to respond quickly to changes in the interest
rate environment. At the close of the reporting period, the
Portfolio's weighted average maturity was 64 days.
AIM remains committed to service and to the primary objectives
of safety, liquidity, and yield in institutional money fund
management. We are ready to respond to your comments about this
report and to any questions you may have. Please contact one of
our representatives at 800-659-1005.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
Government securities, such as U.S. Treasury bills and bonds,
offer a high degree of safety and are guaranteed as to the timely
payment of principal and interest. Fund shares are not insured and
their yield will vary with market conditions. There can be no
assurance that the Portfolio will be able to maintain a stable net
asset value of $1.00 per share.
<PAGE>
AVERAGE MONTHLY YIELD COMPARISON
6 months ended 2/29/96 (Yields are 30-day average yields for the month-ends
shown)
<TABLE>
<CAPTION>
STIC Liquid Assets IBC/Donoghue's Money Fund Averages(TM)- IBC/Donoghue's Money Fund Averages(TM)-
Portfolio Institutional Class First-Tier Institutions Only Total Institutions Only
<C> <C> <S> <C>
9/95 5.81% 5.52% 5.44%
10/95 5.82 5.50 5.42
11/95 5.85 5.51 5.43
12/95 5.81 5.48 5.39
1/96 5.64 5.36 5.24
2/96 5.32 5.14 5.03
</TABLE>
WEIGHTED AVERAGE MATURITY COMPARISON
6 months ended 2/29/96
<TABLE>
<CAPTION>
STIC Liquid Assets Portfolio IBC/Donoghue's Money Fund Averages(TM)- IBC/Donoghue's Money Fund Averages(TM)-
Institutional Class First-Tier Institutions Only Total Institutions Only
<S> <C> <C> <C>
9/95 29 days 50 days 47 days
10/95 34 53 49
11/95 23 49 45
12/95 31 49 44
1/96 30 49 44
2/96 64 52 49
</TABLE>
Source: IBC's Money Market Insight(R)
of Holliston, MA 01746
2
<PAGE>
SCHEDULE OF INVESTMENTS
February 29, 1996
(Unaudited)
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER - 53.96%(a)
CONSUMER DURABLES - 13.38%
AUTOMOBILE - 8.29%
Ford Motor Credit Co.
5.28% 05/03/96 $ 50,000 $ 49,538,000
- ------------------------------------------------------------------------
4.98% 06/07/96 30,000 29,593,300
- ------------------------------------------------------------------------
5.01% 06/10/96 25,000 24,648,604
- ------------------------------------------------------------------------
Toyota Motor Credit Corp.
5.18% 04/04/96 24,000 23,882,587
- ------------------------------------------------------------------------
127,662,491
- ------------------------------------------------------------------------
COMPUTER & OFFICE EQUIPMENT - 5.09%
Hewlett-Packard Co.
4.88% 07/19/96 25,000 24,525,556
- ------------------------------------------------------------------------
4.93% 07/26/96 20,000 19,597,383
- ------------------------------------------------------------------------
4.93% 07/26/96 35,000 34,295,421
- ------------------------------------------------------------------------
78,418,360
- ------------------------------------------------------------------------
Total Consumer Durables 206,080,851
- ------------------------------------------------------------------------
CONSUMER NONDURABLES - 0.19%
MULTIPLE INDUSTRY - 0.19%
PepsiCo Inc.
5.05% 09/03/96 3,000 2,921,725
- ------------------------------------------------------------------------
Total Consumer Nondurables 2,921,725
- ------------------------------------------------------------------------
ENERGY - 2.17%
OIL & GAS - 2.17%
ARCO Coal Australia Inc.
5.62% 03/07/96 12,916 12,903,902
- ------------------------------------------------------------------------
5.07% 05/13/96 5,131 5,078,249
- ------------------------------------------------------------------------
5.05% 05/17/96 15,637 15,468,099
- ------------------------------------------------------------------------
Total Energy 33,450,250
- ------------------------------------------------------------------------
FINANCIAL - 31.69%
ASSET-BACKED SECURITIES - 11.53%
Asset Securitization Cooperative Corp.
5.17% 04/23/96 15,000 14,885,829
- ------------------------------------------------------------------------
5.17% 04/25/96 20,000 19,842,028
- ------------------------------------------------------------------------
5.23% 05/09/96 50,000 49,498,792
- ------------------------------------------------------------------------
Ciesco, L.P.
5.13% 05/03/96 18,000 17,838,405
- ------------------------------------------------------------------------
Clipper Receivables Corp.
5.25% 03/07/96 30,494 30,467,318
- ------------------------------------------------------------------------
5.45% 03/08/96 25,000 24,973,507
- ------------------------------------------------------------------------
Preferred Receivables Funding Corp.
5.45% 04/12/96 20,300 20,170,926
- ------------------------------------------------------------------------
177,676,805
- ------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
<S> <C> <C> <C>
FINANCIAL - (continued)
BROKERAGE/INVESTMENT - 7.34%
Merrill Lynch & Co., Inc.
5.38% 04/12/96 $ 50,000 $ 49,686,167
- -------------------------------------------------------------------
5.00% 06/04/96 25,000 24,670,139
- -------------------------------------------------------------------
4.90% 08/05/96 23,500 22,997,818
- -------------------------------------------------------------------
4.95% 08/30/96 16,000 15,599,600
- -------------------------------------------------------------------
112,953,724
- -------------------------------------------------------------------
INSURANCE - 3.12%
Marsh & McLennan Companies Inc.
5.51% 04/12/96 14,000 13,910,004
- -------------------------------------------------------------------
5.62% 04/25/96 15,000 14,871,209
- -------------------------------------------------------------------
4.81% 11/01/96 20,000 19,345,306
- -------------------------------------------------------------------
48,126,519
- -------------------------------------------------------------------
PERSONAL CREDIT - 3.03%
Associates Corp. of North America
5.62% 04/10/96 13,000 12,918,822
- -------------------------------------------------------------------
Transamerica Finance Corp.
5.10% 05/08/96 19,500 19,312,150
- -------------------------------------------------------------------
4.92% 08/09/96 14,700 14,376,551
- -------------------------------------------------------------------
46,607,523
- -------------------------------------------------------------------
MISCELLANEOUS - 3.49%
Hertz Corp. (The)
5.45% 04/05/96 25,000 24,867,535
- -------------------------------------------------------------------
International Lease Finance Corp.
5.38% 04/11/96 29,000 28,822,311
- -------------------------------------------------------------------
53,689,846
- -------------------------------------------------------------------
MULTIPLE INDUSTRY - 3.18%
General Electric Capital Corp.
4.92% 07/18/96 50,000 49,050,167
- -------------------------------------------------------------------
Total Financial 488,104,584
- -------------------------------------------------------------------
UTILITIES - 3.87%
TELEPHONE - 3.87%
AT&T Corp.
5.55% 04/11/96 60,000 59,620,750
- -------------------------------------------------------------------
Total Utilities 59,620,750
- -------------------------------------------------------------------
OTHER - 2.66%
MISCELLANEOUS - 2.66%
Cargill Financial Services Corp.
4.89% 07/31/96 20,000 19,587,067
- -------------------------------------------------------------------
5.00% 08/15/96 10,000 9,768,056
- -------------------------------------------------------------------
4.95% 10/29/96 12,000 11,600,700
- -------------------------------------------------------------------
Total Other 40,955,823
- -------------------------------------------------------------------
Total Commercial Paper 831,133,983
- -------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
<S> <C> <C> <C>
BANK NOTES - 0.65%
PNC Bank Corp.
6.04%(b) 05/24/96 $ 10,000 $ 10,015,296
- -------------------------------------------------------------------------------
Total Bank Notes 10,015,296
- -------------------------------------------------------------------------------
CORPORATE NOTES - 0.35%
International Lease Finance Corp.
6.625% 06/01/96 5,440 5,447,938
- -------------------------------------------------------------------------------
Total Corporate Notes 5,447,938
- -------------------------------------------------------------------------------
MEDIUM TERM NOTES - 1.30%
General Electric Capital Corp.
5.084% 01/29/97 10,000 10,008,396
- -------------------------------------------------------------------------------
5.138% 01/30/97 10,000 10,013,250
- -------------------------------------------------------------------------------
Total Medium Term Notes 20,021,646
- -------------------------------------------------------------------------------
PROMISSORY AND MASTER NOTE AGREEMENTS -
25.64%
Goldman Sachs Group (The), L.P.
5.5475%(c) 10/25/96 173,000 173,000,000
- -------------------------------------------------------------------------------
Morgan (J.P.) Securities, Inc.
5.4766%(d) 04/12/96 100,000 100,000,000
- -------------------------------------------------------------------------------
Morgan Stanley Group, Inc.
5.5075%(e) 07/31/96 122,000 122,000,000
- -------------------------------------------------------------------------------
Total Promissory and Master Note
Agreements 395,000,000
- -------------------------------------------------------------------------------
U.S. TREASURY SECURITIES - 6.40%
U.S. Treasury Bills - 4.76%(f)
4.805% 06/27/96 25,000 24,606,256
- -------------------------------------------------------------------------------
4.79% 08/29/96 50,000 48,795,846
- -------------------------------------------------------------------------------
73,402,102
- -------------------------------------------------------------------------------
U.S. Treasury Notes - 1.64%
6.50% 09/30/96 25,000 25,213,185
- -------------------------------------------------------------------------------
Total U.S. Treasury Securities 98,615,287
- -------------------------------------------------------------------------------
Total Investments, excluding Repurchase
Agreements 1,360,234,150
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 12.24%(g)
Goldman, Sachs & Co.
6.25%(h) 03/01/96 150,000 150,000,000
- -------------------------------------------------------------------------------
6.00%(i) 03/01/96 38,506 38,506,304
- -------------------------------------------------------------------------------
Total Repurchase Agreements 188,506,304
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.54% 1,548,740,454(j)
- -------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES - (0.54%) (8,335,583)
- -------------------------------------------------------------------------------
NET ASSETS - 100.00% $1,540,404,871
===============================================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Some commercial paper is traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) Interest rates are redetermined weekly. Rate shown is the rate in effect on
February 29, 1996.
5
<PAGE>
(c) 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 February 29, 1996.
(d) 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
February 29, 1996.
(e) 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 February 29, 1996.
(f) U.S. Treasury bills are traded on a discount basis. In such cases, the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(g) Collateral on repurchase agreements, including the Portfolio's pro-rata
interest in joint repurchase agreements, is taken into possession by the
Portfolio 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.
(h) Joint repurchase agreement entered into on 02/29/96 with a maturing value
of $150,026,042. Collateralized by $144,624,000 U.S. Treasury obligations,
0% to 7.25% due 03/01/96 to 09/29/08.
(i) Joint repurchase agreement entered into on 02/29/96 with a maturing value
of $195,032,500. Collateralized by $190,359,000 U.S. Treasury obligations,
5.25% to 8.75% due 08/31/97 to 11/15/08.
(j) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
6
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $1,360,234,150
- ------------------------------------------------------------------------
Repurchase agreements 188,506,304
- ------------------------------------------------------------------------
Interest receivable 3,117,370
- ------------------------------------------------------------------------
Investment for deferred compensation plan 18,517
- ------------------------------------------------------------------------
Other assets 53,745
- ------------------------------------------------------------------------
Total assets 1,551,930,086
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Dividends 11,333,574
- ------------------------------------------------------------------------
Deferred compensation 18,517
- ------------------------------------------------------------------------
Accrued advisory fees 49,045
- ------------------------------------------------------------------------
Accrued distribution fees 1,759
- ------------------------------------------------------------------------
Accrued directors' fees 2,414
- ------------------------------------------------------------------------
Accrued administrative services fees 4,590
- ------------------------------------------------------------------------
Accrued transfer agent fees 36,363
- ------------------------------------------------------------------------
Accrued operating expenses 78,953
- ------------------------------------------------------------------------
Total liabilities 11,525,215
- ------------------------------------------------------------------------
NET ASSETS $1,540,404,871
========================================================================
NET ASSETS:
Institutional Class $1,510,235,332
========================================================================
Cash Management Class $ 22,954,192
========================================================================
Private Investment Class $ 7,215,347
========================================================================
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Institutional Class 1,512,072,509
========================================================================
Cash Management Class 22,982,202
========================================================================
Private Investment Class 7,225,773
========================================================================
NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per share $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended February 29, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $52,532,273
- ----------------------------------------------------------------------------
EXPENSES:
Advisory
fees 1,369,372
- ----------------------------------------------------------------------------
Custodian fees 84,403
- ----------------------------------------------------------------------------
Administrative services fees 20,935
- ----------------------------------------------------------------------------
Distribution fees (Note 2) 1,892
- ----------------------------------------------------------------------------
Directors' fees and expenses 8,330
- ----------------------------------------------------------------------------
Filing fees 46,118
- ----------------------------------------------------------------------------
Transfer agent fees 72,412
- ----------------------------------------------------------------------------
Other 71,073
- ----------------------------------------------------------------------------
Total expenses 1,674,535
- ----------------------------------------------------------------------------
Less expenses assumed by advisor (1,316,370)
- ----------------------------------------------------------------------------
Net expenses 358,165
- ----------------------------------------------------------------------------
Net investment income 52,174,108
- ----------------------------------------------------------------------------
Net realized gain (loss) on sales of investments (1,738,483)
- ----------------------------------------------------------------------------
Net increase in net assets resulting from operations $50,435,625
============================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended February 29, 1996 and year ended August 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
FEBRUARY 29, AUGUST 31,
1996 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 52,174,108 $ 92,913,637
- ----------------------------------------------------------------------------
Net realized gain (loss) on sales of
investments (1,738,483) (74,934)
- ----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 50,435,625 92,838,703
- ----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (52,174,108) (92,913,637)
- ----------------------------------------------------------------------------
Share transactions -- net 254,680,696 259,187,785
- ----------------------------------------------------------------------------
Net increase in net assets 252,942,213 259,112,851
- ----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,287,462,658 1,028,349,807
- ----------------------------------------------------------------------------
End of period $1,540,404,871 $1,287,462,658
============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,542,280,484 $1,287,599,788
- ----------------------------------------------------------------------------
Undistributed net realized gain (loss) on
sales of investment securities (1,875,613) (137,130)
- ----------------------------------------------------------------------------
$1,540,404,871 $1,287,462,658
============================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
(Unaudited)
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 Portfolio consists of three different classes
of shares: the Institutional Class, the Private Investment Class and the Cash
Management Class. Matters affecting each class are voted on exclusively by the
shareholders of each class. The Portfolio's objective is to provide as high a
level of current income as is consistent with the preservation of capital and
liquidity.
The following is a summary of significant accounting policies followed by the
Portfolio 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 - 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 Portfolio 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 Portfolio cannot distribute capital gains to shareholders
until the tax loss carryforwards have been utilized.
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 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 six months
ended February 29, 1996, AIM voluntarily waived fees of $1,291,820 on the
Portfolio and voluntarily reimbursed expenses of $22,000 on the Institutional
Class, $750 on the Private Investment Class and $1,800 on the Cash Management
Class.
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 six months ended February 29,
1996, the Portfolio reimbursed AIM $20,935 for such services.
9
<PAGE>
The Portfolio, pursuant to a transfer agency and service agreement, has agreed
to pay A I M Institutional Fund Services, Inc. ("AIFS") a fee for providing
transfer agent and shareholder services to the Portfolio. During the six months
ended February 29, 1996, the Portfolio paid AIFS $72,412 for such services.
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 and the Cash Management Class of the Portfolio. The Plan
provides that the Private Investment Class and Cash Management Class pay FMC up
to a maximum annual rate of 0.50% and 0.10%, respectively, 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 0.25% and
0.10% of the average daily net assets, respectively, of each of the Private
Investment Class and 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 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 six months ended February 29, 1996, the Private Investment Class and
the Cash Management Class accrued for compensation to FMC amounts of $1,260 and
$632, respectively, under the Plan. Certain officers and directors of the Fund
are officers of AIM, FMC, and AIFS.
During the six months ended February 29, 1996, the Portfolio paid legal fees
of $3,530 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.
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 six months ended February 29, 1996 and the
year ended August 31, 1995 were as follows:
<TABLE>
<CAPTION>
FEBRUARY 29, AUGUST 31,
1996 1995
-------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 23,008,238,967 $23,008,238,967 32,408,905,435 $32,408,905,435
- ---------------------------------------------------------------------------------------------
Cash Management Class* 33,034,108 33,034,108 -- --
- ---------------------------------------------------------------------------------------------
Private Investment
Class** 18,504,008 18,504,008 -- --
- ---------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 2,396,283 2,396,283 2,458,920 2,458,920
- ---------------------------------------------------------------------------------------------
Cash Management Class* 43,106 43,106 -- --
- ---------------------------------------------------------------------------------------------
Private Investment
Class** 21,765 21,765 -- --
- ---------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (22,786,162,529) (22,786,162,529) (32,152,176,570) (32,152,176,570)
- ---------------------------------------------------------------------------------------------
Cash Management Class* (10,095,012) (10,095,012) -- --
- ---------------------------------------------------------------------------------------------
Private Investment
Class** (11,300,000) (11,300,000) -- --
- ---------------------------------------------------------------------------------------------
Net increase 254,680,696 $ 254,680,696 259,187,785 $ 259,187,785
=============================================================================================
</TABLE>
* The Cash Management Class commenced operations on January 17, 1996.
** The Private Investment Class commenced operations on February 16, 1996.
10
<PAGE>
NOTE 5 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of capital stock
outstanding of the Institutional Class during the six months ended February 29,
1996, the year ended August 31, 1995 and the period November 4, 1993 (date
operations commenced) through August 31, 1994.
<TABLE>
<CAPTION>
AUGUST 31,
FEBRUARY 29, -------------------------
1996 1995 1994
------------ ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00
- ------------------------------- ---------- ---------- ----------
Income from investment
operations:
Net investment income 0.03 0.06 0.03
- ------------------------------- ---------- ---------- ----------
Less distributions:
Dividends from net investment
income (0.03) (0.06) (0.03)
- ------------------------------- ---------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
=============================== ========== ========== ==========
Total return 5.80%(a) 5.83% 3.83%(a)
=============================== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $1,510,235 $1,287,463 $1,028,350
=============================== ========== ========== ==========
Ratio of expenses to average
net assets 0.04%(b)(c) 0.11%(c) 0.05%(c)
=============================== ========== ========== ==========
Ratio of net investment income
to average net assets 5.68%(b)(d) 5.69%(d) 3.85%(d)
=============================== ========== ========== ==========
</TABLE>
(a) Annualized.
(b) Ratios are annualized and based on average net assets of $1,843,802,600.
(c) Ratios of expenses to average net assets prior to expense reimbursements
were 0.18% for the periods 1996-1994, respectively. Ratios are annualized
for periods less than one year.
(d) Ratios of net investment income to average net assets prior to expense
reimbursements were 5.54% (annualized), 5.62% and 3.72% (annualized) for
the periods 1996-1994, respectively.
11
<PAGE>
<TABLE>
<S> <C>
DIRECTORS
Charles T. Bauer John F. Kroeger Short-Term
Bruce L. Crockett Lewis F. Pennock Investments Co.
Owen Daly II Ian W. Robinson (STIC)
Carl Frischling Louis S. Sklar
Robert H. Graham
OFFICERS
Charles T. Bauer Chairman
Robert H. Graham President
John J. Arthur Sr. Vice President & Treasurer Liquid Assets
Gary T. Crum Sr. Vice President Portfolio
Carol F. Relihan Vice President & Secretary -----------------------------------------------------
Dana R. Sutton Vice President & Assistant Treasurer Institutional SEMI-
Melville B. Cox Vice President Class ANNUAL
Karen Dunn Kelley Vice President REPORT
J. Abbott Sprague Vice President
P. Michelle Grace Assistant Secretary
David L. Kite Assistant Secretary FEBRUARY 29, 1996
Nancy L. Martin Assistant Secretary
Ofelia M. Mayo Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
Samuel D. Sirko Assistant Secretary
Stephen I. Winer Assistant Secretary
Mary J. Benson Assistant Treasurer
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
The Bank of New York
90 Washington Street, 11th Floor
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
This report may be distributed only to current shareholders or [LOGO APPEARS HERE]
to persons who have received a current prospectus. Fund Management Company
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