<PAGE>
Dear Shareholder:
[AIM LOGO APPEARS HERE] We are pleased to report that during the six
months covered by this report, Short-Term
LETTER [PHOTO of Charles T. Investments Co. (STIC) Prime Portfolio
TO OUR Bauer, Chairman of Institutional Class continued to capture the
SHAREHOLDERS the Board of the Fund, attractive yields available in taxable money
APPEARS HERE] market securities.
As of February 29, 1996, the close of the
reporting period, the 30-day average yield for the Institutional
Class of STIC Prime Portfolio was 5.32%, 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
5.28%. Net assets of the Institutional Class of the Portfolio
grew from $3.75 billion to $4.55 billion during the reporting
period.
STIC Prime Portfolio maintained its strict investment
discipline, emphasizing superior credit quality in its purchase of
money market instruments with maturities of 60 days or less, such
as quality commercial paper and selected repurchase agreement
securities. We are pleased to note that STIC Prime Portfolio
maintained its AAAm credit quality rating, 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 the Portfolio's credit quality, composition,
management, and weekly portfolio reviews.
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 rates could remain unchanged. The short
weighted average maturity of STIC Prime 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 22 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>
Line chart
AVERAGE MONTHLY YIELD COMPARISON
6 months ended 2/29/96 (Yields are 30-day average yields for the month-ends
shown)
<TABLE>
<CAPTION>
STIC Prime 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 5.77 5.52 5.44
10/95 5.76 5.5 5.42
11/95 5.77 5.51 5.43
12/95 5.77 5.48 5.39
1/96 5.61 5.36 5.24
2/96 5.31 5.14 5.03
</TABLE>
Line chart
WEIGHTED AVERAGE MATURITY COMPARISON
6 months ended 2/29/96
<TABLE>
<CAPTION>
STIC Prime 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 19 50 47
10/95 19 53 49
11/95 19 49 45
12/95 18 49 44
1/96 16 49 44
2/96 18 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 - 91.07%(a)
BASIC INDUSTRIES - 1.19%
MULTIPLE INDUSTRY - 1.19%
Philip Morris Capital Corp.
5.42% 03/01/96 $ 32,226 $ 32,226,000
- -----------------------------------------------------------------------
Philip Morris Companies, Inc.
5.42% 03/01/96 30,000 30,000,000
- -----------------------------------------------------------------------
Total Basic Industries 62,226,000
- -----------------------------------------------------------------------
BUSINESS SERVICES - 1.33%
POLLUTION CONTROL SERVICES - 1.33%
Browning-Ferris Industries, Inc.
5.17% 04/02/96 70,000 69,678,311
- -----------------------------------------------------------------------
Total Business Services 69,678,311
- -----------------------------------------------------------------------
CAPITAL GOODS - 3.61%
COMPUTERS & OFFICE EQUIPMENT - 2.85%
Xerox Credit Corp.
5.20% 04/10/96 150,000 149,133,333
- -----------------------------------------------------------------------
MACHINERY - 0.76%
Dover Corp.
5.43% 03/01/96 10,000 10,000,000
- -----------------------------------------------------------------------
5.43% 03/05/96 10,000 9,993,967
- -----------------------------------------------------------------------
5.22% 03/26/96 20,000 19,927,500
- -----------------------------------------------------------------------
39,921,467
- -----------------------------------------------------------------------
Total Capital Goods 189,054,800
- -----------------------------------------------------------------------
CONSUMER DURABLES - 6.42%
AUTOMOBILE - 6.42%
Ford Motor Credit Co.
5.42% 03/05/96 25,000 24,984,944
- -----------------------------------------------------------------------
5.20% 03/19/96 100,000 99,740,000
- -----------------------------------------------------------------------
5.20% 04/03/96 25,000 24,880,833
- -----------------------------------------------------------------------
Toyota Motor Credit Corp.
5.42% 03/04/96 50,000 49,977,417
- -----------------------------------------------------------------------
5.40% 03/12/96 42,000 41,930,700
- -----------------------------------------------------------------------
5.21% 03/15/96 25,000 24,949,347
- -----------------------------------------------------------------------
5.20% 03/25/96 25,000 24,913,333
- -----------------------------------------------------------------------
5.20% 04/01/96 25,000 24,888,056
- -----------------------------------------------------------------------
5.17% 04/22/96 20,000 19,850,644
- -----------------------------------------------------------------------
Total Consumer Durables 336,115,274
- -----------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
CONSUMER NONDURABLES - 0.19%
PUBLISHING - 0.19%
Tribune Co.
5.38% 03/15/96 $ 10,000 $ 9,979,078
- ------------------------------------------------------------------------
Total Consumer Nondurables 9,979,078
- ------------------------------------------------------------------------
ENERGY - 0.89%
NATURAL GAS - 0.26%
Colonial Pipeline Co.
5.20% 03/22/96 13,500 13,459,050
- ------------------------------------------------------------------------
OIL & GAS - 0.63%
Mobil Australia Finance Co., Inc.
5.20% 04/15/96 33,001 32,786,494
- ------------------------------------------------------------------------
Total Energy 46,245,544
- ------------------------------------------------------------------------
FINANCIAL - 74.21%
ASSET-BACKED SECURITIES - 26.50%
Asset Securitization Cooperative Corp.
5.43% 03/06/96 36,000 35,972,850
- ------------------------------------------------------------------------
5.43% 03/07/96 33,000 32,970,135
- ------------------------------------------------------------------------
5.42% 03/14/96 26,500 26,448,134
- ------------------------------------------------------------------------
5.20% 03/20/96 18,000 17,950,600
- ------------------------------------------------------------------------
5.20% 03/25/96 25,000 24,913,333
- ------------------------------------------------------------------------
Ciesco, L.P.
5.20% 03/14/96 50,000 49,906,111
- ------------------------------------------------------------------------
5.20% 03/20/96 20,000 19,945,111
- ------------------------------------------------------------------------
5.38% 03/22/96 20,000 19,937,292
- ------------------------------------------------------------------------
Clipper Receivables Corp.
5.45% 03/08/96 25,339 25,312,148
- ------------------------------------------------------------------------
5.43% 03/11/96 44,000 43,933,633
- ------------------------------------------------------------------------
5.40% 03/13/96 35,000 34,937,000
- ------------------------------------------------------------------------
5.40% 03/14/96 19,000 18,962,950
- ------------------------------------------------------------------------
5.22% 03/18/96 50,000 49,876,750
- ------------------------------------------------------------------------
5.21% 04/02/96 20,000 19,907,378
- ------------------------------------------------------------------------
5.21% 04/03/96 10,000 9,952,242
- ------------------------------------------------------------------------
5.21% 04/04/96 30,000 29,852,383
- ------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
FINANCIAL--(continued)
ASSET-BACKED SECURITIES - (CONTINUED)
Corporate Asset Funding Co., Inc.
5.45% 03/05/96 $ 50,000 $ 49,969,722
- ------------------------------------------------------------------------
5.37% 03/19/96 20,500 20,444,958
- ------------------------------------------------------------------------
5.38% 03/21/96 75,000 74,776,042
- ------------------------------------------------------------------------
5.20% 03/26/96 40,000 39,855,556
- ------------------------------------------------------------------------
5.18% 04/03/96 50,000 49,762,583
- ------------------------------------------------------------------------
Delaware Funding Corp.
5.43% 03/07/96 171,258 171,103,012
- ------------------------------------------------------------------------
5.18% 04/19/96 19,000 18,866,039
- ------------------------------------------------------------------------
5.18% 04/22/96 47,000 46,648,336
- ------------------------------------------------------------------------
Eiger Capital Corp.
5.21% 03/18/96 40,000 39,901,589
- ------------------------------------------------------------------------
5.20% 04/09/96 100,000 99,436,666
- ------------------------------------------------------------------------
Preferred Receivables Funding Corp.
5.42% 03/04/96 17,025 17,017,310
- ------------------------------------------------------------------------
5.40% 03/08/96 26,500 26,472,175
- ------------------------------------------------------------------------
5.38% 03/14/96 9,000 8,982,515
- ------------------------------------------------------------------------
5.18% 04/18/96 110,000 109,240,267
- ------------------------------------------------------------------------
5.18% 04/25/96 34,075 33,805,334
- ------------------------------------------------------------------------
Sheffield Receivables Corp.
5.20% 04/01/96 50,253 50,027,979
- ------------------------------------------------------------------------
5.17% 04/02/96 70,000 69,678,311
- ------------------------------------------------------------------------
1,386,766,444
- ------------------------------------------------------------------------
BROKERAGE/INVESTMENT - 11.31%
Bear, Stearns & Co. Inc.
5.20% 04/12/96 200,000 198,786,668
- ------------------------------------------------------------------------
Merrill Lynch & Co. Inc.
5.50% 03/01/96 25,000 25,000,000
- ------------------------------------------------------------------------
5.38% 03/15/96 57,500 57,379,697
- ------------------------------------------------------------------------
5.18% 04/04/96 100,000 99,510,778
- ------------------------------------------------------------------------
5.19% 04/26/96 61,500 61,003,490
- ------------------------------------------------------------------------
Morgan Stanley Group, Inc.
5.46% 03/04/96 100,000 99,954,500
- ------------------------------------------------------------------------
5.43% 03/08/96 50,000 49,947,208
- ------------------------------------------------------------------------
591,582,341
- ------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
FINANCIAL--(continued)
BUSINESS CREDIT - 6.39%
CIT Group Holdings, Inc.
5.44% 03/01/96 $ 50,000 $ 50,000,000
- -------------------------------------------------------------------------------
5.40% 03/08/96 50,000 49,947,500
- -------------------------------------------------------------------------------
5.40% 03/12/96 50,000 49,917,500
- -------------------------------------------------------------------------------
5.40% 03/13/96 50,000 49,910,000
- -------------------------------------------------------------------------------
5.20% 03/25/96 50,000 49,826,667
- -------------------------------------------------------------------------------
National Rural Utilities Cooperative Finance
5.20% 03/18/96 10,000 9,975,444
- -------------------------------------------------------------------------------
5.18% 04/03/96 75,000 74,643,875
- -------------------------------------------------------------------------------
334,220,986
- -------------------------------------------------------------------------------
INSURANCE - 0.48%
A.I. Credit Corp.
5.20% 03/25/96 25,000 24,913,333
- -------------------------------------------------------------------------------
PERSONAL CREDIT - 15.29%
Associates Corp. of North America
5.21% 03/14/96 50,000 49,905,931
- -------------------------------------------------------------------------------
5.21% 03/15/96 50,000 49,898,694
- -------------------------------------------------------------------------------
5.20% 03/21/96 50,000 49,855,556
- -------------------------------------------------------------------------------
5.19% 04/01/96 75,000 74,664,813
- -------------------------------------------------------------------------------
5.17% 04/23/96 15,500 15,382,023
- -------------------------------------------------------------------------------
AVCO Financial Services, Inc.
5.20% 03/28/96 50,000 49,805,000
- -------------------------------------------------------------------------------
5.20% 03/29/96 50,000 49,797,778
- -------------------------------------------------------------------------------
Household Finance Corp.
5.37% 03/13/96 50,000 49,910,500
- -------------------------------------------------------------------------------
5.20% 03/22/96 100,000 99,696,666
- -------------------------------------------------------------------------------
5.18% 04/08/96 50,000 49,726,611
- -------------------------------------------------------------------------------
5.20% 04/11/96 43,000 42,745,344
- -------------------------------------------------------------------------------
Transamerica Finance Corp.
5.44% 03/01/96 16,500 16,500,000
- -------------------------------------------------------------------------------
5.44% 03/06/96 10,000 9,992,444
- -------------------------------------------------------------------------------
5.40% 03/12/96 60,000 59,901,000
- -------------------------------------------------------------------------------
5.21% 03/21/96 40,000 39,884,222
- -------------------------------------------------------------------------------
5.17% 04/22/96 8,500 8,436,523
- -------------------------------------------------------------------------------
Student Loan Corp.
5.20% 03/20/96 29,000 28,920,411
- -------------------------------------------------------------------------------
5.20% 03/28/96 55,000 54,785,500
- -------------------------------------------------------------------------------
799,809,016
- -------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
FINANCIAL--(continued)
MISCELLANEOUS - 9.37%
Hertz Corp. (The)
5.44% 03/01/96 $ 20,000 $ 20,000,000
- --------------------------------------------------------------------
5.42% 03/05/96 25,000 24,984,944
- --------------------------------------------------------------------
5.20% 03/18/96 50,000 49,877,222
- --------------------------------------------------------------------
5.20% 03/25/96 25,000 24,913,333
- --------------------------------------------------------------------
5.21% 03/26/96 25,000 24,909,549
- --------------------------------------------------------------------
5.21% 03/29/96 25,000 24,898,695
- --------------------------------------------------------------------
5.20% 04/01/96 50,000 49,776,111
- --------------------------------------------------------------------
5.20% 04/08/96 25,000 24,862,778
- --------------------------------------------------------------------
International Lease Finance Corp.
5.41% 03/11/96 50,000 49,924,861
- --------------------------------------------------------------------
5.22% 03/19/96 10,000 9,973,900
- --------------------------------------------------------------------
5.20% 03/20/96 30,000 29,917,667
- --------------------------------------------------------------------
5.20% 03/25/96 40,000 39,861,333
- --------------------------------------------------------------------
5.20% 03/27/96 32,000 31,879,822
- --------------------------------------------------------------------
5.19% 03/28/96 35,000 34,863,762
- --------------------------------------------------------------------
5.18% 04/04/96 30,000 29,853,233
- --------------------------------------------------------------------
USAA Capital Corp.
5.20% 03/26/96 20,000 19,927,778
- --------------------------------------------------------------------
490,424,988
- --------------------------------------------------------------------
MULTIPLE INDUSTRY - 4.87%
American Express Co.
5.20% 03/29/96 45,000 44,818,000
- --------------------------------------------------------------------
General Electric Capital Corp.
5.42% 03/05/96 50,000 49,969,889
- --------------------------------------------------------------------
5.42% 03/06/96 100,000 99,924,722
- --------------------------------------------------------------------
5.41% 03/11/96 60,500 60,409,082
- --------------------------------------------------------------------
255,121,693
- --------------------------------------------------------------------
Total Financial 3,882,838,801
- --------------------------------------------------------------------
OTHER - 3.23%
DIVERSIFIED - 3.23%
BTR Dunlop Finance Inc.
5.16% 04/08/96 65,000 64,645,967
- --------------------------------------------------------------------
5.20% 04/09/96 40,000 39,774,667
- --------------------------------------------------------------------
5.18% 04/11/96 30,000 29,823,017
- --------------------------------------------------------------------
Cargill Inc.
5.20% 03/28/96 15,000 14,941,500
- --------------------------------------------------------------------
5.20% 03/29/96 20,000 19,919,111
- --------------------------------------------------------------------
Total Other 169,104,262
- --------------------------------------------------------------------
Total Commercial Paper 4,765,242,070
- --------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
PROMISSORY NOTE AGREEMENT - 0.51%
Goldman, Sachs & Co.(b)
5.559% 10/25/96 $ 27,000 $ 27,000,000
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.10%(c)
Daiwa Securities America, Inc.(d)
5.44% 03/01/96 48,531 48,531,392
- ------------------------------------------------------------------------------
Nesbitt Burns Securities, Inc.(e)
5.45% -- 75,000 75,000,000
- ------------------------------------------------------------------------------
Nomura Securities Co., Ltd.(f)
5.43% -- 300,000 300,000,000
- ------------------------------------------------------------------------------
Total Repurchase Agreements 423,531,392
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.68% 5,215,773,462(g)
- ------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES - 0.32% 16,764,237
- ------------------------------------------------------------------------------
NET ASSETS - 100.00% $5,232,537,699
==============================================================================
</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 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.
(c) 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.
(d) Joint repurchase agreement entered into 02/29/96 with a maturing value of
$311,474,334. Collateralized by $290,042,000 U.S. Treasury obligations, 0%
to 8.875% due 05/31/96 to 08/15/17.
(e) Open joint repurchase agreement entered into 12/07/95; however, either
party may terminate the agreement upon demand. Interest rates, par, and
collateral are redetermined daily. Collateralized by $409,113,000 U.S.
Treasury obligations, 0% to 6.25% due 05/15/96 to 02/15/25.
(f) Open joint repurchase agreement entered into 11/08/95; however, either
party may terminate the agreement upon demand. Interest rates, par, and
collateral are redetermined daily. Collateralized by $296,156,000 U.S.
Treasury obligations, 0% to 9.375% due 03/04/96 to 11/01/25.
(g) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $5,215,773,462
- ------------------------------------------------------------------------
Receivable from broker 40,000,000
- ------------------------------------------------------------------------
Interest receivable 289,545
- ------------------------------------------------------------------------
Investment for deferred compensation plan 47,393
- ------------------------------------------------------------------------
Other assets 1,243,716
- ------------------------------------------------------------------------
Total assets 5,257,354,116
- ------------------------------------------------------------------------
LIABILITIES:
Dividends payable 24,223,890
- ------------------------------------------------------------------------
Deferred compensation payable 47,393
- ------------------------------------------------------------------------
Accrued advisory fees 255,114
- ------------------------------------------------------------------------
Accrued distribution fees 126,016
- ------------------------------------------------------------------------
Accrued transfer agent fees 44,535
- ------------------------------------------------------------------------
Accrued operating expenses 119,469
- ------------------------------------------------------------------------
Total liabilities 24,816,417
- ------------------------------------------------------------------------
NET ASSETS $5,232,537,699
========================================================================
NET ASSETS:
Institutional Class $4,551,528,324
========================================================================
Private Investment Class $ 198,086,738
========================================================================
Personal Investment Class $ 125,969,330
========================================================================
Cash Management Class $ 280,401,184
========================================================================
Resource Class $ 76,552,123
========================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 4,551,540,347
========================================================================
Private Investment Class 198,086,054
========================================================================
Personal Investment Class 125,969,041
========================================================================
Cash Management Class 280,401,860
========================================================================
Resource Class 76,552,325
========================================================================
NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per share $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended February 29, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $135,138,613
- ------------------------------------------------------------------
EXPENSES:
Advisory fees 1,378,966
- ------------------------------------------------------------------
Custodian fees 142,154
- ------------------------------------------------------------------
Administrative services fees 61,752
- ------------------------------------------------------------------
Directors' fees and expenses 23,717
- ------------------------------------------------------------------
Transfer agent fees 169,993
- ------------------------------------------------------------------
Distribution fees (Note 2) 683,983
- ------------------------------------------------------------------
Other 344,959
- ------------------------------------------------------------------
Total expenses 2,805,524
- ------------------------------------------------------------------
Net investment income 132,333,089
- ------------------------------------------------------------------
Net realized gain on sales of investments 125
- ------------------------------------------------------------------
Net increase in net assets resulting from operations $132,333,214
==================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended February 29, 1996 and the year ended August 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
FEBRUARY 29, AUGUST 31,
1996 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 132,333,089 $ 241,891,385
- ----------------------------------------------------------------------------
Net realized gain on sales of investments 125 --
- ----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 132,333,214 241,891,385
- ----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (132,333,089) (241,891,385)
- ----------------------------------------------------------------------------
Capital stock transactions-net 1,031,457,462 86,066,761
- ----------------------------------------------------------------------------
Net increase in net assets 1,031,457,587 86,066,761
- ----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 4,201,080,112 4,115,013,351
- ----------------------------------------------------------------------------
End of period $5,232,537,699 $4,201,080,112
============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $5,232,549,627 $4,201,092,165
- ----------------------------------------------------------------------------
Undistributed net realized gain (loss) on
sales of investments (11,928) (12,053)
- ----------------------------------------------------------------------------
$5,232,537,699 $4,201,080,112
============================================================================
</TABLE>
See Notes to Financial Statements.
11
<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 Prime Portfolio 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 five different classes of
shares: the Institutional Class, the Private Investment Class, the Personal
Investment Class, the Cash Management Class and the Resource Class. Matters
affecting each class are voted on exclusively by the shareholders of each
class. The Portfolio's objective is the maximization of current income to the
extent consistent with the preservation of capital and the maintenance of
liquidity
The following is a summary of the 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 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 between 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.
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 $61,752 for such services. During the six
months ended February 29, 1996, the Fund paid A I M Institutional Fund
Services, Inc. ("AIFS") $168,661 pursuant to a shareholder and transfer agency
services agreement.
12
<PAGE>
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, the Cash Management Class and
the Resource Class of the Portfolio. The Plan provides that the Private
Investment Class, the Personal Investment Class, the Cash Management Class and
the Resource Class may pay FMC up to a maximum annual rate of 0.50%, 0.75%,
0.10% and 0.20%, respectively, of the average daily net assets attributable to
such class. Of this amount, 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, (b) 0.10% of the average daily net assets of the
Cash Management Class and (c) 0.20% of the average daily net assets of the
Resource 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, the Cash Management Class or the Resource 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, the Personal Investment Class, the Cash Management Class and
the Resource Class accrued $289,761, $278,888, $94,624 and $20,710,
respectively, for compensation to FMC 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 $8,841 for services rendered by Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel as counsel to the Fund's directors. A director of the Fund is a member
of that firm.
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 capital stock during the six months ended February 29, 1996 and the
year ended August 31, 1995 were as follows:
<TABLE>
<CAPTION>
FEBRUARY 29, 1996 AUGUST 31, 1995
-------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 16,444,792,865 $16,444,792,865 30,516,627,315 $30,516,627,315
- -------------------------------------------------------------------------------------------
Private Investment
Class 841,180,227 841,180,227 1,403,913,359 1,403,913,359
- -------------------------------------------------------------------------------------------
Personal Investment
Class 502,116,746 502,116,746 881,857,651 881,857,651
- -------------------------------------------------------------------------------------------
Cash Management Class 1,019,069,492 1,019,069,492 307,521,987 307,521,987
- -------------------------------------------------------------------------------------------
Resource Class* 220,605,332 220,605,332 -- --
- -------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 2,226,316 2,226,316 3,106,371 3,106,371
- -------------------------------------------------------------------------------------------
Private Investment
Class 3,242,014 3,242,014 4,691,704 4,691,704
- -------------------------------------------------------------------------------------------
Personal Investment
Class 2,863,183 2,863,183 4,299,720 4,299,720
- -------------------------------------------------------------------------------------------
Cash Management Class 4,994,934 4,994,934 896,094 896,094
- -------------------------------------------------------------------------------------------
Resource Class* 3,973 3,973 -- --
- -------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (15,648,183,681) (15,648,183,681) (30,847,783,300) (30,847,783,300)
- -------------------------------------------------------------------------------------------
Private Investment
Class (800,614,372) (800,614,372) (1,285,160,664) (1,285,160,664)
- -------------------------------------------------------------------------------------------
Personal Investment
Class (478,640,494) (478,640,494) (789,592,898) (789,592,898)
- -------------------------------------------------------------------------------------------
Cash Management Class (938,142,093) (938,142,093) (114,310,578) (114,310,578)
- -------------------------------------------------------------------------------------------
Resource Class* (144,056,980) (144,056,980) -- --
- -------------------------------------------------------------------------------------------
Net increase 1,031,457,462 $ 1,031,457,462 86,066,761 $ 86,066,761
===========================================================================================
</TABLE>
* The Resource Class commenced operations on January 16, 1996.
13
<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 and each of the years in the nine-year period ended August
31, 1995.
<TABLE>
<S> <C>
</TABLE>
<TABLE>
<CAPTION>
<CAPTION>
AUGUST 31,
-----------------------------------------------------------------------------------------------------------
FEBRUARY 29,
1996
------------
<S> <C>
Net asset value,
beginning of
period $ 1.00
- ---------------- ----------
Income from
investment
operations:
Net investment
income 0.03
- ---------------- ----------
Less
distributions:
Dividends from
net
investment
income (0.03)
- ---------------- ----------
Net asset value,
end of period $ 1.00
================ ==========
Total return 5.73%(a)
- ---------------- ----------
Ratios/supplemental
data:
Net assets, end
of period (000s
omitted) $4,551,528
- ---------------- ----------
Ratio of
expenses to
average net
assets 0.09%(b)
- ---------------- ----------
Ratio of net
investment
income to
average net
assets 5.65%(b)
- ---------------- ----------
1995 1994 1993 1992 1991 1990 1989 1988 1987
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Income from
investment
operations:
Net investment
income 0.06 0.04 0.03 0.04 0.07 0.08 0.09 0.07 0.06
- -------------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Less
distributions:
Dividends from
net
investment
income (0.06) (0.04) (0.03) (0.04) (0.07) (0.08) (0.09) (0.07) (0.06)
- -------------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==================== =========== =========== =========== =========== =========== =========== =========== =========== ===========
Total return 5.80% 3.64% 3.20% 4.44% 7.11% 8.72% 9.42% 7.34% 6.39%
==================== =========== =========== =========== =========== =========== =========== =========== =========== ===========
Ratios/supplemental
data:
Net assets, end
of period (000s
omitted) $3,752,693 $4,080,753 $4,349,945 $3,993,340 $6,108,991 $6,475,123 $7,003,546 $5,841,901 $4,822,758
==================== =========== =========== =========== =========== =========== =========== =========== =========== ===========
Ratio of
expenses to
average net
assets 0.09% 0.08% 0.07% 0.08% 0.07% 0.07% 0.08% 0.09% 0.08%
==================== =========== =========== =========== =========== =========== =========== =========== =========== ===========
Ratio of net
investment
income to
average net
assets 5.64% 3.58% 3.15% 4.43% 6.89% 8.39% 9.07% 7.11% 6.22%
==================== =========== =========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
(a) Annualized.
(b) Ratios are annualized and based on average net assets of $4,152,834,938.
14
<PAGE>
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15
<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
Gary T. Crum Sr. Vice President Prime 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
</TABLE>
