<PAGE>
[AIM LOGO APPEARS HERE] Dear Shareholder:
[PHOTO of As the fiscal year covered by this report
Charles T. Bauer, opened, financial markets were still in
LETTER Chairman of the the grip of the near-meltdown occasioned
TO OUR Board of The Fund by 1998's Asian crises. The situation led
SHAREHOLDERS APPEARS HERE the Federal Reserve Board (the Fed) to
reduce the short-term federal funds
target rate three times late in 1998. These Fed moves were not
motivated by a slowdown in the U.S. economy; rather, they
represented a strenuous effort to reestablish liquidity in
markets worldwide. The U.S. economy continued to move ahead at
a brisk pace, exhibiting the unusual combination of strong
growth coupled with low inflation.
However, this scenario changed slightly as some monthly
economic indicators showed inflationary tendencies in certain
commodity prices. This and the unwinding of the 1998 global
crisis (evident in the stabilization of the foreign markets)
compelled the Fed to increase short-term interest rates twice
late in the fiscal year. The Fed increased the federal funds
rate 25 basis points at both the June 30 and August 24 Federal
Open Market Committee meetings. On August 24, the Fed also
increased the discount rate by 25 basis points to 4.75%. Many
investors felt that part of the Fed's motivation in raising
rates before the fourth quarter was to stabilize the markets
pre-emptively. The Fed has committed to provide as much as $50
billion in cash to banks at year-end, along with special
liquidity facilities so brokers can finance their inventories.
YOUR INVESTMENT PORTFOLIO
As of August 31, 1999, the performance of the portfolio's Cash
Management Class compared very favorably with the performance
reported for comparative indexes, as shown in the table.
This excellent record can be attributed to the portfolio's
disciplined approach of maintaining a laddered 60-day maximum
maturity schedule. This structure allows the portfolio to
respond to higher interest-rate levels more quickly than other
funds with longer maturity schedules, and it also allows the
investor to take advantage of higher yields through quarter-
ends and other volatile market periods. The portfolio's
weighted average maturity was maintained in the 15- to 25-day
range during the period. At the end of August 1999, the WAM
stood at 23 days. The portfolio will continue to maintain a
relatively short WAM to remain flexible in volatile interest-
rate periods. Net assets of the Cash Management Class stood at
$1.25 billion as of August 31, 1999.
The portfolio continues to hold the highest credit-quality
ratings given by the two most widely known credit-rating
agencies: AAAm from Standard & Poor's and Aaa from Moody's. In
addition, the portfolio received the highest rating (AAA) from
Fitch IBCA. These historical ratings are based on an analysis
of the portfolio's credit quality, composition, management and
weekly portfolio reviews. With the addition of the AAA Fitch
rating, AIM has
<TABLE>
<CAPTION>
Yields as of 8/31/99
Average Seven-Day
Monthly Yield Yield
<S> <C> <C>
Prime Portfolio
Cash Management Class 5.06% 5.17%
IBC Money Fund Averages(TM) -
First-Tier Institutions Only 4.82% 4.92%
IBC Money Fund Averages(TM) -
Total Institutions Only 4.70% 4.81%
</TABLE>
(continued)
<PAGE>
become the largest multi-fund complex to have all its
institutional money market portfolios given the highest rating
by three nationally recognized ratings agencies.
The Prime Portfolio seeks to maximize current income to the
extent consistent with preservation of capital and maintenance
of liquidity. It invests in high-grade taxable money market
instruments with maturities of 60 days or fewer, including U.S.
government obligations, bank obligations, commercial paper and
selected repurchase-agreement securities. (An investment in a
money market fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
Although a money market fund seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose
money by investing in the fund.)
OUTLOOK FOR THE FUTURE
Although the U.S. gross domestic product growth rate fell
from 2.3% to 1.6% at the end of the second quarter, the
expected annualized growth rate for the third quarter is 3.5%.
The last two Fed rate increases have so far had little effect
on the U.S. economy, which continues full steam ahead. With two
more Fed meetings scheduled in 1999 (November 16 and December
21), investors are speculating about another Fed tightening.
Liquidity is the primary concern around the Y2K issue. Because
no one knows where the cash will be flowing by year-end, money
managers are dutifully estimating the anticipated high
withdrawal volume from financial institutions. Despite these
concerns, another tightening is still quite possible. Another
increase would position the federal funds target rate exactly
where it was before 1998's international crisis.
We are pleased to send you this annual report on your
investment. AIM is committed to the primary goals of safety,
liquidity and yield in institutional fund management. We are
also committed to customer service and are ready to respond to
your comments about this report. If you have any questions,
please contact one of our representatives at 800-659-1005. We
are happy to be of service.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
2
<PAGE>
SCHEDULE OF INVESTMENTS
August 31, 1999
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER - 82.48%(a)
BASIC INDUSTRIES - 2.62%
CHEMICALS - 0.63%
Du Pont (E.I.) de Nemours and Co.
5.05% 09/03/99 $ 25,000 $ 24,992,985
- -------------------------------------------------------------------------------
Henkel Corp.
5.07% 09/02/99 30,000 29,995,775
- -------------------------------------------------------------------------------
54,988,760
- -------------------------------------------------------------------------------
METAL MINING - 1.99%
Rio Tinto America, Inc.
5.12% 09/01/99 50,000 50,000,000
- -------------------------------------------------------------------------------
5.11% 09/07/99 50,000 49,957,417
- -------------------------------------------------------------------------------
5.27% 09/29/99 42,300 42,126,617
- -------------------------------------------------------------------------------
5.27% 09/30/99 32,000 31,864,151
- -------------------------------------------------------------------------------
173,948,185
- -------------------------------------------------------------------------------
Total Basic Industries 228,936,945
- -------------------------------------------------------------------------------
CAPITAL GOODS - 0.83%
ELECTRICAL EQUIPMENT - 0.83%
Siemens Capital Corp.
5.12% 09/24/99 72,775 72,536,944
- -------------------------------------------------------------------------------
CONSUMER DURABLES - 1.43%
AUTOMOBILE - 1.43%
Daimler-Chrysler North America Holding Corp.
5.09% 09/09/99 50,000 49,943,444
- -------------------------------------------------------------------------------
5.27% 10/12/99 25,000 24,849,951
- -------------------------------------------------------------------------------
5.29% 10/22/99 25,000 24,812,646
- -------------------------------------------------------------------------------
5.28% 10/26/99 25,000 24,798,333
- -------------------------------------------------------------------------------
Total Consumer Durables 124,404,374
- -------------------------------------------------------------------------------
CONSUMER NONDURABLES - 2.61%
HOUSEHOLD PRODUCTS - 2.61%
Colgate-Palmolive Co.
5.26% 09/30/99 67,000 66,716,106
- -------------------------------------------------------------------------------
Kimberly-Clark Worldwide, Inc.
5.27% 10/13/99 33,021 32,817,976
- -------------------------------------------------------------------------------
Procter & Gamble Co.
5.10% 09/13/99 50,000 49,915,000
- -------------------------------------------------------------------------------
5.14% 09/20/99 28,500 28,422,686
- -------------------------------------------------------------------------------
5.16% 09/23/99 50,000 49,842,333
- -------------------------------------------------------------------------------
Total Consumer Nondurables 227,714,101
- -------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
ENERGY - 1.94%
OIL & GAS - 1.94%
Chevron U. S. A., Inc.
5.27% 10/29/99 $ 50,000 $ 49,575,472
- ---------------------------------------------------------------------
Koch Industries, Inc.
5.07% 09/01/99 50,000 50,000,000
- ---------------------------------------------------------------------
Petrofina Delaware, Inc.
5.13% 09/27/99 20,000 19,925,900
- ---------------------------------------------------------------------
5.30% 10/25/99 50,000 49,602,500
- ---------------------------------------------------------------------
Total Energy 169,103,872
- ---------------------------------------------------------------------
FINANCIAL - 71.52%
ASSET-BACKED SECURITIES-COMMERCIAL LOANS/LEASES - 4.98%
Centric Capital Corp.
5.13% 09/13/99 40,000 39,931,600
- ---------------------------------------------------------------------
5.14% 09/23/99 40,742 40,614,025
- ---------------------------------------------------------------------
5.16% 09/28/99 40,000 39,845,200
- ---------------------------------------------------------------------
5.20% 09/29/99 50,000 49,797,778
- ---------------------------------------------------------------------
5.30% 09/29/99 80,226 79,895,291
- ---------------------------------------------------------------------
5.35% 10/06/99 20,000 19,895,972
- ---------------------------------------------------------------------
5.31% 10/08/99 44,000 43,759,870
- ---------------------------------------------------------------------
Fleet Funding Corp.
5.12% 09/17/99 54,655 54,530,629
- ---------------------------------------------------------------------
5.31% 10/12/99 66,381 65,979,561
- ---------------------------------------------------------------------
434,249,926
- ---------------------------------------------------------------------
ASSET-BACKED SECURITIES-CONSUMER RECEIVABLES - 4.00%
Old Line Funding Corp.
5.33% 10/07/99 25,851 25,713,214
- ---------------------------------------------------------------------
Riverwoods Funding Corp.
5.17% 09/08/99 40,000 39,959,789
- ---------------------------------------------------------------------
5.12% 09/24/99 50,000 49,836,444
- ---------------------------------------------------------------------
5.13% 09/27/99 50,000 49,814,750
- ---------------------------------------------------------------------
5.20% 09/27/99 50,000 49,812,222
- ---------------------------------------------------------------------
5.30% 10/01/99 50,000 49,779,167
- ---------------------------------------------------------------------
Thunder Bay Funding Inc.
5.12% 09/10/99 42,273 42,218,891
- ---------------------------------------------------------------------
5.14% 09/17/99 42,280 42,183,414
- ---------------------------------------------------------------------
349,317,891
- ---------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
ASSET-BACKED SECURITIES-MULTI-PURPOSE - 31.69%
Aspen Funding Corp.
5.30% 10/05/99 $ 50,000 $ 49,749,722
- ----------------------------------------------------------------------------
5.34% 10/15/99 100,000 99,347,334
- ----------------------------------------------------------------------------
5.35% 10/22/99 50,000 49,621,042
- ----------------------------------------------------------------------------
Clipper Receivables Corp.
5.13% 09/03/99 50,000 49,985,750
- ----------------------------------------------------------------------------
5.12% 09/07/99 50,000 49,957,333
- ----------------------------------------------------------------------------
5.30% 10/05/99 50,000 49,749,722
- ----------------------------------------------------------------------------
5.30% 10/08/99 80,000 79,564,222
- ----------------------------------------------------------------------------
Corporate Receivables Corp.
5.12% 09/08/99 50,000 49,950,222
- ----------------------------------------------------------------------------
5.12% 09/15/99 50,000 49,900,444
- ----------------------------------------------------------------------------
5.13% 09/15/99 50,000 49,900,250
- ----------------------------------------------------------------------------
5.12% 09/16/99 50,000 49,893,333
- ----------------------------------------------------------------------------
5.11% 09/20/99 50,000 49,865,153
- ----------------------------------------------------------------------------
5.13% 09/21/99 30,000 29,914,500
- ----------------------------------------------------------------------------
5.13% 09/23/99 50,000 49,843,250
- ----------------------------------------------------------------------------
5.30% 10/04/99 75,000 74,635,625
- ----------------------------------------------------------------------------
5.30% 10/08/99 50,000 49,727,639
- ----------------------------------------------------------------------------
Edison Asset Securitization, L.L.C.
5.16% 09/14/99 50,000 49,906,833
- ----------------------------------------------------------------------------
Enterprise Funding Corp.
5.13% 09/10/99 50,000 49,935,875
- ----------------------------------------------------------------------------
5.17% 09/28/99 24,693 24,597,253
- ----------------------------------------------------------------------------
5.20% 09/28/99 53,999 53,788,404
- ----------------------------------------------------------------------------
5.28% 09/30/99 25,185 25,077,880
- ----------------------------------------------------------------------------
5.35% 10/07/99 17,632 17,537,669
- ----------------------------------------------------------------------------
Falcon Asset Securitization Corp.
4.13% 09/09/99 50,000 49,943,000
- ----------------------------------------------------------------------------
5.16% 09/15/99 40,000 39,919,733
- ----------------------------------------------------------------------------
5.17% 09/27/99 25,000 24,906,653
- ----------------------------------------------------------------------------
Mont Blanc Capital Corp.
5.35% 10/19/99 40,000 39,714,667
- ----------------------------------------------------------------------------
Monte Rosa Capital Corp.
5.35% 10/13/99 92,000 91,425,767
- ----------------------------------------------------------------------------
5.35% 10/15/99 25,000 24,836,528
- ----------------------------------------------------------------------------
5.35% 10/18/99 47,000 46,671,718
- ----------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
ASSET-BACKED SECURITIES-MULTI-PURPOSE - (CONTINUED)
Newport Funding Corp.
5.13% 09/16/99 $ 50,000 $ 49,893,125
- ---------------------------------------------------------------------------
5.13% 09/21/99 50,000 49,857,500
- ---------------------------------------------------------------------------
5.30% 10/07/99 100,000 99,470,000
- ---------------------------------------------------------------------------
5.35% 10/22/99 50,000 49,621,042
- ---------------------------------------------------------------------------
Park Avenue Receivables Corp.
5.12% 09/10/99 35,000 34,955,200
- ---------------------------------------------------------------------------
5.14% 09/22/99 40,119 39,998,710
- ---------------------------------------------------------------------------
5.19% 09/22/99 50,000 49,848,625
- ---------------------------------------------------------------------------
5.35% 10/12/99 29,976 29,793,355
- ---------------------------------------------------------------------------
Preferred Receivables Funding Corp.
5.12% 09/13/99 25,000 24,957,333
- ---------------------------------------------------------------------------
5.13% 09/13/99 20,000 19,965,800
- ---------------------------------------------------------------------------
5.13% 09/16/99 50,000 49,893,125
- ---------------------------------------------------------------------------
5.12% 09/20/99 10,000 9,972,978
- ---------------------------------------------------------------------------
5.30% 10/05/99 24,800 24,675,862
- ---------------------------------------------------------------------------
Quincy Capital Corp.
5.13% 09/07/99 50,000 49,957,250
- ---------------------------------------------------------------------------
5.12% 09/08/99 31,655 31,623,486
- ---------------------------------------------------------------------------
5.12% 09/14/99 88,620 88,456,151
- ---------------------------------------------------------------------------
5.13% 09/14/99 27,151 27,100,703
- ---------------------------------------------------------------------------
5.14% 09/16/99 26,066 26,010,175
- ---------------------------------------------------------------------------
5.12% 09/17/99 30,226 30,157,219
- ---------------------------------------------------------------------------
5.17% 09/20/99 29,997 29,915,150
- ---------------------------------------------------------------------------
5.30% 10/06/99 74,274 73,891,283
- ---------------------------------------------------------------------------
5.30% 10/07/99 57,131 56,828,206
- ---------------------------------------------------------------------------
5.35% 10/12/99 55,101 54,765,266
- ---------------------------------------------------------------------------
Receivables Capital Corp.
5.14% 09/16/99 20,000 19,957,167
- ---------------------------------------------------------------------------
5.30% 10/06/99 53,193 52,918,908
- ---------------------------------------------------------------------------
5.30% 10/08/99 83,865 83,408,169
- ---------------------------------------------------------------------------
Sheffield Receivables Corp.
5.15% 09/24/99 22,500 22,425,969
- ---------------------------------------------------------------------------
5.22% 09/28/99 42,800 42,632,438
- ---------------------------------------------------------------------------
5.28% 10/04/99 80,400 80,010,864
- ---------------------------------------------------------------------------
5.38% 10/15/99 42,200 41,922,511
- ---------------------------------------------------------------------------
2,764,751,091
- ---------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
ASSET-BACKED SECURITIES-TRADE RECEIVABLES - 11.33%
Asset Securitization Cooperative Corp.
5.12% 09/17/99 $ 30,000 $ 29,931,733
- ------------------------------------------------------------------------------
5.12% 09/20/99 50,000 49,864,889
- ------------------------------------------------------------------------------
5.15% 09/27/99 50,000 49,814,028
- ------------------------------------------------------------------------------
Ciesco, L.P.
5.16% 09/22/99 50,000 49,849,500
- ------------------------------------------------------------------------------
Corporate Asset Funding Co., Inc.
5.12% 09/01/99 20,000 20,000,000
- ------------------------------------------------------------------------------
5.12% 09/09/99 50,000 49,943,111
- ------------------------------------------------------------------------------
5.16% 09/23/99 40,000 39,873,867
- ------------------------------------------------------------------------------
5.20% 09/28/99 75,000 74,707,500
- ------------------------------------------------------------------------------
5.31% 10/08/99 50,000 49,727,125
- ------------------------------------------------------------------------------
Delaware Funding Corp.
5.12% 09/10/99 25,000 24,968,000
- ------------------------------------------------------------------------------
5.13% 09/15/99 25,059 25,009,007
- ------------------------------------------------------------------------------
5.18% 09/20/99 32,031 31,943,431
- ------------------------------------------------------------------------------
5.33% 10/08/99 66,368 66,004,432
- ------------------------------------------------------------------------------
Variable Funding Capital
5.12% 09/07/99 50,000 49,957,333
- ------------------------------------------------------------------------------
5.11% 09/13/99 25,000 24,957,416
- ------------------------------------------------------------------------------
5.13% 09/14/99 20,000 19,962,950
- ------------------------------------------------------------------------------
5.30% 10/07/99 59,075 58,761,903
- ------------------------------------------------------------------------------
5.34% 10/13/99 100,000 99,377,000
- ------------------------------------------------------------------------------
5.34% 10/18/99 50,000 49,651,417
- ------------------------------------------------------------------------------
5.34% 10/19/99 50,000 49,644,000
- ------------------------------------------------------------------------------
5.35% 10/22/99 75,000 74,431,563
- ------------------------------------------------------------------------------
988,380,205
- ------------------------------------------------------------------------------
BANKING - 3.48%
Canadian Imperial Holdings, Inc.
5.10% 09/01/99 30,000 30,000,000
- ------------------------------------------------------------------------------
Citicorp
5.15% 09/21/99 70,000 69,799,722
- ------------------------------------------------------------------------------
Banc One Financial Corp.
5.11% 09/08/99 50,000 49,950,319
- ------------------------------------------------------------------------------
5.13% 09/13/99 35,000 34,940,150
- ------------------------------------------------------------------------------
5.28% 10/04/99 45,000 44,782,200
- ------------------------------------------------------------------------------
5.26% 10/12/99 15,000 14,910,142
- ------------------------------------------------------------------------------
5.34% 10/18/99 60,000 59,581,700
- ------------------------------------------------------------------------------
303,964,233
- ------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
BROKERAGE/INVESTMENTS - 1.15%
Bear, Stearns & Co., Inc.
5.12% 09/08/99 $ 50,000 $ 49,950,222
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.
5.30% 10/01/99 50,000 49,779,167
- --------------------------------------------------------------------------------
99,729,389
================================================================================
FINANCIAL (DIVERSIFIED) - 12.62%
Ameritech Capital Funding Corp.
5.08% 09/02/99 50,000 49,992,944
- --------------------------------------------------------------------------------
Associates First Capital Corp.
5.15% 09/21/99 50,000 49,856,944
- --------------------------------------------------------------------------------
5.14% 09/23/99 40,000 39,874,356
- --------------------------------------------------------------------------------
5.33% 10/20/99 50,000 49,637,264
- --------------------------------------------------------------------------------
5.33% 10/26/99 30,000 29,755,708
- --------------------------------------------------------------------------------
BellSouth Capital Funding Corp.
5.12% 09/22/99 50,000 49,850,667
- --------------------------------------------------------------------------------
CIT Group Holdings, Inc. (The)
5.30% 10/26/99 50,000 49,595,139
- --------------------------------------------------------------------------------
Commercial Credit Co.
5.11% 09/10/99 50,000 49,936,125
- --------------------------------------------------------------------------------
Deere (John) Capital Corp.
5.13% 09/17/99 50,000 49,886,000
- --------------------------------------------------------------------------------
Deutsche Bank Financial Inc.
5.10% 09/03/99 50,000 49,985,833
- --------------------------------------------------------------------------------
Dresdner U.S. Finance, Inc.
5.11% 09/02/99 50,000 49,992,903
- --------------------------------------------------------------------------------
Ford Motor Credit Co.
5.11% 09/03/99 50,000 49,985,806
- --------------------------------------------------------------------------------
5.13% 09/15/99 50,000 49,900,250
- --------------------------------------------------------------------------------
5.30% 10/06/99 50,000 49,742,361
- --------------------------------------------------------------------------------
General Electric Capital Services
5.31% 10/19/99 100,000 99,292,000
- --------------------------------------------------------------------------------
5.30% 10/20/99 100,000 99,278,612
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.
5.31% 10/20/99 50,000 49,638,625
- --------------------------------------------------------------------------------
International Lease Finance Corp.
5.08% 09/09/99 50,000 49,943,556
- --------------------------------------------------------------------------------
National Rural Utilities Cooperative Finance Corp.
5.24% 10/12/99 35,000 34,791,128
- --------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
UBS Finance (Delaware) Inc.
5.11% 09/02/99 $ 50,000 $ 49,992,903
- --------------------------------------------------------------------------------
5.25% 10/12/99 50,000 49,701,042
- --------------------------------------------------------------------------------
1,100,630,166
- --------------------------------------------------------------------------------
INSURANCE (LIFE) - 0.57%
Prudential Funding Corp.
5.16% 09/21/99 50,000 49,856,667
- --------------------------------------------------------------------------------
PERSONAL CREDIT - 1.14%
American Express Credit Corp.
5.07% 09/01/99 50,000 50,000,000
- --------------------------------------------------------------------------------
5.27% 10/26/99 50,000 49,597,431
- --------------------------------------------------------------------------------
99,597,431
- --------------------------------------------------------------------------------
MULTIPLE INDUSTRY - 0.56%
American General Corp.
5.31% 10/25/99 50,000 49,601,750
- --------------------------------------------------------------------------------
Total Financial 6,240,078,749
- --------------------------------------------------------------------------------
TECHNOLOGY - 0.39%
COMPUTERS (SOFTWARE & SERVICES) - 0.39%
Electronic Data Systems Corp.
5.13% 09/24/99 33,550 33,440,040
- --------------------------------------------------------------------------------
Total Technology 33,440,040
- --------------------------------------------------------------------------------
UTILITIES - 1.14%
TELEPHONE - 1.14%
BellSouth Telecommunications, Inc.
5.28% 10/15/99 50,000 49,677,333
- --------------------------------------------------------------------------------
SBC Communications, Inc.
5.28% 10/27/99 50,000 49,589,333
- --------------------------------------------------------------------------------
Total Utilities 99,266,666
- --------------------------------------------------------------------------------
Total Commercial Paper (Cost - $7,195,481,691) 7,195,481,691
- --------------------------------------------------------------------------------
MASTER NOTE AGREEMENT - 3.57%
Merrill Lynch Mortgage Capital, Inc.
5.82%(b) 08/17/00 311,525 311,525,000
- --------------------------------------------------------------------------------
Total Master Note Agreement (Cost - $311,525,000) 311,525,000
- --------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
MEDIUM TERM NOTE - 0.45%
Toyota Motor Credit Corp.
5.26% 09/29/99 $ 40,000 $ 39,996,709
- ---------------------------------------------------------------------------
Total Medium Term Note (cost - $39,996,709) 39,996,709
- ---------------------------------------------------------------------------
Total Investments (excluding Repurchase Agreements) 7,547,003,400
- ---------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 13.95%(c)
Dean Witter Reynolds Inc.
5.51%(d) 09/01/99 163,902 163,901,609
- ---------------------------------------------------------------------------
Goldman, Sachs & Co.
5.40%(e) 01/24/00 100,000 100,000,000
- ---------------------------------------------------------------------------
4.625%(f) 01/26/00 100,000 100,000,000
- ---------------------------------------------------------------------------
Salomon Smith Barney Inc.
5.51%(g) -- 853,000 853,000,000
- ---------------------------------------------------------------------------
Total Repurchase Agreements (Cost - $1,216,901,609) 1,216,901,609
- ---------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.45% 8,763,905,009(h)
- ---------------------------------------------------------------------------
LIABILITIES LESS OTHER ASSETS - (0.45%) (39,680,318)
- ---------------------------------------------------------------------------
NET ASSETS - 100.00% $8,724,224,691
===========================================================================
</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) Master Note Purchase Agreement may be terminated by either party upon one
business day prior written 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 08/31/99.
(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 is at least 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, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates.
(d) Joint repurchase agreement entered into 08/31/99 with a maturing value of
$300,045,913. Collateralized by $312,373,000 U.S. Government obligations,
0% to 8.25% due 09/14/99 to 05/15/29 with an aggregate market value at
08/31/99 of $306,004,298.
(e) Term repurchase agreement entered into 07/29/99; however, either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $105,904,376 U.S. Government Agency
securities, 5.00% to 7.50% due 09/01/06 to 08/01/29 with an aggregate
market value at 08/31/99 of $102,000,000.
(f) Term repurchase agreement entered into 08/13/99; however, either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $106,703,765 U.S. Government Agency
securities, 5.50% to 8.00% due 01/01/05 to 08/01/29 with an aggregate
market value at 08/31/99 of $102,000,001.
(g) Open repurchase agreement. Either party may terminate the agreement upon
demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $880,779,143 U.S. Government obligations, 0% to 6.85% due
10/21/99 to 01/15/29 with an aggregate market value at 08/31/99 of
$889,114,611.
(h) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $7,547,003,400
- ------------------------------------------------------------------------
Repurchase agreements 1,216,901,609
- ------------------------------------------------------------------------
Interest receivable 2,570,288
- ------------------------------------------------------------------------
Investment for deferred compensation plan 133,814
- ------------------------------------------------------------------------
Other assets 473,146
- ------------------------------------------------------------------------
Total assets 8,767,082,257
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Dividends 41,245,353
- ------------------------------------------------------------------------
Deferred compensation 133,814
- ------------------------------------------------------------------------
Accrued administrative services fees 37,708
- ------------------------------------------------------------------------
Accrued advisory fees 455,928
- ------------------------------------------------------------------------
Accrued distribution fees 409,769
- ------------------------------------------------------------------------
Accrued transfer agent fees 92,318
- ------------------------------------------------------------------------
Accrued operating expenses 482,676
- ------------------------------------------------------------------------
Total liabilities 42,857,566
- ------------------------------------------------------------------------
NET ASSETS $8,724,224,691
========================================================================
NET ASSETS:
Institutional Class $6,210,056,165
========================================================================
Private Investment Class $ 384,893,974
========================================================================
Personal Investment Class $ 87,753,556
========================================================================
Cash Management Class $1,253,799,271
========================================================================
Reserve Class $ 121,782,725
========================================================================
Resource Class $ 665,939,000
========================================================================
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Institutional Class 6,210,062,703
========================================================================
Private Investment Class 384,894,228
========================================================================
Personal Investment Class 87,753,580
========================================================================
Cash Management Class 1,253,799,009
========================================================================
Reserve Class 121,782,724
========================================================================
Resource Class 665,938,785
========================================================================
NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per share $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
STATEMENT OF OPERATIONS
For the year ended August 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 488,890,186
===========================================================================
EXPENSES:
Advisory fees 5,205,023
- ---------------------------------------------------------------------------
Custodian fees 419,158
- ---------------------------------------------------------------------------
Administrative services fees 258,934
- ---------------------------------------------------------------------------
Directors' fees and expenses 63,108
- ---------------------------------------------------------------------------
Transfer agent fees 1,057,109
- ---------------------------------------------------------------------------
Distribution fees (Note 2) 5,691,057
- ---------------------------------------------------------------------------
Other 1,130,340
===========================================================================
Total expenses 13,824,729
===========================================================================
Less: Fee waivers (1,675,069)
===========================================================================
Net expenses 12,149,660
===========================================================================
Net investment income 476,740,526
===========================================================================
Net increase in net assets resulting from operations $ 476,740,526
===========================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 476,740,526 $ 423,578,403
===========================================================================
Net increase in net assets resulting from
operations 476,740,526 423,578,403
===========================================================================
Distributions to shareholders from net
investment income:
Institutional Class (364,347,968) (334,784,531)
- ---------------------------------------------------------------------------
Private Investment Class (18,159,703) (14,188,012)
- ---------------------------------------------------------------------------
Personal Investment Class (6,869,222) (5,889,522)
- ---------------------------------------------------------------------------
Cash Management Class (57,786,622) (49,287,200)
- ---------------------------------------------------------------------------
Reserve Class (1,195,139) (19,429,138)
- ---------------------------------------------------------------------------
Resource Class (28,381,872) --
- ---------------------------------------------------------------------------
Capital stock transactions-net (See Note 4) 884,926,848 984,587,209
- ---------------------------------------------------------------------------
Net increase in net assets 884,926,848 984,587,209
- ---------------------------------------------------------------------------
NET ASSETS:
Beginning of period 7,839,297,843 6,854,710,634
- ---------------------------------------------------------------------------
End of period $8,724,224,691 $7,839,297,843
===========================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $8,724,231,029 $7,839,304,181
- ---------------------------------------------------------------------------
Undistributed net realized gain (loss) on
sales of investments (6,338) (6,338)
- ---------------------------------------------------------------------------
$8,724,224,691 $7,839,297,843
===========================================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 1999
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"), with the assets, liabilities and operations of each portfolio
accounted for separately. The Portfolio currently offers six different classes
of shares: the Institutional Class, the Private Investment Class, the Personal
Investment Class, the Cash Management Class, the Reserve Class and the Resource
Class. Matters affecting each class are voted on exclusively by the
shareholders of each class. The Portfolio is a money market fund whose
objective is the maximization of current income to the extent consistent with
the preservation of capital and the maintenance of liquidity.
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. 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's 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 - Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
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 investment 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>
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended August 31, 1999, AIM was
paid $258,934 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Fund. During the year ended August 31, 1999, AFS
was paid $903,145 for such services.
13
<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, the
Reserve Class, and the Resource Class of the Portfolio. The Plan provides that
the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class, and the Resource Class pay up to a 0.50%,
0.75%, 0.10%, 1.00%, and 0.20%, 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, Personal Investment Class, and the Reserve 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, the Reserve Class, or the Resource Class. Any amounts not paid as a
service fee under such Plan would constitute an asset-based sales charge. The
Plan also imposes a cap on the total amount of sales charges, including asset-
based sales charges, that may be paid by the Portfolio with respect to each
class. During the year ended August 31, 1999, the Private Investment Class, the
Personal Investment Class, the Cash Management Class, the Reserve Class, and
the Resource Class paid $1,155,429, $758,574, $935,042, $940,270, and $226,673,
respectively, as compensation under the Plan. FMC waived fees of $1,675,069 for
the same period. Certain officers and directors of the Fund are officers of
AIM, FMC and AFS.
During the year ended August 31, 1999, the Portfolio paid legal fees of
$20,924 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as
counsel to the Board of Directors. A member of that firm is a director of the
Fund.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid to directors who are not an
"interested person" of AIM. The Fund may invest 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 year ended August 31, 1999 and 1998
were as follows.
<TABLE>
<CAPTION>
1999 1998
------------------------------------ ---------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 109,937,908,800 $ 109,937,908,800 70,953,094,776 $ 70,953,094,776
- -------------------------------------------------------------------------------------------------------
Private Investment Class 3,170,645,036 3,170,645,036 2,265,361,261 2,265,361,261
- -------------------------------------------------------------------------------------------------------
Personal Investment Class 1,878,724,152 1,878,724,152 1,442,106,992 1,442,106,992
- -------------------------------------------------------------------------------------------------------
Cash Management Class 12,368,423,760 12,368,423,760 10,266,695,255 10,266,695,255
- -------------------------------------------------------------------------------------------------------
Reserve Class* 427,972,822 427,972,822 -- --
- -------------------------------------------------------------------------------------------------------
Resource Class 4,803,364,271 4,803,364,271 5,571,480,416 5,571,480,416
- -------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Institutional Class 27,367,341 27,367,341 25,834,568 25,834,568
- -------------------------------------------------------------------------------------------------------
Private Investment Class 9,729,854 9,729,854 6,616,509 6,616,509
- -------------------------------------------------------------------------------------------------------
Personal Investment Class 7,060,491 7,060,491 5,817,504 5,817,504
- -------------------------------------------------------------------------------------------------------
Cash Management Class 43,017,293 43,017,293 27,781,043 27,781,043
- -------------------------------------------------------------------------------------------------------
Reserve Class* 763,247 763,247 -- --
- -------------------------------------------------------------------------------------------------------
Resource Class 24,478,821 24,478,821 16,446,253 16,446,253
- -------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (109,599,031,637) (109,599,031,637) (70,728,159,503) (70,728,159,503)
- -------------------------------------------------------------------------------------------------------
Private Investment Class (3,090,291,929) (3,090,291,929) (2,212,613,562) (2,212,613,562)
- -------------------------------------------------------------------------------------------------------
Personal Investment Class (1,938,117,905) (1,938,117,905) (1,405,052,971) (1,405,052,971)
- -------------------------------------------------------------------------------------------------------
Cash Management Class (12,019,849,792) (12,019,849,792) (10,199,573,686) (10,199,573,686)
- -------------------------------------------------------------------------------------------------------
Reserve Class* (306,953,345) (306,953,345) -- --
- -------------------------------------------------------------------------------------------------------
Resource Class (4,860,284,432) (4,860,284,432) (5,051,247,646) (5,051,247,646)
- -------------------------------------------------------------------------------------------------------
Net increase 884,926,848 $ 884,926,848 984,587,209 $ 984,587,209
=======================================================================================================
</TABLE>
* The Reserve Class commenced sales on January 4, 1999.
14
<PAGE>
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Cash Management Class
capital stock outstanding for each of the years in the five-year period ended
August 31, 1999.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---------- -------- -------- -------- --------
<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 0.05 0.05 0.05 0.06
- ------------------------------------------------------- ---------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.05) (0.05) (0.05) (0.05) (0.06)
- ------------------------------------------------------- ---------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======================================================= ========== ======== ======== ======== ========
Total return 5.07% 5.62% 5.45% 5.55% 5.71%
======================================================= ========== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end ofperiod (000s omitted) $1,253,799 $862,207 $767,304 $507,247 $194,479
======================================================= ========== ======== ======== ======== ========
Ratio of expenses to average net assets(a) 0.17%(b) 0.17% 0.17% 0.17% 0.17%
======================================================= ========== ======== ======== ======== ========
Ratio of net investment income to average net assets(c) 4.94%(b) 5.48% 5.33% 5.38% 5.69%
======================================================= ========== ======== ======== ======== ========
</TABLE>
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.19%, 0.19%, 0.19%, 0.19% and 0.32% for the periods 1999-1995,
respectively.
(b) Ratios based on average net assets of $1,168,802,213.
(c) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.92%, 5.46%, 5.31%, 5.36% and 5.54% for the periods
1999-1995, respectively.
- --------------------------------------------------------------------------------
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 Prime
Portfolio (a series portfolio of Short-Term Investments Co.), including the
schedule of investments, as of August 31, 1999, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
reponsibility 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, 1999 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
Prime Portfolio as of August 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with generally accepted accounting
principles.
KPMG LLP
October 1, 1999
Houston, Texas
15
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS
<S> <C>
Charles T. Bauer Carl Frischling
Bruce L. Crockett Robert H. Graham Short-Term
Owen Daly II Prema Mathai-Davis Investments Co.
Edward K. Dunn, Jr. Lewis F. Pennock (STIC)
Jack M. Fields Louis S. Sklar
OFFICERS
Charles T. Bauer Chairman
Robert H. Graham President
Gary T. Crum Sr. Vice President
Carol F. Relihan Sr. Vice President & Secretary Prime Portfolio
Dana R. Sutton Vice President & Treasurer --------------------------------------------
Melville B. Cox Vice President Cash Annual
Karen Dunn Kelley Vice President Management Report
J. Abbott Sprague Vice President Class
Mary J. Benson Assistant Vice President & Assistant Treasurer
Sheri Morris Assistant Vice President & Assistant Treasurer
Renee A. Friedli Assistant Secretary
P. Michelle Grace Assistant Secretary August 31, 1999
Jeffrey H. Kupor Assistant Secretary
Nancy L. Martin Assistant Secretary
Ofelia M. Mayo Assistant Secretary
Lisa A. Moss Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
Samuel D. Sirko Assistant Secretary
Stephen I. Winer Assistant Secretary
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
800-347-1919
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
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, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
LEGAL COUNSEL TO DIRECTORS
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
TRANSFER AGENT
A I M Fund Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
AUDITORS
KPMG LLP [LOGO APPEARS HERE]
700 Louisiana Fund Management Company
Houston, TX 77002
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
</TABLE>
PRM-AR-4
