<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 the
Chairman of the grip of the near-meltdown occasioned by
LETTER Board of The Fund 1998's Asian crises. The situation led the
TO OUR APPEARS HERE] Federal Reserve Board (the Fed) to reduce the
SHAREHOLDERS 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
Through a combination of short-term cash management vehicles and the
selective use of a longer maturity schedule for higher yields, the
portfolio continued to provide attractive returns. Weighted average
maturity (WAM) was held at a moderate length for much of the period
due to concern about the increased volatility in the fourth quarter
of 1998. The WAM remained in the 20- to 35-day range. At the close
of the period, the WAM was 31 days. Using this strategy, the
portfolio's Cash Management Class outperformed its comparative
indexes as of August 31, 1999, as shown in the table. Net assets of
the Cash Management Class stood at $1.08 billion at the close of the
fiscal year.
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 become the largest multi-
fund complex to have all its institutional money market portfolios
given the highest rating by three nationally recognized ratings
agencies.
<TABLE>
<CAPTION>
Yields as of 8/31/99
Average Seven-Day
Monthly Yield Yield
<S> <C> <C>
Liquid Assets Portfolio
Cash Management Class 5.06% 5.20%
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>
The Liquid Assets Portfolio invests solely in securities rated
"first-tier" as defined in Rule 2a-7 under the Investment Companies
Act of 1940. Its objective is to provide as high a level of current
income as is consistent with the preservation of capital and
liquidity. Using a modified barbell maturity structure, portfolio
management emphasizes superior credit quality in buying money market
securities such as 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. The portfolio will
continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields.
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 dedicated to customer
service, and we 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 if we may help.
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 - 38.93%(a)
BASIC INDUSTRIES - 0.42%
CHEMICALS - 0.42%
Henkel Corp.
4.88% 09/07/99 $ 13,000 $ 12,989,427
- -----------------------------------------------------------------------
4.80% 09/22/99 13,000 12,963,600
- -----------------------------------------------------------------------
Total Basic Industries 25,953,027
- -----------------------------------------------------------------------
CAPITAL GOODS - 1.00%
ELECTRICAL EQUIPMENT - 0.37%
Siemens Capital Corp.
4.78% 09/30/99 23,000 22,911,437
- -----------------------------------------------------------------------
MANUFACTURING - DIVERSIFIED - 0.63%
Cargill, Inc.
5.42% 01/21/00 40,000 39,144,844
- -----------------------------------------------------------------------
Total Capital Goods 62,056,281
- -----------------------------------------------------------------------
CONSUMER SERVICES - 0.29%
ENTERTAINMENT (MISCELLANEOUS) - 0.29%
Walt Disney Co. (The) 4.87% 09/16/99 18,000 17,963,475
- -----------------------------------------------------------------------
ENERGY - 0.76%
OIL & GAS (INTEGRATED) - 0.76%
Shell Oil Co.
5.15% 09/13/99 46,750 46,750,000
- -----------------------------------------------------------------------
FINANCIAL - 36.46%
ASSET BACKED SECURITIES-COMMERCIAL LOANS/LEASES - 2.21%
Centric Capital Corp.
4.86% 09/27/99 23,000 22,919,270
- -----------------------------------------------------------------------
5.14% 09/27/99 30,000 29,888,633
- -----------------------------------------------------------------------
5.14% 09/28/99 30,000 29,884,350
- -----------------------------------------------------------------------
4.81% 10/12/99 37,000 36,797,312
- -----------------------------------------------------------------------
4.82% 10/20/99 17,333 17,219,286
- -----------------------------------------------------------------------
136,708,851
- -----------------------------------------------------------------------
ASSET BACKED SECURITIES-CONSUMER
RECEIVABLES - 0.40%
Old Line Funding Corp.
5.20% 09/15/99 24,946 24,895,554
- -----------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
ASSET BACKED SECURITIES-MULTI-PURPOSE - 19.98%
Bavaria TRR Corp.
4.97% 11/22/99 $ 27,000 $ 26,694,345
- -------------------------------------------------------------------------
5.45% 01/19/00 25,200 24,665,900
- -------------------------------------------------------------------------
5.50% 01/27/00 25,000 24,434,722
- -------------------------------------------------------------------------
5.75% 02/15/00 21,759 21,178,609
- -------------------------------------------------------------------------
5.54% 02/22/00 45,000 45,000,000
- -------------------------------------------------------------------------
Corporate Receivables Corp.
5.13% 09/14/99 25,000 24,953,688
- -------------------------------------------------------------------------
5.12% 09/15/99 50,000 49,900,444
- -------------------------------------------------------------------------
5.37% 02/16/00 41,000 40,998,148
- -------------------------------------------------------------------------
5.77% 02/28/00 35,000 33,990,250
- -------------------------------------------------------------------------
Edison Asset Securitization, L.L.C.
5.16% 09/03/99 30,000 29,991,400
- -------------------------------------------------------------------------
4.84% 09/10/99 30,000 29,963,700
- -------------------------------------------------------------------------
4.85% 09/13/99 25,000 24,959,583
- -------------------------------------------------------------------------
5.13% 09/13/99 17,185 17,155,613
- -------------------------------------------------------------------------
4.84% 09/29/99 38,010 37,866,913
- -------------------------------------------------------------------------
4.82% 09/30/99 25,000 24,902,931
- -------------------------------------------------------------------------
4.82% 10/15/99 30,000 29,823,267
- -------------------------------------------------------------------------
5.43% 01/14/00 25,000 24,490,938
- -------------------------------------------------------------------------
5.48% 01/25/00 33,400 32,657,704
- -------------------------------------------------------------------------
Falcon Asset Securitization Corp.
5.14% 09/14/99 29,295 29,240,625
- -------------------------------------------------------------------------
4.81% 09/20/99 50,000 49,873,069
- -------------------------------------------------------------------------
Monte Rosa Capital Corp.
5.18% 09/08/99 49,000 48,950,646
- -------------------------------------------------------------------------
Park Avenue Receivables Corp.
5.13% 09/13/99 31,593 31,538,976
- -------------------------------------------------------------------------
5.20% 09/17/99 40,000 39,907,556
- -------------------------------------------------------------------------
5.15% 09/24/99 30,000 29,901,292
- -------------------------------------------------------------------------
Preferred Receivables Funding Corp.
5.20% 09/27/99 50,000 49,812,222
- -------------------------------------------------------------------------
Quincy Capital Corp.
5.13% 09/07/99 33,000 32,971,785
- -------------------------------------------------------------------------
Receivables Capital Corp.
5.13% 09/10/99 25,606 25,573,160
- -------------------------------------------------------------------------
Sheffield Receivables Corp.
5.17% 09/03/99 35,350 35,339,846
- -------------------------------------------------------------------------
5.18% 09/07/99 50,000 49,956,833
- -------------------------------------------------------------------------
5.15% 09/10/99 41,500 41,446,569
- -------------------------------------------------------------------------
5.30% 09/20/99 100,000 99,720,278
- -------------------------------------------------------------------------
5.30% 09/21/99 100,000 99,705,556
- -------------------------------------------------------------------------
5.22% 09/28/99 30,000 29,882,550
- -------------------------------------------------------------------------
1,237,449,118
- -------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
ASSET BACKED SECURITIES-TRADE RECEIVABLES - 1.91%
Asset Securitization Cooperative Corp.
5.17% 09/30/99 $ 35,000 $ 34,854,235
- -----------------------------------------------------------------------------
5.39% 03/27/00 25,000 24,998,556
- -----------------------------------------------------------------------------
Variable Funding Capital
5.76% 01/10/00 30,000 29,371,200
- -----------------------------------------------------------------------------
5.68% 01/21/00 30,000 29,327,867
- -----------------------------------------------------------------------------
118,551,858
- -----------------------------------------------------------------------------
BANKS (DOMESTIC) - 2.58%
Bank of America
4.87% 09/08/99 25,000 24,976,326
- -----------------------------------------------------------------------------
4.81% 09/09/99 25,000 24,973,278
- -----------------------------------------------------------------------------
Banc One Financial Corp.
4.85% 09/13/99 15,000 14,975,750
- -----------------------------------------------------------------------------
4.85% 09/20/99 20,000 19,948,806
- -----------------------------------------------------------------------------
5.12% 09/24/99 25,000 24,918,222
- -----------------------------------------------------------------------------
4.80% 09/28/99 50,000 49,820,000
- -----------------------------------------------------------------------------
159,612,382
- -----------------------------------------------------------------------------
BROKER DEALER - 1.83%
Credit Suisse First Boston Inc.
5.68% 02/14/00 30,000 29,214,267
- -----------------------------------------------------------------------------
5.74% 02/18/00 35,000 34,051,306
- -----------------------------------------------------------------------------
Morgan Stanley, Dean Witter, Discover & Co.
5.62% 02/07/00 50,000 50,000,000
- -----------------------------------------------------------------------------
113,265,573
- -----------------------------------------------------------------------------
FINANCIAL - MULTIPLE INDUSTRY - 6.69%
Associates First Capital Corp.
4.81% 09/10/99 30,000 29,963,925
- -----------------------------------------------------------------------------
4.80% 11/03/99 30,000 29,748,000
- -----------------------------------------------------------------------------
5.60% 02/09/00 25,000 24,373,889
- -----------------------------------------------------------------------------
5.74% 02/14/00 35,000 34,073,628
- -----------------------------------------------------------------------------
General Electric Capital Corp.
4.81% 09/02/99 50,000 49,993,319
- -----------------------------------------------------------------------------
4.82% 09/08/99 25,000 24,976,569
- -----------------------------------------------------------------------------
4.81% 09/08/99 25,000 24,976,618
- -----------------------------------------------------------------------------
4.81% 09/09/99 25,000 24,973,278
- -----------------------------------------------------------------------------
4.84% 09/29/99 25,000 24,905,889
- -----------------------------------------------------------------------------
4.81% 11/03/99 25,000 24,789,563
- -----------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
FINANCIAL - MULTIPLE INDUSTRY - (CONTINUED)
5.43% 01/28/00 $ 25,000 $ 24,438,146
- ---------------------------------------------------------------------------------
National Rural Utilities Cooperative Finance
5.14% 09/20/99 33,000 32,910,478
- ---------------------------------------------------------------------------------
UBS Finance ( Delaware) Inc.
4.82% 12/23/99 25,000 24,621,764
- ---------------------------------------------------------------------------------
4.79% 12/27/99 40,000 39,377,300
- ---------------------------------------------------------------------------------
414,122,366
- ---------------------------------------------------------------------------------
INSURANCE - LIFE/HEALTH - 0.87%
Prudential Funding Corp.
4.85% 11/09/99 30,000 29,721,125
- ---------------------------------------------------------------------------------
5.72% 01/28/00 25,000 24,408,139
- ---------------------------------------------------------------------------------
54,129,264
- ---------------------------------------------------------------------------------
Total Financial 2,258,734,966
- ---------------------------------------------------------------------------------
Total Commercial Paper (Cost $2,710,784,869) 2,411,457,749
- ---------------------------------------------------------------------------------
BANK NOTES - 1.05%
First Union National Bank
5.49% 11/23/99 40,000 40,000,000
- ---------------------------------------------------------------------------------
National City Bank Cleveland
5.51%(b) 04/03/00 25,000 24,994,257
- ---------------------------------------------------------------------------------
Total Bank Notes (Cost $64,994,257) 64,994,257
- ---------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 4.03%
ABN-Amro Bank
5.71% 07/03/00 25,000 24,991,972
- ---------------------------------------------------------------------------------
Bank Austria
5.65% 07/06/00 25,000 24,989,858
- ---------------------------------------------------------------------------------
Barclays Bank PLC
5.61% 06/14/00 25,000 24,990,577
- ---------------------------------------------------------------------------------
Chase-USA-Delaware
5.37% 05/22/00 25,000 24,993,931
- ---------------------------------------------------------------------------------
Deutsche Bank AG
5.29% 05/19/00 25,000 24,990,545
- ---------------------------------------------------------------------------------
National Westminster Bank
5.67% 07/03/00 25,000 24,993,976
- ---------------------------------------------------------------------------------
UBS AG
5.24% 03/01/00 25,000 24,992,804
- ---------------------------------------------------------------------------------
5.35% 05/30/00 25,000 24,991,051
- ---------------------------------------------------------------------------------
5.60% 06/14/00 25,000 24,990,576
- ---------------------------------------------------------------------------------
U.S. Bank NA Minneapolis
5.68% 06/12/00 25,000 25,000,000
- ---------------------------------------------------------------------------------
Total Certificates of Deposit (Cost $249,925,290) 249,925,290
- ---------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER TRUST CERTIFICATES - 4.04%
Citibank Securities, Inc. 5.60%(c)
(Cost $250,000,000) 12/28/99 $250,000 $ 250,000,000
- ---------------------------------------------------------------------------------
NOTE AGREEMENTS - 28.02%
General Motors Acceptance Corp.
5.17%(d) 09/01/99 50,000 50,000,000
- ---------------------------------------------------------------------------------
5.21%(d) 09/01/99 100,000 100,000,000
- ---------------------------------------------------------------------------------
5.36%(d) 10/01/99 50,000 49,776,808
- ---------------------------------------------------------------------------------
5.40%(d) 10/01/99 100,000 99,550,312
- ---------------------------------------------------------------------------------
Goldman Sachs Group, L.P.
5.18%(e) 10/18/99 300,000 300,000,000
- ---------------------------------------------------------------------------------
Goldman Sachs Mortgage Corp.
5.44% (f) 09/20/99 100,000 100,000,000
- ---------------------------------------------------------------------------------
Liquid Asset Backed Securities Trust
5.35%(g) 11/26/99 246,337 246,336,676
- ---------------------------------------------------------------------------------
Merrill Lynch Mortgage Capital Inc.
5.82%(h) 08/17/00 357,000 357,000,000
- ---------------------------------------------------------------------------------
Morgan (J.P.) Securities, Inc.
5.69%(i) 11/01/99 245,000 245,000,000
- ---------------------------------------------------------------------------------
Morgan Stanley, Dean Witter, Discover & Co.
5.66%(j) 11/22/99 188,000 188,000,000
- ---------------------------------------------------------------------------------
Total Note Agreements (Cost $1,735,663,796) 1,735,663,796
- ---------------------------------------------------------------------------------
MEDIUM TERM NOTES - 1.14%
Asset Securitization Cooperative Corp.
5.38%(k) 02/01/00 35,000 34,992,615
- ---------------------------------------------------------------------------------
AT&T Corp.
5.27%(l) 07/13/00 25,000 24,991,366
- ---------------------------------------------------------------------------------
SMM Trust 1999-E
5.322%(l) 04/05/00 10,750 10,750,000
- ---------------------------------------------------------------------------------
Total Medium Term Notes (Cost $70,733,981) 70,733,981
- ---------------------------------------------------------------------------------
REVENUE BONDS - 2.30%
Belk, Inc.
5.4%(m)(n) 07/01/08 63,200 63,200,000
- ---------------------------------------------------------------------------------
BMC Special Care Facilities
5.3%(m)(n) 11/15/29 20,000 20,000,000
- ---------------------------------------------------------------------------------
Brosis Finance, LLC
5.35%(m)(n) 09/01/19 20,000 20,000,000
- ---------------------------------------------------------------------------------
Connecticut State Housing Financing
Authority
5.35%(m)(n) 11/15/16 19,205 19,205,000
- ---------------------------------------------------------------------------------
Southeastern Retirement Associates, LLC
5.4%(m)(n) 08/01/19 20,000 20,000,000
- ---------------------------------------------------------------------------------
Total Revenue Bonds (Cost $142,405,000) 142,405,000
- ---------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
TIME DEPOSITS - 16.83%
Amsouth Bank of Birmingham AL Cayman
5.69% 09/01/99 $165,000 $ 165,000,000
- -----------------------------------------------------------------------------
Bank Austria Cayman
5.56% 09/01/99 224,000 224,000,000
- -----------------------------------------------------------------------------
Chase Bank USA Cayman
5.56% 09/01/99 240,000 240,000,000
- -----------------------------------------------------------------------------
Credit Suisse First Boston Cayman
5.63% 09/01/99 48,871 48,870,824
- -----------------------------------------------------------------------------
Norwest Bank, Minnesota Cayman
5.63% 09/01/99 165,000 165,000,000
- -----------------------------------------------------------------------------
Suntrust Bank Atlanta Cayman
5.63% 09/01/99 200,000 200,000,000
- -----------------------------------------------------------------------------
Total Time Deposits (Cost $1,042,870,824) 1,042,870,824
- -----------------------------------------------------------------------------
REPURCHASE AGREEMENTS(o) - 6.35%
Bear, Stearns & Co. Inc.
5.51%(p) -- 200,000 200,000,000
- -----------------------------------------------------------------------------
Deutsche Bank Securities, Inc.
5.51%(q) -- 150,000 150,000,000
- -----------------------------------------------------------------------------
Warburg Dillon Read LLC
5.55%(r) 09/01/99 43,378 43,378,483
- -----------------------------------------------------------------------------
Total Repurchase Agreements (Cost $393,378,483) 393,378,483
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS - 102.69% 6,361,429,380(s)
- -----------------------------------------------------------------------------
OTHER LIABILITIES LESS ASSETS - (2.69)% (166,934,029)
- -----------------------------------------------------------------------------
NET ASSETS - 100.00% $6,194,495,351
=============================================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Some commercial paper is traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) Interest rates are redetermined daily. Rate shown is the rate in effect on
08/31/99.
(c) Variable rate trust certificates representing an interest in a trust
(comprised of eligible debt obligations) entitling the Portfolio to receive
variable rate interest. The Fund has the right, upon seven calendar days'
notice to the trustee, to put its certificates to the trust at par value
plus accrued interest. Because variable rate trust certificates involve a
trust and a third party put feature, they involve complexities and
potential risks that may not be present where the debt obligation is owned
directly. Rate shown is the rate in effect on 08/31/99.
(d) The portfolio may demand prepayment of notes purchased under the Note
Purchase Agreement upon seven business days' notice.
(e) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon seven business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 08/31/99.
(f) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon one business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 08/31/99.
(g) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon seven business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 08/31/99.
(h) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon two business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 08/31/99.
(i) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon one business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 08/31/99.
(j) Master Note Purchase Agreement may be terminated by either party upon three
business days' 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.
(k) Interest rates are redetermined monthly. Rate shown is the rate in effect
on 08/31/99.
(l) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/99.
(m) Demand security; payable upon demand by the Fund with usually no more than
seven calendar days' notice. Interest rates are redetermined periodically.
Rate shown is in effect on 08/31/99.
(n) Secured by a letter of credit.
(o) 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.
(p) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $272,695,821 U.S. Government obligations, 0% to 9.50% due
04/01/01 to 08/01/33 with an aggregate market value at 08/31/99 of
$274,569,940.
(q) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $256,125,337 U.S. Government obligations, 6.00% to 7.50%
due 05/01/12 to 11/01/28 with an aggregate market value at 08/31/99 of
$204,000,000.
(r) Joint repurchase agreement entered into 08/31/99 with a maturing value of
$100,015,417. Collateralized by $102,040,000 U.S. Government obligations,
0% to 6.73% due 11/02/99 to 06/22/09 with an aggregate market value at
08/31/99 of $102,002,704.
(s) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $6,361,429,380
- ------------------------------------------------------------------------
Interest receivable 13,446,695
- ------------------------------------------------------------------------
Investment for deferred compensation plan 68,320
- ------------------------------------------------------------------------
Other assets 1,066,900
- ------------------------------------------------------------------------
Total assets 6,376,011,295
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 149,327,120
- ------------------------------------------------------------------------
Dividends 31,089,809
- ------------------------------------------------------------------------
Deferred compensation 68,320
- ------------------------------------------------------------------------
Accrued administrative services fees 17,721
- ------------------------------------------------------------------------
Accrued advisory fees 355,513
- ------------------------------------------------------------------------
Accrued distribution fees 209,284
- ------------------------------------------------------------------------
Accrued transfer agent fees 84,825
- ------------------------------------------------------------------------
Accrued operating expenses 363,352
- ------------------------------------------------------------------------
Total liabilities 181,515,944
- ------------------------------------------------------------------------
NET ASSETS $6,194,495,351
========================================================================
NET ASSETS:
Institutional Class $4,541,935,494
========================================================================
Private Investment Class $ 266,030,885
========================================================================
Personal Investment Class $ 993,991
========================================================================
Cash Management Class $1,078,777,407
========================================================================
Resource Class $ 306,757,574
========================================================================
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Institutional Class 4,541,904,502
========================================================================
Private Investment Class 266,032,341
========================================================================
Personal Investment Class 993,991
========================================================================
Cash Management Class 1,078,751,891
========================================================================
Resource Class 306,769,839
========================================================================
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 year ended August 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $333,976,773
- -------------------------------------------------------------------
EXPENSES:
Advisory fees 9,813,465
- -------------------------------------------------------------------
Custodian fees 290,863
- -------------------------------------------------------------------
Administrative services fees 155,139
- -------------------------------------------------------------------
Distribution fees (Note 2) 2,195,209
- -------------------------------------------------------------------
Directors' fees and expenses 52,725
- -------------------------------------------------------------------
Transfer agent fees 720,090
- -------------------------------------------------------------------
Other 788,169
- -------------------------------------------------------------------
Total expenses 14,015,660
- -------------------------------------------------------------------
Less: Fee waivers (6,804,321)
- -------------------------------------------------------------------
Net expenses 7,211,339
- -------------------------------------------------------------------
Net investment income 326,765,434
- -------------------------------------------------------------------
Net realized gain on sales of investments 672,252
- -------------------------------------------------------------------
Net increase in net assets resulting from operations $327,437,686
===================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended August 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 326,765,434 $ 231,962,632
- ----------------------------------------------------------------------------------------
Net realized gain on sales of investments 672,252 750,940
- ----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 327,437,686 232,713,572
- ----------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Institutional Class (264,791,600) (207,681,074)
- ----------------------------------------------------------------------------------------
Private Investment Class (9,376,339) (3,506,724)
- ----------------------------------------------------------------------------------------
Personal Class (3,765) --
- ----------------------------------------------------------------------------------------
Cash Management Class (46,551,990) (16,114,306)
- ----------------------------------------------------------------------------------------
Resource Class (6,041,740) (4,660,528)
- ----------------------------------------------------------------------------------------
Capital stock transactions -- net (See Note 4) 2,284,209,435 (113,347,634)
- ----------------------------------------------------------------------------------------
Net increase (decrease) in net assets 2,284,881,687 (112,596,694)
- ----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,909,613,664 4,022,210,358
- ----------------------------------------------------------------------------------------
End of period $6,194,495,351 $3,909,613,664
========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $6,194,452,564 $3,910,243,129
- ----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities 42,787 (629,465)
- ----------------------------------------------------------------------------------------
$6,194,495,351 $3,909,613,664
========================================================================================
</TABLE>
See Notes to Financial Statements.
11
<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 Liquid Assets 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 Cash Management Class, the Private
Investment Class, the Personal Investment Class, the Reserve Class, and the
Resource Class. Sales of the Reserve Class have not yet commenced. 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 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 at the
annual rate of 0.15% of the average daily net assets of the Portfolio. During
the year ended August 31, 1999, AIM waived fees of $6,215,196.
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 $155,139 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Service, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Fund. During the year ended August 31, 1999, AFS was
paid $720,090 for such services.
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, 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 and the Resource Class
paid $600,673, $407, $753,887, and $251,117, respectively, as compensation
under the Plan. FMC waived fees of $589,125 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 Fund paid legal fees of $15,490
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 years 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 153,902,899,999 $ 153,902,899,999 93,828,246,640 $ 93,828,246,640
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 4,203,510,271 4,203,510,271 427,983,177 427,983,177
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class* 1,117,987 1,117,987 -- --
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 14,321,528,231 14,321,528,231 4,263,088,877 4,263,088,877
- ---------------------------------------------------------------------------------------------------------
Resource Class** 2,669,302,439 2,669,302,439 1,649,842,930 1,649,842,930
- ---------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Institutional Class 32,251,894 32,251,894 38,210,037 38,210,037
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 3,157,926 3,157,926 3,283,004 3,283,004
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class* 255 255 -- --
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 34,021,495 34,021,495 10,309,246 10,309,246
- ---------------------------------------------------------------------------------------------------------
Resource Class** 5,318,298 5,318,298 4,593,118 4,593,118
- ---------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (152,491,320,126) (152,491,320,126) (94,557,041,875) (94,557,041,875)
- ---------------------------------------------------------------------------------------------------------
Private Investment Class (4,010,706,089) (4,010,706,089) (432,076,106) (432,076,106)
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class* (124,251) (124,251) -- --
- ---------------------------------------------------------------------------------------------------------
Cash Management Class (13,932,834,793) (13,932,834,793) (3,700,876,338) (3,700,876,338)
- ---------------------------------------------------------------------------------------------------------
Resource Class** (2,453,914,101) (2,453,914,101) (1,648,910,344) (1,648,910,344)
- ---------------------------------------------------------------------------------------------------------
Net increase (decrease) 2,284,209,435 $ 2,284,209,435 (113,347,634) $ (113,347,634)
=========================================================================================================
</TABLE>
* The Personal Investment Class commenced sales on June 22, 1999.
** The MSTC Cash Reserve Class was renamed to the Resource Class on
October 1, 1998.
13
<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 three year period ended
August 31, 1999 and the period January 17, 1996 (date sales commenced) through
August 31, 1996.
<TABLE>
<CAPTION>
1999 1998 1997 1996
---------- -------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------- ---------- -------- ------- -------
Income from investment operations:
Net investment income 0.05 0.06 0.05 0.03
- ------------------------------------------------------- ---------- -------- ------- -------
Less distributions:
Dividends from net investment income (0.05) (0.06) (0.05) (0.03)
- ------------------------------------------------------- ---------- -------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======================================================= ========== ======== ======= =======
Total return 5.09% 5.66% 5.50% 3.32%
======================================================= ========== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,078,777 $655,975 $83,487 $53,209
======================================================= ========== ======== ======= =======
Ratio of expenses to average net assets(a) 0.17%(b) 0.16% 0.15% 0.10%(c)
======================================================= ========== ======== ======= =======
Ratio of net investment income to average net assets(d) 4.94%(b) 5.51% 5.38% 5.27%(c)
======================================================= ========== ======== ======= =======
</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
0.28%, 0.28%, 0.28% and 0.34% (annualized) for the periods 1999-1996,
respectively.
(b) Ratios based on average net assets of $942,340,346.
(c) Annualized.
(d) 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 4.83%, 5.39%, 5.25% and 5.03% (annualized) for the
periods 1999-1996, respectively.
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Short-Term Investments Co.:
We have audited the accompanying statement of assets and liabilities of Liquid
Assets 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 three years in the period then ended and the period
January 17, 1996 (date sales commenced for the Cash Management Class) through
August 31, 1996. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1999 by correspondence with the custodian and brokers. 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
Liquid Assets 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
three years in the period then ended and the period January 17, 1996 (date
sales commenced for the Cash Management Class) through August 31, 1996, 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 Liquid Assets
Carol F. Relihan Sr. Vice President & Secretary 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
700 Louisiana [LOGO APPEARS HERE]
Houston, TX 77002 Fund Management Company
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
</TABLE>
LAP-AR-3
