<PAGE>
[AIM LOGO APPEARS HERE] Dear Shareholder:
--Registered Trademark--
[PHOTO of As the end of the fiscal year arrived, the U.S.
Charles T. Bauer, economy continued to move ahead at a lively
Chairman of the pace. The robust domestic economy (coupled with
LETTER Board of The Fund inflationary tendencies in certain commodity
TO OUR APPEARS HERE] prices) compelled the Federal Reserve Board
SHAREHOLDERS (The Fed) to increase the federal funds rate
four times during the fiscal year, resulting in a current
federal funds rate of 6.50%. On August 22, at its last meeting
before the end of the reporting period, the Fed remained on
hold, leaving the rate unchanged. However, concern about
inflation remains due to trepidation about crude-oil prices. The
energy sector poses the highest risk of inflation; the price of
crude oil has escalated from $25 per barrel to more than $33
during the fiscal year. Recent monthly economic data releases
reflect a moderate growth trend for the economy, a bit slower
than when 2000 began. Gross domestic product for the second
quarter of 2000 was 5.6%, and the estimate for the third quarter
is between 3.5% and 4.0%.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2000, the performance of the portfolio's
Institutional Class topped that of its comparative indexes, as
shown in the table. On August 18, 2000, the Liquid Assets
Portfolio reached record assets of $26 billion, eclipsing the
record of $20 billion (achieved just before our last report to
you). Through a combination of short-term cash management
vehicles and selective use of a longer maturity schedule for
higher yields, the portfolio continued to provide attractive
returns. (Had the advisor not waived fees and expenses during
the reporting period, returns would have been lower.) The
weighted average maturity (WAM) remained in the 25- to 40-day
range; at the close of the period, the WAM was 36 days. The
portfolio will continue to maintain a relatively short maturity
structure to take advantage of any sudden rise in market yields.
Net assets of the Institutional Class stood at $17.35 billion at
the close of the reporting period.
<TABLE>
<CAPTION>
YIELDS AS OF 8/31/00
Average Seven-Day
Monthly Yield Yield
<S> <C> <C>
Liquid Assets Portfolio 6.57% 6.61%
Institutional Class
IBC Money Fund Averages(TM) - 6.26% 6.26%
First-Tier Institutions Only
IBC Money Fund Averages(TM) - 6.14% 6.16%
Total Institutions Only
</TABLE>
The portfolio continues to hold the highest credit-quality
ratings given by three widely known credit-rating agencies: AAAm
from Standard & Poor's, Aaa from Moody's and AAA from Fitch
IBCA. These historical ratings are based on an analysis of the
portfolio's credit quality, composition, management and weekly
portfolio reviews. AIM is the largest multi-fund complex to have
all its institutional money market portfolios given the highest
rating by three nationally recognized ratings agencies,
according to IBC Financial Data, Inc.
The Liquid Assets Portfolio invests solely in securities rated
"first-tier" as defined in Rule 2a-7 under the Investment
Company Act of 1940. Its objective is to provide as high a level
of current income as is consistent with the preservation of
capital and liquidity. Using a modified barbell maturity
structure, portfolio management emphasizes superior credit
quality in buying money market
(continued)
<PAGE>
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 investing in the
fund.
OUTLOOK FOR THE FUTURE
August saw a decline in the Consumer Price Index and the
Producer Price Index and flat retail sales, leading to a partial
consensus among financial markets that the Fed will not increase
short-term rates for the rest of the year. Jobless claims are
the highest they have been since mid-1998. With a presidential
election in the near future, the Fed is expected to remain on
hold, and the economy will experience the gradual effect of the
fiscal year's aggregate 125-basis-point short-term rate
increase. Considering the short weighted average maturity the
portfolio maintains, the inversion of the Treasury yield curve
has allowed it to maintain outstanding performance, along with
the flexibility to adjust its maturity schedule in the event of
sudden rate changes or curve corrections.
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>
<TABLE>
<CAPTION>
AVERAGE MONTHLY YIELD COMPARISON
Year ended 8/31/00 (Yields are average monthly yields for the month-ends shown.)
Short-Term Investments Co. IBC Money Fund IBC Money Fund Averages(TM)
Liquid Assets Portfolio Averages(TM) Total Institutions Only
Institutional Class First-Tier Institutions Only
<S> <C> <C> <C>
9/99 5.31% 4.97% 4.85%
10/99 5.36% 5.08% 4.91%
11/99 5.53% 5.22% 5.06%
12/99 5.62% 5.41% 5.20%
1/00 5.70% 5.45% 5.24%
2/00 5.81% 5.50% 5.37%
3/00 5.91% 5.58% 5.48%
4/00 6.06% 5.72% 5.62%
5/00 6.26% 5.91% 5.77%
6/00 6.54% 6.17% 6.03%
7/00 6.60% 6.25% 6.11%
8/00 6.57% 6.26% 6.14%
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED AVERAGE MATURITY COMPARISON
Year ended 8/31/00
Short-Term Investments Co. IBC Money Fund IBC Money Fund Averages(TM)
Liquid Assets Portfolio Averages(TM) Total Institutions Only
Institutional Class First-Tier Institutions Only
<S> <C> <C> <C>
9/99 33 53 50
10/99 28 50 49
11/99 24 48 47
12/99 22 41 41
1/00 35 41 41
2/00 24 45 44
3/00 37 47 45
4/00 31 46 44
5/00 29 47 45
6/00 34 50 47
7/00 33 48 45
8/00 36 49 46
</TABLE>
Source: IBC Financial Data, Inc. IBC Money Fund Report --Registered Trademark--
for weighted average maturities; IBC Money Fund Insight --Registered
Trademark-- for average monthly yields.
3
<PAGE>
SCHEDULE OF INVESTMENTS
August 31, 2000
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER - 55.18%(a)
BASIC INDUSTRIES - 0.82%
CHEMICALS (SPECIALTY) - 0.82%
Henkel Corp.
6.53% 01/31/01 $ 87,000 $ 84,601,313
------------------------------------------------------------------------------
6.52% 02/16/01 57,000 55,265,680
------------------------------------------------------------------------------
6.52% 02/20/01 50,000 48,442,444
------------------------------------------------------------------------------
Total Basic Industries 188,309,437
------------------------------------------------------------------------------
CAPITAL GOODS - 0.22%
MACHINERY (DIVERSIFIED) - 0.22%
Dover Corp.
6.49% 09/08/00 50,000 49,936,903
------------------------------------------------------------------------------
Total Capital Goods 49,936,903
------------------------------------------------------------------------------
CONSUMER DURABLES - 0.43%
AUTOMOBILE - 0.43%
Daimler-Chrysler North America Holding Corp.
6.55% 09/13/00 100,000 99,781,667
------------------------------------------------------------------------------
Total Consumer Durables 99,781,667
------------------------------------------------------------------------------
CONSUMER NON-DURABLES - 0.54%
PUBLISHING (NEWSPAPERS) - 0.54%
Gannett Co., Inc.
6.49% 10/24/00 125,000 123,805,660
------------------------------------------------------------------------------
Total Consumer Non-Durables 123,805,660
------------------------------------------------------------------------------
ENERGY - 0.34%
OIL & GAS (REFINING) - 0.34%
Shell Oil Co.
6.61% 11/03/00 76,832 76,832,000
------------------------------------------------------------------------------
Total Energy 76,832,000
------------------------------------------------------------------------------
FINANCIAL - 52.19%
ASSET BACKED SECURITIES - COMMERCIAL LOANS/LEASES - 4.80%
Atlantis One Funding Corp.
6.60% 09/01/00 111,755 111,755,000
------------------------------------------------------------------------------
6.62% 09/12/00 116,236 116,000,880
------------------------------------------------------------------------------
6.52% 12/13/00 131,000 128,558,142
------------------------------------------------------------------------------
6.56% 12/13/00 100,000 98,123,111
------------------------------------------------------------------------------
6.60% 12/14/00 77,618 76,138,083
------------------------------------------------------------------------------
6.63% 12/15/00 121,958 119,599,637
------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
ASSET BACKED SECURITIES - COMMERCIAL LOANS/LEASES - (CONTINUED)
Fleet Funding Corp.
6.50% 09/13/00 $84,632 $ 84,448,631
-------------------------------------------------------------------------
Fountain Square Commercial Funding
6.53% 09/18/00 93,388 93,100,028
-------------------------------------------------------------------------
6.59% 10/16/00 32,500 32,232,281
-------------------------------------------------------------------------
Sweetwater Capital Corp.
6.52% 09/05/00 42,754 42,723,027
-------------------------------------------------------------------------
6.53% 09/05/00 200,000 199,854,889
-------------------------------------------------------------------------
1,102,533,709
-------------------------------------------------------------------------
ASSET BACKED SECURITIES - CONSUMER RECEIVABLES - 0.91%
Old Line Funding Corp.
6.50% 09/12/00 45,000 44,910,625
-------------------------------------------------------------------------
6.53% 09/15/00 34,817 34,728,584
-------------------------------------------------------------------------
6.52% 10/25/00 37,423 37,057,003
-------------------------------------------------------------------------
Thunder Bay Funding Inc.
6.53% 09/07/00 51,015 50,959,479
-------------------------------------------------------------------------
6.53% 09/15/00 40,482 40,379,198
-------------------------------------------------------------------------
208,034,889
-------------------------------------------------------------------------
ASSET BACKED SECURITIES - FULLY BACKED - 15.25%
Aquinas Funding LLC
6.68% 09/01/00 440,000 440,000,000
-------------------------------------------------------------------------
Aspen Funding Corp.
6.54% 09/05/00 97,000 96,929,513
-------------------------------------------------------------------------
6.51% 09/12/00 63,506 63,379,676
-------------------------------------------------------------------------
6.20% 09/25/00 100,000 99,586,667
-------------------------------------------------------------------------
6.05% 10/10/00 50,000 49,672,292
-------------------------------------------------------------------------
Blue Ridge Asset Funding Corp.
6.52% 09/05/00 105,000 104,923,933
-------------------------------------------------------------------------
6.51% 09/18/00 226,030 225,335,146
-------------------------------------------------------------------------
6.52% 09/19/00 126,801 126,387,629
-------------------------------------------------------------------------
6.52% 09/20/00 103,764 103,406,937
-------------------------------------------------------------------------
6.62% 09/20/00 62,325 62,107,243
-------------------------------------------------------------------------
6.55% 10/30/00 29,000 28,688,693
-------------------------------------------------------------------------
6.58% 11/15/00 50,000 49,314,583
-------------------------------------------------------------------------
Enterprise Funding Corp.
6.53% 12/13/00 15,421 15,132,889
-------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
ASSET BACKED SECURITIES - FULLY BACKED - (CONTINUED)
Forrestal Funding Master Trust
6.55% 09/26/00 $142,000 $ 141,354,097
--------------------------------------------------------------------------
6.53% 11/08/00 62,095 61,329,093
--------------------------------------------------------------------------
6.56% 11/09/00 42,434 41,900,463
--------------------------------------------------------------------------
6.56% 11/15/00 40,000 39,453,333
--------------------------------------------------------------------------
6.52% 11/17/00 47,144 46,486,551
--------------------------------------------------------------------------
6.52% 11/21/00 20,500 20,199,265
--------------------------------------------------------------------------
Intrepid Funding Master Trust
6.61% 09/05/00 68,596 68,545,620
--------------------------------------------------------------------------
6.64% 09/06/00 30,234 30,206,118
--------------------------------------------------------------------------
6.64% 09/08/00 40,694 40,641,460
--------------------------------------------------------------------------
6.64% 09/26/00 31,004 30,861,037
--------------------------------------------------------------------------
6.64% 11/17/00 82,310 81,141,015
--------------------------------------------------------------------------
6.67% 12/08/00 100,000 98,185,639
--------------------------------------------------------------------------
Kitty Hawk Funding Corp.
6.62% 09/11/00 76,279 76,138,731
--------------------------------------------------------------------------
Newport Funding Corp.
6.05% 10/10/00 50,000 49,672,292
--------------------------------------------------------------------------
6.22% 11/17/00 75,000 74,002,208
--------------------------------------------------------------------------
Old Slip Funding Corp.
6.50% 09/07/00 125,508 125,372,033
--------------------------------------------------------------------------
Three Rivers Funding Corp.
6.50% 09/11/00 123,018 122,795,884
--------------------------------------------------------------------------
6.51% 09/20/00 156,693 156,154,629
--------------------------------------------------------------------------
6.51% 09/22/00 47,509 47,328,585
--------------------------------------------------------------------------
Triple-A One Funding Corp.
6.50% 09/13/00 59,056 58,928,045
--------------------------------------------------------------------------
Variable Funding Capital Corp.
6.60% 09/07/00 100,000 99,890,000
--------------------------------------------------------------------------
6.53% 09/18/00 100,000 99,691,639
--------------------------------------------------------------------------
6.62% 09/18/00 100,000 99,687,389
--------------------------------------------------------------------------
6.63% 09/22/00 80,017 79,707,534
--------------------------------------------------------------------------
6.64% 09/25/00 100,000 99,557,333
--------------------------------------------------------------------------
6.50% 11/09/00 50,000 49,377,083
--------------------------------------------------------------------------
6.64% 12/13/00 100,000 98,100,222
--------------------------------------------------------------------------
3,501,572,499
--------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
ASSET BACKED SECURITIES - MULTI-PURPOSE - 14.21%
Barton Capital Corp.
6.50% 09/05/00 $ 90,000 $ 89,935,000
---------------------------------------------------------------------------
6.53% 09/08/00 55,713 55,642,260
---------------------------------------------------------------------------
6.51% 10/06/00 100,000 99,367,083
---------------------------------------------------------------------------
Bavaria TRR Corp.
6.52% 09/12/00 100,000 99,800,778
---------------------------------------------------------------------------
6.51% 09/26/00 86,172 85,782,431
---------------------------------------------------------------------------
6.51% 09/27/00 78,000 77,633,270
---------------------------------------------------------------------------
Clipper Receivables Corp.
6.54% 09/07/00 50,000 49,945,500
---------------------------------------------------------------------------
6.62% 09/12/00 70,628 70,485,135
---------------------------------------------------------------------------
6.52% 10/27/00 100,000 98,985,778
---------------------------------------------------------------------------
6.51% 11/02/00 90,000 88,990,950
---------------------------------------------------------------------------
Corporate Receivables Corp.
6.10% 09/01/00 100,000 100,000,000
---------------------------------------------------------------------------
6.53% 09/12/00 50,000 49,900,236
---------------------------------------------------------------------------
6.55% 09/14/00 100,000 99,763,472
---------------------------------------------------------------------------
Edison Asset Securitization, L.L.C.
6.06% 09/05/00 100,000 99,932,667
---------------------------------------------------------------------------
6.53% 09/07/00 200,000 199,782,333
---------------------------------------------------------------------------
6.51% 09/14/00 100,000 99,764,917
---------------------------------------------------------------------------
6.54% 10/31/00 100,000 98,910,000
---------------------------------------------------------------------------
6.50% 11/07/00 200,000 197,580,556
---------------------------------------------------------------------------
Falcon Asset Securitization Corp.
6.53% 09/07/00 32,000 31,965,173
---------------------------------------------------------------------------
6.50% 09/11/00 172,675 172,363,226
---------------------------------------------------------------------------
6.19% 09/18/00 43,007 42,881,288
---------------------------------------------------------------------------
Mont Blanc Capital Corp.
6.53% 09/19/00 38,165 38,040,391
---------------------------------------------------------------------------
Monte Rosa Capital Corp.
6.50% 09/05/00 54,215 54,175,845
---------------------------------------------------------------------------
6.51% 10/10/00 71,000 70,499,273
---------------------------------------------------------------------------
Preferred Receivables Funding Corp.
6.50% 09/11/00 86,560 86,403,711
---------------------------------------------------------------------------
6.19% 09/21/00 81,350 81,070,246
---------------------------------------------------------------------------
6.50% 10/02/00 109,820 109,205,313
---------------------------------------------------------------------------
6.48% 10/30/00 27,481 27,189,152
---------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
ASSET BACKED SECURITIES - MULTI-PURPOSE - (CONTINUED)
Quincy Capital Corp.
6.50% 09/19/00 $ 71,010 $ 70,779,218
-------------------------------------------------------------------------------
6.51% 09/19/00 129,324 128,903,374
-------------------------------------------------------------------------------
6.50% 09/22/00 102,875 102,484,932
-------------------------------------------------------------------------------
Receivables Capital Corp.
6.50% 09/08/00 43,244 43,189,344
-------------------------------------------------------------------------------
Sheffield Receivables Corp.
6.64% 09/14/00 100,000 99,760,222
-------------------------------------------------------------------------------
6.51% 09/20/00 130,000 129,553,342
-------------------------------------------------------------------------------
6.51% 09/21/00 45,400 45,235,803
-------------------------------------------------------------------------------
6.51% 09/25/00 65,400 65,116,164
-------------------------------------------------------------------------------
6.51% 09/27/00 100,650 100,176,777
-------------------------------------------------------------------------------
3,261,195,160
-------------------------------------------------------------------------------
ASSET BACKED SECURITIES - TRADE RECEIVABLES - 4.74%
Bills Securitization Ltd.
6.54% 10/06/00 50,000 49,682,083
-------------------------------------------------------------------------------
6.52% 11/08/00 100,000 98,768,444
-------------------------------------------------------------------------------
6.57% 02/05/01 100,000 97,134,750
-------------------------------------------------------------------------------
6.55% 02/07/01 40,000 38,842,833
-------------------------------------------------------------------------------
6.54% 02/16/01 100,000 96,948,000
-------------------------------------------------------------------------------
Ciesco L.P.
6.52% 09/01/00 147,000 147,000,000
-------------------------------------------------------------------------------
Corporate Asset Funding Co.
6.52% 09/07/00 100,000 99,891,333
-------------------------------------------------------------------------------
6.52% 09/11/00 75,000 74,864,167
-------------------------------------------------------------------------------
6.54% 10/12/00 50,000 49,627,583
-------------------------------------------------------------------------------
Delaware Funding Corp.
6.59% 09/14/00 101,729 101,486,913
-------------------------------------------------------------------------------
6.55% 09/15/00 50,660 50,530,958
-------------------------------------------------------------------------------
Eureka Securitization, Inc.
6.50% 09/11/00 50,000 49,909,722
-------------------------------------------------------------------------------
6.50% 09/13/00 33,800 33,726,767
-------------------------------------------------------------------------------
6.50% 09/27/00 100,000 99,530,556
-------------------------------------------------------------------------------
1,087,944,109
-------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
BANKS (MAJOR REGIONAL) - 0.27%
Fortis Funding
6.60% 09/19/00 $ 25,000 $ 24,917,500
---------------------------------------------------------------------
6.52% 02/02/01 37,320 36,279,104
---------------------------------------------------------------------
61,196,604
---------------------------------------------------------------------
BANKS (REGIONAL) - 0.22%
Bank of America Corp.
6.20% 09/25/00 50,000 49,793,500
---------------------------------------------------------------------
49,793,500
---------------------------------------------------------------------
BROKERAGE/INVESTMENTS - 2.78%
Bear, Stearns & Co., Inc.
6.60% 09/05/00 100,000 99,926,667
---------------------------------------------------------------------
6.53% 09/11/00 100,000 99,818,611
---------------------------------------------------------------------
Credit Suisse First Boston Inc.
6.39% 10/24/00 66,000 65,379,105
---------------------------------------------------------------------
Salomon Smith Barney Holdings, Inc.
6.53% 09/06/00 100,000 99,909,306
---------------------------------------------------------------------
6.60% 09/13/00 100,000 99,780,000
---------------------------------------------------------------------
6.62% 09/15/00 75,000 74,806,917
---------------------------------------------------------------------
6.41% 10/25/00 100,000 99,038,500
---------------------------------------------------------------------
638,659,106
---------------------------------------------------------------------
CONSUMER FINANCE - 3.68%
Bank One Financial Corp.
6.52% 11/06/00 50,000 49,402,333
---------------------------------------------------------------------
6.58% 12/22/00 100,000 97,952,889
---------------------------------------------------------------------
General Motors Acceptance Corp.
6.59% 09/01/00 150,000 150,000,000
---------------------------------------------------------------------
6.63% 09/01/00 200,000 200,000,000
---------------------------------------------------------------------
6.60% 10/02/00 150,000 149,147,529
---------------------------------------------------------------------
6.64% 10/02/00 200,000 198,856,561
---------------------------------------------------------------------
845,359,312
---------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - 5.33%
Associates First Capital Corp.
6.67% 09/01/00 200,000 200,000,000
---------------------------------------------------------------------
6.52% 09/13/00 150,000 149,674,000
---------------------------------------------------------------------
CSN Overseas
6.53% 12/04/00 60,000 58,976,967
---------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
FINANCIAL - DIVERSIFIED - (CONTINUED)
GE Capital International Funding, Inc.
6.52% 09/08/00 $164,500 $ 164,291,451
-------------------------------------------------------------------------------
6.52% 09/19/00 164,500 163,963,730
-------------------------------------------------------------------------------
General Electric Capital Corp.
6.52% 02/28/01 125,000 120,925,000
-------------------------------------------------------------------------------
National Rural Utilities Coop
6.20% 10/02/00 75,000 74,599,583
-------------------------------------------------------------------------------
Unilever Capital Corp.
6.65% 09/07/01 180,000 180,000,000
-------------------------------------------------------------------------------
ZCM Matched Funding Corp.
6.51% 12/12/00 38,700 37,986,179
-------------------------------------------------------------------------------
6.53% 02/27/01 75,000 72,564,854
-------------------------------------------------------------------------------
1,222,981,764
-------------------------------------------------------------------------------
Total Financial 11,979,270,652
-------------------------------------------------------------------------------
UTILITIES - 0.64%
TELEPHONE - 0.64%
American Telephone and Telegraph Corp.
6.59% 09/18/00 100,000 99,688,806
-------------------------------------------------------------------------------
SBC Communications, Inc.
6.41% 10/10/00 48,478 48,141,361
-------------------------------------------------------------------------------
Total Utilities 147,830,167
-------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER (Cost $12,665,766,486) 12,665,766,486
-------------------------------------------------------------------------------
BANK NOTES - 0.87%
Bank of America
6.33% 10/04/00 100,000 100,000,000
-------------------------------------------------------------------------------
National City Bank Cleveland
6.98% 08/02/01 100,000 99,965,123
-------------------------------------------------------------------------------
Total Bank Notes (Cost $199,965,123) 199,965,123
-------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 5.66%
Abbey National PLC
6.60% 10/31/00 100,000 100,000,000
-------------------------------------------------------------------------------
7.33% 05/16/01 75,000 75,000,000
-------------------------------------------------------------------------------
7.42% 05/21/01 100,000 100,000,000
-------------------------------------------------------------------------------
Bank Austria
6.48% 11/06/00 50,000 50,000,000
-------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce
6.32% 10/30/00 75,000 75,000,000
-------------------------------------------------------------------------------
Dexia Banque Belgique
5.93% 09/29/00 35,000 34,987,370
-------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT - (CONTINUED)
First Union National Bank
6.83%(b) 02/20/01 $140,000 $ 140,000,000
-----------------------------------------------------------------------
Huntington National Bank
6.33% 10/16/00 75,000 75,000,000
-----------------------------------------------------------------------
National City Bank
6.55% 01/31/01 50,000 49,990,108
-----------------------------------------------------------------------
National Westminster Bank
6.32% 10/27/00 100,000 100,000,742
-----------------------------------------------------------------------
Marshall & Isley Bank
7.04% 07/17/01 100,000 100,017,479
-----------------------------------------------------------------------
Rabobank Nederland
6.30% 10/26/00 50,000 50,000,000
-----------------------------------------------------------------------
Societe Generale
6.95% 05/02/01 50,000 49,993,694
-----------------------------------------------------------------------
Svenska Handelsbanken AB
6.30% 10/26/00 100,000 100,000,000
-----------------------------------------------------------------------
6.48% 11/06/00 50,000 50,000,000
-----------------------------------------------------------------------
6.50% 01/29/01 50,000 49,990,237
-----------------------------------------------------------------------
6.99% 07/17/01 100,000 99,987,590
-----------------------------------------------------------------------
Total Certificates of Deposit (Cost
$1,299,967,220) 1,299,967,220
-----------------------------------------------------------------------
MASTER NOTE AGREEMENTS - 6.17%
Liquid Asset Backed Securities Trust
6.62%(c) 11/27/00 257,674 257,673,784
-----------------------------------------------------------------------
Merrill Lynch Mortgage Capital, Inc.
6.88%(d) 08/20/01 373,500 373,500,000
-----------------------------------------------------------------------
Morgan (J.P.) Securities, Inc.
6.81%(e) 11/01/00 250,000 250,000,000
-----------------------------------------------------------------------
Morgan Stanley Dean Witter & Co.
6.79%(f) 09/01/00 536,000 536,000,000
-----------------------------------------------------------------------
Total Master Note Agreements (Cost
$1,417,173,784) 1,417,173,784
-----------------------------------------------------------------------
MEDIUM TERM NOTES - 3.69%
American Telephone & Telegraph Corp.
6.67% 03/08/01 75,000 75,000,000
-----------------------------------------------------------------------
6.75%(g) 07/13/01 75,000 75,000,000
-----------------------------------------------------------------------
6.65%(h) 07/19/01 90,000 90,000,000
-----------------------------------------------------------------------
Bear Stearns & Co., Inc.
6.88%(b) 11/14/00 122,200 122,200,000
-----------------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
MEDIUM TERM NOTES - (CONTINUED)
Credit Suisse First Boston Ltd.
6.84%(b) 11/14/00 $ 80,000 $ 80,000,000
-------------------------------------------------------------------------------
Merrill Lynch & Co.
6.67%(b) 03/09/01 100,000 99,989,728
-------------------------------------------------------------------------------
6.66%(b) 04/16/01 70,000 69,987,116
-------------------------------------------------------------------------------
7.12% 07/24/01 100,000 100,000,000
-------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co.
6.68%(b) 09/06/00 100,000 100,000,000
-------------------------------------------------------------------------------
Toyota Motor Credit Corp.
6.81%(b) 09/20/00 35,000 35,000,000
-------------------------------------------------------------------------------
Total Medium Term Notes (Cost $847,176,844) 847,176,844
-------------------------------------------------------------------------------
PROMISSORY NOTES - 4.79%
Goldman Sachs Group, L.P.
6.70% 11/15/00 200,000 200,000,000
-------------------------------------------------------------------------------
6.95% 12/20/00 200,000 200,000,000
-------------------------------------------------------------------------------
7.01% 12/27/00 300,000 300,000,000
-------------------------------------------------------------------------------
6.97% 12/28/00 100,000 100,000,000
-------------------------------------------------------------------------------
6.84% 02/15/01 200,000 200,000,000
-------------------------------------------------------------------------------
6.84% 02/20/01 100,000 100,000,000
-------------------------------------------------------------------------------
Total Promissory Notes (Cost $1,100,000,000) 1,100,000,000
-------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES - 0.25%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.25%
Pass Through Certificates Wesley Commercial
and Residential Security Funding
6.65% 03/29/01 57,282 57,281,903
-------------------------------------------------------------------------------
Total U.S. Government Agency Securities (Cost
$57,281,903 ) 57,281,903
-------------------------------------------------------------------------------
VARIABLE RATE DEMAND BONDS - 2.43%
B. Braun Medical Inc.; RB (LOC-First Union
National Bank)
6.68%(i) 02/01/15 46,189 46,189,000
-------------------------------------------------------------------------------
Belk, Inc.; RB (LOC-First Union National
Bank)
6.68%(i) 07/01/08 63,200 63,200,000
-------------------------------------------------------------------------------
BMC Special Care Facilities; RB
6.60%(i)(j) 11/15/29 20,000 20,000,000
-------------------------------------------------------------------------------
Brosis Finance, LLC; RB (LOC-Wachovia Bank)
6.62%(i) 09/01/19 19,700 19,700,000
-------------------------------------------------------------------------------
California Housing Financing Authority; RB
6.63%(i)(j) 08/01/12 40,000 40,000,000
-------------------------------------------------------------------------------
6.60%(i)(j) 02/01/17 70,000 70,000,000
-------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
VARIABLE RATE DEMAND BONDS - (CONTINUED)
Capital One Funding Corp.; Floating Rate
Notes (LOC-Bank One)
6.70%(i) 07/01/20 $ 13,675 $ 13,675,000
-------------------------------------------------------------------------------
6.70%(i) 09/01/20 17,700 17,700,000
-------------------------------------------------------------------------------
Catholic Health Initiatives; RB
6.70%(i)(j) 12/01/27 21,000 21,000,000
-------------------------------------------------------------------------------
Chatham Capital Corp.; VRD Notes (LOC-Bank
One)
6.70%(i) 07/01/20 17,000 17,000,000
-------------------------------------------------------------------------------
Conneticut State Housing Financing Authority;
RB
6.60%(i)(j) 11/15/16 47,920 47,920,000
-------------------------------------------------------------------------------
Foxworh-Galbraith Lumber Co.; Floating Rate
Notes (LOC-Bank One)
6.70%(i) 04/01/21 26,600 26,600,000
-------------------------------------------------------------------------------
Gulf States Paper Corp.; RB (LOC-Wachovia
Bank)
6.62%(i) 11/01/18 25,000 25,000,000
-------------------------------------------------------------------------------
Michigan State Housing Development Authority;
RB
6.60%(i)(j) 12/01/20 25,000 25,000,000
-------------------------------------------------------------------------------
Rhode Island State Student Loan Authority; RB
6.60%(i)(j) 12/01/34 15,000 15,000,000
-------------------------------------------------------------------------------
Southeastern Retirement Association Tax,
Inc.; RB (LOC-First Union
National Bank)
6.68%(i) 08/01/19 34,525 34,525,000
-------------------------------------------------------------------------------
Texas (State of) Veteran's Housing Assistance
Program; Unlimited Tax GO
6.60%(i)(j) 12/01/29 25,000 25,000,000
-------------------------------------------------------------------------------
TP Racing LLP; VRD Notes (LOC-Bank One)
6.70%(i) 06/01/30 30,000 30,000,000
-------------------------------------------------------------------------------
Total Revenue Bonds (Cost $557,509,000) 557,509,000
-------------------------------------------------------------------------------
TIME DEPOSITS - 9.15%
Banque Bruxelles Lambert-London
6.67% 09/01/00 940,000 940,000,000
-------------------------------------------------------------------------------
Deutsche Bank-Cayman
6.59% 09/01/00 500,000 500,000,000
-------------------------------------------------------------------------------
6.69% 09/01/00 13,000 13,000,000
-------------------------------------------------------------------------------
Societe Generale-Cayman
6.56% 09/01/00 212,406 212,405,939
-------------------------------------------------------------------------------
Svenska Handelsbanken AB-Cayman
6.69% 09/01/00 222,000 222,000,000
-------------------------------------------------------------------------------
Westdeutsche Landesbank-Cayman
6.69% 09/01/00 213,000 213,000,000
-------------------------------------------------------------------------------
Total Time Deposits (Cost $2,100,405,939) 2,100,405,939
-------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
PAR
RATING (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS(k) -- 14.01%
Barclays Capital Inc.
6.68%(l) 09/01/00 $ 290,842 $ 290,842,039
-------------------------------------------------------------------------------
Bear, Stearns & Co. Inc.
6.67%(m) -- 572,000 572,000,000
-------------------------------------------------------------------------------
BNP Capital Markets, LLC
6.68%(n) 09/01/00 238,118 238,117,655
-------------------------------------------------------------------------------
Duetsche Bank Securities Inc.
6.66%(o) 09/01/00 47,000 47,000,000
-------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.
6.68%(p) 09/01/00 146,239 146,239,435
-------------------------------------------------------------------------------
Solomon Smith Barney Inc.
6.67%(q) -- 843,000 843,000,000
-------------------------------------------------------------------------------
SG Cowen Securities Corp.
6.68%(r) 09/01/00 499,537 499,537,300
-------------------------------------------------------------------------------
UBS Warburg
6.68%(s) 09/01/00 498,174 498,174,426
-------------------------------------------------------------------------------
6.61%(t) 09/01/00 60,671 60,670,815
-------------------------------------------------------------------------------
Westdeutsche Landesbank Girozentrale
6.67%(u) 09/01/00 17,934 17,933,538
-------------------------------------------------------------------------------
Total Repurchase Agreements (Cost
$3,213,515,208) 3,213,515,208
-------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $23,458,761,507) -
102.20% 23,458,761,507
-------------------------------------------------------------------------------
LIABILITIES LESS OTHER ASSETS - (2.20)% (505,880,616)
-------------------------------------------------------------------------------
NET ASSETS - 100.00% $22,952,880,891
-------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
INVESTMENT ABBREVIATIONS:
GO General Obligation
LOC Letter of Credit
RB Revenue Bonds
VRD Variable Rate Demand
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
08/31/00.
(c) 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 08/31/00.
(d) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon one business day's notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 08/31/00.
(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 08/31/00.
(f) 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 08/31/00.
(g) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/00.
(h) Interest rates are redetermined monthly. Rate shown is the rate in effect
on 08/31/00.
(i) Demand security; payable upon demand by the Fund with usually no more than
seven calendar days' notice.
(j) Secured by bond insurance provided by one of the following companies: AMBAC
Assurance Corp., MBIA Insurance Co., or Morgan Guaranty Trust.
(k) Collateral on repurchase agreements, including the Portfolio's pro-rate
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.
(l) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$337,904,727. Collateralized by $344,076,000 U.S. Government obligations,
5.47% to 7.63% due 02/15/02 to 09/15/09 with an aggregate market value at
08/31/00 of $344,599,443.
(m) Open repurchase agreement; however, either party may terminate the
agreement upon demand. Interest rates, par and collateral are redetermined
daily. Collateralized by $829,785,216 U.S. Government obligations, 0% to
10.50% due 09/01/00 to 04/01/33 with an aggregate market value of
$619,673,747.
(n) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$500,092,778. Collateralized by $649,836,000 U.S. Government obligations,
0% to 7.13% due 09/01/00 to 11/15/21 with an aggregate market value at
08/31/00 of $510,000,646.
(o) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$200,037,000. Collateralized by $203,361,000 U.S. Government obligations,
0% to 7.25% due 11/09/00 to 01/15/10 with an aggregate market value at
08/31/00 of $204,000,357.
(p) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$200,037,111. Collateralized by $311,957,842 U.S. Government obligations,
6.00% to 11.50% due 03/15/13 to 08/20/30 with an aggregate market value at
08/31/00 of $204,000,769.
(q) Open repurchase agreement; however, either party may terminate the
agreement upon demand. Interest rates, par and collateral are redetermined
daily. Collateralized by $1,014,955,000 U.S. Government obligations, 0% to
9.375% due 09/01/00 to 05/15/30 with an aggregate market value of
$933,151,358.
(r) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$1,000,185,556. Collateralized by $1,548,287,613 U.S. Government
obligations, 0% to 8.88% due 06/21/01 to 10/01/38 with an aggregate market
value at 08/31/00 of $1,022,076,846.
(s) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$500,092,778. Collateralized by $595,433,104 U.S. Government obligations,
5.50% to 8.50% due 12/15/01 to 01/15/33 with an aggregate market value at
08/31/00 of $510,002,119.
(t) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$600,110,167. Collateralized by $1,484,465,000 U.S. Government obligations,
0% to 6.50% due 02/15/11 to 11/15/26 with an aggregate market value at
08/31/00 of $612,002,098.
(u) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$75,013,896. Collateralized by $77,459,000 U.S. Government obligations,
5.13% to 7.63% due 03/15/02 to 10/15/08 with an aggregate market value at
08/31/00 of $76,500,286.
(v) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
15
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements at value
(amortized cost) $20,245,246,299
-----------------------------------------------------------------------------
Repurchase agreements (amortized cost) 3,213,515,208
-----------------------------------------------------------------------------
Receivables for:
Investments sold 300,000
-----------------------------------------------------------------------------
Interest 66,266,411
-----------------------------------------------------------------------------
Investment for deferred compensation plan 111,245
-----------------------------------------------------------------------------
Other assets 1,459
-----------------------------------------------------------------------------
Total assets 23,525,440,622
-----------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 436,002,944
-----------------------------------------------------------------------------
Dividends 132,366,985
-----------------------------------------------------------------------------
Deferred compensation plan 111,245
-----------------------------------------------------------------------------
Accrued advisory fees 1,138,834
-----------------------------------------------------------------------------
Accrued administrative services fees 76,328
-----------------------------------------------------------------------------
Accrued distribution fees 863,646
-----------------------------------------------------------------------------
Accrued directors' fees 9,405
-----------------------------------------------------------------------------
Accrued transfer agent fees 393,528
-----------------------------------------------------------------------------
Accrued operating expenses 1,596,816
-----------------------------------------------------------------------------
Total liabilities 572,559,731
-----------------------------------------------------------------------------
Net assets applicable to shares outstanding $22,952,880,891
=============================================================================
NET ASSETS:
Institutional Class $17,353,163,293
=============================================================================
Private Investment Class $ 952,176,821
=============================================================================
Personal Investment Class $ 14,179,239
=============================================================================
Cash Management Class $ 3,528,435,384
=============================================================================
Reserve Class $ 2,494,778
=============================================================================
Resource Class $ 1,102,431,376
=============================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 17,352,856,341
=============================================================================
Private Investment Class 952,280,713
=============================================================================
Personal Investment Class 14,179,336
=============================================================================
Cash Management Class 3,528,373,977
=============================================================================
Reserve Class 2,494,442
=============================================================================
Resource Class 1,102,498,998
=============================================================================
Net asset value, offering and redemption price per share for
all classes $1.00
=============================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
STATEMENT OF OPERATIONS
For the year ended August 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $1,113,419,609
---------------------------------------------------------------------
EXPENSES:
Advisory fees 27,218,774
---------------------------------------------------------------------
Administrative services fee 692,246
---------------------------------------------------------------------
Custodian fees 648,473
---------------------------------------------------------------------
Distribution fees:
Private Investment Class 3,645,780
---------------------------------------------------------------------
Personal Investment Class 49,839
---------------------------------------------------------------------
Cash Management Class 3,004,589
---------------------------------------------------------------------
Resource Class 1,626,640
---------------------------------------------------------------------
Reserve Class 5,478
---------------------------------------------------------------------
Transfer agent fees 2,922,649
---------------------------------------------------------------------
Directors' fees 59,594
---------------------------------------------------------------------
Other 2,216,743
---------------------------------------------------------------------
Total expenses 42,090,805
---------------------------------------------------------------------
Less: Fees waived (19,315,495)
---------------------------------------------------------------------
Net expenses 22,775,310
---------------------------------------------------------------------
Net investment income 1,090,644,299
---------------------------------------------------------------------
Net realized gain from investment securities 154,297
---------------------------------------------------------------------
Net increase in net assets resulting from operations $1,090,798,596
=====================================================================
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
---------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,090,644,299 $ 326,765,434
-------------------------------------------------------------------------------
Net realized gain from investment securities 154,297 672,252
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 1,090,798,596 327,437,686
-------------------------------------------------------------------------------
Distributions to shareholders from net
investment income:
Institutional Class (819,063,962) (264,791,600)
-------------------------------------------------------------------------------
Private Investment Class (42,833,302) (9,376,339)
-------------------------------------------------------------------------------
Personal Investment Class (381,558) (3,765)
-------------------------------------------------------------------------------
Cash Management Class (179,752,801) (46,551,990)
-------------------------------------------------------------------------------
Reserve Class (31,155) --
-------------------------------------------------------------------------------
Resource Class (48,581,521) (6,041,740)
-------------------------------------------------------------------------------
Share transactions-net:
Institutional Class 12,810,951,839 1,443,831,767
-------------------------------------------------------------------------------
Private Investment Class 686,248,372 195,962,108
-------------------------------------------------------------------------------
Personal Investment Class 13,185,345 993,991
-------------------------------------------------------------------------------
Cash Management Class 2,449,622,086 422,714,933
-------------------------------------------------------------------------------
Reserve Class 2,494,442 --
-------------------------------------------------------------------------------
Resource Class 795,729,159 220,706,636
-------------------------------------------------------------------------------
Net increase in net assets 16,758,385,540 2,284,881,687
-------------------------------------------------------------------------------
NET ASSETS:
Beginning of year 6,194,495,351 3,909,613,664
-------------------------------------------------------------------------------
End of year $ 22,952,880,891 $6,194,495,351
===============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 22,952,683,807 $6,194,452,564
-------------------------------------------------------------------------------
Undistributed net realized gain from
investment securities 197,084 42,787
-------------------------------------------------------------------------------
$ 22,952,880,891 $6,194,495,351
===============================================================================
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 2000
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. The assets, liabilities
and operations of each portfolio are accounted for separately. Information
presented in these financial statements pertains only to the Liquid Assets
Portfolio (the "Portfolio"). The Portfolio currently offers six separate
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
investment objective is to provide as high a level of current income as is
consistent with the preservation of capital and liquidity.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 as permitted under Rule 2a-7
of the 1940 Act. 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 and Investment Income - 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 recorded on the accrual basis from settlement date.
C. Distributions - It is the policy of the Portfolio to declare dividends from
net investment income daily and pay on the first business day of the
following month.
D. 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.
E. 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, 2000, AIM waived fees of $17,238,557.
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. For the year ended August 31, 2000, AIM was
paid $692,246 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 agency and
shareholder services to the Fund. For the year ended August 31, 2000, AFS was
paid $2,311,102 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Fund, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution plan ("the Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to the Private
Investment Class, 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 the
maximum annual rate of 0.50%, 0.75%, 0.10%, 1.00% and 0.20%, respectively, of
the average daily net assets attributable to such class. Of this amount, the
Fund may pay a service fee of (a) 0.25% of the average daily net assets of each
of the Private
19
<PAGE>
Investment Class, the 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. Currently, FMC has elected to waive a portion of its compensation
payable by the Fund such that compensation paid pursuant to the Plan with
respect to the Private Investment Class, the Personal Investment Class, the
Cash Management Class and the Reserve Class equals the maximum annual rate of
0.30%, 0.50%, 0.08%, and 0.80%, respectively, of the average daily net assets
attributable to such class. During the year ended August 31, 2000, the Private
Investment Class, the Personal Investment Class, the Cash Management Class, the
Reserve Class and the Resource Class paid $2,187,468, $33,226, $2,403,671,
$4,382 and $1,626,640, respectively, as compensation under the Plan and FMC
waived fees of $2,076,938.
Certain officers and directors of the Fund are officers of AIM, FMC, and AFS.
During the year ended August 31, 2000, the Portfolio paid legal fees of
$27,327 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 - CAPITAL STOCK
Changes in capital stock during the years ended August 31, 2000 and 1999 were
as follows:
<TABLE>
<CAPTION>
2000 1999
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 276,810,497,861 $276,810,497,861 153,902,899,999 $153,902,899,999
-----------------------------------------------------------------------------------------------
Private Investment
Class 9,480,135,664 9,480,135,664 4,203,510,271 4,203,510,271
-----------------------------------------------------------------------------------------------
Personal Investment
Class* 49,930,354 49,930,354 1,117,987 1,117,987
-----------------------------------------------------------------------------------------------
Cash Management Class 45,189,142,640 45,189,142,640 14,321,528,231 14,321,528,231
-----------------------------------------------------------------------------------------------
Reserve Class* 9,708,124 9,708,124 -- --
-----------------------------------------------------------------------------------------------
Resource Class 9,161,613,669 9,161,613,669 2,669,302,439 2,669,302,439
-----------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 121,655,567 121,655,567 32,251,894 32,251,894
-----------------------------------------------------------------------------------------------
Private Investment
Class 7,609,919 7,609,919 3,157,926 3,157,926
-----------------------------------------------------------------------------------------------
Personal Investment
Class* 236,684 236,684 255 255
-----------------------------------------------------------------------------------------------
Cash Management Class 108,025,697 108,025,697 34,021,495 34,021,495
-----------------------------------------------------------------------------------------------
Reserve Class* 4,324 4,324 -- --
-----------------------------------------------------------------------------------------------
Resource Class 42,938,412 42,938,412 5,318,298 5,318,298
-----------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (264,121,201,589) (264,121,201,589) (152,491,320,126) (152,491,320,126)
-----------------------------------------------------------------------------------------------
Private Investment
Class (8,801,497,211) (8,801,497,211) (4,010,706,089) (4,010,706,089)
-----------------------------------------------------------------------------------------------
Personal Investment
Class* (36,981,693) (36,981,693) (124,251) (124,251)
-----------------------------------------------------------------------------------------------
Cash Management Class (42,847,546,251) (42,847,546,251) (13,932,834,793) (13,932,834,793)
-----------------------------------------------------------------------------------------------
Reserve Class* (7,218,006) (7,218,006) -- --
-----------------------------------------------------------------------------------------------
Resource Class (8,408,822,922) (8,408,822,922) (2,453,914,101) (2,453,914,101)
-----------------------------------------------------------------------------------------------
16,758,231,243 $ 16,758,231,243 2,284,209,435 $ 2,284,209,435
-----------------------------------------------------------------------------------------------
</TABLE>
* The Personal Investment Class and Reserve Class commenced sales on January 4,
1999 and January 14, 2000, respectively.
20
<PAGE>
NOTE 5 - FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the
Institutional Class outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
--------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ---------- ---------- ---------- ----------
<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 0.06 0.05 0.06 0.05 0.06
----------------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income (0.06) (0.05) (0.06) (0.05) (0.06)
----------------------------------------------------------------------------------------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================================================================================
Total return 6.12% 5.17% 5.74% 5.58% 5.68%
========================================================================================
Ratios/supplemental
data:
Net assets, end of year
(000s omitted) $17,353,163 $4,541,935 $3,097,539 $3,787,357 $1,988,755
========================================================================================
Ratio of expenses to
average net assets:
With fee waivers 0.09%(a) 0.09% 0.08% 0.06% 0.03%
----------------------------------------------------------------------------------------
Without fee waivers 0.19%(a) 0.18% 0.18% 0.18% 0.18%
========================================================================================
Ratio of net investment
income to average net
assets 6.04%(a) 5.02% 5.59% 5.46% 5.52%
========================================================================================
</TABLE>
(a) Ratios are based on average net assets of $13,591,591,721.
===============================================================================
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, 2000, and the related statement
of operations for the year then ended, the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years or periods in the five-year period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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, 2000 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, 2000, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
years or periods in the five-year period then ended, in conformity with
accounting principles generally accepted in the United States of America.
[KPMG SIGNATURE APPEARS HERE]
October 6, 2000
Houston, Texas
21
<PAGE>
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of Liquid Assets Portfolio (the "Fund"), a
portfolio of Short-Term Investments Co., a Maryland corporation (the
"Company"), was held on May 3, 2000. The meeting was held for the following
purposes:
(1) To elect the following Directors: Charles T. Bauer, Bruce L. Crockett, Owen
Daly II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H.
Graham, Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement with A I M Advisors,
Inc.
(3) To approve changing the fundamental investment restrictions of the Fund.
(4) To approve changing the investment objective of the Fund so that it is non-
fundamental.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund
for the fiscal year ending in 2000.
The results of the voting on the above matters were as follows:
<TABLE>
<CAPTION>
WITHHELD/
DIRECTORS/MATTER VOTES FOR ABSTENTIONS
---------------- -------------- -------------
<C> <S> <C> <C> <C>
(1)* Charles T. Bauer......... 15,215,156,622 543,452,516
Bruce L. Crockett........ 15,215,156,622 543,452,516
Owen Daly II............. 15,215,156,622 543,452,516
Edward K. Dunn, Jr. ..... 15,215,156,622 543,452,516
Jack M. Fields........... 15,215,156,622 543,452,516
Carl Frischling.......... 14,947,430,004 811,179,134
Robert H. Graham......... 15,215,156,622 543,452,516
Prema Mathai-Davis....... 15,215,156,622 543,452,516
Lewis F. Pennock......... 15,215,156,622 543,452,516
Louis S. Sklar........... 15,215,156,622 543,452,516
<CAPTION>
VOTES WITHHELD/
DIRECTORS/MATTER VOTES FOR AGAINST ABSTENTIONS
---------------- -------------- ----------- -------------
<C> <S> <C> <C> <C>
(2) Adjournment of approval
of a new Investment
Advisory Agreement....... 5,644,241,346 4,715,437 2,522,266,799**
(3) (a) Adjournment of approval
of changing the
Fundamental Restriction
on Issuer
Diversification.......... 5,427,396,710 216,968,000 2,526,858,872**
(3) (b) Adjournment of approval
of changing the
Fundamental Restriction
on Borrowing Money and
Issuing Senior
Securities............... 5,427,396,710 216,968,000 2,526,858,872**
(3) (c) Adjournment of changing
the Fundamental
Restriction on
Underwriting Securities.. 5,427,396,710 216,968,000 2,526,858,872**
(3) (d) Adjournment of changing
the Fundamental
Restriction on Industry
Concentration............ 5,585,243,110 59,121,600 2,526,858,872**
(3) (e) Adjournment of approval
of changing the
Fundamental Restriction
on Purchasing or Selling
Real Estate.............. 5,644,364,710 0 2,526,858,872**
(3) (f) Adjournment of approval
of changing the
Fundamental Restriction
on Purchasing or Selling
Commodities and
Elimination of
Fundamental Restrictions
on Margin Transactions,
on Purchasing Securities
on Margin, Short Sales of
Securities and Investing
in Put or Call Options... 5,420,061,345 226,394,678 2,524,767,559**
(3) (g) Adjournment of approval
of changing the
Fundamental Restriction
on Making Loans.......... 5,644,364,710 0 2,526,858,872**
(3) (h) Adjournment of approval
of a new Fundamental
Investment Restriction on
Investing all of the
Fund's Assets in an Open-
End Fund................. 5,644,130,657 234,053 2,526,858,872**
(3) (i) Adjournment of approval
of the Elimination of the
Fundamental Restriction
on Mortgaging or Pledging
Assets................... 5,363,031,057 281,333,653 2,526,858,872**
(3) (j) Adjournment of approval
of the Elimination of
Fundamental Restriction
on Investing in
Obligations not Payable
in United States
Currency................. 5,422,386,710 221,978,000 2,526,858,872**
(4) Adjournment of approval
of changing the
Investment Objective so
that it is Non-
Fundamental.............. 5,185,532,459 458,867,409 2,526,823,714**
(5) Ratification of the
selection of KPMG LLP as
Independent Accountants
of the Fund.............. 5,782,245,529 52,127,576 2,336,850,477
</TABLE>
22
<PAGE>
The Special Meeting of Shareholders of the Company was reconvened on May 31,
2000. The following matters were then considered:
<TABLE>
<CAPTION>
VOTES WITHHELD/
DIRECTORS/MATTER VOTES FOR AGAINST ABSTENTIONS
---------------- ------------- ----------- -------------
<C> <S> <C> <C> <C>
(2) Approval of a new
Investment Advisory
Agreement................. 8,153,354,056 4,793,978 3,226,212,257**
(3) (a) Approval of changing the
Fundamental Restriction on
Issuer Diversification ... 7,936,587,962 216,968,000 3,230,804,329**
(3) (b) Approval of changing the
Fundamental Restriction on
Borrowing Money and
Issuing Senior Securities. 7,936,587,962 216,968,000 3,230,804,329**
(3) (c) Approval of changing the
Fundamental Restriction on
Underwriting Securities... 7,936,587,962 216,968,000 3,230,804,329**
(3) (d) Approval of changing the
Fundamental Restriction on
Industry Concentration.... 8,094,434,362 59,121,600 3,230,804,329**
(3) (e) Approval of changing the
Fundamental Restriction on
Purchasing or Selling Real
Estate.................... 8,153,555,962 0 3,230,804,329**
(3) (f) Approval of changing the
Fundamental Restriction on
Purchasing or Selling
Commodities and
Elimination of Fundamental
Restrictions on Margin
Transactions, on
Purchasing Securities on
Margin, Short Sales of
Securities and Investing
in Put or Call Options.... 7,929,252,596 226,394,678 3,228,713,017**
(3) (g) Approval of changing the
Fundamental Restriction on
Making Loans.............. 8,153,555,962 0 3,230,804,329**
(3) (h) Approval of a new
Fundamental Investment
Restriction on Investing
all of the Fund's assets
in an Open-End Fund....... 8,153,321,909 234,053 3,230,804,329**
(3) (i) Elimination of the
Fundamental Restriction on
Mortgaging or Pledging
Assets.................... 7,871,817,981 281,737,981 3,230,804,329**
(3) (j) Elimination of Fundamental
Restriction on Investing
in Obligations not Payable
in United States Currency. 7,931,173,634 222,382,328 3,230,804,329**
(4) Approval of changing the
Investment Objective so
that it is
Non-Fundamental........... 7,694,300,201 459,290,919 3,230,769,171**
</TABLE>
------
* Proposal 1 required approval by a combined vote of all of the portfolios of
Short-Term Investments Co.
** Includes Broker Non-Votes
<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
Dana R. Sutton Vice President & Treasurer
Melville B. Cox Vice President Liquid Assets
Karen Dunn Kelley Vice President Portfolio
J. Abbott Sprague Vice President -------------------------------------------------
Mary J. Benson Assistant Vice President & Assistant Treasurer Institutional ANNUAL
Sheri Morris Assistant Vice President & Assistant Treasurer Class REPORT
Renee A. Friedli Assistant Secretary
P. Michelle Grace Assistant Secretary
Nancy L. Martin Assistant Secretary
Ofelia M. Mayo Assistant Secretary AUGUST 31, 2000
Lisa A. Moss Assistant Secretary
Kathleen J. Pflueger 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
Houston, TX 77002
This report may be distributed only to current shareholders or [LOGO APPEARS HERE]
to persons who have received a current prospectus. Fund Management Company
</TABLE>
LAP-AR-1
