As filed with the Securities and Exchange Commission on May 2, 2005
Investment Company Act file number 811-2950
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Short Term Income Fund, Inc.
(Exact name of registrant as specified in charter)
600 Fifth Avenue
New York, NY 10020
(Address of principal executive offices) (Zip code)
Rosanne Holtzer
c/o Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-830-5200
Date of fiscal year end: August 31
Date of reporting period: February 28, 2005
ITEM 1: REPORT TO STOCKHOLDERS
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SHORT TERM 600 FIFTH AVENUE, NEW YORK, NY 10020
INCOME FUND, INC. (212) 830-5200
================================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Short Term Income Fund, Inc.
(the "Fund") for the period September 1, 2004 through February 28, 2005.
The Fund's Money Market Portfolio had 13,155 shareholders and net assets of
$1,030,914,359 as of February 28, 2005. The Government Portfolio had 3,852
shareholders and net assets of $510,722,636 as of February 28, 2005.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
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SHORT TERM INCOME FUND, INC.
EXPENSE CHART
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
As a shareholder of the Fund, you incur the following ongoing costs: management
fees and other Fund expenses. You may also incur distribution and/or service
(12b-1) fees. This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period September 1, 2004 through February 28,
2005.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees that you may incur in other
mutual funds. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.
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Money Market Portfolio
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Class A Beginning Account Value Ending Account Value Expenses Paid During the
9/1/04 2/28/05 Period*
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<s> <c> <c> <c>
Actual $1,000.00 $1,005.70 $4.73
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Hypothetical (5% return before $1,000.00 $1,020.08 $4.76
expenses)
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Class B Beginning Account Value Ending Account Value Expenses Paid During the
9/1/04 2/28/05 Period*
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Actual $1,000.00 $1,007.10 $3.28
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Hypothetical (5% return before $1,000.00 $1,021.52 $3.31
expenses)
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First Southwest Shares Beginning Account Value Ending Account Value Expenses Paid During the
9/1/04 2/28/05 Period*
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Actual $1,000.00 $1,002.60 $5.22
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Hypothetical (5% return before $1,000.00 $1,009.79 $5.26
expenses)
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U.S. Government Portfolio
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<s> <c> <c> <c>
Class A Beginning Account Value Ending Account Value Expenses Paid During the
9/1/04 2/28/05 Period*
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Actual $1,000.00 $1,005.50 $4.32
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Hypothetical (5% return before $1,000.00 $1,020.48 $4.36
expenses)
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Class B Beginning Account Value Ending Account Value Expenses Paid During the
9/1/04 2/28/05 Period*
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Actual $1,000.00 $1,006.90 $2.99
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Hypothetical (5% return before $1,000.00 $1,021.82 $3.01
expenses)
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<FN>
* Expenses are equal to the Fund's annualized expense ratios of 0.95%,
0.66%, and 1.05%, for the Money Market Portfolio Class A, Class B, and
First Southwest shares, respectively and 0.87%, and 0.60% for the U.S.
Government Portfolio Class A and Class B shares, respectively,
multiplied by the average account value over the period (September 1,
2004 through February 28, 2005), multiplied by 181/365 (to reflect the
most recent fiscal half-year).
</FN>
The accompanying notes are an integral part of these financial statements.
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SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
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Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Asset Back Commercial Paper (20.33%)
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<s> <c> <c> <c> <c>
$ 40,000,000 Clipper Receivables Corporation 03/01/05 2.60% $ 40,000,000
25,000,000 Greyhawk Funding 03/28/05 2.59 24,951,438
35,000,000 Lockhart Funding LLC 04/04/05 2.61 34,914,386
20,000,000 Market Street Funding 03/10/05 2.54 19,987,350
50,000,000 Sigma Finance Corporation 04/21/05 2.66 49,811,583
40,000,000 Triple-A One Funding Corporation
Insured by MBIA Insurance Corp. 03/21/05 2.53 39,943,778
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210,000,000 Total Asset Back Commercial Paper 209,608,535
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Floating Rate Securities (6.31%)
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$ 30,000,000 Bank of America (a) 12/15/05 2.57% $ 30,000,000
15,000,000 General Electric Capital Corporation Extendible
Monthly Securities (b) 03/17/06 2.69 15,000,000
20,000,000 Mt. Vernon Phenol Plant Partnership with J.P. Morgan Chase (c)
Guaranteed by General Electric Company 05/19/05 2.62 20,000,000
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65,000,000 Total Floating Rate Securities 65,000,000
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Foreign Commercial Paper (22.63%)
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$ 40,000,000 ANZ National International Ltd 05/19/05 2.75% $ 39,758,611
15,000,000 Banco Bilbao Vizcaya Argentaria S.A. 04/19/05 2.62 14,946,917
30,000,000 Banco Bilbao Vizcaya Argentaria S.A. 04/19/05 2.65 29,892,200
35,000,000 Canadian Imperial Holdings Inc. 03/31/05 2.60 34,924,167
20,000,000 Depfa Bank PLC 03/02/05 2.36 19,998,694
30,000,000 Depfa Bank PLC 04/13/05 2.57 29,908,625
9,135,000 HBOS Treasury Services 05/16/05 2.75 9,082,352
15,000,000 HBOS Treasury Services 05/23/05 2.81 14,903,512
20,000,000 Societe Generale North America 04/01/05 2.54 19,956,514
20,000,000 Svenska Handelsbanken 04/25/05 2.66 19,919,181
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234,135,000 Total Foreign Commercial Paper 233,290,773
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Letter of Credit Commercial Paper (15.88%)
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$ 23,000,000 Banco Continental De Panama S.A.
LOC Calyon 06/03/05 2.66% $ 22,842,654
25,000,000 Banco Bradesco S.A.
LOC Calyon 06/10/05 2.71 24,812,729
22,465,000 Banco Rio De La Plata S.A.
LOC Banco Santander 06/17/05 2.32 22,311,339
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The accompanying notes are an integral part of these financial statements.
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===============-================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Letter of Credit Commercial Paper (Continued)
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<s> <c> <c> <c> <c>
$ 41,000,000 Dean Health System, Inc.
LOC Marshall & Ilsley 03/10/05 2.56% $ 40,973,863
15,000,000 Louis Dreyfus Corporation
LOC Barclays Bank 03/17/05 2.53 14,983,067
37,800,000 Vermont EDA - Series A
LOC First Union National Bank 04/05/05 2.53 37,800,000
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164,265,000 Total Letter of Credit Commercial Paper 163,723,652
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Loan Participation (2.91%)
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$ 30,000,000 Equitable Life Assurance Society with J.P. Morgan Chase (c) 03/21/05 2.62% $ 30,000,000
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30,000,000 Total Loan Participation 30,000,000
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Other Notes (3.74%)
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$ 10,320,000 Bergen County, NJ Improvement Authority City Project Notes
(Overpeck Project) - Series 2004 09/22/05 2.35% $ 10,311,370
3,280,000 Glendale, WI Taxable BAN - Series 2004B 09/21/05 2.50 3,280,000
25,000,000 Winston-Salem, NC COPS 04/01/05 2.66 25,000,000
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38,600,000 Total Other Notes 38,591,370
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Repurchase Agreement (6.60%)
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$ 68,000,000 Bank of America, purchased 02/28/05,
repurchase proceeds at maturity $68,004,930 (Collateralized
by $72,354,885, GNMA, 0.000% to 5.500%,due 04/16/33 to
02/20/35, value $69,360,001) 03/01/05 2.61% $ 68,000,000
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68,000,000 Total Repurchase Agreement 68,000,000
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U.S. Government Agency Medium Term Note (0.68%)
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$ 7,000,000 Federal Home Loan Bank 06/08/05 2.02% $ 7,000,000
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7,000,000 Total U.S. Government Agency Medium Term Note 7,000,000
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Variable Rate Demand Instruments (d) (18.84%)
- ----------------------------------------------------------------------------------------------------------------------------
$ 2,740,000 Ali Industries, Inc. Project
LOC National City Bank of Michigan/Illinois 07/01/10 2.68% $ 2,740,000
5,500,000 Allegheny County, PA (Union Electric Steel Corporation)
LOC PNC Bank, N.A. 11/01/27 2.65 5,500,000
2,250,000 Alta Mira LLC
LOC Marshall & Ilsley 11/01/34 2.75 2,250,000
1,830,000 ARS Development Project
LOC National City Bank of Michigan/Illinois 09/01/21 2.73 1,830,000
1,250,000 B & V Land Company, LLC
LOC First Michigan Bank 09/01/27 2.75 1,250,000
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The accompanying notes are an integral part of these financial statements.
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SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (d) (Continued)
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<s> <c> <c> <c> <c>
$ 1,520,000 Bank of Kentucky Building
LOC Firstar Bank 12/01/19 2.75% $ 1,520,000
3,100,000 Bollman Capital, LLC - Series 1996A
LOC First of America Bank 12/15/26 2.68 3,100,000
1,000,000 Bookstore Notes
LOC Marshall & Ilsley 10/01/44 2.70 1,000,000
620,000 Burgess & Niple Limited
LOC National City Bank of Michigan/Illinois 09/01/14 2.68 620,000
1,020,000 Burton I. Saltzman (Dave's Supermarket, Inc. Project)
LOC US Bank, N.A. 09/01/08 2.73 1,020,000
621,000 Capital One Funding Corporation Floating Rate Option Notes -
Series 1997D
LOC Bank One 07/02/18 2.65 621,000
1,190,000 Community Limited Care
LOC Fifth Third Bank 12/01/12 2.77 1,190,000
920,000 Crownover Lumber Company
LOC Fifth Third Bank 09/01/08 2.85 920,000
610,000 Crownover Lumber Company
LOC Fifth Third Bank 09/01/08 2.85 610,000
300,000 Derby Fabricating LLC
LOC Fifth Third Bank 06/01/24 2.70 300,000
3,350,000 Dickenson Press, Inc. - Series 1997
LOC First Michigan Bank 01/01/27 2.75 3,350,000
900,000 Dormont Manufacturing Company, Inc.
LOC PNC Bank, N.A. 03/01/08 2.63 900,000
8,305,000 DP Fox Capital, LLC
LOC Michigan National Bank 09/01/29 2.70 8,305,000
2,825,000 Frank J. Catanzaro Sons and Daughters
LOC Firstar Bank 01/01/15 2.70 2,825,000
1,450,000 Gesmundo & Associates, Inc.
LOC National City Bank of Michigan/Illinois 08/15/27 2.64 1,450,000
1,195,000 Graves Lumber, Inc. Project
Guaranteed by Federal Home Loan Bank 11/01/10 2.73 1,195,000
1,272,000 HCS & DJS Leasing
LOC Fifth Third Bank 06/01/34 2.70 1,272,000
3,845,000 Hunter's Square, Inc. Project - Series 1998
LOC National City Bank of Michigan/Illinois 10/01/16 2.68 3,845,000
1,200,000 ILH LLC - Series 2004
LOC Fifth Third Bank 07/01/34 2.70 1,200,000
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The accompanying notes are an integral part of these financial statements.
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================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (d) (Continued)
- ----------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 360,000 Jake Sweeney Automotive, Inc.
LOC Firstar Bank 04/01/10 2.70% $ 360,000
1,335,000 KBL Capital Fund, Inc.
LOC Old Kent Bank & Trust Co. 07/01/15 2.65 1,335,000
1,175,000 Labelle Capital Funding - Series A
LOC National City Bank of Michigan/Illinois 09/01/26 2.70 1,175,000
1,150,000 LAM Funding, LLC
LOC National City Bank of Michigan/Illinois 12/15/27 2.64 1,150,000
8,700,000 Lexington Financial Health Care RB - Series 2001
LOC LaSalle National Bank 02/01/26 2.72 8,700,000
1,000,000 Lincoln Parkway LLC
LOC Fifth Third Bank 06/01/44 2.70 1,000,000
1,810,000 LKWP Investments, LLC
LOC First Michigan Bank 03/01/27 2.75 1,810,000
800,000 Machining Center
LOC Comerica Bank 10/01/27 2.75 800,000
800,000 Madison, WI Community Development Authority EDA
(Block 90 Project)
LOC US Bank, N.A. 10/01/08 2.75 800,000
3,575,000 Maryland Health & Higher Educational Facilities Authority
(Glen Meadows Retirement Community)
LOC First Union National Bank 07/01/29 2.60 3,575,000
400,000 Maximum Principle Amount Limited Partnership
(Riverview Medical Office Building)
LOC National City Bank of Michigan/Illinois 11/01/17 2.68 400,000
1,265,000 Miami Valley Realty Associates
LOC Key Bank, N.A. 06/01/12 2.77 1,265,000
3,100,000 Mobile Airport
LOC Regions Bank 10/01/24 2.61 3,100,000
14,290,000 Mobile, Al Springhill Medical Clinic Board RB
(Springhill Medical Complex)
LOC Amsouth Bank, N.A. 06/01/20 2.69 14,290,000
935,000 Mount Carmel East Professional Office Building - Series 1994
LOC National City Bank of Michigan/Illinois 01/01/14 2.68 935,000
1,245,000 Mount Carmel Partnership Project
LOC National City Bank of Michigan/Illinois 08/01/14 2.68 1,245,000
3,335,000 Mount Ontario Holdings LLC (e)
LOC Firstar Bank 04/01/21 2.65 3,335,000
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The accompanying notes are an integral part of these financial statements.
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SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (d) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 5,000,000 New Jersey EDA Thermal Energy Facilities RB
(Marina Energy)
LOC First Union National Bank 09/01/21 2.57% $ 5,000,000
4,600,000 New York State HFA (Kew Gardens Hills) - Series 2003B
Collateralized by Federal National Mortgage Association 05/15/36 2.55 4,600,000
8,000,000 Newport, KY Industrial Building RB
(Aquarium Holdings Project)
LOC Fifth Third Bank 12/01/08 2.70 8,000,000
3,215,000 Ohio State Water Development Authority RB
(Independence Excavating, Inc.)
LOC National City Bank of Michigan/Illinois 12/01/09 2.68 3,215,000
3,400,000 Ordeal Properties LLC
LOC Key Bank, N.A. 10/01/12 2.70 3,400,000
1,800,000 Pennsylvania EDFA Taxable Development RB
(West 914 Incorporation Project) - Series 1991A
LOC PNC Bank, N.A. 05/01/21 2.65 1,800,000
10,900,000 PRD Financial LLC
LOC National City Bank of Michigan/Illinois 04/01/27 2.64 10,900,000
4,000,000 Prevea Clinic, Inc.,
LOC Wells Fargo Bank, N.A. 12/01/34 2.60 4,000,000
5,000,000 Rochester, NY Institute of Technology - Series 2004 11/01/21 2.75 5,000,000
1,925,000 Sacramento County Housing Authority
(Hidden Oaks Apartments) - Series 1999
Guaranteed by Federal National Mortgage Association 05/15/29 2.60 1,925,000
10,000,000 Sea Island Company & Sea Island Coastal
Properties LLC - Series 2003B
LOC Columbus Bank & Trust Company 04/01/23 2.72 10,000,000
625,000 SGS Tool Company - Series 1996
LOC Huntington National Bank 06/01/06 2.73 625,000
3,020,000 Shelburne Realty & Troy Realty
LOC National City Bank of Michigan/Illinois 04/01/17 2.68 3,020,000
1,600,000 Soaring Eagle Partners LP
LOC PNC Bank, N.A. 10/01/12 2.72 1,600,000
13,580,000 Southwestern Group, Limited Project
LOC Firstar Bank 07/01/21 2.70 13,580,000
3,105,000 St. Ann's Medical Office Building Limited Partnership
LOC National City Bank of Michigan/Illinois 11/01/19 2.68 3,105,000
6,661,000 Stonegate Partners I, LLC
(Stonegate Partners Project) - Series 2002
LOC US Bank, N.A. 06/01/34 2.68 6,661,000
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The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (d) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c>
$ 4,755,000 Tom Richards, Inc. (Team Land, LLC/Team Industries)
Guaranteed by Federal Home Loan Bank 12/01/16 2.68% $ 4,755,000
3,000,000 Tri-Park Villas Notes
LOC Marshall & Ilsley 10/01/44 2.70 3,000,000
1,400,000 UAI Technologies, Inc. - Series 1998
LOC First Union National Bank 05/01/18 2.72 1,400,000
1,020,000 Valley City Linen Co.
LOC First Michigan Bank 02/01/27 2.75 1,020,000
3,525,000 Washington State HFC MHRB
(The Vintage at Richland Project) - Series 2004B
Guaranteed by Federal National Mortgage Association 01/15/38 2.59 3,525,000
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194,219,000 Total Variable Rate Demand Instruments 194,219,000
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Yankee Certificates of Deposit (2.42%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 Dexia CLF 04/26/05 2.71% $ 25,000,000
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25,000,000 Total Yankee Certificates of Deposit 25,000,000
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Total Investments (100.34%) (cost $1,034,433,330+) 1,034,433,330
Liabilities in excess of cash and other assets (-0.34%) (3,518,971)
--------------
Net Assets (100.00%) $1,030,914,359
==============
Net Asset Value, offering and redemption price per share:
Class A shares 393,329,138 shares outstanding (Note 3) $ 1.00
==============
Class B shares 487,622,672 shares outstanding (Note 3) $ 1.00
==============
First Southwest shares 149,963,664 shares outstanding (Note 3) $ 1.00
==============
<FN>
+ Aggregate cost for federal income tax purposes is identical.
</FN>
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The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
FOOTNOTES:
(a) The interest rate changes daily based upon Prime minus 2.935%.
(b) The interest rate changes monthly based upon one month LIBOR plus 0.10%.
(c) The interest rate is adjusted monthly based upon one month LIBOR plus
0.02%.
(d) Unless otherwise noted securities payable on demand at par including
accrued interest (with seven days notice). Interest is adjusted weekly.
(e) Securities payable on demand at par including accrued interest (with
one-day notice). Interest is adjusted daily.
KEY:
BAN = Bond Anticipation Note HFA = Housing Finance Authority
COPS = Certificates of Participation HFC = Housing Finance Commission
EDA = Economic Development Authority LOC = Letter of Credit
EDFA = Economic Development Finance Authority MHRB = Multi - Family Housing Revenue Bond
GNMA = Government National Mortgage Association RB = Revenue Bond
- --------------------------------------------------------------------------------
BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY
- --------------------------------------------------------------------------------
Securities Maturing in Value % of Portfolio
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Less than 31 Days $ 558,057,189 53.95%
31 through 60 Days 322,073,572 31.14
61 through 90 Days 63,744,476 6.16
91 through 120 Days 76,966,723 7.44
121 through 180 Days -- 0.00
Over 180 Days 13,591,370 1.31
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- --------------------------------------------------------------------------------
Total $ 1,034,433,330 100.00%
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SHORT TERM INCOME FUND, INC.
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF NET ASSETS
FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements (58.74%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 125,000,000 Annaly Mortgage Management, Inc., purchased 02/28/05,
repurchase proceeds at maturity $125,009,167
(Collateralized by $232,674,867, GNMA, 3.000% to 6.000%,
due 01/20/26 to 10/20/33, value $127,500,001) 03/01/05 2.64% $ 125,000,000
30,000,000 Bank of America, purchased 02/28/05,
repurchase proceeds at maturity $30,002,175 (Collateralized by
$32,210,527, GNMA, 0.000%, due 07/20/34, value $30,600,001) 03/01/05 2.61 30,000,000
95,000,000 Bear, Stearns & Co., purchased 02/28/05,
repurchase proceeds at maturity $95,006,914 (Collateralized by
$184,733,410, GNMA, 3.375% to 8.500%,
due 01/15/17 to 02/15/35, value $96,903,213) 03/01/05 2.62 95,000,000
25,000,000 J.P. Morgan Securities, Inc., purchased 02/28/05,
repurchase proceeds at maturity $25,001,819 (Collateralized by
$30,680,000, GNMA, 3.500% to 4.000%,
due 08/20/33 to 05/20/34, value $25,501,313) 03/01/05 2.62 25,000,000
25,000,000 UBS Paine Webber, purchased 02/28/05,
repurchase proceeds at maturity $25,001,799 (Collateralized by
$57,453,636, GNMA, 4.500% to 11.500%,
due 09/20/15 to 11/15/34, value $25,501,303) 03/01/05 2.59 25,000,000
- -------------- --------------
300,000,000 Total Repurchase Agreements 300,000,000
- -------------- --------------
U.S. Government Obligations (40.41%)
- ----------------------------------------------------------------------------------------------------------------------------
$ 75,000,000 U.S. Treasury Bill 03/03/05 2.16% $ 74,991,000
50,000,000 U.S. Treasury Bill 04/14/05 2.20 49,866,778
20,000,000 U.S. Treasury Bill 05/05/05 2.29 19,918,298
30,000,000 U.S. Treasury Bill 06/02/05 2.53 29,806,250
14,000,000 U.S. Treasury Note, 1.625% 02/28/06 3.02 13,808,102
18,000,000 U.S. Treasury Note, 1.625% 03/31/05 1.29 18,004,957
- -------------- --------------
207,000,000 Total U.S. Government Obligations 206,395,385
- -------------- --------------
Total Investments (99.15%) (cost $506,395,385+) 506,395,385
Cash and Other Assets, Net of Liabilities (0.85%) 4,327,251
--------------
Net Assets (100.00%) $ 510,722,636
==============
Net Asset Value, offering and redemption price per share:
Class A Shares, 258,256,666 shares outstanding (Note 3) $ 1.00
==============
Class B Shares, 252,465,970 shares outstanding (Note 3) $ 1.00
==============
<FN>
+ Aggregate cost for federal income tax purposes is identical.
</FN>
KEY:
GNMA = Government National Mortgage Association
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The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
U.S. GOVERNMENT PORTFOLIO
BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY
FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
- --------------------------------------------------------------------------------
Securities Maturing in Value % of Portfolio
- --------------------------------------------------------------------------------
Less than 31 Days $ 374,991,000 74.05%
31 through 60 Days 67,871,735 13.40
61 through 90 Days 19,918,298 3.93
91 through 120 Days 29,806,250 5.89
121 through 180 Days -- 0.00
Over 180 Days 13,808,102 2.73
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total $ 506,395,385 100.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
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SHORT TERM INCOME FUND, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 2005
(UNAUDITED)
================================================================================
Money Market U.S. Government
Portfolio Portfolio
--------------------- -----------------------
INVESTMENT INCOME
Income:
Interest..................................................... $ 11,083,601 $ 5,175,600
--------------------- -----------------------
Expenses: (Note 2)
Investment management fee.................................... 1,573,277 688,614
Administration fee........................................... 1,114,873 552,402
Distribution fee (First Southwest shares).................... 171,478 -0-
Shareholder servicing fee (Class A).......................... 478,616 320,129
Shareholder servicing fee (First Southwest shares)........... 171,478 -0-
Custodian expenses........................................... 27,236 12,757
Shareholder servicing and related shareholder expenses+...... 381,388 189,225
Legal, compliance and filing fees............................ 316,077 85,351
Audit and accounting......................................... 90,027 47,009
Directors' fees.............................................. 18,464 9,714
Miscellaneous................................................ 31,319 10,320
--------------------- -----------------------
Total expenses........................................... 4,374,233 1,915,521
Less: Fees waived (First Southwest shares).............. (41,155) -0-
Expenses paid indirectly.......................... (662) (2,463)
--------------------- -----------------------
Net expenses............................................. 4,332,416 1,913,058
--------------------- -----------------------
Net investment income.......................................... 6,751,185 3,262,542
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments........................ (1,115) 75
--------------------- -----------------------
Increase in net assets from operations......................... $ 6,750,070 $ 3,262,617
===================== =======================
<FN>
+ Includes class specific transfer agency expenses of $159,530 and $135,427
for the Money Market Portfolio Class A and Class B shares, respectively and
$98,219 and $74,248 for the U.S. Government Portfolio Class A and Class B
shares, respectively.
</FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
Money Market Portfolio U.S. Government Portfolio
----------------------------------- -----------------------------------
Six Months Ended Year Six Months Ended Year
February 28, 2005 Ended February 28, 2005 Ended
(Unaudited) August 31, 2004 (Unaudited) August 31, 2004
----------------- --------------- ----------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income.................. $ 6,751,185 $ 5,430,370 $ 3,262,542 $ 2,265,150
Net realized gain on investments....... (1,115) 7,026 75 67
----------------- --------------- ----------------- ---------------
Increase in net assets from operations. 6,750,070 5,437,396 3,262,617 2,265,217
Dividends to shareholders from net investment income:
Class A............................. (2,214,549) (1,199,269) (1,414,060) (645,262)
Class B............................. (3,818,515) (3,975,573) (1,848,482) (1,619,888)
First Southwest shares.............. (718,121) (255,528) -0- -0-
Distributions to shareholders from realized gain on investments:
Class A............................. -0- (2,070) (36) (30)
Class B............................. -0- (4,281) (39) (37)
First Southwest shares.............. -0- (675) -0- -0-
Capital share transactions (Note 3):
Class A............................. 22,679,009 (19,067,760) 7,622,717 13,703,051
Class B............................. (127,168,788) (244,152,247) (38,046,117) (40,617,535)
First Southwest shares.............. 7,579,802 11,955,042 -0- -0-
----------------- --------------- ----------------- ---------------
Total (decrease) increase........... (96,911,092) (251,264,965) (30,423,400) (26,914,484)
Net assets:
Beginning of period................. 1,127,825,451 1,379,090,416 541,146,036 568,060,520
----------------- --------------- ----------------- ---------------
End of period....................... $ 1,030,914,359 $ 1,127,825,451 $ 510,722,636 $ 541,146,036
================= =============== ================= ===============
Undistributed net investment income........ $ -0- $ -0- $ -0- $ -0-
================= =============== ================= ===============
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
1. Summary of Accounting Policies
Short Term Income Fund, Inc. is a no-load, diversified, open-end management
investment company registered under the Investment Company Act of 1940. The Fund
is presently comprised of two portfolios, Money Market Portfolio and U.S.
Government Portfolio. The Money Market Portfolio has three classes of stock
authorized, Class A, Class B and First Southwest Prime Income Fund (the "First
Southwest shares"). The U.S. Government Portfolio has two classes of stock
authorized, Class A and Class B. The Class A shares of each Portfolio, and the
First Southwest shares of the Money Market Portfolio are subject to a service
fee pursuant to each Portfolio's Distribution and Service Plan. The First
Southwest shares are subject to an additional fee pursuant to a Distribution
Agreement. The Class B shares are not subject to a service fee. Additionally,
the Portfolio may allocate among its classes certain expenses, to the extent
allowable to specific classes, including transfer agent fees, government
registration fees, certain printing and postage costs, and administrative and
legal expenses. Class specific expenses of the Fund were limited to shareholder
servicing fees and transfer agent expenses. Income, expenses (other than
expenses attributable to a specific class), and realized and unrealized gains
and losses on investments are allocated to each class of shares based on its
relative net assets. In all other respects, the share classes of each portfolio
represent the same interest in the income and assets of their respective
portfolios. Distribution of First Southwest shares commenced on August 5, 2002.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America for investment
companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method,
a portfolio instrument is valued at cost and any discount or premium
is amortized on a constant basis to the maturity of the instrument.
The maturity of variable rate demand instruments is deemed to be the
longer of the period required before the Fund is entitled to receive
payment of the principal amount or the period remaining until the next
interest rate adjustment.
b) Repurchase Agreements -
In connection with transactions in repurchase agreements, it is the
Fund's policy that its custodian take possession of the underlying
collateral securities, the fair value of which exceeds the principal
amount of the repurchase transaction, including accrued interest, at
all times. If the seller defaults, and the fair market value of the
collateral declines, realization of the collateral by the Fund may be
delayed or limited.
c) Federal Income Taxes -
It is the policy of each Portfolio to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its tax exempt and taxable income to its
shareholders. Therefore, no provision for federal income tax is
required.
d) Dividends and Distributions -
Dividends from investment income (including realized capital gains and
losses), determined on a class level, are declared daily and paid
monthly.
e) Use of Estimates -
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 and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ
from those estimates.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
1. Summary of Accounting Policies (Continued)
f) General -
Securities transactions are recorded on a trade date basis. Interest income
including accretion of discount and amortization of premium is accrued as
earned. Realized gains and losses from securities transactions are recorded
on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates
Under the Management Contract, the Money Market Portfolio pays a management fee
to Reich & Tang Asset Management, LLC (the "Manager") at the annual rate of .30%
of the Portfolio's average daily net assets not in excess of $750 million, plus
..29% of such assets in excess of $750 million but not in excess of $1 billion,
plus .28% of such assets in excess of $1 billion but not in excess of $1.5
billion, plus .27% of such assets in excess of $1.5 billion. The U.S. Government
Portfolio pays a management fee to the Manager equal to .275% of the Portfolio's
average daily net assets not in excess of $250 million, plus .25% of such assets
in excess of $250 million.
The Manager has agreed to reimburse the Fund for its net operating expenses
(exclusive of taxes, brokerage, interest and extraordinary expenses) to the
extent that such expenses, including the management fee, for any fiscal year
exceed 1% of the average daily net assets of each Portfolio for such fiscal
year. No such reimbursement was required for the period ended Febraury 28, 2005.
Pursuant to an Administrative Services Agreement, each Portfolio pays to the
Manager an annual fee of .21% of each Portfolio's average daily net assets not
in excess of $1.25 billion, plus .20% of such assets in excess of $1.25 billion
but not in excess of $1.5 billion, plus .19% of such assets in excess of $1.5
billion.
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors, Inc.
(the "Distributor"), an affiliate of the Manager, have entered into a
Distribution Agreement and a Shareholder Servicing Agreement, only with respect
to the Class A shares of each Portfolio and the First Southwest shares of the
Money Market Portfolio. For its services under the Shareholder Servicing
Agreement, the Distributor receives from each Portfolio a service fee equal to
..25% per annum of each Portfolio's average daily net assets with respect only to
the Class A shares and the First Southwest shares of the Money Market Portfolio.
In addition, the Distributor receives .25% per annum in Distribution fees of the
First Southwest shares' average daily net assets.
For the period ended February 28, 2005, the following fees were voluntarily
waived by the Distributor:
Money Market Portfolio
----------------------
Distribution fees - First Southwest shares $ 41,155
The Distributor has no right to recoup prior fee waivers.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$8,000 per annum plus $1,250 per meeting attended. In addition, the Audit
Committee Chairman receives an aggregate payment of $1,000 per quarter allocated
among the funds of the Reich & Tang Complex on whose Audit Committee he serves.
Effective January 1, 2005, Directors who are unaffiliated with the Manager will
receive from the Fund a fee of $1,450 for each Board of Directors meeting
attended, and each member of the Audit Committee will receive an aggregate
payment of $750 per Audit Committee meeting attended allocated among the funds
of the Reich & Tang Complex.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
Included in the Statements of Operations under the caption "Shareholder
servicing and related shareholder expenses" are fees of $223,013 and $132,582
for the Money Market Portfolio and the U.S. Government Portfolio, respectively,
paid to Reich & Tang Services, Inc., an affiliate of the Manager, as shareholder
servicing agent for the Fund.
For the period ended February 28, 2005, the breakdown of expenses paid
indirectly by the Fund were as follows:
Money Market Portfolio U.S. Government Portfolio
----------------------------------- ------------------------------------
Custodian expenses $ 121 $ 2,121
Shareholder servicing and related shareholder expenses 541 342
------ --------
Total $ 662 $ 2,463
====== ========
3. Capital Stock
At February 28, 2005, 10,000,000,000 shares of $.001 par value stock were
authorized. Transactions in capital stock, all at $1.00 per share, were as
follows:
Money Market Portfolio U.S. Government Portfolio
----------------------------------- ------------------------------------
Six Months Ended Six Months Ended
February 28, 2005 Year Ended February 28, 2005 Year Ended
(Unaudited) August 31, 2004 (Unaudited) August 31, 2004
----------------- --------------- ----------------- ---------------
Class A shares
- --------------
Sold.................................. 980,441,847 2,328,520,418 460,531,305 962,368,959
Issued on reinvestment of dividends... 1,953,319 1,045,824 1,119,216 462,674
Redeemed.............................. (959,716,157) (2,348,634,002) (454,027,804) (949,128,582)
----------------- --------------- ----------------- ---------------
Net (decrease) increase............... 22,679,009 (19,067,760) 7,622,717 13,703,051
================= =============== ================= ===============
Class B shares
- --------------
Sold.................................. 725,327,087 1,429,873,658 566,627,691 1,360,820,813
Issued on reinvestment of dividends... 3,731,214 3,934,774 1,791,209 1,577,147
Redeemed.............................. (856,227,089) (1,677,960,679) (606,465,017) (1,403,015,495)
----------------- --------------- ----------------- ----------------
Net (decrease) increase............... (127,168,788) (244,152,247) (38,046,117) (40,617,535)
================= =============== ================= ================
First Southwest shares
- ----------------------
Sold.................................. 83,105,165 146,074,128
Issued on reinvestment of dividends... 725,643 248,103
Redeemed.............................. (76,251,006) (134,367,189)
----------------- ---------------
Net increase.......................... 7,579,802 11,955,042
================= ===============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
3. Capital Stock (continued)
As of February 28, 2005, the breakdown of net assets by share class were as
follows:
Money Market Portfolio U.S. Government Portfolio
----------------------------------- ------------------------------------
Class A............................... $ 393,328,712 $ 258,256,666
Class B............................... 487,622,145 252,465,970
First Southwest....................... 149,963,502 --
--------------- ---------------
Total........................... $ 1,030,914,359 $ 510,722,636
=============== ===============
4. Liabilities
At February 28, 2005, the Fund had the following liabilities:
Money Market Portfolio U.S. Government Portfolio
----------------------------------- ------------------------------------
Fees payable to Affiliates*.......... $ 348,087 $ 209,284
Due to Custodian..................... 3,676,080 -0-
Dividends payable.............. 457,900 267,201
Accrued other payables............. -0- 38,347
--------------- ---------------
Total liabilities..................... $ 4,482,067 $ 514,832
=============== ===============
<FN>
* Includes fees payable to Reich & Tang Asset Management, LLC, Reich & Tang
Distributors, Inc. and Reich & Tang Services, Inc.
</FN>
5. Tax Information
The tax character of all dividends and distributions paid during the years
ended August 31, 2004 and 2003 were as follows:
Money Market Portfolio U.S. Government Portfolio
----------------------------------- ------------------------------------
2004 2003 2004 2003
------------- ----------- ---------- ------------
Ordinary income....................... $ 5,436,524 $10,626,111 $2,265,217 $ 4,589,686
Long-term capital gains............... 872 -0- -0- -0-
At August 31, 2004, the Fund had no distributable earnings.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
6. Financial Highlights
Six Months Ended Money Market Portfolio
Class A shares February 28, 2005 Year Ended August 31,
- -------------- --------------------------------------------------------------
(Unaudited) 2004 2003 2002 2001 2000
----------- ---------- ---------- --------- --------- ---------
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.............$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- --------- --------- ---------
Income from investment operations:
Net investment income......................... 0.006 0.003 0.006 0.014 0.045 0.050
Net realized and unrealized gain
(loss) on investments......................... 0.000 0.000 -- 0.000 0.000 0.000
----------- ---------- ---------- --------- --------- ---------
Total from investment operations................. 0.006 0.003 0.006 0.014 0.045 0.050
Less distributions from:
Dividends from net investment income.......... (0.006) (0.003) (0.006) (0.014) (0.045) (0.050)
Net realized gains on investments............( -- ) (0.000) ( -- ) (0.000) (0.000) (0.000)
----------- ---------- ---------- --------- --------- ---------
Total distributions............................ ( 0.006) (0.003) (0.006) (0.014) (0.045) (0.050)
----------- ---------- ---------- --------- --------- ---------
)
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ======== ========= =========
Total Return................................... 0.57%(a) 0.33% 0.63% 1.44% 4.59% 5.16%
Ratios/Supplemental Data
Net assets, end of period (000's).............. $ 393,328 $ 370,650 $ 389,718 $322,381 $675,289 $940,199
Ratios to average net assets:
Expenses (net of fees waived)(b)............. 0.95%(c) 0.87% 0.87% 0.97% 1.01% 0.99%
Net investment income................. 1.16%(c) 0.32% 0.61% 1.56% 4.55% 5.02%
Management and administration fees waived 0.00%(c) 0.00% 0.00% 0.00% 0.00% 0.01%
Expenses paid indirectly..................... 0.00%(c) 0.00% 0.00% 0.00% 0.00% 0.00%
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
6. Financial Highlights (Continued)
Six Months Ended Money Market Portfolio
Class B shares February 28, 2005 Year Ended August 31,
- -------------- --------------------------------------------------------------
(Unaudited) 2004 2003 2002 2001 2000
----------- ---------- ---------- --------- --------- ---------
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.... ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- --------- ---------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.007 0.006 0.009 0.018 0.049 0.054
Net realized and unrealized gain (loss)
on investments.............................. 0.000 0.000 -- 0.000 0.000 0.000
----------- ---------- ---------- --------- --------- ---------
Total from investment operations............... 0.007 0.006 0.009 0.018 0.049 0.054
Less distributions from:
Dividends from net investment income (0.007) (0.006) (0.009) (0.018) (0.049) (0.054)
Net realized gains on investments........... ( -- ) (0.000) ( -- ) (0.000) (0.000) (0.000)
----------- ---------- ---------- --------- --------- ---------
Total distributions............................ (0.007) (0.006) (0.009) (0.018) (0.049) (0.054)
----------- ---------- ---------- --------- --------- ---------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========= ========= =========
Total Return................................... 0.71%(a) 0.58% 0.92% 1.80% 5.01% 5.58%
Ratios/Supplemental Data
Net assets, end of period (000's).............. $ 487,622 $ 614,791 $ 858,944 $838,064 $811,173 $ 351,335
Ratios to average net assets:
Expenses (net of fees waived)(b)............ 0.66%(c) 0.62% 0.58% 0.61% 0.61% 0.60%
Net investment income....................... 1.41%(c) 0.57% 0.92% 1.78% 4.71% 5.58%
Management and administration fees waived 0.00%(c) 0.00% 0.00% 0.00% 0.00% 0.01%
Expenses paid indirectly.................... 0.00%(c) 0.00% 0.00% 0.00% 0.00% 0.00%
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
6. Financial Highlights (Continued)
Money Market Portfolio
---------------------------------------------------------------
Six Months Ended August 5, 2002
February 28, 2005 Year Ended August 31, (Commencement of
------------------------ Offering) to
First Southwest Shares (Unaudited) 2004 2003 August 31,2002
- ---------------------- ----------- ---------- ---------- ------------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- --------
Income from investment operations:
Net investment income....................... 0.005 0.002 0.005 0.001
Net realized and unrealized gain (loss)
on investments.............................. 0.000 0.000 -- 0.000
----------- ---------- ---------- --------
Total from investment operations............... 0.005 0.002 0.005 0.001
Less distributions from:
Dividends from net investment income (0.005) (0.002) (0.005) (0.001)
Net realized gains on investments........... -- (0.000) ( -- ) (0.000)
----------- ---------- ---------- --------
Total distributions............................ (0.005) (0.002) (0.005) (0.001)
----------- ---------- ---------- --------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========
Total Return................................... 0.52%(a) 0.19% 0.50% 0.07%(a)
Ratios/Supplemental Data
Net assets, end of period (000's).............. $149,964 $ 142,384 $130,429 $127,082
Ratios to average net assets:
Expenses (net of fees waived) (b)........... 1.05%(c) 1.01% 0.99% 0.99%(c)
Net investment income....................... 1.05%(c) 0.19% 0.51% 0.93%(c)
Distribution fees waived.................... 0.06%(c) 0.06% 0.06% 0.06%(c)
Expenses paid indirectly.................... 0.00%(c) 0.00% 0.00% 0.00%(c)
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
6. Financial Highlights (Continued)
Six Months Ended U.S. Government Portfolio
Class A shares February 28, 2005 Year Ended August 31,
- -------------- --------------------------------------------------------------
(Unaudited) 2004 2003 2002 2001 2000
----------- ---------- ---------- --------- --------- ---------
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.005 0.003 0.006 0.014 0.044 0.048
Net realized and unrealized gain (loss)
on investments.............................. 0.000 0.000 0.000 -- 0.000 --
----------- --------- ---------- --------- --------- ---------
Total from investment operations............... 0.005 0.003 0.006 0.014 0.044 0.048
Less distributions from:
Dividends from net investment income........ (0.005) (0.003) (0.006) (0.014) (0.044) (0.048)
Net realized gains on investments........... (0.000) (0.000) (0.000) ( -- ) (0.000) ( -- )
----------- ---------- ---------- --------- --------- ---------
Total distributions............................ (0.005) (0.003) (0.006) (0.014) (0.044) (0.048)
----------- ---------- ---------- --------- --------- ---------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========= ========= =========
Total Return................................... 0.55%(a) 0.28% 0.64% 1.39% 4.54% 4.95%
Ratios/Supplemental Data
Net assets, end of period (000's).............. $ 258,257 $ 250,634 $ 236,931 $241,906 $484,681 $ 491,022
Ratios to average net assets:
Expenses (net of fees waived)(b)............ 0.87%(c) 0.84% 0.79% 0.89% 0.93% 0.94%
Net investment income....................... 1.10%(c) 0.28% 0.64% 1.46% 4.42% 4.77%
Expenses paid indirectly.................... 0.00%(c) 0.00% 0.00% 0.00% 0.00% 0.00%
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
- --------------------------------------------------------------------------------
================================================================================
6. Financial Highlights (Continued)
Six Months Ended U.S. Government Portfolio
Class B shares February 28, 2005 Year Ended August 31,
- -------------- --------------------------------------------------------------
(Unaudited) 2004 2003 2002 2001 2000
----------- ---------- ---------- --------- --------- ---------
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.007 0.005 0.008 0.017 0.048 0.052
Net realized and unrealized gain (loss)
on investments.............................. 0.000 0.000 0.000 -- 0.000 --
----------- ---------- ---------- --------- --------- ---------
Total from investment operations............... 0.007 0.005 0.008 0.017 0.048 0.052
Less distributions from:
Dividends from net investment income........ (0.007) (0.005) (0.008) (0.017) (0.048) (0.052)
Net realized gains on investments........... (0.000) (0.000) (0.000) ( -- ) (0.000) ( -- )
----------- ---------- ---------- --------- --------- ---------
Total distributions............................ (0.007) (0.005) (0.008) (0.017) (0.048) (0.052)
----------- ---------- ---------- --------- --------- ---------
)
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========= ========= =========
Total Return................................... 0.69%(a) 0.53% 0.84% 1.69% 4.91% 5.32%
Ratios/Supplemental Data
Net assets, end of period (000's).............. $ 252,466 $ 290,512 $ 331,130 $400,833 $216,573 $ 135,862
Ratios to average net assets:
Expenses (net of fees waived)(b)............ 0.60%(c) 0.60% 0.59% 0.58% 0.58% 0.58%
Net investment income....................... 1.37%(c) 0.52% 0.84% 1.61% 4.77% 5.23%
Expenses paid indirectly.................... 0.00%(c) 0.00% 0.00% 0.00% 0.00% 0.00%
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM
INCOME
FUND, INC.
Semi-Annual Report
February 28, 2005
(Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------------------------------
This report is submitted for the general information
of the shareholders of the Fund. It is not authorized
for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective
prospectus, which includes information regarding the
Fund's objectives and policies, experience of its
management, marketability of shares, and other
information.
- ------------------------------------------------------
Short Term Income Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
Custodian
The Bank of New York
101 Barclay Street, 13th Floor
New York, New York 10286
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
STIF2/05S
- --------------------------------------------------------------------------------
ITEM 2: CODE OF ETHICS
Not Applicable.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT
Not Applicable
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not Applicable
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6: SCHEDULE OF INVESTMENTS
Schedule of Investments in securities of unaffiliated issuers is included under
Item 1.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-
END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 8: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 9: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors that were implemented
after the registrant last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A, or this Item 9.
ITEM 10: CONTROLS AND PROCEDURES
(a) The registrant's Principal Executive Officer and Principal Financial
Officer have evaluated the design and operation of the registrant's
disclosure controls and procedures within 90 days of this filing and
have concluded that the registrant's disclosure controls and procedures
were effective in ensuring that information required to be disclosed by
the registrant in this Form N-CSR was recorded, processed, summarized
and reported on a timely basis.
(b) There were no changes in the registrant's internal controls over
financial reporting that occurred during the registrants second fiscal
quarter of the period covered by this report that have materially
affected, or are reasonably likely to affect, the registrant's internal
controls over financial reporting.
ITEM 11: EXHIBITS
(a)(1) Not applicable (disclosure required in annual report on N-CSR only).
(a)(2) Certifications of Principal Executive Officer and Principal Financial
Officer, under Rule 30a-2 of the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer, under Section 906 of the Sarbanes-Oxley Act of 2002 and 18
U.S.C. ss.1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Short Term Income Fund, Inc.
By (Signature and Title)* /s/ Rosanne Holtzer
-------------------
Rosanne Holtzer, Secretary
Date: May 2, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Steven W. Duff
------------------
Steven W. Duff, President
Date: May 2, 2005
By (Signature and Title)* /s/ Anthony Pace
----------------
Anthony Pace, Treasurer
Date: May 2, 2005
* Print the name and title of each signing officer under his or her signature.