As filed with the Securities and Exchange Commission on May 4, 2007
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, 2007
ITEM 1: REPORT TO STOCKHOLDERS
- -------------------------------------------------------------------------------
600 FIFTH AVENUE, NEW YORK, NY 10020
(212) 830-5200
SHORT TERM
INCOME FUND, INC.
===============================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Short Term Income Fund, Inc.
(the "Fund") for the period September 1, 2006 through February 28, 2007.
The Fund's Money Market Portfolio had 14,964 shareholders and net assets of
$866,568,727 as of February 28, 2007. The Government Portfolio had 3,501
shareholders and net assets of $418,577,706 as of February 28, 2007.
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
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
EXPENSE CHART
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007
(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, 2006 through February 28,
2007.
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.
- ----------------------------------------------------------------------------------------------------------------------
Money Market Portfolio
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Class A Beginning Account Value Ending Account Value Expenses Paid During the
9/1/06 2/28/07 Period*
- ----------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,022.00 $4.71
- ----------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before $1,000.00 $1,020.13 $4.71
expenses)
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Class B Beginning Account Value Ending Account Value Expenses Paid During the
9/1/06 2/28/07 Period*
- ----------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,023.30 $3.41
- ----------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before $1,000.00 $1,021.42 $3.41
expenses)
- ----------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
- ----------------------------------------------------------------------------------------------------------------------
Money Market Portfolio
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
First Southwest Shares Beginning Account Value Ending Account Value Expenses Paid During the
9/1/06 2/28/07 Period*
- ----------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,021.40 $5.31
- ----------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before $1,000.00 $1,019.54 $5.31
expenses)
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
U.S. Government Portfolio
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Class A Beginning Account Value Ending Account Value Expenses Paid During the
9/1/06 2/28/07 Period*
- ----------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,021.90 $4.51
- ----------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before $1,000.00 $1,020.33 $4.51
expenses)
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Class B Beginning Account Value Ending Account Value Expenses Paid During the
9/1/06 2/28/07 Period*
- ----------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,023.30 $3.16
- ----------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before $1,000.00 $1,021.67 $3.16
expenses)
- ----------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratios of 0.94%, 0.68%,
and 1.06%, for the Money Market Portfolio Class A, Class B, and First Southwest
shares, respectively and 0.90%, and 0.63% for the U.S. Government Portfolio
Class A and Class B shares, respectively, multiplied by the average account
value over the period (September 1, 2006 through February 28, 2007), multiplied
by 181/365 (to reflect the most recent fiscal half-year).
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
(UNAUDITED)
===============================================================================
Face Maturity Current Value
Amount Date Coupon (a) (Note 1)
- ---------- ------ ---------- --------
Asset Backed Commercial Paper (22.59%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 20,000,000 Chesham Finance Limited 03/01/07 5.31% $ 20,000,000
40,000,000 Clipper Receivables, LLC 03/15/07 5.29 39,918,022
25,000,000 Greyhawk Funding, LLC 03/08/07 5.28 24,974,406
15,000,000 Greyhawk Funding, LLC 03/19/07 5.38 14,960,700
20,000,000 Lockhart Funding, LLC 03/05/07 5.26 19,988,311
5,900,000 Lockhart Funding, LLC 03/05/07 5.29 5,896,545
13,000,000 Lockhart Funding, LLC 03/09/07 5.29 12,984,776
20,000,000 Market Street Funding, LLC 03/05/07 5.28 19,988,311
10,000,000 Sheffield Receivable Corporation 03/15/07 5.28 9,979,545
27,114,000 Three Rivers Funding Corporation 03/06/07 5.29 27,094,154
- -------------- -------------
196,014,000 Total Asset Backed Commercial Paper 195,784,770
- -------------- -------------
Domestic Certificate of Deposit (2.89%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 Wilmington Trust Company 05/21/07 5.32% $ 25,000,000
- -------------- -------------
25,000,000 Total Domestic Certificate of Deposit 25,000,000
- -------------- -------------
Floating Rate Securities (6.35%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 15,000,000 General Electric Capital Corporation
Extendible Monthly Securities (b) 10/17/07 5.45% $ 15,000,000
15,000,000 KBC Bank, N.V. (c) 05/22/07 5.35 15,000,000
15,000,000 Merrill Lynch & Co, Inc. (d) 05/14/07 5.29 15,000,000
10,000,000 Merrill Lynch & Co, Inc. Extendible Monthly Securities (e) 05/14/07 5.33 10,000,000
- -------------- -------------
55,000,000 Total Floating Rate Securities 55,000,000
- -------------- -------------
Foreign Commercial Paper (9.51%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 30,000,000 Anglo Irish Bank Corporation PLC 03/05/07 5.31% $ 29,982,450
12,835,000 Britannia Building Society 04/05/07 5.30 12,769,426
10,000,000 Britannia Building Society 05/14/07 5.32 9,891,980
30,000,000 Yorkshire Building Society 04/23/07 5.31 29,767,683
- -------------- -------------
82,835,000 Total Foreign Commercial Paper 82,411,539
- -------------- -------------
Letter of Credit Commercial Paper (4.60%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 20,000,000 Central American Bank
LOC Barclays Bank PLC 04/03/07 5.30% $ 19,903,292
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
===============================================================================
Face Maturity Current Value
Amount Date Coupon (a) (Note 1)
- ---------- ------ ---------- --------
Letter of Credit Commercial Paper (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 20,000,000 Guam Power Authority
Insured by AMBAC Assurance Corp 04/05/07 5.30% $ 20,000,000
- -------------- -------------
40,000,000 Total Letter of Credit Commercial Paper 39,903,292
- -------------- -------------
Loan Participations (f) (4.62%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 AXA Equitable Life Insurance Company
with JPMorgan Chase Bank, N.A. 03/21/07 5.34% $ 25,000,000
15,000,000 Mt. Vernon Phenol (General Electric Co.)
with JPMorgan Chase Bank, N.A. 05/21/07 5.34 15,000,000
- -------------- -------------
40,000,000 Total Loan Participations 40,000,000
- -------------- -------------
Repurchase Agreement (1.15%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 10,000,000 Bank of America, purchased on 02/28/07, repurchase proceeds at
maturity $10,001,472 (Collateralized by $12,663,234, GNMA,
4.02%, due 12/16/21, value $10,200,000) 03/01/07 5.30% $ 10,000,000
- -------------- -------------
10,000,000 Total Repurchase Agreement 10,000,000
- -------------- -------------
Time Deposit (2.65%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 23,000,000 National Bank of Canada 03/01/07 5.34% $ 23,000,000
- -------------- -------------
23,000,000 Total Time Deposit 23,000,000
- -------------- -------------
Variable Rate Demand Instruments (g) (23.46%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1,750,000 Ali Industries, Inc. Project
LOC National City Bank 07/01/10 5.41% $ 1,750,000
5,500,000 Allegheny County, PA IDA (Union Electric Steel Corporation)
LOC PNC Bank, N.A. 11/01/27 5.34 5,500,000
2,250,000 Alta Mira LLC, - Series 2004
LOC M & I Marshall & Ilsley Bank 11/01/34 5.42 2,250,000
1,630,000 ARS Development Ltd. Project - Series 2001
LOC National City Bank 09/01/21 5.41 1,630,000
990,000 B & V Land Company, LLC
LOC Huntington National Bank 09/01/27 5.42 990,000
5,703,000 Baldwin County Sewer Service, LLC - Series 2005
LOC Amsouth Bank, N.A. 05/01/25 5.37 5,703,000
1,285,000 Bank of Kentucky Building, LLC - Series 1999
LOC US Bank, N.A. 12/01/19 5.39 1,285,000
1,000,000 Bookstore Notes - Series 2004A
LOC M & I Marshall & Ilsley Bank 10/01/44 5.32 1,000,000
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2007
(UNAUDITED)
===============================================================================
Face Maturity Current Value
Amount Date Coupon (a) (Note 1)
- ----------- ---- ---------- --------
Variable Rate Demand Instruments (g) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 475,000 Burgess & Niple Limited, - Series 1999
LOC National City Bank 09/01/14 5.36% $ 475,000
510,000 Burton I. Saltzman (Dave's Supermarket, Inc. Project)
LOC US Bank, N.A. 09/01/08 5.45 510,000
520,000 Capital One Funding Corporation
Floating Rate Option Notes - Series 1997D
LOC JPMorgan Chase Bank, N.A. 07/02/18 5.36 520,000
8,430,000 Chicago, IL GO - Series 1999B
Insured by FGIC 01/01/19 5.31 8,430,000
5,000,000 City of Marion, IN EDRB
(Dolgencorp, Inc. Project) - Series 2005A
LOC KeyBank, N.A. 02/01/35 5.37 5,000,000
940,000 Community Limited Care Dialysis Center - Series 1997
LOC Fifth Third Bank 12/01/12 5.41 940,000
590,000 Crownover Lumber Company - Series 1997A
LOC Fifth Third Bank 09/01/08 5.49 590,000
310,000 Crownover Lumber Company - Series 1997B
LOC Fifth Third Bank 09/01/08 5.49 310,000
300,000 Derby Fabricating LLC
LOC Fifth Third Bank 06/01/24 5.37 300,000
1,860,000 Dickinson Press, Inc. - Series 1997
LOC Huntington National Bank 01/01/27 5.42 1,860,000
4,932,427 Federal Home Loan Mortgage Corporation
Class A Certificates - Series M006 10/15/45 5.39 4,932,427
675,000 Gesmundo & Associates, Inc. Loan Program Notes
LOC National City Bank 08/15/27 5.32 675,000
835,000 Graves Lumber Co. Project , Series 2000
LOC Federal Home Loan Bank of Cincinnati 11/01/10 5.46 835,000
1,140,000 HCS & DJS Leasing - Series 2004
LOC Fifth Third Bank 06/01/34 5.37 1,140,000
2,325,000 Holland - Sheltair Aviation Funding, LLC - Series 2005 - B4
LOC Mellon Bank, N.A. 05/01/35 5.32 2,325,000
3,485,000 Hunter's Square, Inc. Project - Series 1998
LOC National City Bank 10/01/16 5.36 3,485,000
3,950,000 Jeff Wyler Automotive Family, Inc.
LOC US Bank, N.A. 01/02/26 5.39 3,950,000
7,725,000 Lexington Financial Services, LLC Health Care RB - Series 2001
LOC LaSalle Bank, N.A. 02/01/26 5.36 7,725,000
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
===============================================================================
Face Maturity Current Value
Amount Date Coupon (a) (Note 1)
- ---------- ----- ---------- --------
Variable Rate Demand Instruments (g) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1,445,000 LKWP Investments, LLC - Series 1997
LOC Huntington National Bank 03/01/27 5.42% $ 1,445,000
510,000 Machining Center Inc. - Series 1997
LOC Comerica Bank 10/01/27 5.42 510,000
425,000 Madison, WI Community Development Authority
(Block 90 Parking Ramp Project)
LOC US Bank, N.A. 10/01/08 5.42 425,000
3,460,000 Maryland Health & Higher Educational Facilities Authority
(Glen Meadows Retirement Community) - Series 1999B
LOC Wachovia Bank, N.A. 07/01/29 5.32 3,460,000
300,000 Maximum Principal Amount Limited Partnership
(Riverview Medical Office Building) - Series 1997
LOC National City Bank 11/01/17 5.36 300,000
1,000,000 Miami Valley Realty Associates - Series 1997
LOC Key Bank, N.A. 06/01/12 5.41 1,000,000
3,500,000 Mississippi Business Finance Corporation
(Attala Steel Industries, LLC Project) - Series 2005
LOC Federal Home Loan Bank of Dallas 07/01/20 5.32 3,500,000
2,935,000 Mobile Airport Authority RB - Series 1999
LOC Regions Bank 10/01/24 5.32 2,935,000
13,385,000 Mobile, AL Springhill Medical Clinic Board RB
(Springhill Medical Complex)
LOC Amsouth Bank, N.A. 06/01/20 5.32 13,385,000
4,000,000 Montgomery, AL Health Facilities Development - Series 2006A
LOC First Comercial 11/01/33 5.37 4,000,000
915,000 Mount Carmel East Professional Building - Series 1994A
LOC National City Bank 01/01/14 5.36 915,000
1,095,000 MCMC POB II (Mount Carmel Partnership Project) - Series 1994
LOC National City Bank 08/01/14 5.36 1,095,000
3,145,000 Mount Ontario Holdings LLC - Series 2001
LOC US Bank, N.A. 04/01/21 5.36 3,145,000
5,000,000 New Jersey EDA Thermal Energy Facilities RB
(Marina Energy LLC Project) - Series 2001B
LOC Wachovia Bank, N.A. 09/01/21 5.32 5,000,000
6,000,000 Newport, KY Industrial Building RB
(Aquarium Holdings of Northern Kentucky, LLC Project)
LOC Fifth Third Bank 12/01/08 5.37 6,000,000
1,000,000 North Coast Quarry, Ltd.
LOC Fifth Third Bank 07/01/31 5.37 1,000,000
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2007
(UNAUDITED)
===============================================================================
Face Maturity Current Value
Amount Date Coupon (a) (Note 1)
- ---------- ---- ---------- --------
Variable Rate Demand Instruments (g) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 2,070,000 Ohio State Water Development Authority RB
(Independence Excavating, Inc. Project)
LOC National City Bank 12/01/09 5.36% $ 2,070,000
2,525,000 Ordeal Properties LLC - Series 1997
LOC Key Bank, N.A. 10/01/12 5.37 2,525,000
1,500,000 Pennsylvania EDFA
(West 914 Incorporation Project) - Series 1991 A1
LOC PNC Bank, N.A. 05/01/21 5.34 1,500,000
3,915,000 Prevea Clinic, Inc. - Series 2004-A
LOC Wells Fargo Bank, N.A. 12/01/34 5.30 3,915,000
4,600,000 Rochester Institute of Technology, NY RB - Series 2004A 11/01/21 5.40 4,600,000
1,400,000 Sacramento County Housing Authority, CA
(Hidden Oaks Apartments) - Series 1999E
Collateralized by Federal National Mortgage Association 05/15/29 5.38 1,400,000
10,000,000 Sea Island Company & Sea Island Coastal
Properties LLC - Series 2003B
LOC Columbus Bank & Trust Company 04/01/23 5.37 10,000,000
2,680,000 Shelburne Realty & Troy Realty LLC - Series 1996
LOC National City Bank 04/01/17 5.36 2,680,000
25,000,000 Southern Ute Indian Tribe of the Southern Utd Indian Reservation 01/01/27 5.40 25,000,000
12,505,000 Southwestern Group Limited - Series 2001
LOC US Bank, N.A. 07/01/21 5.34 12,505,000
5,600,000 St. Johns County IDA First Mortgage RB
(Presbyterian Retirement Communities Project) - Series 2004B
LOC Allied Irish Banks, PLC 08/01/34 5.42 5,600,000
2,835,000 St. Ann's Medical Office Building II
Limited Partnership - Series 1998
LOC National City Bank 11/01/19 5.36 2,835,000
5,904,000 Stonegate Partners I, LLC
(Stonegate Partners Project) - Series 2002
LOC US Bank, N.A. 06/01/34 5.36 5,904,000
4,180,000 Tom Richards, Inc. (Process Technology Project) - Series 2001
LOC Federal Home Loan Bank of Cincinnati 12/01/16 5.36 4,180,000
3,000,000 Tri-Park Villas Notes - Series 2004-A
LOC M & I Marshall & Ilsley Bank 10/01/44 5.32 3,000,000
1,300,000 UAI Technologies, Inc. - Series 1998
LOC Wachovia Bank, N.A. 05/01/18 5.44 1,300,000
695,000 Valley City Linen Co. - Series 1997
LOC Huntington National Bank 02/01/27 5.42 695,000
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
===============================================================================
Face Maturity Current Value
Amount Date Coupon (a) (Note 1)
- ---------- ------ ---------- --------
Variable Rate Demand Instruments (g) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1,375,000 Washington State HFC MHRB
(The Vintage at Richland Senior Living Project) - Series 2004B
Guaranteed by Federal National Mortgage Association 01/15/38 5.34% $ 1,375,000
- -------------- -------------
203,309,427 Total Variable Rate Demand Instruments 203,309,427
- -------------- -------------
Yankee Certificates of Deposit (21.93%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 Bank of Ireland 03/06/07 5.27% $ 24,999,841
25,000,000 Canadian Imperial Bank of Commerce 03/23/07 5.27 25,000,000
40,000,000 Deutsche Zentral - Genossenschafts Bank 03/05/07 5.29 40,000,000
25,000,000 HSH Nordbank A.G. 03/05/07 5.29 25,000,000
30,000,000 Norddeutsche Landesbank Girozentral 03/19/07 5.29 30,000,000
20,000,000 Royal Bank of Canada 11/09/07 5.40 20,000,000
25,000,000 Union Bank of Switzerland 03/05/07 5.28 25,000,000
- -------------- -------------
190,000,000 Total Yankee Certificates of Deposit 189,999,841
- -------------- -------------
Total Investments (99.75%) (cost $864,408,869+) 864,408,869
Cash and other assets, net of liabilities (0.25%) 2,159,858
-------------
Net Assets (100.00%) $ 866,568,727
=============
+ Aggregate cost for federal income tax purposes is identical.
FOOTNOTES:
(a) The interest rate shown reflects the security's current coupon, unless
yield is available.
(b) The interest rate changes monthly based upon one month LIBOR plus 0.10%.
(c) The interest rate changes daily based upon Federal Funds Target plus 0.10%.
(d) The interest rate changes monthly based upon one month LIBOR minus 0.035%.
(e) The interest rate changes monthly based upon one month LIBOR minus 0.02%.
(f) The interest rate changes monthly based upon one month LIBOR plus 0.02%.
(g) Securities payable on demand at par including accrued interest (usually
with seven days' notice) and, where indicated, are unconditionally secured
as to principal and interest by a bank letter of credit. The interest rates
are adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2007
(UNAUDITED)
===============================================================================
KEY:
EDA = Economic Development Authority HFC = Housing Finance Commission
EDFA = Economic Development Finance Authority IDA = Industrial Development Authority
EDRB = Economic Development Revenue Bond LOC = Letter of Credit
FGIC = Financial Guaranty Insurance Company MHRB = Multi-Family Housing Revenue Bond
GNMA = Government National Mortgage Association RB = Revenue Bond
GO = General Obligation
BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY:
- ------------------------------------------------------------------------------
Securities Maturing in Value % of Portfolio
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Less than 31 Days $727,076,487 84.11%
31 through 60 Days 82,440,401 9.54
61 through 90 Days 34,891,981 4.04
91 through 120 Days -- --
121 through 180 Days -- --
Over 180 Days 20,000,000 2.31
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total $864,408,869 100.00%
- ------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
U.S. GOVERNMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
(UNAUDITED)
===============================================================================
Face Maturity Current Value
Amount Date Yield (a) (Note 1)
- ---------- ---- --------- --------
Repurchase Agreements (54.47%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 100,000,000 Annaly Mortgage Management, Inc., purchased on 02/28/07,
repurchase proceeds at maturity $100,014,778 (Collateralized by
$161,112,075 GNMA, 5.375% to 6.125%,
due 06/20/33 to 03/20/34, value $102,000,000) 03/01/07 5.32% $ 100,000,000
16,000,000 Bank of America, purchased on 02/28/07,
repurchase proceeds at maturity $16,002,356 (Collateralized by
$16,330,120, GNMA, 4.591% to 5.321%,
due 05/16/33 to 12/16/37, value $16,320,001) 03/01/07 5.30 16,000,000
95,000,000 Bear Stearns & Co., purchased on 02/28/07,
repurchase proceeds at maturity $95,014,013 (Collateralized by
$140,926,695, GNMA, 5.000% to 11.000%,
due 06/15/07 to 02/15/37, value $96,900,975) 03/01/07 5.31 95,000,000
17,000,000 UBS Securities, LLC, purchased on 02/28/07,
repurchase proceeds at maturity $17,002,508 (Collateralized by
$22,675,000, GNMA, 5.375% to 6.000%,
due 04/20/30 to 01/20/37, value $17,343,933) 03/01/07 5.31 17,000,000
- -------------- -------------
228,000,000 Total Repurchase Agreements 228,000,000
- -------------- -------------
U.S. Government Obligations (45.36%)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 155,000,000 U.S. Treasury Bill 03/01/07 4.92% $ 155,000,000
20,000,000 U.S. Treasury Note, 3.125% 05/15/07 5.02 19,925,037
15,000,000 U.S. Treasury Note, 3.125% 05/15/07 5.06 14,942,478
- -------------- -------------
190,000,000 Total U.S. Government Obligations 189,867,515
- -------------- -------------
Total Investments (99.83%) (cost $417,867,515+) 417,867,515
Cash and other assets, net of liabilities (0.17%) 710,191
-------------
Net Assets (100.00%) $ 418,577,706
=============
+ Aggregate cost for federal income tax purposes is identical.
FOOTNOTES:
(a) The interest rate shown reflects the security's current yield; coupon rate
for Treasury Securities is shown within the description.
KEY:
GNMA = Government National Mortgage Association
- -------------------------------------------------------------------------------
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, 2007
(UNAUDITED)
===============================================================================
- ------------------------------------------------------------------------------
Securities Maturing in Value % of Portfolio
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Less than 31 Days $ 383,000,000 91.66%
31 through 60 Days -- --
61 through 90 Days 34,867,515 8.34
91 through 120 Days -- --
121 through 180 Days -- --
Over 180 Days -- --
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total $ 417,867,515 100.00%
- ------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007
(UNAUDITED)
===============================================================================
Money Market U.S. Government
Portfolio Portfolio
------------ ---------------
ASSETS
Investments in securities, at amortized cost (Note 1)........ $ 854,408,869 $ 189,867,515
Repurchase agreements (Note 1)............................... 10,000,000 228,000,000
Cash ........................................................ 946,156 1,156,009
Accrued interest receivable.................................. 2,687,552 353,923
Prepaid expenses............................................. 39,774 25,275
Other Receivables............................................ 10,642 2,773
------------------ -----------------
Total assets...................................... 868,092,993 419,405,495
------------------ -----------------
LIABILITIES
Payable to affiliates*....................................... 434,434 188,001
Accrued expenses............................................. 157,220 122,523
Dividends payable............................................ 932,612 517,265
------------------ -----------------
Total liabilities................................. 1,524,266 827,789
------------------ -----------------
Net assets.................................................. $ 866,568,727 $ 418,577,706
================== =================
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock (Note 3)...... $ 866,569,842 $ 418,577,706
Accumulated net realized loss................................ (1,115) -0-
------------------ -----------------
Net assets................................................... $ 866,568,727 $ 418,577,706
================== =================
Net asset value, per share (Note 3):
Money Market Portfolio:
Class A shares, ($356,477,232 applicable to 356,477,690 shares outstanding) $ 1.00
===========
Class B shares, ($330,468,473 applicable to 330,468,899 shares outstanding) $ 1.00
===========
First Southwest shares, ($179,623,022 applicable to 179,623,253 shares outstanding) $ 1.00
===========
U.S. Government Portfolio:
Class A shares, ($176,289,871 applicable to 176,289,871 shares outstanding) $ 1.00
===========
Class B shares, ($242,287,835 applicable to 242,287,835 shares outstanding) $ 1.00
===========
* Includes fees payable to Reich & Tang Asset Management, LLC, Reich & Tang
Distributors, Inc. and Reich & Tang Services, Inc.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 2007
(UNAUDITED)
===============================================================================
Money Market U.S. Government
Portfolio Portfolio
------------ ---------------
INVESTMENT INCOME
Income:
Interest..................................................... $ 23,388,432 $ 11,519,959
------------------ -----------------
Expenses: (Note 2)
Investment management fee.................................... 1,308,249 576,538
Administration fee........................................... 920,420 458,258
Distribution fee (First Southwest shares).................... 199,749 -0-
Shareholder servicing fee (Class A).......................... 513,051 257,479
Shareholder servicing fee (First Southwest shares)........... 199,749 -0-
Custodian expenses........................................... 26,255 20,833
Shareholder servicing and related shareholder expenses+...... 304,053 159,104
Legal, compliance and filing fees............................ 264,168 69,464
Audit and accounting......................................... 92,629 91,756
Directors' fees.............................................. 22,174 15,496
Miscellaneous................................................ 18,626 11,454
------------------ -----------------
Total expenses........................................... 3,869,123 1,660,382
Less: Fees waived (First Southwest shares).............. (47,940) -0-
Expenses paid indirectly.......................... (888) (7,923)
------------------ -----------------
Net expenses............................................. 3,820,295 1,652,459
------------------ -----------------
Net investment income........................................... 19,568,137 9,867,500
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments......................... -0- -0-
------------------ -----------------
Increase in net assets from operations.......................... $ 19,568,137 $ 9,867,500
================== =================
+ Includes class specific transfer agency expenses of $144,195 and $94,925 for
the Money Market Portfolio Class A and Class B shares, respectively and $72,090
and $57,241 for the U.S. Government Portfolio Class A and Class B shares,
respectively.
- -------------------------------------------------------------------------------
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, 2007 Ended February 28, 2007 Ended
(Unaudited) August 31, 2006 (Unaudited) August 31, 2006
------------------ --------------- ------------------ ---------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income.................. $ 19,568,137 $ 32,288,892 $ 9,867,500 $ 16,642,255
Net realized gain (loss) on investments -0- -0- -0- 2,751
---------------- ---------------- --------------- ---------------
Increase in net assets from operations. 19,568,137 32,288,892 9,867,500 16,645,006
Dividends to shareholders from
net investment income:
Class A................................ (9,021,166) (14,316,769) (4,511,307) (8,027,122)
Class B................................ (7,129,706) (13,256,967) (5,356,193) (8,615,133)
First Southwest shares................. (3,417,265) (4,715,156) -0- -0-
---------------- ---------------- -------------- ---------------
Total dividend to shareholders...... (19,568,137) (32,288,892) (9,867,500) (16,642,255)
---------------- ---------------- -------------- ---------------
Distributions to shareholders from
realized gain on investments:
Class A................................ -0- -0- -0- (1,410)
Class B................................ -0- -0- -0- (1,341)
First Southwest shares................. -0- -0- -0- -0-
---------------- ---------------- -------------- ---------------
Total distributions to shareholders. -0- -0- -0- (2,751)
---------------- ---------------- -------------- ---------------
Capital share transactions (Note 3):
Class A................................ (42,627,451) 51,525,598 (28,042,312) (34,032,228)
Class B................................ 16,007,722 (84,626,791) 20,536,464 (11,638,016)
First Southwest shares................. 45,816,254 16,895,909 -0- -0-
---------------- ---------------- -------------- ---------------
Total capital share transactions.... 19,196,525 (16,205,284) (7,505,848) (45,670,244)
---------------- ---------------- -------------- ---------------
Total increase (decrease)........... 19,196,525 (16,205,284) (7,505,848) (45,670,244)
Net assets:
Beginning of period.................... 847,372,202 863,577,486 426,083,554 471,753,798
---------------- ---------------- --------------- ---------------
End of period.......................... $ 866,568,727 $ 847,372,202 $ 418,577,706 $ 426,083,554
================ ================ =============== ===============
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. (the "Fund") is a 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, which approximates market value. 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.
If fluctuating interest rates cause the market value of the Fund's portfolio to
deviate more than 1/2 of 1% from the value determined on the basis of amortized
cost, the Board of Directors will consider whether any action should be
initiated. 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. Net realized
long-term capital gains, if any, are distributed at least annually and in no
event later than 60 days after the end of the Fund's fiscal year.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
1. Summary of Accounting Policies (Continued)
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.
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.
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, 2007, the following fees were voluntarily
waived by the Distributor:
Money Market Portfolio
----------------------
Distribution fees - First Southwest shares $ 47,940
The Distributor has no right to recoup prior fee waivers.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$8,000 per annum plus $1,450 per meeting attended (there are five scheduled
Board Meetings each year) 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. 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. The Lead
Independent Director receives an additional annual fee of $8,000 and the Deputy
Lead Director receives an additional annual fee of $4,000, both fees paid
quarterly and allocated among the funds of the Reich & Tang Complex. Effective
January 1, 2007, the Directors of the Fund not affiliated with the Manager will
be paid a fee that is to be allocated among multiple funds, as defined below.
Each Independent Director will receive an annual retainer of $50,000 and a fee
of $3,000 for each Board of Directors meeting attended. Each Independent
Director will also receive a fee of up to $1,500 at the discretion of the Lead
Director for telephonic Board meetings. In addition, the Lead Independent
Director will receive an additional $12,000, payable quarterly and the Audit
Committee Chairman and Compliance Committee Chairman will each receive an
additional annual fee of $8,000, payable quarterly. Each Independent Director
will also be reimbursed for all out-of-pocket expenses relating to attendance at
such meetings. The fees noted above are to be allocated at the discretion of the
Manager among the Fund, the California Daily Tax Free Income Fund, Inc., the
Connecticut Daily Tax Free Income Fund, Inc., the Daily Income Fund, the Daily
Tax Free Income Fund, Inc., the Florida Daily Municipal Income Fund and the New
Jersey Daily Municipal Income Fund, Inc.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees of $187,244 and $109,988 for the
Money Market Portfolio and the U.S. Government Portfolio, respectively paid to
Reich & Tang Services, Inc., (the "Transfer Agent"), an affiliate of the Manager
as servicing agent for each portfolio. Pursuant to the Transfer Agency
Agreement, the Transfer Agent receives a fee of $17.40 per account per year or a
minimum of 0.05% of the monthly average net assets of the Class A and B shares
of each portfolio. For the period ended February 28, 2007, these fees amounted
to an annual rate of 0.05% of the monthly average net assets of the Class A and
B shares of each portfolio.
For the period ended February 28, 2007, the breakdown of expenses paid
indirectly by the Fund were as follows:
Money Market Portfolio U.S. Government Portfolio
---------------------- -------------------------
Custodian expenses $ 888 $ 7,252
Shareholder servicing and related shareholder expenses -0- 671
------- --------
Total $ 888 $ 7,923
======= ========
3. Capital Stock
At February 28, 2007, 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 Year Six Months Ended Year
Ended Ended Ended Ended
February 28, 2007 August 31, 2006 February 28, 2007 August 31, 2006
----------------- --------------- ----------------- ---------------
Class A shares
- --------------
Sold.................................. 1,326,880,997 2,026,096,416 538,810,782 1,143,651,308
Issued on reinvestment of dividends... 8,538,952 12,881,685 4,252,122 7,219,159
Redeemed.............................. (1,378,047,400) (1,987,452,503) (571,105,216) (1,184,902,695)
---------------- --------------- --------------- ---------------
Net increase (decrease)............... (42,627,451) 51,525,598 (28,042,312) (34,032,228)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
3. Capital Stock (Continued)
Money Market Portfolio U.S. Government Portfolio
--------------------------- ------------------------------
Six Months Year Six Months Ended Year
Ended Ended Ended Ended
February 28, 2007 August 31, 2006 February 28, 2007 August 31, 2006
----------------- --------------- ----------------- ---------------
Class B shares
- --------------
Sold.................................. 554,862,012 1,161,030,721 443,160,032 886,491,976
Issued on reinvestment of dividends... 7,221,570 13,139,388 5,368,721 8,078,598
Redeemed.............................. (546,075,860) (1,258,796,900) (427,992,289) (906,208,590)
---------------- --------------- -------------- -------------
Net increase (decrease)............... 16,007,722 (84,626,791) 20,536,464 (11,638,016)
================ =============== ============== =============
First Southwest shares
Sold.................................. 181,155,301 215,384,221
Issued on reinvestment of dividends... 3,417,262 4,715,497
Redeemed.............................. (138,756,309) (203,203,809)
--------------- ---------------
Net increase (decrease)............... 45,816,254 16,895,909
=============== ===============
4. Tax Information
The tax character of all dividends and distributions paid during the years ended
August 31, 2006 and 2005 were as follows:
Money Market Portfolio U.S. Government Portfolio
----------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Ordinary income....................... $32,288,892 $17,371,571 $16,645,006 $ 9,049,494
Long-term capital gains............... -0- -0- -0- -0-
At August 31, 2006, the Money Market Portfolio had unused capital loss carry
forwards of $1,115, available for Federal income tax purposes to be applied
against future gains, if any. If not applied against future gains, $916 will
expire in 2013 and $199 will expire in 2014.
At August 31, 2006, the Money Market Portfolio and the U.S. Government Portfolio
had no distributable earnings.
In July 2006, the Financial Accounting Standards Board (the "FASB") issued
Interpretation No.48, "Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109" ("the Interpretation"). The
Interpretation establishes for all entities, including pass-through entities
such as the Fund, a minimum threshold for financial statement recognition of the
benefit of positions taken in filling tax returns (including whether an entity
is taxable in a particular jurisdiction) and requires certain expanded tax
disclosures. FIN 48 is effective for fiscal years beginning after December 15,
2006. On December 22, 2006, the Securities and Exchange Commission notified the
industry that the implementation of the Interpretation must be incorporated no
later than the last day on which a Net Assets Value is calculated preceding the
Portfolio's 2007 annual report. Management has begun to evaluate the application
of the Interpretation to the Fund, and is not in a position at this time to
estimate the significance of its impact, if any, on the Fund's financial
statements.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
5. Financial Highlights
Six Months Ended Money Market Portfolio
Class A shares February 28, 2007 Year Ended August 31
- --------------- -----------------------------------------------------------
(Unaudited) 2006 2005 2004 2003 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 $ 1.00 $ 1.00
--------- --------- -------- -------- -------- --------
Income from investment operations:
Net investment income........................... 0.022 0.037 0.017 0.003 0.006 0.014
Net realized and unrealized gain (loss)
on investments.................................. -- -- 0.000 0.000 -- 0.000
--------- --------- -------- -------- -------- --------
Total from investment operations.................... 0.022 0.037 0.017 0.003 0.006 0.014
Less distributions from:
Dividends from net investment income (0.022) (0.037) (0.017) (0.003) (0.006) (0.014)
Net realized gains on investments............... -- (--) (--) (0.000) (--) (0.000)
--------- --------- -------- -------- -------- --------
Total distributions................................. (0.022) (0.037) (0.017) (0.003) (0.006) (0.014)
--------- --------- -------- -------- -------- --------
Net asset value, end of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ======== ======== ======== ========
Total Return........................................ 2.20%(a) 3.72% 1.66% 0.33% 0.63% 1.44%
Ratios/Supplemental Data
Net assets, end of period (000's)................... $ 356,477 $ 399,104 $ 347,579 $ 370,650 $ 389,718 $ 322,381
Ratios to average net assets:
Expenses (net of fees waived)(b).................. 0.94%(c) 0.94% 0.94% 0.87% 0.87% 0.97%
Net investment income............................. 4.40%(c) 3.67% 1.64% 0.32% 0.61% 1.56%
Expenses paid indirectly.......................... 0.00%(c) -- 0.00% 0.00% 0.00% 0.00%
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
5. Financial Highlights ( Continued)
Six Months Ended Money Market Portfolio
Class B shares February 28, 2007 Year Ended August 31
- --------------- -----------------------------------------------------------
(Unaudited) 2006 2005 2004 2003 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 $ 1.00 $ 1.00
--------- --------- -------- -------- -------- --------
Income from investment operations:
Net investment income........................... 0.023 0.039 0.019 0.006 0.009 0.018
Net realized and unrealized gain (loss)
on investments.................................. -- -- 0.000 0.000 -- 0.000
--------- --------- -------- -------- -------- --------
Total from investment operations.................... 0.023 0.039 0.019 0.006 0.009 0.018
Less distributions from:
Dividends from net investment income (0.023) (0.039) (0.019) (0.006) (0.009) (0.018)
Net realized gains on investments............... -- (--) (--) (0.000) (--) (0.000)
--------- --------- -------- -------- -------- --------
Total distributions................................. (0.023) (0.039) (0.019) (0.006) (0.009) (0.018)
--------- --------- -------- -------- -------- --------
Net asset value, end of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ======== ======== ======== ========
Total Return........................................ 2.33%(a) 4.00% 1.95% 0.58% 0.92% 1.80%
Ratios/Supplemental Data
Net assets, end of period (000's)................... $ 330,469 $ 314,461 $ 399,087 $ 614,791 $ 858,944 $ 838,064
Ratios to average net assets:
Expenses (net of fees waived)(b).................. 0.68%(c) 0.67% 0.66% 0.62% 0.58% 0.61%
Net investment income............................. 4.65%(c) 3.89% 1.86% 0.57% 0.92% 1.78%
Expenses paid indirectly.......................... 0.00%(c) -- 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)
===============================================================================
5. Financial Highlights (Continued)
Money Market Portfolio
--------------------------------------------------------------------------
August 5, 2002
Six Months Ended (Commencement
First Southwest shares February 28, 2007 Year Ended August 31, of Offering) to
- ---------------------- -------------------------------------------
(Unaudited) 2006 2005 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 $ 1.00 $ 1.00
--------- --------- -------- -------- -------- --------
Income from investment operations:
Net investment income........................... 0.021 0.035 0.015 0.002 0.005 0.001
Net realized and unrealized gain (loss)
on investments.................................. -- -- 0.000 0.000 -- 0.000
--------- --------- -------- -------- -------- --------
Total from investment operations.................... 0.021 0.035 0.015 0.002 0.005 0.001
Less distributions from:
Dividends from net investment income (0.021) (0.035) (0.015) (0.002) (0.005) (0.001)
Net realized gains on investments............... -- (--) (--) (0.000) (--) (0.000)
--------- --------- -------- -------- -------- --------
Total distributions................................. (0.021) (0.035) (0.015) (0.002) (0.005) (0.001)
--------- --------- -------- -------- -------- --------
Net asset value, end of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ======== ======== ======== ========
Total Return........................................ 2.14%(a) 3.61% 1.56% 0.19% 0.50% 0.07%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)................... $ 179,623 $ 133,807 $ 116,911 $ 142,384 $ 130,429 $ 127,082
Ratios to average net assets:
Expenses (net of fees waived)(b).................. 1.06%(c) 1.05% 1.05% 1.01% 0.99% 0.99%
Net investment income............................. 4.28%(c) 3.56% 1.52% 0.19% 0.51% 0.93%
Distribution fees waived.......................... 0.06%(c) 0.06% 0.06% 0.06% 0.06% 0.06%
Expenses paid indirectly.......................... 0.00%(c) -- 0.00% 0.00% 0.00% 0.00%
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
5. Financial Highlights (Continued)
Six Months Ended U.S. Government Portfolio
Class A shares February 28, 2007 Year Ended August 31
- --------------- -----------------------------------------------------------
(Unaudited) 2006 2005 2004 2003 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 $ 1.00 $ 1.00
--------- --------- -------- -------- -------- --------
Income from investment operations:
Net investment income........................... 0.022 0.036 0.016 0.003 0.006 0.014
Net realized and unrealized gain (loss)
on investments.................................. -- 0.000 0.000 0.000 -- --
--------- --------- -------- -------- -------- --------
Total from investment operations.................... 0.022 0.036 0.016 0.003 0.006 0.014
Less distributions from:
Dividends from net investment income (0.022) (0.036) (0.016) (0.003) (0.006) (0.014)
Net realized gains on investments............... -- (0.000) (0.000) (0.000) (0.000) (--)
--------- --------- -------- -------- -------- --------
Total distributions................................. (0.022) (0.036) (0.016) (0.003) (0.006) (0.014)
--------- --------- -------- -------- -------- --------
Net asset value, end of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ======== ======== ======== ========
Total Return........................................ 2.19%(a) 3.65% 1.64% 0.28% 0.64% 1.39%
Ratios/Supplemental Data
Net assets, end of period (000's)................... $ 176,290 $ 204,332 $ 238,365 $ 250,634 $ 236,931 $ 241,906
Ratios to average net assets:
Expenses (net of fees waived)(b).................. 0.90%(c) 0.88% 0.87% 0.84% 0.79% 0.89%
Net investment income............................. 4.38%(c) 3.55% 1.62% 0.28% 0.64% 1.46%
Expenses paid indirectly.......................... 0.00%(c) -- 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)
===============================================================================
5. Financial Highlights (Continued)
Six Months Ended U.S. Government Portfolio
Class B shares February 28, 2007 Year Ended August 31
- --------------- -----------------------------------------------------------
(Unaudited) 2006 2005 2004 2003 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 $ 1.00 $ 1.00
--------- --------- -------- -------- -------- --------
Income from investment operations:
Net investment income........................... 0.023 0.039 0.019 0.005 0.008 0.017
Net realized and unrealized gain (loss)
on investments.................................. -- 0.000 0.000 0.000 0.000 --
--------- --------- -------- -------- -------- --------
Total from investment operations.................... 0.023 0.039 0.019 0.005 0.008 0.017
Less distributions from:
Dividends from net investment income (0.023) (0.039) (0.019) (0.005) (0.008) (0.017)
Net realized gains on investments............... -- (0.000) (0.000) (0.000) (0.000) (--)
--------- --------- -------- -------- -------- --------
Total distributions................................. (0.023) (0.039) (0.019) (0.005) (0.008) (0.017)
--------- --------- -------- -------- -------- --------
Net asset value, end of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ======== ======== ======== ========
Total Return........................................ 2.33%(a) 3.94% 1.91% 0.53% 0.84% 1.69%
Ratios/Supplemental Data
Net assets, end of period (000's)................... $ 242,288 $ 221,752 $ 233,389 $ 290,512 $ 331,130 $ 400,833
Ratios to average net assets:
Expenses (net of fees waived)(b).................. 0.63%(c) 0.61% 0.60% 0.60% 0.59% 0.58%
Net investment income............................. 4.65%(c) 3.86% 1.85% 0.52% 0.84% 1.61%
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
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
ADDITIONAL INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund is required to file its complete schedule of portfolio holdings with
the Securities and Exchange Commission ("SEC") on Form N-Q for its first and
third fiscal quarters. The Fund's Form N-Q is available without charge on the
SEC's website (http://www.sec.gov) or by calling the Fund toll free at (800)
433-1918. You can also obtain copies of the Fund's Form N-Q by visiting the
SEC's Public Reference Room in Washington, DC (please call the SEC at (800)
732-0330 for information on the operation of the Public Reference Room).
INFORMATION ABOUT PROXY VOTING
Information regarding the Fund's proxy voting record for the 12 month period
ending June 30 of each year is filed with the SEC on Form N-PX no later than
August 31 of each year. The Fund's Form N-PX is available without charge, upon
request, by calling the Fund at (800) 433-1918 and on the SEC's website
(http//www.sec.gov). The Fund does not presently invest in voting securities and
has therefore not adopted proxy voting policies and procedures.
QUALIFIED INTEREST INCOME
For the fiscal year ended August 31, 2006, the Funds' designate the following
percentages of ordinary distributions paid during the fiscal year that are from
qualified interest income to foreign shareholders:
Qualified Interest
Income
------
Short Term Income Fund - Money Market Portfolio 77%
Short Term Income Fund - U.S. Government Portfolio 100%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHORT TERM
INCOME
FUND, INC.
- -------------------------------------------------------
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
2 Hanson Place, 7th Floor, Semi-Annual Report
Brooklyn, New York 11217 February 28, 2007
(Unaudited)
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
STIF2/07S
SHORT TERM
INCOME
FUND, INC.
Semi-Annual Report
February 28, 2006
(Unaudited)
- --------------------------------------------------------------------------------
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 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.
(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 4, 2007
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 4, 2007
By (Signature and Title)* /s/Anthony Pace
Anthony Pace, Treasurer
Date: May 4, 2007
* Print the name and title of each signing officer under his or her signature.