As filed with the Securities and Exchange Commission on October 28, 2003
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: 08/31
Date of reporting period: 08/31/2003
ITEM 1: REPORT TO STOCKHOLDERS
- --------------------------------------------------------------------------------
SHORT TERM 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND, INC. (212) 830-5200
================================================================================
Dear Shareholder:
We are pleased to present the annual report of Short Term Income Fund, Inc. for
the year ended August 31, 2003.
The Fund's Money Market Portfolio had 11,672 shareholders and net assets of
$1,379,090,416 as of August 31, 2003. The Government Portfolio had 4,553
shareholders and net assets of $568,060,520 as of August 31, 2003.
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.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 2003
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Commercial Paper (21.06%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 35,000,000 Clipper Receivables Corporation 09/02/03 1.05% $ 34,998,950
20,000,000 General Electric Capital Corporation 09/10/03 1.15 19,994,250
35,000,000 HBOS Treasury Services 11/21/03 1.08 34,915,344
40,879,000 Long Lane Master Trust IV - Series A (a) 09/15/03 1.08 40,861,831
40,000,000 Sigma Finance Corporation 11/18/03 1.07 39,907,267
30,000,000 Societe Generale North America 09/04/03 1.18 29,997,050
20,000,000 Societe Generale North America 09/08/03 1.16 19,995,508
15,000,000 Societe Generale North America 03/22/04 1.03 14,913,725
40,000,000 Special Purpose Accounts Receivable 11/13/03 1.08 39,912,400
15,000,000 Superior Funding Capital Corporation 10/24/03 1.04 14,977,033
- -------------- -------------
290,879,000 Total Commercial Paper 290,473,358
- -------------- -------------
Domestic Certificates of Deposit (3.26%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 Citibank 09/29/03 1.03% $ 25,000,000
20,000,000 Harris Trust & Savings Bank 03/01/04 1.33 19,999,504
- -------------- -------------
45,000,000 Total Domestic Certificates of Deposit 44,999,504
- -------------- -------------
Floating Rate Securities (17.40%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 40,000,000 Abbey National PLC (b) 03/08/04 1.30% $ 39,997,946
35,000,000 Credit Agricole (c) 01/16/04 1.30 34,999,671
30,000,000 Equitable Life Assurance Society With J.P. Morgan Chase (d) 03/22/04 1.15 30,000,000
15,000,000 General Electric Capital Corporation
Extendible Monthly Security (e) 09/17/04 1.14 15,000,000
20,000,000 Mt. Vernon Phenol Plant Partnership With J.P. Morgan Chase (f)
Guaranteed by General Electric Company 05/19/04 1.13 20,000,000
30,000,000 Rabobank Nederland (g) 01/22/04 1.04 30,000,000
30,000,000 Royal Bank of Canada (g) 01/28/04 1.04 30,000,000
25,000,000 SunTrust Bank (h) 02/03/04 1.10 24,999,735
15,000,000 Verizon Global Funding Floating Rate
Step-Up Exchangeable Note (i) 10/15/03 1.21 15,000,000
- -------------- -------------
240,000,000 Total Floating Rate Securities 239,997,352
- -------------- -------------
Foreign Commercial Paper (9.40%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 15,000,000 Alliance & Leicester PLC 12/08/03 1.03% $ 14,958,350
25,000,000 Alliance & Leicester PLC 01/07/04 1.04 24,908,444
30,000,000 Banco Bilbao Vizcaya Argentaria S.A. 10/22/03 1.06 29,954,950
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Foreign Commercial Paper (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 30,000,000 Banco Bilbao Vizcaya Argentaria S.A. 10/30/03 1.10% $ 29,945,917
29,800,000 Yorkshire Building Society 09/18/03 1.03 29,785,506
- -------------- -------------
129,800,000 Total Foreign Commercial Paper 129,553,167
- -------------- -------------
Letter of Credit Commercial Paper (13.72%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 30,000,000 Banco Cuscatlan S.A.
LOC ING Bank NV 04/05/04 1.08% $ 29,804,700
30,000,000 Banco Rio de La Plata S.A.
LOC Banco Santander 03/18/04 0.98 29,839,142
30,000,000 CSN Overseas
LOC Banco Santander 10/16/03 1.26 29,952,750
32,000,000 Dean Health System Inc.
LOC Marshall & Ilsley 09/18/03 1.06 31,983,982
34,351,000 Quincy Capital Corporation
Insured by AMBAC Indemnity Corp. 09/24/03 1.07 34,327,517
33,300,000 Vermont EDA - Series A
LOC First Union National Bank 10/07/03 1.05 33,300,000
- -------------- -------------
189,651,000 Total Letter of Credit Commercial Paper 189,208,091
- -------------- -------------
Other Notes (4.08%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 35,000,000 State of Mississippi Taxable GO
(Mississippi Major Economic Impact) 12/01/03 1.62% $ 35,000,367
1,270,000 City of Watertown, WI BAN - Series 2003B 03/24/04 1.35 1,270,000
20,000,000 Winston-Salem, NC COPS 11/07/03 1.13 20,000,000
- -------------- -------------
56,270,000 Total Other Notes 56,270,367
- -------------- -------------
Repurchase Agreement (1.52%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 21,000,000 Bank of America, Repurchase proceeds at maturity $21,002,380
(Collateralized by $22,540,039, GNMA, 0.000% To 5.500%,
due 12/16/29 to 10/20/31 value $21,420,001) 09/02/03 1.02% $ 21,000,000
- -------------- -------------
21,000,000 Total Repurchase Agreement 21,000,000
- -------------- -------------
U.S. Government Agency Discount Notes (3.91%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 14,076,000 Federal Home Loan Mortgage Corporation 11/13/03 1.08% $ 14,045,173
20,000,000 Federal Home Loan Mortgage Corporation 12/15/03 1.08 19,937,000
20,000,000 Federal National Mortgage Association 02/18/04 1.12 19,895,167
- -------------- -------------
54,076,000 Total U.S. Government Agency Discount Notes 53,877,340
- -------------- -------------
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 2003
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (16.30%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 1,965,000 ARS Development Project (j)
LOC National City Bank, Northwest 09/01/21 1.13% $ 1,965,000
3,150,000 Ali Industries Inc. Project (j)
LOC National City Bank, Northwest 07/01/10 1.13 3,150,000
5,500,000 Allegheny County, PA (Union Electric Steel Corporation) (j)
LOC PNC Bank, N.A. 11/01/27 1.17 5,500,000
1,370,000 B & V Land Company, L.L.C. (j)
LOC First Michigan Bank 09/01/27 1.23 1,370,000
1,735,000 Bank of Kentucky Building (j)
LOC Firstar Bank 12/01/19 1.25 1,735,000
3,390,000 Bollman Capital, L.L.C. - Series 1996A (j)
LOC National City Bank/Michigan National Bank 12/15/26 1.13 3,390,000
680,000 Burgess & Niple Limited (j)
LOC National City Bank, Northwest 09/01/14 1.13 680,000
1,405,000 Burton I. Saltzman (Dave's Supermarket, Inc. Project) (j)
LOC National City Bank, Northwest 09/01/08 1.13 1,405,000
823,000 Capital One Funding Corporation
Floating Rate Option Notes - Series 1997D (j)
LOC Bank One 07/02/18 1.13 823,000
5,000,000 Catholic Health Initiatives - Series C (j) 12/01/27 1.35 5,000,000
13,000,000 City and County of San Francisco (j)
LOC Bayerische Hypovereinsbank, A.G. 07/01/34 1.20 13,000,000
10,000,000 Columbus, GA Development Authority (Foundry Project) (j)
LOC Bank of Nova Scotia 12/01/19 1.17 10,000,000
1,415,000 Community Limited Care (j)
LOC Fifth Third Bank 12/01/12 1.20 1,415,000
1,130,000 Crownover Lumber Company (j)
LOC Fifth Third Bank 09/01/08 1.20 1,130,000
815,000 Crownover Lumber Company (j)
LOC Fifth Third Bank 09/01/08 1.25 815,000
2,695,000 Defiance Metal Products Company (j)
LOC National City Bank, Northwest 09/01/09 1.13 2,695,000
4,665,000 Dickenson Press, Inc. - Series 1997 (j)
LOC First Michigan Bank 01/01/27 1.23 4,665,000
1,000,000 Dormont Manufacturing Company, Inc. (j)
LOC PNC Bank, N.A. 03/01/08 1.20 1,000,000
8,700,000 DP Fox Capital, L.L.C. (j)
LOC Michigan National Bank 09/01/29 1.18 8,700,000
1,450,000 Erie Funding I - Series 1989 (j)
Guaranteed by Federal Home Loan Bank 11/01/16 1.13 1,450,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 3,230,000 Frank J. Catanzaro Sons and Daughters (j)
LOC Firstar Bank 01/01/15 1.17% $ 3,230,000
1,550,000 Gesmundo & Associates, Inc. (j)
LOC National City Bank, Northwest 08/15/27 1.10 1,550,000
1,435,000 Graves Lumber, Inc. Project (j)
Guaranteed by Federal Home Loan Bank 11/01/10 1.13 1,435,000
560,000 Jake Sweeney Automotive, Inc.(j)
LOC Firstar Bank 04/01/10 1.17 560,000
1,405,000 KBL Capital Fund, Inc. (j)
LOC Old Kent Bank & Trust Co. 07/01/15 1.13 1,405,000
2,930,000 LKWP Investments, L.L.C. (j)
LOC First Michigan Bank 03/01/27 1.23 2,930,000
1,490,000 Labelle Capital Funding - Series A (j)
LOC National City Bank, Northwest 09/01/26 1.18 1,490,000
1,600,000 Lam Funding, L.L.C. (j)
LOC National City Bank, Northwest 12/15/27 1.10 1,600,000
9,340,000 Lexington Financial Health Care RB - Series 2001 (j)
LOC LaSalle National Bank 02/01/26 1.21 9,340,000
1,000,000 Machining Center (j)
LOC Comerica Bank 10/01/27 1.23 1,000,000
1,135,000 Madison, WI Community Development Authority RDA
(Block 90 Project) (j)
LOC US Bank, N.A. 10/01/08 1.23 1,135,000
3,575,000 Maryland Health & Higher Educational Facilities Authority
(Glen Meadows Retirement Community) (j)
LOC First Union National Bank 07/01/29 1.10 3,575,000
1,385,000 Miami Valley Realty Associates (j)
LOC Key Bank, N.A. 06/01/12 1.25 1,385,000
4,030,000 Michigan Strategic Fund Limited Obligation
(Environmental Research Institute of Michigan) (j)
LOC Fifth Third Bank 10/01/11 1.10 4,030,000
3,175,000 Mobile Airport (j)
LOC Regions Bank 10/01/24 1.12 3,175,000
14,685,000 Mobile, AL Springhill Medical Clinic Board RB
(Springhill Medical Complex) (j)
LOC Amsouth Bank, N.A. 06/01/20 1.15 14,685,000
950,000 Mount Carmel East Professional Office Building - Series 1994 (j)
LOC National City Bank, Northwest 01/01/14 1.13 950,000
1,330,000 Mount Carmel Partnership Project (j)
LOC National City Bank, Northwest 08/01/14 1.13 1,330,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 2003
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 3,420,000 Mount Ontario Holdings L.L.C. (k)
LOC Firstar Bank 04/01/21 1.10% $ 3,420,000
860,000 Mubea, Inc. Project (j)
LOC Fifth Third Bank 12/01/04 1.16 860,000
3,615,000 New Federal Cold Storage (j)
LOC National City Bank, Pennsylvania 11/01/12 1.13 3,615,000
5,000,000 New Jersey EDA Thermal Energy Facilities RB
(Marina Energy) (j)
LOC First Union National Bank 09/01/21 1.10 5,000,000
8,000,000 Newport, KY Industrial Building RB
(Aquarium Holdings Project) (j)
LOC Fifth Third Bank 12/01/08 1.15 8,000,000
4,600,000 New York State HFA (Kew Gardens Hills) - Series 2003B (j)
Collateralized by Federal National Mortgage Association 05/15/36 1.05 4,600,000
3,980,000 Ohio State Water Development Authority RB
(Independence Excavating, Inc.) (j)
LOC National City Bank, Northwest 12/01/09 1.13 3,980,000
3,775,000 Ordeal Properties L.L.C. (j)
LOC Key Bank, N.A. 10/01/12 1.16 3,775,000
11,300,000 PRD Financial L.L.C. (j)
LOC National City Bank, Northwest 04/01/27 1.10 11,300,000
2,275,000 Sacramento County Housing Authority
(Hidden Oaks Apartments) - Series 1999 (j)
Guaranteed by Federal National Mortgage Association 05/15/29 1.13 2,275,000
10,000,000 Sea Island Company & Sea Island Coastal Properties L.L.C. -
Series 2003B (j)
LOC Columbus Bank & Trust 04/01/23 1.16 10,000,000
2,080,000 Seven Z. Enterprises (j)
LOC PNC Bank, N.A. 06/03/13 1.20 2,080,000
905,000 SGS Tool Company - Series 1996 (j)
LOC National City Bank, Northwest 06/01/06 1.13 905,000
3,180,000 Shelburne Realty & Troy Realty (j)
LOC National City Bank, Northwest 04/01/17 1.13 3,180,000
2,000,000 Soaring Eagle Partners L.P. (j)
LOC PNC Bank, N.A. 10/01/12 1.17 2,000,000
14,080,000 Southwestern Group, Limited Project (j)
LOC Firstar Bank 07/01/21 1.15 14,080,000
2,000,000 State of Texas Veterans' Hospital (j) 12/01/09 1.08 2,000,000
6,000,000 Stonegate Partners, L.L.C. (Stonegate Partners Project) -
Series 2002 (j)
LOC US Bank, N.A. 06/01/34 1.13 6,000,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 5,145,000 Tom Richards, Inc. (Team Land, L.L.C./Team Industries) (j)
Guaranteed by Federal Home Loan Bank 12/01/16 1.13% $ 5,145,000
1,495,000 UAI Technologies, Inc. - Series 1998 (j)
LOC First Union National Bank 05/01/18 1.18 1,495,000
1,285,000 Valley City Linen Co. (j)
LOC First Michigan Bank 02/01/27 1.38 1,285,000
5,140,000 Wise Investments L.L.C. (j)
LOC National City Bank, Northwest 11/01/27 1.10 5,140,000
- -------------- --------------
224,828,000 Total Variable Rate Demand Instruments 224,828,000
- -------------- --------------
Yankee Certificates of Deposit (9.07%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 15,000,000 Abbey National PLC 10/21/03 1.90% $ 15,000,205
30,000,000 Credit Agricole Indosuez 04/15/04 1.31 30,000,000
30,000,000 Toronto Dominion Bank 11/12/03 1.51 30,000,000
20,000,000 Toronto Dominion Bank 11/25/03 1.59 20,000,000
15,000,000 Toronto Dominion Bank 03/18/04 1.27 15,001,228
15,000,000 Union Bank of Switzerland 03/15/04 1.11 14,999,001
- -------------- --------------
125,000,000 Total Yankee Certificates of Deposit 125,000,434
- -------------- --------------
Total Investments (99.72%) (Cost $1,375,207,613+) 1,375,207,613
Cash and other assets, net of liabilities (0.28%) 3,882,803
--------------
Net Assets (100.00%) $1,379,090,416
==============
Net Asset Value, offering and redemption price per share:
Class A Shares, 389,717,889 Shares Outstanding (Note 3) $ 1.00
==============
Class B Shares, 858,943,707 Shares Outstanding (Note 3) $ 1.00
==============
First Southwest Shares, 130,428,820 Shares Outstanding (Note 3) $ 1.00
==============
<FN>
+ Aggregate cost for federal income tax purpose is identical.
</FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 2003
================================================================================
FOOTNOTES:
(a) Guaranteed by Fleet Bank through Swap Agreement.
(b) The interest rate changes daily based upon Prime minus 2.96%.
(c) The interest rate changes daily based upon Prime minus 2.9525%.
(d) The interest rate is adjusted quarterly based on one month LIBOR plus
0.04%.
(e) The interest rate changes monthly based upon one month LIBOR plus 0.03%.
(f) The interest rate is adjusted monthly based on one month LIBOR plus 0.02%.
(g) The interest rate changes daily based upon Prime minus 2.9575%.
(h) The interest rate changes daily based upon Federal Funds Effective Rate
plus 0.06%.
(i) The interest rate changes quarterly based upon three month LIBOR plus
0.06%.
(j) Securities payable on demand at par including accrued interest (with seven
days notice). Interest is adjusted weekly.
(k) Securities payable on demand at par including accrued interest (with one
days notice). Interest is adjusted daily.
KEY:
BAN = Bond Anticipation Note HFA = Housing Finance Authority
COPS = Certificates of Participation LOC = Letter of Credit
EDA = Economic Development Authority RB = Revenue Bond
GNMA = Government National Mortgage Association RDA = Revenue Development Authority
GO = General Obligation
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 2003
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements (60.73%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 25,000,000 Bank of America, Repurchase proceeds at maturity $25,002,833
(Collateralized by $27,691,739, GNMA, 5.000%, due
11/16/31 to 07/16/33, value $25,500,000) 09/02/03 1.02% $ 25,000,000
130,000,000 Bear, Stearns & Co., Repurchase proceeds at maturity
$130,015,022 (Collateralized by $217,575,545, GNMA, 3.500%
to 8.500%, due 06/15/18 to 08/20/33, value $132,604,017) 09/02/03 1.04 130,000,000
140,000,000 Citigroup Global Markets, Inc., Repurchase proceeds at maturity
$140,015,556 (Collateralized by $217,542,289, GNMA, 5.000% to
7.873%, due 12/16/18 to 08/20/33, value $142,800,001) 09/02/03 1.00 140,000,000
25,000,000 J.P. Morgan Securities, Inc., Repurchase proceeds at maturity
$25,002,833 (Collateralized by $35,466,202, GNMA, 3.000% to
9.000%, due 08/15/17 to 08/20/33, value $25,502,986) 09/02/03 1.02 25,000,000
25,000,000 UBS Paine Webber, Repurchase proceeds at maturity
$25,002,889 (Collateralized by $40,475,000, GNMA,
4.000%, due 06/20/32, value $25,502,939) 09/02/03 1.04 25,000,000
- -------------- -------------
345,000,000 Total Repurchase Agreements 345,000,000
- -------------- -------------
U.S. Government Obligations (38.88%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 60,000,000 U.S. Treasury Bill 09/04/03 0.93% $ 59,995,517
8,000,000 U.S. Treasury Bill 02/12/04 1.04 7,963,009
21,000,000 U.S. Treasury Note, 2.750% 09/30/03 1.76 21,016,107
15,000,000 U.S. Treasury Note, 4.250% 11/15/03 1.76 15,074,985
12,000,000 U.S. Treasury Note, 3.000% 11/30/03 1.50 12,043,205
17,000,000 U.S. Treasury Note, 3.000% 01/31/04 1.35 17,114,012
20,000,000 U.S. Treasury Note, 3.375% 04/30/04 1.26 20,274,910
20,000,000 U.S. Treasury Note, 3.250% 05/31/04 1.18 20,303,580
15,000,000 U.S. Treasury Note, 2.875% 06/30/04 1.01 15,228,058
15,000,000 U.S. Treasury Note, 6.000% 08/15/04 1.07 15,697,132
16,000,000 U.S. Treasury Note, 2.125% 08/31/04 1.30 16,127,898
- -------------- -------------
219,000,000 Total U.S. Government Obligations 220,838,413
- -------------- -------------
Total Investments (99.61%) (Cost $565,838,413+) 565,838,413
Cash and other assets, net of liabilities (0.39%) 2,222,107
-------------
Net Assets (100.00%) $ 568,060,520
=============
Net Asset Value, offering and redemption price per share:
Class A Shares, 236,930,898 Shares Outstanding (Note 3) $ 1.00
=============
Class B Shares, 331,129,622 Shares Outstanding (Note 3) $ 1.00
=============
<FN>
+ Aggregate cost for federal income tax purpose is identical.
</FN>
KEY:
GNMA = Government National Mortgage Association
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED AUGUST 31, 2003
================================================================================
Money Market U.S. Government
Portfolio Portfolio
--------------------- -----------------------
INVESTMENT INCOME
Income:
Interest..................................................... $ 19,845,602 $ 8,544,267
--------------------- -----------------------
Expenses: (Note 2)
Investment management fee.................................... 3,900,309 1,556,367
Administration fee........................................... 2,785,935 1,254,848
Distribution fee (First Southwest Shares).................... 303,030 -0-
Shareholder servicing fee (Class A).......................... 883,025 564,189
Shareholder servicing fee (First Southwest Shares)........... 303,030 -0-
Custodian expenses........................................... 46,646 38,153
Shareholder servicing and related shareholder expenses+...... 633,050 215,643
Legal, compliance and filing fees............................ 263,463 171,653
Audit and accounting......................................... 122,447 124,428
Directors' fees.............................................. 30,536 16,036
Miscellaneous................................................ 31,635 23,275
--------------------- -----------------------
Total expenses........................................... 9,303,106 3,964,592
Less:
Fees waived (First Southwest Shares)............... ( 72,727) -0-
Expenses paid indirectly........................... ( 10,888) ( 9,000)
--------------------- -----------------------
Net expenses.................................. 9,219,491 3,955,592
--------------------- -----------------------
Net investment income........................................... 10,626,111 4,588,675
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments......................... -0- 1,011
--------------------- -----------------------
Increase in net assets from operations.......................... $ 10,626,111 $ 4,589,686
===================== =======================
<FN>
+ Includes class specific transfer agency expenses of $227,379 and $258,192
for the Money Market Portfolio Class A and Class B shares, respectively and
$179,190 for the U.S. Government Portfolio Class B shares.
</FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED AUGUST 2003 AND 2002
================================================================================
Money Market Portfolio U.S. Government Portfolio
----------------------------------- ----------------------------------
2003 2002 2003 2002
---------------- ---------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income.................. $ 10,626,111 $ 21,827,913 $ 4,588,675 $ 9,383,517
Net realized gain (loss) on investments -0- 26,004 1,011 -0-
---------------- ---------------- --------------- ---------------
Increase in net assets from operations. 10,626,111 21,853,917 4,589,686 9,383,517
Dividends to shareholders:
Net investment income
Class A............................. ( 2,163,819) ( 6,659,223) ( 1,449,885) ( 4,636,760)
Class B............................. ( 7,839,415) ( 15,077,456) ( 3,138,790) ( 4,733,539)
First Southwest Shares.............. ( 622,877) ( 91,234) -0- -0-
TRA Class........................... -0- -0- -0- ( 13,218)
Net realized gain on investments:
Class A............................. -0- ( 9,291) ( 371) -0-
Class B............................. -0- ( 16,713) ( 640) -0-
First Southwest Shares.............. -0- -0- -0- -0-
TRA Class........................... -0- -0- -0- -0-
Capital share transactions (Note 3):
Class A............................. 67,336,435 ( 353,039,581) ( 4,974,883) ( 242,775,216)
Class B............................. 20,879,982 27,023,068 ( 69,703,473) 184,260,032
First Southwest Shares.............. 3,347,364 127,081,456 -0- -0-
TRA Class........................... -0- -0- -0- ( 1,056,999)
---------------- ---------------- --------------- --------------
Total increase (decrease)........... 91,563,781 ( 198,935,057) ( 74,678,356) ( 59,572,183)
Net assets:
Beginning of year................... 1,287,526,635 1,486,461,692 642,738,876 702,311,059
---------------- ---------------- --------------- ---------------
End of year......................... $ 1,379,090,416 $ 1,287,526,635 $ 568,060,520 $ 642,738,876
================ ================ =============== ===============
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies
Short Term Income Fund, Inc. (the "Fund") 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 (First
Southwest Shares) Class. The U.S. Government Portfolio has three classes of
stock authorized, Class A, Class B and TRA Class. The Class A shares of each
Portfolio, the First Southwest Share Class of the Money Market Portfolio, and
the TRA Class of the U.S. Government Portfolio are subject to a service fee
pursuant to each Portfolio's Distribution and Service Plan. The TRA Class Shares
liquidated on August 30, 2002; therefore financial highlights for this class are
not presented. 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. In all other
respects, the share classes of each portfolio represent the same interest in the
income and assets of their respective portfolios. 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.
b) 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.
c) Dividends and Distributions -
Dividends from investment income (including realized capital gains and
losses), determined on a class level, are declared daily and paid monthly.
d) 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 effect 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.
e) 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. It is the Fund's policy to take possession of
securities as collateral under repurchase agreements and to determine on a
daily basis that the value of such securities are sufficient to cover the
value of the repurchase agreements.
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
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 year ended August 31, 2003.
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") entered into a Distribution Agreement and a Shareholder
Servicing Agreement, only with respect to the Class A shares of each Portfolio,
the First Southwest Share Class of the Money Market Portfolio and the TRA Class
of the U.S. Government 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, the First Southwest Share Class of the Money
Market Portfolio and the TRA Class of the U.S. Government Portfolio. In
addition, the Distributor receives .25% per annum in Distribution fees of the
First Southwest Share Class' average daily net assets.
During the year ended August 31, 2003, the Distributor voluntarily waived
distribution fees of $72,727 for the First Southwest Share Class of the Money
Market Portfolio.
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.
Included in the Statements of Operations under the caption "Shareholder
servicing and related shareholder expenses" are fees of $609,501 and $298,773
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. Also, included under the same caption are expense
offsets of $6,683 and $4,819 for the Money Market Portfolio and the U.S.
Government Portfolio, respectively.
Included in the statement of operations under the caption "Custodian expenses"
are expense offsets of $4,205 and $4,181 for the Money Market Portfolio and the
U.S. Government Portfolio, respectively.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
3. Capital Stock
At August 31, 2003, 10,000,000,000 shares of $.001 par value stock were
authorized and capital paid in for the Money Market Portfolio and the U.S.
Government Portfolio amounted to $1,379,090,416 and $568,060,520, respectively.
Transactions in capital stock, all at $1.00 per share, were as follows:
Money Market Portfolio U.S. Government Portfolio
----------------------------------- -----------------------------------
Year Ended Year Ended Year Ended Year Ended
August 31, 2003 August 31, 2002 August 31,2003 August 31, 2002
--------------- --------------- --------------- ---------------
Class A shares
- --------------
Sold.................................. 1,245,427,516 1,463,834,631 621,576,820 802,043,192
Issued on reinvestment of dividends... 1,998,024 6,372,957 920,924 4,418,635
Redeemed.............................. ( 1,180,089,105) ( 1,823,247,169) ( 627,472,627) ( 1,049,237,043)
-------------- -------------- -------------- --------------
Net increase (decrease)............... 67,336,435 ( 353,039,581) ( 4,974,883) ( 242,775,216)
=============== =============== =============== ==============
Class B shares
- --------------
Sold.................................. 1,452,559,431 1,427,210,648 1,169,678,184 1,144,999,978
Issued on reinvestment of dividends... 8,065,444 15,550,523 3,283,872 4,779,512
Redeemed.............................. ( 1,439,744,893) ( 1,415,738,103) ( 1,242,665,529) ( 965,519,458)
-------------- -------------- -------------- --------------
Net increase (decrease)............... 20,879,982 27,023,068 ( 69,703,473) 184,260,032
=============== =============== =============== ===============
August 5, 2002
(Commencement of Offering) to
First Southwest Shares August 31, 2002
- ---------------------- ---------------
Sold.................................. 145,272,898 140,102,618
Issued on reinvestment of dividends... 616,905 97,780
Redeemed.............................. ( 142,542,439) ( 13,118,942)
-------------- --------------
Net increase ......................... 3,347,364 127,081,456
=============== ===============
TRA Class *
- -----------
Sold........................................................................ -0- 277,760
Issued on reinvestment of dividends......................................... -0- 12,641
Redeemed.................................................................... -0- ( 1,347,400)
--------------- --------------
Net (decrease).............................................................. -0- ( 1,056,999)
=============== ==============
<FN>
* TRA Class shares liquidated on August 30, 2002.
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
4. Tax Information
The tax character of all distributions paid by the Portfolios during the years
ended August 31, 2003 and 2002 were ordinary income.
At August 31, 2003, the Money Market Portfolio and U.S. Government Portfolio had
undistributed income of $198,065 and $93,540 respectively, for income tax
purposes included in dividends payable.
5. Financial Highlights
Money Market Portfolio
Class A shares Year Ended August 31,
- -------------- ----------------------------------------------------------
2003 2002 2001 2000 1999
-------- -------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.006 0.014 0.045 0.050 0.042
Less distributions:
Dividends from net investment income...... ( 0.006) ( 0.014) ( 0.045) ( 0.050) ( 0.042)
-------- -------- -------- -------- --------
Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ======== ======== ========
Total Return................................. 0.63% 1.44% 4.59% 5.16% 4.30%
Ratios/Supplemental Data
Net assets, end of year (000)................ $ 389,718 $ 322,381 $ 675,289 $ 940,199 $1,193,420
Ratios to average net assets:
Expenses (net of fees waived)(a).......... 0.87% 0.97% 1.01% 0.99% 0.99%
Net investment income..................... 0.61% 1.56% 4.55% 5.02% 4.19%
Management and administration fees waived. 0.00% 0.00% 0.00% 0.01% 0.00%
Expenses paid indirectly.................. 0.00% 0.00% 0.00% 0.00% 0.00%
<FN>
(a) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Financial Highlights (Continued)
Money Market Portfolio
Class B shares Year Ended August 31,
- -------------- ----------------------------------------------------------
2003 2002 2001 2000 1999
-------- -------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.009 0.018 0.049 0.054 0.046
Less distributions:
Dividends from net investment income...... ( 0.009) ( 0.018) ( 0.049) ( 0.054) ( 0.046)
-------- -------- -------- -------- --------
Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ======== ======== ========
Total Return................................. 0.92% 1.80% 5.01% 5.58% 4.67%
Ratios/Supplemental Data
Net assets, end of year (000)................ $ 858,944 $ 838,064 $ 811,173 $ 351,335 $ 297,248
Ratios to average net assets:
Expenses (net of fees waived)(a).......... 0.58% 0.61% 0.61% 0.60% 0.64%
Net investment income..................... 0.92% 1.78% 4.71% 5.58% 4.55%
Management and administration fees waived. 0.00% 0.00% 0.00% 0.01% 0.00%
Expenses paid indirectly.................. 0.00% 0.00% 0.00% 0.00% 0.00%
<FN>
(a) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Financial Highlights (Continued)
Money Market Portfolio
-------------------------------------------------------
August 5, 2002
First Southwest Shares Year Ended (Commencement of Offering) to
- ---------------------- August 31, 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
------------- -------------
Income from investment operations:
Net investment income....................... 0.005 0.001
Less distributions:
Dividends from net investment income........ ( 0.005 ) ( 0.001 )
------------- -------------
Net asset value, end of period................. $ 1.00 $ 1.00
============= =============
Total Return................................... 0.50% 0.07%(a)
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 130,429 $ 127,082
Ratios to average net assets:
Expenses (net of fees waived)(b)............ 0.99% 0.99%(c)
Net investment income....................... 0.51% 0.93%(c)
Distribution fees waived.................... 0.06% 0.06%(c)
Expenses paid indirectly.................... 0.00% 0.00%(c)
<FN>
(a) Not annualized
(b) Includes expenses paid indirectly
(c) Annualized
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
5. Financial Highlights (Continued)
U.S. Government Portfolio
Class A shares Year Ended August 31,
- -------------- ----------------------------------------------------------
2003 2002 2001 2000 1999
-------- -------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.006 0.014 0.044 0.048 0.040
Less distributions:
Dividends from net investment income...... ( 0.006) ( 0.014) ( 0.044) ( 0.048) ( 0.040)
-------- -------- -------- -------- --------
Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ======== ======== ========
Total Return................................. 0.64% 1.39% 4.54% 4.95% 4.10%
Ratios/Supplemental Data
Net assets, end of year (000)................ $ 236,931 $ 241,906 $ 484,681 $ 491,022 $ 723,952
Ratios to average net assets:
Expenses(a)............................... 0.79% 0.89% 0.93% 0.94% 0.89%
Net investment income..................... 0.64% 1.46% 4.42% 4.77% 4.03%
Expenses paid indirectly.................. 0.00% 0.00% 0.00% 0.00% 0.00%
<FN>
(a) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
5. Financial Highlights (continued)
U.S. Government Portfolio
Class B shares Year Ended August 31,
- -------------- ----------------------------------------------------------
2003 2002 2001 2000 1999
-------- -------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.008 0.017 0.048 0.052 0.043
Less distributions:
Dividends from net investment income...... ( 0.008) ( 0.017) ( 0.048) ( 0.052) ( 0.043)
-------- -------- -------- -------- --------
Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return................................. 0.84% 1.69% 4.91% 5.32% 4.44%
Ratios/Supplemental Data
Net assets, end of year (000)................ $ 331,130 $ 400,833 $ 216,573 $ 135,862 $ 117,996
Ratios to average net assets:
Expenses(a)............................... 0.59% 0.58% 0.58% 0.58% 0.56%
Net investment income..................... 0.84% 1.61% 4.77% 5.23% 4.32%
Expenses paid indirectly.................. 0.00% 0.00% 0.00% 0.00% 0.00%
<FN>
(a) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
REPORT OF INDEPENDENT AUDITORS
================================================================================
To the Board of Directors and Shareholders of
Short Term Income Fund, Inc.
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Money Market Portfolio and the U.S. Government Portfolio (constituting Short
Term Income Fund, Inc., hereafter referred to as the "Fund") at August 31, 2003,
the results of each of their operations for the year then ended, the changes in
each of their net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
October 15, 2003
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
ADDITIONAL INFORMATION
(UNAUDITED)
================================================================================
Directors and Officers Information
August 31, 2003+
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Number of Portfolios Other
Position(s) Term of Office Principal Occupation(s) in Directorships
Held with and Length of During Past Fund Complex held by
Name, Address1, Fund Time Served 5 Years Overseen by Director Director
and Age or Officer
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Disinterested Directors:
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Dr. W. Giles Mellon Director 1980 Professor Emeritus of Director/Trustee of N/A
Age 72 Business Administration in ten other portfolios
the Graduate School of
Management, Rutgers
University with which he
has been associated with
since 1966.
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Robert Straniere, Esq. Director 1983 Owner, Straniere Law Firm Director/Trustee of WPG Funds
Age 62 since 1980, NYS Assemblyman ten other portfolios Group
since 1981 and counsel at
Fisher, Fisher & Berger
since 1995.
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Dr. Yung Wong, Director 1980 Managing Director of Abacus Director/Trustee of N/A
Age 64 Associates, an investment ten other portfolios
firm, since 1996.
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
<FN>
+ The Statement of Additional Information includes additional information
about Short Term Income Fund, Inc. (the "Fund") directors and is available,
without charge, upon request by calling the Fund's transfer agent at (212)
830-5200.
1 The address for each of the above directors/officers of the Fund is Reich &
Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020.
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
ADDITIONAL INFORMATION (CONTINUED)
(UNAUDITED)
================================================================================
Directors and Officers Information (continued)
August 31, 2003+
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Number of Portfolios Other
Position(s) Term of Office Principal Occupation(s) in Directorships
Held with and Length of During Past Fund Complex held by
Name, Address1, Fund Time Served 5 Years Overseen by Director Director
and Age or Officer
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Interested Directors/Officers:
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Steven W. Duff, President and 1994 Manager and President of Director/Trustee N/A
Age 49 Director2 Reich & Tang Asset and/or Officer of
Management, LLC ("RTAM, fifteen other
LLC"), a registered portfolios
Investment Advisor.
Associated with RTAM, LLC
since 1994.
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Richard De Sanctis, Treasurer and 1994 Executive Vice President, Officer of fifteen N/A
Age 46 Assistant CFO of RTAM, LLC. other portfolios
Secretary Associated with RTAM,
LLC since 1990.
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Molly Flewharty, Vice President 1995 Senior Vice President of Officer of fifteen N/A
Age 52 RTAM, LLC. Associated with other portfolios
RTAM, LLC since 1977.
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Rosanne Holtzer, Secretary 1998 Senior Vice President of Officer of fifteen N/A
Age 39 and RTAM, LLC. Associated with other portfolios
Assistant RTAM, LLC since 1986.
Treasurer
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
Dana E. Messina, Vice President 1995 Executive Vice President of Officer of twelve N/A
Age 46 RTAM, LLC. Associated with other portfolios
RTAM, LLC since 1980.
- ------------------------ --------------- ---------------- ---------------------------- ---------------------- ---------------
<FN>
+ The Statement of Additional Information includes additional information
about Short Term Income Fund, Inc. (the "Fund") directors and is available,
without charge, upon request by calling the Fund's transfer agent at (212)
830-5200.
1 The address for each of the above directors/officers of the Fund is Reich &
Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020.
2 Steven W. Duff is deemed an interested person of the Fund due to his
affiliation with RTAM, LLC, the Fund's investment advisor.
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[This Page Intentionally Left Blank]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT TERM
INCOME
FUND, INC.
Annual Report
August 31, 2003
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------------------
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
100 Church Street, 10th Floor
New York, New York 10286
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
STIF8/03A
- --------------------------------------------------------------------------------
ITEM 2: CODE OF ETHICS
The Registrant has adopted a Code of Ethics applicable to its Principal
Executive and Senior Financial Officers.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT
The Registrant's Board of Trustees has determined that the Registrant does not
have an audit committee financial expert serving on its audit committee. The
Board discussed that although none of the members qualified as audit committee
financial experts, the collective experience of the audit committee members,
including their long-standing service as audit committee members, was sufficient
to effectively carry out the role and obligations of the audit committee. The
Board also considered the nature of investment company financials, and the fact
that the audit committee was able to consult with the Registrant's independent
accountants and to seek outside advise, as they deemed appropriate.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable at this time.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6: RESERVED
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 8: RESERVED
ITEM 9: CONTROLS AND PROCEDURES
(a) The registrant's Principal Executive Officer and Principal Financial
Officer have evaluated 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 registrant's second
fiscal half-year that have materially affected, or are reasonably
likely to affect, the registrant's internal controls over financial
reporting.
ITEM 10: EXHIBITS
(a)(1) Code of Ethics.
(a)(2) Certifications of Principal Executive Officer and Principal Financial
Officer, under Rule 30a-2 of the Investment Company Act of 1940.
(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) Florida Daily Municipal Income Fund
By (Signature and Title)* /s/ Rosanne Holtzer
Rosanne Holtzer, Secretary
Date October 28, 2003
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, Chief Executive Officer
Date October 28, 2003
By (Signature and Title)* /s/ Richard DeSanctis
Richard DeSanctis, Chief Financial Officer
Date October 28, 2003
* Print the name and title of each signing officer under his or her signature.