UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-21914
RIVERSOURCE SHORT TERM INVESTMENTS SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 7/31
Date of reporting period: 1/31
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
SHORT-TERM CASH FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2010
RIVERSOURCE SHORT-TERM CASH FUND SEEKS TO PROVIDE
SHAREHOLDERS WITH MAXIMUM CURRENT INCOME CONSISTENT
WITH LIQUIDITY AND STABILITY OF PRINCIPAL.
SHARES OF THE FUND ARE ISSUED SOLELY IN PRIVATE PLACEMENT
TRANSACTIONS THAT DO NOT INVOLVE ANY PUBLIC OFFERING WITHIN
THE MEANING OF SECTION 4(2) OF THE SECURITIES ACT OF 1933,
AS AMENDED (THE 1933 ACT). INVESTMENTS IN THE FUND MAY BE
MADE ONLY BY INVESTMENT COMPANIES, COMMON OR COMMINGLED
TRUST FUNDS OR SIMILAR ORGANIZATIONS OR PERSONS THAT ARE
ACCREDITED INVESTORS WITHIN THE MEANING OF THE 1933 ACT.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 3
Portfolio of Investments........... 4
Statement of Assets and
Liabilities...................... 14
Statement of Operations............ 15
Statements of Changes in Net
Assets........................... 16
Financial Highlights............... 17
Notes to Financial Statements...... 18
Proxy Voting....................... 26
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
PORTFOLIO BREAKDOWN(1) (at Jan. 31, 2010)
<Table>
- ------------------------------------------------
Bonds(2) 0.4%
- ------------------------------------------------
Certificates of Deposit 4.8%
- ------------------------------------------------
Commercial Paper 35.2%
- ------------------------------------------------
Floating Rate Notes 3.2%
- ------------------------------------------------
U.S. Government Agencies 39.7%
- ------------------------------------------------
U.S. Government-Insured Debt(3) 16.7%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Category comprised of a short-term asset-backed security.
(3) Funding for this debt is provided by the Federal Financing Bank, which is
funded by the U.S. Department of the Treasury.
- --------------------------------------------------------------------------------
2 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur ongoing costs which may include
custodian fees and other nonadvisory expenses. 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 six months ended Jan. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the 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 titled "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 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.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2009 JAN. 31, 2010 THE PERIOD(A) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,001.30 $0.00(c) .00%(c)
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,024.93 $0.00(c) .00%(c)
- ------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/365 (to reflect the one-half year period).
(b) Based on the actual return of +0.13% for the six months ended Jan. 31, 2010.
(c) Rounds to zero.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 3
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2010 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
U.S. GOVERNMENT AGENCIES (39.7%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Federal Home Loan Bank Disc Nts
02-17-10 0.07% $100,000,000(f) $99,996,250
01-03-11 0.42 50,000,000(f) 50,000,000
Federal Home Loan Mtge Corp Disc Nts
03-22-10 0.10 100,000,000(f) 99,985,125
03-24-10 0.11 100,000,000(f) 99,983,806
03-25-10 0.10 100,000,000(f) 99,984,250
03-29-10 0.10 225,000,000(f) 224,963,346
Federal Natl Mtge Assn Disc Nts
02-01-10 0.04 100,000,000(f) 99,999,667
03-03-10 0.08 100,000,000(f) 99,992,889
- -------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCIES
(Cost: $874,905,333) $874,905,333
- -------------------------------------------------------------------------------------
<Caption>
U.S. GOVERNMENT-INSURED DEBT (16.7%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Straight-A Funding LLC U.S. Treasury Govt Guaranty(c)
02-02-10 0.12% $30,000,000(e) $29,999,600
02-02-10 0.14 22,351,000(e) 22,350,646
02-16-10 0.16 25,227,000(e) 25,224,975
02-18-10 0.13 25,000,000(e) 24,998,285
03-08-10 0.16 65,146,000(e) 65,135,287
04-05-10 0.17 20,170,000(e) 20,163,809
04-07-10 0.16 75,035,000(e) 75,012,656
04-14-10 0.17 26,014,000(e) 26,004,910
04-19-10 0.17 80,000,000(e) 79,970,155
- -------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT-INSURED DEBT
(Cost: $368,860,323) $368,860,323
- -------------------------------------------------------------------------------------
<Caption>
CERTIFICATES OF DEPOSIT (4.8%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Royal Bank of Canada
02-01-10 0.10% $29,800,000 $29,800,000
Royal Bank of Scotland
02-19-10 0.17 25,000,000 25,000,000
02-25-10 0.17 50,000,000 50,000,000
- -------------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $104,800,000) $104,800,000
- -------------------------------------------------------------------------------------
<Caption>
COMMERCIAL PAPER (35.2%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (23.3%)
Amsterdam Funding
03-16-10 0.21% $29,200,000(d) $29,192,335
Bryant Park Funding LLC
02-11-10 0.15 38,000,000 37,997,973
Chariot Funding LLC
02-08-10 0.13 30,000,000 29,998,950
Charta LLC
04-12-10 0.20 35,000,000 34,986,000
Ciesco LLC
03-10-10 0.20 35,000,000(e) 34,992,417
04-20-10 0.19 30,000,000(e) 29,987,333
Enterprise Funding Co LLC
03-18-10 0.17 30,000,000 29,993,342
Falcon Asset Securitization LLC
02-16-10 0.14 50,000,000 49,996,458
FCAR Owner Trust Series I
02-04-10 0.36 50,000,000 49,997,014
Old Line Funding LLC
03-03-10 0.17 28,962,000 28,957,624
Salisbury Receivables Company LLC
03-19-10 0.17 40,000,000(e) 39,990,933
Sheffield Receivables
02-17-10 0.18 40,000,000(e) 39,996,200
04-08-10 0.17 40,000,000(e) 39,987,156
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
4 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMERCIAL PAPER (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (CONT.)
Windmill Funding
02-26-10 0.17% $40,000,000 $39,994,900
---------------
Total 516,068,635
- -------------------------------------------------------------------------------------
BANKING (6.4%)
Barclays US Funding
03-17-10 0.15 40,000,000 39,992,333
HSBC USA
04-27-10 0.17 50,000,000 49,979,458
Scotiabanc
03-01-10 0.13 50,000,000(e) 49,994,584
---------------
Total 139,966,375
- -------------------------------------------------------------------------------------
LIFE INSURANCE (3.2%)
Metlife Short Term Funding LLC
02-01-10 0.14 15,000,000 14,999,833
02-23-10 0.18 25,000,000(e) 24,996,833
03-15-10 0.18 30,625,000(e) 30,618,263
---------------
Total 70,614,929
- -------------------------------------------------------------------------------------
NON CAPTIVE DIVERSIFIED (2.3%)
General Electric Capital Service
04-28-10 0.19 50,000,000 49,976,778
- -------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost: $776,626,717) $776,626,717
- -------------------------------------------------------------------------------------
<Caption>
FLOATING RATE NOTES (3.2%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Federal Home Loan Mtge Corp Disc Nts
02-09-10 0.14% $35,000,000(b,f) $35,000,000
08-10-10 0.05 35,000,000(b) 35,000,000
---------------
Total 70,000,000
- -------------------------------------------------------------------------------------
TOTAL FLOATING RATE NOTES
(Cost: $70,000,000) $70,000,000
- -------------------------------------------------------------------------------------
<Caption>
BONDS (0.4%)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
ASSET-BACKED SECURITIES
Chrysler Financial Auto Securitization Trust
Series 2009-A Cl A1
07-15-10 1.01% $8,689,681(d) $8,689,681
- -------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $8,689,681) $8,689,681
- -------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (30.8%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED COMMERCIAL PAPER (2.6%)
Antalis US Funding
02-22-10 0.21% $9,998,425 $9,998,425
Grampian Funding LLC
02-16-10 0.23 19,995,783 19,995,783
Hannover Funding Company LLC
02-03-10 0.45 6,999,388 6,999,388
Scaldis Capital LLC
02-04-10 0.20 9,998,389 9,998,389
Versailles Commercial Paper LLC
02-23-10 0.25 9,997,639 9,997,639
---------------
Total 56,989,624
- -------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT (20.0%)
Banco Bilbao Viz Argentaria, London
03-01-10 0.26 5,002,538 5,002,538
Banco Espirito Santo e Commerciale
02-04-10 0.25 25,000,000 25,000,000
Banco Popular Caisse d'Epargne
02-16-10 0.28 10,000,000 10,000,000
04-08-10 0.28 10,000,000 10,000,000
Banco Popular Espanol
02-12-10 0.33 4,998,580 4,998,580
03-29-10 0.37 9,993,889 9,993,889
Banco Santander Central Hispano
02-10-10 0.29 3,000,000 3,000,000
04-12-10 0.27 10,000,000 10,000,000
04-16-10 0.30 10,000,000 10,000,000
Bank of Austria
02-04-10 0.25 4,998,889 4,998,889
02-17-10 0.26 4,998,832 4,998,832
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 5
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
CERTIFICATES OF DEPOSIT (CONT.)
Bank of Tokyo Securities
03-23-10 0.29% $15,000,000 $15,000,000
Banque Federative du Credit Mutuel
03-02-10 0.28 4,996,425 4,996,425
04-19-10 0.35 4,995,691 4,995,691
Barclays Bank
02-16-10 0.36 10,000,000 10,000,000
BNP Paribas Securities
02-25-10 0.24 5,000,000 5,000,000
Caisse des Depots
03-01-10 0.28 4,996,502 4,996,502
Caixa Geral de Deposit
03-04-10 0.30 10,000,000 10,000,000
03-15-10 0.30 8,996,274 8,996,274
Credit Industrial et Commercial
03-10-10 0.35 10,000,000 10,000,000
04-07-10 0.38 6,000,037 6,000,037
04-13-10 0.34 2,500,000 2,500,000
Dexia Bank
02-11-10 0.40 19,993,113 19,993,113
02-26-10 0.34 4,998,698 4,998,698
Dexia Credit Local
02-22-10 0.28 5,000,000 5,000,000
Fortis Bank
02-16-10 0.27 15,000,000 15,000,000
Hong Kong Shanghai Bank
02-08-10 0.25 10,000,000 10,000,000
Jyske Bank
03-10-10 0.44 9,989,012 9,989,012
KBC Bank
02-16-10 0.28 10,000,000 10,000,000
02-16-10 0.29 9,997,423 9,997,423
02-26-10 0.30 5,000,000 5,000,000
Lloyds Bank London
02-01-10 0.14 2,857,705 2,857,705
Mizuho Corporate Bank
02-19-10 0.29 10,000,000 10,000,000
Natixis
02-08-10 0.28 4,998,795 4,998,795
Nederlandse Waterschapsbank
03-01-10 0.30 14,988,758 14,988,758
Norinchukin Bank
02-17-10 0.31 29,999,999 29,999,999
NyKredit Bank
04-06-10 0.44 10,000,000 10,000,000
Pohjola Bank
03-15-10 0.38 9,990,634 9,990,634
03-15-10 0.39 4,995,076 4,995,076
Raiffeisen Zentralbank Oesterreich
02-03-10 0.25 9,999,514 9,999,514
02-04-10 0.23 20,000,000 20,000,000
Sumitomo Mitusi Banking
02-19-10 0.31 10,000,000 10,000,000
02-22-10 0.31 8,000,000 8,000,000
04-19-10 0.29 10,000,000 10,000,000
Ulster Bank Ireland Limited, Dublin
02-02-10 0.22 8,000,000 8,000,000
Unicredit BK
02-01-10 0.43 5,000,000 5,000,000
04-06-10 0.30 10,000,000 10,000,000
---------------
Total 439,286,384
- -------------------------------------------------------------------------------------
COMMERCIAL PAPER (0.5%)
BTM Capital
02-05-10 0.39 1,998,028 1,998,028
Citigroup Funding
02-05-10 0.19 9,998,364 9,998,364
---------------
Total 11,996,392
- -------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (7.7%)(g)
Barclays Capital dated 01-29-10,
matures 02-01-10 repurchase price
$20,000,383 0.23 20,000,000 20,000,000
Citigroup Global Markets dated 01-29-10,
matures 02-01-10 repurchase price
$25,000,292 0.14 25,000,000 25,000,000
Goldman Sachs dated 01-29-10,
matures 02-01-10 repurchase price
$45,000,675 0.18 45,000,000 45,000,000
$15,000,225 0.18 15,000,000 15,000,000
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
6 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
REPURCHASE AGREEMENTS (CONT.)
Morgan Stanley dated 01-15-10,
matures 03-01-10 repurchase price
$15,005,554 0.43% $15,000,000 $15,000,000
Morgan Stanley dated 01-21-10,
matures 03-01-10 repurchase price
$25,007,104 0.33 25,000,000 25,000,000
Natixis Financial Products dated 01-29-10,
matures 02-01-10 repurchase price
$25,000,688 0.33 25,000,000 25,000,000
---------------
Total 170,000,000
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $678,272,400) $678,272,400
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,882,154,454)(h) $2,882,154,454
=====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Jan. 31,
2010. The maturity date disclosed represents the final maturity. For
purposes of Rule 2a-7, maturity is the later of the next put or interest
rate reset date.
(c) Funding for this debt is provided by the Federal Financing Bank, which is
funded by the U.S. Department of the Treasury.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At Jan. 31,
2010, the value of these securities amounted to $8,689,681 or 0.39% of net
assets.
(e) Represents a security sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors." This security has been determined to be liquid
under guidelines established by the Fund's Board of Directors. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers. At Jan. 31, 2010, the value of these
securities amounted to $659,424,042 or 29.92% of net assets.
(f) At Jan. 31, 2010, security was partially or fully on loan. See Note 4 to
the financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 7
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(g) The table below represents securities received as collateral subject to
repurchase agreements. This collateral, which is generally high quality
short-term obligations, is deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, must have an aggregate
market value greater than or equal to the repurchase price plus accrued
interest at all times. On a daily basis, the market value of securities
held as collateral for repurchase agreements is monitored to ensure the
existence of the proper level of collateral.
<Table>
<Caption>
BARCLAYS CAPITAL (0.23%)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
Fannie Mae Pool $10,782,173
Freddie Mac Gold Pool 6,680,487
Freddie Mac Non Gold Pool 2,937,340
- --------------------------------------------------------------
Total market value of collateral securities $20,400,000
- --------------------------------------------------------------
<Caption>
CITIGROUP GLOBAL MARKETS (0.14%)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
Fannie Mae REMICS $11,211,335
Freddie Mac REMICS 12,323,825
Govt Natl Mtge Assn 1,964,840
- --------------------------------------------------------------
Total market value of collateral securities $25,500,000
- --------------------------------------------------------------
<Caption>
GOLDMAN SACHS (0.18%)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
7-Eleven $861,058
Alcon Capital Corp 935,291
American Honda Finan 274,806
Amsterdam Fdg 1,321,608
ANZ National Int'l Ltd/London 173,065
Aust & New Zea 884,995
BG Energy Finance 204,224
BNP Paribas Fin Inc 375,385
Chariot Fndg LLC 865,299
Ciesco LLC 245,465
Clipper Receivables Co 138,454
Conoco Phillips 452,675
</Table>
- --------------------------------------------------------------------------------
8 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
GOLDMAN SACHS (CONT.)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
Danaher Corporation 1,756,186
Danske 96,895
Disney Company 1,997,919
Electricite De France 34,610
ENI Coordination Cntr 1,211,433
FPL Fuels Inc 1,126,263
Franklin Resources 519,193
General Electric Capt Co 34,592
Govco LLC 690,936
Governor & Co 110,756
Hannover Fdg Co LLC 865,067
Her Majesty Rgt Cana 17,307
Honeywell International Inc 3,896,972
KFW 1,384,334
Kittyhawk Fndg 519,329
Liberty Funding LLC 952,952
Macquarie Bank Ltd 913,062
NetJets Inc 1,537,531
Nordea North Amer 346,083
Nstar Electric Company 1,138,318
NYSE Euronext Inc 2,326,393
Old Line Funding LLC 869,789
Paccar Financial 812,821
Philip Morris Intl Inc 1,608,953
Royal Bk of Scotland 162,850
Salisbury Rec Co LLC 3,479,704
Sheffield Receivables 1,210,272
Sigma Aldrich 221,488
Skandin Ens Banken AG 138,455
Straight-A Funding LLC 1,285,412
Sumitomo Corp. of America 3,065,315
Tasman Funding Inc 468,389
Toyota Motor Credit 3,461
Tulip Fdng Corp 724,147
Unilever Capital Corporation 1,549,904
Victory Receivables 1,436,236
Wal-Mart Stores Inc 1,118,514
Westpac Banking Corp 110,879
Windmill Fdg Corp 518,880
Working Cap Man Co 256,075
- --------------------------------------------------------------
Total market value of collateral securities $47,250,000
- --------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 9
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
GOLDMAN SACHS (0.18%)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
Cafco LLC $149,203
Govco Inc 2,397,240
KFW 2,607,940
Kittyhawk Fndg 2,879,518
Sheffield Receivables 2,812,314
Standard Chartered Bnk 2,178,267
Victory Receivables 2,725,518
- --------------------------------------------------------------
Total market value of collateral securities $15,750,000
- --------------------------------------------------------------
<Caption>
MORGAN STANLEY (0.43%)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
American Home Mortgage Investment Trust $233,041
Banc of America Commercial Mortgage Inc 2,321,342
Credit Suisse Mortgage Capital Certificates 14,540
Equity One ABS Inc 249,780
Fannie Mae REMICS 728,438
Granite Master Issuer PLC 774,312
Granite Mortgages PLC 42,632
Morgan Stanley Dean Witter Capital I 30,219
Structured Asset Investment Loan Trust 512,521
Structured Asset Mortgage Investments Inc 872,685
Wachovia Bank Commercial Mortgage Trust 9,918,699
WaMu Mortgage Pass Through Certificates 150,038
Westpac Securitisation Trust 12,706
- --------------------------------------------------------------
Total market value of collateral securities $15,860,953
- --------------------------------------------------------------
<Caption>
MORGAN STANLEY (0.33%)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
Abbot Laboratories $3,356,952
Banque Et Caisse 3,373,275
Erasmus Capital Corp 6,987,359
Fcar Owner Trust 1,036,458
Nestle Cap Corp 1,329,037
Pacific Life Insurance Com 1,851,741
Solitaire Funding 3,007,338
Tempo Finance LTD 3,902,655
TSL Inc 1,429,049
- --------------------------------------------------------------
Total market value of collateral securities $26,273,864
- --------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
10 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
NATIXIS FINANCIAL PRODUCTS (0.33%)
SECURITY DESCRIPTION VALUE(a)
- --------------------------------------------------------------
A4 Funding LP $9,221,236
Fannie Mae Interest Strip 549,203
Fannie Mae Pool 1,921,150
Fannie Mae REMICS 4,051,366
Federal Home Loan Mtge Corp 10,095
FHLMC-GNMA 39,161
Freddie Mac Gold Pool 279,536
Freddie Mac Non Gold Pool 532,079
Freddie Mac REMICS 4,588,789
Freddie Mac Strips 544,015
Ginnie Mae II Pool 642,313
Govt Natl Mtge Assn 1,202,363
US Treasury Note 2,182,865
- --------------------------------------------------------------
Total market value of collateral securities $25,764,171
- --------------------------------------------------------------
</Table>
(h) Also represents the cost of securities for federal income tax purposes at
Jan. 31, 2010.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1(800) SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Short-term securities are valued using amortized cost, as permitted under Rule
2a-7 of the Investment Company Act of 1940, as amended. Generally, amortized
cost approximates the current fair value of these securities, but because the
value is not obtained from a quoted price in an active market, such securities
are reflected as Level 2.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as
- --------------------------------------------------------------------------------
12 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 investments due to lack of market transparency and corroboration to
support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in a valuation model may
include, but are not limited to, financial statement analysis, discount rates
and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Jan. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2010
--------------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- -----------------------------------------------------------------------------------------------
Short-Term Securities
U.S. Government
Agencies $-- $874,905,333 $-- $874,905,333
U.S. Government-
Insured Debt -- 368,860,323 -- 368,860,323
Certificates of
Deposit -- 104,800,000 -- 104,800,000
Commercial Paper -- 776,626,717 -- 776,626,717
Floating Rate Notes -- 70,000,000 -- 70,000,000
- -----------------------------------------------------------------------------------------------
Total Short-Term
Securities -- 2,195,192,373 -- 2,195,192,373
- -----------------------------------------------------------------------------------------------
Bonds
Asset-Backed
Securities -- 8,689,681 -- 8,689,681
- -----------------------------------------------------------------------------------------------
Total Bonds 8,689,681 8,689,681
- -----------------------------------------------------------------------------------------------
Other
Investments of Cash
Collateral Received
for Securities on
Loan(a) -- 678,272,400 -- 678,272,400
- -----------------------------------------------------------------------------------------------
Total Other -- 678,272,400 -- 678,272,400
- -----------------------------------------------------------------------------------------------
Total $-- $2,882,154,454 $-- $2,882,154,454
- -----------------------------------------------------------------------------------------------
</Table>
(a) Asset categories for Investments of Cash Collateral are identified in the
Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 13
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JAN. 31, 2010 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities*, at value (identified cost
$2,203,882,054) $2,203,882,054
Investments of cash collateral received for securities on loan
(identified cost $678,272,400) 678,272,400
- ---------------------------------------------------------------------------------
Total investments in securities (identified cost $2,882,154,454) 2,882,154,454
Cash 63,752
Accrued interest receivable 65,567
- ---------------------------------------------------------------------------------
Total assets 2,882,283,773
- ---------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 313,441
Payable upon return of securities loaned 678,272,400
Other accrued expenses 36,208
- ---------------------------------------------------------------------------------
Total liabilities 678,622,049
- ---------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $2,203,661,724
- ---------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 22,036,819
Additional paid-in capital 2,181,645,097
Undistributed net investment income 1,110
Accumulated net realized gain (loss) (21,302)
- ---------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $2,203,661,724
- ---------------------------------------------------------------------------------
Shares outstanding 2,203,681,916
- ---------------------------------------------------------------------------------
Net asset value per share of outstanding capital stock $ 1.00
- ---------------------------------------------------------------------------------
*Value of securities on loan $ 664,978,283
- ---------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
14 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JAN. 31, 2010 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Interest 2,899,171
Income from securities lending -- net 364,082
- -----------------------------------------------------------------------------
Total income 3,263,253
- -----------------------------------------------------------------------------
Expenses:
Custodian fees 17,336
Shareholder reports and communications 4,598
Professional fees 9,290
Other 21,831
- -----------------------------------------------------------------------------
Total expenses 53,055
- -----------------------------------------------------------------------------
Investment income (loss) -- net 3,210,198
- -----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on security transactions 833
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $3,211,031
- -----------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 15
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2010 JULY 31, 2009
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 3,210,198 $ 26,871,635
Net realized gain (loss) on security transactions 833 (39,140,572)
Increase from payments by affiliate (Note 6) N/A 39,122,218
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 3,211,031 26,853,281
- -----------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (3,209,544) (26,871,179)
- -----------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS AT CONSTANT $1 NET ASSET VALUE
Proceeds from sales of shares 5,603,636,411 16,234,642,143
Net asset value of shares issued for reinvestment of
distributions 3,533,439 26,941,738
Payments for redemptions of shares (6,393,999,700) (16,490,996,879)
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (786,829,850) (229,412,998)
- -----------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (786,828,363) (229,430,896)
Net assets at beginning of period 2,990,490,087 3,219,920,983
- -----------------------------------------------------------------------------------------------------
Net assets at end of period $ 2,203,661,724 $ 2,990,490,087
- -----------------------------------------------------------------------------------------------------
Undistributed net investment income $ 1,110 $ 456
- -----------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
16 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following table is intended to help you understand the Fund's financial
performance. Total returns assume reinvestment of all dividends and
distributions. Total returns are not annualized for periods of less than one
year.
<Table>
<Caption>
SIX MONTHS
ENDED JAN. 31, YEAR ENDED JULY 31,
2010 -------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007(a)
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(b) .009 .04 .04
Net gains (losses) (both realized and
unrealized) -- (.011) -- --
Increase from payments by affiliate -- .011 -- --
- ------------------------------------------------------------------------------------------------------
Total from investment operations .00(b) .009 .04 .04
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.00)(b) (.009) (.04) (.04)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN(C) .13% .92% 4.07% 4.66%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Total expenses .00%(b),(d) .01% .01% .01%(d)
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) .24%(d) 1.02% 3.93% 5.37%(d)
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $2,204 $2,990 $3,220 $3,229
- ------------------------------------------------------------------------------------------------------
</Table>
(a) For the period from Sept. 26, 2006 (date the Fund became available) to July
31, 2007.
(b) Rounds to zero.
(c) During the year ended July 31, 2009, the Fund received payments by an
affiliate. Had the Fund not received these payments, the total return would
have been lower by 1.14%.
(d) Annualized.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 17
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS OF JAN. 31, 2010)
1. ORGANIZATION
RiverSource Short-Term Cash Fund (the Fund) is a series of RiverSource Short
Term Investments Series, Inc. (the Corporation) and is registered under the
Investment Company Act of 1940, as amended (the 1940 Act) as a diversified,
open-end management investment company. The Corporation has 100 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Corporation's Board of Directors (the Board). The
Fund invests primarily in money market instruments.
Investments in the Fund may be made only by investment companies, common or
commingled trust funds or similar organizations or persons that are accredited
investors within the meaning of the Securities Act of 1933 (as amended).
At Jan. 31, 2010, the affiliated funds in the RiverSource Family of Funds owned
100% of the Fund's outstanding shares.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ADOPTION OF NEW ACCOUNTING STANDARD
In June 2009, the Financial Accounting Standards Board (FASB) established the
FASB Accounting Standards Codification(TM) (Codification) as the single source
of authoritative accounting principles recognized by the FASB in the preparation
of financial statements in conformity with U.S. generally accepted accounting
principles (GAAP). The Codification supersedes existing non-grandfathered, non-
SEC accounting and reporting standards. The Codification did not change GAAP
but, rather, organized it into a hierarchy where all guidance within the
Codification carries an equal level of authority. The Codification became
effective for financial statements issued for interim and annual periods ending
after Sept. 15, 2009. The Codification did not have an effect on the Fund's
financial statements.
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at
amortized cost, which approximates market value.
- --------------------------------------------------------------------------------
18 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. On a daily basis, the market value of securities
held as collateral for repurchase agreements is monitored to ensure the
existence of the proper level of collateral.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required. The Fund
is treated as a separate entity for federal income tax purposes.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
RECENT ACCOUNTING PRONOUNCEMENT
On Jan. 21, 2010, the FASB issued an Accounting Standards Update (the
amendment), Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements, which provides guidance on how
investment assets and liabilities are to be valued and disclosed. Specifically,
the amendment requires reporting entities to disclose the input and valuation
techniques used to measure fair value for both recurring and nonrecurring fair
value measurements for Level 2 or Level 3 positions. The amendment also requires
that transfers between all levels (including Level 1 and Level 2) be disclosed
on a gross basis (i.e., transfers out must be disclosed separately from
transfers in), and the reason(s) for the transfer. Additionally purchases,
sales, issuances and settlements must be disclosed on a gross basis in the Level
3 rollforward. The effective date of the amendment is for interim and annual
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 19
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
periods beginning after Dec. 15, 2009, however, the requirement to provide the
Level 3 activity for purchases, sales, issuances and settlements on a gross
basis will be effective for interim and annual periods beginning after Dec. 15,
2010. At this time the Fund is evaluating the implications of the amendment and
the impact to the financial statements.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared daily and payable monthly, are
reinvested in additional shares of the Fund at net asset value or payable in
cash.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including amortization of premium and discount, is
recognized daily.
3. EXPENSES
INVESTMENT MANAGEMENT SERVICES
Under the Investment Management Services Agreement, RiverSource Investments, LLC
(RiverSource Investments or the Investment Manager), subject to the policies set
by the Board, provides investment management services. The Fund does not pay the
Investment Manager a fee for services, but it does pay taxes, brokerage
commissions and nonadvisory expenses.
COMPENSATION OF BOARD MEMBERS
The Fund does not pay compensation to the board members. Compensation and
certain other core expenses are paid directly by the other funds in the
RiverSource Family of Funds that invest in this Fund.
4. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral balance are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the
- --------------------------------------------------------------------------------
20 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
collateral upon the return of the securities loaned. At Jan. 31, 2010,
securities valued at $664,978,283 were on loan, secured by cash collateral of
$678,272,400 invested in short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$364,082 earned from securities lending for the six months ended Jan. 31, 2010
is included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
5. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
15, 2009, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds in the
RiverSource Family of Funds, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each Fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 21
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
annum, in addition to an upfront fee equal to its pro rata share of 0.04% of the
amount of the credit facility. Prior to Oct. 15, 2009, the credit facility
agreement, which was a collective agreement between the Fund and certain other
funds in the RiverSource Family of Funds, severally and not jointly, permitted
collective borrowings up to $475 million. Interest was charged to each Fund
based on its borrowings at a rate equal to the federal funds rate plus 0.75%.
The Fund also paid a commitment fee equal to its pro rata share of the amount of
the credit facility at a rate of 0.06% per annum, in addition to an upfront fee
equal to its pro rata share of 0.02% of the amount of the credit facility. The
Fund had no borrowings during the six months ended Jan. 31, 2010.
6. PAYMENTS BY AFFILIATE
On Sept. 15, 2008, Lehman Brothers Holdings Inc. (Lehman Brothers) filed a
Chapter 11 bankruptcy petition. At that time, the Fund owned $50 million in
medium term commercial paper issued by Lehman Brothers (the Lehman Notes). The
value of the Lehman Notes declined following Lehman Brothers filing of its
bankruptcy petition. From Sept. 16, 2008 through Sept. 30, 2008, Ameriprise
Financial purchased the total $50 million par of the Lehman Notes from the Fund
for cash at a price equal to amortized cost plus accrued interest in accordance
with Rule 17a-9 of the 1940 Act. The amount shown in the Fund's Statement of
Changes in Net Assets as payments by affiliate is equal to the difference
between the fair value of the Lehman Notes at purchase date and the cash
received from Ameriprise Financial.
7. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes. The character of distributions made during
the year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to the
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains (losses)
were recorded by the Fund.
For federal income tax purposes, the Fund had a capital loss carry-over of
$22,135 at July 31, 2009, that if not offset by capital gains will expire as
follows:
<Table>
<Caption>
2016 2017
$1,875 $20,260
</Table>
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires. There
- --------------------------------------------------------------------------------
22 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
is no assurance that the Fund will be able to utilize all of its capital loss
carry-over before it expires.
8. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
9. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court,
asking the U.S. Supreme Court to stay the District Court proceedings while the
U.S. Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 23
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Commerce (MDOC) related to market timing activities. As a result, AEFC was
censured and ordered to cease and desist from committing or causing any
violations of certain provisions of the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to retain an independent distribution consultant to assist in developing
a plan for distribution of all disgorgement and civil penalties ordered by the
SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In
late 2003, Seligman conducted an extensive internal review concerning mutual
fund trading practices. Seligman's review, which covered the period 2001-2003,
noted one arrangement that permitted frequent trading in certain open-end
registered investment companies managed by Seligman (the Seligman Funds); this
arrangement was in the process of being closed down by Seligman before September
2003. Seligman identified three other arrangements that permitted frequent
trading, all of which had been terminated by September 2002. In January 2004,
Seligman, on a voluntary basis, publicly disclosed these four arrangements to
its clients and to shareholders of the Seligman Funds. Seligman also provided
information concerning mutual fund trading practices to the SEC and the Office
of the Attorney General of the State of New York (NYAG).
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund
Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the
Seligman Parties), alleging, in substance, that the Seligman Parties permitted
various persons to engage in frequent trading and, as a result, the prospectus
disclosure used by the registered investment companies then managed by Seligman
was and had been misleading. The NYAG included other related claims and also
claimed that the fees charged by Seligman to the Seligman Funds were excessive.
On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, the Seligman Parties entered into a stipulation of settlement with
the NYAG and settled the claims made by the NYAG. Under the terms of the
settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement
resolved all outstanding matters between the Seligman Parties and the NYAG. In
addition to the foregoing matter, the New
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24 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT
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York staff of the SEC indicated in September 2005 that it was considering
recommending to the Commissioners of the SEC the instituting of a formal action
against Seligman and Seligman Advisors, Inc. relating to frequent trading in the
Seligman Funds. Seligman responded to the staff in October 2005 that it believed
that any action would be both inappropriate and unnecessary, especially in light
of the fact that Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
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RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT 25
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling the RiverSource Family of Funds at 1(800) 221-2450; contacting your
financial intermediary; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting riversource.com/funds; or searching the website of
the SEC at www.sec.gov.
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26 RIVERSOURCE SHORT-TERM CASH FUND -- 2010 SEMIANNUAL REPORT S-6284 E (4/10)
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual
reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. Investments.
(a) The complete schedule of investments is included in Item 1 of this Form
N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not
applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of matters to a vote of security holders. Not applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's Principal Financial Officer and Principal Executive Officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) Separate certification for the Registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached
as EX.99.906 CERT.
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) RiverSource Short Term Investments Series, Inc.
By /s/ Patrick T. Bannigan
-----------------------------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date April 6, 2010
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 /s/ Patrick T. Bannigan
-----------------------------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date April 6, 2010
By /s/ Jeffrey P. Fox
-----------------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date April 6, 2010