OMB APPROVAL
-------------------------
OMB Number: 3235-0570
Expires: Nov. 30, 2005
Estimated average burden
hours per response: 5.0
-------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR/A
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file
number 811 - 7892
--------------------------------------------------------------------------
Short-Term Investments Co.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
11 Greenway Plaza Suite 100 Houston, Texas 77046
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert H. Graham 11 Greenway Plaza Suite 100 Houston, Texas 77046
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (713) 626 - 1919
-----------------------------
Date of fiscal year end: 8/31
----------------------
Date of reporting period: 8/31/03
---------------------
- ----------------
Explanatory Note
The Registrant is filing this Amendment to its Certified Shareholder Report on
Form N-CSR originally filed with the Securities and Exchange Commission on
November 7, 2003 to provide the proper form of Certifications required by Rule
30a-2(a) of the Investment Company Act of 1940, as amended that were required at
the original time of filing. This Form N-CSR/A also updates Item 9 "Controls and
Procedures" and Item 10 "Exhibits" as required. Other than the aforementioned
revisions this Form N-CSR/A does not reflect events occurring after the filing
of the original Form N-CSR, or modify or update the disclosures therein in any
way.
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
LIQUID ASSETS PORTFOLIO
CASH MANAGEMENT CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
LAP-AR-3
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Liquid
ROBERT H. Assets Portfolio covers a fiscal year during which
GRAHAM] reductions in short-term interest rates caused yields on
money market funds and other short-term instruments to
decline. Saying it favored a more expansive monetary policy
because the economy had not yet exhibited sustainable
growth, the Federal Reserve Board (the Fed) lowered the
federal funds rate twice during the fiscal year. In November
2002, it reduced the rate from 1.75% to 1.25%. In late June
2003, it reduced that rate to 1.00%, its lowest level since
1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose from 5.8% at the
start of the fiscal year to 6.1% at its close. Despite the growth in the
economy, companies generally were reluctant to add workers, relying on strong
productivity growth to support earnings. During the second quarter of 2003,
productivity in the nonfarm business sector rose at a robust 6.8% annualized
rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Cash Management Class outperformed its
indexes, as shown in the table. Had the advisor and distributor not waived fees
and/or reimbursed expenses, performance would have been lower. Through a
combination of short-term cash management vehicles and selective use of a longer
maturity schedule for higher yields, the portfolio continued to provide
attractive yields. The weighted average maturity (WAM) remained in the 38- to
60-day range; at the close of the reporting period, the WAM stood at 49 days.
The portfolio will continue to maintain a relatively short maturity structure to
take advantage of any sudden rise in market yields. At the close of the fiscal
year, net assets of the Cash Management Class stood at $4.5 billion. Past
performance cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
================================================================================
YIELDS AS OF 8/31/03*
MONTHLY YIELD SEVEN-DAY
SEC YIELD
Liquid Assets Portfolio 0.91% 0.91%
Cash Management Class
iMoneyNet Money Fund Averages--Trademark-- 0.71% 0.72%
First-Tier Institutions Only
iMoneyNet Money Fund Averages--Trademark-- 0.67% 0.67%
Total Institutions Only
================================================================================
(continued)
The Liquid Assets Portfolio invests solely in securities rated "first-tier"
as defined in Rule 2a-7 under the Investment Company Act of 1940. Its objective
is to provide as high a level of current income as is consistent with the
preservation of capital and liquidity. Using a modified barbell maturity
structure, portfolio management emphasizes superior credit quality in buying
money market securities such as commercial paper and selected repurchase
agreement securities. An investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although a money market fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money investing in the
fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
*The seven-day SEC Yield and monthly yield represent annualized results for the
period, net of fees and expenses, and exclude any realized capital gains or
losses. Yields will fluctuate. iMoneyNet, Inc. is an independent mutual fund
performance monitor. The iMoneyNet First-Tier Institutions Only category
consists of 276 funds that invest in any allowable 2a-7 investment, except
second-tier commercial paper. The Total Institutions Only category consists of
589 funds with a minimum initial investment of $100,000 or funds that are only
open to institutions.
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
COMMERCIAL PAPER-25.08%(a)
FINANCIAL-25.08%
ASSET BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-2.55%
Atlantis One Funding Corp. (Rabobank-ABS
Program Sponsor)(b)
(Acquired 05/22/03; Cost $41,406,228)
1.20% 09/10/03 $ 41,560 $ 41,547,532
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $223,474,677)
0.97% 10/01/03 224,139 223,957,821
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $59,925,562)
0.97% 11/12/03 60,172 60,055,266
- ------------------------------------------------------------------------------------
(Acquired 06/25/03; Cost $149,465,375)
0.91% 11/13/03 150,000 149,723,208
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $101,389,167)
0.98% 11/14/03 101,816 101,610,899
- ------------------------------------------------------------------------------------
Fleet Funding Corp. (General Electric Capital
Corp.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $99,659,528)
1.03% 10/09/03 100,000 99,891,278
- ------------------------------------------------------------------------------------
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $36,942,280)
1.04% 09/03/03 37,000 36,997,862
====================================================================================
713,783,866
====================================================================================
ASSET BACKED SECURITIES-CONSUMER
RECEIVABLES-0.35%
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $60,005,368)
1.03% 09/09/03 60,112 60,098,241
- ------------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 08/06/03; Cost $38,743,745)
1.06% 09/12/03 38,786 38,773,438
====================================================================================
98,871,679
====================================================================================
ASSET BACKED SECURITIES-FULLY BACKED-2.12%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 06/02/03; Cost $74,615,000)
1.20% 11/03/03 75,000 74,842,500
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $19,944,800)
1.08% 11/20/03 20,000 19,952,000
- ------------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $49,859,208)
1.09% 09/12/03 50,000 49,983,347
- ------------------------------------------------------------------------------------
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-FULLY BACKED-(CONTINUED)
Forrestal Funding Master Trust (Bank of
America-ABS Program Sponsor)(b)
(Acquired 08/22/03; Cost $225,292,170)
1.06% 09/22/03 $225,498 $ 225,358,567
- ------------------------------------------------------------------------------------
Old Slip Funding Corp. (Bank of New York-ABS
Program Sponsor)(b)
(Acquired 08/20/03; Cost $25,002,801)
1.08% 11/20/03 25,072 25,011,827
- ------------------------------------------------------------------------------------
Three Rivers Funding Corp. (Mellon Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,084
- ------------------------------------------------------------------------------------
Triple A One Funding Corp. (MBIA Insurance
Corp.-ABS Program Sponsor)(b)(c)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,083
- ------------------------------------------------------------------------------------
Tulip Funding Corp. (ABN AMRO Bank N.V.-ABS
Program Sponsor)(b)
(Acquired 08/06/03; Cost $99,917,556)
1.06% 09/03/03 100,000 99,994,111
====================================================================================
595,080,519
====================================================================================
ASSET BACKED SECURITIES-MULTI-PURPOSE-6.09%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 07/03/03; Cost $54,094,845)
1.04% 10/10/03 54,250 54,188,878
- ------------------------------------------------------------------------------------
CRC Funding, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/06/03; Cost $99,873,389)
1.06% 09/18/03 100,000 99,949,944
- ------------------------------------------------------------------------------------
Edison Asset Securitization, LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $72,103,070)
1.07% 10/07/03 72,359 72,281,576
- ------------------------------------------------------------------------------------
(Acquired 06/10/03; Cost $199,286,667)
1.07% 10/08/03 200,000 199,780,056
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $44,845,500)
1.03% 10/09/03 45,000 44,951,075
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $256,155,426)
1.03% 10/10/03 257,000 256,712,418
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $87,482,218)
1.19% 11/10/03 88,000 87,796,378
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $173,958,750)
1.19% 11/12/03 175,000 174,583,500
- ------------------------------------------------------------------------------------
(Acquired 07/03/03; Cost $27,315,857)
1.03% 12/17/03 27,447 27,362,974
- ------------------------------------------------------------------------------------
Falcon Asset Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,899,889)
1.06% 09/25/03 100,000 99,929,334
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $80,227,236)
1.06% 09/26/03 80,310 80,250,883
- ------------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Jupiter Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 08/21/03; Cost $99,900,361)
1.06% 09/24/03 $100,000 $ 99,932,597
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $134,864,850)
1.06% 09/30/03 135,000 134,884,725
- ------------------------------------------------------------------------------------
(Acquired 07/08/03; Cost $40,995,649)
1.04% 10/06/03 41,102 41,060,641
- ------------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $72,082,084)
1.04% 11/10/03 72,400 72,253,591
- ------------------------------------------------------------------------------------
Sheffield Receivables Corp. (Barclays Bank
PLC-NY Branch-ABS Program Sponsor)
1.06% 09/22/03 100,630 100,567,777
- ------------------------------------------------------------------------------------
Floating Rate, 1.07%(d) 01/20/04 60,000 60,000,000
====================================================================================
1,706,486,347
====================================================================================
ASSET BACKED SECURITIES-TRADE
RECEIVABLES-7.06%
Bills Securitization Ltd. (Germany) (Deutsche
Bank A.G.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $99,767,444)
0.91% 09/26/03 100,000 99,936,806
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $99,728,194)
1.03% 10/14/03 100,000 99,876,972
- ------------------------------------------------------------------------------------
Blue Ridge Asset Funding Corp. (Wachovia Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $149,863,083)
1.06% 09/26/03 150,000 149,889,583
- ------------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $99,721,000)
1.08% 11/21/03 100,000 99,757,000
- ------------------------------------------------------------------------------------
FCAR Owner Trust II-Series II (Ford Motor
Credit Co.-ABS Program Sponsor)(b)
(Acquired 06/03/03; Cost $99,691,611)
1.22% 09/02/03 100,000 99,996,611
- ------------------------------------------------------------------------------------
(Acquired 06/03/03; Cost $99,688,222)
1.22% 09/03/03 100,000 99,993,222
- ------------------------------------------------------------------------------------
(Acquired 06/12/03; Cost $141,189,245)
1.04% 09/17/03 141,586 141,520,556
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $96,725,248)
1.03% 10/17/03 97,000 96,872,337
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $99,733,000)
1.08% 11/17/03 100,000 99,769,000
- ------------------------------------------------------------------------------------
(Acquired 08/07/03, Cost $54,805,300)
1.08% 12/03/03 55,000 54,846,550
- ------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust (General Motors
Acceptance Corp.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $199,545,000)
0.91% 09/23/03 $200,000 $ 199,888,778
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $74,922,708)
1.06% 09/25/03 75,000 74,947,000
- ------------------------------------------------------------------------------------
(Acquired 04/16/03; Cost $39,755,000)
1.26% 10/08/03 40,000 39,948,200
- ------------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $124,606,250)
1.08% 11/18/03 125,000 124,707,500
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $199,279,333)
1.10% 12/02/03 200,000 199,442,889
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $99,630,278)
1.10% 12/03/03 100,000 99,715,833
- ------------------------------------------------------------------------------------
(Acquired 08/07/03; Cost $124,550,000)
1.08% 12/05/03 125,000 124,643,750
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $74,743,500)
1.08% 12/12/03 75,000 74,770,500
====================================================================================
1,980,523,087
====================================================================================
DIVERSIFIED BANKS-0.52%
Societe Generale North America (France)
1.10% 12/11/03 144,570 144,125,869
====================================================================================
INVESTMENT BANKING & BROKERAGE-2.80%
Bear, Stearns & Co. Inc.
1.04% 09/19/03 200,000 199,896,000
- ------------------------------------------------------------------------------------
1.01% 10/10/03 185,000 184,797,579
- ------------------------------------------------------------------------------------
Lehman Brothers Holdings Inc.(e)
1.23% 09/30/03 50,000 50,000,000
- ------------------------------------------------------------------------------------
1.23% 10/14/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 11/20/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 12/04/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.20% 01/23/04 50,000 50,000,000
====================================================================================
784,693,579
====================================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-1.14%
GE Capital International Funding Inc.-Series
A(b)
(Acquired 04/23/03; Cost $129,181,000)
1.26% 10/20/03 130,000 129,777,050
- ------------------------------------------------------------------------------------
General Electric Capital Services, Inc.
1.03% 10/08/03 41,000 40,956,597
- ------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
Morgan Stanley, Floating Rate(e)
1.14% 12/01/03 $150,000 $ 150,000,000
====================================================================================
320,733,647
====================================================================================
REGIONAL BANKS-2.45%
Banque et Caisse d'Epargne de l'Etat
(Luxembourg)
1.23% 11/03/03 100,000 99,784,750
- ------------------------------------------------------------------------------------
Danske Corp. (Denmark)
1.08% 12/23/03 25,187 25,101,616
- ------------------------------------------------------------------------------------
Stadshypotek Delaware, Inc. (Sweden)
1.03% 09/15/03 200,000 199,919,889
- ------------------------------------------------------------------------------------
1.03% 09/16/03 100,000 99,957,083
- ------------------------------------------------------------------------------------
0.91% 09/23/03 100,000 99,944,389
- ------------------------------------------------------------------------------------
1.07% 11/05/03 163,000 162,685,094
====================================================================================
687,392,821
====================================================================================
Total Financial 7,031,691,414
====================================================================================
Total Commercial Paper (Cost
$7,031,691,414) 7,031,691,414
====================================================================================
TIME DEPOSITS-15.75%
Danske Bank A/S-Cayman (Denmark)
1.02% 09/02/03 370,000 370,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank A.G.-Cayman (Germany)
1.00% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Fifth Third Bank-Cayman
1.01% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
ING Belgium S.A./N.V.-Brussels (Belgium)
1.13% 09/02/03 800,000 800,000,000
- ------------------------------------------------------------------------------------
M&I Marshall & Ilsley Bank-Milwaukee
1.00% 09/02/03 261,489 261,488,678
- ------------------------------------------------------------------------------------
Rabobank Nederland-London (Netherlands)
1.14% 09/02/03 585,000 585,000,000
- ------------------------------------------------------------------------------------
Royal Bank of Canada-Cayman (Canada)
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Societe Generale-Cayman (France)
1.02% 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
Suntrust Bank Atlanta-Cayman
0.97% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
U.S. Bank N.A.-Cayman
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-Cayman (Germany)
1.13% 09/02/03 150,000 150,000,000
====================================================================================
Total Time Deposits (Cost $4,416,488,678) 4,416,488,678
====================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT-13.03%
Barclays Bank PLC (United Kingdom)
1.03% 10/14/03 $200,000 $ 200,000,000
- ------------------------------------------------------------------------------------
BNP Paribas (France)
1.39% 08/05/04 75,000 75,027,868
- ------------------------------------------------------------------------------------
Citibank N.A.
1.07% 11/03/03 100,000 99,999,854
- ------------------------------------------------------------------------------------
1.08% 11/05/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.08% 11/06/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Credit Agricole Indosuez (France)
1.03% 09/11/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.03% 10/03/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.04% 10/09/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
Danske Bank A/S (Denmark)
1.36% 01/28/04 150,000 149,998,469
- ------------------------------------------------------------------------------------
Deutsche Bank A.G. (Germany)
1.03% 10/22/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
Dexia Bank S.A.-New York Branch (Belgium)(e)
1.03% 06/09/04 200,000 199,968,934
- ------------------------------------------------------------------------------------
HBOS Treasury Services PLC (United Kingdom)
1.08% 09/12/03 230,000 230,000,000
- ------------------------------------------------------------------------------------
1.03% 10/17/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
Lloyd's TSB Bank PLC-New York Branch (United
Kingdom)
1.21% 12/11/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia)
1.04% 07/23/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
1.26% 08/24/04 229,000 229,000,000
- ------------------------------------------------------------------------------------
Rabobank Nederland (Netherlands)
1.21% 10/31/03 150,000 150,060,651
- ------------------------------------------------------------------------------------
1.19% 08/04/04 75,000 74,993,044
- ------------------------------------------------------------------------------------
Societe Generale (France)
1.25% 10/16/03 100,000 99,997,510
- ------------------------------------------------------------------------------------
1.16% 08/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Svenska Handelsbanken A.B. (Sweden)
1.61% 10/08/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 03/17/04 70,000 69,996,198
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A.
1.06% 09/22/03 100,000 100,000,000
====================================================================================
Total Certificates of Deposit (Cost
$3,654,042,528) 3,654,042,528
====================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-8.38%
FEDERAL FARM CREDIT BANK-0.27%
Bonds,
1.80% 09/03/03 $ 75,000 $ 75,000,000
====================================================================================
FEDERAL HOME LOAN BANK-3.09%
Unsec. Bonds,
2.50% 11/14/03 61,800 61,877,787
- ------------------------------------------------------------------------------------
1.20% 04/08/04 200,965 200,959,245
- ------------------------------------------------------------------------------------
1.42% 04/21/04 93,000 93,000,000
- ------------------------------------------------------------------------------------
1.38% 05/11/04 145,000 145,000,000
- ------------------------------------------------------------------------------------
1.12% 07/12/04 235,000 235,000,000
- ------------------------------------------------------------------------------------
1.22% 08/04/04 100,000 99,984,855
- ------------------------------------------------------------------------------------
1.28% 09/08/04 30,000 30,000,000
====================================================================================
865,821,887
====================================================================================
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC)-1.52%
Reference Bills,(a)
1.04% 09/11/03 30,000 29,991,333
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.04% 10/15/03 47,000 46,940,258
- ------------------------------------------------------------------------------------
1.06% 10/31/03 250,000 249,558,333
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
3.25% 01/15/04 100,000 100,629,476
====================================================================================
427,119,400
====================================================================================
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA)-3.13%
Pass Thru Ctfs.,
1.09% 12/01/03 98,615 98,346,465
- ------------------------------------------------------------------------------------
1.10% 12/01/03 230,479 229,845,182
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.23% 09/30/03 250,000 249,752,292
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
5.63% 05/14/04 50,000 51,482,370
- ------------------------------------------------------------------------------------
Unsec. Notes,
4.75% 11/14/03 75,000 75,525,258
- ------------------------------------------------------------------------------------
1.08% 12/31/03 100,000 99,637,000
- ------------------------------------------------------------------------------------
1.18% 07/23/04 75,000 74,198,583
====================================================================================
878,787,150
====================================================================================
OVERSEAS PRIVATE INVESTMENT CORP.-0.00%
Floating Rate Notes,(f)(g)
1.11% 01/15/09 494 494,175
====================================================================================
</Table>
F-7
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION-0.37%
Global Notes,
5.00% 06/30/04 $100,000 $ 103,293,929
====================================================================================
Total U.S. Government Agency Securities
(Cost $2,350,516,541) 2,350,516,541
====================================================================================
PROMISSORY NOTES-4.91%
Goldman Sachs Group, Inc. (The)(b)(h)
(Acquired 08/04/03; Cost $250,000,000)
1.26% 03/01/04 250,000 250,000,000
- ------------------------------------------------------------------------------------
(Acquired 07/25/03; Cost $120,000,000)
1.23% 06/21/04 120,000 120,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/06/03; Cost $125,000,000)
1.32%(e) 09/03/03 125,000 125,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/21/03; Cost $100,000,000)
1.26%(e) 09/17/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/27/03; Cost $140,000,000)
1.19%(e) 09/29/03 140,000 140,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/02/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 04/09/03; Cost $130,000,000)
1.20%(e) 10/06/03 130,000 130,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/06/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $211,000,000)
1.33%(e) 10/07/03 211,000 211,000,000
====================================================================================
Total Promissory Notes (Cost
$1,376,000,000) 1,376,000,000
====================================================================================
VARIABLE RATE DEMAND NOTES-4.74%(j)
CORPORATE GUARANTEED-0.04%
Mississippi (State of) Business Finance Corp.
(General Electric Plastics Project);
Taxable Series 1998 IDR(b)(d)(f)(i)
(Acquired 01/25/02; Cost $12,000,000)
1.08% 02/01/23 12,000 12,000,000
====================================================================================
INSURED-2.20%(c)(f)(g)
Alaska (State of) Housing Finance Corp.;
Taxable Home Mortgage Series 2002 B RB
1.06% 12/01/36 8,100 8,100,000
- ------------------------------------------------------------------------------------
California (State of) Housing Finance Agency;
Taxable Home Mortgage Series 1998 RB
Series M, 1.03% 08/01/19 10,585 10,585,000
- ------------------------------------------------------------------------------------
Series M, 1.03% 08/01/23 28,530 28,530,000
- ------------------------------------------------------------------------------------
Series T, 1.05% 08/01/29 13,980 13,980,000
- ------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
INSURED-(CONTINUED)
Connecticut (State of) Housing Financing
Authority (Housing Mortgage Finance
Program); RB
Taxable Series 1998 F-2, 1.11% 11/15/16 $ 25,450 $ 25,450,000
- ------------------------------------------------------------------------------------
Taxable Series 2002 A-5, 1.10% 05/15/33 19,365 19,365,000
- ------------------------------------------------------------------------------------
Florida (State of) Baptist Health System of
South Florida; RB
Taxable Series 1995 A, 1.10% 05/15/17 11,100 11,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1995 B, 1.10% 05/15/25 23,900 23,900,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Agency;
Taxable Housing Series 1993 A RB
1.05% 01/01/34 31,200 31,200,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.;
Taxable Housing Series 2000 A RB
1.05% 01/01/45 59,580 59,580,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.
(Affordable Housing); Taxable Series 2002 A
RB
1.10% 01/01/47 39,320 39,320,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Student Loan RB
Taxable Series 1998 B, 1.11% 09/01/32 12,870 12,870,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-I, 1.11% 09/01/34 7,100 7,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-II, 1.11% 09/01/34 2,000 2,000,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-III, 1.11% 09/01/34 3,350 3,350,000
- ------------------------------------------------------------------------------------
Loanstar Asset Partners II; Student Loan
RB(b)
(Acquired 11/14/02; Cost $25,000,000)
Series 2001 Tranche 1 1.12% 09/01/36 25,000 25,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $60,000,000)
Series 2002 Tranche 1 1.12% 08/01/37 60,000 60,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $40,000,000)
Series 2002 Tranche 2 1.12% 08/01/37 40,000 40,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 3 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 4 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
Michigan (State of) Housing Development
Authority; Taxable Series 2000 C RB
1.06% 12/01/20 33,005 33,005,000
- ------------------------------------------------------------------------------------
Minnesota (State of) Fairview, Minnesota
Hospital & Health Care Services;
Taxable Series 1994 A ACES
1.10% 11/01/15 4,400 4,400,000
- ------------------------------------------------------------------------------------
Montgomery (City of), Alabama BMC Special
Care Facilities Financing Authority
(Baptist Health); Taxable Series 1998 C
Floating Rate RB
1.12% 11/15/29 19,300 19,300,000
- ------------------------------------------------------------------------------------
New Orleans (City of), Louisiana; Taxable
Pension Series 2000 RB
1.10% 09/01/30 40,000 40,000,000
====================================================================================
618,135,000
====================================================================================
</Table>
F-9
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-2.50%(f)(k)
Advocare of South Carolina; Series 1997 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 03/28/02; Cost $6,100,000)
1.11% 06/01/17 $ 6,100 $ 6,100,000
- ------------------------------------------------------------------------------------
B. Braun Medical Inc.; Series 2000 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.13% 02/01/15 30,479 30,479,000
- ------------------------------------------------------------------------------------
Baltimore (County of), Maryland (Oak Crest
Village Inc. Project); Series 1999 B RB
(LOC-Wachovia Bank N.A.)(g)
1.12% 01/01/29 1,140 1,140,000
- ------------------------------------------------------------------------------------
Barrington Development Funding LLC; Series
2002 A Notes (LOC-Bank One N.A.)(g)
1.13% 12/01/32 6,005 6,005,000
- ------------------------------------------------------------------------------------
Belk, Inc.; Series 1998 Bonds (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $91,030,000)
1.13% 07/01/08 91,030 91,030,000
- ------------------------------------------------------------------------------------
Brosis Finance, LLC; Series 1999 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.11% 09/01/19 18,400 18,400,000
- ------------------------------------------------------------------------------------
Capital One Funding Corp.; Floating Rate
Notes (LOC-Bank One N.A.)(g)
1.13% 12/02/19 5,024 5,024,000
- ------------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $9,064,000)
1.13%(b) 07/01/20 9,064 9,064,000
- ------------------------------------------------------------------------------------
1.13% 09/01/20 470 470,000
- ------------------------------------------------------------------------------------
1.13% 05/01/26 7,500 7,500,000
- ------------------------------------------------------------------------------------
Carlton Arms of Ocala; Series 2002 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $1,100,000)
1.11% 09/01/34 1,100 1,100,000
- ------------------------------------------------------------------------------------
Chatham Capital Corp.; Series 2000 Floating
Rate Notes (LOC-Bank One N.A.)(g)
1.13% 07/01/20 9,149 9,149,000
- ------------------------------------------------------------------------------------
Dome Corp.; Floating Rate Notes (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 05/31/02; Cost $10,435,000)
1.13% 08/31/16 10,435 10,435,000
- ------------------------------------------------------------------------------------
Georgia (State of) Brooks Development
Authority (Langboard Inc. Project);
Series 2003 IDR (LOC-Bank of America
N.A.)(g)
1.11% 04/01/18 10,000 10,000,000
- ------------------------------------------------------------------------------------
Gulf States Paper Corp.; Series 1998 Unsec.
Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 11/01/18 25,000 25,000,000
- ------------------------------------------------------------------------------------
Health Insurance Plan of Greater New York;
Series 1990 B-1 ACES
(LOC-JP Morgan Chase & Co.)(g)
1.08% 07/01/16 2,900 2,900,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Taxable Student Loan Series
1997 B RB
(LOC-Bank One Chicago N.A.)(g)
1.11% 09/01/31 7,700 7,700,000
- ------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
LP Pinewood SPV; Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 02/01/18 $ 15,300 $ 15,300,000
- ------------------------------------------------------------------------------------
Michigan (State of) Botsford General
Hospital; Series 1997 A RB
(LOC-Michigan National Bank)(e)
1.10% 02/15/27 10,300 10,300,000
- ------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Telepak Inc. Project); Taxable Series 2002
IDR
(LOC-Wachovia Bank N.A.) (Acquired
05/23/02; Cost $40,000,000)(b)(g)
1.11% 05/01/17 40,000 40,000,000
- ------------------------------------------------------------------------------------
New York (City of) Housing Development Corp.
(Chelsea Centro); Series 2003 RB
(LOC-Bayerische Landesbank)(g)
1.09% 06/01/33 8,300 8,300,000
- ------------------------------------------------------------------------------------
New York (State of) Housing Finance Agency;
Taxable Service Contract Series 2003 F RB
(LOC-State Street Bank & Trust Co.)(g)
1.09% 09/15/07 10,000 10,000,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Charlotte; Series 2002 A RB
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/14 13,800 13,800,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Raleigh; Series 2002 A RB
(LOC-Bank of America N.A.)(g)
1.16% 06/01/18 1,800 1,800,000
- ------------------------------------------------------------------------------------
Ohio (State of) (Fayette County Memorial
Hospital); Series 2003 RB
(LOC-National City Bank)(g)
1.10% 08/01/23 2,400 2,400,000
- ------------------------------------------------------------------------------------
Rockwood Quarry LLC; Notes (LOC-Fifth Third
Bank)(g)
1.10% 12/01/22 5,000 5,000,000
- ------------------------------------------------------------------------------------
Sabine River Authority of Texas (TXU Energy
Co. LLC Project); Series 2001 E PCR
(LOC-Chase Manhattan Bank)(g)
1.11% 12/01/36 1,587 1,587,142
- ------------------------------------------------------------------------------------
San Jose (City of), California Redevelopment
Agency (Merged Area); RB
(LOC-Bank of New York)(g)
Series 2002 G, 1.10% 08/01/29 8,000 8,000,000
- ------------------------------------------------------------------------------------
Series 2002 H, 1.10% 08/01/29 17,226 17,226,000
- ------------------------------------------------------------------------------------
Shepherd Capital LLC;
Floating Rate Series 2003 B Notes
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/53 15,000 15,000,000
- ------------------------------------------------------------------------------------
Floating Rate Series 96A Notes
(LOC-Standard Federal Bank)(g)
1.18% 10/01/46 1,250 1,250,000
- ------------------------------------------------------------------------------------
Floating Rate Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 11/01/52 10,000 10,000,000
- ------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
Southeastern Retirement Association, Inc.;
Series 1999 Bonds (LOC-Wachovia Bank
N.A.)(b)(g)
(Acquired 05/16/02; Cost $60,000)
1.13% 08/01/19 $ 60 $ 60,000
- ------------------------------------------------------------------------------------
Texas (State of) Brazos River Authority (TXU
Energy Co. LLC Project); Series 2001 I PCR
(LOC-Wachovia Bank N.A.)(g)
1.11% 12/01/36 62,920 62,920,000
- ------------------------------------------------------------------------------------
TP Racing L.L.L.P.; Floating Rate Series 2000
Notes
(LOC-Bank One Trust Co. N.A.)(g)
1.13% 06/01/30 29,140 29,140,000
- ------------------------------------------------------------------------------------
Union (County of), Arkansas (Del-Tin Fiber
LLC Project); Series 1998 IDR
(LOC-Bank One Chicago N.A.)(g)
1.13% 10/01/27 34,400 34,400,000
- ------------------------------------------------------------------------------------
University of Virginia Real Estate
Foundation; Series 2001 RB (LOC-Wachovia
Bank N.A.)
(Acquired 07/31/03; Cost $48,145,000)(b)(g)
1.13% 07/01/26 48,145 48,145,000
- ------------------------------------------------------------------------------------
Virginia (State of) Richmond Redevelopment &
Housing Authority Project (Old Manchester);
Taxable Series 1995 B RB (LOC-Wachovia Bank
N.A.)(d)
1.15% 12/01/25 1,590 1,590,000
- ------------------------------------------------------------------------------------
Wake Forest University; Floating Rate Series
1997 Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 07/01/17 6,900 6,900,000
- ------------------------------------------------------------------------------------
Wisconsin (State of) Madison Community
Development Authority (Overture Development
Corp.); Series 2001 RB (LOC-Bank One
Milwaukee N.A.; U.S. Bancorp; M&I Marshall
& Ilsley; Northern Trust Co.)(g)
1.13% 06/01/36 115,000 115,000,000
====================================================================================
699,614,142
====================================================================================
Total Variable Rate Demand Notes (Cost
$1,329,749,142) 1,329,749,142
====================================================================================
ASSET BACKED NOTES-4.08%
STRUCTURED-2.60%
Carmax Auto Owner Trust-Series 2003-1, Class
A-1
1.24% 06/15/04 40,136 40,136,423
- ------------------------------------------------------------------------------------
Granite Mortgages PLC (United Kingdom)-Series
2003-1, Class 1A1, Floating Rate
Bonds(b)(d)
(Acquired 01/22/03; Cost $50,000,000)
1.10% 01/20/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Holmes Financing (No. 6) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.11% 10/15/03 72,500 72,500,000
- ------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STRUCTURED-(CONTINUED)
Holmes Financing (No. 7) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.07% 04/15/04 $100,000 $ 100,000,000
- ------------------------------------------------------------------------------------
Honda Auto Receivables 2003-2 Owner
Trust-Class A-1 Notes
1.23% 06/11/04 73,596 73,596,305
- ------------------------------------------------------------------------------------
Household Automotive Trust-Series 2003-1,
Class A-1(c)
1.24% 05/17/04 36,773 36,772,528
- ------------------------------------------------------------------------------------
IKON Receivables Funding LLC Lease-Backed
Notes-Series 2003-1, Class A-1(c)
1.31% 05/17/04 48,644 48,643,911
- ------------------------------------------------------------------------------------
Permanent Financing (No. 2) PLC (United
Kingdom) Series 1, Class A, Floating Rate
Bonds (Halifax PLC-ABS Program Sponsor)
(Acquired 02/26/03; Cost
$105,000,000)(b)(d)
1.07% 03/10/04 105,000 105,000,000
- ------------------------------------------------------------------------------------
Residential Mortgage Securities (United
Kingdom)-Series 14A, Class A1, Floating
Rate Bonds (Acquired 03/17/03; Cost
$55,826,175)(b)
1.14% 03/10/04 55,826 55,826,175
- ------------------------------------------------------------------------------------
Triad Automobile Receivables Trust-Series
2003-A, Class A-1(c)
1.25% 04/12/04 34,118 34,117,936
- ------------------------------------------------------------------------------------
WFS Financial 2003-2 Owner Trust, Class A-1
1.26% 06/14/04 99,056 99,055,851
- ------------------------------------------------------------------------------------
World Omni Auto Receivables Trust-Series
2003-A, Class A-1
1.30% 03/15/04 12,738 12,737,635
====================================================================================
728,386,764
====================================================================================
STRUCTURED INVESTMENT VEHICLES/SECURITY
ARBITRAGE-1.48%
Beta Finance Inc., Floating Rate MTN
(Citibank International PLC-ABS Program
Sponsor)(b)(e)
(Acquired 10/02/02; Cost $75,000,000)
1.12% 10/07/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
(Acquired 10/03/02; Cost $99,995,000)
1.11% 10/16/03 100,000 99,999,384
- ------------------------------------------------------------------------------------
(Acquired 05/19/03; Cost $89,111,606)
1.24% 04/30/04 89,000 89,078,514
- ------------------------------------------------------------------------------------
(Acquired 05/08/03; Cost $50,000,000)
1.06% 05/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 06/09/03; Cost $99,990,000)
1.06% 06/16/04 100,000 99,992,104
====================================================================================
414,070,002
====================================================================================
Total Asset Backed Notes (Cost
$1,142,456,766) 1,142,456,766
====================================================================================
</Table>
F-13
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
MASTER NOTE AGREEMENTS-2.76%(l)
Merrill Lynch Mortgage Capital, Inc.(b)(m)
(Acquired 08/25/03; Cost $220,000,000)
1.27% 02/23/04 $220,000 $ 220,000,000
- ------------------------------------------------------------------------------------
Morgan Stanley(b)(n)
(Acquired 03/17/03; Cost $555,000,000)
1.20% 09/15/03 555,000 555,000,000
====================================================================================
Total Master Note Agreements (Cost
$775,000,000) 775,000,000
====================================================================================
MEDIUM TERM NOTES-2.54%
Associates Corp. of North America, Sr. Global
MTN,
5.80% 04/20/04 49,000 50,443,106
- ------------------------------------------------------------------------------------
General Electric Capital Corp.-Series A
Floating Rate Global MTN, 1.33%(e) 10/22/03 40,000 40,005,870
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.19%(d) 09/08/04 332,900 332,900,000
- ------------------------------------------------------------------------------------
MetLife Global Funding(d)
(Acquired 08/20/03; Cost $90,000,000)
Floating Rate Global MTN, 1.12%(b) 09/15/04 90,000 90,000,000
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.12% 09/27/04 99,300 99,300,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia),
Euro Floating Rate MTN,(o)
1.20% 03/12/04 50,000 50,008,379
- ------------------------------------------------------------------------------------
1.13% 05/02/04 50,000 50,013,519
====================================================================================
Total Medium Term Notes (Cost
$712,670,874) 712,670,874
====================================================================================
FUNDING AGREEMENTS-1.66%
New York Life Insurance Co.(b)(d)(h)
(Acquired 04/03/03; Cost $265,000,000)
1.18% 04/07/04 265,000 265,000,000
- ------------------------------------------------------------------------------------
Travelers Insurance Co.(b)(h)(o)
(Acquired 08/27/03; Cost $100,000,000)
1.24% 11/25/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $100,000,000)
1.24% 08/27/04 100,000 100,000,000
====================================================================================
Total Funding Agreements (Cost
$465,000,000) 465,000,000
====================================================================================
BANK NOTES-1.52%
BNP Paribas-New York Branch (France),
Floating Rate Notes,(e)
1.04% 06/07/04 200,000 199,968,979
- ------------------------------------------------------------------------------------
National City Bank of Indiana, Floating Rate
Notes,(e)
1.04% 06/14/04 100,000 99,984,285
- ------------------------------------------------------------------------------------
Wachovia Bank, N.A., Floating Rate Notes,(o)
1.19% 06/24/04 25,000 25,044,996
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A., Floating Rate
Notes,(e)
1.04% 05/10/04 100,000 100,000,000
====================================================================================
Total Bank Notes (Cost $424,998,260) 424,998,260
====================================================================================
</Table>
F-14
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
PUTTABLE RESET NOTES-1.01%
Merck & Co., Inc.; PURS Notes (Acquired
02/18/03; Cost $103,194,800)(b)
4.49% 02/22/04 $100,000 $ 101,531,392
- ------------------------------------------------------------------------------------
Wal-Mart Stores, Inc.; Unsec. Unsub. PURS
Notes
5.20% 06/01/04 175,000 180,536,131
====================================================================================
Total Puttable Reset Notes (Cost
$282,067,523) 282,067,523
====================================================================================
U.S. TREASURY NOTES-0.36%
3.00% 01/31/04 100,000 100,717,649
====================================================================================
Total U.S. Treasury Notes (Cost
$100,717,649) 100,717,649
====================================================================================
Total Investments Excluding Repurchase
Agreements (Cost $24,061,399,375) 24,061,399,375
====================================================================================
REPURCHASE AGREEMENTS-15.33%
ABN AMRO Bank N.V.-New York Branch
(Netherlands)
1.05%(p) 09/02/03 37,000 37,000,000
- ------------------------------------------------------------------------------------
Banc of America Securities LLC
1.05%(q) 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
1.08%(r) 09/02/03 102,000 102,000,000
- ------------------------------------------------------------------------------------
Banc One Capital Markets Group
1.06%(s) 09/02/03 2,116 2,116,069
- ------------------------------------------------------------------------------------
Bank of Nova Scotia (The)-New York Branch
(Canada)
1.05%(t) 09/02/03 252,501 252,501,380
- ------------------------------------------------------------------------------------
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.05%(u) 09/02/03 297,003 297,002,850
- ------------------------------------------------------------------------------------
BNP Paribas Securities Corp.-New York Branch
(France)
1.05%(v) 09/02/03 307,000 307,000,000
- ------------------------------------------------------------------------------------
Citigroup Global Markets Inc.
1.05%(w) 09/02/03 287,000 287,000,000
- ------------------------------------------------------------------------------------
Credit Suisse First Boston LLC-New York
Branch (Switzerland)
1.16%(x) 07/09/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank Securities Inc.-New York Branch
(Germany)
1.06%(y) 09/02/03 224,536 224,536,185
- ------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(z) 09/02/03 52,000 52,000,000
- ------------------------------------------------------------------------------------
JP Morgan Securities Inc.
1.07%(aa) 09/02/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Lehman Brothers Inc.
1.00%(ab) 09/02/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
UBS Warburg LLC-New York Branch (Switzerland)
1.01%(ac) 09/02/03 372,163 372,163,170
- ------------------------------------------------------------------------------------
1.05%(ad) 09/02/03 425,000 425,000,000
- ------------------------------------------------------------------------------------
1.05%(ae) 09/02/03 475,814 475,814,111
- ------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-(CONTINUED)
Wachovia Securities, Inc.
1.03%(af) 09/02/03 $275,616 $ 275,616,254
- ------------------------------------------------------------------------------------
1.08%(ag) 09/02/03 62,000 62,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-New York Branch (Germany)
1.13%(ah) 09/02/03 127,000 127,000,000
====================================================================================
Total Repurchase Agreements (Cost
$4,298,750,019) 4,298,750,019
____________________________________________________________________________________
====================================================================================
TOTAL INVESTMENTS (Cost
$28,360,149,394)(ai)-101.15% 28,360,149,394
____________________________________________________________________________________
====================================================================================
OTHER ASSETS LESS LIABILITIES-(1.15)% (323,748,205)
____________________________________________________________________________________
====================================================================================
NET ASSETS-100.00% $28,036,401,189
____________________________________________________________________________________
====================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
ACES - Automatically Convertible Extendable Security
Disc. - Discounted
IDR - Industrial Revenue Bonds
LOC - Letter of Credit
MTN - Medium Term Notes
PCR - Pollution Control Revenue Bonds
PURS - Puttable Reset Securities
RB - Revenue Bonds
Sr. - Senior
Unsec. - Unsecured
Unsub. - Unsubordinated
</Table>
Notes to Schedule of Investments
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$8,939,316,340, which represented 31.88% of the Fund's net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
(c) Principal and interest payments are secured by bond insurance provided by
one of the following companies: AMBAC Assurance Corp., MBIA Insurance Corp.
or Financial Security Assurance.
(d) Interest rates are redetermined monthly. Rate shown is the rate in effect on
08/31/03.
(e) Interest rates are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) Demand security; payable upon demand by the Fund with usually no more than
seven calendar day's notice.
(g) Interest rates are redetermined weekly. Rate shown is the rate in effect on
08/31/03.
(h) Security considered to be illiquid. The aggregate market value of these
securities at 08/31/03 was $1,841,000,000 which represents 6.57% of the
Fund's net assets.
(i) Principal and interest payments are guaranteed by the corporate guarantor.
(j) Interest on these securities is taxable income to the Fund.
(k) Principal and interest payments are guaranteed by the letter of credit
agreement.
(l) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-16
(m) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(n) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(o) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/03.
(p) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,167. Collateralized by $254,927,000 U.S. Government obligations, 0%
to 4.00% due 11/05/03 to 09/02/08 with an aggregate market value at 08/31/03
of $255,000,220.
(q) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $499,105,000 U.S. Government obligations, 0%
to 9.70% due 10/03/03 to 04/05/19 with an aggregate market value at 08/31/03
of $510,000,486.
(r) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,030,000. Collateralized by $252,007,493 U.S. Government obligations,
5.50% to 6.00% due 12/01/32 to 06/01/33 with an aggregate market value at
08/31/03 of $255,000,000.
(s) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$300,035,333. Collateralized by $294,930,000 U.S. Government obligations, 0%
to 7.70% due 09/15/03 to 04/09/09 with an aggregate market value at 08/31/03
of $306,001,703.
(t) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $494,322,000 U.S. Government obligations, 0%
to 7.25% due 12/15/03 to 05/15/30 with an aggregate market value at 08/31/03
of $510,000,259.
(u) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$660,079,850. Collateralized by $664,688,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 03/15/12 with an aggregate market value at 08/31/03
of $673,203,742.
(v) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $511,522,000 U.S. Government obligations, 0%
to 0% due 10/16/03 to 12/31/03 with an aggregate market value at 08/31/03 of
$510,000,869.
(w) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $493,678,000 U.S. Government obligations, 0%
to 6.00% due 12/15/03 to 11/11/16 with an aggregate market value at 08/31/03
of $510,000,421.
(x) Term repurchase agreement entered into 08/29/03; however either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $526,959,000 U.S. Treasury
obligations, 0% to 8.13% due 11/15/15 to 08/15/21 with an aggregate market
value at 08/31/03 of $306,000,504.
(y) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,889. Collateralized by $479,866,000 U.S. Government obligations,
1.88% to 6.25% due 01/15/05 to 01/05/27 with an aggregate market value at
08/31/03 of $510,000,195.
(z) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(aa)Repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,722. Collateralized by $252,112,237 U.S. Government obligations, 0%
to 0% due 05/01/23 to 08/01/33 with a market value at 08/31/03 of
$255,000,797.
(ab)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,055,556. Collateralized by $407,091,000 U.S. Treasury obligations,
6.00% to 8.88% due 02/15/19 to 05/15/30 with an aggregate market value at
08/31/03 of $510,005,167.
(ac)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$900,101,000. Collateralized by $705,327,000 U.S. Treasury obligations,
3.38% to 8.88% due 01/15/07 to 08/15/17 with an aggregate market value at
08/31/03 of $918,002,342.
(ad)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $496,282,742 U.S. Government obligations,
4.50% to 8.00% due 10/01/08 to 07/01/33 with an aggregate market value at
08/31/03 of $510,001,793.
(ae)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$850,099,167. Collateralized by $1,792,017,000 U.S. Government obligations,
0% to 9.38% due 10/16/03 to 10/15/22 with an aggregate market value at
08/31/03 of $867,004,984.
F-17
(af)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(ag)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(ah)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$200,025,000. Collateralized by $196,970,652 U.S. Government obligations,
4.51% to 7.24% due 11/01/10 to 10/01/32 with an aggregate market value at
08/31/03 of $204,000,000.
(ai)Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-18
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements at value
(amortized cost) $24,061,399,375
- -----------------------------------------------------------------------------
Repurchase agreements 4,298,750,019
- -----------------------------------------------------------------------------
Interest receivable 30,772,488
- -----------------------------------------------------------------------------
Investment for deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Other assets 237,318
=============================================================================
Total assets 28,391,503,877
_____________________________________________________________________________
=============================================================================
LIABILITIES:
Payables for:
Investments purchased 329,391,647
- -----------------------------------------------------------------------------
Dividends 22,694,969
- -----------------------------------------------------------------------------
Deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Accrued distribution fees 868,780
- -----------------------------------------------------------------------------
Accrued directors' fees 690,790
- -----------------------------------------------------------------------------
Accrued transfer agent fees 479,586
- -----------------------------------------------------------------------------
Accrued operating expenses 632,239
=============================================================================
Total liabilities 355,102,688
=============================================================================
Net assets applicable to shares outstanding $28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $28,033,722,732
- -----------------------------------------------------------------------------
Undistributed net investment income (502)
- -----------------------------------------------------------------------------
Undistributed net realized gain from investment securities 2,678,959
=============================================================================
$28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS:
Institutional Class $21,240,698,662
_____________________________________________________________________________
=============================================================================
Private Investment Class $ 978,383,482
_____________________________________________________________________________
=============================================================================
Personal Investment Class $ 47,265,983
_____________________________________________________________________________
=============================================================================
Cash Management Class $ 4,473,591,100
_____________________________________________________________________________
=============================================================================
Reserve Class $ 57,082,236
_____________________________________________________________________________
=============================================================================
Resource Class $ 1,239,379,726
_____________________________________________________________________________
=============================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 21,238,605,055
_____________________________________________________________________________
=============================================================================
Private Investment Class 978,299,714
_____________________________________________________________________________
=============================================================================
Personal Investment Class 47,264,708
_____________________________________________________________________________
=============================================================================
Cash Management 4,473,177,698
_____________________________________________________________________________
=============================================================================
Reserve Class 57,081,678
_____________________________________________________________________________
=============================================================================
Resource Class 1,239,293,377
_____________________________________________________________________________
=============================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
_____________________________________________________________________________
=============================================================================
</Table>
See Notes to Financial Statements.
F-19
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $486,848,043
==========================================================================
EXPENSES:
Advisory fees 50,444,589
- --------------------------------------------------------------------------
Administrative services fees 1,478,810
- --------------------------------------------------------------------------
Custodian fees 535,640
- --------------------------------------------------------------------------
Distribution fees:
Private Investment Class 4,886,422
- --------------------------------------------------------------------------
Personal Investment Class 264,903
- --------------------------------------------------------------------------
Cash Management Class 5,831,375
- --------------------------------------------------------------------------
Reserve Class 537,761
- --------------------------------------------------------------------------
Resource Class 2,575,170
- --------------------------------------------------------------------------
Directors' fees 605,192
- --------------------------------------------------------------------------
Transfer agent fees 5,162,855
- --------------------------------------------------------------------------
Other 143,818
- --------------------------------------------------------------------------
Filing fee refund (1,251,673)
==========================================================================
Total expenses 71,214,862
==========================================================================
Less: Fees waived (21,804,747)
==========================================================================
Net expenses 49,410,115
==========================================================================
Net investment income 437,437,928
==========================================================================
Net realized gain from investment securities 222,356
==========================================================================
Net increase in net assets resulting from operations $437,660,284
__________________________________________________________________________
==========================================================================
</Table>
See Notes to Financial Statements.
F-20
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- -----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 437,437,928 $ 871,551,545
- -----------------------------------------------------------------------------------------------
Net realized gain from investment securities 222,356 929,565
===============================================================================================
Net increase in net assets resulting from operations 437,660,284 872,481,110
===============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (339,841,789) (699,238,125)
- -----------------------------------------------------------------------------------------------
Private Investment Class (9,944,836) (23,638,000)
- -----------------------------------------------------------------------------------------------
Personal Investment Class (251,405) (309,171)
- -----------------------------------------------------------------------------------------------
Cash Management Class (72,636,877) (117,705,827)
- -----------------------------------------------------------------------------------------------
Reserve Class (240,042) (285,587)
- -----------------------------------------------------------------------------------------------
Resource Class (14,522,979) (30,374,835)
===============================================================================================
Decrease in net assets resulting from distributions (437,437,928) (871,551,545)
===============================================================================================
Share transactions-net:
Institutional Class (7,882,172,341) 2,349,669,794
- -----------------------------------------------------------------------------------------------
Private Investment Class 169,919,767 (481,056,789)
- -----------------------------------------------------------------------------------------------
Personal Investment Class 16,988,324 18,347,438
- -----------------------------------------------------------------------------------------------
Cash Management Class (1,286,520,760) 260,027,687
- -----------------------------------------------------------------------------------------------
Reserve Class 5,802,855 46,109,690
- -----------------------------------------------------------------------------------------------
Resource Class (306,784,517) 276,712,399
===============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (9,282,766,672) 2,469,810,219
===============================================================================================
Net increase (decrease) in net assets (9,282,544,316) 2,470,739,784
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS:
Beginning of year 37,318,945,505 34,848,205,721
===============================================================================================
End of year $28,036,401,189 $37,318,945,505
_______________________________________________________________________________________________
===============================================================================================
</Table>
See Notes to Financial Statements.
F-21
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Liquid Assets Portfolio (the "Fund") is an investment portfolio of
Short-Term Investments Co. (the "Company"). The Company is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital and liquidity. Each
company listed in the Schedule of Investments is organized in the United States
unless otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date. The Fund allocates realized and unrealized capital gains
and losses to a class based on the relative net assets of each class. The
Fund allocates income to a class based on the relative value of the settled
shares of each class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to
F-22
federal income taxes on otherwise taxable income (including net realized
capital gain) which is distributed to shareholders. Therefore, no provision
for federal income taxes is recorded in the financial statements. Any
capital loss carryforwards listed are reduced for limitations, if any, to
the extent required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets of the Fund. AIM has voluntarily agreed to limit
Total Fund operating expenses (excluding Rule 12b-1 fees, interest, taxes, fund
merger and reorganization expenses, extraordinary items, including other items
designated as such by the Board of Directors, and increases in expenses due to
expense offset arrangements, if any) to 0.12%. Voluntary expense limitations may
be modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived advisory fees of $18,538,393.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $1,478,810 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $5,044,459 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Reserve Class equals the maximum annual
rate of 0.30%, 0.55%, 0.08%, and 0.87%, respectively, of the average daily net
assets attributable to such class. Pursuant to the Plan, for the year ended
August 31, 2003, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$2,931,853, $193,606, $4,665,100, $463,548 and $2,575,170, respectively, after
FMC waived plan fees of $1,954,569, $71,297, $1,166,275, $74,213 and $0,
respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
F-23
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
During the year ended August 31, 2003, the Fund paid legal fees of $68,007
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ------------------------------------------------------------------------------------------
Distributions paid from ordinary income $437,437,928 $871,551,545
__________________________________________________________________________________________
==========================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 3,727,333
- -----------------------------------------------------------------------------
Temporary book/tax differences (1,048,876)
- -----------------------------------------------------------------------------
Capital (par value and additional paid-in) 28,033,722,732
=============================================================================
Total net assets $28,036,401,189
_____________________________________________________________________________
=============================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of director deferral of compensation and
retirement plan expenses.
F-24
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
2003 2002
------------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 419,054,374,755 $ 419,054,374,755 586,514,671,312 $ 586,514,671,312
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 9,405,817,790 9,405,817,790 17,787,233,352 17,787,233,352
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 133,770,375 133,770,375 135,176,893 135,176,893
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 66,799,786,336 66,799,786,336 93,169,483,414 93,169,483,414
- -----------------------------------------------------------------------------------------------------------
Reserve Class 102,414,453 102,414,453 132,778,052 132,778,052
- -----------------------------------------------------------------------------------------------------------
Resource Class 8,435,843,716 8,435,843,716 11,871,763,813 11,871,763,813
- -----------------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Institutional Class 93,354,431 93,354,431 191,080,549 191,080,549
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 4,021,536 4,021,536 9,235,046 9,235,046
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 178,509 178,509 222,812 222,812
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 44,707,654 44,707,654 84,049,065 84,049,065
- -----------------------------------------------------------------------------------------------------------
Reserve Class 257,929 257,929 217,048 217,048
- -----------------------------------------------------------------------------------------------------------
Resource Class 12,586,231 12,586,231 27,437,407 27,437,407
- -----------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (427,029,901,527) (427,029,901,527) (584,356,082,067) (584,356,082,067)
- -----------------------------------------------------------------------------------------------------------
Private Investment Class (9,239,919,559) (9,239,919,559) (18,277,525,187) (18,277,525,187)
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class (116,960,560) (116,960,560) (117,052,267) (117,052,267)
- -----------------------------------------------------------------------------------------------------------
Cash Management Class (68,131,014,750) (68,131,014,750) (92,993,504,792) (92,993,504,792)
- -----------------------------------------------------------------------------------------------------------
Reserve Class (96,869,527) (96,869,527) (86,885,410) (86,885,410)
- -----------------------------------------------------------------------------------------------------------
Resource Class (8,755,214,464) (8,755,214,464) (11,622,488,821) (11,622,488,821)
===========================================================================================================
(9,282,766,672) $ (9,282,766,672) 2,469,810,219 $ 2,469,810,219
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-25
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CASH MANAGEMENT CLASS
---------------------------------------------------------------------
YEAR ENDED AUGUST 31,
---------------------------------------------------------------------
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
=====================================================================================================
Less distributions from net
investment income (0.01) (0.02) (0.05) (0.06) (0.05)
=====================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_____________________________________________________________________________________________________
=====================================================================================================
Total return(a) 1.24% 2.08% 5.45% 6.04% 5.09%
_____________________________________________________________________________________________________
=====================================================================================================
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $4,473,591 $5,760,074 $5,499,916 $3,528,435 $1,078,777
_____________________________________________________________________________________________________
=====================================================================================================
Ratio of expenses to average
net assets:
With fee waivers 0.19%(b) 0.19% 0.18% 0.17% 0.17%
- -----------------------------------------------------------------------------------------------------
Without fee waivers 0.27%(b) 0.29% 0.29% 0.29% 0.28%
=====================================================================================================
Ratio of net investment income
to average net assets 1.26%(b) 2.04% 5.11% 5.96% 4.94%
_____________________________________________________________________________________________________
=====================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $5,831,374,790.
F-26
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Liquid
Assets Portfolio (a series portfolio of Short-Term Investments Co.), including
the schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, and the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the years or periods in the two-year period ended August 31, 2000
have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Liquid
Assets Portfolio as of August 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the three-year period then ended, in conformity with accounting principles
generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-27
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY OR OFFICER SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- -----------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- -----------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- -----------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -----------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- -----------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- -----------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
REQUIRED STATE INCOME TAX INFORMATION (Unaudited)
Of the ordinary dividends paid, 0.25% was derived from U.S. Treasury
Obligations.
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
LIQUID ASSETS PORTFOLIO
INSTITUTIONAL CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
LAP-AR-1
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Liquid
ROBERT H. Assets Portfolio covers a fiscal year during which
GRAHAM] reductions in short-term interest rates caused yields on
money market funds and other short-term instruments to
decline. Saying it favored a more expansive monetary policy
because the economy had not yet exhibited sustainable
growth, the Federal Reserve Board (the Fed) lowered the
federal funds rate twice during the fiscal year. In November
2002, it reduced the rate from 1.75% to 1.25%. In late June
2003, it reduced that rate to 1.00%, its lowest level since
1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose from 5.8% at the
start of the fiscal year to 6.1% at its close. Despite the growth in the
economy, companies generally were reluctant to add workers, relying on strong
productivity growth to support earnings. During the second quarter of 2003,
productivity in the nonfarm business sector rose at a robust 6.8% annualized
rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Institutional Class outperformed its
indexes, as shown in the table. Had the advisor not waived fees and/or
reimbursed expenses, performance would have been lower. Through a combination of
short-term cash management vehicles and selective use of a longer maturity
schedule for higher yields, the portfolio continued to provide attractive
yields. The weighted average maturity (WAM) remained in the 38- to 60-day range;
at the close of the reporting period, the WAM stood at 49 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Institutional Class stood at $21.2 billion. Past performance
cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
================================================================================
YIELDS AS OF 8/31/03*
MONTHLY YIELD SEVEN-DAY
SEC YIELD
Liquid Assets Portfolio 0.99% 0.99%
Institutional Class
iMoneyNet Money Fund Averages--Trademark-- 0.71% 0.72%
First-Tier Institutions Only
iMoneyNet Money Fund Averages--Trademark-- 0.67% 0.67%
Total Institutions Only
================================================================================
(continued)
The Liquid Assets Portfolio invests solely in securities rated "first-tier"
as defined in Rule 2a-7 under the Investment Company Act of 1940. Its objective
is to provide as high a level of current income as is consistent with the
preservation of capital and liquidity. Using a modified barbell maturity
structure, portfolio management emphasizes superior credit quality in buying
money market securities such as commercial paper and selected repurchase
agreement securities. An investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although a money market fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money investing in the
fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
*The seven-day SEC Yield and monthly yield represent annualized results for the
period, net of fees and expenses, and exclude any realized capital gains or
losses. Yields will fluctuate. iMoneyNet, Inc. is an independent mutual fund
performance monitor. The iMoneyNet First-Tier Institutions Only category
consists of 276 funds that invest in any allowable 2a-7 investment, except
second-tier commercial paper. The Total Institutions Only category consists of
589 funds with a minimum initial investment of $100,000 or funds that are only
open to institutions.
2
================================================================================
[LINE ART]
MONTHLY YIELD COMPARISON
Year ended 8/31/03 (Yields are monthly yields for the month-ends shown.)
<Table>
<Caption>
Short-Term Investments Co. iMoneyNet Money Fund Averages--Trademark-- iMoneyNet Money Fund Averages--Trademark--
Liquid Asset Portfolio First-Tier Institutions Only Total Institutions Only
Institutional Class
YIELD YIELD YIELD
9/02 1.78 1.46 1.42
10/02 1.77 1.45 1.40
11/02 1.46 1.26 1.20
12/02 1.34 1.12 1.07
1/03 1.30 1.05 0.99
2/03 1.27 1.00 0.95
3/03 1.26 0.96 0.92
4/03 1.23 0.93 0.89
5/03 1.21 0.91 0.86
6/03 1.16 0.87 0.81
7/03 1.01 0.74 0.68
8/03 0.99 0.71 0.67
==================================================================================================================================
</Table>
================================================================================
[LINE ART]
WEIGHTED AVERAGE MATURITY COMPARISON
Year ended 8/31/03, as of the month-ends shown
<Table>
<Caption>
Short-Term Investments Co. iMoneyNet Money Fund Averages--Trademark-- iMoneyNet Money Fund Averages--Trademark--
Liquid Asset Portfolio First-Tier Institutions Only Total Institutions Only
Institutional Class
DAYS DAYS DAYS
9/02 55 54 53
10/02 53 54 53
11/02 45 54 53
12/02 45 51 51
1/03 46 50 50
2/03 49 51 50
3/03 50 53 53
4/03 49 53 52
5/03 48 51 50
6/03 52 54 54
7/03 52 54 54
8/03 49 55 55
Source: iMoneyNet Financial Data, Inc. iMoneyNet Money Fund Report--Registered
Trademark-- for weighted average maturities; iMoneyNet Money Fund
Insight--Registered Trademark-- for monthly yields.
==================================================================================================================================
</Table>
3
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
COMMERCIAL PAPER-25.08%(a)
FINANCIAL-25.08%
ASSET BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-2.55%
Atlantis One Funding Corp. (Rabobank-ABS
Program Sponsor)(b)
(Acquired 05/22/03; Cost $41,406,228)
1.20% 09/10/03 $ 41,560 $ 41,547,532
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $223,474,677)
0.97% 10/01/03 224,139 223,957,821
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $59,925,562)
0.97% 11/12/03 60,172 60,055,266
- ------------------------------------------------------------------------------------
(Acquired 06/25/03; Cost $149,465,375)
0.91% 11/13/03 150,000 149,723,208
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $101,389,167)
0.98% 11/14/03 101,816 101,610,899
- ------------------------------------------------------------------------------------
Fleet Funding Corp. (General Electric Capital
Corp.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $99,659,528)
1.03% 10/09/03 100,000 99,891,278
- ------------------------------------------------------------------------------------
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $36,942,280)
1.04% 09/03/03 37,000 36,997,862
====================================================================================
713,783,866
====================================================================================
ASSET BACKED SECURITIES-CONSUMER
RECEIVABLES-0.35%
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $60,005,368)
1.03% 09/09/03 60,112 60,098,241
- ------------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 08/06/03; Cost $38,743,745)
1.06% 09/12/03 38,786 38,773,438
====================================================================================
98,871,679
====================================================================================
ASSET BACKED SECURITIES-FULLY BACKED-2.12%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 06/02/03; Cost $74,615,000)
1.20% 11/03/03 75,000 74,842,500
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $19,944,800)
1.08% 11/20/03 20,000 19,952,000
- ------------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $49,859,208)
1.09% 09/12/03 50,000 49,983,347
- ------------------------------------------------------------------------------------
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-FULLY BACKED-(CONTINUED)
Forrestal Funding Master Trust (Bank of
America-ABS Program Sponsor)(b)
(Acquired 08/22/03; Cost $225,292,170)
1.06% 09/22/03 $225,498 $ 225,358,567
- ------------------------------------------------------------------------------------
Old Slip Funding Corp. (Bank of New York-ABS
Program Sponsor)(b)
(Acquired 08/20/03; Cost $25,002,801)
1.08% 11/20/03 25,072 25,011,827
- ------------------------------------------------------------------------------------
Three Rivers Funding Corp. (Mellon Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,084
- ------------------------------------------------------------------------------------
Triple A One Funding Corp. (MBIA Insurance
Corp.-ABS Program Sponsor)(b)(c)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,083
- ------------------------------------------------------------------------------------
Tulip Funding Corp. (ABN AMRO Bank N.V.-ABS
Program Sponsor)(b)
(Acquired 08/06/03; Cost $99,917,556)
1.06% 09/03/03 100,000 99,994,111
====================================================================================
595,080,519
====================================================================================
ASSET BACKED SECURITIES-MULTI-PURPOSE-6.09%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 07/03/03; Cost $54,094,845)
1.04% 10/10/03 54,250 54,188,878
- ------------------------------------------------------------------------------------
CRC Funding, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/06/03; Cost $99,873,389)
1.06% 09/18/03 100,000 99,949,944
- ------------------------------------------------------------------------------------
Edison Asset Securitization, LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $72,103,070)
1.07% 10/07/03 72,359 72,281,576
- ------------------------------------------------------------------------------------
(Acquired 06/10/03; Cost $199,286,667)
1.07% 10/08/03 200,000 199,780,056
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $44,845,500)
1.03% 10/09/03 45,000 44,951,075
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $256,155,426)
1.03% 10/10/03 257,000 256,712,418
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $87,482,218)
1.19% 11/10/03 88,000 87,796,378
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $173,958,750)
1.19% 11/12/03 175,000 174,583,500
- ------------------------------------------------------------------------------------
(Acquired 07/03/03; Cost $27,315,857)
1.03% 12/17/03 27,447 27,362,974
- ------------------------------------------------------------------------------------
Falcon Asset Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,899,889)
1.06% 09/25/03 100,000 99,929,334
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $80,227,236)
1.06% 09/26/03 80,310 80,250,883
- ------------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Jupiter Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 08/21/03; Cost $99,900,361)
1.06% 09/24/03 $100,000 $ 99,932,597
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $134,864,850)
1.06% 09/30/03 135,000 134,884,725
- ------------------------------------------------------------------------------------
(Acquired 07/08/03; Cost $40,995,649)
1.04% 10/06/03 41,102 41,060,641
- ------------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $72,082,084)
1.04% 11/10/03 72,400 72,253,591
- ------------------------------------------------------------------------------------
Sheffield Receivables Corp. (Barclays Bank
PLC-NY Branch-ABS Program Sponsor)
1.06% 09/22/03 100,630 100,567,777
- ------------------------------------------------------------------------------------
Floating Rate, 1.07%(d) 01/20/04 60,000 60,000,000
====================================================================================
1,706,486,347
====================================================================================
ASSET BACKED SECURITIES-TRADE
RECEIVABLES-7.06%
Bills Securitization Ltd. (Germany) (Deutsche
Bank A.G.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $99,767,444)
0.91% 09/26/03 100,000 99,936,806
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $99,728,194)
1.03% 10/14/03 100,000 99,876,972
- ------------------------------------------------------------------------------------
Blue Ridge Asset Funding Corp. (Wachovia Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $149,863,083)
1.06% 09/26/03 150,000 149,889,583
- ------------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $99,721,000)
1.08% 11/21/03 100,000 99,757,000
- ------------------------------------------------------------------------------------
FCAR Owner Trust II-Series II (Ford Motor
Credit Co.-ABS Program Sponsor)(b)
(Acquired 06/03/03; Cost $99,691,611)
1.22% 09/02/03 100,000 99,996,611
- ------------------------------------------------------------------------------------
(Acquired 06/03/03; Cost $99,688,222)
1.22% 09/03/03 100,000 99,993,222
- ------------------------------------------------------------------------------------
(Acquired 06/12/03; Cost $141,189,245)
1.04% 09/17/03 141,586 141,520,556
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $96,725,248)
1.03% 10/17/03 97,000 96,872,337
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $99,733,000)
1.08% 11/17/03 100,000 99,769,000
- ------------------------------------------------------------------------------------
(Acquired 08/07/03, Cost $54,805,300)
1.08% 12/03/03 55,000 54,846,550
- ------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust (General Motors
Acceptance Corp.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $199,545,000)
0.91% 09/23/03 $200,000 $ 199,888,778
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $74,922,708)
1.06% 09/25/03 75,000 74,947,000
- ------------------------------------------------------------------------------------
(Acquired 04/16/03; Cost $39,755,000)
1.26% 10/08/03 40,000 39,948,200
- ------------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $124,606,250)
1.08% 11/18/03 125,000 124,707,500
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $199,279,333)
1.10% 12/02/03 200,000 199,442,889
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $99,630,278)
1.10% 12/03/03 100,000 99,715,833
- ------------------------------------------------------------------------------------
(Acquired 08/07/03; Cost $124,550,000)
1.08% 12/05/03 125,000 124,643,750
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $74,743,500)
1.08% 12/12/03 75,000 74,770,500
====================================================================================
1,980,523,087
====================================================================================
DIVERSIFIED BANKS-0.52%
Societe Generale North America (France)
1.10% 12/11/03 144,570 144,125,869
====================================================================================
INVESTMENT BANKING & BROKERAGE-2.80%
Bear, Stearns & Co. Inc.
1.04% 09/19/03 200,000 199,896,000
- ------------------------------------------------------------------------------------
1.01% 10/10/03 185,000 184,797,579
- ------------------------------------------------------------------------------------
Lehman Brothers Holdings Inc.(e)
1.23% 09/30/03 50,000 50,000,000
- ------------------------------------------------------------------------------------
1.23% 10/14/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 11/20/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 12/04/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.20% 01/23/04 50,000 50,000,000
====================================================================================
784,693,579
====================================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-1.14%
GE Capital International Funding Inc.-Series
A(b)
(Acquired 04/23/03; Cost $129,181,000)
1.26% 10/20/03 130,000 129,777,050
- ------------------------------------------------------------------------------------
General Electric Capital Services, Inc.
1.03% 10/08/03 41,000 40,956,597
- ------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
Morgan Stanley, Floating Rate(e)
1.14% 12/01/03 $150,000 $ 150,000,000
====================================================================================
320,733,647
====================================================================================
REGIONAL BANKS-2.45%
Banque et Caisse d'Epargne de l'Etat
(Luxembourg)
1.23% 11/03/03 100,000 99,784,750
- ------------------------------------------------------------------------------------
Danske Corp. (Denmark)
1.08% 12/23/03 25,187 25,101,616
- ------------------------------------------------------------------------------------
Stadshypotek Delaware, Inc. (Sweden)
1.03% 09/15/03 200,000 199,919,889
- ------------------------------------------------------------------------------------
1.03% 09/16/03 100,000 99,957,083
- ------------------------------------------------------------------------------------
0.91% 09/23/03 100,000 99,944,389
- ------------------------------------------------------------------------------------
1.07% 11/05/03 163,000 162,685,094
====================================================================================
687,392,821
====================================================================================
Total Financial 7,031,691,414
====================================================================================
Total Commercial Paper (Cost
$7,031,691,414) 7,031,691,414
====================================================================================
TIME DEPOSITS-15.75%
Danske Bank A/S-Cayman (Denmark)
1.02% 09/02/03 370,000 370,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank A.G.-Cayman (Germany)
1.00% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Fifth Third Bank-Cayman
1.01% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
ING Belgium S.A./N.V.-Brussels (Belgium)
1.13% 09/02/03 800,000 800,000,000
- ------------------------------------------------------------------------------------
M&I Marshall & Ilsley Bank-Milwaukee
1.00% 09/02/03 261,489 261,488,678
- ------------------------------------------------------------------------------------
Rabobank Nederland-London (Netherlands)
1.14% 09/02/03 585,000 585,000,000
- ------------------------------------------------------------------------------------
Royal Bank of Canada-Cayman (Canada)
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Societe Generale-Cayman (France)
1.02% 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
Suntrust Bank Atlanta-Cayman
0.97% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
U.S. Bank N.A.-Cayman
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-Cayman (Germany)
1.13% 09/02/03 150,000 150,000,000
====================================================================================
Total Time Deposits (Cost $4,416,488,678) 4,416,488,678
====================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT-13.03%
Barclays Bank PLC (United Kingdom)
1.03% 10/14/03 $200,000 $ 200,000,000
- ------------------------------------------------------------------------------------
BNP Paribas (France)
1.39% 08/05/04 75,000 75,027,868
- ------------------------------------------------------------------------------------
Citibank N.A.
1.07% 11/03/03 100,000 99,999,854
- ------------------------------------------------------------------------------------
1.08% 11/05/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.08% 11/06/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Credit Agricole Indosuez (France)
1.03% 09/11/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.03% 10/03/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.04% 10/09/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
Danske Bank A/S (Denmark)
1.36% 01/28/04 150,000 149,998,469
- ------------------------------------------------------------------------------------
Deutsche Bank A.G. (Germany)
1.03% 10/22/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
Dexia Bank S.A.-New York Branch (Belgium)(e)
1.03% 06/09/04 200,000 199,968,934
- ------------------------------------------------------------------------------------
HBOS Treasury Services PLC (United Kingdom)
1.08% 09/12/03 230,000 230,000,000
- ------------------------------------------------------------------------------------
1.03% 10/17/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
Lloyd's TSB Bank PLC-New York Branch (United
Kingdom)
1.21% 12/11/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia)
1.04% 07/23/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
1.26% 08/24/04 229,000 229,000,000
- ------------------------------------------------------------------------------------
Rabobank Nederland (Netherlands)
1.21% 10/31/03 150,000 150,060,651
- ------------------------------------------------------------------------------------
1.19% 08/04/04 75,000 74,993,044
- ------------------------------------------------------------------------------------
Societe Generale (France)
1.25% 10/16/03 100,000 99,997,510
- ------------------------------------------------------------------------------------
1.16% 08/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Svenska Handelsbanken A.B. (Sweden)
1.61% 10/08/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 03/17/04 70,000 69,996,198
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A.
1.06% 09/22/03 100,000 100,000,000
====================================================================================
Total Certificates of Deposit (Cost
$3,654,042,528) 3,654,042,528
====================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-8.38%
FEDERAL FARM CREDIT BANK-0.27%
Bonds,
1.80% 09/03/03 $ 75,000 $ 75,000,000
====================================================================================
FEDERAL HOME LOAN BANK-3.09%
Unsec. Bonds,
2.50% 11/14/03 61,800 61,877,787
- ------------------------------------------------------------------------------------
1.20% 04/08/04 200,965 200,959,245
- ------------------------------------------------------------------------------------
1.42% 04/21/04 93,000 93,000,000
- ------------------------------------------------------------------------------------
1.38% 05/11/04 145,000 145,000,000
- ------------------------------------------------------------------------------------
1.12% 07/12/04 235,000 235,000,000
- ------------------------------------------------------------------------------------
1.22% 08/04/04 100,000 99,984,855
- ------------------------------------------------------------------------------------
1.28% 09/08/04 30,000 30,000,000
====================================================================================
865,821,887
====================================================================================
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC)-1.52%
Reference Bills,(a)
1.04% 09/11/03 30,000 29,991,333
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.04% 10/15/03 47,000 46,940,258
- ------------------------------------------------------------------------------------
1.06% 10/31/03 250,000 249,558,333
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
3.25% 01/15/04 100,000 100,629,476
====================================================================================
427,119,400
====================================================================================
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA)-3.13%
Pass Thru Ctfs.,
1.09% 12/01/03 98,615 98,346,465
- ------------------------------------------------------------------------------------
1.10% 12/01/03 230,479 229,845,182
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.23% 09/30/03 250,000 249,752,292
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
5.63% 05/14/04 50,000 51,482,370
- ------------------------------------------------------------------------------------
Unsec. Notes,
4.75% 11/14/03 75,000 75,525,258
- ------------------------------------------------------------------------------------
1.08% 12/31/03 100,000 99,637,000
- ------------------------------------------------------------------------------------
1.18% 07/23/04 75,000 74,198,583
====================================================================================
878,787,150
====================================================================================
OVERSEAS PRIVATE INVESTMENT CORP.-0.00%
Floating Rate Notes,(f)(g)
1.11% 01/15/09 494 494,175
====================================================================================
</Table>
F-7
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION-0.37%
Global Notes,
5.00% 06/30/04 $100,000 $ 103,293,929
====================================================================================
Total U.S. Government Agency Securities
(Cost $2,350,516,541) 2,350,516,541
====================================================================================
PROMISSORY NOTES-4.91%
Goldman Sachs Group, Inc. (The)(b)(h)
(Acquired 08/04/03; Cost $250,000,000)
1.26% 03/01/04 250,000 250,000,000
- ------------------------------------------------------------------------------------
(Acquired 07/25/03; Cost $120,000,000)
1.23% 06/21/04 120,000 120,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/06/03; Cost $125,000,000)
1.32%(e) 09/03/03 125,000 125,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/21/03; Cost $100,000,000)
1.26%(e) 09/17/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/27/03; Cost $140,000,000)
1.19%(e) 09/29/03 140,000 140,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/02/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 04/09/03; Cost $130,000,000)
1.20%(e) 10/06/03 130,000 130,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/06/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $211,000,000)
1.33%(e) 10/07/03 211,000 211,000,000
====================================================================================
Total Promissory Notes (Cost
$1,376,000,000) 1,376,000,000
====================================================================================
VARIABLE RATE DEMAND NOTES-4.74%(j)
CORPORATE GUARANTEED-0.04%
Mississippi (State of) Business Finance Corp.
(General Electric Plastics Project);
Taxable Series 1998 IDR(b)(d)(f)(i)
(Acquired 01/25/02; Cost $12,000,000)
1.08% 02/01/23 12,000 12,000,000
====================================================================================
INSURED-2.20%(c)(f)(g)
Alaska (State of) Housing Finance Corp.;
Taxable Home Mortgage Series 2002 B RB
1.06% 12/01/36 8,100 8,100,000
- ------------------------------------------------------------------------------------
California (State of) Housing Finance Agency;
Taxable Home Mortgage Series 1998 RB
Series M, 1.03% 08/01/19 10,585 10,585,000
- ------------------------------------------------------------------------------------
Series M, 1.03% 08/01/23 28,530 28,530,000
- ------------------------------------------------------------------------------------
Series T, 1.05% 08/01/29 13,980 13,980,000
- ------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
INSURED-(CONTINUED)
Connecticut (State of) Housing Financing
Authority (Housing Mortgage Finance
Program); RB
Taxable Series 1998 F-2, 1.11% 11/15/16 $ 25,450 $ 25,450,000
- ------------------------------------------------------------------------------------
Taxable Series 2002 A-5, 1.10% 05/15/33 19,365 19,365,000
- ------------------------------------------------------------------------------------
Florida (State of) Baptist Health System of
South Florida; RB
Taxable Series 1995 A, 1.10% 05/15/17 11,100 11,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1995 B, 1.10% 05/15/25 23,900 23,900,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Agency;
Taxable Housing Series 1993 A RB
1.05% 01/01/34 31,200 31,200,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.;
Taxable Housing Series 2000 A RB
1.05% 01/01/45 59,580 59,580,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.
(Affordable Housing); Taxable Series 2002 A
RB
1.10% 01/01/47 39,320 39,320,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Student Loan RB
Taxable Series 1998 B, 1.11% 09/01/32 12,870 12,870,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-I, 1.11% 09/01/34 7,100 7,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-II, 1.11% 09/01/34 2,000 2,000,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-III, 1.11% 09/01/34 3,350 3,350,000
- ------------------------------------------------------------------------------------
Loanstar Asset Partners II; Student Loan
RB(b)
(Acquired 11/14/02; Cost $25,000,000)
Series 2001 Tranche 1 1.12% 09/01/36 25,000 25,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $60,000,000)
Series 2002 Tranche 1 1.12% 08/01/37 60,000 60,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $40,000,000)
Series 2002 Tranche 2 1.12% 08/01/37 40,000 40,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 3 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 4 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
Michigan (State of) Housing Development
Authority; Taxable Series 2000 C RB
1.06% 12/01/20 33,005 33,005,000
- ------------------------------------------------------------------------------------
Minnesota (State of) Fairview, Minnesota
Hospital & Health Care Services;
Taxable Series 1994 A ACES
1.10% 11/01/15 4,400 4,400,000
- ------------------------------------------------------------------------------------
Montgomery (City of), Alabama BMC Special
Care Facilities Financing Authority
(Baptist Health); Taxable Series 1998 C
Floating Rate RB
1.12% 11/15/29 19,300 19,300,000
- ------------------------------------------------------------------------------------
New Orleans (City of), Louisiana; Taxable
Pension Series 2000 RB
1.10% 09/01/30 40,000 40,000,000
====================================================================================
618,135,000
====================================================================================
</Table>
F-9
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-2.50%(f)(k)
Advocare of South Carolina; Series 1997 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 03/28/02; Cost $6,100,000)
1.11% 06/01/17 $ 6,100 $ 6,100,000
- ------------------------------------------------------------------------------------
B. Braun Medical Inc.; Series 2000 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.13% 02/01/15 30,479 30,479,000
- ------------------------------------------------------------------------------------
Baltimore (County of), Maryland (Oak Crest
Village Inc. Project); Series 1999 B RB
(LOC-Wachovia Bank N.A.)(g)
1.12% 01/01/29 1,140 1,140,000
- ------------------------------------------------------------------------------------
Barrington Development Funding LLC; Series
2002 A Notes (LOC-Bank One N.A.)(g)
1.13% 12/01/32 6,005 6,005,000
- ------------------------------------------------------------------------------------
Belk, Inc.; Series 1998 Bonds (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $91,030,000)
1.13% 07/01/08 91,030 91,030,000
- ------------------------------------------------------------------------------------
Brosis Finance, LLC; Series 1999 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.11% 09/01/19 18,400 18,400,000
- ------------------------------------------------------------------------------------
Capital One Funding Corp.; Floating Rate
Notes (LOC-Bank One N.A.)(g)
1.13% 12/02/19 5,024 5,024,000
- ------------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $9,064,000)
1.13%(b) 07/01/20 9,064 9,064,000
- ------------------------------------------------------------------------------------
1.13% 09/01/20 470 470,000
- ------------------------------------------------------------------------------------
1.13% 05/01/26 7,500 7,500,000
- ------------------------------------------------------------------------------------
Carlton Arms of Ocala; Series 2002 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $1,100,000)
1.11% 09/01/34 1,100 1,100,000
- ------------------------------------------------------------------------------------
Chatham Capital Corp.; Series 2000 Floating
Rate Notes (LOC-Bank One N.A.)(g)
1.13% 07/01/20 9,149 9,149,000
- ------------------------------------------------------------------------------------
Dome Corp.; Floating Rate Notes (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 05/31/02; Cost $10,435,000)
1.13% 08/31/16 10,435 10,435,000
- ------------------------------------------------------------------------------------
Georgia (State of) Brooks Development
Authority (Langboard Inc. Project);
Series 2003 IDR (LOC-Bank of America
N.A.)(g)
1.11% 04/01/18 10,000 10,000,000
- ------------------------------------------------------------------------------------
Gulf States Paper Corp.; Series 1998 Unsec.
Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 11/01/18 25,000 25,000,000
- ------------------------------------------------------------------------------------
Health Insurance Plan of Greater New York;
Series 1990 B-1 ACES
(LOC-JP Morgan Chase & Co.)(g)
1.08% 07/01/16 2,900 2,900,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Taxable Student Loan Series
1997 B RB
(LOC-Bank One Chicago N.A.)(g)
1.11% 09/01/31 7,700 7,700,000
- ------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
LP Pinewood SPV; Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 02/01/18 $ 15,300 $ 15,300,000
- ------------------------------------------------------------------------------------
Michigan (State of) Botsford General
Hospital; Series 1997 A RB
(LOC-Michigan National Bank)(e)
1.10% 02/15/27 10,300 10,300,000
- ------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Telepak Inc. Project); Taxable Series 2002
IDR
(LOC-Wachovia Bank N.A.) (Acquired
05/23/02; Cost $40,000,000)(b)(g)
1.11% 05/01/17 40,000 40,000,000
- ------------------------------------------------------------------------------------
New York (City of) Housing Development Corp.
(Chelsea Centro); Series 2003 RB
(LOC-Bayerische Landesbank)(g)
1.09% 06/01/33 8,300 8,300,000
- ------------------------------------------------------------------------------------
New York (State of) Housing Finance Agency;
Taxable Service Contract Series 2003 F RB
(LOC-State Street Bank & Trust Co.)(g)
1.09% 09/15/07 10,000 10,000,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Charlotte; Series 2002 A RB
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/14 13,800 13,800,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Raleigh; Series 2002 A RB
(LOC-Bank of America N.A.)(g)
1.16% 06/01/18 1,800 1,800,000
- ------------------------------------------------------------------------------------
Ohio (State of) (Fayette County Memorial
Hospital); Series 2003 RB
(LOC-National City Bank)(g)
1.10% 08/01/23 2,400 2,400,000
- ------------------------------------------------------------------------------------
Rockwood Quarry LLC; Notes (LOC-Fifth Third
Bank)(g)
1.10% 12/01/22 5,000 5,000,000
- ------------------------------------------------------------------------------------
Sabine River Authority of Texas (TXU Energy
Co. LLC Project); Series 2001 E PCR
(LOC-Chase Manhattan Bank)(g)
1.11% 12/01/36 1,587 1,587,142
- ------------------------------------------------------------------------------------
San Jose (City of), California Redevelopment
Agency (Merged Area); RB
(LOC-Bank of New York)(g)
Series 2002 G, 1.10% 08/01/29 8,000 8,000,000
- ------------------------------------------------------------------------------------
Series 2002 H, 1.10% 08/01/29 17,226 17,226,000
- ------------------------------------------------------------------------------------
Shepherd Capital LLC;
Floating Rate Series 2003 B Notes
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/53 15,000 15,000,000
- ------------------------------------------------------------------------------------
Floating Rate Series 96A Notes
(LOC-Standard Federal Bank)(g)
1.18% 10/01/46 1,250 1,250,000
- ------------------------------------------------------------------------------------
Floating Rate Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 11/01/52 10,000 10,000,000
- ------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
Southeastern Retirement Association, Inc.;
Series 1999 Bonds (LOC-Wachovia Bank
N.A.)(b)(g)
(Acquired 05/16/02; Cost $60,000)
1.13% 08/01/19 $ 60 $ 60,000
- ------------------------------------------------------------------------------------
Texas (State of) Brazos River Authority (TXU
Energy Co. LLC Project); Series 2001 I PCR
(LOC-Wachovia Bank N.A.)(g)
1.11% 12/01/36 62,920 62,920,000
- ------------------------------------------------------------------------------------
TP Racing L.L.L.P.; Floating Rate Series 2000
Notes
(LOC-Bank One Trust Co. N.A.)(g)
1.13% 06/01/30 29,140 29,140,000
- ------------------------------------------------------------------------------------
Union (County of), Arkansas (Del-Tin Fiber
LLC Project); Series 1998 IDR
(LOC-Bank One Chicago N.A.)(g)
1.13% 10/01/27 34,400 34,400,000
- ------------------------------------------------------------------------------------
University of Virginia Real Estate
Foundation; Series 2001 RB (LOC-Wachovia
Bank N.A.)
(Acquired 07/31/03; Cost $48,145,000)(b)(g)
1.13% 07/01/26 48,145 48,145,000
- ------------------------------------------------------------------------------------
Virginia (State of) Richmond Redevelopment &
Housing Authority Project (Old Manchester);
Taxable Series 1995 B RB (LOC-Wachovia Bank
N.A.)(d)
1.15% 12/01/25 1,590 1,590,000
- ------------------------------------------------------------------------------------
Wake Forest University; Floating Rate Series
1997 Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 07/01/17 6,900 6,900,000
- ------------------------------------------------------------------------------------
Wisconsin (State of) Madison Community
Development Authority (Overture Development
Corp.); Series 2001 RB (LOC-Bank One
Milwaukee N.A.; U.S. Bancorp; M&I Marshall
& Ilsley; Northern Trust Co.)(g)
1.13% 06/01/36 115,000 115,000,000
====================================================================================
699,614,142
====================================================================================
Total Variable Rate Demand Notes (Cost
$1,329,749,142) 1,329,749,142
====================================================================================
ASSET BACKED NOTES-4.08%
STRUCTURED-2.60%
Carmax Auto Owner Trust-Series 2003-1, Class
A-1
1.24% 06/15/04 40,136 40,136,423
- ------------------------------------------------------------------------------------
Granite Mortgages PLC (United Kingdom)-Series
2003-1, Class 1A1, Floating Rate
Bonds(b)(d)
(Acquired 01/22/03; Cost $50,000,000)
1.10% 01/20/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Holmes Financing (No. 6) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.11% 10/15/03 72,500 72,500,000
- ------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STRUCTURED-(CONTINUED)
Holmes Financing (No. 7) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.07% 04/15/04 $100,000 $ 100,000,000
- ------------------------------------------------------------------------------------
Honda Auto Receivables 2003-2 Owner
Trust-Class A-1 Notes
1.23% 06/11/04 73,596 73,596,305
- ------------------------------------------------------------------------------------
Household Automotive Trust-Series 2003-1,
Class A-1(c)
1.24% 05/17/04 36,773 36,772,528
- ------------------------------------------------------------------------------------
IKON Receivables Funding LLC Lease-Backed
Notes-Series 2003-1, Class A-1(c)
1.31% 05/17/04 48,644 48,643,911
- ------------------------------------------------------------------------------------
Permanent Financing (No. 2) PLC (United
Kingdom) Series 1, Class A, Floating Rate
Bonds (Halifax PLC-ABS Program Sponsor)
(Acquired 02/26/03; Cost
$105,000,000)(b)(d)
1.07% 03/10/04 105,000 105,000,000
- ------------------------------------------------------------------------------------
Residential Mortgage Securities (United
Kingdom)-Series 14A, Class A1, Floating
Rate Bonds (Acquired 03/17/03; Cost
$55,826,175)(b)
1.14% 03/10/04 55,826 55,826,175
- ------------------------------------------------------------------------------------
Triad Automobile Receivables Trust-Series
2003-A, Class A-1(c)
1.25% 04/12/04 34,118 34,117,936
- ------------------------------------------------------------------------------------
WFS Financial 2003-2 Owner Trust, Class A-1
1.26% 06/14/04 99,056 99,055,851
- ------------------------------------------------------------------------------------
World Omni Auto Receivables Trust-Series
2003-A, Class A-1
1.30% 03/15/04 12,738 12,737,635
====================================================================================
728,386,764
====================================================================================
STRUCTURED INVESTMENT VEHICLES/SECURITY
ARBITRAGE-1.48%
Beta Finance Inc., Floating Rate MTN
(Citibank International PLC-ABS Program
Sponsor)(b)(e)
(Acquired 10/02/02; Cost $75,000,000)
1.12% 10/07/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
(Acquired 10/03/02; Cost $99,995,000)
1.11% 10/16/03 100,000 99,999,384
- ------------------------------------------------------------------------------------
(Acquired 05/19/03; Cost $89,111,606)
1.24% 04/30/04 89,000 89,078,514
- ------------------------------------------------------------------------------------
(Acquired 05/08/03; Cost $50,000,000)
1.06% 05/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 06/09/03; Cost $99,990,000)
1.06% 06/16/04 100,000 99,992,104
====================================================================================
414,070,002
====================================================================================
Total Asset Backed Notes (Cost
$1,142,456,766) 1,142,456,766
====================================================================================
</Table>
F-13
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
MASTER NOTE AGREEMENTS-2.76%(l)
Merrill Lynch Mortgage Capital, Inc.(b)(m)
(Acquired 08/25/03; Cost $220,000,000)
1.27% 02/23/04 $220,000 $ 220,000,000
- ------------------------------------------------------------------------------------
Morgan Stanley(b)(n)
(Acquired 03/17/03; Cost $555,000,000)
1.20% 09/15/03 555,000 555,000,000
====================================================================================
Total Master Note Agreements (Cost
$775,000,000) 775,000,000
====================================================================================
MEDIUM TERM NOTES-2.54%
Associates Corp. of North America, Sr. Global
MTN,
5.80% 04/20/04 49,000 50,443,106
- ------------------------------------------------------------------------------------
General Electric Capital Corp.-Series A
Floating Rate Global MTN, 1.33%(e) 10/22/03 40,000 40,005,870
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.19%(d) 09/08/04 332,900 332,900,000
- ------------------------------------------------------------------------------------
MetLife Global Funding(d)
(Acquired 08/20/03; Cost $90,000,000)
Floating Rate Global MTN, 1.12%(b) 09/15/04 90,000 90,000,000
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.12% 09/27/04 99,300 99,300,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia),
Euro Floating Rate MTN,(o)
1.20% 03/12/04 50,000 50,008,379
- ------------------------------------------------------------------------------------
1.13% 05/02/04 50,000 50,013,519
====================================================================================
Total Medium Term Notes (Cost
$712,670,874) 712,670,874
====================================================================================
FUNDING AGREEMENTS-1.66%
New York Life Insurance Co.(b)(d)(h)
(Acquired 04/03/03; Cost $265,000,000)
1.18% 04/07/04 265,000 265,000,000
- ------------------------------------------------------------------------------------
Travelers Insurance Co.(b)(h)(o)
(Acquired 08/27/03; Cost $100,000,000)
1.24% 11/25/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $100,000,000)
1.24% 08/27/04 100,000 100,000,000
====================================================================================
Total Funding Agreements (Cost
$465,000,000) 465,000,000
====================================================================================
BANK NOTES-1.52%
BNP Paribas-New York Branch (France),
Floating Rate Notes,(e)
1.04% 06/07/04 200,000 199,968,979
- ------------------------------------------------------------------------------------
National City Bank of Indiana, Floating Rate
Notes,(e)
1.04% 06/14/04 100,000 99,984,285
- ------------------------------------------------------------------------------------
Wachovia Bank, N.A., Floating Rate Notes,(o)
1.19% 06/24/04 25,000 25,044,996
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A., Floating Rate
Notes,(e)
1.04% 05/10/04 100,000 100,000,000
====================================================================================
Total Bank Notes (Cost $424,998,260) 424,998,260
====================================================================================
</Table>
F-14
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
PUTTABLE RESET NOTES-1.01%
Merck & Co., Inc.; PURS Notes (Acquired
02/18/03; Cost $103,194,800)(b)
4.49% 02/22/04 $100,000 $ 101,531,392
- ------------------------------------------------------------------------------------
Wal-Mart Stores, Inc.; Unsec. Unsub. PURS
Notes
5.20% 06/01/04 175,000 180,536,131
====================================================================================
Total Puttable Reset Notes (Cost
$282,067,523) 282,067,523
====================================================================================
U.S. TREASURY NOTES-0.36%
3.00% 01/31/04 100,000 100,717,649
====================================================================================
Total U.S. Treasury Notes (Cost
$100,717,649) 100,717,649
====================================================================================
Total Investments Excluding Repurchase
Agreements (Cost $24,061,399,375) 24,061,399,375
====================================================================================
REPURCHASE AGREEMENTS-15.33%
ABN AMRO Bank N.V.-New York Branch
(Netherlands)
1.05%(p) 09/02/03 37,000 37,000,000
- ------------------------------------------------------------------------------------
Banc of America Securities LLC
1.05%(q) 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
1.08%(r) 09/02/03 102,000 102,000,000
- ------------------------------------------------------------------------------------
Banc One Capital Markets Group
1.06%(s) 09/02/03 2,116 2,116,069
- ------------------------------------------------------------------------------------
Bank of Nova Scotia (The)-New York Branch
(Canada)
1.05%(t) 09/02/03 252,501 252,501,380
- ------------------------------------------------------------------------------------
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.05%(u) 09/02/03 297,003 297,002,850
- ------------------------------------------------------------------------------------
BNP Paribas Securities Corp.-New York Branch
(France)
1.05%(v) 09/02/03 307,000 307,000,000
- ------------------------------------------------------------------------------------
Citigroup Global Markets Inc.
1.05%(w) 09/02/03 287,000 287,000,000
- ------------------------------------------------------------------------------------
Credit Suisse First Boston LLC-New York
Branch (Switzerland)
1.16%(x) 07/09/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank Securities Inc.-New York Branch
(Germany)
1.06%(y) 09/02/03 224,536 224,536,185
- ------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(z) 09/02/03 52,000 52,000,000
- ------------------------------------------------------------------------------------
JP Morgan Securities Inc.
1.07%(aa) 09/02/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Lehman Brothers Inc.
1.00%(ab) 09/02/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
UBS Warburg LLC-New York Branch (Switzerland)
1.01%(ac) 09/02/03 372,163 372,163,170
- ------------------------------------------------------------------------------------
1.05%(ad) 09/02/03 425,000 425,000,000
- ------------------------------------------------------------------------------------
1.05%(ae) 09/02/03 475,814 475,814,111
- ------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-(CONTINUED)
Wachovia Securities, Inc.
1.03%(af) 09/02/03 $275,616 $ 275,616,254
- ------------------------------------------------------------------------------------
1.08%(ag) 09/02/03 62,000 62,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-New York Branch (Germany)
1.13%(ah) 09/02/03 127,000 127,000,000
====================================================================================
Total Repurchase Agreements (Cost
$4,298,750,019) 4,298,750,019
____________________________________________________________________________________
====================================================================================
TOTAL INVESTMENTS (Cost
$28,360,149,394)(ai)-101.15% 28,360,149,394
____________________________________________________________________________________
====================================================================================
OTHER ASSETS LESS LIABILITIES-(1.15)% (323,748,205)
____________________________________________________________________________________
====================================================================================
NET ASSETS-100.00% $28,036,401,189
____________________________________________________________________________________
====================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
ACES - Automatically Convertible Extendable Security
Disc. - Discounted
IDR - Industrial Revenue Bonds
LOC - Letter of Credit
MTN - Medium Term Notes
PCR - Pollution Control Revenue Bonds
PURS - Puttable Reset Securities
RB - Revenue Bonds
Sr. - Senior
Unsec. - Unsecured
Unsub. - Unsubordinated
</Table>
Notes to Schedule of Investments
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$8,939,316,340, which represented 31.88% of the Fund's net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
(c) Principal and interest payments are secured by bond insurance provided by
one of the following companies: AMBAC Assurance Corp., MBIA Insurance Corp.
or Financial Security Assurance.
(d) Interest rates are redetermined monthly. Rate shown is the rate in effect on
08/31/03.
(e) Interest rates are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) Demand security; payable upon demand by the Fund with usually no more than
seven calendar day's notice.
(g) Interest rates are redetermined weekly. Rate shown is the rate in effect on
08/31/03.
(h) Security considered to be illiquid. The aggregate market value of these
securities at 08/31/03 was $1,841,000,000 which represents 6.57% of the
Fund's net assets.
(i) Principal and interest payments are guaranteed by the corporate guarantor.
(j) Interest on these securities is taxable income to the Fund.
(k) Principal and interest payments are guaranteed by the letter of credit
agreement.
(l) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-16
(m) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(n) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(o) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/03.
(p) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,167. Collateralized by $254,927,000 U.S. Government obligations, 0%
to 4.00% due 11/05/03 to 09/02/08 with an aggregate market value at 08/31/03
of $255,000,220.
(q) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $499,105,000 U.S. Government obligations, 0%
to 9.70% due 10/03/03 to 04/05/19 with an aggregate market value at 08/31/03
of $510,000,486.
(r) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,030,000. Collateralized by $252,007,493 U.S. Government obligations,
5.50% to 6.00% due 12/01/32 to 06/01/33 with an aggregate market value at
08/31/03 of $255,000,000.
(s) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$300,035,333. Collateralized by $294,930,000 U.S. Government obligations, 0%
to 7.70% due 09/15/03 to 04/09/09 with an aggregate market value at 08/31/03
of $306,001,703.
(t) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $494,322,000 U.S. Government obligations, 0%
to 7.25% due 12/15/03 to 05/15/30 with an aggregate market value at 08/31/03
of $510,000,259.
(u) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$660,079,850. Collateralized by $664,688,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 03/15/12 with an aggregate market value at 08/31/03
of $673,203,742.
(v) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $511,522,000 U.S. Government obligations, 0%
to 0% due 10/16/03 to 12/31/03 with an aggregate market value at 08/31/03 of
$510,000,869.
(w) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $493,678,000 U.S. Government obligations, 0%
to 6.00% due 12/15/03 to 11/11/16 with an aggregate market value at 08/31/03
of $510,000,421.
(x) Term repurchase agreement entered into 08/29/03; however either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $526,959,000 U.S. Treasury
obligations, 0% to 8.13% due 11/15/15 to 08/15/21 with an aggregate market
value at 08/31/03 of $306,000,504.
(y) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,889. Collateralized by $479,866,000 U.S. Government obligations,
1.88% to 6.25% due 01/15/05 to 01/05/27 with an aggregate market value at
08/31/03 of $510,000,195.
(z) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(aa)Repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,722. Collateralized by $252,112,237 U.S. Government obligations, 0%
to 0% due 05/01/23 to 08/01/33 with a market value at 08/31/03 of
$255,000,797.
(ab)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,055,556. Collateralized by $407,091,000 U.S. Treasury obligations,
6.00% to 8.88% due 02/15/19 to 05/15/30 with an aggregate market value at
08/31/03 of $510,005,167.
(ac)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$900,101,000. Collateralized by $705,327,000 U.S. Treasury obligations,
3.38% to 8.88% due 01/15/07 to 08/15/17 with an aggregate market value at
08/31/03 of $918,002,342.
(ad)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $496,282,742 U.S. Government obligations,
4.50% to 8.00% due 10/01/08 to 07/01/33 with an aggregate market value at
08/31/03 of $510,001,793.
(ae)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$850,099,167. Collateralized by $1,792,017,000 U.S. Government obligations,
0% to 9.38% due 10/16/03 to 10/15/22 with an aggregate market value at
08/31/03 of $867,004,984.
F-17
(af)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(ag)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(ah)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$200,025,000. Collateralized by $196,970,652 U.S. Government obligations,
4.51% to 7.24% due 11/01/10 to 10/01/32 with an aggregate market value at
08/31/03 of $204,000,000.
(ai)Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-18
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements at value
(amortized cost) $24,061,399,375
- -----------------------------------------------------------------------------
Repurchase agreements 4,298,750,019
- -----------------------------------------------------------------------------
Interest receivable 30,772,488
- -----------------------------------------------------------------------------
Investment for deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Other assets 237,318
=============================================================================
Total assets 28,391,503,877
_____________________________________________________________________________
=============================================================================
LIABILITIES:
Payables for:
Investments purchased 329,391,647
- -----------------------------------------------------------------------------
Dividends 22,694,969
- -----------------------------------------------------------------------------
Deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Accrued distribution fees 868,780
- -----------------------------------------------------------------------------
Accrued directors' fees 690,790
- -----------------------------------------------------------------------------
Accrued transfer agent fees 479,586
- -----------------------------------------------------------------------------
Accrued operating expenses 632,239
=============================================================================
Total liabilities 355,102,688
=============================================================================
Net assets applicable to shares outstanding $28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $28,033,722,732
- -----------------------------------------------------------------------------
Undistributed net investment income (502)
- -----------------------------------------------------------------------------
Undistributed net realized gain from investment securities 2,678,959
=============================================================================
$28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS:
Institutional Class $21,240,698,662
_____________________________________________________________________________
=============================================================================
Private Investment Class $ 978,383,482
_____________________________________________________________________________
=============================================================================
Personal Investment Class $ 47,265,983
_____________________________________________________________________________
=============================================================================
Cash Management Class $ 4,473,591,100
_____________________________________________________________________________
=============================================================================
Reserve Class $ 57,082,236
_____________________________________________________________________________
=============================================================================
Resource Class $ 1,239,379,726
_____________________________________________________________________________
=============================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 21,238,605,055
_____________________________________________________________________________
=============================================================================
Private Investment Class 978,299,714
_____________________________________________________________________________
=============================================================================
Personal Investment Class 47,264,708
_____________________________________________________________________________
=============================================================================
Cash Management 4,473,177,698
_____________________________________________________________________________
=============================================================================
Reserve Class 57,081,678
_____________________________________________________________________________
=============================================================================
Resource Class 1,239,293,377
_____________________________________________________________________________
=============================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
_____________________________________________________________________________
=============================================================================
</Table>
See Notes to Financial Statements.
F-19
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $486,848,043
==========================================================================
EXPENSES:
Advisory fees 50,444,589
- --------------------------------------------------------------------------
Administrative services fees 1,478,810
- --------------------------------------------------------------------------
Custodian fees 535,640
- --------------------------------------------------------------------------
Distribution fees:
Private Investment Class 4,886,422
- --------------------------------------------------------------------------
Personal Investment Class 264,903
- --------------------------------------------------------------------------
Cash Management Class 5,831,375
- --------------------------------------------------------------------------
Reserve Class 537,761
- --------------------------------------------------------------------------
Resource Class 2,575,170
- --------------------------------------------------------------------------
Directors' fees 605,192
- --------------------------------------------------------------------------
Transfer agent fees 5,162,855
- --------------------------------------------------------------------------
Other 143,818
- --------------------------------------------------------------------------
Filing fee refund (1,251,673)
==========================================================================
Total expenses 71,214,862
==========================================================================
Less: Fees waived (21,804,747)
==========================================================================
Net expenses 49,410,115
==========================================================================
Net investment income 437,437,928
==========================================================================
Net realized gain from investment securities 222,356
==========================================================================
Net increase in net assets resulting from operations $437,660,284
__________________________________________________________________________
==========================================================================
</Table>
See Notes to Financial Statements.
F-20
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- -----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 437,437,928 $ 871,551,545
- -----------------------------------------------------------------------------------------------
Net realized gain from investment securities 222,356 929,565
===============================================================================================
Net increase in net assets resulting from operations 437,660,284 872,481,110
===============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (339,841,789) (699,238,125)
- -----------------------------------------------------------------------------------------------
Private Investment Class (9,944,836) (23,638,000)
- -----------------------------------------------------------------------------------------------
Personal Investment Class (251,405) (309,171)
- -----------------------------------------------------------------------------------------------
Cash Management Class (72,636,877) (117,705,827)
- -----------------------------------------------------------------------------------------------
Reserve Class (240,042) (285,587)
- -----------------------------------------------------------------------------------------------
Resource Class (14,522,979) (30,374,835)
===============================================================================================
Decrease in net assets resulting from distributions (437,437,928) (871,551,545)
===============================================================================================
Share transactions-net:
Institutional Class (7,882,172,341) 2,349,669,794
- -----------------------------------------------------------------------------------------------
Private Investment Class 169,919,767 (481,056,789)
- -----------------------------------------------------------------------------------------------
Personal Investment Class 16,988,324 18,347,438
- -----------------------------------------------------------------------------------------------
Cash Management Class (1,286,520,760) 260,027,687
- -----------------------------------------------------------------------------------------------
Reserve Class 5,802,855 46,109,690
- -----------------------------------------------------------------------------------------------
Resource Class (306,784,517) 276,712,399
===============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (9,282,766,672) 2,469,810,219
===============================================================================================
Net increase (decrease) in net assets (9,282,544,316) 2,470,739,784
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS:
Beginning of year 37,318,945,505 34,848,205,721
===============================================================================================
End of year $28,036,401,189 $37,318,945,505
_______________________________________________________________________________________________
===============================================================================================
</Table>
See Notes to Financial Statements.
F-21
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Liquid Assets Portfolio (the "Fund") is an investment portfolio of
Short-Term Investments Co. (the "Company"). The Company is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital and liquidity. Each
company listed in the Schedule of Investments is organized in the United States
unless otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date. The Fund allocates realized and unrealized capital gains
and losses to a class based on the relative net assets of each class. The
Fund allocates income to a class based on the relative value of the settled
shares of each class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to
F-22
federal income taxes on otherwise taxable income (including net realized
capital gain) which is distributed to shareholders. Therefore, no provision
for federal income taxes is recorded in the financial statements. Any
capital loss carryforwards listed are reduced for limitations, if any, to
the extent required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets of the Fund. AIM has voluntarily agreed to limit
Total Fund operating expenses (excluding Rule 12b-1 fees, interest, taxes, fund
merger and reorganization expenses, extraordinary items, including other items
designated as such by the Board of Directors, and increases in expenses due to
expense offset arrangements, if any) to 0.12%. Voluntary expense limitations may
be modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived advisory fees of $18,538,393.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $1,478,810 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $5,044,459 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Reserve Class equals the maximum annual
rate of 0.30%, 0.55%, 0.08%, and 0.87%, respectively, of the average daily net
assets attributable to such class. Pursuant to the Plan, for the year ended
August 31, 2003, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$2,931,853, $193,606, $4,665,100, $463,548 and $2,575,170, respectively, after
FMC waived plan fees of $1,954,569, $71,297, $1,166,275, $74,213 and $0,
respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
F-23
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
During the year ended August 31, 2003, the Fund paid legal fees of $68,007
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ------------------------------------------------------------------------------------------
Distributions paid from ordinary income $437,437,928 $871,551,545
__________________________________________________________________________________________
==========================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 3,727,333
- -----------------------------------------------------------------------------
Temporary book/tax differences (1,048,876)
- -----------------------------------------------------------------------------
Capital (par value and additional paid-in) 28,033,722,732
=============================================================================
Total net assets $28,036,401,189
_____________________________________________________________________________
=============================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of director deferral of compensation and
retirement plan expenses.
F-24
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
2003 2002
------------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 419,054,374,755 $ 419,054,374,755 586,514,671,312 $ 586,514,671,312
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 9,405,817,790 9,405,817,790 17,787,233,352 17,787,233,352
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 133,770,375 133,770,375 135,176,893 135,176,893
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 66,799,786,336 66,799,786,336 93,169,483,414 93,169,483,414
- -----------------------------------------------------------------------------------------------------------
Reserve Class 102,414,453 102,414,453 132,778,052 132,778,052
- -----------------------------------------------------------------------------------------------------------
Resource Class 8,435,843,716 8,435,843,716 11,871,763,813 11,871,763,813
- -----------------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Institutional Class 93,354,431 93,354,431 191,080,549 191,080,549
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 4,021,536 4,021,536 9,235,046 9,235,046
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 178,509 178,509 222,812 222,812
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 44,707,654 44,707,654 84,049,065 84,049,065
- -----------------------------------------------------------------------------------------------------------
Reserve Class 257,929 257,929 217,048 217,048
- -----------------------------------------------------------------------------------------------------------
Resource Class 12,586,231 12,586,231 27,437,407 27,437,407
- -----------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (427,029,901,527) (427,029,901,527) (584,356,082,067) (584,356,082,067)
- -----------------------------------------------------------------------------------------------------------
Private Investment Class (9,239,919,559) (9,239,919,559) (18,277,525,187) (18,277,525,187)
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class (116,960,560) (116,960,560) (117,052,267) (117,052,267)
- -----------------------------------------------------------------------------------------------------------
Cash Management Class (68,131,014,750) (68,131,014,750) (92,993,504,792) (92,993,504,792)
- -----------------------------------------------------------------------------------------------------------
Reserve Class (96,869,527) (96,869,527) (86,885,410) (86,885,410)
- -----------------------------------------------------------------------------------------------------------
Resource Class (8,755,214,464) (8,755,214,464) (11,622,488,821) (11,622,488,821)
===========================================================================================================
(9,282,766,672) $ (9,282,766,672) 2,469,810,219 $ 2,469,810,219
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-25
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
INSTITUTIONAL CLASS
-------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------
2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
======================================================================================================
Less distributions from net
investment income (0.01) (0.02) (0.05) (0.06) (0.05)
======================================================================================================
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______________________________________________________________________________________________________
======================================================================================================
Total return(a) 1.32% 2.16% 5.54% 6.12% 5.17%
______________________________________________________________________________________________________
======================================================================================================
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $21,240,699 $29,122,702 $26,772,308 $17,353,163 $4,541,935
______________________________________________________________________________________________________
======================================================================================================
Ratio of expenses to
average net assets:
With fee waivers 0.11%(b) 0.11% 0.10% 0.09% 0.09%
- ------------------------------------------------------------------------------------------------------
Without fee waivers 0.17%(b) 0.19% 0.19% 0.19% 0.18%
======================================================================================================
Ratio of net investment
income to average net
assets 1.34%(b) 2.12% 5.19% 6.04% 5.02%
______________________________________________________________________________________________________
======================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $25,444,384,862.
F-26
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Liquid
Assets Portfolio (a series portfolio of Short-Term Investments Co.), including
the schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, and the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the years or periods in the two-year period ended August 31, 2000
have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Liquid
Assets Portfolio as of August 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the three-year period then ended, in conformity with accounting principles
generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-27
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY OR OFFICER SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- -----------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- -----------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- -----------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -----------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- -----------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- -----------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
REQUIRED STATE INCOME TAX INFORMATION (Unaudited)
Of the ordinary dividends paid, 0.25% was derived from U.S. Treasury
Obligations.
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
LIQUID ASSETS PORTFOLIO
PERSONAL INVESTMENT CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
LAP-AR-4
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Liquid
ROBERT H. Assets Portfolio covers a fiscal year during which
GRAHAM] reductions in short-term interest rates caused yields on
money market funds and other short-term instruments to
decline. Saying it favored a more expansive monetary policy
because the economy had not yet exhibited sustainable
growth, the Federal Reserve Board (the Fed) lowered the
federal funds rate twice during the fiscal year. In November
2002, it reduced the rate from 1.75% to 1.25%. In late June
2003, it reduced that rate to 1.00%, its lowest level since
1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose from 5.8% at the
start of the fiscal year to 6.1% at its close. Despite the growth in the
economy, companies generally were reluctant to add workers, relying on strong
productivity growth to support earnings. During the second quarter of 2003,
productivity in the nonfarm business sector rose at a robust 6.8% annualized
rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Personal Investment Class was producing a
monthly yield of 0.44% and a seven-day SEC yield of 0.44%. Had the advisor and
distributor not waived fees and/or reimbursed expenses, performance would have
been lower. Portfolio managers employed a combination of short-term cash
management vehicles and selective use of a longer maturity schedule for higher
yields. The weighted average maturity (WAM) remained in the 38- to 60-day range;
at the close of the reporting period, the WAM stood at 49 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Personal Investment Class stood at $47.3 million. Past
performance cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
(continued)
The Liquid Assets Portfolio invests solely in securities rated "first-tier"
as defined in Rule 2a-7 under the Investment Company Act of 1940. Its objective
is to provide as high a level of current income as is consistent with the
preservation of capital and liquidity. Using a modified barbell maturity
structure, portfolio management emphasizes superior credit quality in buying
money market securities such as commercial paper and selected repurchase
agreement securities. An investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although a money market fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money investing in the
fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
COMMERCIAL PAPER-25.08%(a)
FINANCIAL-25.08%
ASSET BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-2.55%
Atlantis One Funding Corp. (Rabobank-ABS
Program Sponsor)(b)
(Acquired 05/22/03; Cost $41,406,228)
1.20% 09/10/03 $ 41,560 $ 41,547,532
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $223,474,677)
0.97% 10/01/03 224,139 223,957,821
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $59,925,562)
0.97% 11/12/03 60,172 60,055,266
- ------------------------------------------------------------------------------------
(Acquired 06/25/03; Cost $149,465,375)
0.91% 11/13/03 150,000 149,723,208
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $101,389,167)
0.98% 11/14/03 101,816 101,610,899
- ------------------------------------------------------------------------------------
Fleet Funding Corp. (General Electric Capital
Corp.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $99,659,528)
1.03% 10/09/03 100,000 99,891,278
- ------------------------------------------------------------------------------------
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $36,942,280)
1.04% 09/03/03 37,000 36,997,862
====================================================================================
713,783,866
====================================================================================
ASSET BACKED SECURITIES-CONSUMER
RECEIVABLES-0.35%
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $60,005,368)
1.03% 09/09/03 60,112 60,098,241
- ------------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 08/06/03; Cost $38,743,745)
1.06% 09/12/03 38,786 38,773,438
====================================================================================
98,871,679
====================================================================================
ASSET BACKED SECURITIES-FULLY BACKED-2.12%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 06/02/03; Cost $74,615,000)
1.20% 11/03/03 75,000 74,842,500
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $19,944,800)
1.08% 11/20/03 20,000 19,952,000
- ------------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $49,859,208)
1.09% 09/12/03 50,000 49,983,347
- ------------------------------------------------------------------------------------
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-FULLY BACKED-(CONTINUED)
Forrestal Funding Master Trust (Bank of
America-ABS Program Sponsor)(b)
(Acquired 08/22/03; Cost $225,292,170)
1.06% 09/22/03 $225,498 $ 225,358,567
- ------------------------------------------------------------------------------------
Old Slip Funding Corp. (Bank of New York-ABS
Program Sponsor)(b)
(Acquired 08/20/03; Cost $25,002,801)
1.08% 11/20/03 25,072 25,011,827
- ------------------------------------------------------------------------------------
Three Rivers Funding Corp. (Mellon Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,084
- ------------------------------------------------------------------------------------
Triple A One Funding Corp. (MBIA Insurance
Corp.-ABS Program Sponsor)(b)(c)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,083
- ------------------------------------------------------------------------------------
Tulip Funding Corp. (ABN AMRO Bank N.V.-ABS
Program Sponsor)(b)
(Acquired 08/06/03; Cost $99,917,556)
1.06% 09/03/03 100,000 99,994,111
====================================================================================
595,080,519
====================================================================================
ASSET BACKED SECURITIES-MULTI-PURPOSE-6.09%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 07/03/03; Cost $54,094,845)
1.04% 10/10/03 54,250 54,188,878
- ------------------------------------------------------------------------------------
CRC Funding, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/06/03; Cost $99,873,389)
1.06% 09/18/03 100,000 99,949,944
- ------------------------------------------------------------------------------------
Edison Asset Securitization, LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $72,103,070)
1.07% 10/07/03 72,359 72,281,576
- ------------------------------------------------------------------------------------
(Acquired 06/10/03; Cost $199,286,667)
1.07% 10/08/03 200,000 199,780,056
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $44,845,500)
1.03% 10/09/03 45,000 44,951,075
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $256,155,426)
1.03% 10/10/03 257,000 256,712,418
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $87,482,218)
1.19% 11/10/03 88,000 87,796,378
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $173,958,750)
1.19% 11/12/03 175,000 174,583,500
- ------------------------------------------------------------------------------------
(Acquired 07/03/03; Cost $27,315,857)
1.03% 12/17/03 27,447 27,362,974
- ------------------------------------------------------------------------------------
Falcon Asset Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,899,889)
1.06% 09/25/03 100,000 99,929,334
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $80,227,236)
1.06% 09/26/03 80,310 80,250,883
- ------------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Jupiter Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 08/21/03; Cost $99,900,361)
1.06% 09/24/03 $100,000 $ 99,932,597
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $134,864,850)
1.06% 09/30/03 135,000 134,884,725
- ------------------------------------------------------------------------------------
(Acquired 07/08/03; Cost $40,995,649)
1.04% 10/06/03 41,102 41,060,641
- ------------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $72,082,084)
1.04% 11/10/03 72,400 72,253,591
- ------------------------------------------------------------------------------------
Sheffield Receivables Corp. (Barclays Bank
PLC-NY Branch-ABS Program Sponsor)
1.06% 09/22/03 100,630 100,567,777
- ------------------------------------------------------------------------------------
Floating Rate, 1.07%(d) 01/20/04 60,000 60,000,000
====================================================================================
1,706,486,347
====================================================================================
ASSET BACKED SECURITIES-TRADE
RECEIVABLES-7.06%
Bills Securitization Ltd. (Germany) (Deutsche
Bank A.G.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $99,767,444)
0.91% 09/26/03 100,000 99,936,806
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $99,728,194)
1.03% 10/14/03 100,000 99,876,972
- ------------------------------------------------------------------------------------
Blue Ridge Asset Funding Corp. (Wachovia Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $149,863,083)
1.06% 09/26/03 150,000 149,889,583
- ------------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $99,721,000)
1.08% 11/21/03 100,000 99,757,000
- ------------------------------------------------------------------------------------
FCAR Owner Trust II-Series II (Ford Motor
Credit Co.-ABS Program Sponsor)(b)
(Acquired 06/03/03; Cost $99,691,611)
1.22% 09/02/03 100,000 99,996,611
- ------------------------------------------------------------------------------------
(Acquired 06/03/03; Cost $99,688,222)
1.22% 09/03/03 100,000 99,993,222
- ------------------------------------------------------------------------------------
(Acquired 06/12/03; Cost $141,189,245)
1.04% 09/17/03 141,586 141,520,556
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $96,725,248)
1.03% 10/17/03 97,000 96,872,337
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $99,733,000)
1.08% 11/17/03 100,000 99,769,000
- ------------------------------------------------------------------------------------
(Acquired 08/07/03, Cost $54,805,300)
1.08% 12/03/03 55,000 54,846,550
- ------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust (General Motors
Acceptance Corp.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $199,545,000)
0.91% 09/23/03 $200,000 $ 199,888,778
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $74,922,708)
1.06% 09/25/03 75,000 74,947,000
- ------------------------------------------------------------------------------------
(Acquired 04/16/03; Cost $39,755,000)
1.26% 10/08/03 40,000 39,948,200
- ------------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $124,606,250)
1.08% 11/18/03 125,000 124,707,500
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $199,279,333)
1.10% 12/02/03 200,000 199,442,889
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $99,630,278)
1.10% 12/03/03 100,000 99,715,833
- ------------------------------------------------------------------------------------
(Acquired 08/07/03; Cost $124,550,000)
1.08% 12/05/03 125,000 124,643,750
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $74,743,500)
1.08% 12/12/03 75,000 74,770,500
====================================================================================
1,980,523,087
====================================================================================
DIVERSIFIED BANKS-0.52%
Societe Generale North America (France)
1.10% 12/11/03 144,570 144,125,869
====================================================================================
INVESTMENT BANKING & BROKERAGE-2.80%
Bear, Stearns & Co. Inc.
1.04% 09/19/03 200,000 199,896,000
- ------------------------------------------------------------------------------------
1.01% 10/10/03 185,000 184,797,579
- ------------------------------------------------------------------------------------
Lehman Brothers Holdings Inc.(e)
1.23% 09/30/03 50,000 50,000,000
- ------------------------------------------------------------------------------------
1.23% 10/14/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 11/20/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 12/04/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.20% 01/23/04 50,000 50,000,000
====================================================================================
784,693,579
====================================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-1.14%
GE Capital International Funding Inc.-Series
A(b)
(Acquired 04/23/03; Cost $129,181,000)
1.26% 10/20/03 130,000 129,777,050
- ------------------------------------------------------------------------------------
General Electric Capital Services, Inc.
1.03% 10/08/03 41,000 40,956,597
- ------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
Morgan Stanley, Floating Rate(e)
1.14% 12/01/03 $150,000 $ 150,000,000
====================================================================================
320,733,647
====================================================================================
REGIONAL BANKS-2.45%
Banque et Caisse d'Epargne de l'Etat
(Luxembourg)
1.23% 11/03/03 100,000 99,784,750
- ------------------------------------------------------------------------------------
Danske Corp. (Denmark)
1.08% 12/23/03 25,187 25,101,616
- ------------------------------------------------------------------------------------
Stadshypotek Delaware, Inc. (Sweden)
1.03% 09/15/03 200,000 199,919,889
- ------------------------------------------------------------------------------------
1.03% 09/16/03 100,000 99,957,083
- ------------------------------------------------------------------------------------
0.91% 09/23/03 100,000 99,944,389
- ------------------------------------------------------------------------------------
1.07% 11/05/03 163,000 162,685,094
====================================================================================
687,392,821
====================================================================================
Total Financial 7,031,691,414
====================================================================================
Total Commercial Paper (Cost
$7,031,691,414) 7,031,691,414
====================================================================================
TIME DEPOSITS-15.75%
Danske Bank A/S-Cayman (Denmark)
1.02% 09/02/03 370,000 370,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank A.G.-Cayman (Germany)
1.00% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Fifth Third Bank-Cayman
1.01% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
ING Belgium S.A./N.V.-Brussels (Belgium)
1.13% 09/02/03 800,000 800,000,000
- ------------------------------------------------------------------------------------
M&I Marshall & Ilsley Bank-Milwaukee
1.00% 09/02/03 261,489 261,488,678
- ------------------------------------------------------------------------------------
Rabobank Nederland-London (Netherlands)
1.14% 09/02/03 585,000 585,000,000
- ------------------------------------------------------------------------------------
Royal Bank of Canada-Cayman (Canada)
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Societe Generale-Cayman (France)
1.02% 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
Suntrust Bank Atlanta-Cayman
0.97% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
U.S. Bank N.A.-Cayman
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-Cayman (Germany)
1.13% 09/02/03 150,000 150,000,000
====================================================================================
Total Time Deposits (Cost $4,416,488,678) 4,416,488,678
====================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT-13.03%
Barclays Bank PLC (United Kingdom)
1.03% 10/14/03 $200,000 $ 200,000,000
- ------------------------------------------------------------------------------------
BNP Paribas (France)
1.39% 08/05/04 75,000 75,027,868
- ------------------------------------------------------------------------------------
Citibank N.A.
1.07% 11/03/03 100,000 99,999,854
- ------------------------------------------------------------------------------------
1.08% 11/05/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.08% 11/06/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Credit Agricole Indosuez (France)
1.03% 09/11/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.03% 10/03/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.04% 10/09/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
Danske Bank A/S (Denmark)
1.36% 01/28/04 150,000 149,998,469
- ------------------------------------------------------------------------------------
Deutsche Bank A.G. (Germany)
1.03% 10/22/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
Dexia Bank S.A.-New York Branch (Belgium)(e)
1.03% 06/09/04 200,000 199,968,934
- ------------------------------------------------------------------------------------
HBOS Treasury Services PLC (United Kingdom)
1.08% 09/12/03 230,000 230,000,000
- ------------------------------------------------------------------------------------
1.03% 10/17/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
Lloyd's TSB Bank PLC-New York Branch (United
Kingdom)
1.21% 12/11/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia)
1.04% 07/23/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
1.26% 08/24/04 229,000 229,000,000
- ------------------------------------------------------------------------------------
Rabobank Nederland (Netherlands)
1.21% 10/31/03 150,000 150,060,651
- ------------------------------------------------------------------------------------
1.19% 08/04/04 75,000 74,993,044
- ------------------------------------------------------------------------------------
Societe Generale (France)
1.25% 10/16/03 100,000 99,997,510
- ------------------------------------------------------------------------------------
1.16% 08/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Svenska Handelsbanken A.B. (Sweden)
1.61% 10/08/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 03/17/04 70,000 69,996,198
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A.
1.06% 09/22/03 100,000 100,000,000
====================================================================================
Total Certificates of Deposit (Cost
$3,654,042,528) 3,654,042,528
====================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-8.38%
FEDERAL FARM CREDIT BANK-0.27%
Bonds,
1.80% 09/03/03 $ 75,000 $ 75,000,000
====================================================================================
FEDERAL HOME LOAN BANK-3.09%
Unsec. Bonds,
2.50% 11/14/03 61,800 61,877,787
- ------------------------------------------------------------------------------------
1.20% 04/08/04 200,965 200,959,245
- ------------------------------------------------------------------------------------
1.42% 04/21/04 93,000 93,000,000
- ------------------------------------------------------------------------------------
1.38% 05/11/04 145,000 145,000,000
- ------------------------------------------------------------------------------------
1.12% 07/12/04 235,000 235,000,000
- ------------------------------------------------------------------------------------
1.22% 08/04/04 100,000 99,984,855
- ------------------------------------------------------------------------------------
1.28% 09/08/04 30,000 30,000,000
====================================================================================
865,821,887
====================================================================================
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC)-1.52%
Reference Bills,(a)
1.04% 09/11/03 30,000 29,991,333
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.04% 10/15/03 47,000 46,940,258
- ------------------------------------------------------------------------------------
1.06% 10/31/03 250,000 249,558,333
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
3.25% 01/15/04 100,000 100,629,476
====================================================================================
427,119,400
====================================================================================
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA)-3.13%
Pass Thru Ctfs.,
1.09% 12/01/03 98,615 98,346,465
- ------------------------------------------------------------------------------------
1.10% 12/01/03 230,479 229,845,182
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.23% 09/30/03 250,000 249,752,292
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
5.63% 05/14/04 50,000 51,482,370
- ------------------------------------------------------------------------------------
Unsec. Notes,
4.75% 11/14/03 75,000 75,525,258
- ------------------------------------------------------------------------------------
1.08% 12/31/03 100,000 99,637,000
- ------------------------------------------------------------------------------------
1.18% 07/23/04 75,000 74,198,583
====================================================================================
878,787,150
====================================================================================
OVERSEAS PRIVATE INVESTMENT CORP.-0.00%
Floating Rate Notes,(f)(g)
1.11% 01/15/09 494 494,175
====================================================================================
</Table>
F-7
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION-0.37%
Global Notes,
5.00% 06/30/04 $100,000 $ 103,293,929
====================================================================================
Total U.S. Government Agency Securities
(Cost $2,350,516,541) 2,350,516,541
====================================================================================
PROMISSORY NOTES-4.91%
Goldman Sachs Group, Inc. (The)(b)(h)
(Acquired 08/04/03; Cost $250,000,000)
1.26% 03/01/04 250,000 250,000,000
- ------------------------------------------------------------------------------------
(Acquired 07/25/03; Cost $120,000,000)
1.23% 06/21/04 120,000 120,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/06/03; Cost $125,000,000)
1.32%(e) 09/03/03 125,000 125,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/21/03; Cost $100,000,000)
1.26%(e) 09/17/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/27/03; Cost $140,000,000)
1.19%(e) 09/29/03 140,000 140,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/02/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 04/09/03; Cost $130,000,000)
1.20%(e) 10/06/03 130,000 130,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/06/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $211,000,000)
1.33%(e) 10/07/03 211,000 211,000,000
====================================================================================
Total Promissory Notes (Cost
$1,376,000,000) 1,376,000,000
====================================================================================
VARIABLE RATE DEMAND NOTES-4.74%(j)
CORPORATE GUARANTEED-0.04%
Mississippi (State of) Business Finance Corp.
(General Electric Plastics Project);
Taxable Series 1998 IDR(b)(d)(f)(i)
(Acquired 01/25/02; Cost $12,000,000)
1.08% 02/01/23 12,000 12,000,000
====================================================================================
INSURED-2.20%(c)(f)(g)
Alaska (State of) Housing Finance Corp.;
Taxable Home Mortgage Series 2002 B RB
1.06% 12/01/36 8,100 8,100,000
- ------------------------------------------------------------------------------------
California (State of) Housing Finance Agency;
Taxable Home Mortgage Series 1998 RB
Series M, 1.03% 08/01/19 10,585 10,585,000
- ------------------------------------------------------------------------------------
Series M, 1.03% 08/01/23 28,530 28,530,000
- ------------------------------------------------------------------------------------
Series T, 1.05% 08/01/29 13,980 13,980,000
- ------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
INSURED-(CONTINUED)
Connecticut (State of) Housing Financing
Authority (Housing Mortgage Finance
Program); RB
Taxable Series 1998 F-2, 1.11% 11/15/16 $ 25,450 $ 25,450,000
- ------------------------------------------------------------------------------------
Taxable Series 2002 A-5, 1.10% 05/15/33 19,365 19,365,000
- ------------------------------------------------------------------------------------
Florida (State of) Baptist Health System of
South Florida; RB
Taxable Series 1995 A, 1.10% 05/15/17 11,100 11,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1995 B, 1.10% 05/15/25 23,900 23,900,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Agency;
Taxable Housing Series 1993 A RB
1.05% 01/01/34 31,200 31,200,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.;
Taxable Housing Series 2000 A RB
1.05% 01/01/45 59,580 59,580,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.
(Affordable Housing); Taxable Series 2002 A
RB
1.10% 01/01/47 39,320 39,320,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Student Loan RB
Taxable Series 1998 B, 1.11% 09/01/32 12,870 12,870,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-I, 1.11% 09/01/34 7,100 7,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-II, 1.11% 09/01/34 2,000 2,000,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-III, 1.11% 09/01/34 3,350 3,350,000
- ------------------------------------------------------------------------------------
Loanstar Asset Partners II; Student Loan
RB(b)
(Acquired 11/14/02; Cost $25,000,000)
Series 2001 Tranche 1 1.12% 09/01/36 25,000 25,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $60,000,000)
Series 2002 Tranche 1 1.12% 08/01/37 60,000 60,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $40,000,000)
Series 2002 Tranche 2 1.12% 08/01/37 40,000 40,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 3 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 4 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
Michigan (State of) Housing Development
Authority; Taxable Series 2000 C RB
1.06% 12/01/20 33,005 33,005,000
- ------------------------------------------------------------------------------------
Minnesota (State of) Fairview, Minnesota
Hospital & Health Care Services;
Taxable Series 1994 A ACES
1.10% 11/01/15 4,400 4,400,000
- ------------------------------------------------------------------------------------
Montgomery (City of), Alabama BMC Special
Care Facilities Financing Authority
(Baptist Health); Taxable Series 1998 C
Floating Rate RB
1.12% 11/15/29 19,300 19,300,000
- ------------------------------------------------------------------------------------
New Orleans (City of), Louisiana; Taxable
Pension Series 2000 RB
1.10% 09/01/30 40,000 40,000,000
====================================================================================
618,135,000
====================================================================================
</Table>
F-9
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-2.50%(f)(k)
Advocare of South Carolina; Series 1997 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 03/28/02; Cost $6,100,000)
1.11% 06/01/17 $ 6,100 $ 6,100,000
- ------------------------------------------------------------------------------------
B. Braun Medical Inc.; Series 2000 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.13% 02/01/15 30,479 30,479,000
- ------------------------------------------------------------------------------------
Baltimore (County of), Maryland (Oak Crest
Village Inc. Project); Series 1999 B RB
(LOC-Wachovia Bank N.A.)(g)
1.12% 01/01/29 1,140 1,140,000
- ------------------------------------------------------------------------------------
Barrington Development Funding LLC; Series
2002 A Notes (LOC-Bank One N.A.)(g)
1.13% 12/01/32 6,005 6,005,000
- ------------------------------------------------------------------------------------
Belk, Inc.; Series 1998 Bonds (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $91,030,000)
1.13% 07/01/08 91,030 91,030,000
- ------------------------------------------------------------------------------------
Brosis Finance, LLC; Series 1999 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.11% 09/01/19 18,400 18,400,000
- ------------------------------------------------------------------------------------
Capital One Funding Corp.; Floating Rate
Notes (LOC-Bank One N.A.)(g)
1.13% 12/02/19 5,024 5,024,000
- ------------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $9,064,000)
1.13%(b) 07/01/20 9,064 9,064,000
- ------------------------------------------------------------------------------------
1.13% 09/01/20 470 470,000
- ------------------------------------------------------------------------------------
1.13% 05/01/26 7,500 7,500,000
- ------------------------------------------------------------------------------------
Carlton Arms of Ocala; Series 2002 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $1,100,000)
1.11% 09/01/34 1,100 1,100,000
- ------------------------------------------------------------------------------------
Chatham Capital Corp.; Series 2000 Floating
Rate Notes (LOC-Bank One N.A.)(g)
1.13% 07/01/20 9,149 9,149,000
- ------------------------------------------------------------------------------------
Dome Corp.; Floating Rate Notes (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 05/31/02; Cost $10,435,000)
1.13% 08/31/16 10,435 10,435,000
- ------------------------------------------------------------------------------------
Georgia (State of) Brooks Development
Authority (Langboard Inc. Project);
Series 2003 IDR (LOC-Bank of America
N.A.)(g)
1.11% 04/01/18 10,000 10,000,000
- ------------------------------------------------------------------------------------
Gulf States Paper Corp.; Series 1998 Unsec.
Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 11/01/18 25,000 25,000,000
- ------------------------------------------------------------------------------------
Health Insurance Plan of Greater New York;
Series 1990 B-1 ACES
(LOC-JP Morgan Chase & Co.)(g)
1.08% 07/01/16 2,900 2,900,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Taxable Student Loan Series
1997 B RB
(LOC-Bank One Chicago N.A.)(g)
1.11% 09/01/31 7,700 7,700,000
- ------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
LP Pinewood SPV; Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 02/01/18 $ 15,300 $ 15,300,000
- ------------------------------------------------------------------------------------
Michigan (State of) Botsford General
Hospital; Series 1997 A RB
(LOC-Michigan National Bank)(e)
1.10% 02/15/27 10,300 10,300,000
- ------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Telepak Inc. Project); Taxable Series 2002
IDR
(LOC-Wachovia Bank N.A.) (Acquired
05/23/02; Cost $40,000,000)(b)(g)
1.11% 05/01/17 40,000 40,000,000
- ------------------------------------------------------------------------------------
New York (City of) Housing Development Corp.
(Chelsea Centro); Series 2003 RB
(LOC-Bayerische Landesbank)(g)
1.09% 06/01/33 8,300 8,300,000
- ------------------------------------------------------------------------------------
New York (State of) Housing Finance Agency;
Taxable Service Contract Series 2003 F RB
(LOC-State Street Bank & Trust Co.)(g)
1.09% 09/15/07 10,000 10,000,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Charlotte; Series 2002 A RB
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/14 13,800 13,800,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Raleigh; Series 2002 A RB
(LOC-Bank of America N.A.)(g)
1.16% 06/01/18 1,800 1,800,000
- ------------------------------------------------------------------------------------
Ohio (State of) (Fayette County Memorial
Hospital); Series 2003 RB
(LOC-National City Bank)(g)
1.10% 08/01/23 2,400 2,400,000
- ------------------------------------------------------------------------------------
Rockwood Quarry LLC; Notes (LOC-Fifth Third
Bank)(g)
1.10% 12/01/22 5,000 5,000,000
- ------------------------------------------------------------------------------------
Sabine River Authority of Texas (TXU Energy
Co. LLC Project); Series 2001 E PCR
(LOC-Chase Manhattan Bank)(g)
1.11% 12/01/36 1,587 1,587,142
- ------------------------------------------------------------------------------------
San Jose (City of), California Redevelopment
Agency (Merged Area); RB
(LOC-Bank of New York)(g)
Series 2002 G, 1.10% 08/01/29 8,000 8,000,000
- ------------------------------------------------------------------------------------
Series 2002 H, 1.10% 08/01/29 17,226 17,226,000
- ------------------------------------------------------------------------------------
Shepherd Capital LLC;
Floating Rate Series 2003 B Notes
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/53 15,000 15,000,000
- ------------------------------------------------------------------------------------
Floating Rate Series 96A Notes
(LOC-Standard Federal Bank)(g)
1.18% 10/01/46 1,250 1,250,000
- ------------------------------------------------------------------------------------
Floating Rate Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 11/01/52 10,000 10,000,000
- ------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
Southeastern Retirement Association, Inc.;
Series 1999 Bonds (LOC-Wachovia Bank
N.A.)(b)(g)
(Acquired 05/16/02; Cost $60,000)
1.13% 08/01/19 $ 60 $ 60,000
- ------------------------------------------------------------------------------------
Texas (State of) Brazos River Authority (TXU
Energy Co. LLC Project); Series 2001 I PCR
(LOC-Wachovia Bank N.A.)(g)
1.11% 12/01/36 62,920 62,920,000
- ------------------------------------------------------------------------------------
TP Racing L.L.L.P.; Floating Rate Series 2000
Notes
(LOC-Bank One Trust Co. N.A.)(g)
1.13% 06/01/30 29,140 29,140,000
- ------------------------------------------------------------------------------------
Union (County of), Arkansas (Del-Tin Fiber
LLC Project); Series 1998 IDR
(LOC-Bank One Chicago N.A.)(g)
1.13% 10/01/27 34,400 34,400,000
- ------------------------------------------------------------------------------------
University of Virginia Real Estate
Foundation; Series 2001 RB (LOC-Wachovia
Bank N.A.)
(Acquired 07/31/03; Cost $48,145,000)(b)(g)
1.13% 07/01/26 48,145 48,145,000
- ------------------------------------------------------------------------------------
Virginia (State of) Richmond Redevelopment &
Housing Authority Project (Old Manchester);
Taxable Series 1995 B RB (LOC-Wachovia Bank
N.A.)(d)
1.15% 12/01/25 1,590 1,590,000
- ------------------------------------------------------------------------------------
Wake Forest University; Floating Rate Series
1997 Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 07/01/17 6,900 6,900,000
- ------------------------------------------------------------------------------------
Wisconsin (State of) Madison Community
Development Authority (Overture Development
Corp.); Series 2001 RB (LOC-Bank One
Milwaukee N.A.; U.S. Bancorp; M&I Marshall
& Ilsley; Northern Trust Co.)(g)
1.13% 06/01/36 115,000 115,000,000
====================================================================================
699,614,142
====================================================================================
Total Variable Rate Demand Notes (Cost
$1,329,749,142) 1,329,749,142
====================================================================================
ASSET BACKED NOTES-4.08%
STRUCTURED-2.60%
Carmax Auto Owner Trust-Series 2003-1, Class
A-1
1.24% 06/15/04 40,136 40,136,423
- ------------------------------------------------------------------------------------
Granite Mortgages PLC (United Kingdom)-Series
2003-1, Class 1A1, Floating Rate
Bonds(b)(d)
(Acquired 01/22/03; Cost $50,000,000)
1.10% 01/20/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Holmes Financing (No. 6) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.11% 10/15/03 72,500 72,500,000
- ------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STRUCTURED-(CONTINUED)
Holmes Financing (No. 7) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.07% 04/15/04 $100,000 $ 100,000,000
- ------------------------------------------------------------------------------------
Honda Auto Receivables 2003-2 Owner
Trust-Class A-1 Notes
1.23% 06/11/04 73,596 73,596,305
- ------------------------------------------------------------------------------------
Household Automotive Trust-Series 2003-1,
Class A-1(c)
1.24% 05/17/04 36,773 36,772,528
- ------------------------------------------------------------------------------------
IKON Receivables Funding LLC Lease-Backed
Notes-Series 2003-1, Class A-1(c)
1.31% 05/17/04 48,644 48,643,911
- ------------------------------------------------------------------------------------
Permanent Financing (No. 2) PLC (United
Kingdom) Series 1, Class A, Floating Rate
Bonds (Halifax PLC-ABS Program Sponsor)
(Acquired 02/26/03; Cost
$105,000,000)(b)(d)
1.07% 03/10/04 105,000 105,000,000
- ------------------------------------------------------------------------------------
Residential Mortgage Securities (United
Kingdom)-Series 14A, Class A1, Floating
Rate Bonds (Acquired 03/17/03; Cost
$55,826,175)(b)
1.14% 03/10/04 55,826 55,826,175
- ------------------------------------------------------------------------------------
Triad Automobile Receivables Trust-Series
2003-A, Class A-1(c)
1.25% 04/12/04 34,118 34,117,936
- ------------------------------------------------------------------------------------
WFS Financial 2003-2 Owner Trust, Class A-1
1.26% 06/14/04 99,056 99,055,851
- ------------------------------------------------------------------------------------
World Omni Auto Receivables Trust-Series
2003-A, Class A-1
1.30% 03/15/04 12,738 12,737,635
====================================================================================
728,386,764
====================================================================================
STRUCTURED INVESTMENT VEHICLES/SECURITY
ARBITRAGE-1.48%
Beta Finance Inc., Floating Rate MTN
(Citibank International PLC-ABS Program
Sponsor)(b)(e)
(Acquired 10/02/02; Cost $75,000,000)
1.12% 10/07/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
(Acquired 10/03/02; Cost $99,995,000)
1.11% 10/16/03 100,000 99,999,384
- ------------------------------------------------------------------------------------
(Acquired 05/19/03; Cost $89,111,606)
1.24% 04/30/04 89,000 89,078,514
- ------------------------------------------------------------------------------------
(Acquired 05/08/03; Cost $50,000,000)
1.06% 05/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 06/09/03; Cost $99,990,000)
1.06% 06/16/04 100,000 99,992,104
====================================================================================
414,070,002
====================================================================================
Total Asset Backed Notes (Cost
$1,142,456,766) 1,142,456,766
====================================================================================
</Table>
F-13
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
MASTER NOTE AGREEMENTS-2.76%(l)
Merrill Lynch Mortgage Capital, Inc.(b)(m)
(Acquired 08/25/03; Cost $220,000,000)
1.27% 02/23/04 $220,000 $ 220,000,000
- ------------------------------------------------------------------------------------
Morgan Stanley(b)(n)
(Acquired 03/17/03; Cost $555,000,000)
1.20% 09/15/03 555,000 555,000,000
====================================================================================
Total Master Note Agreements (Cost
$775,000,000) 775,000,000
====================================================================================
MEDIUM TERM NOTES-2.54%
Associates Corp. of North America, Sr. Global
MTN,
5.80% 04/20/04 49,000 50,443,106
- ------------------------------------------------------------------------------------
General Electric Capital Corp.-Series A
Floating Rate Global MTN, 1.33%(e) 10/22/03 40,000 40,005,870
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.19%(d) 09/08/04 332,900 332,900,000
- ------------------------------------------------------------------------------------
MetLife Global Funding(d)
(Acquired 08/20/03; Cost $90,000,000)
Floating Rate Global MTN, 1.12%(b) 09/15/04 90,000 90,000,000
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.12% 09/27/04 99,300 99,300,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia),
Euro Floating Rate MTN,(o)
1.20% 03/12/04 50,000 50,008,379
- ------------------------------------------------------------------------------------
1.13% 05/02/04 50,000 50,013,519
====================================================================================
Total Medium Term Notes (Cost
$712,670,874) 712,670,874
====================================================================================
FUNDING AGREEMENTS-1.66%
New York Life Insurance Co.(b)(d)(h)
(Acquired 04/03/03; Cost $265,000,000)
1.18% 04/07/04 265,000 265,000,000
- ------------------------------------------------------------------------------------
Travelers Insurance Co.(b)(h)(o)
(Acquired 08/27/03; Cost $100,000,000)
1.24% 11/25/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $100,000,000)
1.24% 08/27/04 100,000 100,000,000
====================================================================================
Total Funding Agreements (Cost
$465,000,000) 465,000,000
====================================================================================
BANK NOTES-1.52%
BNP Paribas-New York Branch (France),
Floating Rate Notes,(e)
1.04% 06/07/04 200,000 199,968,979
- ------------------------------------------------------------------------------------
National City Bank of Indiana, Floating Rate
Notes,(e)
1.04% 06/14/04 100,000 99,984,285
- ------------------------------------------------------------------------------------
Wachovia Bank, N.A., Floating Rate Notes,(o)
1.19% 06/24/04 25,000 25,044,996
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A., Floating Rate
Notes,(e)
1.04% 05/10/04 100,000 100,000,000
====================================================================================
Total Bank Notes (Cost $424,998,260) 424,998,260
====================================================================================
</Table>
F-14
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
PUTTABLE RESET NOTES-1.01%
Merck & Co., Inc.; PURS Notes (Acquired
02/18/03; Cost $103,194,800)(b)
4.49% 02/22/04 $100,000 $ 101,531,392
- ------------------------------------------------------------------------------------
Wal-Mart Stores, Inc.; Unsec. Unsub. PURS
Notes
5.20% 06/01/04 175,000 180,536,131
====================================================================================
Total Puttable Reset Notes (Cost
$282,067,523) 282,067,523
====================================================================================
U.S. TREASURY NOTES-0.36%
3.00% 01/31/04 100,000 100,717,649
====================================================================================
Total U.S. Treasury Notes (Cost
$100,717,649) 100,717,649
====================================================================================
Total Investments Excluding Repurchase
Agreements (Cost $24,061,399,375) 24,061,399,375
====================================================================================
REPURCHASE AGREEMENTS-15.33%
ABN AMRO Bank N.V.-New York Branch
(Netherlands)
1.05%(p) 09/02/03 37,000 37,000,000
- ------------------------------------------------------------------------------------
Banc of America Securities LLC
1.05%(q) 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
1.08%(r) 09/02/03 102,000 102,000,000
- ------------------------------------------------------------------------------------
Banc One Capital Markets Group
1.06%(s) 09/02/03 2,116 2,116,069
- ------------------------------------------------------------------------------------
Bank of Nova Scotia (The)-New York Branch
(Canada)
1.05%(t) 09/02/03 252,501 252,501,380
- ------------------------------------------------------------------------------------
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.05%(u) 09/02/03 297,003 297,002,850
- ------------------------------------------------------------------------------------
BNP Paribas Securities Corp.-New York Branch
(France)
1.05%(v) 09/02/03 307,000 307,000,000
- ------------------------------------------------------------------------------------
Citigroup Global Markets Inc.
1.05%(w) 09/02/03 287,000 287,000,000
- ------------------------------------------------------------------------------------
Credit Suisse First Boston LLC-New York
Branch (Switzerland)
1.16%(x) 07/09/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank Securities Inc.-New York Branch
(Germany)
1.06%(y) 09/02/03 224,536 224,536,185
- ------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(z) 09/02/03 52,000 52,000,000
- ------------------------------------------------------------------------------------
JP Morgan Securities Inc.
1.07%(aa) 09/02/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Lehman Brothers Inc.
1.00%(ab) 09/02/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
UBS Warburg LLC-New York Branch (Switzerland)
1.01%(ac) 09/02/03 372,163 372,163,170
- ------------------------------------------------------------------------------------
1.05%(ad) 09/02/03 425,000 425,000,000
- ------------------------------------------------------------------------------------
1.05%(ae) 09/02/03 475,814 475,814,111
- ------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-(CONTINUED)
Wachovia Securities, Inc.
1.03%(af) 09/02/03 $275,616 $ 275,616,254
- ------------------------------------------------------------------------------------
1.08%(ag) 09/02/03 62,000 62,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-New York Branch (Germany)
1.13%(ah) 09/02/03 127,000 127,000,000
====================================================================================
Total Repurchase Agreements (Cost
$4,298,750,019) 4,298,750,019
____________________________________________________________________________________
====================================================================================
TOTAL INVESTMENTS (Cost
$28,360,149,394)(ai)-101.15% 28,360,149,394
____________________________________________________________________________________
====================================================================================
OTHER ASSETS LESS LIABILITIES-(1.15)% (323,748,205)
____________________________________________________________________________________
====================================================================================
NET ASSETS-100.00% $28,036,401,189
____________________________________________________________________________________
====================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
ACES - Automatically Convertible Extendable Security
Disc. - Discounted
IDR - Industrial Revenue Bonds
LOC - Letter of Credit
MTN - Medium Term Notes
PCR - Pollution Control Revenue Bonds
PURS - Puttable Reset Securities
RB - Revenue Bonds
Sr. - Senior
Unsec. - Unsecured
Unsub. - Unsubordinated
</Table>
Notes to Schedule of Investments
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$8,939,316,340, which represented 31.88% of the Fund's net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
(c) Principal and interest payments are secured by bond insurance provided by
one of the following companies: AMBAC Assurance Corp., MBIA Insurance Corp.
or Financial Security Assurance.
(d) Interest rates are redetermined monthly. Rate shown is the rate in effect on
08/31/03.
(e) Interest rates are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) Demand security; payable upon demand by the Fund with usually no more than
seven calendar day's notice.
(g) Interest rates are redetermined weekly. Rate shown is the rate in effect on
08/31/03.
(h) Security considered to be illiquid. The aggregate market value of these
securities at 08/31/03 was $1,841,000,000 which represents 6.57% of the
Fund's net assets.
(i) Principal and interest payments are guaranteed by the corporate guarantor.
(j) Interest on these securities is taxable income to the Fund.
(k) Principal and interest payments are guaranteed by the letter of credit
agreement.
(l) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-16
(m) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(n) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(o) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/03.
(p) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,167. Collateralized by $254,927,000 U.S. Government obligations, 0%
to 4.00% due 11/05/03 to 09/02/08 with an aggregate market value at 08/31/03
of $255,000,220.
(q) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $499,105,000 U.S. Government obligations, 0%
to 9.70% due 10/03/03 to 04/05/19 with an aggregate market value at 08/31/03
of $510,000,486.
(r) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,030,000. Collateralized by $252,007,493 U.S. Government obligations,
5.50% to 6.00% due 12/01/32 to 06/01/33 with an aggregate market value at
08/31/03 of $255,000,000.
(s) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$300,035,333. Collateralized by $294,930,000 U.S. Government obligations, 0%
to 7.70% due 09/15/03 to 04/09/09 with an aggregate market value at 08/31/03
of $306,001,703.
(t) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $494,322,000 U.S. Government obligations, 0%
to 7.25% due 12/15/03 to 05/15/30 with an aggregate market value at 08/31/03
of $510,000,259.
(u) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$660,079,850. Collateralized by $664,688,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 03/15/12 with an aggregate market value at 08/31/03
of $673,203,742.
(v) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $511,522,000 U.S. Government obligations, 0%
to 0% due 10/16/03 to 12/31/03 with an aggregate market value at 08/31/03 of
$510,000,869.
(w) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $493,678,000 U.S. Government obligations, 0%
to 6.00% due 12/15/03 to 11/11/16 with an aggregate market value at 08/31/03
of $510,000,421.
(x) Term repurchase agreement entered into 08/29/03; however either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $526,959,000 U.S. Treasury
obligations, 0% to 8.13% due 11/15/15 to 08/15/21 with an aggregate market
value at 08/31/03 of $306,000,504.
(y) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,889. Collateralized by $479,866,000 U.S. Government obligations,
1.88% to 6.25% due 01/15/05 to 01/05/27 with an aggregate market value at
08/31/03 of $510,000,195.
(z) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(aa)Repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,722. Collateralized by $252,112,237 U.S. Government obligations, 0%
to 0% due 05/01/23 to 08/01/33 with a market value at 08/31/03 of
$255,000,797.
(ab)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,055,556. Collateralized by $407,091,000 U.S. Treasury obligations,
6.00% to 8.88% due 02/15/19 to 05/15/30 with an aggregate market value at
08/31/03 of $510,005,167.
(ac)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$900,101,000. Collateralized by $705,327,000 U.S. Treasury obligations,
3.38% to 8.88% due 01/15/07 to 08/15/17 with an aggregate market value at
08/31/03 of $918,002,342.
(ad)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $496,282,742 U.S. Government obligations,
4.50% to 8.00% due 10/01/08 to 07/01/33 with an aggregate market value at
08/31/03 of $510,001,793.
(ae)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$850,099,167. Collateralized by $1,792,017,000 U.S. Government obligations,
0% to 9.38% due 10/16/03 to 10/15/22 with an aggregate market value at
08/31/03 of $867,004,984.
F-17
(af)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(ag)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(ah)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$200,025,000. Collateralized by $196,970,652 U.S. Government obligations,
4.51% to 7.24% due 11/01/10 to 10/01/32 with an aggregate market value at
08/31/03 of $204,000,000.
(ai)Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-18
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements at value
(amortized cost) $24,061,399,375
- -----------------------------------------------------------------------------
Repurchase agreements 4,298,750,019
- -----------------------------------------------------------------------------
Interest receivable 30,772,488
- -----------------------------------------------------------------------------
Investment for deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Other assets 237,318
=============================================================================
Total assets 28,391,503,877
_____________________________________________________________________________
=============================================================================
LIABILITIES:
Payables for:
Investments purchased 329,391,647
- -----------------------------------------------------------------------------
Dividends 22,694,969
- -----------------------------------------------------------------------------
Deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Accrued distribution fees 868,780
- -----------------------------------------------------------------------------
Accrued directors' fees 690,790
- -----------------------------------------------------------------------------
Accrued transfer agent fees 479,586
- -----------------------------------------------------------------------------
Accrued operating expenses 632,239
=============================================================================
Total liabilities 355,102,688
=============================================================================
Net assets applicable to shares outstanding $28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $28,033,722,732
- -----------------------------------------------------------------------------
Undistributed net investment income (502)
- -----------------------------------------------------------------------------
Undistributed net realized gain from investment securities 2,678,959
=============================================================================
$28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS:
Institutional Class $21,240,698,662
_____________________________________________________________________________
=============================================================================
Private Investment Class $ 978,383,482
_____________________________________________________________________________
=============================================================================
Personal Investment Class $ 47,265,983
_____________________________________________________________________________
=============================================================================
Cash Management Class $ 4,473,591,100
_____________________________________________________________________________
=============================================================================
Reserve Class $ 57,082,236
_____________________________________________________________________________
=============================================================================
Resource Class $ 1,239,379,726
_____________________________________________________________________________
=============================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 21,238,605,055
_____________________________________________________________________________
=============================================================================
Private Investment Class 978,299,714
_____________________________________________________________________________
=============================================================================
Personal Investment Class 47,264,708
_____________________________________________________________________________
=============================================================================
Cash Management 4,473,177,698
_____________________________________________________________________________
=============================================================================
Reserve Class 57,081,678
_____________________________________________________________________________
=============================================================================
Resource Class 1,239,293,377
_____________________________________________________________________________
=============================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
_____________________________________________________________________________
=============================================================================
</Table>
See Notes to Financial Statements.
F-19
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $486,848,043
==========================================================================
EXPENSES:
Advisory fees 50,444,589
- --------------------------------------------------------------------------
Administrative services fees 1,478,810
- --------------------------------------------------------------------------
Custodian fees 535,640
- --------------------------------------------------------------------------
Distribution fees:
Private Investment Class 4,886,422
- --------------------------------------------------------------------------
Personal Investment Class 264,903
- --------------------------------------------------------------------------
Cash Management Class 5,831,375
- --------------------------------------------------------------------------
Reserve Class 537,761
- --------------------------------------------------------------------------
Resource Class 2,575,170
- --------------------------------------------------------------------------
Directors' fees 605,192
- --------------------------------------------------------------------------
Transfer agent fees 5,162,855
- --------------------------------------------------------------------------
Other 143,818
- --------------------------------------------------------------------------
Filing fee refund (1,251,673)
==========================================================================
Total expenses 71,214,862
==========================================================================
Less: Fees waived (21,804,747)
==========================================================================
Net expenses 49,410,115
==========================================================================
Net investment income 437,437,928
==========================================================================
Net realized gain from investment securities 222,356
==========================================================================
Net increase in net assets resulting from operations $437,660,284
__________________________________________________________________________
==========================================================================
</Table>
See Notes to Financial Statements.
F-20
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- -----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 437,437,928 $ 871,551,545
- -----------------------------------------------------------------------------------------------
Net realized gain from investment securities 222,356 929,565
===============================================================================================
Net increase in net assets resulting from operations 437,660,284 872,481,110
===============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (339,841,789) (699,238,125)
- -----------------------------------------------------------------------------------------------
Private Investment Class (9,944,836) (23,638,000)
- -----------------------------------------------------------------------------------------------
Personal Investment Class (251,405) (309,171)
- -----------------------------------------------------------------------------------------------
Cash Management Class (72,636,877) (117,705,827)
- -----------------------------------------------------------------------------------------------
Reserve Class (240,042) (285,587)
- -----------------------------------------------------------------------------------------------
Resource Class (14,522,979) (30,374,835)
===============================================================================================
Decrease in net assets resulting from distributions (437,437,928) (871,551,545)
===============================================================================================
Share transactions-net:
Institutional Class (7,882,172,341) 2,349,669,794
- -----------------------------------------------------------------------------------------------
Private Investment Class 169,919,767 (481,056,789)
- -----------------------------------------------------------------------------------------------
Personal Investment Class 16,988,324 18,347,438
- -----------------------------------------------------------------------------------------------
Cash Management Class (1,286,520,760) 260,027,687
- -----------------------------------------------------------------------------------------------
Reserve Class 5,802,855 46,109,690
- -----------------------------------------------------------------------------------------------
Resource Class (306,784,517) 276,712,399
===============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (9,282,766,672) 2,469,810,219
===============================================================================================
Net increase (decrease) in net assets (9,282,544,316) 2,470,739,784
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS:
Beginning of year 37,318,945,505 34,848,205,721
===============================================================================================
End of year $28,036,401,189 $37,318,945,505
_______________________________________________________________________________________________
===============================================================================================
</Table>
See Notes to Financial Statements.
F-21
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Liquid Assets Portfolio (the "Fund") is an investment portfolio of
Short-Term Investments Co. (the "Company"). The Company is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital and liquidity. Each
company listed in the Schedule of Investments is organized in the United States
unless otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date. The Fund allocates realized and unrealized capital gains
and losses to a class based on the relative net assets of each class. The
Fund allocates income to a class based on the relative value of the settled
shares of each class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to
F-22
federal income taxes on otherwise taxable income (including net realized
capital gain) which is distributed to shareholders. Therefore, no provision
for federal income taxes is recorded in the financial statements. Any
capital loss carryforwards listed are reduced for limitations, if any, to
the extent required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets of the Fund. AIM has voluntarily agreed to limit
Total Fund operating expenses (excluding Rule 12b-1 fees, interest, taxes, fund
merger and reorganization expenses, extraordinary items, including other items
designated as such by the Board of Directors, and increases in expenses due to
expense offset arrangements, if any) to 0.12%. Voluntary expense limitations may
be modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived advisory fees of $18,538,393.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $1,478,810 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $5,044,459 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Reserve Class equals the maximum annual
rate of 0.30%, 0.55%, 0.08%, and 0.87%, respectively, of the average daily net
assets attributable to such class. Pursuant to the Plan, for the year ended
August 31, 2003, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$2,931,853, $193,606, $4,665,100, $463,548 and $2,575,170, respectively, after
FMC waived plan fees of $1,954,569, $71,297, $1,166,275, $74,213 and $0,
respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
F-23
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
During the year ended August 31, 2003, the Fund paid legal fees of $68,007
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ------------------------------------------------------------------------------------------
Distributions paid from ordinary income $437,437,928 $871,551,545
__________________________________________________________________________________________
==========================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 3,727,333
- -----------------------------------------------------------------------------
Temporary book/tax differences (1,048,876)
- -----------------------------------------------------------------------------
Capital (par value and additional paid-in) 28,033,722,732
=============================================================================
Total net assets $28,036,401,189
_____________________________________________________________________________
=============================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of director deferral of compensation and
retirement plan expenses.
F-24
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
2003 2002
------------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 419,054,374,755 $ 419,054,374,755 586,514,671,312 $ 586,514,671,312
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 9,405,817,790 9,405,817,790 17,787,233,352 17,787,233,352
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 133,770,375 133,770,375 135,176,893 135,176,893
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 66,799,786,336 66,799,786,336 93,169,483,414 93,169,483,414
- -----------------------------------------------------------------------------------------------------------
Reserve Class 102,414,453 102,414,453 132,778,052 132,778,052
- -----------------------------------------------------------------------------------------------------------
Resource Class 8,435,843,716 8,435,843,716 11,871,763,813 11,871,763,813
- -----------------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Institutional Class 93,354,431 93,354,431 191,080,549 191,080,549
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 4,021,536 4,021,536 9,235,046 9,235,046
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 178,509 178,509 222,812 222,812
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 44,707,654 44,707,654 84,049,065 84,049,065
- -----------------------------------------------------------------------------------------------------------
Reserve Class 257,929 257,929 217,048 217,048
- -----------------------------------------------------------------------------------------------------------
Resource Class 12,586,231 12,586,231 27,437,407 27,437,407
- -----------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (427,029,901,527) (427,029,901,527) (584,356,082,067) (584,356,082,067)
- -----------------------------------------------------------------------------------------------------------
Private Investment Class (9,239,919,559) (9,239,919,559) (18,277,525,187) (18,277,525,187)
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class (116,960,560) (116,960,560) (117,052,267) (117,052,267)
- -----------------------------------------------------------------------------------------------------------
Cash Management Class (68,131,014,750) (68,131,014,750) (92,993,504,792) (92,993,504,792)
- -----------------------------------------------------------------------------------------------------------
Reserve Class (96,869,527) (96,869,527) (86,885,410) (86,885,410)
- -----------------------------------------------------------------------------------------------------------
Resource Class (8,755,214,464) (8,755,214,464) (11,622,488,821) (11,622,488,821)
===========================================================================================================
(9,282,766,672) $ (9,282,766,672) 2,469,810,219 $ 2,469,810,219
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-25
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
PERSONAL INVESTMENT CLASS
--------------------------------------------------------------
JANUARY 4, 1999
(DATE SALES
YEAR ENDED AUGUST 31, COMMENCED) TO
------------------------------------------- AUGUST 31,
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.05 0.01
===============================================================================================
Less distributions from net
investment income (0.01) (0.02) (0.05) (0.05) (0.01)
===============================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______________________________________________________________________________________________
===============================================================================================
Total return(a) 0.77% 1.65% 5.01% 5.60% 2.94%
_______________________________________________________________________________________________
===============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $47,266 $30,277 $11,930 $14,179 $ 994
_______________________________________________________________________________________________
===============================================================================================
Ratio of expenses to average
net assets:
With fee waivers 0.66%(b) 0.61% 0.60% 0.59% 0.59%(c)
- -----------------------------------------------------------------------------------------------
Without fee waivers 0.92%(b) 0.94% 0.94% 0.94% 0.93%(c)
===============================================================================================
Ratio of net investment income
to average net assets 0.79%(b) 1.62% 4.69% 5.54% 4.52%(c)
_______________________________________________________________________________________________
===============================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are based on average daily net assets of $35,320,455.
(c) Annualized.
F-26
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Liquid
Assets Portfolio (a series portfolio of Short-Term Investments Co.), including
the schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, and the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the years or periods in the two-year period ended August 31, 2000
have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Liquid
Assets Portfolio as of August 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the three-year period then ended, in conformity with accounting principles
generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-27
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY OR OFFICER SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- -----------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- -----------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- -----------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -----------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- -----------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- -----------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
REQUIRED STATE INCOME TAX INFORMATION (Unaudited)
Of the ordinary dividends paid, 0.25% was derived from U.S. Treasury
Obligations.
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
LIQUID ASSETS PORTFOLIO
PRIVATE INVESTMENT CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
LAP-AR-2
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Liquid
ROBERT H. Assets Portfolio covers a fiscal year during which
GRAHAM] reductions in short-term interest rates caused yields on
money market funds and other short-term instruments to
decline. Saying it favored a more expansive monetary policy
because the economy had not yet exhibited sustainable
growth, the Federal Reserve Board (the Fed) lowered the
federal funds rate twice during the fiscal year. In November
2002, it reduced the rate from 1.75% to 1.25%. In late June
2003, it reduced that rate to 1.00%, its lowest level since
1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose from 5.8% at the
start of the fiscal year to 6.1% at its close. Despite the growth in the
economy, companies generally were reluctant to add workers, relying on strong
productivity growth to support earnings. During the second quarter of 2003,
productivity in the nonfarm business sector rose at a robust 6.8% annualized
rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Private Investment Class was producing
competitive monthly yield and seven-day SEC Yield, as shown in the table. Had
the advisor and distributor not waived fees and/or reimbursed expenses,
performance would have been lower. Through a combination of short-term cash
management vehicles and selective use of a longer maturity schedule for higher
yields, the portfolio continued to provide attractive yields. The weighted
average maturity (WAM) remained in the 38- to 60-day range; at the close of the
reporting period, the WAM stood at 49 days. The portfolio will continue to
maintain a relatively short maturity structure to take advantage of any sudden
rise in market yields. At the close of the fiscal year, net assets of the
Private Investment Class stood at $978.4 million. Past performance cannot
guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
================================================================================
YIELDS AS OF 8/31/03*
MONTHLY YIELD SEVEN-DAY
SEC YIELD
Liquid Assets Portfolio 0.69% 0.69%
Private Investment Class
iMoneyNet Money Fund Averages--Trademark-- 0.71% 0.72%
First-Tier Institutions Only
iMoneyNet Money Fund Averages--Trademark-- 0.67% 0.67%
Total Institutions Only
================================================================================
(continued)
The Liquid Assets Portfolio invests solely in securities rated "first-tier"
as defined in Rule 2a-7 under the Investment Company Act of 1940. Its objective
is to provide as high a level of current income as is consistent with the
preservation of capital and liquidity. Using a modified barbell maturity
structure, portfolio management emphasizes superior credit quality in buying
money market securities such as commercial paper and selected repurchase
agreement securities. An investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although a money market fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money investing in the
fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
*The seven-day SEC Yield and monthly yield represent annualized results for the
period, net of fees and expenses, and exclude any realized capital gains or
losses. Yields will fluctuate. iMoneyNet, Inc. is an independent mutual fund
performance monitor. The iMoneyNet First-Tier Institutions Only category
consists of 276 funds that invest in any allowable 2a-7 investment, except
second-tier commercial paper. The Total Institutions Only category consists of
589 funds with a minimum initial investment of $100,000 or funds that are only
open to institutions.
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
COMMERCIAL PAPER-25.08%(a)
FINANCIAL-25.08%
ASSET BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-2.55%
Atlantis One Funding Corp. (Rabobank-ABS
Program Sponsor)(b)
(Acquired 05/22/03; Cost $41,406,228)
1.20% 09/10/03 $ 41,560 $ 41,547,532
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $223,474,677)
0.97% 10/01/03 224,139 223,957,821
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $59,925,562)
0.97% 11/12/03 60,172 60,055,266
- ------------------------------------------------------------------------------------
(Acquired 06/25/03; Cost $149,465,375)
0.91% 11/13/03 150,000 149,723,208
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $101,389,167)
0.98% 11/14/03 101,816 101,610,899
- ------------------------------------------------------------------------------------
Fleet Funding Corp. (General Electric Capital
Corp.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $99,659,528)
1.03% 10/09/03 100,000 99,891,278
- ------------------------------------------------------------------------------------
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $36,942,280)
1.04% 09/03/03 37,000 36,997,862
====================================================================================
713,783,866
====================================================================================
ASSET BACKED SECURITIES-CONSUMER
RECEIVABLES-0.35%
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $60,005,368)
1.03% 09/09/03 60,112 60,098,241
- ------------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 08/06/03; Cost $38,743,745)
1.06% 09/12/03 38,786 38,773,438
====================================================================================
98,871,679
====================================================================================
ASSET BACKED SECURITIES-FULLY BACKED-2.12%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 06/02/03; Cost $74,615,000)
1.20% 11/03/03 75,000 74,842,500
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $19,944,800)
1.08% 11/20/03 20,000 19,952,000
- ------------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $49,859,208)
1.09% 09/12/03 50,000 49,983,347
- ------------------------------------------------------------------------------------
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-FULLY BACKED-(CONTINUED)
Forrestal Funding Master Trust (Bank of
America-ABS Program Sponsor)(b)
(Acquired 08/22/03; Cost $225,292,170)
1.06% 09/22/03 $225,498 $ 225,358,567
- ------------------------------------------------------------------------------------
Old Slip Funding Corp. (Bank of New York-ABS
Program Sponsor)(b)
(Acquired 08/20/03; Cost $25,002,801)
1.08% 11/20/03 25,072 25,011,827
- ------------------------------------------------------------------------------------
Three Rivers Funding Corp. (Mellon Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,084
- ------------------------------------------------------------------------------------
Triple A One Funding Corp. (MBIA Insurance
Corp.-ABS Program Sponsor)(b)(c)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,083
- ------------------------------------------------------------------------------------
Tulip Funding Corp. (ABN AMRO Bank N.V.-ABS
Program Sponsor)(b)
(Acquired 08/06/03; Cost $99,917,556)
1.06% 09/03/03 100,000 99,994,111
====================================================================================
595,080,519
====================================================================================
ASSET BACKED SECURITIES-MULTI-PURPOSE-6.09%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 07/03/03; Cost $54,094,845)
1.04% 10/10/03 54,250 54,188,878
- ------------------------------------------------------------------------------------
CRC Funding, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/06/03; Cost $99,873,389)
1.06% 09/18/03 100,000 99,949,944
- ------------------------------------------------------------------------------------
Edison Asset Securitization, LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $72,103,070)
1.07% 10/07/03 72,359 72,281,576
- ------------------------------------------------------------------------------------
(Acquired 06/10/03; Cost $199,286,667)
1.07% 10/08/03 200,000 199,780,056
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $44,845,500)
1.03% 10/09/03 45,000 44,951,075
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $256,155,426)
1.03% 10/10/03 257,000 256,712,418
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $87,482,218)
1.19% 11/10/03 88,000 87,796,378
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $173,958,750)
1.19% 11/12/03 175,000 174,583,500
- ------------------------------------------------------------------------------------
(Acquired 07/03/03; Cost $27,315,857)
1.03% 12/17/03 27,447 27,362,974
- ------------------------------------------------------------------------------------
Falcon Asset Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,899,889)
1.06% 09/25/03 100,000 99,929,334
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $80,227,236)
1.06% 09/26/03 80,310 80,250,883
- ------------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Jupiter Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 08/21/03; Cost $99,900,361)
1.06% 09/24/03 $100,000 $ 99,932,597
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $134,864,850)
1.06% 09/30/03 135,000 134,884,725
- ------------------------------------------------------------------------------------
(Acquired 07/08/03; Cost $40,995,649)
1.04% 10/06/03 41,102 41,060,641
- ------------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $72,082,084)
1.04% 11/10/03 72,400 72,253,591
- ------------------------------------------------------------------------------------
Sheffield Receivables Corp. (Barclays Bank
PLC-NY Branch-ABS Program Sponsor)
1.06% 09/22/03 100,630 100,567,777
- ------------------------------------------------------------------------------------
Floating Rate, 1.07%(d) 01/20/04 60,000 60,000,000
====================================================================================
1,706,486,347
====================================================================================
ASSET BACKED SECURITIES-TRADE
RECEIVABLES-7.06%
Bills Securitization Ltd. (Germany) (Deutsche
Bank A.G.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $99,767,444)
0.91% 09/26/03 100,000 99,936,806
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $99,728,194)
1.03% 10/14/03 100,000 99,876,972
- ------------------------------------------------------------------------------------
Blue Ridge Asset Funding Corp. (Wachovia Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $149,863,083)
1.06% 09/26/03 150,000 149,889,583
- ------------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $99,721,000)
1.08% 11/21/03 100,000 99,757,000
- ------------------------------------------------------------------------------------
FCAR Owner Trust II-Series II (Ford Motor
Credit Co.-ABS Program Sponsor)(b)
(Acquired 06/03/03; Cost $99,691,611)
1.22% 09/02/03 100,000 99,996,611
- ------------------------------------------------------------------------------------
(Acquired 06/03/03; Cost $99,688,222)
1.22% 09/03/03 100,000 99,993,222
- ------------------------------------------------------------------------------------
(Acquired 06/12/03; Cost $141,189,245)
1.04% 09/17/03 141,586 141,520,556
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $96,725,248)
1.03% 10/17/03 97,000 96,872,337
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $99,733,000)
1.08% 11/17/03 100,000 99,769,000
- ------------------------------------------------------------------------------------
(Acquired 08/07/03, Cost $54,805,300)
1.08% 12/03/03 55,000 54,846,550
- ------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust (General Motors
Acceptance Corp.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $199,545,000)
0.91% 09/23/03 $200,000 $ 199,888,778
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $74,922,708)
1.06% 09/25/03 75,000 74,947,000
- ------------------------------------------------------------------------------------
(Acquired 04/16/03; Cost $39,755,000)
1.26% 10/08/03 40,000 39,948,200
- ------------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $124,606,250)
1.08% 11/18/03 125,000 124,707,500
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $199,279,333)
1.10% 12/02/03 200,000 199,442,889
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $99,630,278)
1.10% 12/03/03 100,000 99,715,833
- ------------------------------------------------------------------------------------
(Acquired 08/07/03; Cost $124,550,000)
1.08% 12/05/03 125,000 124,643,750
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $74,743,500)
1.08% 12/12/03 75,000 74,770,500
====================================================================================
1,980,523,087
====================================================================================
DIVERSIFIED BANKS-0.52%
Societe Generale North America (France)
1.10% 12/11/03 144,570 144,125,869
====================================================================================
INVESTMENT BANKING & BROKERAGE-2.80%
Bear, Stearns & Co. Inc.
1.04% 09/19/03 200,000 199,896,000
- ------------------------------------------------------------------------------------
1.01% 10/10/03 185,000 184,797,579
- ------------------------------------------------------------------------------------
Lehman Brothers Holdings Inc.(e)
1.23% 09/30/03 50,000 50,000,000
- ------------------------------------------------------------------------------------
1.23% 10/14/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 11/20/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 12/04/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.20% 01/23/04 50,000 50,000,000
====================================================================================
784,693,579
====================================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-1.14%
GE Capital International Funding Inc.-Series
A(b)
(Acquired 04/23/03; Cost $129,181,000)
1.26% 10/20/03 130,000 129,777,050
- ------------------------------------------------------------------------------------
General Electric Capital Services, Inc.
1.03% 10/08/03 41,000 40,956,597
- ------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
Morgan Stanley, Floating Rate(e)
1.14% 12/01/03 $150,000 $ 150,000,000
====================================================================================
320,733,647
====================================================================================
REGIONAL BANKS-2.45%
Banque et Caisse d'Epargne de l'Etat
(Luxembourg)
1.23% 11/03/03 100,000 99,784,750
- ------------------------------------------------------------------------------------
Danske Corp. (Denmark)
1.08% 12/23/03 25,187 25,101,616
- ------------------------------------------------------------------------------------
Stadshypotek Delaware, Inc. (Sweden)
1.03% 09/15/03 200,000 199,919,889
- ------------------------------------------------------------------------------------
1.03% 09/16/03 100,000 99,957,083
- ------------------------------------------------------------------------------------
0.91% 09/23/03 100,000 99,944,389
- ------------------------------------------------------------------------------------
1.07% 11/05/03 163,000 162,685,094
====================================================================================
687,392,821
====================================================================================
Total Financial 7,031,691,414
====================================================================================
Total Commercial Paper (Cost
$7,031,691,414) 7,031,691,414
====================================================================================
TIME DEPOSITS-15.75%
Danske Bank A/S-Cayman (Denmark)
1.02% 09/02/03 370,000 370,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank A.G.-Cayman (Germany)
1.00% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Fifth Third Bank-Cayman
1.01% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
ING Belgium S.A./N.V.-Brussels (Belgium)
1.13% 09/02/03 800,000 800,000,000
- ------------------------------------------------------------------------------------
M&I Marshall & Ilsley Bank-Milwaukee
1.00% 09/02/03 261,489 261,488,678
- ------------------------------------------------------------------------------------
Rabobank Nederland-London (Netherlands)
1.14% 09/02/03 585,000 585,000,000
- ------------------------------------------------------------------------------------
Royal Bank of Canada-Cayman (Canada)
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Societe Generale-Cayman (France)
1.02% 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
Suntrust Bank Atlanta-Cayman
0.97% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
U.S. Bank N.A.-Cayman
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-Cayman (Germany)
1.13% 09/02/03 150,000 150,000,000
====================================================================================
Total Time Deposits (Cost $4,416,488,678) 4,416,488,678
====================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT-13.03%
Barclays Bank PLC (United Kingdom)
1.03% 10/14/03 $200,000 $ 200,000,000
- ------------------------------------------------------------------------------------
BNP Paribas (France)
1.39% 08/05/04 75,000 75,027,868
- ------------------------------------------------------------------------------------
Citibank N.A.
1.07% 11/03/03 100,000 99,999,854
- ------------------------------------------------------------------------------------
1.08% 11/05/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.08% 11/06/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Credit Agricole Indosuez (France)
1.03% 09/11/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.03% 10/03/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.04% 10/09/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
Danske Bank A/S (Denmark)
1.36% 01/28/04 150,000 149,998,469
- ------------------------------------------------------------------------------------
Deutsche Bank A.G. (Germany)
1.03% 10/22/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
Dexia Bank S.A.-New York Branch (Belgium)(e)
1.03% 06/09/04 200,000 199,968,934
- ------------------------------------------------------------------------------------
HBOS Treasury Services PLC (United Kingdom)
1.08% 09/12/03 230,000 230,000,000
- ------------------------------------------------------------------------------------
1.03% 10/17/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
Lloyd's TSB Bank PLC-New York Branch (United
Kingdom)
1.21% 12/11/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia)
1.04% 07/23/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
1.26% 08/24/04 229,000 229,000,000
- ------------------------------------------------------------------------------------
Rabobank Nederland (Netherlands)
1.21% 10/31/03 150,000 150,060,651
- ------------------------------------------------------------------------------------
1.19% 08/04/04 75,000 74,993,044
- ------------------------------------------------------------------------------------
Societe Generale (France)
1.25% 10/16/03 100,000 99,997,510
- ------------------------------------------------------------------------------------
1.16% 08/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Svenska Handelsbanken A.B. (Sweden)
1.61% 10/08/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 03/17/04 70,000 69,996,198
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A.
1.06% 09/22/03 100,000 100,000,000
====================================================================================
Total Certificates of Deposit (Cost
$3,654,042,528) 3,654,042,528
====================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-8.38%
FEDERAL FARM CREDIT BANK-0.27%
Bonds,
1.80% 09/03/03 $ 75,000 $ 75,000,000
====================================================================================
FEDERAL HOME LOAN BANK-3.09%
Unsec. Bonds,
2.50% 11/14/03 61,800 61,877,787
- ------------------------------------------------------------------------------------
1.20% 04/08/04 200,965 200,959,245
- ------------------------------------------------------------------------------------
1.42% 04/21/04 93,000 93,000,000
- ------------------------------------------------------------------------------------
1.38% 05/11/04 145,000 145,000,000
- ------------------------------------------------------------------------------------
1.12% 07/12/04 235,000 235,000,000
- ------------------------------------------------------------------------------------
1.22% 08/04/04 100,000 99,984,855
- ------------------------------------------------------------------------------------
1.28% 09/08/04 30,000 30,000,000
====================================================================================
865,821,887
====================================================================================
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC)-1.52%
Reference Bills,(a)
1.04% 09/11/03 30,000 29,991,333
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.04% 10/15/03 47,000 46,940,258
- ------------------------------------------------------------------------------------
1.06% 10/31/03 250,000 249,558,333
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
3.25% 01/15/04 100,000 100,629,476
====================================================================================
427,119,400
====================================================================================
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA)-3.13%
Pass Thru Ctfs.,
1.09% 12/01/03 98,615 98,346,465
- ------------------------------------------------------------------------------------
1.10% 12/01/03 230,479 229,845,182
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.23% 09/30/03 250,000 249,752,292
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
5.63% 05/14/04 50,000 51,482,370
- ------------------------------------------------------------------------------------
Unsec. Notes,
4.75% 11/14/03 75,000 75,525,258
- ------------------------------------------------------------------------------------
1.08% 12/31/03 100,000 99,637,000
- ------------------------------------------------------------------------------------
1.18% 07/23/04 75,000 74,198,583
====================================================================================
878,787,150
====================================================================================
OVERSEAS PRIVATE INVESTMENT CORP.-0.00%
Floating Rate Notes,(f)(g)
1.11% 01/15/09 494 494,175
====================================================================================
</Table>
F-7
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION-0.37%
Global Notes,
5.00% 06/30/04 $100,000 $ 103,293,929
====================================================================================
Total U.S. Government Agency Securities
(Cost $2,350,516,541) 2,350,516,541
====================================================================================
PROMISSORY NOTES-4.91%
Goldman Sachs Group, Inc. (The)(b)(h)
(Acquired 08/04/03; Cost $250,000,000)
1.26% 03/01/04 250,000 250,000,000
- ------------------------------------------------------------------------------------
(Acquired 07/25/03; Cost $120,000,000)
1.23% 06/21/04 120,000 120,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/06/03; Cost $125,000,000)
1.32%(e) 09/03/03 125,000 125,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/21/03; Cost $100,000,000)
1.26%(e) 09/17/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/27/03; Cost $140,000,000)
1.19%(e) 09/29/03 140,000 140,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/02/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 04/09/03; Cost $130,000,000)
1.20%(e) 10/06/03 130,000 130,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/06/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $211,000,000)
1.33%(e) 10/07/03 211,000 211,000,000
====================================================================================
Total Promissory Notes (Cost
$1,376,000,000) 1,376,000,000
====================================================================================
VARIABLE RATE DEMAND NOTES-4.74%(j)
CORPORATE GUARANTEED-0.04%
Mississippi (State of) Business Finance Corp.
(General Electric Plastics Project);
Taxable Series 1998 IDR(b)(d)(f)(i)
(Acquired 01/25/02; Cost $12,000,000)
1.08% 02/01/23 12,000 12,000,000
====================================================================================
INSURED-2.20%(c)(f)(g)
Alaska (State of) Housing Finance Corp.;
Taxable Home Mortgage Series 2002 B RB
1.06% 12/01/36 8,100 8,100,000
- ------------------------------------------------------------------------------------
California (State of) Housing Finance Agency;
Taxable Home Mortgage Series 1998 RB
Series M, 1.03% 08/01/19 10,585 10,585,000
- ------------------------------------------------------------------------------------
Series M, 1.03% 08/01/23 28,530 28,530,000
- ------------------------------------------------------------------------------------
Series T, 1.05% 08/01/29 13,980 13,980,000
- ------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
INSURED-(CONTINUED)
Connecticut (State of) Housing Financing
Authority (Housing Mortgage Finance
Program); RB
Taxable Series 1998 F-2, 1.11% 11/15/16 $ 25,450 $ 25,450,000
- ------------------------------------------------------------------------------------
Taxable Series 2002 A-5, 1.10% 05/15/33 19,365 19,365,000
- ------------------------------------------------------------------------------------
Florida (State of) Baptist Health System of
South Florida; RB
Taxable Series 1995 A, 1.10% 05/15/17 11,100 11,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1995 B, 1.10% 05/15/25 23,900 23,900,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Agency;
Taxable Housing Series 1993 A RB
1.05% 01/01/34 31,200 31,200,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.;
Taxable Housing Series 2000 A RB
1.05% 01/01/45 59,580 59,580,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.
(Affordable Housing); Taxable Series 2002 A
RB
1.10% 01/01/47 39,320 39,320,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Student Loan RB
Taxable Series 1998 B, 1.11% 09/01/32 12,870 12,870,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-I, 1.11% 09/01/34 7,100 7,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-II, 1.11% 09/01/34 2,000 2,000,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-III, 1.11% 09/01/34 3,350 3,350,000
- ------------------------------------------------------------------------------------
Loanstar Asset Partners II; Student Loan
RB(b)
(Acquired 11/14/02; Cost $25,000,000)
Series 2001 Tranche 1 1.12% 09/01/36 25,000 25,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $60,000,000)
Series 2002 Tranche 1 1.12% 08/01/37 60,000 60,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $40,000,000)
Series 2002 Tranche 2 1.12% 08/01/37 40,000 40,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 3 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 4 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
Michigan (State of) Housing Development
Authority; Taxable Series 2000 C RB
1.06% 12/01/20 33,005 33,005,000
- ------------------------------------------------------------------------------------
Minnesota (State of) Fairview, Minnesota
Hospital & Health Care Services;
Taxable Series 1994 A ACES
1.10% 11/01/15 4,400 4,400,000
- ------------------------------------------------------------------------------------
Montgomery (City of), Alabama BMC Special
Care Facilities Financing Authority
(Baptist Health); Taxable Series 1998 C
Floating Rate RB
1.12% 11/15/29 19,300 19,300,000
- ------------------------------------------------------------------------------------
New Orleans (City of), Louisiana; Taxable
Pension Series 2000 RB
1.10% 09/01/30 40,000 40,000,000
====================================================================================
618,135,000
====================================================================================
</Table>
F-9
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-2.50%(f)(k)
Advocare of South Carolina; Series 1997 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 03/28/02; Cost $6,100,000)
1.11% 06/01/17 $ 6,100 $ 6,100,000
- ------------------------------------------------------------------------------------
B. Braun Medical Inc.; Series 2000 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.13% 02/01/15 30,479 30,479,000
- ------------------------------------------------------------------------------------
Baltimore (County of), Maryland (Oak Crest
Village Inc. Project); Series 1999 B RB
(LOC-Wachovia Bank N.A.)(g)
1.12% 01/01/29 1,140 1,140,000
- ------------------------------------------------------------------------------------
Barrington Development Funding LLC; Series
2002 A Notes (LOC-Bank One N.A.)(g)
1.13% 12/01/32 6,005 6,005,000
- ------------------------------------------------------------------------------------
Belk, Inc.; Series 1998 Bonds (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $91,030,000)
1.13% 07/01/08 91,030 91,030,000
- ------------------------------------------------------------------------------------
Brosis Finance, LLC; Series 1999 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.11% 09/01/19 18,400 18,400,000
- ------------------------------------------------------------------------------------
Capital One Funding Corp.; Floating Rate
Notes (LOC-Bank One N.A.)(g)
1.13% 12/02/19 5,024 5,024,000
- ------------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $9,064,000)
1.13%(b) 07/01/20 9,064 9,064,000
- ------------------------------------------------------------------------------------
1.13% 09/01/20 470 470,000
- ------------------------------------------------------------------------------------
1.13% 05/01/26 7,500 7,500,000
- ------------------------------------------------------------------------------------
Carlton Arms of Ocala; Series 2002 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $1,100,000)
1.11% 09/01/34 1,100 1,100,000
- ------------------------------------------------------------------------------------
Chatham Capital Corp.; Series 2000 Floating
Rate Notes (LOC-Bank One N.A.)(g)
1.13% 07/01/20 9,149 9,149,000
- ------------------------------------------------------------------------------------
Dome Corp.; Floating Rate Notes (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 05/31/02; Cost $10,435,000)
1.13% 08/31/16 10,435 10,435,000
- ------------------------------------------------------------------------------------
Georgia (State of) Brooks Development
Authority (Langboard Inc. Project);
Series 2003 IDR (LOC-Bank of America
N.A.)(g)
1.11% 04/01/18 10,000 10,000,000
- ------------------------------------------------------------------------------------
Gulf States Paper Corp.; Series 1998 Unsec.
Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 11/01/18 25,000 25,000,000
- ------------------------------------------------------------------------------------
Health Insurance Plan of Greater New York;
Series 1990 B-1 ACES
(LOC-JP Morgan Chase & Co.)(g)
1.08% 07/01/16 2,900 2,900,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Taxable Student Loan Series
1997 B RB
(LOC-Bank One Chicago N.A.)(g)
1.11% 09/01/31 7,700 7,700,000
- ------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
LP Pinewood SPV; Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 02/01/18 $ 15,300 $ 15,300,000
- ------------------------------------------------------------------------------------
Michigan (State of) Botsford General
Hospital; Series 1997 A RB
(LOC-Michigan National Bank)(e)
1.10% 02/15/27 10,300 10,300,000
- ------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Telepak Inc. Project); Taxable Series 2002
IDR
(LOC-Wachovia Bank N.A.) (Acquired
05/23/02; Cost $40,000,000)(b)(g)
1.11% 05/01/17 40,000 40,000,000
- ------------------------------------------------------------------------------------
New York (City of) Housing Development Corp.
(Chelsea Centro); Series 2003 RB
(LOC-Bayerische Landesbank)(g)
1.09% 06/01/33 8,300 8,300,000
- ------------------------------------------------------------------------------------
New York (State of) Housing Finance Agency;
Taxable Service Contract Series 2003 F RB
(LOC-State Street Bank & Trust Co.)(g)
1.09% 09/15/07 10,000 10,000,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Charlotte; Series 2002 A RB
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/14 13,800 13,800,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Raleigh; Series 2002 A RB
(LOC-Bank of America N.A.)(g)
1.16% 06/01/18 1,800 1,800,000
- ------------------------------------------------------------------------------------
Ohio (State of) (Fayette County Memorial
Hospital); Series 2003 RB
(LOC-National City Bank)(g)
1.10% 08/01/23 2,400 2,400,000
- ------------------------------------------------------------------------------------
Rockwood Quarry LLC; Notes (LOC-Fifth Third
Bank)(g)
1.10% 12/01/22 5,000 5,000,000
- ------------------------------------------------------------------------------------
Sabine River Authority of Texas (TXU Energy
Co. LLC Project); Series 2001 E PCR
(LOC-Chase Manhattan Bank)(g)
1.11% 12/01/36 1,587 1,587,142
- ------------------------------------------------------------------------------------
San Jose (City of), California Redevelopment
Agency (Merged Area); RB
(LOC-Bank of New York)(g)
Series 2002 G, 1.10% 08/01/29 8,000 8,000,000
- ------------------------------------------------------------------------------------
Series 2002 H, 1.10% 08/01/29 17,226 17,226,000
- ------------------------------------------------------------------------------------
Shepherd Capital LLC;
Floating Rate Series 2003 B Notes
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/53 15,000 15,000,000
- ------------------------------------------------------------------------------------
Floating Rate Series 96A Notes
(LOC-Standard Federal Bank)(g)
1.18% 10/01/46 1,250 1,250,000
- ------------------------------------------------------------------------------------
Floating Rate Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 11/01/52 10,000 10,000,000
- ------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
Southeastern Retirement Association, Inc.;
Series 1999 Bonds (LOC-Wachovia Bank
N.A.)(b)(g)
(Acquired 05/16/02; Cost $60,000)
1.13% 08/01/19 $ 60 $ 60,000
- ------------------------------------------------------------------------------------
Texas (State of) Brazos River Authority (TXU
Energy Co. LLC Project); Series 2001 I PCR
(LOC-Wachovia Bank N.A.)(g)
1.11% 12/01/36 62,920 62,920,000
- ------------------------------------------------------------------------------------
TP Racing L.L.L.P.; Floating Rate Series 2000
Notes
(LOC-Bank One Trust Co. N.A.)(g)
1.13% 06/01/30 29,140 29,140,000
- ------------------------------------------------------------------------------------
Union (County of), Arkansas (Del-Tin Fiber
LLC Project); Series 1998 IDR
(LOC-Bank One Chicago N.A.)(g)
1.13% 10/01/27 34,400 34,400,000
- ------------------------------------------------------------------------------------
University of Virginia Real Estate
Foundation; Series 2001 RB (LOC-Wachovia
Bank N.A.)
(Acquired 07/31/03; Cost $48,145,000)(b)(g)
1.13% 07/01/26 48,145 48,145,000
- ------------------------------------------------------------------------------------
Virginia (State of) Richmond Redevelopment &
Housing Authority Project (Old Manchester);
Taxable Series 1995 B RB (LOC-Wachovia Bank
N.A.)(d)
1.15% 12/01/25 1,590 1,590,000
- ------------------------------------------------------------------------------------
Wake Forest University; Floating Rate Series
1997 Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 07/01/17 6,900 6,900,000
- ------------------------------------------------------------------------------------
Wisconsin (State of) Madison Community
Development Authority (Overture Development
Corp.); Series 2001 RB (LOC-Bank One
Milwaukee N.A.; U.S. Bancorp; M&I Marshall
& Ilsley; Northern Trust Co.)(g)
1.13% 06/01/36 115,000 115,000,000
====================================================================================
699,614,142
====================================================================================
Total Variable Rate Demand Notes (Cost
$1,329,749,142) 1,329,749,142
====================================================================================
ASSET BACKED NOTES-4.08%
STRUCTURED-2.60%
Carmax Auto Owner Trust-Series 2003-1, Class
A-1
1.24% 06/15/04 40,136 40,136,423
- ------------------------------------------------------------------------------------
Granite Mortgages PLC (United Kingdom)-Series
2003-1, Class 1A1, Floating Rate
Bonds(b)(d)
(Acquired 01/22/03; Cost $50,000,000)
1.10% 01/20/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Holmes Financing (No. 6) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.11% 10/15/03 72,500 72,500,000
- ------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STRUCTURED-(CONTINUED)
Holmes Financing (No. 7) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.07% 04/15/04 $100,000 $ 100,000,000
- ------------------------------------------------------------------------------------
Honda Auto Receivables 2003-2 Owner
Trust-Class A-1 Notes
1.23% 06/11/04 73,596 73,596,305
- ------------------------------------------------------------------------------------
Household Automotive Trust-Series 2003-1,
Class A-1(c)
1.24% 05/17/04 36,773 36,772,528
- ------------------------------------------------------------------------------------
IKON Receivables Funding LLC Lease-Backed
Notes-Series 2003-1, Class A-1(c)
1.31% 05/17/04 48,644 48,643,911
- ------------------------------------------------------------------------------------
Permanent Financing (No. 2) PLC (United
Kingdom) Series 1, Class A, Floating Rate
Bonds (Halifax PLC-ABS Program Sponsor)
(Acquired 02/26/03; Cost
$105,000,000)(b)(d)
1.07% 03/10/04 105,000 105,000,000
- ------------------------------------------------------------------------------------
Residential Mortgage Securities (United
Kingdom)-Series 14A, Class A1, Floating
Rate Bonds (Acquired 03/17/03; Cost
$55,826,175)(b)
1.14% 03/10/04 55,826 55,826,175
- ------------------------------------------------------------------------------------
Triad Automobile Receivables Trust-Series
2003-A, Class A-1(c)
1.25% 04/12/04 34,118 34,117,936
- ------------------------------------------------------------------------------------
WFS Financial 2003-2 Owner Trust, Class A-1
1.26% 06/14/04 99,056 99,055,851
- ------------------------------------------------------------------------------------
World Omni Auto Receivables Trust-Series
2003-A, Class A-1
1.30% 03/15/04 12,738 12,737,635
====================================================================================
728,386,764
====================================================================================
STRUCTURED INVESTMENT VEHICLES/SECURITY
ARBITRAGE-1.48%
Beta Finance Inc., Floating Rate MTN
(Citibank International PLC-ABS Program
Sponsor)(b)(e)
(Acquired 10/02/02; Cost $75,000,000)
1.12% 10/07/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
(Acquired 10/03/02; Cost $99,995,000)
1.11% 10/16/03 100,000 99,999,384
- ------------------------------------------------------------------------------------
(Acquired 05/19/03; Cost $89,111,606)
1.24% 04/30/04 89,000 89,078,514
- ------------------------------------------------------------------------------------
(Acquired 05/08/03; Cost $50,000,000)
1.06% 05/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 06/09/03; Cost $99,990,000)
1.06% 06/16/04 100,000 99,992,104
====================================================================================
414,070,002
====================================================================================
Total Asset Backed Notes (Cost
$1,142,456,766) 1,142,456,766
====================================================================================
</Table>
F-13
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
MASTER NOTE AGREEMENTS-2.76%(l)
Merrill Lynch Mortgage Capital, Inc.(b)(m)
(Acquired 08/25/03; Cost $220,000,000)
1.27% 02/23/04 $220,000 $ 220,000,000
- ------------------------------------------------------------------------------------
Morgan Stanley(b)(n)
(Acquired 03/17/03; Cost $555,000,000)
1.20% 09/15/03 555,000 555,000,000
====================================================================================
Total Master Note Agreements (Cost
$775,000,000) 775,000,000
====================================================================================
MEDIUM TERM NOTES-2.54%
Associates Corp. of North America, Sr. Global
MTN,
5.80% 04/20/04 49,000 50,443,106
- ------------------------------------------------------------------------------------
General Electric Capital Corp.-Series A
Floating Rate Global MTN, 1.33%(e) 10/22/03 40,000 40,005,870
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.19%(d) 09/08/04 332,900 332,900,000
- ------------------------------------------------------------------------------------
MetLife Global Funding(d)
(Acquired 08/20/03; Cost $90,000,000)
Floating Rate Global MTN, 1.12%(b) 09/15/04 90,000 90,000,000
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.12% 09/27/04 99,300 99,300,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia),
Euro Floating Rate MTN,(o)
1.20% 03/12/04 50,000 50,008,379
- ------------------------------------------------------------------------------------
1.13% 05/02/04 50,000 50,013,519
====================================================================================
Total Medium Term Notes (Cost
$712,670,874) 712,670,874
====================================================================================
FUNDING AGREEMENTS-1.66%
New York Life Insurance Co.(b)(d)(h)
(Acquired 04/03/03; Cost $265,000,000)
1.18% 04/07/04 265,000 265,000,000
- ------------------------------------------------------------------------------------
Travelers Insurance Co.(b)(h)(o)
(Acquired 08/27/03; Cost $100,000,000)
1.24% 11/25/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $100,000,000)
1.24% 08/27/04 100,000 100,000,000
====================================================================================
Total Funding Agreements (Cost
$465,000,000) 465,000,000
====================================================================================
BANK NOTES-1.52%
BNP Paribas-New York Branch (France),
Floating Rate Notes,(e)
1.04% 06/07/04 200,000 199,968,979
- ------------------------------------------------------------------------------------
National City Bank of Indiana, Floating Rate
Notes,(e)
1.04% 06/14/04 100,000 99,984,285
- ------------------------------------------------------------------------------------
Wachovia Bank, N.A., Floating Rate Notes,(o)
1.19% 06/24/04 25,000 25,044,996
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A., Floating Rate
Notes,(e)
1.04% 05/10/04 100,000 100,000,000
====================================================================================
Total Bank Notes (Cost $424,998,260) 424,998,260
====================================================================================
</Table>
F-14
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
PUTTABLE RESET NOTES-1.01%
Merck & Co., Inc.; PURS Notes (Acquired
02/18/03; Cost $103,194,800)(b)
4.49% 02/22/04 $100,000 $ 101,531,392
- ------------------------------------------------------------------------------------
Wal-Mart Stores, Inc.; Unsec. Unsub. PURS
Notes
5.20% 06/01/04 175,000 180,536,131
====================================================================================
Total Puttable Reset Notes (Cost
$282,067,523) 282,067,523
====================================================================================
U.S. TREASURY NOTES-0.36%
3.00% 01/31/04 100,000 100,717,649
====================================================================================
Total U.S. Treasury Notes (Cost
$100,717,649) 100,717,649
====================================================================================
Total Investments Excluding Repurchase
Agreements (Cost $24,061,399,375) 24,061,399,375
====================================================================================
REPURCHASE AGREEMENTS-15.33%
ABN AMRO Bank N.V.-New York Branch
(Netherlands)
1.05%(p) 09/02/03 37,000 37,000,000
- ------------------------------------------------------------------------------------
Banc of America Securities LLC
1.05%(q) 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
1.08%(r) 09/02/03 102,000 102,000,000
- ------------------------------------------------------------------------------------
Banc One Capital Markets Group
1.06%(s) 09/02/03 2,116 2,116,069
- ------------------------------------------------------------------------------------
Bank of Nova Scotia (The)-New York Branch
(Canada)
1.05%(t) 09/02/03 252,501 252,501,380
- ------------------------------------------------------------------------------------
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.05%(u) 09/02/03 297,003 297,002,850
- ------------------------------------------------------------------------------------
BNP Paribas Securities Corp.-New York Branch
(France)
1.05%(v) 09/02/03 307,000 307,000,000
- ------------------------------------------------------------------------------------
Citigroup Global Markets Inc.
1.05%(w) 09/02/03 287,000 287,000,000
- ------------------------------------------------------------------------------------
Credit Suisse First Boston LLC-New York
Branch (Switzerland)
1.16%(x) 07/09/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank Securities Inc.-New York Branch
(Germany)
1.06%(y) 09/02/03 224,536 224,536,185
- ------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(z) 09/02/03 52,000 52,000,000
- ------------------------------------------------------------------------------------
JP Morgan Securities Inc.
1.07%(aa) 09/02/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Lehman Brothers Inc.
1.00%(ab) 09/02/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
UBS Warburg LLC-New York Branch (Switzerland)
1.01%(ac) 09/02/03 372,163 372,163,170
- ------------------------------------------------------------------------------------
1.05%(ad) 09/02/03 425,000 425,000,000
- ------------------------------------------------------------------------------------
1.05%(ae) 09/02/03 475,814 475,814,111
- ------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-(CONTINUED)
Wachovia Securities, Inc.
1.03%(af) 09/02/03 $275,616 $ 275,616,254
- ------------------------------------------------------------------------------------
1.08%(ag) 09/02/03 62,000 62,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-New York Branch (Germany)
1.13%(ah) 09/02/03 127,000 127,000,000
====================================================================================
Total Repurchase Agreements (Cost
$4,298,750,019) 4,298,750,019
____________________________________________________________________________________
====================================================================================
TOTAL INVESTMENTS (Cost
$28,360,149,394)(ai)-101.15% 28,360,149,394
____________________________________________________________________________________
====================================================================================
OTHER ASSETS LESS LIABILITIES-(1.15)% (323,748,205)
____________________________________________________________________________________
====================================================================================
NET ASSETS-100.00% $28,036,401,189
____________________________________________________________________________________
====================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
ACES - Automatically Convertible Extendable Security
Disc. - Discounted
IDR - Industrial Revenue Bonds
LOC - Letter of Credit
MTN - Medium Term Notes
PCR - Pollution Control Revenue Bonds
PURS - Puttable Reset Securities
RB - Revenue Bonds
Sr. - Senior
Unsec. - Unsecured
Unsub. - Unsubordinated
</Table>
Notes to Schedule of Investments
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$8,939,316,340, which represented 31.88% of the Fund's net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
(c) Principal and interest payments are secured by bond insurance provided by
one of the following companies: AMBAC Assurance Corp., MBIA Insurance Corp.
or Financial Security Assurance.
(d) Interest rates are redetermined monthly. Rate shown is the rate in effect on
08/31/03.
(e) Interest rates are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) Demand security; payable upon demand by the Fund with usually no more than
seven calendar day's notice.
(g) Interest rates are redetermined weekly. Rate shown is the rate in effect on
08/31/03.
(h) Security considered to be illiquid. The aggregate market value of these
securities at 08/31/03 was $1,841,000,000 which represents 6.57% of the
Fund's net assets.
(i) Principal and interest payments are guaranteed by the corporate guarantor.
(j) Interest on these securities is taxable income to the Fund.
(k) Principal and interest payments are guaranteed by the letter of credit
agreement.
(l) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-16
(m) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(n) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(o) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/03.
(p) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,167. Collateralized by $254,927,000 U.S. Government obligations, 0%
to 4.00% due 11/05/03 to 09/02/08 with an aggregate market value at 08/31/03
of $255,000,220.
(q) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $499,105,000 U.S. Government obligations, 0%
to 9.70% due 10/03/03 to 04/05/19 with an aggregate market value at 08/31/03
of $510,000,486.
(r) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,030,000. Collateralized by $252,007,493 U.S. Government obligations,
5.50% to 6.00% due 12/01/32 to 06/01/33 with an aggregate market value at
08/31/03 of $255,000,000.
(s) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$300,035,333. Collateralized by $294,930,000 U.S. Government obligations, 0%
to 7.70% due 09/15/03 to 04/09/09 with an aggregate market value at 08/31/03
of $306,001,703.
(t) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $494,322,000 U.S. Government obligations, 0%
to 7.25% due 12/15/03 to 05/15/30 with an aggregate market value at 08/31/03
of $510,000,259.
(u) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$660,079,850. Collateralized by $664,688,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 03/15/12 with an aggregate market value at 08/31/03
of $673,203,742.
(v) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $511,522,000 U.S. Government obligations, 0%
to 0% due 10/16/03 to 12/31/03 with an aggregate market value at 08/31/03 of
$510,000,869.
(w) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $493,678,000 U.S. Government obligations, 0%
to 6.00% due 12/15/03 to 11/11/16 with an aggregate market value at 08/31/03
of $510,000,421.
(x) Term repurchase agreement entered into 08/29/03; however either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $526,959,000 U.S. Treasury
obligations, 0% to 8.13% due 11/15/15 to 08/15/21 with an aggregate market
value at 08/31/03 of $306,000,504.
(y) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,889. Collateralized by $479,866,000 U.S. Government obligations,
1.88% to 6.25% due 01/15/05 to 01/05/27 with an aggregate market value at
08/31/03 of $510,000,195.
(z) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(aa)Repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,722. Collateralized by $252,112,237 U.S. Government obligations, 0%
to 0% due 05/01/23 to 08/01/33 with a market value at 08/31/03 of
$255,000,797.
(ab)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,055,556. Collateralized by $407,091,000 U.S. Treasury obligations,
6.00% to 8.88% due 02/15/19 to 05/15/30 with an aggregate market value at
08/31/03 of $510,005,167.
(ac)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$900,101,000. Collateralized by $705,327,000 U.S. Treasury obligations,
3.38% to 8.88% due 01/15/07 to 08/15/17 with an aggregate market value at
08/31/03 of $918,002,342.
(ad)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $496,282,742 U.S. Government obligations,
4.50% to 8.00% due 10/01/08 to 07/01/33 with an aggregate market value at
08/31/03 of $510,001,793.
(ae)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$850,099,167. Collateralized by $1,792,017,000 U.S. Government obligations,
0% to 9.38% due 10/16/03 to 10/15/22 with an aggregate market value at
08/31/03 of $867,004,984.
F-17
(af)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(ag)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(ah)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$200,025,000. Collateralized by $196,970,652 U.S. Government obligations,
4.51% to 7.24% due 11/01/10 to 10/01/32 with an aggregate market value at
08/31/03 of $204,000,000.
(ai)Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-18
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements at value
(amortized cost) $24,061,399,375
- -----------------------------------------------------------------------------
Repurchase agreements 4,298,750,019
- -----------------------------------------------------------------------------
Interest receivable 30,772,488
- -----------------------------------------------------------------------------
Investment for deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Other assets 237,318
=============================================================================
Total assets 28,391,503,877
_____________________________________________________________________________
=============================================================================
LIABILITIES:
Payables for:
Investments purchased 329,391,647
- -----------------------------------------------------------------------------
Dividends 22,694,969
- -----------------------------------------------------------------------------
Deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Accrued distribution fees 868,780
- -----------------------------------------------------------------------------
Accrued directors' fees 690,790
- -----------------------------------------------------------------------------
Accrued transfer agent fees 479,586
- -----------------------------------------------------------------------------
Accrued operating expenses 632,239
=============================================================================
Total liabilities 355,102,688
=============================================================================
Net assets applicable to shares outstanding $28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $28,033,722,732
- -----------------------------------------------------------------------------
Undistributed net investment income (502)
- -----------------------------------------------------------------------------
Undistributed net realized gain from investment securities 2,678,959
=============================================================================
$28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS:
Institutional Class $21,240,698,662
_____________________________________________________________________________
=============================================================================
Private Investment Class $ 978,383,482
_____________________________________________________________________________
=============================================================================
Personal Investment Class $ 47,265,983
_____________________________________________________________________________
=============================================================================
Cash Management Class $ 4,473,591,100
_____________________________________________________________________________
=============================================================================
Reserve Class $ 57,082,236
_____________________________________________________________________________
=============================================================================
Resource Class $ 1,239,379,726
_____________________________________________________________________________
=============================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 21,238,605,055
_____________________________________________________________________________
=============================================================================
Private Investment Class 978,299,714
_____________________________________________________________________________
=============================================================================
Personal Investment Class 47,264,708
_____________________________________________________________________________
=============================================================================
Cash Management 4,473,177,698
_____________________________________________________________________________
=============================================================================
Reserve Class 57,081,678
_____________________________________________________________________________
=============================================================================
Resource Class 1,239,293,377
_____________________________________________________________________________
=============================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
_____________________________________________________________________________
=============================================================================
</Table>
See Notes to Financial Statements.
F-19
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $486,848,043
==========================================================================
EXPENSES:
Advisory fees 50,444,589
- --------------------------------------------------------------------------
Administrative services fees 1,478,810
- --------------------------------------------------------------------------
Custodian fees 535,640
- --------------------------------------------------------------------------
Distribution fees:
Private Investment Class 4,886,422
- --------------------------------------------------------------------------
Personal Investment Class 264,903
- --------------------------------------------------------------------------
Cash Management Class 5,831,375
- --------------------------------------------------------------------------
Reserve Class 537,761
- --------------------------------------------------------------------------
Resource Class 2,575,170
- --------------------------------------------------------------------------
Directors' fees 605,192
- --------------------------------------------------------------------------
Transfer agent fees 5,162,855
- --------------------------------------------------------------------------
Other 143,818
- --------------------------------------------------------------------------
Filing fee refund (1,251,673)
==========================================================================
Total expenses 71,214,862
==========================================================================
Less: Fees waived (21,804,747)
==========================================================================
Net expenses 49,410,115
==========================================================================
Net investment income 437,437,928
==========================================================================
Net realized gain from investment securities 222,356
==========================================================================
Net increase in net assets resulting from operations $437,660,284
__________________________________________________________________________
==========================================================================
</Table>
See Notes to Financial Statements.
F-20
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- -----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 437,437,928 $ 871,551,545
- -----------------------------------------------------------------------------------------------
Net realized gain from investment securities 222,356 929,565
===============================================================================================
Net increase in net assets resulting from operations 437,660,284 872,481,110
===============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (339,841,789) (699,238,125)
- -----------------------------------------------------------------------------------------------
Private Investment Class (9,944,836) (23,638,000)
- -----------------------------------------------------------------------------------------------
Personal Investment Class (251,405) (309,171)
- -----------------------------------------------------------------------------------------------
Cash Management Class (72,636,877) (117,705,827)
- -----------------------------------------------------------------------------------------------
Reserve Class (240,042) (285,587)
- -----------------------------------------------------------------------------------------------
Resource Class (14,522,979) (30,374,835)
===============================================================================================
Decrease in net assets resulting from distributions (437,437,928) (871,551,545)
===============================================================================================
Share transactions-net:
Institutional Class (7,882,172,341) 2,349,669,794
- -----------------------------------------------------------------------------------------------
Private Investment Class 169,919,767 (481,056,789)
- -----------------------------------------------------------------------------------------------
Personal Investment Class 16,988,324 18,347,438
- -----------------------------------------------------------------------------------------------
Cash Management Class (1,286,520,760) 260,027,687
- -----------------------------------------------------------------------------------------------
Reserve Class 5,802,855 46,109,690
- -----------------------------------------------------------------------------------------------
Resource Class (306,784,517) 276,712,399
===============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (9,282,766,672) 2,469,810,219
===============================================================================================
Net increase (decrease) in net assets (9,282,544,316) 2,470,739,784
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS:
Beginning of year 37,318,945,505 34,848,205,721
===============================================================================================
End of year $28,036,401,189 $37,318,945,505
_______________________________________________________________________________________________
===============================================================================================
</Table>
See Notes to Financial Statements.
F-21
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Liquid Assets Portfolio (the "Fund") is an investment portfolio of
Short-Term Investments Co. (the "Company"). The Company is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital and liquidity. Each
company listed in the Schedule of Investments is organized in the United States
unless otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date. The Fund allocates realized and unrealized capital gains
and losses to a class based on the relative net assets of each class. The
Fund allocates income to a class based on the relative value of the settled
shares of each class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to
F-22
federal income taxes on otherwise taxable income (including net realized
capital gain) which is distributed to shareholders. Therefore, no provision
for federal income taxes is recorded in the financial statements. Any
capital loss carryforwards listed are reduced for limitations, if any, to
the extent required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets of the Fund. AIM has voluntarily agreed to limit
Total Fund operating expenses (excluding Rule 12b-1 fees, interest, taxes, fund
merger and reorganization expenses, extraordinary items, including other items
designated as such by the Board of Directors, and increases in expenses due to
expense offset arrangements, if any) to 0.12%. Voluntary expense limitations may
be modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived advisory fees of $18,538,393.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $1,478,810 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $5,044,459 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Reserve Class equals the maximum annual
rate of 0.30%, 0.55%, 0.08%, and 0.87%, respectively, of the average daily net
assets attributable to such class. Pursuant to the Plan, for the year ended
August 31, 2003, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$2,931,853, $193,606, $4,665,100, $463,548 and $2,575,170, respectively, after
FMC waived plan fees of $1,954,569, $71,297, $1,166,275, $74,213 and $0,
respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
F-23
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
During the year ended August 31, 2003, the Fund paid legal fees of $68,007
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ------------------------------------------------------------------------------------------
Distributions paid from ordinary income $437,437,928 $871,551,545
__________________________________________________________________________________________
==========================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 3,727,333
- -----------------------------------------------------------------------------
Temporary book/tax differences (1,048,876)
- -----------------------------------------------------------------------------
Capital (par value and additional paid-in) 28,033,722,732
=============================================================================
Total net assets $28,036,401,189
_____________________________________________________________________________
=============================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of director deferral of compensation and
retirement plan expenses.
F-24
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
2003 2002
------------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 419,054,374,755 $ 419,054,374,755 586,514,671,312 $ 586,514,671,312
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 9,405,817,790 9,405,817,790 17,787,233,352 17,787,233,352
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 133,770,375 133,770,375 135,176,893 135,176,893
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 66,799,786,336 66,799,786,336 93,169,483,414 93,169,483,414
- -----------------------------------------------------------------------------------------------------------
Reserve Class 102,414,453 102,414,453 132,778,052 132,778,052
- -----------------------------------------------------------------------------------------------------------
Resource Class 8,435,843,716 8,435,843,716 11,871,763,813 11,871,763,813
- -----------------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Institutional Class 93,354,431 93,354,431 191,080,549 191,080,549
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 4,021,536 4,021,536 9,235,046 9,235,046
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 178,509 178,509 222,812 222,812
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 44,707,654 44,707,654 84,049,065 84,049,065
- -----------------------------------------------------------------------------------------------------------
Reserve Class 257,929 257,929 217,048 217,048
- -----------------------------------------------------------------------------------------------------------
Resource Class 12,586,231 12,586,231 27,437,407 27,437,407
- -----------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (427,029,901,527) (427,029,901,527) (584,356,082,067) (584,356,082,067)
- -----------------------------------------------------------------------------------------------------------
Private Investment Class (9,239,919,559) (9,239,919,559) (18,277,525,187) (18,277,525,187)
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class (116,960,560) (116,960,560) (117,052,267) (117,052,267)
- -----------------------------------------------------------------------------------------------------------
Cash Management Class (68,131,014,750) (68,131,014,750) (92,993,504,792) (92,993,504,792)
- -----------------------------------------------------------------------------------------------------------
Reserve Class (96,869,527) (96,869,527) (86,885,410) (86,885,410)
- -----------------------------------------------------------------------------------------------------------
Resource Class (8,755,214,464) (8,755,214,464) (11,622,488,821) (11,622,488,821)
===========================================================================================================
(9,282,766,672) $ (9,282,766,672) 2,469,810,219 $ 2,469,810,219
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-25
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
PRIVATE INVESTMENT CLASS
-------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------
2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
==================================================================================================
Less distributions from net
investment income (0.01) (0.02) (0.05) (0.06) (0.05)
==================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
__________________________________________________________________________________________________
==================================================================================================
Total return(a) 1.02% 1.85% 5.22% 5.81% 4.85%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $978,383 $808,457 $1,289,479 $952,177 $266,031
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.41%(b) 0.41% 0.40% 0.39% 0.39%
- --------------------------------------------------------------------------------------------------
Without fee waivers 0.67%(b) 0.69% 0.69% 0.69% 0.68%
==================================================================================================
Ratio of net investment income to
average net assets 1.04%(b) 1.82% 4.89% 5.74% 4.72%
__________________________________________________________________________________________________
==================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $977,284,404.
F-26
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Liquid
Assets Portfolio (a series portfolio of Short-Term Investments Co.), including
the schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, and the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the years or periods in the two-year period ended August 31, 2000
have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Liquid
Assets Portfolio as of August 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the three-year period then ended, in conformity with accounting principles
generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-27
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY OR OFFICER SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- -----------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- -----------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- -----------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -----------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- -----------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- -----------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
REQUIRED STATE INCOME TAX INFORMATION (Unaudited)
Of the ordinary dividends paid, 0.25% was derived from U.S. Treasury
Obligations.
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
LIQUID ASSETS PORTFOLIO
RESERVE CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
LAP-AR-6
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Liquid
ROBERT H. Assets Portfolio covers a fiscal year during which
GRAHAM] reductions in short-term interest rates caused yields on
money market funds and other short-term instruments to
decline. Saying it favored a more expansive monetary policy
because the economy had not yet exhibited sustainable
growth, the Federal Reserve Board (the Fed) lowered the
federal funds rate twice during the fiscal year. In November
2002, it reduced the rate from 1.75% to 1.25%. In late June
2003, it reduced that rate to 1.00%, its lowest level since
1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose from 5.8% at the
start of the fiscal year to 6.1% at its close. Despite the growth in the
economy, companies generally were reluctant to add workers, relying on strong
productivity growth to support earnings. During the second quarter of 2003,
productivity in the nonfarm business sector rose at a robust 6.8% annualized
rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Reserve Class was producing a monthly
yield of 0.12% and a seven-day SEC yield of 0.12%. Had the advisor and
distributor not waived fees and/or reimbursed expenses, performance would have
been lower. Portfolio managers employed a combination of short-term cash
management vehicles and selective use of a longer maturity schedule for higher
yields. The weighted average maturity (WAM) remained in the 38- to 60-day range;
at the close of the reporting period, the WAM stood at 49 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Reserve Class stood at $57.1 million. Past performance cannot
guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
(continued)
The Liquid Assets Portfolio invests solely in securities rated "first-tier"
as defined in Rule 2a-7 under the Investment Company Act of 1940. Its objective
is to provide as high a level of current income as is consistent with the
preservation of capital and liquidity. Using a modified barbell maturity
structure, portfolio management emphasizes superior credit quality in buying
money market securities such as commercial paper and selected repurchase
agreement securities. An investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although a money market fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money investing in the
fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
COMMERCIAL PAPER-25.08%(a)
FINANCIAL-25.08%
ASSET BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-2.55%
Atlantis One Funding Corp. (Rabobank-ABS
Program Sponsor)(b)
(Acquired 05/22/03; Cost $41,406,228)
1.20% 09/10/03 $ 41,560 $ 41,547,532
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $223,474,677)
0.97% 10/01/03 224,139 223,957,821
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $59,925,562)
0.97% 11/12/03 60,172 60,055,266
- ------------------------------------------------------------------------------------
(Acquired 06/25/03; Cost $149,465,375)
0.91% 11/13/03 150,000 149,723,208
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $101,389,167)
0.98% 11/14/03 101,816 101,610,899
- ------------------------------------------------------------------------------------
Fleet Funding Corp. (General Electric Capital
Corp.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $99,659,528)
1.03% 10/09/03 100,000 99,891,278
- ------------------------------------------------------------------------------------
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $36,942,280)
1.04% 09/03/03 37,000 36,997,862
====================================================================================
713,783,866
====================================================================================
ASSET BACKED SECURITIES-CONSUMER
RECEIVABLES-0.35%
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $60,005,368)
1.03% 09/09/03 60,112 60,098,241
- ------------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 08/06/03; Cost $38,743,745)
1.06% 09/12/03 38,786 38,773,438
====================================================================================
98,871,679
====================================================================================
ASSET BACKED SECURITIES-FULLY BACKED-2.12%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 06/02/03; Cost $74,615,000)
1.20% 11/03/03 75,000 74,842,500
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $19,944,800)
1.08% 11/20/03 20,000 19,952,000
- ------------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $49,859,208)
1.09% 09/12/03 50,000 49,983,347
- ------------------------------------------------------------------------------------
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-FULLY BACKED-(CONTINUED)
Forrestal Funding Master Trust (Bank of
America-ABS Program Sponsor)(b)
(Acquired 08/22/03; Cost $225,292,170)
1.06% 09/22/03 $225,498 $ 225,358,567
- ------------------------------------------------------------------------------------
Old Slip Funding Corp. (Bank of New York-ABS
Program Sponsor)(b)
(Acquired 08/20/03; Cost $25,002,801)
1.08% 11/20/03 25,072 25,011,827
- ------------------------------------------------------------------------------------
Three Rivers Funding Corp. (Mellon Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,084
- ------------------------------------------------------------------------------------
Triple A One Funding Corp. (MBIA Insurance
Corp.-ABS Program Sponsor)(b)(c)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,083
- ------------------------------------------------------------------------------------
Tulip Funding Corp. (ABN AMRO Bank N.V.-ABS
Program Sponsor)(b)
(Acquired 08/06/03; Cost $99,917,556)
1.06% 09/03/03 100,000 99,994,111
====================================================================================
595,080,519
====================================================================================
ASSET BACKED SECURITIES-MULTI-PURPOSE-6.09%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 07/03/03; Cost $54,094,845)
1.04% 10/10/03 54,250 54,188,878
- ------------------------------------------------------------------------------------
CRC Funding, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/06/03; Cost $99,873,389)
1.06% 09/18/03 100,000 99,949,944
- ------------------------------------------------------------------------------------
Edison Asset Securitization, LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $72,103,070)
1.07% 10/07/03 72,359 72,281,576
- ------------------------------------------------------------------------------------
(Acquired 06/10/03; Cost $199,286,667)
1.07% 10/08/03 200,000 199,780,056
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $44,845,500)
1.03% 10/09/03 45,000 44,951,075
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $256,155,426)
1.03% 10/10/03 257,000 256,712,418
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $87,482,218)
1.19% 11/10/03 88,000 87,796,378
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $173,958,750)
1.19% 11/12/03 175,000 174,583,500
- ------------------------------------------------------------------------------------
(Acquired 07/03/03; Cost $27,315,857)
1.03% 12/17/03 27,447 27,362,974
- ------------------------------------------------------------------------------------
Falcon Asset Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,899,889)
1.06% 09/25/03 100,000 99,929,334
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $80,227,236)
1.06% 09/26/03 80,310 80,250,883
- ------------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Jupiter Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 08/21/03; Cost $99,900,361)
1.06% 09/24/03 $100,000 $ 99,932,597
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $134,864,850)
1.06% 09/30/03 135,000 134,884,725
- ------------------------------------------------------------------------------------
(Acquired 07/08/03; Cost $40,995,649)
1.04% 10/06/03 41,102 41,060,641
- ------------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $72,082,084)
1.04% 11/10/03 72,400 72,253,591
- ------------------------------------------------------------------------------------
Sheffield Receivables Corp. (Barclays Bank
PLC-NY Branch-ABS Program Sponsor)
1.06% 09/22/03 100,630 100,567,777
- ------------------------------------------------------------------------------------
Floating Rate, 1.07%(d) 01/20/04 60,000 60,000,000
====================================================================================
1,706,486,347
====================================================================================
ASSET BACKED SECURITIES-TRADE
RECEIVABLES-7.06%
Bills Securitization Ltd. (Germany) (Deutsche
Bank A.G.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $99,767,444)
0.91% 09/26/03 100,000 99,936,806
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $99,728,194)
1.03% 10/14/03 100,000 99,876,972
- ------------------------------------------------------------------------------------
Blue Ridge Asset Funding Corp. (Wachovia Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $149,863,083)
1.06% 09/26/03 150,000 149,889,583
- ------------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $99,721,000)
1.08% 11/21/03 100,000 99,757,000
- ------------------------------------------------------------------------------------
FCAR Owner Trust II-Series II (Ford Motor
Credit Co.-ABS Program Sponsor)(b)
(Acquired 06/03/03; Cost $99,691,611)
1.22% 09/02/03 100,000 99,996,611
- ------------------------------------------------------------------------------------
(Acquired 06/03/03; Cost $99,688,222)
1.22% 09/03/03 100,000 99,993,222
- ------------------------------------------------------------------------------------
(Acquired 06/12/03; Cost $141,189,245)
1.04% 09/17/03 141,586 141,520,556
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $96,725,248)
1.03% 10/17/03 97,000 96,872,337
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $99,733,000)
1.08% 11/17/03 100,000 99,769,000
- ------------------------------------------------------------------------------------
(Acquired 08/07/03, Cost $54,805,300)
1.08% 12/03/03 55,000 54,846,550
- ------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust (General Motors
Acceptance Corp.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $199,545,000)
0.91% 09/23/03 $200,000 $ 199,888,778
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $74,922,708)
1.06% 09/25/03 75,000 74,947,000
- ------------------------------------------------------------------------------------
(Acquired 04/16/03; Cost $39,755,000)
1.26% 10/08/03 40,000 39,948,200
- ------------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $124,606,250)
1.08% 11/18/03 125,000 124,707,500
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $199,279,333)
1.10% 12/02/03 200,000 199,442,889
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $99,630,278)
1.10% 12/03/03 100,000 99,715,833
- ------------------------------------------------------------------------------------
(Acquired 08/07/03; Cost $124,550,000)
1.08% 12/05/03 125,000 124,643,750
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $74,743,500)
1.08% 12/12/03 75,000 74,770,500
====================================================================================
1,980,523,087
====================================================================================
DIVERSIFIED BANKS-0.52%
Societe Generale North America (France)
1.10% 12/11/03 144,570 144,125,869
====================================================================================
INVESTMENT BANKING & BROKERAGE-2.80%
Bear, Stearns & Co. Inc.
1.04% 09/19/03 200,000 199,896,000
- ------------------------------------------------------------------------------------
1.01% 10/10/03 185,000 184,797,579
- ------------------------------------------------------------------------------------
Lehman Brothers Holdings Inc.(e)
1.23% 09/30/03 50,000 50,000,000
- ------------------------------------------------------------------------------------
1.23% 10/14/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 11/20/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 12/04/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.20% 01/23/04 50,000 50,000,000
====================================================================================
784,693,579
====================================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-1.14%
GE Capital International Funding Inc.-Series
A(b)
(Acquired 04/23/03; Cost $129,181,000)
1.26% 10/20/03 130,000 129,777,050
- ------------------------------------------------------------------------------------
General Electric Capital Services, Inc.
1.03% 10/08/03 41,000 40,956,597
- ------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
Morgan Stanley, Floating Rate(e)
1.14% 12/01/03 $150,000 $ 150,000,000
====================================================================================
320,733,647
====================================================================================
REGIONAL BANKS-2.45%
Banque et Caisse d'Epargne de l'Etat
(Luxembourg)
1.23% 11/03/03 100,000 99,784,750
- ------------------------------------------------------------------------------------
Danske Corp. (Denmark)
1.08% 12/23/03 25,187 25,101,616
- ------------------------------------------------------------------------------------
Stadshypotek Delaware, Inc. (Sweden)
1.03% 09/15/03 200,000 199,919,889
- ------------------------------------------------------------------------------------
1.03% 09/16/03 100,000 99,957,083
- ------------------------------------------------------------------------------------
0.91% 09/23/03 100,000 99,944,389
- ------------------------------------------------------------------------------------
1.07% 11/05/03 163,000 162,685,094
====================================================================================
687,392,821
====================================================================================
Total Financial 7,031,691,414
====================================================================================
Total Commercial Paper (Cost
$7,031,691,414) 7,031,691,414
====================================================================================
TIME DEPOSITS-15.75%
Danske Bank A/S-Cayman (Denmark)
1.02% 09/02/03 370,000 370,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank A.G.-Cayman (Germany)
1.00% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Fifth Third Bank-Cayman
1.01% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
ING Belgium S.A./N.V.-Brussels (Belgium)
1.13% 09/02/03 800,000 800,000,000
- ------------------------------------------------------------------------------------
M&I Marshall & Ilsley Bank-Milwaukee
1.00% 09/02/03 261,489 261,488,678
- ------------------------------------------------------------------------------------
Rabobank Nederland-London (Netherlands)
1.14% 09/02/03 585,000 585,000,000
- ------------------------------------------------------------------------------------
Royal Bank of Canada-Cayman (Canada)
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Societe Generale-Cayman (France)
1.02% 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
Suntrust Bank Atlanta-Cayman
0.97% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
U.S. Bank N.A.-Cayman
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-Cayman (Germany)
1.13% 09/02/03 150,000 150,000,000
====================================================================================
Total Time Deposits (Cost $4,416,488,678) 4,416,488,678
====================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT-13.03%
Barclays Bank PLC (United Kingdom)
1.03% 10/14/03 $200,000 $ 200,000,000
- ------------------------------------------------------------------------------------
BNP Paribas (France)
1.39% 08/05/04 75,000 75,027,868
- ------------------------------------------------------------------------------------
Citibank N.A.
1.07% 11/03/03 100,000 99,999,854
- ------------------------------------------------------------------------------------
1.08% 11/05/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.08% 11/06/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Credit Agricole Indosuez (France)
1.03% 09/11/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.03% 10/03/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.04% 10/09/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
Danske Bank A/S (Denmark)
1.36% 01/28/04 150,000 149,998,469
- ------------------------------------------------------------------------------------
Deutsche Bank A.G. (Germany)
1.03% 10/22/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
Dexia Bank S.A.-New York Branch (Belgium)(e)
1.03% 06/09/04 200,000 199,968,934
- ------------------------------------------------------------------------------------
HBOS Treasury Services PLC (United Kingdom)
1.08% 09/12/03 230,000 230,000,000
- ------------------------------------------------------------------------------------
1.03% 10/17/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
Lloyd's TSB Bank PLC-New York Branch (United
Kingdom)
1.21% 12/11/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia)
1.04% 07/23/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
1.26% 08/24/04 229,000 229,000,000
- ------------------------------------------------------------------------------------
Rabobank Nederland (Netherlands)
1.21% 10/31/03 150,000 150,060,651
- ------------------------------------------------------------------------------------
1.19% 08/04/04 75,000 74,993,044
- ------------------------------------------------------------------------------------
Societe Generale (France)
1.25% 10/16/03 100,000 99,997,510
- ------------------------------------------------------------------------------------
1.16% 08/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Svenska Handelsbanken A.B. (Sweden)
1.61% 10/08/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 03/17/04 70,000 69,996,198
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A.
1.06% 09/22/03 100,000 100,000,000
====================================================================================
Total Certificates of Deposit (Cost
$3,654,042,528) 3,654,042,528
====================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-8.38%
FEDERAL FARM CREDIT BANK-0.27%
Bonds,
1.80% 09/03/03 $ 75,000 $ 75,000,000
====================================================================================
FEDERAL HOME LOAN BANK-3.09%
Unsec. Bonds,
2.50% 11/14/03 61,800 61,877,787
- ------------------------------------------------------------------------------------
1.20% 04/08/04 200,965 200,959,245
- ------------------------------------------------------------------------------------
1.42% 04/21/04 93,000 93,000,000
- ------------------------------------------------------------------------------------
1.38% 05/11/04 145,000 145,000,000
- ------------------------------------------------------------------------------------
1.12% 07/12/04 235,000 235,000,000
- ------------------------------------------------------------------------------------
1.22% 08/04/04 100,000 99,984,855
- ------------------------------------------------------------------------------------
1.28% 09/08/04 30,000 30,000,000
====================================================================================
865,821,887
====================================================================================
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC)-1.52%
Reference Bills,(a)
1.04% 09/11/03 30,000 29,991,333
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.04% 10/15/03 47,000 46,940,258
- ------------------------------------------------------------------------------------
1.06% 10/31/03 250,000 249,558,333
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
3.25% 01/15/04 100,000 100,629,476
====================================================================================
427,119,400
====================================================================================
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA)-3.13%
Pass Thru Ctfs.,
1.09% 12/01/03 98,615 98,346,465
- ------------------------------------------------------------------------------------
1.10% 12/01/03 230,479 229,845,182
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.23% 09/30/03 250,000 249,752,292
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
5.63% 05/14/04 50,000 51,482,370
- ------------------------------------------------------------------------------------
Unsec. Notes,
4.75% 11/14/03 75,000 75,525,258
- ------------------------------------------------------------------------------------
1.08% 12/31/03 100,000 99,637,000
- ------------------------------------------------------------------------------------
1.18% 07/23/04 75,000 74,198,583
====================================================================================
878,787,150
====================================================================================
OVERSEAS PRIVATE INVESTMENT CORP.-0.00%
Floating Rate Notes,(f)(g)
1.11% 01/15/09 494 494,175
====================================================================================
</Table>
F-7
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION-0.37%
Global Notes,
5.00% 06/30/04 $100,000 $ 103,293,929
====================================================================================
Total U.S. Government Agency Securities
(Cost $2,350,516,541) 2,350,516,541
====================================================================================
PROMISSORY NOTES-4.91%
Goldman Sachs Group, Inc. (The)(b)(h)
(Acquired 08/04/03; Cost $250,000,000)
1.26% 03/01/04 250,000 250,000,000
- ------------------------------------------------------------------------------------
(Acquired 07/25/03; Cost $120,000,000)
1.23% 06/21/04 120,000 120,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/06/03; Cost $125,000,000)
1.32%(e) 09/03/03 125,000 125,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/21/03; Cost $100,000,000)
1.26%(e) 09/17/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/27/03; Cost $140,000,000)
1.19%(e) 09/29/03 140,000 140,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/02/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 04/09/03; Cost $130,000,000)
1.20%(e) 10/06/03 130,000 130,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/06/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $211,000,000)
1.33%(e) 10/07/03 211,000 211,000,000
====================================================================================
Total Promissory Notes (Cost
$1,376,000,000) 1,376,000,000
====================================================================================
VARIABLE RATE DEMAND NOTES-4.74%(j)
CORPORATE GUARANTEED-0.04%
Mississippi (State of) Business Finance Corp.
(General Electric Plastics Project);
Taxable Series 1998 IDR(b)(d)(f)(i)
(Acquired 01/25/02; Cost $12,000,000)
1.08% 02/01/23 12,000 12,000,000
====================================================================================
INSURED-2.20%(c)(f)(g)
Alaska (State of) Housing Finance Corp.;
Taxable Home Mortgage Series 2002 B RB
1.06% 12/01/36 8,100 8,100,000
- ------------------------------------------------------------------------------------
California (State of) Housing Finance Agency;
Taxable Home Mortgage Series 1998 RB
Series M, 1.03% 08/01/19 10,585 10,585,000
- ------------------------------------------------------------------------------------
Series M, 1.03% 08/01/23 28,530 28,530,000
- ------------------------------------------------------------------------------------
Series T, 1.05% 08/01/29 13,980 13,980,000
- ------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
INSURED-(CONTINUED)
Connecticut (State of) Housing Financing
Authority (Housing Mortgage Finance
Program); RB
Taxable Series 1998 F-2, 1.11% 11/15/16 $ 25,450 $ 25,450,000
- ------------------------------------------------------------------------------------
Taxable Series 2002 A-5, 1.10% 05/15/33 19,365 19,365,000
- ------------------------------------------------------------------------------------
Florida (State of) Baptist Health System of
South Florida; RB
Taxable Series 1995 A, 1.10% 05/15/17 11,100 11,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1995 B, 1.10% 05/15/25 23,900 23,900,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Agency;
Taxable Housing Series 1993 A RB
1.05% 01/01/34 31,200 31,200,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.;
Taxable Housing Series 2000 A RB
1.05% 01/01/45 59,580 59,580,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.
(Affordable Housing); Taxable Series 2002 A
RB
1.10% 01/01/47 39,320 39,320,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Student Loan RB
Taxable Series 1998 B, 1.11% 09/01/32 12,870 12,870,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-I, 1.11% 09/01/34 7,100 7,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-II, 1.11% 09/01/34 2,000 2,000,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-III, 1.11% 09/01/34 3,350 3,350,000
- ------------------------------------------------------------------------------------
Loanstar Asset Partners II; Student Loan
RB(b)
(Acquired 11/14/02; Cost $25,000,000)
Series 2001 Tranche 1 1.12% 09/01/36 25,000 25,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $60,000,000)
Series 2002 Tranche 1 1.12% 08/01/37 60,000 60,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $40,000,000)
Series 2002 Tranche 2 1.12% 08/01/37 40,000 40,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 3 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 4 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
Michigan (State of) Housing Development
Authority; Taxable Series 2000 C RB
1.06% 12/01/20 33,005 33,005,000
- ------------------------------------------------------------------------------------
Minnesota (State of) Fairview, Minnesota
Hospital & Health Care Services;
Taxable Series 1994 A ACES
1.10% 11/01/15 4,400 4,400,000
- ------------------------------------------------------------------------------------
Montgomery (City of), Alabama BMC Special
Care Facilities Financing Authority
(Baptist Health); Taxable Series 1998 C
Floating Rate RB
1.12% 11/15/29 19,300 19,300,000
- ------------------------------------------------------------------------------------
New Orleans (City of), Louisiana; Taxable
Pension Series 2000 RB
1.10% 09/01/30 40,000 40,000,000
====================================================================================
618,135,000
====================================================================================
</Table>
F-9
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-2.50%(f)(k)
Advocare of South Carolina; Series 1997 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 03/28/02; Cost $6,100,000)
1.11% 06/01/17 $ 6,100 $ 6,100,000
- ------------------------------------------------------------------------------------
B. Braun Medical Inc.; Series 2000 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.13% 02/01/15 30,479 30,479,000
- ------------------------------------------------------------------------------------
Baltimore (County of), Maryland (Oak Crest
Village Inc. Project); Series 1999 B RB
(LOC-Wachovia Bank N.A.)(g)
1.12% 01/01/29 1,140 1,140,000
- ------------------------------------------------------------------------------------
Barrington Development Funding LLC; Series
2002 A Notes (LOC-Bank One N.A.)(g)
1.13% 12/01/32 6,005 6,005,000
- ------------------------------------------------------------------------------------
Belk, Inc.; Series 1998 Bonds (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $91,030,000)
1.13% 07/01/08 91,030 91,030,000
- ------------------------------------------------------------------------------------
Brosis Finance, LLC; Series 1999 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.11% 09/01/19 18,400 18,400,000
- ------------------------------------------------------------------------------------
Capital One Funding Corp.; Floating Rate
Notes (LOC-Bank One N.A.)(g)
1.13% 12/02/19 5,024 5,024,000
- ------------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $9,064,000)
1.13%(b) 07/01/20 9,064 9,064,000
- ------------------------------------------------------------------------------------
1.13% 09/01/20 470 470,000
- ------------------------------------------------------------------------------------
1.13% 05/01/26 7,500 7,500,000
- ------------------------------------------------------------------------------------
Carlton Arms of Ocala; Series 2002 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $1,100,000)
1.11% 09/01/34 1,100 1,100,000
- ------------------------------------------------------------------------------------
Chatham Capital Corp.; Series 2000 Floating
Rate Notes (LOC-Bank One N.A.)(g)
1.13% 07/01/20 9,149 9,149,000
- ------------------------------------------------------------------------------------
Dome Corp.; Floating Rate Notes (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 05/31/02; Cost $10,435,000)
1.13% 08/31/16 10,435 10,435,000
- ------------------------------------------------------------------------------------
Georgia (State of) Brooks Development
Authority (Langboard Inc. Project);
Series 2003 IDR (LOC-Bank of America
N.A.)(g)
1.11% 04/01/18 10,000 10,000,000
- ------------------------------------------------------------------------------------
Gulf States Paper Corp.; Series 1998 Unsec.
Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 11/01/18 25,000 25,000,000
- ------------------------------------------------------------------------------------
Health Insurance Plan of Greater New York;
Series 1990 B-1 ACES
(LOC-JP Morgan Chase & Co.)(g)
1.08% 07/01/16 2,900 2,900,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Taxable Student Loan Series
1997 B RB
(LOC-Bank One Chicago N.A.)(g)
1.11% 09/01/31 7,700 7,700,000
- ------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
LP Pinewood SPV; Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 02/01/18 $ 15,300 $ 15,300,000
- ------------------------------------------------------------------------------------
Michigan (State of) Botsford General
Hospital; Series 1997 A RB
(LOC-Michigan National Bank)(e)
1.10% 02/15/27 10,300 10,300,000
- ------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Telepak Inc. Project); Taxable Series 2002
IDR
(LOC-Wachovia Bank N.A.) (Acquired
05/23/02; Cost $40,000,000)(b)(g)
1.11% 05/01/17 40,000 40,000,000
- ------------------------------------------------------------------------------------
New York (City of) Housing Development Corp.
(Chelsea Centro); Series 2003 RB
(LOC-Bayerische Landesbank)(g)
1.09% 06/01/33 8,300 8,300,000
- ------------------------------------------------------------------------------------
New York (State of) Housing Finance Agency;
Taxable Service Contract Series 2003 F RB
(LOC-State Street Bank & Trust Co.)(g)
1.09% 09/15/07 10,000 10,000,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Charlotte; Series 2002 A RB
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/14 13,800 13,800,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Raleigh; Series 2002 A RB
(LOC-Bank of America N.A.)(g)
1.16% 06/01/18 1,800 1,800,000
- ------------------------------------------------------------------------------------
Ohio (State of) (Fayette County Memorial
Hospital); Series 2003 RB
(LOC-National City Bank)(g)
1.10% 08/01/23 2,400 2,400,000
- ------------------------------------------------------------------------------------
Rockwood Quarry LLC; Notes (LOC-Fifth Third
Bank)(g)
1.10% 12/01/22 5,000 5,000,000
- ------------------------------------------------------------------------------------
Sabine River Authority of Texas (TXU Energy
Co. LLC Project); Series 2001 E PCR
(LOC-Chase Manhattan Bank)(g)
1.11% 12/01/36 1,587 1,587,142
- ------------------------------------------------------------------------------------
San Jose (City of), California Redevelopment
Agency (Merged Area); RB
(LOC-Bank of New York)(g)
Series 2002 G, 1.10% 08/01/29 8,000 8,000,000
- ------------------------------------------------------------------------------------
Series 2002 H, 1.10% 08/01/29 17,226 17,226,000
- ------------------------------------------------------------------------------------
Shepherd Capital LLC;
Floating Rate Series 2003 B Notes
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/53 15,000 15,000,000
- ------------------------------------------------------------------------------------
Floating Rate Series 96A Notes
(LOC-Standard Federal Bank)(g)
1.18% 10/01/46 1,250 1,250,000
- ------------------------------------------------------------------------------------
Floating Rate Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 11/01/52 10,000 10,000,000
- ------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
Southeastern Retirement Association, Inc.;
Series 1999 Bonds (LOC-Wachovia Bank
N.A.)(b)(g)
(Acquired 05/16/02; Cost $60,000)
1.13% 08/01/19 $ 60 $ 60,000
- ------------------------------------------------------------------------------------
Texas (State of) Brazos River Authority (TXU
Energy Co. LLC Project); Series 2001 I PCR
(LOC-Wachovia Bank N.A.)(g)
1.11% 12/01/36 62,920 62,920,000
- ------------------------------------------------------------------------------------
TP Racing L.L.L.P.; Floating Rate Series 2000
Notes
(LOC-Bank One Trust Co. N.A.)(g)
1.13% 06/01/30 29,140 29,140,000
- ------------------------------------------------------------------------------------
Union (County of), Arkansas (Del-Tin Fiber
LLC Project); Series 1998 IDR
(LOC-Bank One Chicago N.A.)(g)
1.13% 10/01/27 34,400 34,400,000
- ------------------------------------------------------------------------------------
University of Virginia Real Estate
Foundation; Series 2001 RB (LOC-Wachovia
Bank N.A.)
(Acquired 07/31/03; Cost $48,145,000)(b)(g)
1.13% 07/01/26 48,145 48,145,000
- ------------------------------------------------------------------------------------
Virginia (State of) Richmond Redevelopment &
Housing Authority Project (Old Manchester);
Taxable Series 1995 B RB (LOC-Wachovia Bank
N.A.)(d)
1.15% 12/01/25 1,590 1,590,000
- ------------------------------------------------------------------------------------
Wake Forest University; Floating Rate Series
1997 Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 07/01/17 6,900 6,900,000
- ------------------------------------------------------------------------------------
Wisconsin (State of) Madison Community
Development Authority (Overture Development
Corp.); Series 2001 RB (LOC-Bank One
Milwaukee N.A.; U.S. Bancorp; M&I Marshall
& Ilsley; Northern Trust Co.)(g)
1.13% 06/01/36 115,000 115,000,000
====================================================================================
699,614,142
====================================================================================
Total Variable Rate Demand Notes (Cost
$1,329,749,142) 1,329,749,142
====================================================================================
ASSET BACKED NOTES-4.08%
STRUCTURED-2.60%
Carmax Auto Owner Trust-Series 2003-1, Class
A-1
1.24% 06/15/04 40,136 40,136,423
- ------------------------------------------------------------------------------------
Granite Mortgages PLC (United Kingdom)-Series
2003-1, Class 1A1, Floating Rate
Bonds(b)(d)
(Acquired 01/22/03; Cost $50,000,000)
1.10% 01/20/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Holmes Financing (No. 6) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.11% 10/15/03 72,500 72,500,000
- ------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STRUCTURED-(CONTINUED)
Holmes Financing (No. 7) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.07% 04/15/04 $100,000 $ 100,000,000
- ------------------------------------------------------------------------------------
Honda Auto Receivables 2003-2 Owner
Trust-Class A-1 Notes
1.23% 06/11/04 73,596 73,596,305
- ------------------------------------------------------------------------------------
Household Automotive Trust-Series 2003-1,
Class A-1(c)
1.24% 05/17/04 36,773 36,772,528
- ------------------------------------------------------------------------------------
IKON Receivables Funding LLC Lease-Backed
Notes-Series 2003-1, Class A-1(c)
1.31% 05/17/04 48,644 48,643,911
- ------------------------------------------------------------------------------------
Permanent Financing (No. 2) PLC (United
Kingdom) Series 1, Class A, Floating Rate
Bonds (Halifax PLC-ABS Program Sponsor)
(Acquired 02/26/03; Cost
$105,000,000)(b)(d)
1.07% 03/10/04 105,000 105,000,000
- ------------------------------------------------------------------------------------
Residential Mortgage Securities (United
Kingdom)-Series 14A, Class A1, Floating
Rate Bonds (Acquired 03/17/03; Cost
$55,826,175)(b)
1.14% 03/10/04 55,826 55,826,175
- ------------------------------------------------------------------------------------
Triad Automobile Receivables Trust-Series
2003-A, Class A-1(c)
1.25% 04/12/04 34,118 34,117,936
- ------------------------------------------------------------------------------------
WFS Financial 2003-2 Owner Trust, Class A-1
1.26% 06/14/04 99,056 99,055,851
- ------------------------------------------------------------------------------------
World Omni Auto Receivables Trust-Series
2003-A, Class A-1
1.30% 03/15/04 12,738 12,737,635
====================================================================================
728,386,764
====================================================================================
STRUCTURED INVESTMENT VEHICLES/SECURITY
ARBITRAGE-1.48%
Beta Finance Inc., Floating Rate MTN
(Citibank International PLC-ABS Program
Sponsor)(b)(e)
(Acquired 10/02/02; Cost $75,000,000)
1.12% 10/07/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
(Acquired 10/03/02; Cost $99,995,000)
1.11% 10/16/03 100,000 99,999,384
- ------------------------------------------------------------------------------------
(Acquired 05/19/03; Cost $89,111,606)
1.24% 04/30/04 89,000 89,078,514
- ------------------------------------------------------------------------------------
(Acquired 05/08/03; Cost $50,000,000)
1.06% 05/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 06/09/03; Cost $99,990,000)
1.06% 06/16/04 100,000 99,992,104
====================================================================================
414,070,002
====================================================================================
Total Asset Backed Notes (Cost
$1,142,456,766) 1,142,456,766
====================================================================================
</Table>
F-13
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
MASTER NOTE AGREEMENTS-2.76%(l)
Merrill Lynch Mortgage Capital, Inc.(b)(m)
(Acquired 08/25/03; Cost $220,000,000)
1.27% 02/23/04 $220,000 $ 220,000,000
- ------------------------------------------------------------------------------------
Morgan Stanley(b)(n)
(Acquired 03/17/03; Cost $555,000,000)
1.20% 09/15/03 555,000 555,000,000
====================================================================================
Total Master Note Agreements (Cost
$775,000,000) 775,000,000
====================================================================================
MEDIUM TERM NOTES-2.54%
Associates Corp. of North America, Sr. Global
MTN,
5.80% 04/20/04 49,000 50,443,106
- ------------------------------------------------------------------------------------
General Electric Capital Corp.-Series A
Floating Rate Global MTN, 1.33%(e) 10/22/03 40,000 40,005,870
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.19%(d) 09/08/04 332,900 332,900,000
- ------------------------------------------------------------------------------------
MetLife Global Funding(d)
(Acquired 08/20/03; Cost $90,000,000)
Floating Rate Global MTN, 1.12%(b) 09/15/04 90,000 90,000,000
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.12% 09/27/04 99,300 99,300,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia),
Euro Floating Rate MTN,(o)
1.20% 03/12/04 50,000 50,008,379
- ------------------------------------------------------------------------------------
1.13% 05/02/04 50,000 50,013,519
====================================================================================
Total Medium Term Notes (Cost
$712,670,874) 712,670,874
====================================================================================
FUNDING AGREEMENTS-1.66%
New York Life Insurance Co.(b)(d)(h)
(Acquired 04/03/03; Cost $265,000,000)
1.18% 04/07/04 265,000 265,000,000
- ------------------------------------------------------------------------------------
Travelers Insurance Co.(b)(h)(o)
(Acquired 08/27/03; Cost $100,000,000)
1.24% 11/25/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $100,000,000)
1.24% 08/27/04 100,000 100,000,000
====================================================================================
Total Funding Agreements (Cost
$465,000,000) 465,000,000
====================================================================================
BANK NOTES-1.52%
BNP Paribas-New York Branch (France),
Floating Rate Notes,(e)
1.04% 06/07/04 200,000 199,968,979
- ------------------------------------------------------------------------------------
National City Bank of Indiana, Floating Rate
Notes,(e)
1.04% 06/14/04 100,000 99,984,285
- ------------------------------------------------------------------------------------
Wachovia Bank, N.A., Floating Rate Notes,(o)
1.19% 06/24/04 25,000 25,044,996
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A., Floating Rate
Notes,(e)
1.04% 05/10/04 100,000 100,000,000
====================================================================================
Total Bank Notes (Cost $424,998,260) 424,998,260
====================================================================================
</Table>
F-14
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
PUTTABLE RESET NOTES-1.01%
Merck & Co., Inc.; PURS Notes (Acquired
02/18/03; Cost $103,194,800)(b)
4.49% 02/22/04 $100,000 $ 101,531,392
- ------------------------------------------------------------------------------------
Wal-Mart Stores, Inc.; Unsec. Unsub. PURS
Notes
5.20% 06/01/04 175,000 180,536,131
====================================================================================
Total Puttable Reset Notes (Cost
$282,067,523) 282,067,523
====================================================================================
U.S. TREASURY NOTES-0.36%
3.00% 01/31/04 100,000 100,717,649
====================================================================================
Total U.S. Treasury Notes (Cost
$100,717,649) 100,717,649
====================================================================================
Total Investments Excluding Repurchase
Agreements (Cost $24,061,399,375) 24,061,399,375
====================================================================================
REPURCHASE AGREEMENTS-15.33%
ABN AMRO Bank N.V.-New York Branch
(Netherlands)
1.05%(p) 09/02/03 37,000 37,000,000
- ------------------------------------------------------------------------------------
Banc of America Securities LLC
1.05%(q) 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
1.08%(r) 09/02/03 102,000 102,000,000
- ------------------------------------------------------------------------------------
Banc One Capital Markets Group
1.06%(s) 09/02/03 2,116 2,116,069
- ------------------------------------------------------------------------------------
Bank of Nova Scotia (The)-New York Branch
(Canada)
1.05%(t) 09/02/03 252,501 252,501,380
- ------------------------------------------------------------------------------------
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.05%(u) 09/02/03 297,003 297,002,850
- ------------------------------------------------------------------------------------
BNP Paribas Securities Corp.-New York Branch
(France)
1.05%(v) 09/02/03 307,000 307,000,000
- ------------------------------------------------------------------------------------
Citigroup Global Markets Inc.
1.05%(w) 09/02/03 287,000 287,000,000
- ------------------------------------------------------------------------------------
Credit Suisse First Boston LLC-New York
Branch (Switzerland)
1.16%(x) 07/09/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank Securities Inc.-New York Branch
(Germany)
1.06%(y) 09/02/03 224,536 224,536,185
- ------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(z) 09/02/03 52,000 52,000,000
- ------------------------------------------------------------------------------------
JP Morgan Securities Inc.
1.07%(aa) 09/02/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Lehman Brothers Inc.
1.00%(ab) 09/02/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
UBS Warburg LLC-New York Branch (Switzerland)
1.01%(ac) 09/02/03 372,163 372,163,170
- ------------------------------------------------------------------------------------
1.05%(ad) 09/02/03 425,000 425,000,000
- ------------------------------------------------------------------------------------
1.05%(ae) 09/02/03 475,814 475,814,111
- ------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-(CONTINUED)
Wachovia Securities, Inc.
1.03%(af) 09/02/03 $275,616 $ 275,616,254
- ------------------------------------------------------------------------------------
1.08%(ag) 09/02/03 62,000 62,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-New York Branch (Germany)
1.13%(ah) 09/02/03 127,000 127,000,000
====================================================================================
Total Repurchase Agreements (Cost
$4,298,750,019) 4,298,750,019
____________________________________________________________________________________
====================================================================================
TOTAL INVESTMENTS (Cost
$28,360,149,394)(ai)-101.15% 28,360,149,394
____________________________________________________________________________________
====================================================================================
OTHER ASSETS LESS LIABILITIES-(1.15)% (323,748,205)
____________________________________________________________________________________
====================================================================================
NET ASSETS-100.00% $28,036,401,189
____________________________________________________________________________________
====================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
ACES - Automatically Convertible Extendable Security
Disc. - Discounted
IDR - Industrial Revenue Bonds
LOC - Letter of Credit
MTN - Medium Term Notes
PCR - Pollution Control Revenue Bonds
PURS - Puttable Reset Securities
RB - Revenue Bonds
Sr. - Senior
Unsec. - Unsecured
Unsub. - Unsubordinated
</Table>
Notes to Schedule of Investments
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$8,939,316,340, which represented 31.88% of the Fund's net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
(c) Principal and interest payments are secured by bond insurance provided by
one of the following companies: AMBAC Assurance Corp., MBIA Insurance Corp.
or Financial Security Assurance.
(d) Interest rates are redetermined monthly. Rate shown is the rate in effect on
08/31/03.
(e) Interest rates are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) Demand security; payable upon demand by the Fund with usually no more than
seven calendar day's notice.
(g) Interest rates are redetermined weekly. Rate shown is the rate in effect on
08/31/03.
(h) Security considered to be illiquid. The aggregate market value of these
securities at 08/31/03 was $1,841,000,000 which represents 6.57% of the
Fund's net assets.
(i) Principal and interest payments are guaranteed by the corporate guarantor.
(j) Interest on these securities is taxable income to the Fund.
(k) Principal and interest payments are guaranteed by the letter of credit
agreement.
(l) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-16
(m) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(n) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(o) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/03.
(p) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,167. Collateralized by $254,927,000 U.S. Government obligations, 0%
to 4.00% due 11/05/03 to 09/02/08 with an aggregate market value at 08/31/03
of $255,000,220.
(q) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $499,105,000 U.S. Government obligations, 0%
to 9.70% due 10/03/03 to 04/05/19 with an aggregate market value at 08/31/03
of $510,000,486.
(r) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,030,000. Collateralized by $252,007,493 U.S. Government obligations,
5.50% to 6.00% due 12/01/32 to 06/01/33 with an aggregate market value at
08/31/03 of $255,000,000.
(s) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$300,035,333. Collateralized by $294,930,000 U.S. Government obligations, 0%
to 7.70% due 09/15/03 to 04/09/09 with an aggregate market value at 08/31/03
of $306,001,703.
(t) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $494,322,000 U.S. Government obligations, 0%
to 7.25% due 12/15/03 to 05/15/30 with an aggregate market value at 08/31/03
of $510,000,259.
(u) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$660,079,850. Collateralized by $664,688,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 03/15/12 with an aggregate market value at 08/31/03
of $673,203,742.
(v) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $511,522,000 U.S. Government obligations, 0%
to 0% due 10/16/03 to 12/31/03 with an aggregate market value at 08/31/03 of
$510,000,869.
(w) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $493,678,000 U.S. Government obligations, 0%
to 6.00% due 12/15/03 to 11/11/16 with an aggregate market value at 08/31/03
of $510,000,421.
(x) Term repurchase agreement entered into 08/29/03; however either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $526,959,000 U.S. Treasury
obligations, 0% to 8.13% due 11/15/15 to 08/15/21 with an aggregate market
value at 08/31/03 of $306,000,504.
(y) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,889. Collateralized by $479,866,000 U.S. Government obligations,
1.88% to 6.25% due 01/15/05 to 01/05/27 with an aggregate market value at
08/31/03 of $510,000,195.
(z) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(aa)Repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,722. Collateralized by $252,112,237 U.S. Government obligations, 0%
to 0% due 05/01/23 to 08/01/33 with a market value at 08/31/03 of
$255,000,797.
(ab)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,055,556. Collateralized by $407,091,000 U.S. Treasury obligations,
6.00% to 8.88% due 02/15/19 to 05/15/30 with an aggregate market value at
08/31/03 of $510,005,167.
(ac)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$900,101,000. Collateralized by $705,327,000 U.S. Treasury obligations,
3.38% to 8.88% due 01/15/07 to 08/15/17 with an aggregate market value at
08/31/03 of $918,002,342.
(ad)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $496,282,742 U.S. Government obligations,
4.50% to 8.00% due 10/01/08 to 07/01/33 with an aggregate market value at
08/31/03 of $510,001,793.
(ae)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$850,099,167. Collateralized by $1,792,017,000 U.S. Government obligations,
0% to 9.38% due 10/16/03 to 10/15/22 with an aggregate market value at
08/31/03 of $867,004,984.
F-17
(af)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(ag)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(ah)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$200,025,000. Collateralized by $196,970,652 U.S. Government obligations,
4.51% to 7.24% due 11/01/10 to 10/01/32 with an aggregate market value at
08/31/03 of $204,000,000.
(ai)Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-18
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements at value
(amortized cost) $24,061,399,375
- -----------------------------------------------------------------------------
Repurchase agreements 4,298,750,019
- -----------------------------------------------------------------------------
Interest receivable 30,772,488
- -----------------------------------------------------------------------------
Investment for deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Other assets 237,318
=============================================================================
Total assets 28,391,503,877
_____________________________________________________________________________
=============================================================================
LIABILITIES:
Payables for:
Investments purchased 329,391,647
- -----------------------------------------------------------------------------
Dividends 22,694,969
- -----------------------------------------------------------------------------
Deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Accrued distribution fees 868,780
- -----------------------------------------------------------------------------
Accrued directors' fees 690,790
- -----------------------------------------------------------------------------
Accrued transfer agent fees 479,586
- -----------------------------------------------------------------------------
Accrued operating expenses 632,239
=============================================================================
Total liabilities 355,102,688
=============================================================================
Net assets applicable to shares outstanding $28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $28,033,722,732
- -----------------------------------------------------------------------------
Undistributed net investment income (502)
- -----------------------------------------------------------------------------
Undistributed net realized gain from investment securities 2,678,959
=============================================================================
$28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS:
Institutional Class $21,240,698,662
_____________________________________________________________________________
=============================================================================
Private Investment Class $ 978,383,482
_____________________________________________________________________________
=============================================================================
Personal Investment Class $ 47,265,983
_____________________________________________________________________________
=============================================================================
Cash Management Class $ 4,473,591,100
_____________________________________________________________________________
=============================================================================
Reserve Class $ 57,082,236
_____________________________________________________________________________
=============================================================================
Resource Class $ 1,239,379,726
_____________________________________________________________________________
=============================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 21,238,605,055
_____________________________________________________________________________
=============================================================================
Private Investment Class 978,299,714
_____________________________________________________________________________
=============================================================================
Personal Investment Class 47,264,708
_____________________________________________________________________________
=============================================================================
Cash Management 4,473,177,698
_____________________________________________________________________________
=============================================================================
Reserve Class 57,081,678
_____________________________________________________________________________
=============================================================================
Resource Class 1,239,293,377
_____________________________________________________________________________
=============================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
_____________________________________________________________________________
=============================================================================
</Table>
See Notes to Financial Statements.
F-19
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $486,848,043
==========================================================================
EXPENSES:
Advisory fees 50,444,589
- --------------------------------------------------------------------------
Administrative services fees 1,478,810
- --------------------------------------------------------------------------
Custodian fees 535,640
- --------------------------------------------------------------------------
Distribution fees:
Private Investment Class 4,886,422
- --------------------------------------------------------------------------
Personal Investment Class 264,903
- --------------------------------------------------------------------------
Cash Management Class 5,831,375
- --------------------------------------------------------------------------
Reserve Class 537,761
- --------------------------------------------------------------------------
Resource Class 2,575,170
- --------------------------------------------------------------------------
Directors' fees 605,192
- --------------------------------------------------------------------------
Transfer agent fees 5,162,855
- --------------------------------------------------------------------------
Other 143,818
- --------------------------------------------------------------------------
Filing fee refund (1,251,673)
==========================================================================
Total expenses 71,214,862
==========================================================================
Less: Fees waived (21,804,747)
==========================================================================
Net expenses 49,410,115
==========================================================================
Net investment income 437,437,928
==========================================================================
Net realized gain from investment securities 222,356
==========================================================================
Net increase in net assets resulting from operations $437,660,284
__________________________________________________________________________
==========================================================================
</Table>
See Notes to Financial Statements.
F-20
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- -----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 437,437,928 $ 871,551,545
- -----------------------------------------------------------------------------------------------
Net realized gain from investment securities 222,356 929,565
===============================================================================================
Net increase in net assets resulting from operations 437,660,284 872,481,110
===============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (339,841,789) (699,238,125)
- -----------------------------------------------------------------------------------------------
Private Investment Class (9,944,836) (23,638,000)
- -----------------------------------------------------------------------------------------------
Personal Investment Class (251,405) (309,171)
- -----------------------------------------------------------------------------------------------
Cash Management Class (72,636,877) (117,705,827)
- -----------------------------------------------------------------------------------------------
Reserve Class (240,042) (285,587)
- -----------------------------------------------------------------------------------------------
Resource Class (14,522,979) (30,374,835)
===============================================================================================
Decrease in net assets resulting from distributions (437,437,928) (871,551,545)
===============================================================================================
Share transactions-net:
Institutional Class (7,882,172,341) 2,349,669,794
- -----------------------------------------------------------------------------------------------
Private Investment Class 169,919,767 (481,056,789)
- -----------------------------------------------------------------------------------------------
Personal Investment Class 16,988,324 18,347,438
- -----------------------------------------------------------------------------------------------
Cash Management Class (1,286,520,760) 260,027,687
- -----------------------------------------------------------------------------------------------
Reserve Class 5,802,855 46,109,690
- -----------------------------------------------------------------------------------------------
Resource Class (306,784,517) 276,712,399
===============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (9,282,766,672) 2,469,810,219
===============================================================================================
Net increase (decrease) in net assets (9,282,544,316) 2,470,739,784
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS:
Beginning of year 37,318,945,505 34,848,205,721
===============================================================================================
End of year $28,036,401,189 $37,318,945,505
_______________________________________________________________________________________________
===============================================================================================
</Table>
See Notes to Financial Statements.
F-21
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Liquid Assets Portfolio (the "Fund") is an investment portfolio of
Short-Term Investments Co. (the "Company"). The Company is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital and liquidity. Each
company listed in the Schedule of Investments is organized in the United States
unless otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date. The Fund allocates realized and unrealized capital gains
and losses to a class based on the relative net assets of each class. The
Fund allocates income to a class based on the relative value of the settled
shares of each class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to
F-22
federal income taxes on otherwise taxable income (including net realized
capital gain) which is distributed to shareholders. Therefore, no provision
for federal income taxes is recorded in the financial statements. Any
capital loss carryforwards listed are reduced for limitations, if any, to
the extent required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets of the Fund. AIM has voluntarily agreed to limit
Total Fund operating expenses (excluding Rule 12b-1 fees, interest, taxes, fund
merger and reorganization expenses, extraordinary items, including other items
designated as such by the Board of Directors, and increases in expenses due to
expense offset arrangements, if any) to 0.12%. Voluntary expense limitations may
be modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived advisory fees of $18,538,393.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $1,478,810 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $5,044,459 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Reserve Class equals the maximum annual
rate of 0.30%, 0.55%, 0.08%, and 0.87%, respectively, of the average daily net
assets attributable to such class. Pursuant to the Plan, for the year ended
August 31, 2003, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$2,931,853, $193,606, $4,665,100, $463,548 and $2,575,170, respectively, after
FMC waived plan fees of $1,954,569, $71,297, $1,166,275, $74,213 and $0,
respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
F-23
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
During the year ended August 31, 2003, the Fund paid legal fees of $68,007
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ------------------------------------------------------------------------------------------
Distributions paid from ordinary income $437,437,928 $871,551,545
__________________________________________________________________________________________
==========================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 3,727,333
- -----------------------------------------------------------------------------
Temporary book/tax differences (1,048,876)
- -----------------------------------------------------------------------------
Capital (par value and additional paid-in) 28,033,722,732
=============================================================================
Total net assets $28,036,401,189
_____________________________________________________________________________
=============================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of director deferral of compensation and
retirement plan expenses.
F-24
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
2003 2002
------------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 419,054,374,755 $ 419,054,374,755 586,514,671,312 $ 586,514,671,312
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 9,405,817,790 9,405,817,790 17,787,233,352 17,787,233,352
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 133,770,375 133,770,375 135,176,893 135,176,893
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 66,799,786,336 66,799,786,336 93,169,483,414 93,169,483,414
- -----------------------------------------------------------------------------------------------------------
Reserve Class 102,414,453 102,414,453 132,778,052 132,778,052
- -----------------------------------------------------------------------------------------------------------
Resource Class 8,435,843,716 8,435,843,716 11,871,763,813 11,871,763,813
- -----------------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Institutional Class 93,354,431 93,354,431 191,080,549 191,080,549
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 4,021,536 4,021,536 9,235,046 9,235,046
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 178,509 178,509 222,812 222,812
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 44,707,654 44,707,654 84,049,065 84,049,065
- -----------------------------------------------------------------------------------------------------------
Reserve Class 257,929 257,929 217,048 217,048
- -----------------------------------------------------------------------------------------------------------
Resource Class 12,586,231 12,586,231 27,437,407 27,437,407
- -----------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (427,029,901,527) (427,029,901,527) (584,356,082,067) (584,356,082,067)
- -----------------------------------------------------------------------------------------------------------
Private Investment Class (9,239,919,559) (9,239,919,559) (18,277,525,187) (18,277,525,187)
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class (116,960,560) (116,960,560) (117,052,267) (117,052,267)
- -----------------------------------------------------------------------------------------------------------
Cash Management Class (68,131,014,750) (68,131,014,750) (92,993,504,792) (92,993,504,792)
- -----------------------------------------------------------------------------------------------------------
Reserve Class (96,869,527) (96,869,527) (86,885,410) (86,885,410)
- -----------------------------------------------------------------------------------------------------------
Resource Class (8,755,214,464) (8,755,214,464) (11,622,488,821) (11,622,488,821)
===========================================================================================================
(9,282,766,672) $ (9,282,766,672) 2,469,810,219 $ 2,469,810,219
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-25
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
RESERVE CLASS
---------------------------------------------------
JANUARY 14, 2000
(DATE SALES
YEAR ENDED AUGUST 31, COMMENCED) TO
------------------------------- AUGUST 31,
2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------
Net investment income 0.005 0.01 0.05 0.03
=============================================================================================
Less distributions from net investment
income (0.005) (0.01) (0.05) (0.03)
=============================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
_____________________________________________________________________________________________
=============================================================================================
Total return(a) 0.45% 1.34% 4.70% 3.48%
_____________________________________________________________________________________________
=============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $57,082 $51,279 $5,169 $2,495
_____________________________________________________________________________________________
=============================================================================================
Ratio of expenses to average net assets:
With fee waivers 0.98%(b) 0.91% 0.90% 0.89%(c)
- ---------------------------------------------------------------------------------------------
Without fee waivers 1.17%(b) 1.19% 1.19% 1.19%(c)
=============================================================================================
Ratio of net investment income to
average net assets 0.47%(b) 1.32% 4.39% 5.24%(c)
_____________________________________________________________________________________________
=============================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are based on average daily net assets of $53,776,132.
(c) Annualized.
F-26
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Liquid
Assets Portfolio (a series portfolio of Short-Term Investments Co.), including
the schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, and the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the years or periods in the two-year period ended August 31, 2000
have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Liquid
Assets Portfolio as of August 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the three-year period then ended, in conformity with accounting principles
generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-27
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY OR OFFICER SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- -----------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- -----------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- -----------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -----------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- -----------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- -----------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
REQUIRED STATE INCOME TAX INFORMATION (Unaudited)
Of the ordinary dividends paid, 0.25% was derived from U.S. Treasury
Obligations.
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
LIQUID ASSETS PORTFOLIO
RESOURCE CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
LAP-AR-5
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Liquid
ROBERT H. Assets Portfolio covers a fiscal year during which
GRAHAM] reductions in short-term interest rates caused yields on
money market funds and other short-term instruments to
decline. Saying it favored a more expansive monetary policy
because the economy had not yet exhibited sustainable
growth, the Federal Reserve Board (the Fed) lowered the
federal funds rate twice during the fiscal year. In November
2002, it reduced the rate from 1.75% to 1.25%. In late June
2003, it reduced that rate to 1.00%, its lowest level since
1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose from 5.8% at the
start of the fiscal year to 6.1% at its close. Despite the growth in the
economy, companies generally were reluctant to add workers, relying on strong
productivity growth to support earnings. During the second quarter of 2003,
productivity in the nonfarm business sector rose at a robust 6.8% annualized
rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Resource Class outperformed its indexes,
as shown in the table. Had the advisor and distributor not waived fees and/or
reimbursed expenses, performance would have been lower. Through a combination of
short-term cash management vehicles and selective use of a longer maturity
schedule for higher yields, the portfolio continued to provide attractive
returns. The weighted average maturity (WAM) remained in the 38- to 60-day
range; at the close of the reporting period, the WAM stood at 49 days. The
portfolio will continue to maintain a relatively short maturity structure to
take advantage of any sudden rise in market yields. At the close of the fiscal
year, net assets of the Resource Class stood at $1.2 billion. Past performance
cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
================================================================================
YIELDS AS OF 8/31/03*
MONTHLY YIELD SEVEN-DAY
SEC YIELD
Liquid Assets Portfolio 0.79% 0.79%
Resource Class
iMoneyNet Money Fund Averages--Trademark-- 0.71% 0.72%
First-Tier Institutions Only
iMoneyNet Money Fund Averages--Trademark-- 0.67% 0.67%
Total Institutions Only
================================================================================
(continued)
The Liquid Assets Portfolio invests solely in securities rated "first-tier"
as defined in Rule 2a-7 under the Investment Company Act of 1940. Its objective
is to provide as high a level of current income as is consistent with the
preservation of capital and liquidity. Using a modified barbell maturity
structure, portfolio management emphasizes superior credit quality in buying
money market securities such as commercial paper and selected repurchase
agreement securities. An investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although a money market fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money investing in the
fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
*The seven-day SEC Yield and monthly yield represent annualized results for the
period, net of fees and expenses, and exclude any realized capital gains or
losses. Yields will fluctuate. iMoneyNet, Inc. is an independent mutual fund
performance monitor. The iMoneyNet First-Tier Institutions Only category
consists of 276 funds that invest in any allowable 2a-7 investment, except
second-tier commercial paper. The Total Institutions Only category consists of
589 funds with a minimum initial investment of $100,000 or funds that are only
open to institutions.
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
COMMERCIAL PAPER-25.08%(a)
FINANCIAL-25.08%
ASSET BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-2.55%
Atlantis One Funding Corp. (Rabobank-ABS
Program Sponsor)(b)
(Acquired 05/22/03; Cost $41,406,228)
1.20% 09/10/03 $ 41,560 $ 41,547,532
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $223,474,677)
0.97% 10/01/03 224,139 223,957,821
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $59,925,562)
0.97% 11/12/03 60,172 60,055,266
- ------------------------------------------------------------------------------------
(Acquired 06/25/03; Cost $149,465,375)
0.91% 11/13/03 150,000 149,723,208
- ------------------------------------------------------------------------------------
(Acquired 06/13/03; Cost $101,389,167)
0.98% 11/14/03 101,816 101,610,899
- ------------------------------------------------------------------------------------
Fleet Funding Corp. (General Electric Capital
Corp.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $99,659,528)
1.03% 10/09/03 100,000 99,891,278
- ------------------------------------------------------------------------------------
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $36,942,280)
1.04% 09/03/03 37,000 36,997,862
====================================================================================
713,783,866
====================================================================================
ASSET BACKED SECURITIES-CONSUMER
RECEIVABLES-0.35%
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $60,005,368)
1.03% 09/09/03 60,112 60,098,241
- ------------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 08/06/03; Cost $38,743,745)
1.06% 09/12/03 38,786 38,773,438
====================================================================================
98,871,679
====================================================================================
ASSET BACKED SECURITIES-FULLY BACKED-2.12%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 06/02/03; Cost $74,615,000)
1.20% 11/03/03 75,000 74,842,500
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $19,944,800)
1.08% 11/20/03 20,000 19,952,000
- ------------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $49,859,208)
1.09% 09/12/03 50,000 49,983,347
- ------------------------------------------------------------------------------------
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-FULLY BACKED-(CONTINUED)
Forrestal Funding Master Trust (Bank of
America-ABS Program Sponsor)(b)
(Acquired 08/22/03; Cost $225,292,170)
1.06% 09/22/03 $225,498 $ 225,358,567
- ------------------------------------------------------------------------------------
Old Slip Funding Corp. (Bank of New York-ABS
Program Sponsor)(b)
(Acquired 08/20/03; Cost $25,002,801)
1.08% 11/20/03 25,072 25,011,827
- ------------------------------------------------------------------------------------
Three Rivers Funding Corp. (Mellon Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,084
- ------------------------------------------------------------------------------------
Triple A One Funding Corp. (MBIA Insurance
Corp.-ABS Program Sponsor)(b)(c)
(Acquired 08/20/03; Cost $49,951,417)
1.06% 09/22/03 50,000 49,969,083
- ------------------------------------------------------------------------------------
Tulip Funding Corp. (ABN AMRO Bank N.V.-ABS
Program Sponsor)(b)
(Acquired 08/06/03; Cost $99,917,556)
1.06% 09/03/03 100,000 99,994,111
====================================================================================
595,080,519
====================================================================================
ASSET BACKED SECURITIES-MULTI-PURPOSE-6.09%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 07/03/03; Cost $54,094,845)
1.04% 10/10/03 54,250 54,188,878
- ------------------------------------------------------------------------------------
CRC Funding, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/06/03; Cost $99,873,389)
1.06% 09/18/03 100,000 99,949,944
- ------------------------------------------------------------------------------------
Edison Asset Securitization, LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 06/10/03; Cost $72,103,070)
1.07% 10/07/03 72,359 72,281,576
- ------------------------------------------------------------------------------------
(Acquired 06/10/03; Cost $199,286,667)
1.07% 10/08/03 200,000 199,780,056
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $44,845,500)
1.03% 10/09/03 45,000 44,951,075
- ------------------------------------------------------------------------------------
(Acquired 06/11/03; Cost $256,155,426)
1.03% 10/10/03 257,000 256,712,418
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $87,482,218)
1.19% 11/10/03 88,000 87,796,378
- ------------------------------------------------------------------------------------
(Acquired 05/16/03; Cost $173,958,750)
1.19% 11/12/03 175,000 174,583,500
- ------------------------------------------------------------------------------------
(Acquired 07/03/03; Cost $27,315,857)
1.03% 12/17/03 27,447 27,362,974
- ------------------------------------------------------------------------------------
Falcon Asset Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,899,889)
1.06% 09/25/03 100,000 99,929,334
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $80,227,236)
1.06% 09/26/03 80,310 80,250,883
- ------------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Jupiter Securitization Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 08/21/03; Cost $99,900,361)
1.06% 09/24/03 $100,000 $ 99,932,597
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $134,864,850)
1.06% 09/30/03 135,000 134,884,725
- ------------------------------------------------------------------------------------
(Acquired 07/08/03; Cost $40,995,649)
1.04% 10/06/03 41,102 41,060,641
- ------------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 06/11/03; Cost $72,082,084)
1.04% 11/10/03 72,400 72,253,591
- ------------------------------------------------------------------------------------
Sheffield Receivables Corp. (Barclays Bank
PLC-NY Branch-ABS Program Sponsor)
1.06% 09/22/03 100,630 100,567,777
- ------------------------------------------------------------------------------------
Floating Rate, 1.07%(d) 01/20/04 60,000 60,000,000
====================================================================================
1,706,486,347
====================================================================================
ASSET BACKED SECURITIES-TRADE
RECEIVABLES-7.06%
Bills Securitization Ltd. (Germany) (Deutsche
Bank A.G.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $99,767,444)
0.91% 09/26/03 100,000 99,936,806
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $99,728,194)
1.03% 10/14/03 100,000 99,876,972
- ------------------------------------------------------------------------------------
Blue Ridge Asset Funding Corp. (Wachovia Bank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $149,863,083)
1.06% 09/26/03 150,000 149,889,583
- ------------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 08/20/03; Cost $99,721,000)
1.08% 11/21/03 100,000 99,757,000
- ------------------------------------------------------------------------------------
FCAR Owner Trust II-Series II (Ford Motor
Credit Co.-ABS Program Sponsor)(b)
(Acquired 06/03/03; Cost $99,691,611)
1.22% 09/02/03 100,000 99,996,611
- ------------------------------------------------------------------------------------
(Acquired 06/03/03; Cost $99,688,222)
1.22% 09/03/03 100,000 99,993,222
- ------------------------------------------------------------------------------------
(Acquired 06/12/03; Cost $141,189,245)
1.04% 09/17/03 141,586 141,520,556
- ------------------------------------------------------------------------------------
(Acquired 07/10/03; Cost $96,725,248)
1.03% 10/17/03 97,000 96,872,337
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $99,733,000)
1.08% 11/17/03 100,000 99,769,000
- ------------------------------------------------------------------------------------
(Acquired 08/07/03, Cost $54,805,300)
1.08% 12/03/03 55,000 54,846,550
- ------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
ASSET BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust (General Motors
Acceptance Corp.-ABS Program Sponsor)(b)
(Acquired 06/25/03; Cost $199,545,000)
0.91% 09/23/03 $200,000 $ 199,888,778
- ------------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $74,922,708)
1.06% 09/25/03 75,000 74,947,000
- ------------------------------------------------------------------------------------
(Acquired 04/16/03; Cost $39,755,000)
1.26% 10/08/03 40,000 39,948,200
- ------------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $124,606,250)
1.08% 11/18/03 125,000 124,707,500
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $199,279,333)
1.10% 12/02/03 200,000 199,442,889
- ------------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $99,630,278)
1.10% 12/03/03 100,000 99,715,833
- ------------------------------------------------------------------------------------
(Acquired 08/07/03; Cost $124,550,000)
1.08% 12/05/03 125,000 124,643,750
- ------------------------------------------------------------------------------------
(Acquired 08/20/03; Cost $74,743,500)
1.08% 12/12/03 75,000 74,770,500
====================================================================================
1,980,523,087
====================================================================================
DIVERSIFIED BANKS-0.52%
Societe Generale North America (France)
1.10% 12/11/03 144,570 144,125,869
====================================================================================
INVESTMENT BANKING & BROKERAGE-2.80%
Bear, Stearns & Co. Inc.
1.04% 09/19/03 200,000 199,896,000
- ------------------------------------------------------------------------------------
1.01% 10/10/03 185,000 184,797,579
- ------------------------------------------------------------------------------------
Lehman Brothers Holdings Inc.(e)
1.23% 09/30/03 50,000 50,000,000
- ------------------------------------------------------------------------------------
1.23% 10/14/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 11/20/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 12/04/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.20% 01/23/04 50,000 50,000,000
====================================================================================
784,693,579
====================================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-1.14%
GE Capital International Funding Inc.-Series
A(b)
(Acquired 04/23/03; Cost $129,181,000)
1.26% 10/20/03 130,000 129,777,050
- ------------------------------------------------------------------------------------
General Electric Capital Services, Inc.
1.03% 10/08/03 41,000 40,956,597
- ------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
Morgan Stanley, Floating Rate(e)
1.14% 12/01/03 $150,000 $ 150,000,000
====================================================================================
320,733,647
====================================================================================
REGIONAL BANKS-2.45%
Banque et Caisse d'Epargne de l'Etat
(Luxembourg)
1.23% 11/03/03 100,000 99,784,750
- ------------------------------------------------------------------------------------
Danske Corp. (Denmark)
1.08% 12/23/03 25,187 25,101,616
- ------------------------------------------------------------------------------------
Stadshypotek Delaware, Inc. (Sweden)
1.03% 09/15/03 200,000 199,919,889
- ------------------------------------------------------------------------------------
1.03% 09/16/03 100,000 99,957,083
- ------------------------------------------------------------------------------------
0.91% 09/23/03 100,000 99,944,389
- ------------------------------------------------------------------------------------
1.07% 11/05/03 163,000 162,685,094
====================================================================================
687,392,821
====================================================================================
Total Financial 7,031,691,414
====================================================================================
Total Commercial Paper (Cost
$7,031,691,414) 7,031,691,414
====================================================================================
TIME DEPOSITS-15.75%
Danske Bank A/S-Cayman (Denmark)
1.02% 09/02/03 370,000 370,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank A.G.-Cayman (Germany)
1.00% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Fifth Third Bank-Cayman
1.01% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
ING Belgium S.A./N.V.-Brussels (Belgium)
1.13% 09/02/03 800,000 800,000,000
- ------------------------------------------------------------------------------------
M&I Marshall & Ilsley Bank-Milwaukee
1.00% 09/02/03 261,489 261,488,678
- ------------------------------------------------------------------------------------
Rabobank Nederland-London (Netherlands)
1.14% 09/02/03 585,000 585,000,000
- ------------------------------------------------------------------------------------
Royal Bank of Canada-Cayman (Canada)
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
Societe Generale-Cayman (France)
1.02% 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
Suntrust Bank Atlanta-Cayman
0.97% 09/02/03 500,000 500,000,000
- ------------------------------------------------------------------------------------
U.S. Bank N.A.-Cayman
1.01% 09/02/03 300,000 300,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-Cayman (Germany)
1.13% 09/02/03 150,000 150,000,000
====================================================================================
Total Time Deposits (Cost $4,416,488,678) 4,416,488,678
====================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT-13.03%
Barclays Bank PLC (United Kingdom)
1.03% 10/14/03 $200,000 $ 200,000,000
- ------------------------------------------------------------------------------------
BNP Paribas (France)
1.39% 08/05/04 75,000 75,027,868
- ------------------------------------------------------------------------------------
Citibank N.A.
1.07% 11/03/03 100,000 99,999,854
- ------------------------------------------------------------------------------------
1.08% 11/05/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.08% 11/06/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Credit Agricole Indosuez (France)
1.03% 09/11/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.03% 10/03/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
1.04% 10/09/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
Danske Bank A/S (Denmark)
1.36% 01/28/04 150,000 149,998,469
- ------------------------------------------------------------------------------------
Deutsche Bank A.G. (Germany)
1.03% 10/22/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
Dexia Bank S.A.-New York Branch (Belgium)(e)
1.03% 06/09/04 200,000 199,968,934
- ------------------------------------------------------------------------------------
HBOS Treasury Services PLC (United Kingdom)
1.08% 09/12/03 230,000 230,000,000
- ------------------------------------------------------------------------------------
1.03% 10/17/03 200,000 200,000,000
- ------------------------------------------------------------------------------------
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
Lloyd's TSB Bank PLC-New York Branch (United
Kingdom)
1.21% 12/11/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia)
1.04% 07/23/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
1.26% 08/24/04 229,000 229,000,000
- ------------------------------------------------------------------------------------
Rabobank Nederland (Netherlands)
1.21% 10/31/03 150,000 150,060,651
- ------------------------------------------------------------------------------------
1.19% 08/04/04 75,000 74,993,044
- ------------------------------------------------------------------------------------
Societe Generale (France)
1.25% 10/16/03 100,000 99,997,510
- ------------------------------------------------------------------------------------
1.16% 08/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Svenska Handelsbanken A.B. (Sweden)
1.61% 10/08/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
1.23% 03/17/04 70,000 69,996,198
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A.
1.06% 09/22/03 100,000 100,000,000
====================================================================================
Total Certificates of Deposit (Cost
$3,654,042,528) 3,654,042,528
====================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-8.38%
FEDERAL FARM CREDIT BANK-0.27%
Bonds,
1.80% 09/03/03 $ 75,000 $ 75,000,000
====================================================================================
FEDERAL HOME LOAN BANK-3.09%
Unsec. Bonds,
2.50% 11/14/03 61,800 61,877,787
- ------------------------------------------------------------------------------------
1.20% 04/08/04 200,965 200,959,245
- ------------------------------------------------------------------------------------
1.42% 04/21/04 93,000 93,000,000
- ------------------------------------------------------------------------------------
1.38% 05/11/04 145,000 145,000,000
- ------------------------------------------------------------------------------------
1.12% 07/12/04 235,000 235,000,000
- ------------------------------------------------------------------------------------
1.22% 08/04/04 100,000 99,984,855
- ------------------------------------------------------------------------------------
1.28% 09/08/04 30,000 30,000,000
====================================================================================
865,821,887
====================================================================================
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC)-1.52%
Reference Bills,(a)
1.04% 09/11/03 30,000 29,991,333
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.04% 10/15/03 47,000 46,940,258
- ------------------------------------------------------------------------------------
1.06% 10/31/03 250,000 249,558,333
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
3.25% 01/15/04 100,000 100,629,476
====================================================================================
427,119,400
====================================================================================
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA)-3.13%
Pass Thru Ctfs.,
1.09% 12/01/03 98,615 98,346,465
- ------------------------------------------------------------------------------------
1.10% 12/01/03 230,479 229,845,182
- ------------------------------------------------------------------------------------
Unsec. Disc. Notes,(a)
1.23% 09/30/03 250,000 249,752,292
- ------------------------------------------------------------------------------------
Unsec. Global Notes,
5.63% 05/14/04 50,000 51,482,370
- ------------------------------------------------------------------------------------
Unsec. Notes,
4.75% 11/14/03 75,000 75,525,258
- ------------------------------------------------------------------------------------
1.08% 12/31/03 100,000 99,637,000
- ------------------------------------------------------------------------------------
1.18% 07/23/04 75,000 74,198,583
====================================================================================
878,787,150
====================================================================================
OVERSEAS PRIVATE INVESTMENT CORP.-0.00%
Floating Rate Notes,(f)(g)
1.11% 01/15/09 494 494,175
====================================================================================
</Table>
F-7
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION-0.37%
Global Notes,
5.00% 06/30/04 $100,000 $ 103,293,929
====================================================================================
Total U.S. Government Agency Securities
(Cost $2,350,516,541) 2,350,516,541
====================================================================================
PROMISSORY NOTES-4.91%
Goldman Sachs Group, Inc. (The)(b)(h)
(Acquired 08/04/03; Cost $250,000,000)
1.26% 03/01/04 250,000 250,000,000
- ------------------------------------------------------------------------------------
(Acquired 07/25/03; Cost $120,000,000)
1.23% 06/21/04 120,000 120,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/06/03; Cost $125,000,000)
1.32%(e) 09/03/03 125,000 125,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/21/03; Cost $100,000,000)
1.26%(e) 09/17/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/27/03; Cost $140,000,000)
1.19%(e) 09/29/03 140,000 140,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/02/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 04/09/03; Cost $130,000,000)
1.20%(e) 10/06/03 130,000 130,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $150,000,000)
1.33%(e) 10/06/03 150,000 150,000,000
- ------------------------------------------------------------------------------------
(Acquired 03/13/03; Cost $211,000,000)
1.33%(e) 10/07/03 211,000 211,000,000
====================================================================================
Total Promissory Notes (Cost
$1,376,000,000) 1,376,000,000
====================================================================================
VARIABLE RATE DEMAND NOTES-4.74%(j)
CORPORATE GUARANTEED-0.04%
Mississippi (State of) Business Finance Corp.
(General Electric Plastics Project);
Taxable Series 1998 IDR(b)(d)(f)(i)
(Acquired 01/25/02; Cost $12,000,000)
1.08% 02/01/23 12,000 12,000,000
====================================================================================
INSURED-2.20%(c)(f)(g)
Alaska (State of) Housing Finance Corp.;
Taxable Home Mortgage Series 2002 B RB
1.06% 12/01/36 8,100 8,100,000
- ------------------------------------------------------------------------------------
California (State of) Housing Finance Agency;
Taxable Home Mortgage Series 1998 RB
Series M, 1.03% 08/01/19 10,585 10,585,000
- ------------------------------------------------------------------------------------
Series M, 1.03% 08/01/23 28,530 28,530,000
- ------------------------------------------------------------------------------------
Series T, 1.05% 08/01/29 13,980 13,980,000
- ------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
INSURED-(CONTINUED)
Connecticut (State of) Housing Financing
Authority (Housing Mortgage Finance
Program); RB
Taxable Series 1998 F-2, 1.11% 11/15/16 $ 25,450 $ 25,450,000
- ------------------------------------------------------------------------------------
Taxable Series 2002 A-5, 1.10% 05/15/33 19,365 19,365,000
- ------------------------------------------------------------------------------------
Florida (State of) Baptist Health System of
South Florida; RB
Taxable Series 1995 A, 1.10% 05/15/17 11,100 11,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1995 B, 1.10% 05/15/25 23,900 23,900,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Agency;
Taxable Housing Series 1993 A RB
1.05% 01/01/34 31,200 31,200,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.;
Taxable Housing Series 2000 A RB
1.05% 01/01/45 59,580 59,580,000
- ------------------------------------------------------------------------------------
Florida (State of) Housing Finance Corp.
(Affordable Housing); Taxable Series 2002 A
RB
1.10% 01/01/47 39,320 39,320,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Student Loan RB
Taxable Series 1998 B, 1.11% 09/01/32 12,870 12,870,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-I, 1.11% 09/01/34 7,100 7,100,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-II, 1.11% 09/01/34 2,000 2,000,000
- ------------------------------------------------------------------------------------
Taxable Series 1999 B-III, 1.11% 09/01/34 3,350 3,350,000
- ------------------------------------------------------------------------------------
Loanstar Asset Partners II; Student Loan
RB(b)
(Acquired 11/14/02; Cost $25,000,000)
Series 2001 Tranche 1 1.12% 09/01/36 25,000 25,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $60,000,000)
Series 2002 Tranche 1 1.12% 08/01/37 60,000 60,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $40,000,000)
Series 2002 Tranche 2 1.12% 08/01/37 40,000 40,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 3 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/06/02; Cost $50,000,000)
Series 2002 Tranche 4 1.12% 08/01/37 50,000 50,000,000
- ------------------------------------------------------------------------------------
Michigan (State of) Housing Development
Authority; Taxable Series 2000 C RB
1.06% 12/01/20 33,005 33,005,000
- ------------------------------------------------------------------------------------
Minnesota (State of) Fairview, Minnesota
Hospital & Health Care Services;
Taxable Series 1994 A ACES
1.10% 11/01/15 4,400 4,400,000
- ------------------------------------------------------------------------------------
Montgomery (City of), Alabama BMC Special
Care Facilities Financing Authority
(Baptist Health); Taxable Series 1998 C
Floating Rate RB
1.12% 11/15/29 19,300 19,300,000
- ------------------------------------------------------------------------------------
New Orleans (City of), Louisiana; Taxable
Pension Series 2000 RB
1.10% 09/01/30 40,000 40,000,000
====================================================================================
618,135,000
====================================================================================
</Table>
F-9
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-2.50%(f)(k)
Advocare of South Carolina; Series 1997 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 03/28/02; Cost $6,100,000)
1.11% 06/01/17 $ 6,100 $ 6,100,000
- ------------------------------------------------------------------------------------
B. Braun Medical Inc.; Series 2000 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.13% 02/01/15 30,479 30,479,000
- ------------------------------------------------------------------------------------
Baltimore (County of), Maryland (Oak Crest
Village Inc. Project); Series 1999 B RB
(LOC-Wachovia Bank N.A.)(g)
1.12% 01/01/29 1,140 1,140,000
- ------------------------------------------------------------------------------------
Barrington Development Funding LLC; Series
2002 A Notes (LOC-Bank One N.A.)(g)
1.13% 12/01/32 6,005 6,005,000
- ------------------------------------------------------------------------------------
Belk, Inc.; Series 1998 Bonds (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $91,030,000)
1.13% 07/01/08 91,030 91,030,000
- ------------------------------------------------------------------------------------
Brosis Finance, LLC; Series 1999 Bonds
(LOC-Wachovia Bank N.A.)(g)
1.11% 09/01/19 18,400 18,400,000
- ------------------------------------------------------------------------------------
Capital One Funding Corp.; Floating Rate
Notes (LOC-Bank One N.A.)(g)
1.13% 12/02/19 5,024 5,024,000
- ------------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $9,064,000)
1.13%(b) 07/01/20 9,064 9,064,000
- ------------------------------------------------------------------------------------
1.13% 09/01/20 470 470,000
- ------------------------------------------------------------------------------------
1.13% 05/01/26 7,500 7,500,000
- ------------------------------------------------------------------------------------
Carlton Arms of Ocala; Series 2002 Bonds
(LOC-Wachovia Bank N.A.)(b)(g)
(Acquired 07/31/03; Cost $1,100,000)
1.11% 09/01/34 1,100 1,100,000
- ------------------------------------------------------------------------------------
Chatham Capital Corp.; Series 2000 Floating
Rate Notes (LOC-Bank One N.A.)(g)
1.13% 07/01/20 9,149 9,149,000
- ------------------------------------------------------------------------------------
Dome Corp.; Floating Rate Notes (LOC-Wachovia
Bank N.A.)(b)(g)
(Acquired 05/31/02; Cost $10,435,000)
1.13% 08/31/16 10,435 10,435,000
- ------------------------------------------------------------------------------------
Georgia (State of) Brooks Development
Authority (Langboard Inc. Project);
Series 2003 IDR (LOC-Bank of America
N.A.)(g)
1.11% 04/01/18 10,000 10,000,000
- ------------------------------------------------------------------------------------
Gulf States Paper Corp.; Series 1998 Unsec.
Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 11/01/18 25,000 25,000,000
- ------------------------------------------------------------------------------------
Health Insurance Plan of Greater New York;
Series 1990 B-1 ACES
(LOC-JP Morgan Chase & Co.)(g)
1.08% 07/01/16 2,900 2,900,000
- ------------------------------------------------------------------------------------
Illinois (State of) Student Assistance
Commission; Taxable Student Loan Series
1997 B RB
(LOC-Bank One Chicago N.A.)(g)
1.11% 09/01/31 7,700 7,700,000
- ------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
LP Pinewood SPV; Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 02/01/18 $ 15,300 $ 15,300,000
- ------------------------------------------------------------------------------------
Michigan (State of) Botsford General
Hospital; Series 1997 A RB
(LOC-Michigan National Bank)(e)
1.10% 02/15/27 10,300 10,300,000
- ------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Telepak Inc. Project); Taxable Series 2002
IDR
(LOC-Wachovia Bank N.A.) (Acquired
05/23/02; Cost $40,000,000)(b)(g)
1.11% 05/01/17 40,000 40,000,000
- ------------------------------------------------------------------------------------
New York (City of) Housing Development Corp.
(Chelsea Centro); Series 2003 RB
(LOC-Bayerische Landesbank)(g)
1.09% 06/01/33 8,300 8,300,000
- ------------------------------------------------------------------------------------
New York (State of) Housing Finance Agency;
Taxable Service Contract Series 2003 F RB
(LOC-State Street Bank & Trust Co.)(g)
1.09% 09/15/07 10,000 10,000,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Charlotte; Series 2002 A RB
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/14 13,800 13,800,000
- ------------------------------------------------------------------------------------
North Carolina (State of) Roman Catholic
Diocese of Raleigh; Series 2002 A RB
(LOC-Bank of America N.A.)(g)
1.16% 06/01/18 1,800 1,800,000
- ------------------------------------------------------------------------------------
Ohio (State of) (Fayette County Memorial
Hospital); Series 2003 RB
(LOC-National City Bank)(g)
1.10% 08/01/23 2,400 2,400,000
- ------------------------------------------------------------------------------------
Rockwood Quarry LLC; Notes (LOC-Fifth Third
Bank)(g)
1.10% 12/01/22 5,000 5,000,000
- ------------------------------------------------------------------------------------
Sabine River Authority of Texas (TXU Energy
Co. LLC Project); Series 2001 E PCR
(LOC-Chase Manhattan Bank)(g)
1.11% 12/01/36 1,587 1,587,142
- ------------------------------------------------------------------------------------
San Jose (City of), California Redevelopment
Agency (Merged Area); RB
(LOC-Bank of New York)(g)
Series 2002 G, 1.10% 08/01/29 8,000 8,000,000
- ------------------------------------------------------------------------------------
Series 2002 H, 1.10% 08/01/29 17,226 17,226,000
- ------------------------------------------------------------------------------------
Shepherd Capital LLC;
Floating Rate Series 2003 B Notes
(LOC-Wachovia Bank N.A.)(g)
1.11% 05/01/53 15,000 15,000,000
- ------------------------------------------------------------------------------------
Floating Rate Series 96A Notes
(LOC-Standard Federal Bank)(g)
1.18% 10/01/46 1,250 1,250,000
- ------------------------------------------------------------------------------------
Floating Rate Notes (LOC-Wachovia Bank
N.A.)(g)
1.11% 11/01/52 10,000 10,000,000
- ------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
LETTER OF CREDIT GUARANTEED-(CONTINUED)
Southeastern Retirement Association, Inc.;
Series 1999 Bonds (LOC-Wachovia Bank
N.A.)(b)(g)
(Acquired 05/16/02; Cost $60,000)
1.13% 08/01/19 $ 60 $ 60,000
- ------------------------------------------------------------------------------------
Texas (State of) Brazos River Authority (TXU
Energy Co. LLC Project); Series 2001 I PCR
(LOC-Wachovia Bank N.A.)(g)
1.11% 12/01/36 62,920 62,920,000
- ------------------------------------------------------------------------------------
TP Racing L.L.L.P.; Floating Rate Series 2000
Notes
(LOC-Bank One Trust Co. N.A.)(g)
1.13% 06/01/30 29,140 29,140,000
- ------------------------------------------------------------------------------------
Union (County of), Arkansas (Del-Tin Fiber
LLC Project); Series 1998 IDR
(LOC-Bank One Chicago N.A.)(g)
1.13% 10/01/27 34,400 34,400,000
- ------------------------------------------------------------------------------------
University of Virginia Real Estate
Foundation; Series 2001 RB (LOC-Wachovia
Bank N.A.)
(Acquired 07/31/03; Cost $48,145,000)(b)(g)
1.13% 07/01/26 48,145 48,145,000
- ------------------------------------------------------------------------------------
Virginia (State of) Richmond Redevelopment &
Housing Authority Project (Old Manchester);
Taxable Series 1995 B RB (LOC-Wachovia Bank
N.A.)(d)
1.15% 12/01/25 1,590 1,590,000
- ------------------------------------------------------------------------------------
Wake Forest University; Floating Rate Series
1997 Bonds (LOC-Wachovia Bank N.A.)(g)
1.11% 07/01/17 6,900 6,900,000
- ------------------------------------------------------------------------------------
Wisconsin (State of) Madison Community
Development Authority (Overture Development
Corp.); Series 2001 RB (LOC-Bank One
Milwaukee N.A.; U.S. Bancorp; M&I Marshall
& Ilsley; Northern Trust Co.)(g)
1.13% 06/01/36 115,000 115,000,000
====================================================================================
699,614,142
====================================================================================
Total Variable Rate Demand Notes (Cost
$1,329,749,142) 1,329,749,142
====================================================================================
ASSET BACKED NOTES-4.08%
STRUCTURED-2.60%
Carmax Auto Owner Trust-Series 2003-1, Class
A-1
1.24% 06/15/04 40,136 40,136,423
- ------------------------------------------------------------------------------------
Granite Mortgages PLC (United Kingdom)-Series
2003-1, Class 1A1, Floating Rate
Bonds(b)(d)
(Acquired 01/22/03; Cost $50,000,000)
1.10% 01/20/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
Holmes Financing (No. 6) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.11% 10/15/03 72,500 72,500,000
- ------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
STRUCTURED-(CONTINUED)
Holmes Financing (No. 7) PLC (United
Kingdom)-Series 1, Class A, Floating Rate
Bonds(d)
1.07% 04/15/04 $100,000 $ 100,000,000
- ------------------------------------------------------------------------------------
Honda Auto Receivables 2003-2 Owner
Trust-Class A-1 Notes
1.23% 06/11/04 73,596 73,596,305
- ------------------------------------------------------------------------------------
Household Automotive Trust-Series 2003-1,
Class A-1(c)
1.24% 05/17/04 36,773 36,772,528
- ------------------------------------------------------------------------------------
IKON Receivables Funding LLC Lease-Backed
Notes-Series 2003-1, Class A-1(c)
1.31% 05/17/04 48,644 48,643,911
- ------------------------------------------------------------------------------------
Permanent Financing (No. 2) PLC (United
Kingdom) Series 1, Class A, Floating Rate
Bonds (Halifax PLC-ABS Program Sponsor)
(Acquired 02/26/03; Cost
$105,000,000)(b)(d)
1.07% 03/10/04 105,000 105,000,000
- ------------------------------------------------------------------------------------
Residential Mortgage Securities (United
Kingdom)-Series 14A, Class A1, Floating
Rate Bonds (Acquired 03/17/03; Cost
$55,826,175)(b)
1.14% 03/10/04 55,826 55,826,175
- ------------------------------------------------------------------------------------
Triad Automobile Receivables Trust-Series
2003-A, Class A-1(c)
1.25% 04/12/04 34,118 34,117,936
- ------------------------------------------------------------------------------------
WFS Financial 2003-2 Owner Trust, Class A-1
1.26% 06/14/04 99,056 99,055,851
- ------------------------------------------------------------------------------------
World Omni Auto Receivables Trust-Series
2003-A, Class A-1
1.30% 03/15/04 12,738 12,737,635
====================================================================================
728,386,764
====================================================================================
STRUCTURED INVESTMENT VEHICLES/SECURITY
ARBITRAGE-1.48%
Beta Finance Inc., Floating Rate MTN
(Citibank International PLC-ABS Program
Sponsor)(b)(e)
(Acquired 10/02/02; Cost $75,000,000)
1.12% 10/07/03 75,000 75,000,000
- ------------------------------------------------------------------------------------
(Acquired 10/03/02; Cost $99,995,000)
1.11% 10/16/03 100,000 99,999,384
- ------------------------------------------------------------------------------------
(Acquired 05/19/03; Cost $89,111,606)
1.24% 04/30/04 89,000 89,078,514
- ------------------------------------------------------------------------------------
(Acquired 05/08/03; Cost $50,000,000)
1.06% 05/17/04 50,000 50,000,000
- ------------------------------------------------------------------------------------
(Acquired 06/09/03; Cost $99,990,000)
1.06% 06/16/04 100,000 99,992,104
====================================================================================
414,070,002
====================================================================================
Total Asset Backed Notes (Cost
$1,142,456,766) 1,142,456,766
====================================================================================
</Table>
F-13
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
MASTER NOTE AGREEMENTS-2.76%(l)
Merrill Lynch Mortgage Capital, Inc.(b)(m)
(Acquired 08/25/03; Cost $220,000,000)
1.27% 02/23/04 $220,000 $ 220,000,000
- ------------------------------------------------------------------------------------
Morgan Stanley(b)(n)
(Acquired 03/17/03; Cost $555,000,000)
1.20% 09/15/03 555,000 555,000,000
====================================================================================
Total Master Note Agreements (Cost
$775,000,000) 775,000,000
====================================================================================
MEDIUM TERM NOTES-2.54%
Associates Corp. of North America, Sr. Global
MTN,
5.80% 04/20/04 49,000 50,443,106
- ------------------------------------------------------------------------------------
General Electric Capital Corp.-Series A
Floating Rate Global MTN, 1.33%(e) 10/22/03 40,000 40,005,870
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.19%(d) 09/08/04 332,900 332,900,000
- ------------------------------------------------------------------------------------
MetLife Global Funding(d)
(Acquired 08/20/03; Cost $90,000,000)
Floating Rate Global MTN, 1.12%(b) 09/15/04 90,000 90,000,000
- ------------------------------------------------------------------------------------
Floating Rate MTN, 1.12% 09/27/04 99,300 99,300,000
- ------------------------------------------------------------------------------------
National Australia Bank Ltd. (Australia),
Euro Floating Rate MTN,(o)
1.20% 03/12/04 50,000 50,008,379
- ------------------------------------------------------------------------------------
1.13% 05/02/04 50,000 50,013,519
====================================================================================
Total Medium Term Notes (Cost
$712,670,874) 712,670,874
====================================================================================
FUNDING AGREEMENTS-1.66%
New York Life Insurance Co.(b)(d)(h)
(Acquired 04/03/03; Cost $265,000,000)
1.18% 04/07/04 265,000 265,000,000
- ------------------------------------------------------------------------------------
Travelers Insurance Co.(b)(h)(o)
(Acquired 08/27/03; Cost $100,000,000)
1.24% 11/25/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $100,000,000)
1.24% 08/27/04 100,000 100,000,000
====================================================================================
Total Funding Agreements (Cost
$465,000,000) 465,000,000
====================================================================================
BANK NOTES-1.52%
BNP Paribas-New York Branch (France),
Floating Rate Notes,(e)
1.04% 06/07/04 200,000 199,968,979
- ------------------------------------------------------------------------------------
National City Bank of Indiana, Floating Rate
Notes,(e)
1.04% 06/14/04 100,000 99,984,285
- ------------------------------------------------------------------------------------
Wachovia Bank, N.A., Floating Rate Notes,(o)
1.19% 06/24/04 25,000 25,044,996
- ------------------------------------------------------------------------------------
Wells Fargo Bank, N.A., Floating Rate
Notes,(e)
1.04% 05/10/04 100,000 100,000,000
====================================================================================
Total Bank Notes (Cost $424,998,260) 424,998,260
====================================================================================
</Table>
F-14
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
PUTTABLE RESET NOTES-1.01%
Merck & Co., Inc.; PURS Notes (Acquired
02/18/03; Cost $103,194,800)(b)
4.49% 02/22/04 $100,000 $ 101,531,392
- ------------------------------------------------------------------------------------
Wal-Mart Stores, Inc.; Unsec. Unsub. PURS
Notes
5.20% 06/01/04 175,000 180,536,131
====================================================================================
Total Puttable Reset Notes (Cost
$282,067,523) 282,067,523
====================================================================================
U.S. TREASURY NOTES-0.36%
3.00% 01/31/04 100,000 100,717,649
====================================================================================
Total U.S. Treasury Notes (Cost
$100,717,649) 100,717,649
====================================================================================
Total Investments Excluding Repurchase
Agreements (Cost $24,061,399,375) 24,061,399,375
====================================================================================
REPURCHASE AGREEMENTS-15.33%
ABN AMRO Bank N.V.-New York Branch
(Netherlands)
1.05%(p) 09/02/03 37,000 37,000,000
- ------------------------------------------------------------------------------------
Banc of America Securities LLC
1.05%(q) 09/02/03 350,000 350,000,000
- ------------------------------------------------------------------------------------
1.08%(r) 09/02/03 102,000 102,000,000
- ------------------------------------------------------------------------------------
Banc One Capital Markets Group
1.06%(s) 09/02/03 2,116 2,116,069
- ------------------------------------------------------------------------------------
Bank of Nova Scotia (The)-New York Branch
(Canada)
1.05%(t) 09/02/03 252,501 252,501,380
- ------------------------------------------------------------------------------------
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.05%(u) 09/02/03 297,003 297,002,850
- ------------------------------------------------------------------------------------
BNP Paribas Securities Corp.-New York Branch
(France)
1.05%(v) 09/02/03 307,000 307,000,000
- ------------------------------------------------------------------------------------
Citigroup Global Markets Inc.
1.05%(w) 09/02/03 287,000 287,000,000
- ------------------------------------------------------------------------------------
Credit Suisse First Boston LLC-New York
Branch (Switzerland)
1.16%(x) 07/09/04 300,000 300,000,000
- ------------------------------------------------------------------------------------
Deutsche Bank Securities Inc.-New York Branch
(Germany)
1.06%(y) 09/02/03 224,536 224,536,185
- ------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(z) 09/02/03 52,000 52,000,000
- ------------------------------------------------------------------------------------
JP Morgan Securities Inc.
1.07%(aa) 09/02/03 250,000 250,000,000
- ------------------------------------------------------------------------------------
Lehman Brothers Inc.
1.00%(ab) 09/02/03 100,000 100,000,000
- ------------------------------------------------------------------------------------
UBS Warburg LLC-New York Branch (Switzerland)
1.01%(ac) 09/02/03 372,163 372,163,170
- ------------------------------------------------------------------------------------
1.05%(ad) 09/02/03 425,000 425,000,000
- ------------------------------------------------------------------------------------
1.05%(ae) 09/02/03 475,814 475,814,111
- ------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-(CONTINUED)
Wachovia Securities, Inc.
1.03%(af) 09/02/03 $275,616 $ 275,616,254
- ------------------------------------------------------------------------------------
1.08%(ag) 09/02/03 62,000 62,000,000
- ------------------------------------------------------------------------------------
WestLB A.G.-New York Branch (Germany)
1.13%(ah) 09/02/03 127,000 127,000,000
====================================================================================
Total Repurchase Agreements (Cost
$4,298,750,019) 4,298,750,019
____________________________________________________________________________________
====================================================================================
TOTAL INVESTMENTS (Cost
$28,360,149,394)(ai)-101.15% 28,360,149,394
____________________________________________________________________________________
====================================================================================
OTHER ASSETS LESS LIABILITIES-(1.15)% (323,748,205)
____________________________________________________________________________________
====================================================================================
NET ASSETS-100.00% $28,036,401,189
____________________________________________________________________________________
====================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
ACES - Automatically Convertible Extendable Security
Disc. - Discounted
IDR - Industrial Revenue Bonds
LOC - Letter of Credit
MTN - Medium Term Notes
PCR - Pollution Control Revenue Bonds
PURS - Puttable Reset Securities
RB - Revenue Bonds
Sr. - Senior
Unsec. - Unsecured
Unsub. - Unsubordinated
</Table>
Notes to Schedule of Investments
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$8,939,316,340, which represented 31.88% of the Fund's net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
(c) Principal and interest payments are secured by bond insurance provided by
one of the following companies: AMBAC Assurance Corp., MBIA Insurance Corp.
or Financial Security Assurance.
(d) Interest rates are redetermined monthly. Rate shown is the rate in effect on
08/31/03.
(e) Interest rates are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) Demand security; payable upon demand by the Fund with usually no more than
seven calendar day's notice.
(g) Interest rates are redetermined weekly. Rate shown is the rate in effect on
08/31/03.
(h) Security considered to be illiquid. The aggregate market value of these
securities at 08/31/03 was $1,841,000,000 which represents 6.57% of the
Fund's net assets.
(i) Principal and interest payments are guaranteed by the corporate guarantor.
(j) Interest on these securities is taxable income to the Fund.
(k) Principal and interest payments are guaranteed by the letter of credit
agreement.
(l) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-16
(m) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(n) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(o) Interest rates are redetermined quarterly. Rate shown is the rate in effect
on 08/31/03.
(p) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,167. Collateralized by $254,927,000 U.S. Government obligations, 0%
to 4.00% due 11/05/03 to 09/02/08 with an aggregate market value at 08/31/03
of $255,000,220.
(q) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $499,105,000 U.S. Government obligations, 0%
to 9.70% due 10/03/03 to 04/05/19 with an aggregate market value at 08/31/03
of $510,000,486.
(r) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$250,030,000. Collateralized by $252,007,493 U.S. Government obligations,
5.50% to 6.00% due 12/01/32 to 06/01/33 with an aggregate market value at
08/31/03 of $255,000,000.
(s) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$300,035,333. Collateralized by $294,930,000 U.S. Government obligations, 0%
to 7.70% due 09/15/03 to 04/09/09 with an aggregate market value at 08/31/03
of $306,001,703.
(t) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $494,322,000 U.S. Government obligations, 0%
to 7.25% due 12/15/03 to 05/15/30 with an aggregate market value at 08/31/03
of $510,000,259.
(u) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$660,079,850. Collateralized by $664,688,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 03/15/12 with an aggregate market value at 08/31/03
of $673,203,742.
(v) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $511,522,000 U.S. Government obligations, 0%
to 0% due 10/16/03 to 12/31/03 with an aggregate market value at 08/31/03 of
$510,000,869.
(w) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $493,678,000 U.S. Government obligations, 0%
to 6.00% due 12/15/03 to 11/11/16 with an aggregate market value at 08/31/03
of $510,000,421.
(x) Term repurchase agreement entered into 08/29/03; however either party may
terminate the agreement upon demand. Interest rates, par and collateral are
redetermined daily. Collateralized by $526,959,000 U.S. Treasury
obligations, 0% to 8.13% due 11/15/15 to 08/15/21 with an aggregate market
value at 08/31/03 of $306,000,504.
(y) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,889. Collateralized by $479,866,000 U.S. Government obligations,
1.88% to 6.25% due 01/15/05 to 01/05/27 with an aggregate market value at
08/31/03 of $510,000,195.
(z) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(aa)Repurchase agreement entered into 08/29/03 with a maturing value of
$250,029,722. Collateralized by $252,112,237 U.S. Government obligations, 0%
to 0% due 05/01/23 to 08/01/33 with a market value at 08/31/03 of
$255,000,797.
(ab)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,055,556. Collateralized by $407,091,000 U.S. Treasury obligations,
6.00% to 8.88% due 02/15/19 to 05/15/30 with an aggregate market value at
08/31/03 of $510,005,167.
(ac)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$900,101,000. Collateralized by $705,327,000 U.S. Treasury obligations,
3.38% to 8.88% due 01/15/07 to 08/15/17 with an aggregate market value at
08/31/03 of $918,002,342.
(ad)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,058,333. Collateralized by $496,282,742 U.S. Government obligations,
4.50% to 8.00% due 10/01/08 to 07/01/33 with an aggregate market value at
08/31/03 of $510,001,793.
(ae)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$850,099,167. Collateralized by $1,792,017,000 U.S. Government obligations,
0% to 9.38% due 10/16/03 to 10/15/22 with an aggregate market value at
08/31/03 of $867,004,984.
F-17
(af)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(ag)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(ah)Joint repurchase agreement entered into 08/29/03 with a maturing value of
$200,025,000. Collateralized by $196,970,652 U.S. Government obligations,
4.51% to 7.24% due 11/01/10 to 10/01/32 with an aggregate market value at
08/31/03 of $204,000,000.
(ai)Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-18
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements at value
(amortized cost) $24,061,399,375
- -----------------------------------------------------------------------------
Repurchase agreements 4,298,750,019
- -----------------------------------------------------------------------------
Interest receivable 30,772,488
- -----------------------------------------------------------------------------
Investment for deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Other assets 237,318
=============================================================================
Total assets 28,391,503,877
_____________________________________________________________________________
=============================================================================
LIABILITIES:
Payables for:
Investments purchased 329,391,647
- -----------------------------------------------------------------------------
Dividends 22,694,969
- -----------------------------------------------------------------------------
Deferred compensation plan 344,677
- -----------------------------------------------------------------------------
Accrued distribution fees 868,780
- -----------------------------------------------------------------------------
Accrued directors' fees 690,790
- -----------------------------------------------------------------------------
Accrued transfer agent fees 479,586
- -----------------------------------------------------------------------------
Accrued operating expenses 632,239
=============================================================================
Total liabilities 355,102,688
=============================================================================
Net assets applicable to shares outstanding $28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $28,033,722,732
- -----------------------------------------------------------------------------
Undistributed net investment income (502)
- -----------------------------------------------------------------------------
Undistributed net realized gain from investment securities 2,678,959
=============================================================================
$28,036,401,189
_____________________________________________________________________________
=============================================================================
NET ASSETS:
Institutional Class $21,240,698,662
_____________________________________________________________________________
=============================================================================
Private Investment Class $ 978,383,482
_____________________________________________________________________________
=============================================================================
Personal Investment Class $ 47,265,983
_____________________________________________________________________________
=============================================================================
Cash Management Class $ 4,473,591,100
_____________________________________________________________________________
=============================================================================
Reserve Class $ 57,082,236
_____________________________________________________________________________
=============================================================================
Resource Class $ 1,239,379,726
_____________________________________________________________________________
=============================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 21,238,605,055
_____________________________________________________________________________
=============================================================================
Private Investment Class 978,299,714
_____________________________________________________________________________
=============================================================================
Personal Investment Class 47,264,708
_____________________________________________________________________________
=============================================================================
Cash Management 4,473,177,698
_____________________________________________________________________________
=============================================================================
Reserve Class 57,081,678
_____________________________________________________________________________
=============================================================================
Resource Class 1,239,293,377
_____________________________________________________________________________
=============================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
_____________________________________________________________________________
=============================================================================
</Table>
See Notes to Financial Statements.
F-19
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $486,848,043
==========================================================================
EXPENSES:
Advisory fees 50,444,589
- --------------------------------------------------------------------------
Administrative services fees 1,478,810
- --------------------------------------------------------------------------
Custodian fees 535,640
- --------------------------------------------------------------------------
Distribution fees:
Private Investment Class 4,886,422
- --------------------------------------------------------------------------
Personal Investment Class 264,903
- --------------------------------------------------------------------------
Cash Management Class 5,831,375
- --------------------------------------------------------------------------
Reserve Class 537,761
- --------------------------------------------------------------------------
Resource Class 2,575,170
- --------------------------------------------------------------------------
Directors' fees 605,192
- --------------------------------------------------------------------------
Transfer agent fees 5,162,855
- --------------------------------------------------------------------------
Other 143,818
- --------------------------------------------------------------------------
Filing fee refund (1,251,673)
==========================================================================
Total expenses 71,214,862
==========================================================================
Less: Fees waived (21,804,747)
==========================================================================
Net expenses 49,410,115
==========================================================================
Net investment income 437,437,928
==========================================================================
Net realized gain from investment securities 222,356
==========================================================================
Net increase in net assets resulting from operations $437,660,284
__________________________________________________________________________
==========================================================================
</Table>
See Notes to Financial Statements.
F-20
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- -----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 437,437,928 $ 871,551,545
- -----------------------------------------------------------------------------------------------
Net realized gain from investment securities 222,356 929,565
===============================================================================================
Net increase in net assets resulting from operations 437,660,284 872,481,110
===============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (339,841,789) (699,238,125)
- -----------------------------------------------------------------------------------------------
Private Investment Class (9,944,836) (23,638,000)
- -----------------------------------------------------------------------------------------------
Personal Investment Class (251,405) (309,171)
- -----------------------------------------------------------------------------------------------
Cash Management Class (72,636,877) (117,705,827)
- -----------------------------------------------------------------------------------------------
Reserve Class (240,042) (285,587)
- -----------------------------------------------------------------------------------------------
Resource Class (14,522,979) (30,374,835)
===============================================================================================
Decrease in net assets resulting from distributions (437,437,928) (871,551,545)
===============================================================================================
Share transactions-net:
Institutional Class (7,882,172,341) 2,349,669,794
- -----------------------------------------------------------------------------------------------
Private Investment Class 169,919,767 (481,056,789)
- -----------------------------------------------------------------------------------------------
Personal Investment Class 16,988,324 18,347,438
- -----------------------------------------------------------------------------------------------
Cash Management Class (1,286,520,760) 260,027,687
- -----------------------------------------------------------------------------------------------
Reserve Class 5,802,855 46,109,690
- -----------------------------------------------------------------------------------------------
Resource Class (306,784,517) 276,712,399
===============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (9,282,766,672) 2,469,810,219
===============================================================================================
Net increase (decrease) in net assets (9,282,544,316) 2,470,739,784
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS:
Beginning of year 37,318,945,505 34,848,205,721
===============================================================================================
End of year $28,036,401,189 $37,318,945,505
_______________________________________________________________________________________________
===============================================================================================
</Table>
See Notes to Financial Statements.
F-21
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Liquid Assets Portfolio (the "Fund") is an investment portfolio of
Short-Term Investments Co. (the "Company"). The Company is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital and liquidity. Each
company listed in the Schedule of Investments is organized in the United States
unless otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date. The Fund allocates realized and unrealized capital gains
and losses to a class based on the relative net assets of each class. The
Fund allocates income to a class based on the relative value of the settled
shares of each class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to
F-22
federal income taxes on otherwise taxable income (including net realized
capital gain) which is distributed to shareholders. Therefore, no provision
for federal income taxes is recorded in the financial statements. Any
capital loss carryforwards listed are reduced for limitations, if any, to
the extent required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets of the Fund. AIM has voluntarily agreed to limit
Total Fund operating expenses (excluding Rule 12b-1 fees, interest, taxes, fund
merger and reorganization expenses, extraordinary items, including other items
designated as such by the Board of Directors, and increases in expenses due to
expense offset arrangements, if any) to 0.12%. Voluntary expense limitations may
be modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived advisory fees of $18,538,393.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $1,478,810 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $5,044,459 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Reserve Class equals the maximum annual
rate of 0.30%, 0.55%, 0.08%, and 0.87%, respectively, of the average daily net
assets attributable to such class. Pursuant to the Plan, for the year ended
August 31, 2003, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$2,931,853, $193,606, $4,665,100, $463,548 and $2,575,170, respectively, after
FMC waived plan fees of $1,954,569, $71,297, $1,166,275, $74,213 and $0,
respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
F-23
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
During the year ended August 31, 2003, the Fund paid legal fees of $68,007
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ------------------------------------------------------------------------------------------
Distributions paid from ordinary income $437,437,928 $871,551,545
__________________________________________________________________________________________
==========================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 3,727,333
- -----------------------------------------------------------------------------
Temporary book/tax differences (1,048,876)
- -----------------------------------------------------------------------------
Capital (par value and additional paid-in) 28,033,722,732
=============================================================================
Total net assets $28,036,401,189
_____________________________________________________________________________
=============================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of director deferral of compensation and
retirement plan expenses.
F-24
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
2003 2002
------------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 419,054,374,755 $ 419,054,374,755 586,514,671,312 $ 586,514,671,312
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 9,405,817,790 9,405,817,790 17,787,233,352 17,787,233,352
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 133,770,375 133,770,375 135,176,893 135,176,893
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 66,799,786,336 66,799,786,336 93,169,483,414 93,169,483,414
- -----------------------------------------------------------------------------------------------------------
Reserve Class 102,414,453 102,414,453 132,778,052 132,778,052
- -----------------------------------------------------------------------------------------------------------
Resource Class 8,435,843,716 8,435,843,716 11,871,763,813 11,871,763,813
- -----------------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Institutional Class 93,354,431 93,354,431 191,080,549 191,080,549
- -----------------------------------------------------------------------------------------------------------
Private Investment Class 4,021,536 4,021,536 9,235,046 9,235,046
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class 178,509 178,509 222,812 222,812
- -----------------------------------------------------------------------------------------------------------
Cash Management Class 44,707,654 44,707,654 84,049,065 84,049,065
- -----------------------------------------------------------------------------------------------------------
Reserve Class 257,929 257,929 217,048 217,048
- -----------------------------------------------------------------------------------------------------------
Resource Class 12,586,231 12,586,231 27,437,407 27,437,407
- -----------------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (427,029,901,527) (427,029,901,527) (584,356,082,067) (584,356,082,067)
- -----------------------------------------------------------------------------------------------------------
Private Investment Class (9,239,919,559) (9,239,919,559) (18,277,525,187) (18,277,525,187)
- -----------------------------------------------------------------------------------------------------------
Personal Investment Class (116,960,560) (116,960,560) (117,052,267) (117,052,267)
- -----------------------------------------------------------------------------------------------------------
Cash Management Class (68,131,014,750) (68,131,014,750) (92,993,504,792) (92,993,504,792)
- -----------------------------------------------------------------------------------------------------------
Reserve Class (96,869,527) (96,869,527) (86,885,410) (86,885,410)
- -----------------------------------------------------------------------------------------------------------
Resource Class (8,755,214,464) (8,755,214,464) (11,622,488,821) (11,622,488,821)
===========================================================================================================
(9,282,766,672) $ (9,282,766,672) 2,469,810,219 $ 2,469,810,219
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-25
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
RESOURCE CLASS
-------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------
2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
====================================================================================================
Less distributions from net
investment income (0.01) (0.02) (0.05) (0.06) (0.05)
====================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
____________________________________________________________________________________________________
====================================================================================================
Total return(a) 1.12% 1.96% 5.33% 5.91% 4.96%
____________________________________________________________________________________________________
====================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $1,239,380 $1,546,155 $1,269,405 $1,102,431 $306,758
____________________________________________________________________________________________________
====================================================================================================
Ratio of expenses to average
net assets:
With fee waivers 0.31%(b) 0.31% 0.30% 0.29% 0.29%
- ----------------------------------------------------------------------------------------------------
Without fee waivers 0.37%(b) 0.39% 0.39% 0.39% 0.38%
====================================================================================================
Ratio of net investment income
to average net assets 1.14%(b) 1.92% 4.99% 5.84% 4.82%
____________________________________________________________________________________________________
====================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $1,287,585,199.
F-26
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Liquid
Assets Portfolio (a series portfolio of Short-Term Investments Co.), including
the schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, and the statement of changes in net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the years or periods in the two-year period ended August 31, 2000
have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Liquid
Assets Portfolio as of August 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the three-year period then ended, in conformity with accounting principles
generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-27
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY OR OFFICER SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- -----------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- -----------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- -----------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- -----------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -----------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- -----------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- -----------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
REQUIRED STATE INCOME TAX INFORMATION (Unaudited)
Of the ordinary dividends paid, 0.25% was derived from U.S. Treasury
Obligations.
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
PRIME PORTFOLIO
CASH MANAGEMENT CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your Goals. Our Solutions.
--Servicemark--
The report may be distributed only to current shareholders or
to persons who have received a current prospectus.
PRM-AR-4
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Prime
ROBERT H. Portfolio covers a fiscal year during which reductions in
GRAHAM] short-term interest rates caused yields on money market
funds and other short-term instruments to decline. Saying it
favored a more expansive monetary policy because the economy
had not yet exhibited sustainable growth, the Federal
Reserve Board (the Fed) lowered the federal funds rate twice
during the fiscal year. In November 2002, it reduced the
rate from 1.75% to 1.25%. In late June 2003, it reduced that
rate to 1.00%, its lowest level since 1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose
from 5.8% at the start of the fiscal year to 6.1% at its close. Despite the
growth in the economy, companies generally were reluctant to add workers,
relying on strong productivity growth to support earnings. During the second
quarter of 2003, productivity in the nonfarm business sector rose at a robust
6.8% annualized rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Cash Management Class outperformed its
indexes, as shown in the table. Had the advisor and distributor not waived fees
and/or reimbursed expenses, performance would have been lower. Through a
combination of short-term cash management vehicles and selective use of a longer
maturity schedule for higher yields, the portfolio continued to provide
attractive yields. The weighted average maturity (WAM) remained in the 12- to
28-day range; at the close of the reporting period, the WAM stood at 19 days.
The portfolio will continue to maintain a relatively short maturity structure to
take advantage of any sudden rise in market yields. At the close of the fiscal
year, net assets of the Cash Management Class stood at $536.7 million. Past
performance cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
================================================================================
YIELDS AS OF 8/31/03*
MONTHLY YIELD SEVEN-DAY
SEC YIELD
Prime Portfolio 0.87% 0.88%
Cash Management Class
iMoneyNet Money Fund Averages--Trademark-- 0.71% 0.72%
First-Tier Institutions Only
iMoneyNet Money Fund Averages--Trademark-- 0.67% 0.67%
Total Institutions Only
================================================================================
(continued)
The Prime Portfolio seeks to maximize current income to the extent
consistent with preservation of capital and maintenance of liquidity. It invests
in high-grade taxable money market instruments with maturities of 60 days or
fewer, including U.S. government obligations bank obligations, commercial paper
and selected repurchase-agreement securities. An investment in a money market
fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
investing in the fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
*The seven-day SEC Yield and monthly yield represent annualized results for the
period, net of fees and expenses, and exclude any realized capital gains or
losses. Yields will fluctuate. iMoneyNet, Inc. is an independent mutual fund
performance monitor. The iMoneyNet First-Tier Institutions Only category
consists of 276 funds that invest in any allowable 2a-7 investment, except
second-tier commercial paper. The Total Institutions Only category consists of
589 funds with a minimum initial investment of $100,000 or funds that are only
open to institutions.
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
COMMERCIAL PAPER-64.12%(a)
FINANCIALS-64.12%
ASSET-BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-0.94%
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 08/04/03; Cost $32,599,732)
1.07% 10/02/03 $ 32,657 $ 32,626,910
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $32,941,150)
1.07% 10/03/03 33,000 32,968,614
===================================================================================
65,595,524
===================================================================================
ASSET-BACKED SECURITIES-CONSUMER
RECEIVABLES-3.68%
Delaware Funding Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $24,956,160)
1.07% 10/24/03 25,000 24,960,618
- -----------------------------------------------------------------------------------
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $15,502,879)
1.04% 09/03/03 15,528 15,527,103
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $30,557,983)
1.06% 09/12/03 30,585 30,575,094
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $35,968,178)
1.07% 10/20/03 36,026 35,973,532
- -----------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $27,875,215)
1.04% 09/05/03 27,922 27,918,773
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $55,771,367)
1.06% 10/07/03 55,857 55,797,575
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $27,933,760)
1.07% 10/09/03 27,977 27,945,402
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $38,970,703)
1.07% 10/15/03 39,038 38,986,947
===================================================================================
257,685,044
===================================================================================
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-FULLY BACKED-8.51%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 08/18/03; Cost $59,921,532)
1.07% 10/01/03 $ 60,000 $ 59,946,499
- -----------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 07/24/03; Cost $99,826,667)
1.04% 09/22/03 100,000 99,939,333
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,000)
1.08% 09/24/03 100,000 99,931,000
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $49,917,500)
1.08% 09/25/03 50,000 49,964,000
- -----------------------------------------------------------------------------------
(Acquired 08/08/03; Cost $70,256,040)
1.06% 10/02/03 70,370 70,305,768
- -----------------------------------------------------------------------------------
Newport Funding Corp. (Deutsche Bank A.G.,
New York Branch-ABS Program Sponsor)(b)(c)
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
Triple-A One Funding Corp. (MBIA Insurance
Corp.-ABS Programs Sponsor)(b)(c)
(Acquired 07/24/03; Cost $77,038,026)
1.04% 09/10/03 77,145 77,124,942
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,656,098)
1.06% 09/12/03 49,700 49,683,903
- -----------------------------------------------------------------------------------
(Acquired 08/25/03; Cost $24,999,264)
1.07% 10/08/03 25,032 25,004,472
===================================================================================
596,825,275
===================================================================================
ASSET-BACKED SECURITIES-MULTI-PURPOSE-19.58%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/13/03; Cost $34,970,114)
1.06% 09/11/03 35,000 34,989,694
- -----------------------------------------------------------------------------------
Barton Capital Corp. (Societe Generale-ABS
Program Sponsor)(b)(c)
(Acquired 08/08/03; Cost $91,097,468)
1.06% 10/06/03 91,256 91,161,956
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $21,880,131)
1.07% 10/09/03 21,914 21,889,249
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $45,522,435)
1.06% 10/10/03 45,603 45,550,633
- -----------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Charta LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/05/03; Cost $79,893,000)
1.07% 09/19/03 $ 80,000 $ 79,957,200
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $49,915,292)
1.07% 10/01/03 50,000 49,955,417
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $99,824,639)
1.07% 10/16/03 100,000 99,866,250
- -----------------------------------------------------------------------------------
CRC Funding LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,860,306)
1.07% 10/07/03 100,000 99,893,000
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $99,829,222)
1.06% 10/08/03 100,000 99,891,055
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $76,866,234)
1.06% 10/09/03 77,000 76,913,845
- -----------------------------------------------------------------------------------
Edison Asset Securitization LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 08/04/03; Cost $7,599,876)
1.07% 10/01/03 7,613 7,606,212
- -----------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $199,643,333)
1.07% 10/20/03 200,000 199,708,722
- -----------------------------------------------------------------------------------
Park Avenue Receivables Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/05/03; Cost $30,001,501)
1.07% 09/16/03 30,039 30,025,608
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $150,009,953)
1.07% 10/15/03 150,269 150,072,482
- -----------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $67,139,546)
1.03% 09/09/03 67,255 67,239,606
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,947,250)
1.06% 09/18/03 50,000 49,975,090
- -----------------------------------------------------------------------------------
Windmill Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/01/03; Cost $68,634,659)
1.07% 09/02/03 68,700 68,697,958
===================================================================================
1,373,320,366
===================================================================================
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE
RECEIVABLES-17.88%
CAFCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $99,881,556)
1.04% 09/03/03 $100,000 $ 99,994,222
- -----------------------------------------------------------------------------------
(Acquired 07/24/03; Cost $99,861,333)
1.04% 09/10/03 100,000 99,974,000
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $39,941,744)
1.07% 10/06/03 40,000 39,958,389
- -----------------------------------------------------------------------------------
CIESCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $34,951,467)
1.04% 09/10/03 35,000 34,990,900
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $74,877,396)
1.07% 10/21/03 75,000 74,888,542
- -----------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 07/24/03; Cost $89,844,000)
1.04% 09/22/03 90,000 89,945,400
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,841,000)
1.08% 09/23/03 100,000 99,934,000
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
FCAR Owner Trust-Series II (Ford Motor Credit
Co.-ABS Program Sponsor)
(Acquired 07/22/03; Cost $99,839,778)
1.03% 09/16/03 100,000 99,957,083
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $101,818,100)
1.07% 10/03/03 102,000 101,902,987
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $47,423,076)
1.06% 10/07/03 47,500 47,449,650
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $49,913,806)
1.07% 10/24/03 50,000 49,921,236
- -----------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust-Series A-1+ (General
Motors Acceptance Corp.-ABS Program
Sponsor)
(Acquired 07/25/03; Cost $99,826,667)
1.04% 09/23/03 $100,000 $ 99,936,444
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,056)
1.06% 09/25/03 100,000 99,929,333
- -----------------------------------------------------------------------------------
(Acquired 08/14/03; Cost $49,915,292)
1.07% 10/10/03 50,000 49,942,042
===================================================================================
1,253,575,975
===================================================================================
CONSUMER FINANCE-0.71%
Toyota Motor Credit Corp.
1.02% 09/04/03 50,000 49,995,750
===================================================================================
DIVERSIFIED BANKS-4.99%
UBS Finance Delaware, LLC
1.03% 09/04/03 100,000 99,991,417
- -----------------------------------------------------------------------------------
1.03% 09/05/03 100,000 99,988,555
- -----------------------------------------------------------------------------------
1.02% 09/09/03 150,000 149,966,000
===================================================================================
349,945,972
===================================================================================
DIVERSIFIED CAPITAL MARKETS-3.56%
Citigroup Global Markets Holdings Inc.
1.07% 10/22/03 100,000 99,848,417
- -----------------------------------------------------------------------------------
Citigroup Inc.
1.07% 10/17/03 150,000 149,794,920
===================================================================================
249,643,337
===================================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.71%
SBC International Inc.
(Acquired 08/21/03; Cost $49,960,625)
1.05%(b) 09/17/03 50,000 49,976,667
===================================================================================
MULTI-LINE INSURANCE-1.42%
GE Financial Assurance Holdings, Inc.
(Acquired 08/25/03; Cost $99,850,000)
1.08%(b) 10/14/03 100,000 99,871,000
===================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-2.14%
General Electric Capital Corp.
1.07% 10/08/03 $ 50,000 $ 49,945,014
- -----------------------------------------------------------------------------------
1.07% 10/21/03 100,000 99,851,389
===================================================================================
149,796,403
===================================================================================
Total Financials 4,496,231,313
===================================================================================
Total Commercial Paper (Cost
$4,496,231,313) 4,496,231,313
===================================================================================
MASTER NOTE AGREEMENTS-6.34%(d)
Merrill Lynch Mortgage Capital, Inc.
(Acquired 08/25/03; Cost $100,000,000)
1.27%(b)(e) 02/23/04 100,000 100,000,000
- -----------------------------------------------------------------------------------
Morgan Stanley
(Acquired 03/17/03; Cost $345,000,000)
1.20%(b)(f) 09/15/03 345,000 345,000,000
===================================================================================
Total Master Note Agreements (Cost
$445,000,000) 445,000,000
===================================================================================
PROMISSORY NOTES-4.99%
Goldman Sachs Group, Inc. (The)
(Acquired 08/29/03; Cost $350,000,000)
1.16%(b)(g)(h) 10/28/03 350,000 350,000,000
===================================================================================
BANK NOTES-4.08%
Standard Federal Bank, N.A.
1.02% 09/08/03 200,000 200,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Bank N.A.
1.02% 09/03/03 51,000 50,999,971
- -----------------------------------------------------------------------------------
1.06% 09/22/03 35,000 35,000,000
===================================================================================
Total Bank Notes (Cost $285,999,971) 285,999,971
===================================================================================
CERTIFICATE OF DEPOSIT-3.49%
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Co.
1.06% 09/18/03 100,000 100,000,000
- -----------------------------------------------------------------------------------
1.06% 10/06/03 70,000 69,999,994
===================================================================================
Total Certificates of Deposit (Cost
$244,999,994) 244,999,994
===================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-0.23%
Federal Home Loan Bank Disc. Notes,
0.84% (Cost $15,786,632)(a) 09/02/03 $ 15,787 $ 15,786,632
===================================================================================
Total Investments (excluding Repurchase
Agreements) (Cost $5,838,017,910) 5,838,017,910
===================================================================================
REPURCHASE AGREEMENTS-16.82%
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.00%(i) 09/02/03 50,000 50,000,000
- -----------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(j) 09/02/03 300,000 300,000,000
- -----------------------------------------------------------------------------------
Societe Generale-New York Branch (France)
1.08%(k) 09/02/03 305,000 305,000,000
- -----------------------------------------------------------------------------------
Wachovia Securities, Inc.
1.03%(l) 09/02/03 224,384 224,383,746
- -----------------------------------------------------------------------------------
1.08%(m) 09/02/03 300,000 300,000,000
===================================================================================
Total Repurchase Agreements (Cost
$1,179,383,746) 1,179,383,746
===================================================================================
TOTAL INVESTMENTS-100.07% (Cost
$7,017,401,656)(n) 7,017,401,656
___________________________________________________________________________________
===================================================================================
OTHER ASSETS LESS LIABILITIES-(0.07%) (5,125,092)
___________________________________________________________________________________
===================================================================================
NET ASSETS-100% $7,012,276,564
___________________________________________________________________________________
===================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
Disc. - Discount
</Table>
Notes to Schedule of Investments:
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$3,942,811,076, which represented 56.23% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(c) Principal and interest are secured by bond insurance provided by one of the
following companies: Ambac Assurance Corp., Financial Guaranty Insurance Co.
or MBIA Insurance Corp.
(d) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-7
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(g) Security considered to be illiquid. The market value of this security at
8/31/03 represents 5.0% of the Fund's net assets.
(h) Interest rate is redetermined daily. Rate shown is rate in effect on
08/31/03.
(i) Repurchase agreement entered into 08/29/03 with a maturing value of
$50,005,556. Collateralized by $50,228,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 11/05/12 with an aggregate market value at 08/31/03
of $51,000,205.
(j) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(k) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$400,048,000. Collateralized by $462,114,538 U.S. Government obligations, 0%
to 7.68% due 09/26/05 to 08/01/33 with an aggregate market value at 08/31/03
of $408,002,899.
(l) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(m) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-8
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $5,838,017,910
- --------------------------------------------------------------------------------
Repurchase agreements 1,179,383,746
- --------------------------------------------------------------------------------
Receivables for:
Interest 1,029,605
- --------------------------------------------------------------------------------
Amount due from advisor 39,846
- --------------------------------------------------------------------------------
Investment for deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Other assets 162,686
================================================================================
Total assets 7,018,876,058
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Dividends 5,416,551
- --------------------------------------------------------------------------------
Deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Accrued distribution fees 341,271
- --------------------------------------------------------------------------------
Accrued directors' fees 364,386
- --------------------------------------------------------------------------------
Accrued transfer agent fees 134,881
- --------------------------------------------------------------------------------
Accrued operating expenses 100,140
================================================================================
Total liabilities 6,599,494
================================================================================
Net assets applicable to shares outstanding $7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $7,010,848,166
- --------------------------------------------------------------------------------
Undistributed net investment income 1,430,149
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (1,751)
================================================================================
$7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS:
Institutional Class $5,589,107,525
________________________________________________________________________________
================================================================================
Private Investment Class $ 560,824,671
________________________________________________________________________________
================================================================================
Personal Investment Class $ 133,718,682
________________________________________________________________________________
================================================================================
Cash Management Class $ 536,685,443
________________________________________________________________________________
================================================================================
Reserve Class $ 103,681,241
________________________________________________________________________________
================================================================================
Resource Class $ 88,259,002
________________________________________________________________________________
================================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 5,589,124,342
________________________________________________________________________________
================================================================================
Private Investment Class 560,881,268
________________________________________________________________________________
================================================================================
Personal Investment Class 133,660,128
________________________________________________________________________________
================================================================================
Cash Management Class 536,712,535
________________________________________________________________________________
================================================================================
Reserve Class 103,681,137
________________________________________________________________________________
================================================================================
Resource Class 88,218,740
________________________________________________________________________________
================================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-9
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $110,013,685
================================================================================
EXPENSES:
Advisory fees 11,975,189
- --------------------------------------------------------------------------------
Administrative services fees 709,422
- --------------------------------------------------------------------------------
Distribution fees:
Private Investment Class 2,472,464
- --------------------------------------------------------------------------------
Personal Investment Class 1,153,443
- --------------------------------------------------------------------------------
Cash Management Class 794,336
- --------------------------------------------------------------------------------
Reserve Class 1,424,817
- --------------------------------------------------------------------------------
Resource Class 288,942
- --------------------------------------------------------------------------------
Transfer agent fees 1,259,339
- --------------------------------------------------------------------------------
Directors' fees 147,029
- --------------------------------------------------------------------------------
Other 47,539
================================================================================
Total expenses 20,272,520
================================================================================
Less: Fees waived (7,544,631)
================================================================================
Net expenses 12,727,889
================================================================================
Net investment income 97,285,796
================================================================================
Net increase in net assets resulting from operations $ 97,285,796
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-10
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 97,285,796 $ 194,565,853
- ---------------------------------------------------------------------------------
Net realized gain (loss) from investment
securities -- (1,014)
=================================================================================
Net increase in net assets resulting
from operations 97,285,796 194,564,839
=================================================================================
Distributions to shareholders from net
investment income:
Institutional Class (79,265,979) (152,003,031)
- ---------------------------------------------------------------------------------
Private Investment Class (4,790,723) (9,135,125)
- ---------------------------------------------------------------------------------
Personal Investment Class (1,135,614) (2,982,406)
- ---------------------------------------------------------------------------------
Cash Management Class (9,794,878) (20,969,503)
- ---------------------------------------------------------------------------------
Reserve Class (602,071) (1,671,130)
- ---------------------------------------------------------------------------------
Resource Class (1,696,366) (7,804,658)
=================================================================================
Decrease in net assets resulting from
distributions (97,285,631) (194,565,853)
=================================================================================
Share transactions-net:
Institutional Class (341,182,886) (1,909,907,666)
- ---------------------------------------------------------------------------------
Private Investment Class 61,372,457 (73,145,194)
- ---------------------------------------------------------------------------------
Personal Investment Class (43,774,130) (38,793,383)
- ---------------------------------------------------------------------------------
Cash Management Class (437,330,384) (165,758,781)
- ---------------------------------------------------------------------------------
Reserve Class (42,828,014) 2,060,196
- ---------------------------------------------------------------------------------
Resource Class (125,390,496) (239,950,953)
=================================================================================
Net increase (decrease) in net assets
resulting from share transactions (929,133,453) (2,425,495,781)
=================================================================================
Net increase (decrease) in net assets (929,133,288) (2,425,496,795)
=================================================================================
NET ASSETS:
Beginning of year 7,941,409,852 10,366,906,647
=================================================================================
End of year $7,012,276,564 $ 7,941,409,852
_________________________________________________________________________________
=================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Prime Portfolio (the "Fund") is an investment portfolio of Short-Term
Investments Co. (the "Company"). The Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
F-11
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to maximize current income consistent
with the preservation of capital and the maintenance of liquidity. Each company
listed in the Schedule of Investments is organized in the United States unless
otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gain) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. Any capital loss
carryforwards listed are reduced for limitations, if any, to the extent
required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
F-12
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets. AIM has voluntarily agreed to limit Fund operating
expenses (excluding Rule 12b-1 fees, interest, taxes, fund merger and
reorganization expenses, extraordinary items, including other items designated
as such by the Board of Directors, and increases in expenses due to expense
offset arrangements, if any) to 0.12%. Voluntary expense limitations may be
modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived fees of $5,829,596.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $709,422 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $1,197,519 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of the such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class, the Reserve Class and the Resource Class
equals the maximum annual rate of 0.30%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Pursuant to the Plan, for the year ended August 31, 2003, the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class paid $1,483,478, $841,521, $635,469, $1,227,345 and
$231,154, respectively, after FMC waived plan fees of $988,986, $311,922,
$158,867, $197,472 and $57,788, respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
F-13
During the year ended August 31, 2003, the Fund paid legal fees of $17,282
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------------
Distributions paid from ordinary income $97,285,631 $194,565,853
_______________________________________________________________________________________
=======================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 2,065,838
- -------------------------------------------------------------------------------------------
Temporary book/tax differences (636,426)
- -------------------------------------------------------------------------------------------
Capital loss carryforward (1,014)
- -------------------------------------------------------------------------------------------
Capital (par value and additional paid-in) 7,010,848,166
===========================================================================================
Total net assets $7,012,276,564
___________________________________________________________________________________________
===========================================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are primarily the result of director's deferral of
compensation and retirement plan expenses.
The Fund's capital loss carryforward expires as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD
- -----------------------------------------------------------------------------------------
August 31, 2011 $1,014
_________________________________________________________________________________________
=========================================================================================
</Table>
F-14
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
2003 2002
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------
Sold:
Institutional Class 39,538,699,529 $ 39,538,699,529 49,867,711,739 $ 49,867,711,739
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,361,767,415 2,361,767,415 2,478,100,689 2,478,100,689
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,713,575,941 1,713,575,941 2,372,542,859 2,372,542,859
- -------------------------------------------------------------------------------------------------
Cash Management
Class 4,401,672,934 4,401,672,934 5,844,111,815 5,844,111,815
- -------------------------------------------------------------------------------------------------
Reserve Class 5,302,349,656 5,302,349,656 1,426,473,845 1,426,473,845
- -------------------------------------------------------------------------------------------------
Resource Class 831,814,148 831,814,148 2,197,934,978 2,197,934,978
=================================================================================================
Issued as
reinvestment of
dividends:
Institutional Class 5,289,215 5,289,215 9,850,826 9,850,826
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,463,410 2,463,410 4,909,338 4,909,338
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,073,144 1,073,144 3,033,277 3,033,277
- -------------------------------------------------------------------------------------------------
Cash Management
Class 3,808,779 3,808,779 13,867,829 13,867,829
- -------------------------------------------------------------------------------------------------
Reserve Class 616,859 616,859 1,755,442 1,755,442
- -------------------------------------------------------------------------------------------------
Resource Class 1,719,060 1,719,060 8,321,610 8,321,610
=================================================================================================
Reacquired:
Institutional Class (39,885,171,630) (39,885,171,630) (51,787,470,231) (51,787,470,231)
- -------------------------------------------------------------------------------------------------
Private Investment
Class (2,302,858,368) (2,302,858,368) (2,556,155,221) (2,556,155,221)
- -------------------------------------------------------------------------------------------------
Personal Investment
Class (1,758,423,215) (1,758,423,215) (2,414,369,519) (2,414,369,519)
- -------------------------------------------------------------------------------------------------
Cash Management
Class (4,842,812,097) (4,842,812,097) (6,023,738,425) (6,023,738,425)
- -------------------------------------------------------------------------------------------------
Reserve Class (5,345,794,529) (5,345,794,529) (1,426,169,091) (1,426,169,091)
- -------------------------------------------------------------------------------------------------
Resource Class (958,923,704) (958,923,704) (2,446,207,541) (2,446,207,541)
=================================================================================================
(929,133,453) $ (929,133,453) (2,425,495,781) $ (2,425,495,781)
_________________________________________________________________________________________________
=================================================================================================
</Table>
F-15
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-16
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CASH MANAGEMENT CLASS
-----------------------------------------------------------------
YEAR ENDED AUGUST 31,
-----------------------------------------------------------------
2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
- ---------------------------------------------------------------------------------------------------
Less dividends from net
investment income (0.01) (0.02) (0.05) (0.06) (0.05)
===================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
___________________________________________________________________________________________________
===================================================================================================
Total return(a) 1.19% 1.93% 5.37% 6.00% 5.07%
___________________________________________________________________________________________________
===================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $536,685 $974,016 $1,139,775 $1,157,412 $1,253,799
___________________________________________________________________________________________________
===================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.18%(b) 0.18% 0.17% 0.17% 0.17%
- ---------------------------------------------------------------------------------------------------
Without fee waivers 0.28%(b) 0.24% 0.19% 0.19% 0.19%
===================================================================================================
Ratio of net investment income
to average net assets 1.20%(b) 1.97% 5.33% 5.86% 4.94%
___________________________________________________________________________________________________
===================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $794,336,286.
F-17
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Prime
Portfolio (a series portfolio of Short-Term Investments Co.), including the
schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended August
31, 2000 have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Portfolio as of August 31, 2003, the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
three-year period then ended, in conformity with accounting principles generally
accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-18
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- ---------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- ---------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- ---------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- ---------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- ---------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
<Caption>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
PRIME PORTFOLIO
INSTITUTIONAL CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
PRM-AR-1
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Prime
ROBERT H. Portfolio covers a fiscal year during which reductions in
GRAHAM] short-term interest rates caused yields on money market
funds and other short-term instruments to decline. Saying it
favored a more expansive monetary policy because the economy
had not yet exhibited sustainable growth, the Federal
Reserve Board (the Fed) lowered the federal funds rate twice
during the fiscal year. In November 2002, it reduced the
rate from 1.75% to 1.25%. In late June 2003, it reduced that
rate to 1.00%, its lowest level since 1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose
from 5.8% at the start of the fiscal year to 6.1% at its close. Despite the
growth in the economy, companies generally were reluctant to add workers,
relying on strong productivity growth to support earnings. During the second
quarter of 2003, productivity in the nonfarm business sector rose at a robust
6.8% annualized rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Institutional Class outperformed its
indexes, as shown in the table. Had the advisor not waived fees and/or
reimbursed expenses, performance would have been lower. Through a combination of
short-term cash management vehicles and selective use of a longer maturity
schedule for higher yields, the portfolio continued to provide attractive
yields. The weighted average maturity (WAM) remained in the 12- to 28-day range;
at the close of the reporting period, the WAM stood at 19 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Institutional Class stood at $5.6 billion. Past performance
cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
================================================================================
YIELDS AS OF 8/31/03*
MONTHLY YIELD SEVEN-DAY
SEC YIELD
Prime Portfolio 0.95% 0.96%
Institutional Class
iMoneyNet Money Fund Averages--Trademark-- 0.71% 0.72%
First-Tier Institutions Only
iMoneyNet Money Fund Averages--Trademark-- 0.67% 0.67%
Total Institutions Only
================================================================================
(continued)
The Prime Portfolio seeks to maximize current income to the extent
consistent with preservation of capital and maintenance of liquidity. It invests
in high-grade taxable money market instruments with maturities of 60 days or
fewer, including U.S. government obligations bank obligations, commercial paper
and selected repurchase-agreement securities. An investment in a money market
fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
investing in the fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
*The seven-day SEC Yield and monthly yield represent annualized results for the
period, net of fees and expenses, and exclude any realized capital gains or
losses. Yields will fluctuate. iMoneyNet, Inc. is an independent mutual fund
performance monitor. The iMoneyNet First-Tier Institutions Only category
consists of 276 funds that invest in any allowable 2a-7 investment, except
second-tier commercial paper. The Total Institutions Only category consists of
589 funds with a minimum initial investment of $100,000 or funds that are only
open to institutions.
2
================================================================================
[LINE ART]
MONTHLY YIELD COMPARISON
Year ended 8/31/03 (Yields are monthly yields for the month-ends shown.)
<Table>
<Caption>
SHORT-TERM INVESTMENTS CO. IMONEYNET MONEY FUND AVERAGES--TRADEMARK-- IMONEYNET MONEY FUND AVERAGES--TRADEMARK--
PRIME PORTFOLIO FIRST-TIER INSTITUTIONS ONLY TOTAL INSTITUTIONS ONLY
INSTITUTIONAL CLASS
YIELD YIELD YIELD
9/02 1.68 1.42 1.46
10/02 1.69 1.40 1.45
11/02 1.46 1.20 1.26
12/02 1.32 1.07 1.12
1/03 1.23 0.99 1.05
2/03 1.20 0.95 1.00
3/03 1.19 0.92 0.96
4/03 1.18 0.89 0.93
5/03 1.18 0.86 0.91
6/03 1.13 0.81 0.87
7/03 0.97 0.68 0.74
8/03 0.95 0.67 0.71
</Table>
================================================================================
================================================================================
[LINE ART]
WEIGHTED AVERAGE MATURITY COMPARISON
Year ended 8/31/03, as of the month-ends shown.
<Table>
<Caption>
SHORT-TERM INVESTMENTS CO. IMONEYNET MONEY FUND AVERAGES--TRADEMARK-- IMONEYNET MONEY FUND AVERAGES--TRADEMARK--
PRIME PORTFOLIO FIRST-TIER INSTITUTIONS ONLY TOTAL INSTITUTIONS ONLY
INSTITUTIONAL CLASS
DAYS DAYS DAYS
9/02 20 54 53
10/02 21 54 53
11/02 19 54 53
12/02 13 51 51
1/03 18 50 50
2/03 17 51 50
3/03 14 53 53
4/03 19 53 52
5/03 14 51 50
6/03 19 54 54
7/03 16 54 54
8/03 19 55 55
</Table>
Source: iMoneyNet Financial Data, Inc. iMoneyNet Money Fund Report--Registered
Trademark-- for weighted average maturities; iMoneyNet Money Fund
Insight--Registered Trademark-- for monthly yields.
================================================================================
3
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
COMMERCIAL PAPER-64.12%(a)
FINANCIALS-64.12%
ASSET-BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-0.94%
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 08/04/03; Cost $32,599,732)
1.07% 10/02/03 $ 32,657 $ 32,626,910
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $32,941,150)
1.07% 10/03/03 33,000 32,968,614
===================================================================================
65,595,524
===================================================================================
ASSET-BACKED SECURITIES-CONSUMER
RECEIVABLES-3.68%
Delaware Funding Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $24,956,160)
1.07% 10/24/03 25,000 24,960,618
- -----------------------------------------------------------------------------------
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $15,502,879)
1.04% 09/03/03 15,528 15,527,103
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $30,557,983)
1.06% 09/12/03 30,585 30,575,094
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $35,968,178)
1.07% 10/20/03 36,026 35,973,532
- -----------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $27,875,215)
1.04% 09/05/03 27,922 27,918,773
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $55,771,367)
1.06% 10/07/03 55,857 55,797,575
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $27,933,760)
1.07% 10/09/03 27,977 27,945,402
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $38,970,703)
1.07% 10/15/03 39,038 38,986,947
===================================================================================
257,685,044
===================================================================================
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-FULLY BACKED-8.51%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 08/18/03; Cost $59,921,532)
1.07% 10/01/03 $ 60,000 $ 59,946,499
- -----------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 07/24/03; Cost $99,826,667)
1.04% 09/22/03 100,000 99,939,333
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,000)
1.08% 09/24/03 100,000 99,931,000
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $49,917,500)
1.08% 09/25/03 50,000 49,964,000
- -----------------------------------------------------------------------------------
(Acquired 08/08/03; Cost $70,256,040)
1.06% 10/02/03 70,370 70,305,768
- -----------------------------------------------------------------------------------
Newport Funding Corp. (Deutsche Bank A.G.,
New York Branch-ABS Program Sponsor)(b)(c)
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
Triple-A One Funding Corp. (MBIA Insurance
Corp.-ABS Programs Sponsor)(b)(c)
(Acquired 07/24/03; Cost $77,038,026)
1.04% 09/10/03 77,145 77,124,942
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,656,098)
1.06% 09/12/03 49,700 49,683,903
- -----------------------------------------------------------------------------------
(Acquired 08/25/03; Cost $24,999,264)
1.07% 10/08/03 25,032 25,004,472
===================================================================================
596,825,275
===================================================================================
ASSET-BACKED SECURITIES-MULTI-PURPOSE-19.58%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/13/03; Cost $34,970,114)
1.06% 09/11/03 35,000 34,989,694
- -----------------------------------------------------------------------------------
Barton Capital Corp. (Societe Generale-ABS
Program Sponsor)(b)(c)
(Acquired 08/08/03; Cost $91,097,468)
1.06% 10/06/03 91,256 91,161,956
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $21,880,131)
1.07% 10/09/03 21,914 21,889,249
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $45,522,435)
1.06% 10/10/03 45,603 45,550,633
- -----------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Charta LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/05/03; Cost $79,893,000)
1.07% 09/19/03 $ 80,000 $ 79,957,200
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $49,915,292)
1.07% 10/01/03 50,000 49,955,417
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $99,824,639)
1.07% 10/16/03 100,000 99,866,250
- -----------------------------------------------------------------------------------
CRC Funding LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,860,306)
1.07% 10/07/03 100,000 99,893,000
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $99,829,222)
1.06% 10/08/03 100,000 99,891,055
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $76,866,234)
1.06% 10/09/03 77,000 76,913,845
- -----------------------------------------------------------------------------------
Edison Asset Securitization LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 08/04/03; Cost $7,599,876)
1.07% 10/01/03 7,613 7,606,212
- -----------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $199,643,333)
1.07% 10/20/03 200,000 199,708,722
- -----------------------------------------------------------------------------------
Park Avenue Receivables Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/05/03; Cost $30,001,501)
1.07% 09/16/03 30,039 30,025,608
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $150,009,953)
1.07% 10/15/03 150,269 150,072,482
- -----------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $67,139,546)
1.03% 09/09/03 67,255 67,239,606
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,947,250)
1.06% 09/18/03 50,000 49,975,090
- -----------------------------------------------------------------------------------
Windmill Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/01/03; Cost $68,634,659)
1.07% 09/02/03 68,700 68,697,958
===================================================================================
1,373,320,366
===================================================================================
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE
RECEIVABLES-17.88%
CAFCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $99,881,556)
1.04% 09/03/03 $100,000 $ 99,994,222
- -----------------------------------------------------------------------------------
(Acquired 07/24/03; Cost $99,861,333)
1.04% 09/10/03 100,000 99,974,000
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $39,941,744)
1.07% 10/06/03 40,000 39,958,389
- -----------------------------------------------------------------------------------
CIESCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $34,951,467)
1.04% 09/10/03 35,000 34,990,900
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $74,877,396)
1.07% 10/21/03 75,000 74,888,542
- -----------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 07/24/03; Cost $89,844,000)
1.04% 09/22/03 90,000 89,945,400
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,841,000)
1.08% 09/23/03 100,000 99,934,000
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
FCAR Owner Trust-Series II (Ford Motor Credit
Co.-ABS Program Sponsor)
(Acquired 07/22/03; Cost $99,839,778)
1.03% 09/16/03 100,000 99,957,083
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $101,818,100)
1.07% 10/03/03 102,000 101,902,987
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $47,423,076)
1.06% 10/07/03 47,500 47,449,650
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $49,913,806)
1.07% 10/24/03 50,000 49,921,236
- -----------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust-Series A-1+ (General
Motors Acceptance Corp.-ABS Program
Sponsor)
(Acquired 07/25/03; Cost $99,826,667)
1.04% 09/23/03 $100,000 $ 99,936,444
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,056)
1.06% 09/25/03 100,000 99,929,333
- -----------------------------------------------------------------------------------
(Acquired 08/14/03; Cost $49,915,292)
1.07% 10/10/03 50,000 49,942,042
===================================================================================
1,253,575,975
===================================================================================
CONSUMER FINANCE-0.71%
Toyota Motor Credit Corp.
1.02% 09/04/03 50,000 49,995,750
===================================================================================
DIVERSIFIED BANKS-4.99%
UBS Finance Delaware, LLC
1.03% 09/04/03 100,000 99,991,417
- -----------------------------------------------------------------------------------
1.03% 09/05/03 100,000 99,988,555
- -----------------------------------------------------------------------------------
1.02% 09/09/03 150,000 149,966,000
===================================================================================
349,945,972
===================================================================================
DIVERSIFIED CAPITAL MARKETS-3.56%
Citigroup Global Markets Holdings Inc.
1.07% 10/22/03 100,000 99,848,417
- -----------------------------------------------------------------------------------
Citigroup Inc.
1.07% 10/17/03 150,000 149,794,920
===================================================================================
249,643,337
===================================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.71%
SBC International Inc.
(Acquired 08/21/03; Cost $49,960,625)
1.05%(b) 09/17/03 50,000 49,976,667
===================================================================================
MULTI-LINE INSURANCE-1.42%
GE Financial Assurance Holdings, Inc.
(Acquired 08/25/03; Cost $99,850,000)
1.08%(b) 10/14/03 100,000 99,871,000
===================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-2.14%
General Electric Capital Corp.
1.07% 10/08/03 $ 50,000 $ 49,945,014
- -----------------------------------------------------------------------------------
1.07% 10/21/03 100,000 99,851,389
===================================================================================
149,796,403
===================================================================================
Total Financials 4,496,231,313
===================================================================================
Total Commercial Paper (Cost
$4,496,231,313) 4,496,231,313
===================================================================================
MASTER NOTE AGREEMENTS-6.34%(d)
Merrill Lynch Mortgage Capital, Inc.
(Acquired 08/25/03; Cost $100,000,000)
1.27%(b)(e) 02/23/04 100,000 100,000,000
- -----------------------------------------------------------------------------------
Morgan Stanley
(Acquired 03/17/03; Cost $345,000,000)
1.20%(b)(f) 09/15/03 345,000 345,000,000
===================================================================================
Total Master Note Agreements (Cost
$445,000,000) 445,000,000
===================================================================================
PROMISSORY NOTES-4.99%
Goldman Sachs Group, Inc. (The)
(Acquired 08/29/03; Cost $350,000,000)
1.16%(b)(g)(h) 10/28/03 350,000 350,000,000
===================================================================================
BANK NOTES-4.08%
Standard Federal Bank, N.A.
1.02% 09/08/03 200,000 200,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Bank N.A.
1.02% 09/03/03 51,000 50,999,971
- -----------------------------------------------------------------------------------
1.06% 09/22/03 35,000 35,000,000
===================================================================================
Total Bank Notes (Cost $285,999,971) 285,999,971
===================================================================================
CERTIFICATE OF DEPOSIT-3.49%
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Co.
1.06% 09/18/03 100,000 100,000,000
- -----------------------------------------------------------------------------------
1.06% 10/06/03 70,000 69,999,994
===================================================================================
Total Certificates of Deposit (Cost
$244,999,994) 244,999,994
===================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-0.23%
Federal Home Loan Bank Disc. Notes,
0.84% (Cost $15,786,632)(a) 09/02/03 $ 15,787 $ 15,786,632
===================================================================================
Total Investments (excluding Repurchase
Agreements) (Cost $5,838,017,910) 5,838,017,910
===================================================================================
REPURCHASE AGREEMENTS-16.82%
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.00%(i) 09/02/03 50,000 50,000,000
- -----------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(j) 09/02/03 300,000 300,000,000
- -----------------------------------------------------------------------------------
Societe Generale-New York Branch (France)
1.08%(k) 09/02/03 305,000 305,000,000
- -----------------------------------------------------------------------------------
Wachovia Securities, Inc.
1.03%(l) 09/02/03 224,384 224,383,746
- -----------------------------------------------------------------------------------
1.08%(m) 09/02/03 300,000 300,000,000
===================================================================================
Total Repurchase Agreements (Cost
$1,179,383,746) 1,179,383,746
===================================================================================
TOTAL INVESTMENTS-100.07% (Cost
$7,017,401,656)(n) 7,017,401,656
___________________________________________________________________________________
===================================================================================
OTHER ASSETS LESS LIABILITIES-(0.07%) (5,125,092)
___________________________________________________________________________________
===================================================================================
NET ASSETS-100% $7,012,276,564
___________________________________________________________________________________
===================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
Disc. - Discount
</Table>
Notes to Schedule of Investments:
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$3,942,811,076, which represented 56.23% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(c) Principal and interest are secured by bond insurance provided by one of the
following companies: Ambac Assurance Corp., Financial Guaranty Insurance Co.
or MBIA Insurance Corp.
(d) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-7
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(g) Security considered to be illiquid. The market value of this security at
8/31/03 represents 5.0% of the Fund's net assets.
(h) Interest rate is redetermined daily. Rate shown is rate in effect on
08/31/03.
(i) Repurchase agreement entered into 08/29/03 with a maturing value of
$50,005,556. Collateralized by $50,228,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 11/05/12 with an aggregate market value at 08/31/03
of $51,000,205.
(j) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(k) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$400,048,000. Collateralized by $462,114,538 U.S. Government obligations, 0%
to 7.68% due 09/26/05 to 08/01/33 with an aggregate market value at 08/31/03
of $408,002,899.
(l) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(m) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-8
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $5,838,017,910
- --------------------------------------------------------------------------------
Repurchase agreements 1,179,383,746
- --------------------------------------------------------------------------------
Receivables for:
Interest 1,029,605
- --------------------------------------------------------------------------------
Amount due from advisor 39,846
- --------------------------------------------------------------------------------
Investment for deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Other assets 162,686
================================================================================
Total assets 7,018,876,058
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Dividends 5,416,551
- --------------------------------------------------------------------------------
Deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Accrued distribution fees 341,271
- --------------------------------------------------------------------------------
Accrued directors' fees 364,386
- --------------------------------------------------------------------------------
Accrued transfer agent fees 134,881
- --------------------------------------------------------------------------------
Accrued operating expenses 100,140
================================================================================
Total liabilities 6,599,494
================================================================================
Net assets applicable to shares outstanding $7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $7,010,848,166
- --------------------------------------------------------------------------------
Undistributed net investment income 1,430,149
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (1,751)
================================================================================
$7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS:
Institutional Class $5,589,107,525
________________________________________________________________________________
================================================================================
Private Investment Class $ 560,824,671
________________________________________________________________________________
================================================================================
Personal Investment Class $ 133,718,682
________________________________________________________________________________
================================================================================
Cash Management Class $ 536,685,443
________________________________________________________________________________
================================================================================
Reserve Class $ 103,681,241
________________________________________________________________________________
================================================================================
Resource Class $ 88,259,002
________________________________________________________________________________
================================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 5,589,124,342
________________________________________________________________________________
================================================================================
Private Investment Class 560,881,268
________________________________________________________________________________
================================================================================
Personal Investment Class 133,660,128
________________________________________________________________________________
================================================================================
Cash Management Class 536,712,535
________________________________________________________________________________
================================================================================
Reserve Class 103,681,137
________________________________________________________________________________
================================================================================
Resource Class 88,218,740
________________________________________________________________________________
================================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-9
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $110,013,685
================================================================================
EXPENSES:
Advisory fees 11,975,189
- --------------------------------------------------------------------------------
Administrative services fees 709,422
- --------------------------------------------------------------------------------
Distribution fees:
Private Investment Class 2,472,464
- --------------------------------------------------------------------------------
Personal Investment Class 1,153,443
- --------------------------------------------------------------------------------
Cash Management Class 794,336
- --------------------------------------------------------------------------------
Reserve Class 1,424,817
- --------------------------------------------------------------------------------
Resource Class 288,942
- --------------------------------------------------------------------------------
Transfer agent fees 1,259,339
- --------------------------------------------------------------------------------
Directors' fees 147,029
- --------------------------------------------------------------------------------
Other 47,539
================================================================================
Total expenses 20,272,520
================================================================================
Less: Fees waived (7,544,631)
================================================================================
Net expenses 12,727,889
================================================================================
Net investment income 97,285,796
================================================================================
Net increase in net assets resulting from operations $ 97,285,796
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-10
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 97,285,796 $ 194,565,853
- ---------------------------------------------------------------------------------
Net realized gain (loss) from investment
securities -- (1,014)
=================================================================================
Net increase in net assets resulting
from operations 97,285,796 194,564,839
=================================================================================
Distributions to shareholders from net
investment income:
Institutional Class (79,265,979) (152,003,031)
- ---------------------------------------------------------------------------------
Private Investment Class (4,790,723) (9,135,125)
- ---------------------------------------------------------------------------------
Personal Investment Class (1,135,614) (2,982,406)
- ---------------------------------------------------------------------------------
Cash Management Class (9,794,878) (20,969,503)
- ---------------------------------------------------------------------------------
Reserve Class (602,071) (1,671,130)
- ---------------------------------------------------------------------------------
Resource Class (1,696,366) (7,804,658)
=================================================================================
Decrease in net assets resulting from
distributions (97,285,631) (194,565,853)
=================================================================================
Share transactions-net:
Institutional Class (341,182,886) (1,909,907,666)
- ---------------------------------------------------------------------------------
Private Investment Class 61,372,457 (73,145,194)
- ---------------------------------------------------------------------------------
Personal Investment Class (43,774,130) (38,793,383)
- ---------------------------------------------------------------------------------
Cash Management Class (437,330,384) (165,758,781)
- ---------------------------------------------------------------------------------
Reserve Class (42,828,014) 2,060,196
- ---------------------------------------------------------------------------------
Resource Class (125,390,496) (239,950,953)
=================================================================================
Net increase (decrease) in net assets
resulting from share transactions (929,133,453) (2,425,495,781)
=================================================================================
Net increase (decrease) in net assets (929,133,288) (2,425,496,795)
=================================================================================
NET ASSETS:
Beginning of year 7,941,409,852 10,366,906,647
=================================================================================
End of year $7,012,276,564 $ 7,941,409,852
_________________________________________________________________________________
=================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Prime Portfolio (the "Fund") is an investment portfolio of Short-Term
Investments Co. (the "Company"). The Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
F-11
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to maximize current income consistent
with the preservation of capital and the maintenance of liquidity. Each company
listed in the Schedule of Investments is organized in the United States unless
otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gain) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. Any capital loss
carryforwards listed are reduced for limitations, if any, to the extent
required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
F-12
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets. AIM has voluntarily agreed to limit Fund operating
expenses (excluding Rule 12b-1 fees, interest, taxes, fund merger and
reorganization expenses, extraordinary items, including other items designated
as such by the Board of Directors, and increases in expenses due to expense
offset arrangements, if any) to 0.12%. Voluntary expense limitations may be
modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived fees of $5,829,596.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $709,422 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $1,197,519 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of the such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class, the Reserve Class and the Resource Class
equals the maximum annual rate of 0.30%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Pursuant to the Plan, for the year ended August 31, 2003, the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class paid $1,483,478, $841,521, $635,469, $1,227,345 and
$231,154, respectively, after FMC waived plan fees of $988,986, $311,922,
$158,867, $197,472 and $57,788, respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
F-13
During the year ended August 31, 2003, the Fund paid legal fees of $17,282
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------------
Distributions paid from ordinary income $97,285,631 $194,565,853
_______________________________________________________________________________________
=======================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 2,065,838
- -------------------------------------------------------------------------------------------
Temporary book/tax differences (636,426)
- -------------------------------------------------------------------------------------------
Capital loss carryforward (1,014)
- -------------------------------------------------------------------------------------------
Capital (par value and additional paid-in) 7,010,848,166
===========================================================================================
Total net assets $7,012,276,564
___________________________________________________________________________________________
===========================================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are primarily the result of director's deferral of
compensation and retirement plan expenses.
The Fund's capital loss carryforward expires as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD
- -----------------------------------------------------------------------------------------
August 31, 2011 $1,014
_________________________________________________________________________________________
=========================================================================================
</Table>
F-14
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
2003 2002
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------
Sold:
Institutional Class 39,538,699,529 $ 39,538,699,529 49,867,711,739 $ 49,867,711,739
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,361,767,415 2,361,767,415 2,478,100,689 2,478,100,689
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,713,575,941 1,713,575,941 2,372,542,859 2,372,542,859
- -------------------------------------------------------------------------------------------------
Cash Management
Class 4,401,672,934 4,401,672,934 5,844,111,815 5,844,111,815
- -------------------------------------------------------------------------------------------------
Reserve Class 5,302,349,656 5,302,349,656 1,426,473,845 1,426,473,845
- -------------------------------------------------------------------------------------------------
Resource Class 831,814,148 831,814,148 2,197,934,978 2,197,934,978
=================================================================================================
Issued as
reinvestment of
dividends:
Institutional Class 5,289,215 5,289,215 9,850,826 9,850,826
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,463,410 2,463,410 4,909,338 4,909,338
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,073,144 1,073,144 3,033,277 3,033,277
- -------------------------------------------------------------------------------------------------
Cash Management
Class 3,808,779 3,808,779 13,867,829 13,867,829
- -------------------------------------------------------------------------------------------------
Reserve Class 616,859 616,859 1,755,442 1,755,442
- -------------------------------------------------------------------------------------------------
Resource Class 1,719,060 1,719,060 8,321,610 8,321,610
=================================================================================================
Reacquired:
Institutional Class (39,885,171,630) (39,885,171,630) (51,787,470,231) (51,787,470,231)
- -------------------------------------------------------------------------------------------------
Private Investment
Class (2,302,858,368) (2,302,858,368) (2,556,155,221) (2,556,155,221)
- -------------------------------------------------------------------------------------------------
Personal Investment
Class (1,758,423,215) (1,758,423,215) (2,414,369,519) (2,414,369,519)
- -------------------------------------------------------------------------------------------------
Cash Management
Class (4,842,812,097) (4,842,812,097) (6,023,738,425) (6,023,738,425)
- -------------------------------------------------------------------------------------------------
Reserve Class (5,345,794,529) (5,345,794,529) (1,426,169,091) (1,426,169,091)
- -------------------------------------------------------------------------------------------------
Resource Class (958,923,704) (958,923,704) (2,446,207,541) (2,446,207,541)
=================================================================================================
(929,133,453) $ (929,133,453) (2,425,495,781) $ (2,425,495,781)
_________________________________________________________________________________________________
=================================================================================================
</Table>
F-15
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-16
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
INSTITUTIONAL CLASS
----------------------------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------------------------
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
- -----------------------------------------------------------------------------------------------------
Less dividends from net
investment income (0.01) (0.02) (0.05) (0.06) (0.05)
=====================================================================================================
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_____________________________________________________________________________________________________
=====================================================================================================
Total return(a) 1.27% 2.01% 5.46% 6.08% 5.15%
_____________________________________________________________________________________________________
=====================================================================================================
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $5,589,108 $5,930,291 $7,840,199 $11,874,103 $6,210,056
_____________________________________________________________________________________________________
=====================================================================================================
Ratio of expenses to average
net assets:
With fee waivers 0.10%(b) 0.10% 0.09% 0.09% 0.09%
- -----------------------------------------------------------------------------------------------------
Without fee waivers 0.18%(b) 0.14% -- -- --
=====================================================================================================
Ratio of net investment
income to average net
assets 1.28%(b) 2.05% 5.41% 5.94% 5.02%
_____________________________________________________________________________________________________
=====================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $6,253,885,126.
F-17
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Prime
Portfolio (a series portfolio of Short-Term Investments Co.), including the
schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended August
31, 2000 have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Portfolio as of August 31, 2003, the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
three-year period then ended, in conformity with accounting principles generally
accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-18
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- ---------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- ---------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- ---------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- ---------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- ---------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
<Caption>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
PRIME PORTFOLIO
PERSONAL INVESTMENT CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
PRM-AR-4
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Prime
ROBERT H. Portfolio covers a fiscal year during which reductions in
GRAHAM] short-term interest rates caused yields on money market
funds and other short-term instruments to decline. Saying it
favored a more expansive monetary policy because the economy
had not yet exhibited sustainable growth, the Federal
Reserve Board (the Fed) lowered the federal funds rate twice
during the fiscal year. In November 2002, it reduced the
rate from 1.75% to 1.25%. In late June 2003, it reduced that
rate to 1.00%, its lowest level since 1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose
from 5.8% at the start of the fiscal year to 6.1% at its close. Despite the
growth in the economy, companies generally were reluctant to add workers,
relying on strong productivity growth to support earnings. During the second
quarter of 2003, productivity in the nonfarm business sector rose at a robust
6.8% annualized rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Personal Investment Class was producing a
monthly yield of 0.40% and a seven-day SEC yield of 0.41%. Had the advisor and
distributor not waived fees and/or reimbursed expenses, performance would have
been lower. Portfolio managers employed a combination of short-term cash
management vehicles and selective use of a longer maturity schedule for higher
yields. The weighted average maturity (WAM) remained in the 12- to 28-day range;
at the close of the reporting period, the WAM stood at 19 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Personal Investment Class stood at $133.7 million. Past
performance cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
The Prime Portfolio seeks to maximize current income to the extent
consistent with preservation of capital and maintenance of liquidity. It invests
in high-grade taxable money market instruments with maturities of 60 days or
fewer, including U.S. government obligations bank obligations, commercial paper
and selected repurchase-agreement securities. An investment in a money market
fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
investing in the fund.
(continued)
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is
committed to the primary goals of safety, liquidity and yield in institutional
fund management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
COMMERCIAL PAPER-64.12%(a)
FINANCIALS-64.12%
ASSET-BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-0.94%
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 08/04/03; Cost $32,599,732)
1.07% 10/02/03 $ 32,657 $ 32,626,910
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $32,941,150)
1.07% 10/03/03 33,000 32,968,614
===================================================================================
65,595,524
===================================================================================
ASSET-BACKED SECURITIES-CONSUMER
RECEIVABLES-3.68%
Delaware Funding Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $24,956,160)
1.07% 10/24/03 25,000 24,960,618
- -----------------------------------------------------------------------------------
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $15,502,879)
1.04% 09/03/03 15,528 15,527,103
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $30,557,983)
1.06% 09/12/03 30,585 30,575,094
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $35,968,178)
1.07% 10/20/03 36,026 35,973,532
- -----------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $27,875,215)
1.04% 09/05/03 27,922 27,918,773
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $55,771,367)
1.06% 10/07/03 55,857 55,797,575
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $27,933,760)
1.07% 10/09/03 27,977 27,945,402
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $38,970,703)
1.07% 10/15/03 39,038 38,986,947
===================================================================================
257,685,044
===================================================================================
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-FULLY BACKED-8.51%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 08/18/03; Cost $59,921,532)
1.07% 10/01/03 $ 60,000 $ 59,946,499
- -----------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 07/24/03; Cost $99,826,667)
1.04% 09/22/03 100,000 99,939,333
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,000)
1.08% 09/24/03 100,000 99,931,000
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $49,917,500)
1.08% 09/25/03 50,000 49,964,000
- -----------------------------------------------------------------------------------
(Acquired 08/08/03; Cost $70,256,040)
1.06% 10/02/03 70,370 70,305,768
- -----------------------------------------------------------------------------------
Newport Funding Corp. (Deutsche Bank A.G.,
New York Branch-ABS Program Sponsor)(b)(c)
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
Triple-A One Funding Corp. (MBIA Insurance
Corp.-ABS Programs Sponsor)(b)(c)
(Acquired 07/24/03; Cost $77,038,026)
1.04% 09/10/03 77,145 77,124,942
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,656,098)
1.06% 09/12/03 49,700 49,683,903
- -----------------------------------------------------------------------------------
(Acquired 08/25/03; Cost $24,999,264)
1.07% 10/08/03 25,032 25,004,472
===================================================================================
596,825,275
===================================================================================
ASSET-BACKED SECURITIES-MULTI-PURPOSE-19.58%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/13/03; Cost $34,970,114)
1.06% 09/11/03 35,000 34,989,694
- -----------------------------------------------------------------------------------
Barton Capital Corp. (Societe Generale-ABS
Program Sponsor)(b)(c)
(Acquired 08/08/03; Cost $91,097,468)
1.06% 10/06/03 91,256 91,161,956
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $21,880,131)
1.07% 10/09/03 21,914 21,889,249
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $45,522,435)
1.06% 10/10/03 45,603 45,550,633
- -----------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Charta LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/05/03; Cost $79,893,000)
1.07% 09/19/03 $ 80,000 $ 79,957,200
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $49,915,292)
1.07% 10/01/03 50,000 49,955,417
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $99,824,639)
1.07% 10/16/03 100,000 99,866,250
- -----------------------------------------------------------------------------------
CRC Funding LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,860,306)
1.07% 10/07/03 100,000 99,893,000
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $99,829,222)
1.06% 10/08/03 100,000 99,891,055
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $76,866,234)
1.06% 10/09/03 77,000 76,913,845
- -----------------------------------------------------------------------------------
Edison Asset Securitization LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 08/04/03; Cost $7,599,876)
1.07% 10/01/03 7,613 7,606,212
- -----------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $199,643,333)
1.07% 10/20/03 200,000 199,708,722
- -----------------------------------------------------------------------------------
Park Avenue Receivables Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/05/03; Cost $30,001,501)
1.07% 09/16/03 30,039 30,025,608
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $150,009,953)
1.07% 10/15/03 150,269 150,072,482
- -----------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $67,139,546)
1.03% 09/09/03 67,255 67,239,606
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,947,250)
1.06% 09/18/03 50,000 49,975,090
- -----------------------------------------------------------------------------------
Windmill Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/01/03; Cost $68,634,659)
1.07% 09/02/03 68,700 68,697,958
===================================================================================
1,373,320,366
===================================================================================
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE
RECEIVABLES-17.88%
CAFCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $99,881,556)
1.04% 09/03/03 $100,000 $ 99,994,222
- -----------------------------------------------------------------------------------
(Acquired 07/24/03; Cost $99,861,333)
1.04% 09/10/03 100,000 99,974,000
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $39,941,744)
1.07% 10/06/03 40,000 39,958,389
- -----------------------------------------------------------------------------------
CIESCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $34,951,467)
1.04% 09/10/03 35,000 34,990,900
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $74,877,396)
1.07% 10/21/03 75,000 74,888,542
- -----------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 07/24/03; Cost $89,844,000)
1.04% 09/22/03 90,000 89,945,400
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,841,000)
1.08% 09/23/03 100,000 99,934,000
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
FCAR Owner Trust-Series II (Ford Motor Credit
Co.-ABS Program Sponsor)
(Acquired 07/22/03; Cost $99,839,778)
1.03% 09/16/03 100,000 99,957,083
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $101,818,100)
1.07% 10/03/03 102,000 101,902,987
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $47,423,076)
1.06% 10/07/03 47,500 47,449,650
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $49,913,806)
1.07% 10/24/03 50,000 49,921,236
- -----------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust-Series A-1+ (General
Motors Acceptance Corp.-ABS Program
Sponsor)
(Acquired 07/25/03; Cost $99,826,667)
1.04% 09/23/03 $100,000 $ 99,936,444
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,056)
1.06% 09/25/03 100,000 99,929,333
- -----------------------------------------------------------------------------------
(Acquired 08/14/03; Cost $49,915,292)
1.07% 10/10/03 50,000 49,942,042
===================================================================================
1,253,575,975
===================================================================================
CONSUMER FINANCE-0.71%
Toyota Motor Credit Corp.
1.02% 09/04/03 50,000 49,995,750
===================================================================================
DIVERSIFIED BANKS-4.99%
UBS Finance Delaware, LLC
1.03% 09/04/03 100,000 99,991,417
- -----------------------------------------------------------------------------------
1.03% 09/05/03 100,000 99,988,555
- -----------------------------------------------------------------------------------
1.02% 09/09/03 150,000 149,966,000
===================================================================================
349,945,972
===================================================================================
DIVERSIFIED CAPITAL MARKETS-3.56%
Citigroup Global Markets Holdings Inc.
1.07% 10/22/03 100,000 99,848,417
- -----------------------------------------------------------------------------------
Citigroup Inc.
1.07% 10/17/03 150,000 149,794,920
===================================================================================
249,643,337
===================================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.71%
SBC International Inc.
(Acquired 08/21/03; Cost $49,960,625)
1.05%(b) 09/17/03 50,000 49,976,667
===================================================================================
MULTI-LINE INSURANCE-1.42%
GE Financial Assurance Holdings, Inc.
(Acquired 08/25/03; Cost $99,850,000)
1.08%(b) 10/14/03 100,000 99,871,000
===================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-2.14%
General Electric Capital Corp.
1.07% 10/08/03 $ 50,000 $ 49,945,014
- -----------------------------------------------------------------------------------
1.07% 10/21/03 100,000 99,851,389
===================================================================================
149,796,403
===================================================================================
Total Financials 4,496,231,313
===================================================================================
Total Commercial Paper (Cost
$4,496,231,313) 4,496,231,313
===================================================================================
MASTER NOTE AGREEMENTS-6.34%(d)
Merrill Lynch Mortgage Capital, Inc.
(Acquired 08/25/03; Cost $100,000,000)
1.27%(b)(e) 02/23/04 100,000 100,000,000
- -----------------------------------------------------------------------------------
Morgan Stanley
(Acquired 03/17/03; Cost $345,000,000)
1.20%(b)(f) 09/15/03 345,000 345,000,000
===================================================================================
Total Master Note Agreements (Cost
$445,000,000) 445,000,000
===================================================================================
PROMISSORY NOTES-4.99%
Goldman Sachs Group, Inc. (The)
(Acquired 08/29/03; Cost $350,000,000)
1.16%(b)(g)(h) 10/28/03 350,000 350,000,000
===================================================================================
BANK NOTES-4.08%
Standard Federal Bank, N.A.
1.02% 09/08/03 200,000 200,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Bank N.A.
1.02% 09/03/03 51,000 50,999,971
- -----------------------------------------------------------------------------------
1.06% 09/22/03 35,000 35,000,000
===================================================================================
Total Bank Notes (Cost $285,999,971) 285,999,971
===================================================================================
CERTIFICATE OF DEPOSIT-3.49%
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Co.
1.06% 09/18/03 100,000 100,000,000
- -----------------------------------------------------------------------------------
1.06% 10/06/03 70,000 69,999,994
===================================================================================
Total Certificates of Deposit (Cost
$244,999,994) 244,999,994
===================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-0.23%
Federal Home Loan Bank Disc. Notes,
0.84% (Cost $15,786,632)(a) 09/02/03 $ 15,787 $ 15,786,632
===================================================================================
Total Investments (excluding Repurchase
Agreements) (Cost $5,838,017,910) 5,838,017,910
===================================================================================
REPURCHASE AGREEMENTS-16.82%
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.00%(i) 09/02/03 50,000 50,000,000
- -----------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(j) 09/02/03 300,000 300,000,000
- -----------------------------------------------------------------------------------
Societe Generale-New York Branch (France)
1.08%(k) 09/02/03 305,000 305,000,000
- -----------------------------------------------------------------------------------
Wachovia Securities, Inc.
1.03%(l) 09/02/03 224,384 224,383,746
- -----------------------------------------------------------------------------------
1.08%(m) 09/02/03 300,000 300,000,000
===================================================================================
Total Repurchase Agreements (Cost
$1,179,383,746) 1,179,383,746
===================================================================================
TOTAL INVESTMENTS-100.07% (Cost
$7,017,401,656)(n) 7,017,401,656
___________________________________________________________________________________
===================================================================================
OTHER ASSETS LESS LIABILITIES-(0.07%) (5,125,092)
___________________________________________________________________________________
===================================================================================
NET ASSETS-100% $7,012,276,564
___________________________________________________________________________________
===================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
Disc. - Discount
</Table>
Notes to Schedule of Investments:
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$3,942,811,076, which represented 56.23% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(c) Principal and interest are secured by bond insurance provided by one of the
following companies: Ambac Assurance Corp., Financial Guaranty Insurance Co.
or MBIA Insurance Corp.
(d) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-7
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(g) Security considered to be illiquid. The market value of this security at
8/31/03 represents 5.0% of the Fund's net assets.
(h) Interest rate is redetermined daily. Rate shown is rate in effect on
08/31/03.
(i) Repurchase agreement entered into 08/29/03 with a maturing value of
$50,005,556. Collateralized by $50,228,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 11/05/12 with an aggregate market value at 08/31/03
of $51,000,205.
(j) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(k) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$400,048,000. Collateralized by $462,114,538 U.S. Government obligations, 0%
to 7.68% due 09/26/05 to 08/01/33 with an aggregate market value at 08/31/03
of $408,002,899.
(l) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(m) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-8
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $5,838,017,910
- --------------------------------------------------------------------------------
Repurchase agreements 1,179,383,746
- --------------------------------------------------------------------------------
Receivables for:
Interest 1,029,605
- --------------------------------------------------------------------------------
Amount due from advisor 39,846
- --------------------------------------------------------------------------------
Investment for deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Other assets 162,686
================================================================================
Total assets 7,018,876,058
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Dividends 5,416,551
- --------------------------------------------------------------------------------
Deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Accrued distribution fees 341,271
- --------------------------------------------------------------------------------
Accrued directors' fees 364,386
- --------------------------------------------------------------------------------
Accrued transfer agent fees 134,881
- --------------------------------------------------------------------------------
Accrued operating expenses 100,140
================================================================================
Total liabilities 6,599,494
================================================================================
Net assets applicable to shares outstanding $7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $7,010,848,166
- --------------------------------------------------------------------------------
Undistributed net investment income 1,430,149
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (1,751)
================================================================================
$7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS:
Institutional Class $5,589,107,525
________________________________________________________________________________
================================================================================
Private Investment Class $ 560,824,671
________________________________________________________________________________
================================================================================
Personal Investment Class $ 133,718,682
________________________________________________________________________________
================================================================================
Cash Management Class $ 536,685,443
________________________________________________________________________________
================================================================================
Reserve Class $ 103,681,241
________________________________________________________________________________
================================================================================
Resource Class $ 88,259,002
________________________________________________________________________________
================================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 5,589,124,342
________________________________________________________________________________
================================================================================
Private Investment Class 560,881,268
________________________________________________________________________________
================================================================================
Personal Investment Class 133,660,128
________________________________________________________________________________
================================================================================
Cash Management Class 536,712,535
________________________________________________________________________________
================================================================================
Reserve Class 103,681,137
________________________________________________________________________________
================================================================================
Resource Class 88,218,740
________________________________________________________________________________
================================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-9
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $110,013,685
================================================================================
EXPENSES:
Advisory fees 11,975,189
- --------------------------------------------------------------------------------
Administrative services fees 709,422
- --------------------------------------------------------------------------------
Distribution fees:
Private Investment Class 2,472,464
- --------------------------------------------------------------------------------
Personal Investment Class 1,153,443
- --------------------------------------------------------------------------------
Cash Management Class 794,336
- --------------------------------------------------------------------------------
Reserve Class 1,424,817
- --------------------------------------------------------------------------------
Resource Class 288,942
- --------------------------------------------------------------------------------
Transfer agent fees 1,259,339
- --------------------------------------------------------------------------------
Directors' fees 147,029
- --------------------------------------------------------------------------------
Other 47,539
================================================================================
Total expenses 20,272,520
================================================================================
Less: Fees waived (7,544,631)
================================================================================
Net expenses 12,727,889
================================================================================
Net investment income 97,285,796
================================================================================
Net increase in net assets resulting from operations $ 97,285,796
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-10
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 97,285,796 $ 194,565,853
- ---------------------------------------------------------------------------------
Net realized gain (loss) from investment
securities -- (1,014)
=================================================================================
Net increase in net assets resulting
from operations 97,285,796 194,564,839
=================================================================================
Distributions to shareholders from net
investment income:
Institutional Class (79,265,979) (152,003,031)
- ---------------------------------------------------------------------------------
Private Investment Class (4,790,723) (9,135,125)
- ---------------------------------------------------------------------------------
Personal Investment Class (1,135,614) (2,982,406)
- ---------------------------------------------------------------------------------
Cash Management Class (9,794,878) (20,969,503)
- ---------------------------------------------------------------------------------
Reserve Class (602,071) (1,671,130)
- ---------------------------------------------------------------------------------
Resource Class (1,696,366) (7,804,658)
=================================================================================
Decrease in net assets resulting from
distributions (97,285,631) (194,565,853)
=================================================================================
Share transactions-net:
Institutional Class (341,182,886) (1,909,907,666)
- ---------------------------------------------------------------------------------
Private Investment Class 61,372,457 (73,145,194)
- ---------------------------------------------------------------------------------
Personal Investment Class (43,774,130) (38,793,383)
- ---------------------------------------------------------------------------------
Cash Management Class (437,330,384) (165,758,781)
- ---------------------------------------------------------------------------------
Reserve Class (42,828,014) 2,060,196
- ---------------------------------------------------------------------------------
Resource Class (125,390,496) (239,950,953)
=================================================================================
Net increase (decrease) in net assets
resulting from share transactions (929,133,453) (2,425,495,781)
=================================================================================
Net increase (decrease) in net assets (929,133,288) (2,425,496,795)
=================================================================================
NET ASSETS:
Beginning of year 7,941,409,852 10,366,906,647
=================================================================================
End of year $7,012,276,564 $ 7,941,409,852
_________________________________________________________________________________
=================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Prime Portfolio (the "Fund") is an investment portfolio of Short-Term
Investments Co. (the "Company"). The Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
F-11
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to maximize current income consistent
with the preservation of capital and the maintenance of liquidity. Each company
listed in the Schedule of Investments is organized in the United States unless
otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gain) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. Any capital loss
carryforwards listed are reduced for limitations, if any, to the extent
required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
F-12
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets. AIM has voluntarily agreed to limit Fund operating
expenses (excluding Rule 12b-1 fees, interest, taxes, fund merger and
reorganization expenses, extraordinary items, including other items designated
as such by the Board of Directors, and increases in expenses due to expense
offset arrangements, if any) to 0.12%. Voluntary expense limitations may be
modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived fees of $5,829,596.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $709,422 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $1,197,519 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of the such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class, the Reserve Class and the Resource Class
equals the maximum annual rate of 0.30%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Pursuant to the Plan, for the year ended August 31, 2003, the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class paid $1,483,478, $841,521, $635,469, $1,227,345 and
$231,154, respectively, after FMC waived plan fees of $988,986, $311,922,
$158,867, $197,472 and $57,788, respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
F-13
During the year ended August 31, 2003, the Fund paid legal fees of $17,282
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------------
Distributions paid from ordinary income $97,285,631 $194,565,853
_______________________________________________________________________________________
=======================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 2,065,838
- -------------------------------------------------------------------------------------------
Temporary book/tax differences (636,426)
- -------------------------------------------------------------------------------------------
Capital loss carryforward (1,014)
- -------------------------------------------------------------------------------------------
Capital (par value and additional paid-in) 7,010,848,166
===========================================================================================
Total net assets $7,012,276,564
___________________________________________________________________________________________
===========================================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are primarily the result of director's deferral of
compensation and retirement plan expenses.
The Fund's capital loss carryforward expires as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD
- -----------------------------------------------------------------------------------------
August 31, 2011 $1,014
_________________________________________________________________________________________
=========================================================================================
</Table>
F-14
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
2003 2002
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------
Sold:
Institutional Class 39,538,699,529 $ 39,538,699,529 49,867,711,739 $ 49,867,711,739
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,361,767,415 2,361,767,415 2,478,100,689 2,478,100,689
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,713,575,941 1,713,575,941 2,372,542,859 2,372,542,859
- -------------------------------------------------------------------------------------------------
Cash Management
Class 4,401,672,934 4,401,672,934 5,844,111,815 5,844,111,815
- -------------------------------------------------------------------------------------------------
Reserve Class 5,302,349,656 5,302,349,656 1,426,473,845 1,426,473,845
- -------------------------------------------------------------------------------------------------
Resource Class 831,814,148 831,814,148 2,197,934,978 2,197,934,978
=================================================================================================
Issued as
reinvestment of
dividends:
Institutional Class 5,289,215 5,289,215 9,850,826 9,850,826
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,463,410 2,463,410 4,909,338 4,909,338
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,073,144 1,073,144 3,033,277 3,033,277
- -------------------------------------------------------------------------------------------------
Cash Management
Class 3,808,779 3,808,779 13,867,829 13,867,829
- -------------------------------------------------------------------------------------------------
Reserve Class 616,859 616,859 1,755,442 1,755,442
- -------------------------------------------------------------------------------------------------
Resource Class 1,719,060 1,719,060 8,321,610 8,321,610
=================================================================================================
Reacquired:
Institutional Class (39,885,171,630) (39,885,171,630) (51,787,470,231) (51,787,470,231)
- -------------------------------------------------------------------------------------------------
Private Investment
Class (2,302,858,368) (2,302,858,368) (2,556,155,221) (2,556,155,221)
- -------------------------------------------------------------------------------------------------
Personal Investment
Class (1,758,423,215) (1,758,423,215) (2,414,369,519) (2,414,369,519)
- -------------------------------------------------------------------------------------------------
Cash Management
Class (4,842,812,097) (4,842,812,097) (6,023,738,425) (6,023,738,425)
- -------------------------------------------------------------------------------------------------
Reserve Class (5,345,794,529) (5,345,794,529) (1,426,169,091) (1,426,169,091)
- -------------------------------------------------------------------------------------------------
Resource Class (958,923,704) (958,923,704) (2,446,207,541) (2,446,207,541)
=================================================================================================
(929,133,453) $ (929,133,453) (2,425,495,781) $ (2,425,495,781)
_________________________________________________________________________________________________
=================================================================================================
</Table>
F-15
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-16
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
PERSONAL INVESTMENT CLASS
-----------------------------------------------------------
YEAR ENDED AUGUST 31,
-----------------------------------------------------------
2003 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.05 0.05
- -------------------------------------------------------------------------------------------------
Less dividends from net investment
income (0.01) (0.02) (0.05) (0.05) (0.05)
=================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_________________________________________________________________________________________________
=================================================================================================
Total return(a) 0.72% 1.50% 4.93% 5.55% 4.63%
_________________________________________________________________________________________________
=================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $133,719 $177,493 $216,286 $142,235 $ 87,754
_________________________________________________________________________________________________
=================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.65%(b) 0.60% 0.59% 0.59% 0.59%
- -------------------------------------------------------------------------------------------------
Without fee waivers 0.93%(b) 0.89% 0.84% 0.84% 0.84%
=================================================================================================
Ratio of net investment income to
average net assets 0.73%(b) 1.55% 4.91% 5.44% 4.52%
_________________________________________________________________________________________________
=================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $153,792,389.
F-17
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Prime
Portfolio (a series portfolio of Short-Term Investments Co.), including the
schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended August
31, 2000 have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Portfolio as of August 31, 2003, the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
three-year period then ended, in conformity with accounting principles generally
accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-18
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- ---------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- ---------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- ---------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- ---------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- ---------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
<Caption>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
PRIME PORTFOLIO
PRIVATE INVESTMENT CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
PRM-AR-2
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This report on the Short-Term Investments Co.'s Prime
ROBERT H. Portfolio covers a fiscal year during which reductions in
GRAHAM short-term interest rates caused yields on money market
funds and other short-term instruments to decline. Saying it
favored a more expansive monetary policy because the economy
had not yet exhibited sustainable growth, the Federal
Reserve Board (the Fed) lowered the federal funds rate twice
during the fiscal year. In November 2002, it reduced the
rate from 1.75% to 1.25%. In late June 2003, it reduced that
rate to 1.00%, its lowest level since 1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose
from 5.8% at the start of the fiscal year to 6.1% at its close. Despite the
growth in the economy, companies generally were reluctant to add workers,
relying on strong productivity growth to support earnings. During the second
quarter of 2003, productivity in the nonfarm business sector rose at a robust
6.8% annualized rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Private Investment Class was producing a
monthly yield of 0.65% and a seven-day SEC yield of 0.66%. Had the advisor and
distributor not waived fees and/or reimbursed expenses, performance would have
been lower. Portfolio managers employed a combination of short-term cash
management vehicles and selective use of a longer maturity schedule for higher
yields. The weighted average maturity (WAM) remained in the 12- to 28-day range;
at the close of the reporting period, the WAM stood at 19 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Private Investment Class stood at $560.8 million. Past
performance cannot guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
The Prime Portfolio seeks to maximize current income to the extent
consistent with preservation of capital and maintenance of liquidity. It invests
in high-grade taxable money market instruments with maturities of 60 days or
fewer, including U.S. government obligations bank obligations, commercial paper
and selected repurchase-agreement securities. An investment in a money market
fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
investing in the fund.
(continued)
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
COMMERCIAL PAPER-64.12%(a)
FINANCIALS-64.12%
ASSET-BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-0.94%
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 08/04/03; Cost $32,599,732)
1.07% 10/02/03 $ 32,657 $ 32,626,910
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $32,941,150)
1.07% 10/03/03 33,000 32,968,614
===================================================================================
65,595,524
===================================================================================
ASSET-BACKED SECURITIES-CONSUMER
RECEIVABLES-3.68%
Delaware Funding Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $24,956,160)
1.07% 10/24/03 25,000 24,960,618
- -----------------------------------------------------------------------------------
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $15,502,879)
1.04% 09/03/03 15,528 15,527,103
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $30,557,983)
1.06% 09/12/03 30,585 30,575,094
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $35,968,178)
1.07% 10/20/03 36,026 35,973,532
- -----------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $27,875,215)
1.04% 09/05/03 27,922 27,918,773
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $55,771,367)
1.06% 10/07/03 55,857 55,797,575
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $27,933,760)
1.07% 10/09/03 27,977 27,945,402
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $38,970,703)
1.07% 10/15/03 39,038 38,986,947
===================================================================================
257,685,044
===================================================================================
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-FULLY BACKED-8.51%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 08/18/03; Cost $59,921,532)
1.07% 10/01/03 $ 60,000 $ 59,946,499
- -----------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 07/24/03; Cost $99,826,667)
1.04% 09/22/03 100,000 99,939,333
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,000)
1.08% 09/24/03 100,000 99,931,000
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $49,917,500)
1.08% 09/25/03 50,000 49,964,000
- -----------------------------------------------------------------------------------
(Acquired 08/08/03; Cost $70,256,040)
1.06% 10/02/03 70,370 70,305,768
- -----------------------------------------------------------------------------------
Newport Funding Corp. (Deutsche Bank A.G.,
New York Branch-ABS Program Sponsor)(b)(c)
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
Triple-A One Funding Corp. (MBIA Insurance
Corp.-ABS Programs Sponsor)(b)(c)
(Acquired 07/24/03; Cost $77,038,026)
1.04% 09/10/03 77,145 77,124,942
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,656,098)
1.06% 09/12/03 49,700 49,683,903
- -----------------------------------------------------------------------------------
(Acquired 08/25/03; Cost $24,999,264)
1.07% 10/08/03 25,032 25,004,472
===================================================================================
596,825,275
===================================================================================
ASSET-BACKED SECURITIES-MULTI-PURPOSE-19.58%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/13/03; Cost $34,970,114)
1.06% 09/11/03 35,000 34,989,694
- -----------------------------------------------------------------------------------
Barton Capital Corp. (Societe Generale-ABS
Program Sponsor)(b)(c)
(Acquired 08/08/03; Cost $91,097,468)
1.06% 10/06/03 91,256 91,161,956
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $21,880,131)
1.07% 10/09/03 21,914 21,889,249
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $45,522,435)
1.06% 10/10/03 45,603 45,550,633
- -----------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Charta LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/05/03; Cost $79,893,000)
1.07% 09/19/03 $ 80,000 $ 79,957,200
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $49,915,292)
1.07% 10/01/03 50,000 49,955,417
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $99,824,639)
1.07% 10/16/03 100,000 99,866,250
- -----------------------------------------------------------------------------------
CRC Funding LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,860,306)
1.07% 10/07/03 100,000 99,893,000
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $99,829,222)
1.06% 10/08/03 100,000 99,891,055
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $76,866,234)
1.06% 10/09/03 77,000 76,913,845
- -----------------------------------------------------------------------------------
Edison Asset Securitization LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 08/04/03; Cost $7,599,876)
1.07% 10/01/03 7,613 7,606,212
- -----------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $199,643,333)
1.07% 10/20/03 200,000 199,708,722
- -----------------------------------------------------------------------------------
Park Avenue Receivables Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/05/03; Cost $30,001,501)
1.07% 09/16/03 30,039 30,025,608
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $150,009,953)
1.07% 10/15/03 150,269 150,072,482
- -----------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $67,139,546)
1.03% 09/09/03 67,255 67,239,606
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,947,250)
1.06% 09/18/03 50,000 49,975,090
- -----------------------------------------------------------------------------------
Windmill Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/01/03; Cost $68,634,659)
1.07% 09/02/03 68,700 68,697,958
===================================================================================
1,373,320,366
===================================================================================
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE
RECEIVABLES-17.88%
CAFCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $99,881,556)
1.04% 09/03/03 $100,000 $ 99,994,222
- -----------------------------------------------------------------------------------
(Acquired 07/24/03; Cost $99,861,333)
1.04% 09/10/03 100,000 99,974,000
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $39,941,744)
1.07% 10/06/03 40,000 39,958,389
- -----------------------------------------------------------------------------------
CIESCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $34,951,467)
1.04% 09/10/03 35,000 34,990,900
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $74,877,396)
1.07% 10/21/03 75,000 74,888,542
- -----------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 07/24/03; Cost $89,844,000)
1.04% 09/22/03 90,000 89,945,400
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,841,000)
1.08% 09/23/03 100,000 99,934,000
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
FCAR Owner Trust-Series II (Ford Motor Credit
Co.-ABS Program Sponsor)
(Acquired 07/22/03; Cost $99,839,778)
1.03% 09/16/03 100,000 99,957,083
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $101,818,100)
1.07% 10/03/03 102,000 101,902,987
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $47,423,076)
1.06% 10/07/03 47,500 47,449,650
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $49,913,806)
1.07% 10/24/03 50,000 49,921,236
- -----------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust-Series A-1+ (General
Motors Acceptance Corp.-ABS Program
Sponsor)
(Acquired 07/25/03; Cost $99,826,667)
1.04% 09/23/03 $100,000 $ 99,936,444
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,056)
1.06% 09/25/03 100,000 99,929,333
- -----------------------------------------------------------------------------------
(Acquired 08/14/03; Cost $49,915,292)
1.07% 10/10/03 50,000 49,942,042
===================================================================================
1,253,575,975
===================================================================================
CONSUMER FINANCE-0.71%
Toyota Motor Credit Corp.
1.02% 09/04/03 50,000 49,995,750
===================================================================================
DIVERSIFIED BANKS-4.99%
UBS Finance Delaware, LLC
1.03% 09/04/03 100,000 99,991,417
- -----------------------------------------------------------------------------------
1.03% 09/05/03 100,000 99,988,555
- -----------------------------------------------------------------------------------
1.02% 09/09/03 150,000 149,966,000
===================================================================================
349,945,972
===================================================================================
DIVERSIFIED CAPITAL MARKETS-3.56%
Citigroup Global Markets Holdings Inc.
1.07% 10/22/03 100,000 99,848,417
- -----------------------------------------------------------------------------------
Citigroup Inc.
1.07% 10/17/03 150,000 149,794,920
===================================================================================
249,643,337
===================================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.71%
SBC International Inc.
(Acquired 08/21/03; Cost $49,960,625)
1.05%(b) 09/17/03 50,000 49,976,667
===================================================================================
MULTI-LINE INSURANCE-1.42%
GE Financial Assurance Holdings, Inc.
(Acquired 08/25/03; Cost $99,850,000)
1.08%(b) 10/14/03 100,000 99,871,000
===================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-2.14%
General Electric Capital Corp.
1.07% 10/08/03 $ 50,000 $ 49,945,014
- -----------------------------------------------------------------------------------
1.07% 10/21/03 100,000 99,851,389
===================================================================================
149,796,403
===================================================================================
Total Financials 4,496,231,313
===================================================================================
Total Commercial Paper (Cost
$4,496,231,313) 4,496,231,313
===================================================================================
MASTER NOTE AGREEMENTS-6.34%(d)
Merrill Lynch Mortgage Capital, Inc.
(Acquired 08/25/03; Cost $100,000,000)
1.27%(b)(e) 02/23/04 100,000 100,000,000
- -----------------------------------------------------------------------------------
Morgan Stanley
(Acquired 03/17/03; Cost $345,000,000)
1.20%(b)(f) 09/15/03 345,000 345,000,000
===================================================================================
Total Master Note Agreements (Cost
$445,000,000) 445,000,000
===================================================================================
PROMISSORY NOTES-4.99%
Goldman Sachs Group, Inc. (The)
(Acquired 08/29/03; Cost $350,000,000)
1.16%(b)(g)(h) 10/28/03 350,000 350,000,000
===================================================================================
BANK NOTES-4.08%
Standard Federal Bank, N.A.
1.02% 09/08/03 200,000 200,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Bank N.A.
1.02% 09/03/03 51,000 50,999,971
- -----------------------------------------------------------------------------------
1.06% 09/22/03 35,000 35,000,000
===================================================================================
Total Bank Notes (Cost $285,999,971) 285,999,971
===================================================================================
CERTIFICATE OF DEPOSIT-3.49%
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Co.
1.06% 09/18/03 100,000 100,000,000
- -----------------------------------------------------------------------------------
1.06% 10/06/03 70,000 69,999,994
===================================================================================
Total Certificates of Deposit (Cost
$244,999,994) 244,999,994
===================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-0.23%
Federal Home Loan Bank Disc. Notes,
0.84% (Cost $15,786,632)(a) 09/02/03 $ 15,787 $ 15,786,632
===================================================================================
Total Investments (excluding Repurchase
Agreements) (Cost $5,838,017,910) 5,838,017,910
===================================================================================
REPURCHASE AGREEMENTS-16.82%
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.00%(i) 09/02/03 50,000 50,000,000
- -----------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(j) 09/02/03 300,000 300,000,000
- -----------------------------------------------------------------------------------
Societe Generale-New York Branch (France)
1.08%(k) 09/02/03 305,000 305,000,000
- -----------------------------------------------------------------------------------
Wachovia Securities, Inc.
1.03%(l) 09/02/03 224,384 224,383,746
- -----------------------------------------------------------------------------------
1.08%(m) 09/02/03 300,000 300,000,000
===================================================================================
Total Repurchase Agreements (Cost
$1,179,383,746) 1,179,383,746
===================================================================================
TOTAL INVESTMENTS-100.07% (Cost
$7,017,401,656)(n) 7,017,401,656
___________________________________________________________________________________
===================================================================================
OTHER ASSETS LESS LIABILITIES-(0.07%) (5,125,092)
___________________________________________________________________________________
===================================================================================
NET ASSETS-100% $7,012,276,564
___________________________________________________________________________________
===================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
Disc. - Discount
</Table>
Notes to Schedule of Investments:
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$3,942,811,076, which represented 56.23% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(c) Principal and interest are secured by bond insurance provided by one of the
following companies: Ambac Assurance Corp., Financial Guaranty Insurance Co.
or MBIA Insurance Corp.
(d) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-7
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(g) Security considered to be illiquid. The market value of this security at
8/31/03 represents 5.0% of the Fund's net assets.
(h) Interest rate is redetermined daily. Rate shown is rate in effect on
08/31/03.
(i) Repurchase agreement entered into 08/29/03 with a maturing value of
$50,005,556. Collateralized by $50,228,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 11/05/12 with an aggregate market value at 08/31/03
of $51,000,205.
(j) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(k) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$400,048,000. Collateralized by $462,114,538 U.S. Government obligations, 0%
to 7.68% due 09/26/05 to 08/01/33 with an aggregate market value at 08/31/03
of $408,002,899.
(l) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(m) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-8
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $5,838,017,910
- --------------------------------------------------------------------------------
Repurchase agreements 1,179,383,746
- --------------------------------------------------------------------------------
Receivables for:
Interest 1,029,605
- --------------------------------------------------------------------------------
Amount due from advisor 39,846
- --------------------------------------------------------------------------------
Investment for deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Other assets 162,686
================================================================================
Total assets 7,018,876,058
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Dividends 5,416,551
- --------------------------------------------------------------------------------
Deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Accrued distribution fees 341,271
- --------------------------------------------------------------------------------
Accrued directors' fees 364,386
- --------------------------------------------------------------------------------
Accrued transfer agent fees 134,881
- --------------------------------------------------------------------------------
Accrued operating expenses 100,140
================================================================================
Total liabilities 6,599,494
================================================================================
Net assets applicable to shares outstanding $7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $7,010,848,166
- --------------------------------------------------------------------------------
Undistributed net investment income 1,430,149
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (1,751)
================================================================================
$7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS:
Institutional Class $5,589,107,525
________________________________________________________________________________
================================================================================
Private Investment Class $ 560,824,671
________________________________________________________________________________
================================================================================
Personal Investment Class $ 133,718,682
________________________________________________________________________________
================================================================================
Cash Management Class $ 536,685,443
________________________________________________________________________________
================================================================================
Reserve Class $ 103,681,241
________________________________________________________________________________
================================================================================
Resource Class $ 88,259,002
________________________________________________________________________________
================================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 5,589,124,342
________________________________________________________________________________
================================================================================
Private Investment Class 560,881,268
________________________________________________________________________________
================================================================================
Personal Investment Class 133,660,128
________________________________________________________________________________
================================================================================
Cash Management Class 536,712,535
________________________________________________________________________________
================================================================================
Reserve Class 103,681,137
________________________________________________________________________________
================================================================================
Resource Class 88,218,740
________________________________________________________________________________
================================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-9
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $110,013,685
================================================================================
EXPENSES:
Advisory fees 11,975,189
- --------------------------------------------------------------------------------
Administrative services fees 709,422
- --------------------------------------------------------------------------------
Distribution fees:
Private Investment Class 2,472,464
- --------------------------------------------------------------------------------
Personal Investment Class 1,153,443
- --------------------------------------------------------------------------------
Cash Management Class 794,336
- --------------------------------------------------------------------------------
Reserve Class 1,424,817
- --------------------------------------------------------------------------------
Resource Class 288,942
- --------------------------------------------------------------------------------
Transfer agent fees 1,259,339
- --------------------------------------------------------------------------------
Directors' fees 147,029
- --------------------------------------------------------------------------------
Other 47,539
================================================================================
Total expenses 20,272,520
================================================================================
Less: Fees waived (7,544,631)
================================================================================
Net expenses 12,727,889
================================================================================
Net investment income 97,285,796
================================================================================
Net increase in net assets resulting from operations $ 97,285,796
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-10
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 97,285,796 $ 194,565,853
- ---------------------------------------------------------------------------------
Net realized gain (loss) from investment
securities -- (1,014)
=================================================================================
Net increase in net assets resulting
from operations 97,285,796 194,564,839
=================================================================================
Distributions to shareholders from net
investment income:
Institutional Class (79,265,979) (152,003,031)
- ---------------------------------------------------------------------------------
Private Investment Class (4,790,723) (9,135,125)
- ---------------------------------------------------------------------------------
Personal Investment Class (1,135,614) (2,982,406)
- ---------------------------------------------------------------------------------
Cash Management Class (9,794,878) (20,969,503)
- ---------------------------------------------------------------------------------
Reserve Class (602,071) (1,671,130)
- ---------------------------------------------------------------------------------
Resource Class (1,696,366) (7,804,658)
=================================================================================
Decrease in net assets resulting from
distributions (97,285,631) (194,565,853)
=================================================================================
Share transactions-net:
Institutional Class (341,182,886) (1,909,907,666)
- ---------------------------------------------------------------------------------
Private Investment Class 61,372,457 (73,145,194)
- ---------------------------------------------------------------------------------
Personal Investment Class (43,774,130) (38,793,383)
- ---------------------------------------------------------------------------------
Cash Management Class (437,330,384) (165,758,781)
- ---------------------------------------------------------------------------------
Reserve Class (42,828,014) 2,060,196
- ---------------------------------------------------------------------------------
Resource Class (125,390,496) (239,950,953)
=================================================================================
Net increase (decrease) in net assets
resulting from share transactions (929,133,453) (2,425,495,781)
=================================================================================
Net increase (decrease) in net assets (929,133,288) (2,425,496,795)
=================================================================================
NET ASSETS:
Beginning of year 7,941,409,852 10,366,906,647
=================================================================================
End of year $7,012,276,564 $ 7,941,409,852
_________________________________________________________________________________
=================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Prime Portfolio (the "Fund") is an investment portfolio of Short-Term
Investments Co. (the "Company"). The Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
F-11
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to maximize current income consistent
with the preservation of capital and the maintenance of liquidity. Each company
listed in the Schedule of Investments is organized in the United States unless
otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gain) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. Any capital loss
carryforwards listed are reduced for limitations, if any, to the extent
required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
F-12
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets. AIM has voluntarily agreed to limit Fund operating
expenses (excluding Rule 12b-1 fees, interest, taxes, fund merger and
reorganization expenses, extraordinary items, including other items designated
as such by the Board of Directors, and increases in expenses due to expense
offset arrangements, if any) to 0.12%. Voluntary expense limitations may be
modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived fees of $5,829,596.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $709,422 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $1,197,519 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of the such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class, the Reserve Class and the Resource Class
equals the maximum annual rate of 0.30%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Pursuant to the Plan, for the year ended August 31, 2003, the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class paid $1,483,478, $841,521, $635,469, $1,227,345 and
$231,154, respectively, after FMC waived plan fees of $988,986, $311,922,
$158,867, $197,472 and $57,788, respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
F-13
During the year ended August 31, 2003, the Fund paid legal fees of $17,282
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------------
Distributions paid from ordinary income $97,285,631 $194,565,853
_______________________________________________________________________________________
=======================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 2,065,838
- -------------------------------------------------------------------------------------------
Temporary book/tax differences (636,426)
- -------------------------------------------------------------------------------------------
Capital loss carryforward (1,014)
- -------------------------------------------------------------------------------------------
Capital (par value and additional paid-in) 7,010,848,166
===========================================================================================
Total net assets $7,012,276,564
___________________________________________________________________________________________
===========================================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are primarily the result of director's deferral of
compensation and retirement plan expenses.
The Fund's capital loss carryforward expires as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD
- -----------------------------------------------------------------------------------------
August 31, 2011 $1,014
_________________________________________________________________________________________
=========================================================================================
</Table>
F-14
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
2003 2002
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------
Sold:
Institutional Class 39,538,699,529 $ 39,538,699,529 49,867,711,739 $ 49,867,711,739
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,361,767,415 2,361,767,415 2,478,100,689 2,478,100,689
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,713,575,941 1,713,575,941 2,372,542,859 2,372,542,859
- -------------------------------------------------------------------------------------------------
Cash Management
Class 4,401,672,934 4,401,672,934 5,844,111,815 5,844,111,815
- -------------------------------------------------------------------------------------------------
Reserve Class 5,302,349,656 5,302,349,656 1,426,473,845 1,426,473,845
- -------------------------------------------------------------------------------------------------
Resource Class 831,814,148 831,814,148 2,197,934,978 2,197,934,978
=================================================================================================
Issued as
reinvestment of
dividends:
Institutional Class 5,289,215 5,289,215 9,850,826 9,850,826
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,463,410 2,463,410 4,909,338 4,909,338
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,073,144 1,073,144 3,033,277 3,033,277
- -------------------------------------------------------------------------------------------------
Cash Management
Class 3,808,779 3,808,779 13,867,829 13,867,829
- -------------------------------------------------------------------------------------------------
Reserve Class 616,859 616,859 1,755,442 1,755,442
- -------------------------------------------------------------------------------------------------
Resource Class 1,719,060 1,719,060 8,321,610 8,321,610
=================================================================================================
Reacquired:
Institutional Class (39,885,171,630) (39,885,171,630) (51,787,470,231) (51,787,470,231)
- -------------------------------------------------------------------------------------------------
Private Investment
Class (2,302,858,368) (2,302,858,368) (2,556,155,221) (2,556,155,221)
- -------------------------------------------------------------------------------------------------
Personal Investment
Class (1,758,423,215) (1,758,423,215) (2,414,369,519) (2,414,369,519)
- -------------------------------------------------------------------------------------------------
Cash Management
Class (4,842,812,097) (4,842,812,097) (6,023,738,425) (6,023,738,425)
- -------------------------------------------------------------------------------------------------
Reserve Class (5,345,794,529) (5,345,794,529) (1,426,169,091) (1,426,169,091)
- -------------------------------------------------------------------------------------------------
Resource Class (958,923,704) (958,923,704) (2,446,207,541) (2,446,207,541)
=================================================================================================
(929,133,453) $ (929,133,453) (2,425,495,781) $ (2,425,495,781)
_________________________________________________________________________________________________
=================================================================================================
</Table>
F-15
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-16
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
PRIVATE INVESTMENT CLASS
-----------------------------------------------------------
YEAR ENDED AUGUST 31,
-----------------------------------------------------------
2003 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
- -------------------------------------------------------------------------------------------------
Less dividends from net investment
income (0.01) (0.02) (0.05) (0.06) (0.05)
=================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_________________________________________________________________________________________________
=================================================================================================
Total return(a) 0.97% 1.70% 5.14% 5.76% 4.84%
_________________________________________________________________________________________________
=================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $560,825 $499,452 $572,597 $470,368 $384,894
_________________________________________________________________________________________________
=================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.40%(b) 0.40% 0.39% 0.39% 0.39%
- -------------------------------------------------------------------------------------------------
Without fee waivers 0.68%(b) 0.64% 0.59% 0.59% 0.59%
=================================================================================================
Ratio of net investment income to
average net assets 0.98%(b) 1.75% 5.11% 5.64% 4.72%
_________________________________________________________________________________________________
=================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $494,492,810.
F-17
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Prime
Portfolio (a series portfolio of Short-Term Investments Co.), including the
schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended August
31, 2000 have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Portfolio as of August 31, 2003, the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
three-year period then ended, in conformity with accounting principles generally
accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-18
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- ---------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- ---------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- ---------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- ---------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- ---------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
<Caption>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
PRIME PORTFOLIO
RESERVE CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
PRM-AR-5
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
[PHOTO OF DEAR SHAREHOLDER:
ROBERT H.
GRAHAM] This report on the Short-Term Investments Co.'s Prime
Portfolio covers a fiscal year during which reductions in
short-term interest rates caused yields on money market
funds and other short-term instruments to decline. Saying it
favored a more expansive monetary policy because the economy
had not yet exhibited sustainable growth, the Federal
Reserve Board (the Fed) lowered the federal funds rate twice
during the fiscal year. In November 2002, it reduced the
rate from 1.75% to 1.25%. In late June 2003, it reduced that
rate to 1.00%, its lowest level since 1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose
from 5.8% at the start of the fiscal year to 6.1% at its close. Despite the
growth in the economy, companies generally were reluctant to add workers,
relying on strong productivity growth to support earnings. During the second
quarter of 2003, productivity in the nonfarm business sector rose at a robust
6.8% annualized rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Reserve Class was producing a monthly
yield of 0.08% and a seven-day SEC yield of 0.09%. Had the advisor and
distributor not waived fees and/or reimbursed expenses, performance would have
been lower. Portfolio managers employed a combination of short-term cash
management vehicles and selective use of a longer maturity schedule for higher
yields. The weighted average maturity (WAM) remained in the 12 to 28-day range;
at the close of the reporting period, the WAM stood at 19 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Reserve Class stood at $103.7 million. Past performance cannot
guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
The Prime Portfolio seeks to maximize current income to the extent
consistent with preservation of capital and maintenance of liquidity. It invests
in high-grade taxable money market instruments with maturities of 60 days or
fewer, including U.S. government obligations bank obligations, commercial paper
and selected repurchase-agreement securities. An investment in a money market
fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
investing in the fund.
(continued)
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
COMMERCIAL PAPER-64.12%(a)
FINANCIALS-64.12%
ASSET-BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-0.94%
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 08/04/03; Cost $32,599,732)
1.07% 10/02/03 $ 32,657 $ 32,626,910
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $32,941,150)
1.07% 10/03/03 33,000 32,968,614
===================================================================================
65,595,524
===================================================================================
ASSET-BACKED SECURITIES-CONSUMER
RECEIVABLES-3.68%
Delaware Funding Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $24,956,160)
1.07% 10/24/03 25,000 24,960,618
- -----------------------------------------------------------------------------------
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $15,502,879)
1.04% 09/03/03 15,528 15,527,103
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $30,557,983)
1.06% 09/12/03 30,585 30,575,094
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $35,968,178)
1.07% 10/20/03 36,026 35,973,532
- -----------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $27,875,215)
1.04% 09/05/03 27,922 27,918,773
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $55,771,367)
1.06% 10/07/03 55,857 55,797,575
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $27,933,760)
1.07% 10/09/03 27,977 27,945,402
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $38,970,703)
1.07% 10/15/03 39,038 38,986,947
===================================================================================
257,685,044
===================================================================================
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-FULLY BACKED-8.51%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 08/18/03; Cost $59,921,532)
1.07% 10/01/03 $ 60,000 $ 59,946,499
- -----------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 07/24/03; Cost $99,826,667)
1.04% 09/22/03 100,000 99,939,333
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,000)
1.08% 09/24/03 100,000 99,931,000
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $49,917,500)
1.08% 09/25/03 50,000 49,964,000
- -----------------------------------------------------------------------------------
(Acquired 08/08/03; Cost $70,256,040)
1.06% 10/02/03 70,370 70,305,768
- -----------------------------------------------------------------------------------
Newport Funding Corp. (Deutsche Bank A.G.,
New York Branch-ABS Program Sponsor)(b)(c)
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
Triple-A One Funding Corp. (MBIA Insurance
Corp.-ABS Programs Sponsor)(b)(c)
(Acquired 07/24/03; Cost $77,038,026)
1.04% 09/10/03 77,145 77,124,942
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,656,098)
1.06% 09/12/03 49,700 49,683,903
- -----------------------------------------------------------------------------------
(Acquired 08/25/03; Cost $24,999,264)
1.07% 10/08/03 25,032 25,004,472
===================================================================================
596,825,275
===================================================================================
ASSET-BACKED SECURITIES-MULTI-PURPOSE-19.58%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/13/03; Cost $34,970,114)
1.06% 09/11/03 35,000 34,989,694
- -----------------------------------------------------------------------------------
Barton Capital Corp. (Societe Generale-ABS
Program Sponsor)(b)(c)
(Acquired 08/08/03; Cost $91,097,468)
1.06% 10/06/03 91,256 91,161,956
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $21,880,131)
1.07% 10/09/03 21,914 21,889,249
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $45,522,435)
1.06% 10/10/03 45,603 45,550,633
- -----------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Charta LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/05/03; Cost $79,893,000)
1.07% 09/19/03 $ 80,000 $ 79,957,200
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $49,915,292)
1.07% 10/01/03 50,000 49,955,417
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $99,824,639)
1.07% 10/16/03 100,000 99,866,250
- -----------------------------------------------------------------------------------
CRC Funding LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,860,306)
1.07% 10/07/03 100,000 99,893,000
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $99,829,222)
1.06% 10/08/03 100,000 99,891,055
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $76,866,234)
1.06% 10/09/03 77,000 76,913,845
- -----------------------------------------------------------------------------------
Edison Asset Securitization LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 08/04/03; Cost $7,599,876)
1.07% 10/01/03 7,613 7,606,212
- -----------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $199,643,333)
1.07% 10/20/03 200,000 199,708,722
- -----------------------------------------------------------------------------------
Park Avenue Receivables Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/05/03; Cost $30,001,501)
1.07% 09/16/03 30,039 30,025,608
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $150,009,953)
1.07% 10/15/03 150,269 150,072,482
- -----------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $67,139,546)
1.03% 09/09/03 67,255 67,239,606
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,947,250)
1.06% 09/18/03 50,000 49,975,090
- -----------------------------------------------------------------------------------
Windmill Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/01/03; Cost $68,634,659)
1.07% 09/02/03 68,700 68,697,958
===================================================================================
1,373,320,366
===================================================================================
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE
RECEIVABLES-17.88%
CAFCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $99,881,556)
1.04% 09/03/03 $100,000 $ 99,994,222
- -----------------------------------------------------------------------------------
(Acquired 07/24/03; Cost $99,861,333)
1.04% 09/10/03 100,000 99,974,000
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $39,941,744)
1.07% 10/06/03 40,000 39,958,389
- -----------------------------------------------------------------------------------
CIESCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $34,951,467)
1.04% 09/10/03 35,000 34,990,900
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $74,877,396)
1.07% 10/21/03 75,000 74,888,542
- -----------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 07/24/03; Cost $89,844,000)
1.04% 09/22/03 90,000 89,945,400
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,841,000)
1.08% 09/23/03 100,000 99,934,000
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
FCAR Owner Trust-Series II (Ford Motor Credit
Co.-ABS Program Sponsor)
(Acquired 07/22/03; Cost $99,839,778)
1.03% 09/16/03 100,000 99,957,083
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $101,818,100)
1.07% 10/03/03 102,000 101,902,987
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $47,423,076)
1.06% 10/07/03 47,500 47,449,650
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $49,913,806)
1.07% 10/24/03 50,000 49,921,236
- -----------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust-Series A-1+ (General
Motors Acceptance Corp.-ABS Program
Sponsor)
(Acquired 07/25/03; Cost $99,826,667)
1.04% 09/23/03 $100,000 $ 99,936,444
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,056)
1.06% 09/25/03 100,000 99,929,333
- -----------------------------------------------------------------------------------
(Acquired 08/14/03; Cost $49,915,292)
1.07% 10/10/03 50,000 49,942,042
===================================================================================
1,253,575,975
===================================================================================
CONSUMER FINANCE-0.71%
Toyota Motor Credit Corp.
1.02% 09/04/03 50,000 49,995,750
===================================================================================
DIVERSIFIED BANKS-4.99%
UBS Finance Delaware, LLC
1.03% 09/04/03 100,000 99,991,417
- -----------------------------------------------------------------------------------
1.03% 09/05/03 100,000 99,988,555
- -----------------------------------------------------------------------------------
1.02% 09/09/03 150,000 149,966,000
===================================================================================
349,945,972
===================================================================================
DIVERSIFIED CAPITAL MARKETS-3.56%
Citigroup Global Markets Holdings Inc.
1.07% 10/22/03 100,000 99,848,417
- -----------------------------------------------------------------------------------
Citigroup Inc.
1.07% 10/17/03 150,000 149,794,920
===================================================================================
249,643,337
===================================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.71%
SBC International Inc.
(Acquired 08/21/03; Cost $49,960,625)
1.05%(b) 09/17/03 50,000 49,976,667
===================================================================================
MULTI-LINE INSURANCE-1.42%
GE Financial Assurance Holdings, Inc.
(Acquired 08/25/03; Cost $99,850,000)
1.08%(b) 10/14/03 100,000 99,871,000
===================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-2.14%
General Electric Capital Corp.
1.07% 10/08/03 $ 50,000 $ 49,945,014
- -----------------------------------------------------------------------------------
1.07% 10/21/03 100,000 99,851,389
===================================================================================
149,796,403
===================================================================================
Total Financials 4,496,231,313
===================================================================================
Total Commercial Paper (Cost
$4,496,231,313) 4,496,231,313
===================================================================================
MASTER NOTE AGREEMENTS-6.34%(d)
Merrill Lynch Mortgage Capital, Inc.
(Acquired 08/25/03; Cost $100,000,000)
1.27%(b)(e) 02/23/04 100,000 100,000,000
- -----------------------------------------------------------------------------------
Morgan Stanley
(Acquired 03/17/03; Cost $345,000,000)
1.20%(b)(f) 09/15/03 345,000 345,000,000
===================================================================================
Total Master Note Agreements (Cost
$445,000,000) 445,000,000
===================================================================================
PROMISSORY NOTES-4.99%
Goldman Sachs Group, Inc. (The)
(Acquired 08/29/03; Cost $350,000,000)
1.16%(b)(g)(h) 10/28/03 350,000 350,000,000
===================================================================================
BANK NOTES-4.08%
Standard Federal Bank, N.A.
1.02% 09/08/03 200,000 200,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Bank N.A.
1.02% 09/03/03 51,000 50,999,971
- -----------------------------------------------------------------------------------
1.06% 09/22/03 35,000 35,000,000
===================================================================================
Total Bank Notes (Cost $285,999,971) 285,999,971
===================================================================================
CERTIFICATE OF DEPOSIT-3.49%
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Co.
1.06% 09/18/03 100,000 100,000,000
- -----------------------------------------------------------------------------------
1.06% 10/06/03 70,000 69,999,994
===================================================================================
Total Certificates of Deposit (Cost
$244,999,994) 244,999,994
===================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-0.23%
Federal Home Loan Bank Disc. Notes,
0.84% (Cost $15,786,632)(a) 09/02/03 $ 15,787 $ 15,786,632
===================================================================================
Total Investments (excluding Repurchase
Agreements) (Cost $5,838,017,910) 5,838,017,910
===================================================================================
REPURCHASE AGREEMENTS-16.82%
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.00%(i) 09/02/03 50,000 50,000,000
- -----------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(j) 09/02/03 300,000 300,000,000
- -----------------------------------------------------------------------------------
Societe Generale-New York Branch (France)
1.08%(k) 09/02/03 305,000 305,000,000
- -----------------------------------------------------------------------------------
Wachovia Securities, Inc.
1.03%(l) 09/02/03 224,384 224,383,746
- -----------------------------------------------------------------------------------
1.08%(m) 09/02/03 300,000 300,000,000
===================================================================================
Total Repurchase Agreements (Cost
$1,179,383,746) 1,179,383,746
===================================================================================
TOTAL INVESTMENTS-100.07% (Cost
$7,017,401,656)(n) 7,017,401,656
___________________________________________________________________________________
===================================================================================
OTHER ASSETS LESS LIABILITIES-(0.07%) (5,125,092)
___________________________________________________________________________________
===================================================================================
NET ASSETS-100% $7,012,276,564
___________________________________________________________________________________
===================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
Disc. - Discount
</Table>
Notes to Schedule of Investments:
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$3,942,811,076, which represented 56.23% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(c) Principal and interest are secured by bond insurance provided by one of the
following companies: Ambac Assurance Corp., Financial Guaranty Insurance Co.
or MBIA Insurance Corp.
(d) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-7
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(g) Security considered to be illiquid. The market value of this security at
8/31/03 represents 5.0% of the Fund's net assets.
(h) Interest rate is redetermined daily. Rate shown is rate in effect on
08/31/03.
(i) Repurchase agreement entered into 08/29/03 with a maturing value of
$50,005,556. Collateralized by $50,228,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 11/05/12 with an aggregate market value at 08/31/03
of $51,000,205.
(j) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(k) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$400,048,000. Collateralized by $462,114,538 U.S. Government obligations, 0%
to 7.68% due 09/26/05 to 08/01/33 with an aggregate market value at 08/31/03
of $408,002,899.
(l) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(m) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-8
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $5,838,017,910
- --------------------------------------------------------------------------------
Repurchase agreements 1,179,383,746
- --------------------------------------------------------------------------------
Receivables for:
Interest 1,029,605
- --------------------------------------------------------------------------------
Amount due from advisor 39,846
- --------------------------------------------------------------------------------
Investment for deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Other assets 162,686
================================================================================
Total assets 7,018,876,058
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Dividends 5,416,551
- --------------------------------------------------------------------------------
Deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Accrued distribution fees 341,271
- --------------------------------------------------------------------------------
Accrued directors' fees 364,386
- --------------------------------------------------------------------------------
Accrued transfer agent fees 134,881
- --------------------------------------------------------------------------------
Accrued operating expenses 100,140
================================================================================
Total liabilities 6,599,494
================================================================================
Net assets applicable to shares outstanding $7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $7,010,848,166
- --------------------------------------------------------------------------------
Undistributed net investment income 1,430,149
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (1,751)
================================================================================
$7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS:
Institutional Class $5,589,107,525
________________________________________________________________________________
================================================================================
Private Investment Class $ 560,824,671
________________________________________________________________________________
================================================================================
Personal Investment Class $ 133,718,682
________________________________________________________________________________
================================================================================
Cash Management Class $ 536,685,443
________________________________________________________________________________
================================================================================
Reserve Class $ 103,681,241
________________________________________________________________________________
================================================================================
Resource Class $ 88,259,002
________________________________________________________________________________
================================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 5,589,124,342
________________________________________________________________________________
================================================================================
Private Investment Class 560,881,268
________________________________________________________________________________
================================================================================
Personal Investment Class 133,660,128
________________________________________________________________________________
================================================================================
Cash Management Class 536,712,535
________________________________________________________________________________
================================================================================
Reserve Class 103,681,137
________________________________________________________________________________
================================================================================
Resource Class 88,218,740
________________________________________________________________________________
================================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-9
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $110,013,685
================================================================================
EXPENSES:
Advisory fees 11,975,189
- --------------------------------------------------------------------------------
Administrative services fees 709,422
- --------------------------------------------------------------------------------
Distribution fees:
Private Investment Class 2,472,464
- --------------------------------------------------------------------------------
Personal Investment Class 1,153,443
- --------------------------------------------------------------------------------
Cash Management Class 794,336
- --------------------------------------------------------------------------------
Reserve Class 1,424,817
- --------------------------------------------------------------------------------
Resource Class 288,942
- --------------------------------------------------------------------------------
Transfer agent fees 1,259,339
- --------------------------------------------------------------------------------
Directors' fees 147,029
- --------------------------------------------------------------------------------
Other 47,539
================================================================================
Total expenses 20,272,520
================================================================================
Less: Fees waived (7,544,631)
================================================================================
Net expenses 12,727,889
================================================================================
Net investment income 97,285,796
================================================================================
Net increase in net assets resulting from operations $ 97,285,796
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-10
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 97,285,796 $ 194,565,853
- ---------------------------------------------------------------------------------
Net realized gain (loss) from investment
securities -- (1,014)
=================================================================================
Net increase in net assets resulting
from operations 97,285,796 194,564,839
=================================================================================
Distributions to shareholders from net
investment income:
Institutional Class (79,265,979) (152,003,031)
- ---------------------------------------------------------------------------------
Private Investment Class (4,790,723) (9,135,125)
- ---------------------------------------------------------------------------------
Personal Investment Class (1,135,614) (2,982,406)
- ---------------------------------------------------------------------------------
Cash Management Class (9,794,878) (20,969,503)
- ---------------------------------------------------------------------------------
Reserve Class (602,071) (1,671,130)
- ---------------------------------------------------------------------------------
Resource Class (1,696,366) (7,804,658)
=================================================================================
Decrease in net assets resulting from
distributions (97,285,631) (194,565,853)
=================================================================================
Share transactions-net:
Institutional Class (341,182,886) (1,909,907,666)
- ---------------------------------------------------------------------------------
Private Investment Class 61,372,457 (73,145,194)
- ---------------------------------------------------------------------------------
Personal Investment Class (43,774,130) (38,793,383)
- ---------------------------------------------------------------------------------
Cash Management Class (437,330,384) (165,758,781)
- ---------------------------------------------------------------------------------
Reserve Class (42,828,014) 2,060,196
- ---------------------------------------------------------------------------------
Resource Class (125,390,496) (239,950,953)
=================================================================================
Net increase (decrease) in net assets
resulting from share transactions (929,133,453) (2,425,495,781)
=================================================================================
Net increase (decrease) in net assets (929,133,288) (2,425,496,795)
=================================================================================
NET ASSETS:
Beginning of year 7,941,409,852 10,366,906,647
=================================================================================
End of year $7,012,276,564 $ 7,941,409,852
_________________________________________________________________________________
=================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Prime Portfolio (the "Fund") is an investment portfolio of Short-Term
Investments Co. (the "Company"). The Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
F-11
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to maximize current income consistent
with the preservation of capital and the maintenance of liquidity. Each company
listed in the Schedule of Investments is organized in the United States unless
otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gain) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. Any capital loss
carryforwards listed are reduced for limitations, if any, to the extent
required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
F-12
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets. AIM has voluntarily agreed to limit Fund operating
expenses (excluding Rule 12b-1 fees, interest, taxes, fund merger and
reorganization expenses, extraordinary items, including other items designated
as such by the Board of Directors, and increases in expenses due to expense
offset arrangements, if any) to 0.12%. Voluntary expense limitations may be
modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived fees of $5,829,596.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $709,422 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $1,197,519 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of the such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class, the Reserve Class and the Resource Class
equals the maximum annual rate of 0.30%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Pursuant to the Plan, for the year ended August 31, 2003, the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class paid $1,483,478, $841,521, $635,469, $1,227,345 and
$231,154, respectively, after FMC waived plan fees of $988,986, $311,922,
$158,867, $197,472 and $57,788, respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
F-13
During the year ended August 31, 2003, the Fund paid legal fees of $17,282
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------------
Distributions paid from ordinary income $97,285,631 $194,565,853
_______________________________________________________________________________________
=======================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 2,065,838
- -------------------------------------------------------------------------------------------
Temporary book/tax differences (636,426)
- -------------------------------------------------------------------------------------------
Capital loss carryforward (1,014)
- -------------------------------------------------------------------------------------------
Capital (par value and additional paid-in) 7,010,848,166
===========================================================================================
Total net assets $7,012,276,564
___________________________________________________________________________________________
===========================================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are primarily the result of director's deferral of
compensation and retirement plan expenses.
The Fund's capital loss carryforward expires as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD
- -----------------------------------------------------------------------------------------
August 31, 2011 $1,014
_________________________________________________________________________________________
=========================================================================================
</Table>
F-14
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
2003 2002
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------
Sold:
Institutional Class 39,538,699,529 $ 39,538,699,529 49,867,711,739 $ 49,867,711,739
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,361,767,415 2,361,767,415 2,478,100,689 2,478,100,689
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,713,575,941 1,713,575,941 2,372,542,859 2,372,542,859
- -------------------------------------------------------------------------------------------------
Cash Management
Class 4,401,672,934 4,401,672,934 5,844,111,815 5,844,111,815
- -------------------------------------------------------------------------------------------------
Reserve Class 5,302,349,656 5,302,349,656 1,426,473,845 1,426,473,845
- -------------------------------------------------------------------------------------------------
Resource Class 831,814,148 831,814,148 2,197,934,978 2,197,934,978
=================================================================================================
Issued as
reinvestment of
dividends:
Institutional Class 5,289,215 5,289,215 9,850,826 9,850,826
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,463,410 2,463,410 4,909,338 4,909,338
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,073,144 1,073,144 3,033,277 3,033,277
- -------------------------------------------------------------------------------------------------
Cash Management
Class 3,808,779 3,808,779 13,867,829 13,867,829
- -------------------------------------------------------------------------------------------------
Reserve Class 616,859 616,859 1,755,442 1,755,442
- -------------------------------------------------------------------------------------------------
Resource Class 1,719,060 1,719,060 8,321,610 8,321,610
=================================================================================================
Reacquired:
Institutional Class (39,885,171,630) (39,885,171,630) (51,787,470,231) (51,787,470,231)
- -------------------------------------------------------------------------------------------------
Private Investment
Class (2,302,858,368) (2,302,858,368) (2,556,155,221) (2,556,155,221)
- -------------------------------------------------------------------------------------------------
Personal Investment
Class (1,758,423,215) (1,758,423,215) (2,414,369,519) (2,414,369,519)
- -------------------------------------------------------------------------------------------------
Cash Management
Class (4,842,812,097) (4,842,812,097) (6,023,738,425) (6,023,738,425)
- -------------------------------------------------------------------------------------------------
Reserve Class (5,345,794,529) (5,345,794,529) (1,426,169,091) (1,426,169,091)
- -------------------------------------------------------------------------------------------------
Resource Class (958,923,704) (958,923,704) (2,446,207,541) (2,446,207,541)
=================================================================================================
(929,133,453) $ (929,133,453) (2,425,495,781) $ (2,425,495,781)
_________________________________________________________________________________________________
=================================================================================================
</Table>
F-15
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-16
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
RESERVE CLASS
------------------------------------------------------------------
JANUARY 4, 1999
(DATE SALES
YEAR ENDED AUGUST 31, COMMENCED) TO
----------------------------------------------- AUGUST 31,
2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------
Net investment income 0.004 0.01 0.05 0.05 0.03
- ------------------------------------------------------------------------------------------------
Less dividends from net
investment income (0.004) (0.01) (0.05) (0.05) (0.03)
================================================================================================
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
________________________________________________________________________________________________
================================================================================================
Total return(a) 0.40% 1.19% 4.62% 5.24% 2.73%
________________________________________________________________________________________________
================================================================================================
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $103,681 $146,505 $144,449 $131,370 $121,783
________________________________________________________________________________________________
================================================================================================
Ratio of expenses to average
net assets:
With fee waivers 0.97%(b) 0.90% 0.89% 0.89% 0.89%(c)
- ------------------------------------------------------------------------------------------------
Without fee waivers 1.18%(b) 1.14% 1.09% 1.09% 1.09%(c)
================================================================================================
Ratio of net investment
income to average net
assets 0.41%(b) 1.25% 4.61% 5.14% 4.22%(c)
________________________________________________________________________________________________
================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are based on average daily net assets of $142,481,672.
(c) Annualized.
F-17
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Prime
Portfolio (a series portfolio of Short-Term Investments Co.), including the
schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended August
31, 2000 have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Portfolio as of August 31, 2003, the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
three-year period then ended, in conformity with accounting principles generally
accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-18
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- ---------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- ---------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- ---------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- ---------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- ---------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
<Caption>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
ANNUAL REPORT / AUGUST 31, 2003
SHORT-TERM INVESTMENTS CO.
(STIC)
PRIME PORTFOLIO
RESOURCE CLASS
[COVER IMAGE]
[AIM INVESTMENTS LOGO APPEARS HERE]
--Servicemark--
Your goals. Our solutions.
--Servicemark--
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
PRM-AR-5
[AIM INVESTMENTS LOGO APPEARS HERE]
- --Servicemark--
LETTER TO OUR SHAREHOLDERS
[PHOTO OF DEAR SHAREHOLDER:
ROBERT H.
GRAHAM] This report on the Short-Term Investments Co.'s Prime
Portfolio covers a fiscal year during which reductions in
short-term interest rates caused yields on money market
funds and other short-term instruments to decline. Saying it
favored a more expansive monetary policy because the economy
had not yet exhibited sustainable growth, the Federal
Reserve Board (the Fed) lowered the federal funds rate twice
during the fiscal year. In November 2002, it reduced the
rate from 1.75% to 1.25%. In late June 2003, it reduced that
rate to 1.00%, its lowest level since 1958.
U.S. gross domestic product rose during the fiscal year
covered by this report. Annualized, the growth rate
accelerated from a 1.4% rate during the fourth quarter of
2002 and the first quarter of 2003 to a 3.3% rate for the
second quarter of 2003. However, the unemployment rate rose
from 5.8% at the start of the fiscal year to 6.1% at its close. Despite the
growth in the economy, companies generally were reluctant to add workers,
relying on strong productivity growth to support earnings. During the second
quarter of 2003, productivity in the nonfarm business sector rose at a robust
6.8% annualized rate.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2003, the portfolio's Resource Class outperformed its indexes,
as shown in the table. Had the advisor and distributor not waived fees and/or
reimbursed expenses, performance would have been lower. Through a combination of
short-term cash management vehicles and selective use of a longer maturity
schedule for higher yields, the portfolio continued to provide attractive
yields. The weighted average maturity (WAM) remained in the 12- to 28-day range;
at the close of the reporting period, the WAM stood at 19 days. The portfolio
will continue to maintain a relatively short maturity structure to take
advantage of any sudden rise in market yields. At the close of the fiscal year,
net assets of the Resource Class stood at $88.3 million. Past performance cannot
guarantee comparable future results.
The portfolio continues to hold the highest credit-quality ratings given by
three widely known credit rating agencies: AAAm from Standard & Poor's, Aaa from
Moody's and AAA from Fitch IBCA. These historical ratings are based upon an
analysis of the portfolio's credit quality, composition, management and weekly
portfolio reviews.
================================================================================
YIELDS AS OF 8/31/03*
MONTHLY YIELD SEVEN-DAY
SEC YIELD
Prime Portfolio 0.79% 0.80%
Resource Class
iMoneyNet Money Fund Averages--Trademark-- 0.71% 0.72%
First-Tier Institutions Only
iMoneyNet Money Fund Averages--Trademark-- 0.67% 0.67%
Total Institutions Only
================================================================================
(continued)
The Prime Portfolio seeks to maximize current income to the extent
consistent with preservation of capital and maintenance of liquidity. It invests
in high-grade taxable money market instruments with maturities of 60 days or
fewer, including U.S. government obligations bank obligations, commercial paper
and selected repurchase-agreement securities. An investment in a money market
fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
investing in the fund.
IN CONCLUSION
As the fiscal year ended, there were positive economic signals. Both the
manufacturing and nonmanufacturing sectors were expanding, as shown by data from
the Institute for Supply Management. In fact, that organization's index of
nonmanufacturing sector business activity was at its highest level since its
inception in August 1997.
At its August meeting, the Fed kept the federal funds rate at 1.00%.
Although the Fed found firmer spending between June and August, it noted mixed
labor market indicators and reiterated its belief that accommodative monetary
policy was providing important support to economic activity. The Federal Open
Market Committee's August announcement hinted that interest rates may remain
low, saying, "In these circumstances, the Committee believes that policy
accommodation can be maintained for a considerable period."
We are pleased to send you this report on your investment. AIM is committed
to the primary goals of safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service, and we are ready to
respond to your comments about this report. Please contact one of our
representatives at 800-659-1005 if we can be of help.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
*The seven-day SEC Yield and monthly yield represent annualized results for the
period, net of fees and expenses, and exclude any realized capital gains or
losses. Yields will fluctuate. iMoneyNet, Inc. is an independent mutual fund
performance monitor. The iMoneyNet First-Tier Institutions Only category
consists of 276 funds that invest in any allowable 2a-7 investment, except
second-tier commercial paper. The Total Institutions Only category consists of
589 funds with a minimum initial investment of $100,000 or funds that are only
open to institutions.
2
SCHEDULE OF INVESTMENTS
August 31, 2003
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
COMMERCIAL PAPER-64.12%(a)
FINANCIALS-64.12%
ASSET-BACKED SECURITIES-COMMERCIAL LOANS/
LEASES-0.94%
Fountain Square Commercial Funding Corp.
(Fifth Third Bank-ABS Program Sponsor)(b)
(Acquired 08/04/03; Cost $32,599,732)
1.07% 10/02/03 $ 32,657 $ 32,626,910
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $32,941,150)
1.07% 10/03/03 33,000 32,968,614
===================================================================================
65,595,524
===================================================================================
ASSET-BACKED SECURITIES-CONSUMER
RECEIVABLES-3.68%
Delaware Funding Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/25/03; Cost $24,956,160)
1.07% 10/24/03 25,000 24,960,618
- -----------------------------------------------------------------------------------
Old Line Funding Corp. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $15,502,879)
1.04% 09/03/03 15,528 15,527,103
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $30,557,983)
1.06% 09/12/03 30,585 30,575,094
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $35,968,178)
1.07% 10/20/03 36,026 35,973,532
- -----------------------------------------------------------------------------------
Thunder Bay Funding Inc. (Royal Bank of
Canada-ABS Program Sponsor)(b)
(Acquired 07/09/03; Cost $27,875,215)
1.04% 09/05/03 27,922 27,918,773
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $55,771,367)
1.06% 10/07/03 55,857 55,797,575
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $27,933,760)
1.07% 10/09/03 27,977 27,945,402
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $38,970,703)
1.07% 10/15/03 39,038 38,986,947
===================================================================================
257,685,044
===================================================================================
</Table>
F-1
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-FULLY BACKED-8.51%
Aquinas Funding LLC (Rabobank-ABS Program
Sponsor)(b)
(Acquired 08/18/03; Cost $59,921,532)
1.07% 10/01/03 $ 60,000 $ 59,946,499
- -----------------------------------------------------------------------------------
CXC LLC (Citibank N.A.-ABS Program
Sponsor)(b)
(Acquired 07/24/03; Cost $99,826,667)
1.04% 09/22/03 100,000 99,939,333
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,000)
1.08% 09/24/03 100,000 99,931,000
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $49,917,500)
1.08% 09/25/03 50,000 49,964,000
- -----------------------------------------------------------------------------------
(Acquired 08/08/03; Cost $70,256,040)
1.06% 10/02/03 70,370 70,305,768
- -----------------------------------------------------------------------------------
Newport Funding Corp. (Deutsche Bank A.G.,
New York Branch-ABS Program Sponsor)(b)(c)
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
Triple-A One Funding Corp. (MBIA Insurance
Corp.-ABS Programs Sponsor)(b)(c)
(Acquired 07/24/03; Cost $77,038,026)
1.04% 09/10/03 77,145 77,124,942
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,656,098)
1.06% 09/12/03 49,700 49,683,903
- -----------------------------------------------------------------------------------
(Acquired 08/25/03; Cost $24,999,264)
1.07% 10/08/03 25,032 25,004,472
===================================================================================
596,825,275
===================================================================================
ASSET-BACKED SECURITIES-MULTI-PURPOSE-19.58%
Amsterdam Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/13/03; Cost $34,970,114)
1.06% 09/11/03 35,000 34,989,694
- -----------------------------------------------------------------------------------
Barton Capital Corp. (Societe Generale-ABS
Program Sponsor)(b)(c)
(Acquired 08/08/03; Cost $91,097,468)
1.06% 10/06/03 91,256 91,161,956
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $21,880,131)
1.07% 10/09/03 21,914 21,889,249
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $45,522,435)
1.06% 10/10/03 45,603 45,550,633
- -----------------------------------------------------------------------------------
</Table>
F-2
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-MULTI-PURPOSE-(CONTINUED)
Charta LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/05/03; Cost $79,893,000)
1.07% 09/19/03 $ 80,000 $ 79,957,200
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/05/03; Cost $49,915,292)
1.07% 10/01/03 50,000 49,955,417
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $99,824,639)
1.07% 10/16/03 100,000 99,866,250
- -----------------------------------------------------------------------------------
CRC Funding LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 08/21/03; Cost $99,860,306)
1.07% 10/07/03 100,000 99,893,000
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $99,829,222)
1.06% 10/08/03 100,000 99,891,055
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $76,866,234)
1.06% 10/09/03 77,000 76,913,845
- -----------------------------------------------------------------------------------
Edison Asset Securitization LLC (General
Electric Capital Corp.-ABS Program
Sponsor)(b)
(Acquired 08/04/03; Cost $7,599,876)
1.07% 10/01/03 7,613 7,606,212
- -----------------------------------------------------------------------------------
(Acquired 08/21/03; Cost $199,643,333)
1.07% 10/20/03 200,000 199,708,722
- -----------------------------------------------------------------------------------
Park Avenue Receivables Corp. (JPMorgan Chase
Bank-ABS Program Sponsor)(b)
(Acquired 08/05/03; Cost $30,001,501)
1.07% 09/16/03 30,039 30,025,608
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $150,009,953)
1.07% 10/15/03 150,269 150,072,482
- -----------------------------------------------------------------------------------
Preferred Receivables Funding Corp. (Bank One
N.A.-ABS Program Sponsor)(b)
(Acquired 07/11/03; Cost $67,139,546)
1.03% 09/09/03 67,255 67,239,606
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $49,947,250)
1.06% 09/18/03 50,000 49,975,090
- -----------------------------------------------------------------------------------
Windmill Funding Corp. (ABN AMRO Bank
N.V.-ABS Program Sponsor)(b)
(Acquired 08/01/03; Cost $68,634,659)
1.07% 09/02/03 68,700 68,697,958
===================================================================================
1,373,320,366
===================================================================================
</Table>
F-3
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE
RECEIVABLES-17.88%
CAFCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $99,881,556)
1.04% 09/03/03 $100,000 $ 99,994,222
- -----------------------------------------------------------------------------------
(Acquired 07/24/03; Cost $99,861,333)
1.04% 09/10/03 100,000 99,974,000
- -----------------------------------------------------------------------------------
(Acquired 08/18/03; Cost $39,941,744)
1.07% 10/06/03 40,000 39,958,389
- -----------------------------------------------------------------------------------
CIESCO, LLC (Citibank N.A.-ABS Program
Sponsor)(b)(c)
(Acquired 07/24/03; Cost $34,951,467)
1.04% 09/10/03 35,000 34,990,900
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $74,877,396)
1.07% 10/21/03 75,000 74,888,542
- -----------------------------------------------------------------------------------
Eureka Securitization, Inc. (Citibank
N.A.-ABS Program Sponsor)(b)
(Acquired 07/24/03; Cost $89,844,000)
1.04% 09/22/03 90,000 89,945,400
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,841,000)
1.08% 09/23/03 100,000 99,934,000
- -----------------------------------------------------------------------------------
(Acquired 07/30/03; Cost $99,829,222)
1.06% 09/26/03 100,000 99,926,389
- -----------------------------------------------------------------------------------
(Acquired 08/11/03; Cost $64,885,167)
1.06% 10/10/03 65,000 64,925,358
- -----------------------------------------------------------------------------------
FCAR Owner Trust-Series II (Ford Motor Credit
Co.-ABS Program Sponsor)
(Acquired 07/22/03; Cost $99,839,778)
1.03% 09/16/03 100,000 99,957,083
- -----------------------------------------------------------------------------------
(Acquired 08/04/03; Cost $101,818,100)
1.07% 10/03/03 102,000 101,902,987
- -----------------------------------------------------------------------------------
(Acquired 08/13/03; Cost $47,423,076)
1.06% 10/07/03 47,500 47,449,650
- -----------------------------------------------------------------------------------
(Acquired 08/27/03; Cost $49,913,806)
1.07% 10/24/03 50,000 49,921,236
- -----------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-TRADE RECEIVABLES-(CONTINUED)
New Center Asset Trust-Series A-1+ (General
Motors Acceptance Corp.-ABS Program
Sponsor)
(Acquired 07/25/03; Cost $99,826,667)
1.04% 09/23/03 $100,000 $ 99,936,444
- -----------------------------------------------------------------------------------
(Acquired 08/01/03; Cost $99,838,056)
1.06% 09/25/03 100,000 99,929,333
- -----------------------------------------------------------------------------------
(Acquired 08/14/03; Cost $49,915,292)
1.07% 10/10/03 50,000 49,942,042
===================================================================================
1,253,575,975
===================================================================================
CONSUMER FINANCE-0.71%
Toyota Motor Credit Corp.
1.02% 09/04/03 50,000 49,995,750
===================================================================================
DIVERSIFIED BANKS-4.99%
UBS Finance Delaware, LLC
1.03% 09/04/03 100,000 99,991,417
- -----------------------------------------------------------------------------------
1.03% 09/05/03 100,000 99,988,555
- -----------------------------------------------------------------------------------
1.02% 09/09/03 150,000 149,966,000
===================================================================================
349,945,972
===================================================================================
DIVERSIFIED CAPITAL MARKETS-3.56%
Citigroup Global Markets Holdings Inc.
1.07% 10/22/03 100,000 99,848,417
- -----------------------------------------------------------------------------------
Citigroup Inc.
1.07% 10/17/03 150,000 149,794,920
===================================================================================
249,643,337
===================================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.71%
SBC International Inc.
(Acquired 08/21/03; Cost $49,960,625)
1.05%(b) 09/17/03 50,000 49,976,667
===================================================================================
MULTI-LINE INSURANCE-1.42%
GE Financial Assurance Holdings, Inc.
(Acquired 08/25/03; Cost $99,850,000)
1.08%(b) 10/14/03 100,000 99,871,000
===================================================================================
</Table>
F-5
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-2.14%
General Electric Capital Corp.
1.07% 10/08/03 $ 50,000 $ 49,945,014
- -----------------------------------------------------------------------------------
1.07% 10/21/03 100,000 99,851,389
===================================================================================
149,796,403
===================================================================================
Total Financials 4,496,231,313
===================================================================================
Total Commercial Paper (Cost
$4,496,231,313) 4,496,231,313
===================================================================================
MASTER NOTE AGREEMENTS-6.34%(d)
Merrill Lynch Mortgage Capital, Inc.
(Acquired 08/25/03; Cost $100,000,000)
1.27%(b)(e) 02/23/04 100,000 100,000,000
- -----------------------------------------------------------------------------------
Morgan Stanley
(Acquired 03/17/03; Cost $345,000,000)
1.20%(b)(f) 09/15/03 345,000 345,000,000
===================================================================================
Total Master Note Agreements (Cost
$445,000,000) 445,000,000
===================================================================================
PROMISSORY NOTES-4.99%
Goldman Sachs Group, Inc. (The)
(Acquired 08/29/03; Cost $350,000,000)
1.16%(b)(g)(h) 10/28/03 350,000 350,000,000
===================================================================================
BANK NOTES-4.08%
Standard Federal Bank, N.A.
1.02% 09/08/03 200,000 200,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Bank N.A.
1.02% 09/03/03 51,000 50,999,971
- -----------------------------------------------------------------------------------
1.06% 09/22/03 35,000 35,000,000
===================================================================================
Total Bank Notes (Cost $285,999,971) 285,999,971
===================================================================================
CERTIFICATE OF DEPOSIT-3.49%
HSBC Bank USA (United Kingdom)
1.00% 09/19/03 75,000 75,000,000
- -----------------------------------------------------------------------------------
Wells Fargo Co.
1.06% 09/18/03 100,000 100,000,000
- -----------------------------------------------------------------------------------
1.06% 10/06/03 70,000 69,999,994
===================================================================================
Total Certificates of Deposit (Cost
$244,999,994) 244,999,994
===================================================================================
</Table>
F-6
<Table>
<Caption>
PAR
MATURITY (000) VALUE
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-0.23%
Federal Home Loan Bank Disc. Notes,
0.84% (Cost $15,786,632)(a) 09/02/03 $ 15,787 $ 15,786,632
===================================================================================
Total Investments (excluding Repurchase
Agreements) (Cost $5,838,017,910) 5,838,017,910
===================================================================================
REPURCHASE AGREEMENTS-16.82%
Barclays Capital Inc.-New York Branch (United
Kingdom)
1.00%(i) 09/02/03 50,000 50,000,000
- -----------------------------------------------------------------------------------
Greenwich Capital Markets, Inc.-New York
Branch (United Kingdom)
1.07%(j) 09/02/03 300,000 300,000,000
- -----------------------------------------------------------------------------------
Societe Generale-New York Branch (France)
1.08%(k) 09/02/03 305,000 305,000,000
- -----------------------------------------------------------------------------------
Wachovia Securities, Inc.
1.03%(l) 09/02/03 224,384 224,383,746
- -----------------------------------------------------------------------------------
1.08%(m) 09/02/03 300,000 300,000,000
===================================================================================
Total Repurchase Agreements (Cost
$1,179,383,746) 1,179,383,746
===================================================================================
TOTAL INVESTMENTS-100.07% (Cost
$7,017,401,656)(n) 7,017,401,656
___________________________________________________________________________________
===================================================================================
OTHER ASSETS LESS LIABILITIES-(0.07%) (5,125,092)
___________________________________________________________________________________
===================================================================================
NET ASSETS-100% $7,012,276,564
___________________________________________________________________________________
===================================================================================
</Table>
Investment Abbreviations:
<Table>
ABS - Asset Backed Security
Disc. - Discount
</Table>
Notes to Schedule of Investments:
(a) Security is traded on a discount basis. Unless otherwise indicated, the
interest rate shown represents the discount rate at the time of purchase by
the Fund.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at 08/31/03 was
$3,942,811,076, which represented 56.23% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(c) Principal and interest are secured by bond insurance provided by one of the
following companies: Ambac Assurance Corp., Financial Guaranty Insurance Co.
or MBIA Insurance Corp.
(d) The investments in master note agreements are through participation in joint
accounts with other mutual funds, private accounts, and certain
non-registered investment companies managed by the investment advisor or its
affiliates.
F-7
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement by the next following business day provided orally by
telephone by 10:00 a.m. New York time on a business day. Interest rates on
master notes are redetermined daily. Rate shown is the rate in effect on
08/31/03.
(f) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business day's oral notice for up to 10% of
outstanding amount, otherwise, upon seven business day's written notice for
more than 10% of outstanding balance. Interest rates on master notes are
redetermined daily. Rate shown is the rate in effect on 08/31/03.
(g) Security considered to be illiquid. The market value of this security at
8/31/03 represents 5.0% of the Fund's net assets.
(h) Interest rate is redetermined daily. Rate shown is rate in effect on
08/31/03.
(i) Repurchase agreement entered into 08/29/03 with a maturing value of
$50,005,556. Collateralized by $50,228,000 U.S. Government obligations, 0%
to 6.38% due 11/15/03 to 11/05/12 with an aggregate market value at 08/31/03
of $51,000,205.
(j) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,059,444. Collateralized by $769,479,889 U.S. Government obligations, 0%
to 8.88% due 09/15/05 to 09/01/33 with an aggregate market value at 08/31/03
of $510,005,162.
(k) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$400,048,000. Collateralized by $462,114,538 U.S. Government obligations, 0%
to 7.68% due 09/26/05 to 08/01/33 with an aggregate market value at 08/31/03
of $408,002,899.
(l) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,057,222. Collateralized by $504,588,000 U.S. Government obligations, 0%
to 6.47% due 09/15/03 to 08/20/18 with an aggregate market value at 08/31/03
of $510,000,301.
(m) Joint repurchase agreement entered into 08/29/03 with a maturing value of
$500,060,000. Collateralized by $519,855,221 U.S. Government obligations,
2.50% to 5.00% due 04/15/04 to 08/01/18 with an aggregate market value at
08/31/03 of $510,000,612.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
F-8
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003
<Table>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $5,838,017,910
- --------------------------------------------------------------------------------
Repurchase agreements 1,179,383,746
- --------------------------------------------------------------------------------
Receivables for:
Interest 1,029,605
- --------------------------------------------------------------------------------
Amount due from advisor 39,846
- --------------------------------------------------------------------------------
Investment for deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Other assets 162,686
================================================================================
Total assets 7,018,876,058
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Dividends 5,416,551
- --------------------------------------------------------------------------------
Deferred compensation plan 242,265
- --------------------------------------------------------------------------------
Accrued distribution fees 341,271
- --------------------------------------------------------------------------------
Accrued directors' fees 364,386
- --------------------------------------------------------------------------------
Accrued transfer agent fees 134,881
- --------------------------------------------------------------------------------
Accrued operating expenses 100,140
================================================================================
Total liabilities 6,599,494
================================================================================
Net assets applicable to shares outstanding $7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $7,010,848,166
- --------------------------------------------------------------------------------
Undistributed net investment income 1,430,149
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (1,751)
================================================================================
$7,012,276,564
________________________________________________________________________________
================================================================================
NET ASSETS:
Institutional Class $5,589,107,525
________________________________________________________________________________
================================================================================
Private Investment Class $ 560,824,671
________________________________________________________________________________
================================================================================
Personal Investment Class $ 133,718,682
________________________________________________________________________________
================================================================================
Cash Management Class $ 536,685,443
________________________________________________________________________________
================================================================================
Reserve Class $ 103,681,241
________________________________________________________________________________
================================================================================
Resource Class $ 88,259,002
________________________________________________________________________________
================================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class 5,589,124,342
________________________________________________________________________________
================================================================================
Private Investment Class 560,881,268
________________________________________________________________________________
================================================================================
Personal Investment Class 133,660,128
________________________________________________________________________________
================================================================================
Cash Management Class 536,712,535
________________________________________________________________________________
================================================================================
Reserve Class 103,681,137
________________________________________________________________________________
================================================================================
Resource Class 88,218,740
________________________________________________________________________________
================================================================================
Net asset value, offering and redemption price per share for
each class $ 1.00
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-9
STATEMENT OF OPERATIONS
For the year ended August 31, 2003
<Table>
INVESTMENT INCOME:
Interest $110,013,685
================================================================================
EXPENSES:
Advisory fees 11,975,189
- --------------------------------------------------------------------------------
Administrative services fees 709,422
- --------------------------------------------------------------------------------
Distribution fees:
Private Investment Class 2,472,464
- --------------------------------------------------------------------------------
Personal Investment Class 1,153,443
- --------------------------------------------------------------------------------
Cash Management Class 794,336
- --------------------------------------------------------------------------------
Reserve Class 1,424,817
- --------------------------------------------------------------------------------
Resource Class 288,942
- --------------------------------------------------------------------------------
Transfer agent fees 1,259,339
- --------------------------------------------------------------------------------
Directors' fees 147,029
- --------------------------------------------------------------------------------
Other 47,539
================================================================================
Total expenses 20,272,520
================================================================================
Less: Fees waived (7,544,631)
================================================================================
Net expenses 12,727,889
================================================================================
Net investment income 97,285,796
================================================================================
Net increase in net assets resulting from operations $ 97,285,796
________________________________________________________________________________
================================================================================
</Table>
See Notes to Financial Statements.
F-10
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2003 and 2002
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 97,285,796 $ 194,565,853
- ---------------------------------------------------------------------------------
Net realized gain (loss) from investment
securities -- (1,014)
=================================================================================
Net increase in net assets resulting
from operations 97,285,796 194,564,839
=================================================================================
Distributions to shareholders from net
investment income:
Institutional Class (79,265,979) (152,003,031)
- ---------------------------------------------------------------------------------
Private Investment Class (4,790,723) (9,135,125)
- ---------------------------------------------------------------------------------
Personal Investment Class (1,135,614) (2,982,406)
- ---------------------------------------------------------------------------------
Cash Management Class (9,794,878) (20,969,503)
- ---------------------------------------------------------------------------------
Reserve Class (602,071) (1,671,130)
- ---------------------------------------------------------------------------------
Resource Class (1,696,366) (7,804,658)
=================================================================================
Decrease in net assets resulting from
distributions (97,285,631) (194,565,853)
=================================================================================
Share transactions-net:
Institutional Class (341,182,886) (1,909,907,666)
- ---------------------------------------------------------------------------------
Private Investment Class 61,372,457 (73,145,194)
- ---------------------------------------------------------------------------------
Personal Investment Class (43,774,130) (38,793,383)
- ---------------------------------------------------------------------------------
Cash Management Class (437,330,384) (165,758,781)
- ---------------------------------------------------------------------------------
Reserve Class (42,828,014) 2,060,196
- ---------------------------------------------------------------------------------
Resource Class (125,390,496) (239,950,953)
=================================================================================
Net increase (decrease) in net assets
resulting from share transactions (929,133,453) (2,425,495,781)
=================================================================================
Net increase (decrease) in net assets (929,133,288) (2,425,496,795)
=================================================================================
NET ASSETS:
Beginning of year 7,941,409,852 10,366,906,647
=================================================================================
End of year $7,012,276,564 $ 7,941,409,852
_________________________________________________________________________________
=================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Prime Portfolio (the "Fund") is an investment portfolio of Short-Term
Investments Co. (the "Company"). The Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
diversified management investment company. The Company is organized as a
Maryland corporation consisting of three separate portfolios. The Fund currently
offers multiple classes of shares. Matters affecting each portfolio or class
will be voted on exclusively by the shareholders of such portfolio or class. The
F-11
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is to maximize current income consistent
with the preservation of capital and the maintenance of liquidity. Each company
listed in the Schedule of Investments is organized in the United States unless
otherwise noted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted under Rule 2a-7
of the 1940 Act. This method values a security at its cost on the date of
purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements.
Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. Eligible securities for collateral
are U.S. Government Securities, U.S. Government Agency Securities and/or
Investment Grade Debt Securities. Collateral consisting of U.S. Government
Securities and U.S. Government Agency Securities is marked to market daily
to ensure its market value is at least 102% of the sales price of the
repurchase agreement. Collateral consisting of Investment Grade Debt
Securities is marked to market daily to ensure its market value is at least
105% of the sales price of the repurchase agreement. The investments in
some repurchase agreements are through participation with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates ("Joint repurchase
agreements").
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
D. DISTRIBUTIONS -- It is the policy of the Fund to declare dividends from net
investment income daily and pay dividends on the first business day of the
following month. The Fund generally distributes net realized capital gain
(including net short-term capital gain), if any, annually.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gain) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. Any capital loss
carryforwards listed are reduced for limitations, if any, to the extent
required by the Internal Revenue Code.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
F-12
NOTE 2--ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.15% of
the average daily net assets. AIM has voluntarily agreed to limit Fund operating
expenses (excluding Rule 12b-1 fees, interest, taxes, fund merger and
reorganization expenses, extraordinary items, including other items designated
as such by the Board of Directors, and increases in expenses due to expense
offset arrangements, if any) to 0.12%. Voluntary expense limitations may be
modified or discontinued at any time without further notice to investors. For
the year ended August 31, 2003, AIM waived fees of $5,829,596.
The Company, pursuant to a master administrative services agreement with
AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund. For the year ended August 31, 2003,
AIM was paid $709,422 for such services.
The Company, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended August 31,
2003, AISI retained $1,197,519 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Company, FMC acts as the exclusive distributor of the
Fund's shares. The Company has adopted a master distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Fund's Private Investment
Class, Personal Investment Class, Cash Management Class, Reserve Class and
Resource Class (the "Plan"). The Plan provides that the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of up
to 0.25% of the average daily net assets of each class to selected banks,
broker-dealers and other financial institutions who offer continuing personal
shareholder services to their customers who purchase and own shares of the such
classes. Any amounts not paid as a service fee under such Plan would constitute
an asset-based sales charge. NASD Rules also impose a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by any
class of shares of the Fund. Currently, FMC has elected to waive a portion of
its compensation payable by the Fund such that compensation paid pursuant to the
Plan with respect to the Private Investment Class, the Personal Investment
Class, the Cash Management Class, the Reserve Class and the Resource Class
equals the maximum annual rate of 0.30%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Pursuant to the Plan, for the year ended August 31, 2003, the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class paid $1,483,478, $841,521, $635,469, $1,227,345 and
$231,154, respectively, after FMC waived plan fees of $988,986, $311,922,
$158,867, $197,472 and $57,788, respectively.
Certain officers and directors of the Company are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--DIRECTORS' FEES
Directors' fees represent remuneration paid to each Director of the Company who
is not an "interested person" of AIM. Directors have the option to defer
compensation payable by the Company. The Directors deferring compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested.
F-13
During the year ended August 31, 2003, the Fund paid legal fees of $17,282
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Directors. A member of that firm is a Director of the Company.
NOTE 4--BORROWINGS
The Fund may participate in an interfund lending facility that AIM has
established for temporary borrowings by the AIM Funds. An interfund loan will be
made under this facility only if the loan rate (an average of the rate available
on bank loans and the rate available on investments in overnight repurchase
agreements) is favorable to both the lending fund and the borrowing fund. Under
certain circumstances, a loan will be secured by collateral. To the extent that
the loan is required to be secured by collateral, the collateral is marked to
market daily to ensure that the market value is at least 102% of the outstanding
principal value of the loan. The Fund did not borrow or lend under the facility
during the year ended August 31, 2003.
NOTE 5--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
Distributions to Shareholders:
The tax character of distributions paid during the years ended August 31, 2003
and 2002 was as follows:
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------------
Distributions paid from ordinary income $97,285,631 $194,565,853
_______________________________________________________________________________________
=======================================================================================
</Table>
Tax Components of Net Assets:
As of August 31, 2003, the components of net assets on a tax basis were as
follows:
<Table>
Undistributed ordinary income $ 2,065,838
- -------------------------------------------------------------------------------------------
Temporary book/tax differences (636,426)
- -------------------------------------------------------------------------------------------
Capital loss carryforward (1,014)
- -------------------------------------------------------------------------------------------
Capital (par value and additional paid-in) 7,010,848,166
===========================================================================================
Total net assets $7,012,276,564
___________________________________________________________________________________________
===========================================================================================
</Table>
The temporary book/tax differences are a result of timing differences
between book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are primarily the result of director's deferral of
compensation and retirement plan expenses.
The Fund's capital loss carryforward expires as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD
- -----------------------------------------------------------------------------------------
August 31, 2011 $1,014
_________________________________________________________________________________________
=========================================================================================
</Table>
F-14
NOTE 6--CAPITAL STOCK
The fund currently offers six different classes of shares: the Institutional
Class, the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class.
<Table>
<Caption>
CHANGES IN CAPITAL STOCK OUTSTANDING
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
2003 2002
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------
Sold:
Institutional Class 39,538,699,529 $ 39,538,699,529 49,867,711,739 $ 49,867,711,739
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,361,767,415 2,361,767,415 2,478,100,689 2,478,100,689
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,713,575,941 1,713,575,941 2,372,542,859 2,372,542,859
- -------------------------------------------------------------------------------------------------
Cash Management
Class 4,401,672,934 4,401,672,934 5,844,111,815 5,844,111,815
- -------------------------------------------------------------------------------------------------
Reserve Class 5,302,349,656 5,302,349,656 1,426,473,845 1,426,473,845
- -------------------------------------------------------------------------------------------------
Resource Class 831,814,148 831,814,148 2,197,934,978 2,197,934,978
=================================================================================================
Issued as
reinvestment of
dividends:
Institutional Class 5,289,215 5,289,215 9,850,826 9,850,826
- -------------------------------------------------------------------------------------------------
Private Investment
Class 2,463,410 2,463,410 4,909,338 4,909,338
- -------------------------------------------------------------------------------------------------
Personal Investment
Class 1,073,144 1,073,144 3,033,277 3,033,277
- -------------------------------------------------------------------------------------------------
Cash Management
Class 3,808,779 3,808,779 13,867,829 13,867,829
- -------------------------------------------------------------------------------------------------
Reserve Class 616,859 616,859 1,755,442 1,755,442
- -------------------------------------------------------------------------------------------------
Resource Class 1,719,060 1,719,060 8,321,610 8,321,610
=================================================================================================
Reacquired:
Institutional Class (39,885,171,630) (39,885,171,630) (51,787,470,231) (51,787,470,231)
- -------------------------------------------------------------------------------------------------
Private Investment
Class (2,302,858,368) (2,302,858,368) (2,556,155,221) (2,556,155,221)
- -------------------------------------------------------------------------------------------------
Personal Investment
Class (1,758,423,215) (1,758,423,215) (2,414,369,519) (2,414,369,519)
- -------------------------------------------------------------------------------------------------
Cash Management
Class (4,842,812,097) (4,842,812,097) (6,023,738,425) (6,023,738,425)
- -------------------------------------------------------------------------------------------------
Reserve Class (5,345,794,529) (5,345,794,529) (1,426,169,091) (1,426,169,091)
- -------------------------------------------------------------------------------------------------
Resource Class (958,923,704) (958,923,704) (2,446,207,541) (2,446,207,541)
=================================================================================================
(929,133,453) $ (929,133,453) (2,425,495,781) $ (2,425,495,781)
_________________________________________________________________________________________________
=================================================================================================
</Table>
F-15
NOTE 7--SIGNIFICANT EVENT
The Board of Directors of the Company approved, an Agreement and Plan of
Reorganization (the "Plan"), on July 30, 2003 that provides for the
redomestication of the Fund. Currently, the Fund is a series portfolio of the
Company, which is a Maryland corporation. Under the Plan, the Fund will be
reorganized as a series of Short-Term Investments Trust, a Delaware statutory
trust. The Plan is more fully described in a proxy statement that was sent to
shareholders on or about August 25, 2003.
F-16
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
RESOURCE CLASS
----------------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------------
2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------
Net investment income 0.01 0.02 0.05 0.06 0.05
- ------------------------------------------------------------------------------------------------
Less dividends from net investment
income (0.01) (0.02) (0.05) (0.06) (0.05)
================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
________________________________________________________________________________________________
================================================================================================
Total return(a) 1.11% 1.85% 5.29% 5.91% 4.99%
________________________________________________________________________________________________
================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $88,259 $213,654 $453,601 $563,431 $665,939
________________________________________________________________________________________________
================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.26%(b) 0.26% 0.25% 0.25% 0.25%
- ------------------------------------------------------------------------------------------------
Without fee waivers 0.38(%)(b) 0.34% 0.29% 0.29% 0.29%
================================================================================================
Ratio of net investment income to
average net assets 1.12%(b) 1.89% 5.25% 5.78% 4.86%
________________________________________________________________________________________________
================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America.
(b) Ratios are based on average daily net assets of $144,471,201.
F-17
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Short-Term Investments Co.
We have audited the accompanying statement of assets and liabilities of Prime
Portfolio (a series portfolio of Short-Term Investments Co.), including the
schedule of investments, as of August 31, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended August
31, 2000 have been audited by other auditors, whose report dated October 6, 2000
expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Portfolio as of August 31, 2003, the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
three-year period then ended, in conformity with accounting principles generally
accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 26, 2003
F-18
DIRECTORS AND OFFICERS
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(1) -- 1946 1993 Director and Chairman, A I M Management Group None
Director, Chairman and Inc. (financial services holding company);
President and Director and Vice Chairman, AMVESCAP PLC
and Chairman of AMVESCAP PLC -- AIM Division
(parent of AIM and a global investment
management firm)
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); and Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors, Inc.
(registered broker dealer), AIM Investment
Services, Inc.(3), (registered transfer
agent), and Fund Management Company
(registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC -- Managed
Products
- --------------------------------------------------------------------------------------------------------------------------
Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman,
Director and Executive Vice Officer, A I M Management Group Inc. INVESCO Bond Funds,
President (financial services holding company); Inc., INVESCO
Director, Chairman and President, A I M Combination Stock &
Advisors, Inc. (registered investment Bond Funds, Inc.,
advisor); Director, A I M Capital Management, INVESCO Counselor
Inc. (registered investment advisor) and Series Funds, Inc.,
A I M Distributors, Inc. (registered broker INVESCO International
dealer); Director and Chairman, AIM Funds, Inc., INVESCO
Investment Services, Inc.(3) (registered Manager Series Funds,
transfer agent); and Fund Management Company Inc., INVESCO Money
(registered broker dealer); and Chief Market Funds, Inc.,
Executive Officer, AMVESCAP PLC -- AIM INVESCO Sector Funds,
Division (parent of AIM and a global Inc., INVESCO Stock
investment management firm) Funds, Inc., INVESCO
Treasurer's Series
Formerly: Director, Chairman, President and Funds, Inc. and
Chief Executive Officer, INVESCO Funds Group, INVESCO Variable
Inc. and INVESCO Distributors, Inc.; Chief Investment Funds, Inc.
Executive Officer, AMVESCAP PLC -- Managed
Products; Chairman and Chief Executive
Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc.
Director (registered investment
company)
- --------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance
Director (technology consulting company) company); and
Captaris, Inc.
(unified messaging
provider)
- --------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc.
Director business corporations, including the Boss (Chairman) (registered
Group Ltd. (private investment and investment company);
management) and Magellan Insurance Company Annuity and Life Re
(Holdings), Ltd.
Formerly: Director, President and Chief (insurance company)
Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and
director of various affiliated Volvo Group
companies
- --------------------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None
Director Corp.; President and Chief Operating Officer,
Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
- --------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Administaff
Director Group, Inc. (government affairs company) and
Texana Timber LP
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Graham is considered an interested person of the Company because he is a
director of AMVESCAP PLC, parent of the advisor to the Company.
(2) Mr. Williamson is considered an interested person of the Company because he
is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Company. Mr. Williamson became Executive Vice
President of the Company on March 4, 2003.
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
Directors and Officers (continued)
As of January 1, 2003
The address of each director and officer of Short-Term Investments Co. is 11
Greenway Plaza, Suite 100, Houston, Texas 77046. Each director oversees 86
portfolios in the AIM Funds complex. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND DIRECTOR AND/
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S)
COMPANY SINCE DURING PAST 5 YEARS HELD BY DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Naftalis Cortland Trust, Inc.
Director and Frankel LLP (registered investment
company)
- ---------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of None
Director the USA
- ---------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Director
- ---------------------------------------------------------------------------------------------------------------------------
Louis S. Sklar -- 1939 1993 Executive Vice President, Development and None
Director Operations Hines Interests Limited
Partnership (real estate development company)
- ---------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary N/A
Senior Vice President and General Counsel, A I M Management Group
Inc. (financial services holding company) and
A I M Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M Distributors,
Inc. and AIM Investment Services, Inc.(3);
and Director, Vice President and General
Counsel, Fund Management Company
Formerly: Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group, LLC
- ---------------------------------------------------------------------------------------------------------------------------
Gary T. Crum(5) -- 1947 1993 Director, Chairman and Director of N/A
Senior Vice President Investments, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M
Management Group Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Formerly: Chief Executive Officer and
President, A I M Capital Management Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A
Vice President Officer -- Fixed Income, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Melville B. Cox -- 1943 1993 Vice President and Chief Compliance Officer, N/A
Vice President A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, AIM
Investment Services, Inc.(3)
- ---------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Managing Director and Chief Cash Management N/A
Vice President Officer, A I M Capital Management, Inc.;
Director and President, Fund Management
Company; and Vice President, A I M Advisors,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Edgar M. Larsen(5) -- 1940 2002 Vice President, A I M Advisors, Inc., and N/A
Vice President President, Chief Executive Officer and Chief
Investment Officer, A I M Capital Management,
Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Dana R. Sutton -- 1959 1993 Vice President and Fund Treasurer, A I M N/A
Vice President and Treasurer Advisors, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
(3) Effective September 30, 2003, A I M Fund Services, Inc. became known as AIM
Investment Services, Inc.
(4) Mr. Carome became Senior Vice President of the Company on May 13, 2003.
(5) Information is current as of January 10, 2003.
The Statement of Additional Information of the Company includes additional
information about the Fund's Directors and is available upon request, without
charge, by calling 1.800.347.4246.
<Table>
<Caption>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. Fund Management Company Tait, Weller & Baker
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1818 Market Street
Houston, TX 77046 Suite 100 Suite 100 Suite 2400
Houston, TX 77046 Houston, TX 77046-1173 Philadelphia, PA 19103
COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN
Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. The Bank of New York
Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 90 Washington Street,
1735 Market Street 919 Third Avenue Houston, TX 77210-4739 11th Floor
Philadelphia, PA 19103 New York, NY 10022 New York, NY 10286
</Table>
ITEM 2. CODE OF ETHICS
Pursuant to rules of the Securities and Exchange Commission adopted pursuant to
Section 406 of the Sarbanes-Oxley Act of 2002 that became effective on March 1,
2003, a registered management investment company must disclose, for each fiscal
year ending on or after July 15, 2003, whether the investment company has
adopted a code of ethics for its principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
serving similar positions (collectively, "Senior Officers"), and if not why
not.
Registrant is one of eighteen legal entities, consisting of 87 series
portfolios, known as "The AIM Family of Funds--Registered Trademark--" (the
"AIM Funds"). The AIM Funds have fiscal years that end at different times
throughout the year.
At a meeting in person held on September 16-17, 2003, the Boards of
Directors/Trustees of the AIM Funds adopted a uniform code of ethics for the
Senior Officers of all of the AIM Funds, including Registrant, a copy of which
is included in this filing under Item 10(a) (the "Code"). Most of the AIM Funds
have fiscal years ending in October and December. For those Funds, the action
taken by the Boards to adopt the Code occurred prior to the end of their
current fiscal years. For Funds with fiscal years that ended July 31, 2003 or
August 31, 2003, including Registrant, this action occurred subsequent to the
end of their 2003 fiscal year-end.
The Senior Officers have represented to the Registrant that there would have
been no waivers, including implied waivers, sought under the Code had it been
in effect during Registrant's most recent fiscal year. As officers of the
Registrant's investment advisor, which is a wholly owned subsidiary of AMVESCAP
PLC, the Senior Officers are also subject to AMVESCAP's Code of Conduct. The
AMVESCAP Code of Conduct requires the Senior Officers to adhere to the highest
standards of honest and ethical conduct.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees has determined that the registrant has at least one audit
committee financial expert serving on its Audit Committee. The Audit Committee
financial expert is Prema Mathai-Davis. Ms. Mathai-Davis is "independent"
within the meaning of that term used in Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. [RESERVED]
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) As of June 18, 2004, an evaluation was performed under the supervision
and with the participation of the officers of the Registrant, including
the Principal Executive Officer ("PEO") and Principal Financial Officer
("PFO"), to assess the effectiveness of the Registrant's disclosure
controls and procedures, as that term is defined in Rule 30a-3(c) under
the Investment Company Act of 1940 (the "Act"), as amended. Based on
that evaluation, the Registrant's officers, including the PEO and PFO,
concluded that, as of June 18, 2004, the Registrant's disclosure
controls and procedures were reasonably designed so as to ensure: (1)
that information required to be disclosed by the Registrant on Form
N-CSR/A is recorded, processed, summarized and reported within the time
periods specified by the rules and forms of the Securities and Exchange
Commission; and (2) that material information relating to the
Registrant is made known to the PEO and PFO as appropriate to allow
timely decisions regarding required disclosure.
(b) There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act) that
occurred during the period covered by the report on Form N-CSR/A that
has materially affected, or is reasonably likely to materially affect,
the Registrant's internal control over financial reporting.
ITEM 10. EXHIBITS.
10(a)(1) Code of Ethics.
10(a)(2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act
of 1940.
10(a)(3) Not applicable.
10(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act
of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: Short-Term Investments Co.
By: /s/ ROBERT H. GRAHAM
-------------------------------------------
Robert H. Graham
Principal Executive Officer
Date: August 3, 2004
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investments 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/ ROBERT H. GRAHAM
-------------------------------------------
Robert H. Graham
Principal Executive Officer
Date: August 3, 2004
By: /s/ SIDNEY M. DILGREN
-------------------------------------------
Sidney M. Dilgren
Principal Financial Officer
Date: August 3, 2004
EXHIBIT INDEX
10(a)(1) Code of Ethics.
10(a)(2) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(a) under the Investment
Company Act of 1940.
10(a)(3) Not applicable.
10(b) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(b) under the Investment
Company Act of 1940.