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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811- 07890
AIM Tax-Exempt Funds
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 100 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Philip A. Taylor 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: 3/31
Date of reporting period: 3/31/07
Item 1. Reports to Stockholders.
AIM High Income Municipal Fund
Annual Report to Shareholders o March 31, 2007
[COVER GLOBE IMAGE]
FIXED INCOME
Tax-Free
Noninvestment Grade
Table of Contents
Supplemental Information.................. 2
Letters to Shareholders................... 3
Performance Summary....................... 5
Management Discussion..................... 5
Fund Expenses............................. 7
Long-term Fund Performance................ 8
Schedule of Investments................... F-1
Financial Statements...................... F-16
Notes to Financial Statements............. F-19
Financial Highlights...................... F-24
Auditor's Report.......................... F-27
Tax Information........................... F-28
Trustees and Officers..................... F-29
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- --REGISTERED TRADEMARK--
AIM HIGH INCOME MUNICIPAL FUND
AIM HIGH INCOME MUNICIPAL FUND'S INVESTMENT OBJECTIVE IS TO ACHIEVE A HIGH LEVEL
OF CURRENT INCOME THAT IS EXEMPT FROM FEDERAL INCOME TAXES.
o Unless otherwise stated, information presented in this report is as of March
31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management
Group Inc.
ABOUT SHARE CLASSES directly involving the issuers (or, in the o The Fund is not managed to track the
case of industrial development revenue performance of any particular index,
o Class B shares are not available as an bonds, the company for whose benefit the including the indexes defined here, and
investment for retirement plans maintained bonds are issued). These factors include consequently, the performance of the Fund
pursuant to Section 401 of the Internal general economic and market conditions, may deviate significantly from the
Revenue Code, including 401(k) plans, regional or global economic instability performance of the indexes.
money purchase pension plans and profit and interest rate fluctuations.
sharing plans. Plans that had existing o A direct investment cannot be made in an
accounts invested in Class B shares prior o The tax-exempt character of the interest index. Unless otherwise indicated, index
to September 30, 2003, will continue to be paid on synthetic municipal securities is results include reinvested dividends, and
allowed to make additional purchases. based on the tax-exempt income stream from they do not reflect sales charges.
the collateral. The Internal Revenue Performance of an index of funds reflects
PRINCIPAL RISKS OF INVESTING IN THE FUND Service has not ruled on this issue and fund expenses; performance of a market
could deem income derived from synthetic index does not.
o The Fund may invest in debt securities municipal securities to be taxable.
such as notes and bonds that carry OTHER INFORMATION
interest rate risk and credit risk. o The Fund may invest in securities on
which the issuer has defaulted on the o Revenue bonds are issued to finance
o The Fund may invest in lower quality payment of interest and/or principal. public-works projects and are supported
debt securities, commonly known as "junk Defaulted securities are speculative and directly by the project's revenues.
bonds." Compared to higher quality debt involve risks that the principal will General obligation (GO) bonds are backed
securities, junk bonds involve a greater not be repaid and may be subject to by the full faith and credit (including
risk of default or price changes due to restrictions on sale. the taxing and further borrowing power)
changes in credit quality of the issuer, of a state or municipality. Revenue bonds
because they are generally unse cured and o There is no guarantee that the often are considered more attractive,
because they may be subordinated to other investment techniques and risk analyses since many public-works projects (water
creditors' claims. Credit ratings of junk used by the Fund's managers will produce and sewer improvements, for example) are
bonds do not necessarily reflect their the desired results. necessities, and demand for them remains
actual market risk. constant regardless of economic
o After the close of the fiscal year, the conditions. Shareholders may benefit from
o The value of, payment of interest and Fund was re-opened to all investors their consistent income in the event of an
repayment of principal by, and the ability commencing with the start of business on economic slow down. Escrowed and
of the Fund to sell a municipal security May 1, 2007, through the close of business pre-refunded bonds are bonds whose
may be affected by constitutional on or about May 31, 2007. Thereafter, the repayment is guaranteed by the funds from
amendments, legislative enactments, Fund will conduct a limited public a second bond issue, which are usually
executive orders, administrative offering of its shares. invested in U.S. Treasury bonds.
regulations and voter initiatives as well
as the economies of the regions in which ABOUT INDEXES USED IN THIS REPORT o Weighted average maturity is the
the Fund invests. weighted average of the remaining terms to
o The unmanaged LIPPER HIGH YIELD maturity of the securities underlying the
o Because the Fund may invest a relatively MUNICIPAL DEBT FUNDS INDEX represents an collateral pool at the date of issue,
high percentage of its total assets in average of the largest high-yield using the balances of the securities as
municipal securities issued by entities municipal- bond funds tracked by Lipper the issue date as the weighting factor.
having similar characteristics, the value Inc., an independent mutual fund
of your shares may rise and fall more than performance monitor. o The average credit quality of the Fund's
the shares of a fund that invests in a holdings as of the close of the reporting
broader range of securities. o The unmanaged LEHMAN BROTHERS MUNICIPAL period represents the weighted average
BOND INDEX, which represents the quality rating of the securities in the
o The prices of and the income generated performance of investment-grade municipal portfolio as assigned by Nationally
by securities held by the Fund may decline bonds, is compiled by Lehman Brothers, a Recognized Statistical Rating
in response to certain factors, including global investment bank.
those
Continued on page 9
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class A Shares AHMAX
======================================================================================= Class B Shares AHMBX
Class C Shares AHMCX
==========================================
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
AIMINVESTMENTS.COM
2
AIM HIGH INCOME MUNICIPAL FUND
DEAR SHAREHOLDERS OF THE AIM FAMILY OF FUNDS --REGISTERED TRADEMARK--:
I'm pleased to provide you with this report, which includes a discussion of how
your Fund was managed during the period under review, and what factors affected
its performance. The following pages contain important information that answers
[TAYLOR questions you may have about your investment.
PHOTO]
Most major stock market indexes, in the U.S. and overseas, performed well for
the 12 months ended March 31, 2007, as did major fixed-income indexes.(1) Reasons
Philip Taylor for their positive performance included continued economic expansion and a
cessation of interest rate increases by the U.S. Federal Reserve Board, among
other factors.(2)
As the period covered by this report drew to a close, however, stock market
volatility returned. In late February, Asian markets sold off, triggering a
global decline. Additional volatility followed in March, partly due to
uncertainty about the health of the U.S. housing market and rising concern about
the ability of sub-prime borrowers to repay their mortgages. By mid-April,
after the close of the period covered by this report, U.S. and foreign markets
had largely resumed their upward trend, helped by good economic growth and a
rash of corporate buyouts.
At AIM Investments --REGISTERED TRADEMARK--, we know that market conditions
change--often suddenly and sometimes dramatically. We can help you deal with
market volatility by offering a broad range of mutual funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds
and PowerShares --REGISTERED TRADEMARK--exchange-traded funds--with risk/return
characteristics that change as your target retirement date nears
We believe in the value of working with a trusted financial advisor. Your
financial advisor can recommend various AIM funds that, together, can create a
portfolio that's appropriate for your investment goals, time horizon and risk
tolerance. Market volatility can be disconcerting--but your financial advisor
can help you keep on track with your investment program, making periodic
adjustments as market conditions and your changing investment goals warrant.
IN CONCLUSION
Our highly trained, courteous client service representatives are eager to answer
your questions, provide you with product information or assist you with account
transactions. I encourage you to give us an opportunity to serve you by calling
us at 800-959-4246.
Of course, you can access your account information, review your Fund's
performance, learn more about your Fund's investment strategies and obtain
general investing information when it's convenient for you by visiting our Web
site, AIMinvestments.com.
All of us at AIM are committed to helping you achieve your financial goals.
We work every day to earn your trust, and we're grateful for the confidence
you've placed in us.
Sincerely,
/s/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
May 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc. A I M
Advisors, Inc. and A I M Capital Management, Inc. are the investment advisors.
A I M Distributors, Inc. is the distributor for the retail mutual funds
represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
Sources: (1)Lipper Inc.; (2)U.S. Federal Reserve Board
3
AIM HIGH INCOME MUNICIPAL FUND
DEAR FELLOW AIM FUND SHAREHOLDERS:
Your AIM Funds Board started 2007 committed to continue working with management
at A I M Advisors, Inc. (AIM) with the goal of improving performance and
[CROCKETT lowering shareholder expenses for the AIM Funds.
PHOTO]
The progress made to date is encouraging. Following the general trends of
global equity markets and the U.S. stock market, the asset-weighted absolute
Bruce L. Crockett performance for all the money market, equity and fixed-income AIM Funds im-
proved for the one-year period ended December 31, 2006, as compared to the
one-year period ended December 31, 2005, and the one-year period ended December
31, 2004.(1)
In November, your Board approved, subject to shareholder vote, four more AIM
Fund consolidations. As always, these decisions were made to benefit existing
shareholders and were driven by a desire to improve the merged funds' perform-
ance, attract new assets and reduce costs. The asset class subcommittees of your
Board's Investments Committee are meeting frequently with portfolio managers to
identify how performance might be further improved.
On the expense side, both AMVESCAP, the parent company of AIM, and AIM
continue to take advantage of opportunities for operational consolidation,
outsourcing and new technologies to improve cost efficiencies for your benefit.
Your Board, for example, takes advantage of effective software solutions that
enable us to save money through electronic information sharing. Additional
cost-saving steps are under way. I'll report more on these steps once they're
completed.
Another major Board initiative for early 2007 is the revision of the AIM
Funds' proxy voting guidelines, a project begun by a special Board task force
late last year. We expect to have new procedures in place for the 2007 spring
proxy season that will improve the ability of the AIM Funds to cast votes that
are in the best interests of all fund shareholders.
While your Board recognizes that additional work lies ahead, we are gratified
that some key external sources have recognized changes at AIM and the AIM Funds
in the past two years. An article in the November 21, 2006, issue of Morningstar
Report (Morningstar, Inc. is a leading provider of independent mutual fund
investment research) included a review of AIM's progress, highlighting lower
expenses, stronger investment teams and an improved sales culture, as well as
areas for continued improvement. I'm looking forward to a return visit to
Morningstar this year to review AIM Funds' performance and governance ratings.
Your Board thanks Mark Williamson, former President and CEO of AIM
Investments, who retired from your Board in 2006. He has been succeeded on your
Board by Phil Taylor, President of AIM Funds. We extend a warm welcome to Phil.
I'd like to hear from you. Please write to me at AIM Investments, AIM
Investments Tower, 11 Greenway Plaza, Suite 100, Houston TX 77046. Let me know
your thoughts on how your Board is doing and how we might serve you better.
Sincerely,
/s/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board
May 17, 2007
Sources: A I M Management Group Inc. and Lipper Inc.
(1) Past performance is no guarantee of future results. Please visit
AIMinvestments.com for the most recent month-end performance for all AIM
funds.
4
AIM HIGH INCOME MUNICIPAL FUND
MANAGEMENT'S DISCUSSION MARKET CONDITIONS AND YOUR FUND
OF FUND PERFORMANCE
======================================================================================= Gross domestic product, a measure of
PERFORMANCE SUMMARY economic growth, declined from an
annualized rate of 2.5% in the fourth
Excluding applicable sales charges, AIM High Income Municipal Fund registered positive quarter of 2006 to 1.3% in the first
returns for the fiscal year ended March 31, 2007 and outperformed the Lehman Brothers quarter of 2007.(1) While consumer
Municipal Bond Index, the Fund's broad market and style-specific benchmark.(1) The spending remained healthy, reduced
Fund's outperformance can be attributed primarily to its exposure to higher yielding investments in housing, businesses and
bonds issued by municipalities to finance projects in some of the top performing inventories were an impediment on more
sectors such as hospitals, continuing care retirement facilities and tax increment robust growth in the last quarter of 2006.
financing. Economic activity in the manufacturing
sector expanded in March 2007 for the
Your Fund's long-term performance appears on pages 8 and 9. second consecutive month, while the
overall economy had grown for 65
FUND VS. INDEXES consecutive months by the end of the
reporting period.(2)
Total returns, 3/31/06-3/31/07, excluding applicable sales charges. If sales charges
were included, returns would be lower. In early 2007, housing sales showed
some signs of stabilization, but high
Class A Shares 7.11% inventory levels and problems in the
Class B Shares 6.31 sub-prime mortgage market added an
Class C Shares 6.43 element of risk to the housing sector's
Lehman Brothers Municipal Bond Index(1) (Broad Market and Style-Specific Index) 5.43 stability. In addition, measures of
Lipper High Yield Municipal Debt Funds Index(1) (Peer Group Index) 7.16 manufacturers' inventory levels had
decreased, putting downward pressure on
SOURCE: (1)LIPPER INC. economic growth. On the other hand, labor
market conditions remained relatively
======================================================================================= strong in January and February, generally
offsetting the weakened trends of other
HOW WE INVEST We generally take a buy-and-hold economic indicators.
approach, but may decide to sell a holding
We invest mostly in municipal revenue for any of the following reasons: As a result, recent mixed economic
bonds as proceeds for specific projects signals prompted the markets to scale back
are used to pay interest and principal on o Credit quality deterioration or other their expectations for a potential
those bonds. unfa- vorable circumstances impacting the interest rate cut by the U.S. Federal
financial viability of an issuer/project Reserve Board (the Fed) in the first-half
We believe an opportunity exists among of 2007. On March 21, 2007, as widely
relatively small, less-followed o To reduce or extend duration of the fund anticipated by financial markets, the Fed
municipal revenue bond issues. These decided to keep the federal funds target
bonds, which are backed by dedicated o To reinvest in other securities with rate at 5.25%.(3) This was the sixth
revenues from specific projects, may be more favorable return characteristics or consecutive meeting that the Fed left the
priced incorrectly in the market with rate unchanged after 17 consecutive
yields that do not accurately correspond o To change sector exposure increases.(3)
to the risk factors of the securities.
(continued)
=======================================================================================
PORTFOLIO COMPOSITION TOP FIVE FIXED-INCOME HOLDINGS*
By type of bond % OF NET
COUPON MATURITY ASSETS
========================================== ------ -------- --------
1. New York Liberty Development Corp. 5.25% 10/1/35 1.1%
[PIE CHART 2. Jacksonville (City of) Economic Development
Commission 5.00 11/15/36 0.8
General Obligation Bonds 10.1% 3. Illinois (State of) Finance Authority 6.00 11/15/39 0.7
Escrowed & Prerefunded Bonds 7.3% 4. Illinois (State of) Finance Authority 6.00 5/15/37 0.7
Other Assets Less Liabilities 0.7% 5. Colorado (State of) Educational & Cultural
Revenue Bonds 81.9% Facilities Authority 6.25 5/1/36 0.6
========================================== =======================================================================================
The Fund's holdings are subject to change, Total Net Assets $519.87 million
and there is no assurance that the Fund Total Number of Holdings* 534
will continue to hold any particular Average Credit Quality Rating BB
security. Weighted Average Maturity 21.13 years
Average Duration 5.89 years
* Excluding cash equivalent holdings. =======================================================================================
5
AIM HIGH INCOME MUNICIPAL FUND
The interest rate environment continued and continued support from local, state Franklin Ruben
to be defined by a flat to slightly and federal authorities. Hospital and [RUBEN Senior portfolio manager, is
inverted yield curve, as yields for the retirement communities bonds performed PHOTO] lead manager of AIM High Income
two-year Treasury were higher than the well for the fiscal year, benefiting Fund Municipal Fund. Mr. Ruben
10-year Treasury for most of the fiscal performance. joined AIM in 1997 after having
year.(3) served as a senior fixed income research
Security specific detractors included a analyst and associate portfolio manager. A
Municipal bonds remained attractively bond issued in 2003 to support development native of Johannesburg, South Africa, he
valued throughout the year; however, their of a new school, Pioneer Charter School in graduated with a B.S. in accounting and an
performance lagged the taxable bond Colorado. The school struggled to attract M.S. in finance, both from The University
sector.(4) enough students to support its financial of Texas at Dallas. Mr. Ruben also
obligations. It was decided to close the completed the Cash Management Executive
Demand for higher yield continued to facility by the end of the current school Education Program at Duke University.
drive performance in the municipal bond year. As a result of these developments,
market. Investors focused on the we decided to sell this holding. Gerard Pollard
lower-rated bonds, which outperformed [POLLARD Portfolio manager, is manager
higher quality municipal bonds during the We welcome any new investors who joined PHOTO] of AIM High Income Municipal
fiscal year. the Fund during the fiscal year and thank Fund. Mr. Pollard served as a
all of our shareholders for your continued senior analyst on AIM's
Reflecting the strong demand for yield, investment in AIM High Income Municipal Municipal Bond Team from 1998
most of the portfolio's top performance Fund. to 2007. Prior to joining AIM, he was a
came from non-rated municipal bonds. In money market trader and a fixed income
this credit segment, we tended to find Sources: (1) Bureau of Economic Analysis; analyst for another firm. He has been in
more special opportunities to earn yield (2) Institute for Supply Management;(3) the investment industr y since 1985. Mr.
above that of the yield on generic high U.S. Federal Reserve Board; (4) Lehman Pollard earned a B.B.A. from the
grade securities. While looking for ways Brothers Inc. University of Houston and an M.B.A. in
to maximize yield and at the same time to finance from the University of St. Thomas.
minimize risk associated with lower credit THE VIEWS AND OPINIONS EXPRESSED IN Assisted by the Municipal Bond Team
qual- ity issues, we limited our exposure MANAGEMENT'S DISCUSSION OF FUND
to airline and tobacco bonds, as they PERFORMANCE ARE THOSE OF A I M ADVISORS,
exhibited frequent price volatility. INC. THESE VIEWS AND OPINIONS ARE SUBJECT
During the reporting period, TO CHANGE AT ANY TIME BASED ON FACTORS
non-investment grade tobacco and airline SUCH AS MARKET AND ECONOMIC CONDITIONS.
bonds performed quite well. Our THESE VIEWS AND OPINIONS MAY NOT BE RELIED
underweight in these two sectors slightly UPON AS INVESTMENT ADVICE OR
limited returns. However, the Fund's RECOMMENDATIONS, OR AS AN OFFER FOR A
exposure to other higher yielding sectors PARTICULAR SECURITY. THE INFORMATION IS
enhanced performance. NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF
ANY MARKET, COUNTRY, INDUSTRY, SECURITY OR
The Fund remained invested in higher THE FUND. STATEMENTS OF FACT ARE FROM
yielding revenue bonds, with a SOURCES CONSIDERED RELIABLE, BUT A I M
preference for issues that were backed by ADVISORS, INC. MAKES NO REPRESENTATION OR
the property and sales taxes in addition WARRANTY AS TO THEIR COMPLETENESS OR
to the regular stream of revenues ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
generated by projects. We preferred bonds IS NO GUARANTEE OF FUTURE RESULTS, THESE
with more predictable and stable revenue INSIGHTS MAY HELP YOU UNDERSTAND OUR
flows. Such bonds tend to be issued to INVESTMENT MANAGEMENT PHILOSOPHY.
finance projects in sectors such as
continuing care retirement facilities, See important Fund and index
hospitals and charter schools. We disclosures on the inside front cover.
continued to maintain larger weights in
these three sectors.
We favored hospital bonds, as many of
these facilities have been improving their
profitability because of better cost
controls and efficient expense management.
We also preferred municipal bonds in the
retirement communities sector. As the
population ages, more baby boomers will
retire and may choose to reside in
continuing care retirement communities. In
addition, we maintained a positive outlook
on the charter schools sector, due to the
fundamental factors such as industry FOR A PRESENTATION OF YOUR FUND'S
maturation, growing enrollment levels in LONG-TERM PERFORMANCE, PLEASE SEE PAGES 8
this type of schools AND 9.
6
AIM HIGH INCOME MUNICIPAL FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE together with the amount you invested, to The hypothetical account values and
estimate the expenses that you paid over expenses may not be used to estimate the
As a shareholder of the Fund, you incur the period. Simply divide your account actual ending account balance or expenses
two types of costs: (1) transaction costs, value by $1,000 (for example, an $8,600 you paid for the period. You may use this
which may include sales charges (loads) on account value divided by $1,000 = 8.6), information to compare the ongoing costs
purchase pay- ments or contingent deferred then multiply the result by the number in of investing in the Fund and other funds.
sales charges on redemptions, and the table under the heading entitled To do so, compare this 5% hypothetical
redemption fees, if any; and (2) ongoing "Actual Expenses Paid During Period" to example with the 5% hypothetical examples
costs, including management fees; estimate the expenses you paid on your that appear in the shareholder reports of
distribution and/or service (12b-1) fees; account during this period. the other funds.
and other Fund expenses. This example is
intended to help you understand your HYPOTHETICAL EXAMPLE FOR COMPARISON Please note that the expenses shown in
ongoing costs (in dollars) of investing in PURPOSES the table are meant to highlight your
the Fund and to compare these costs with ongoing costs only and do not reflect any
ongoing costs of investing in other mutual The table below also provides information transaction costs, such as sales charges
funds. The example is based on an about hypothetical account values and (loads) on purchase payments, contingent
investment of $1,000 invested at the hypothetical expenses based on the deferred sales charges on redemptions, and
beginning of the period and held for the Fund's actual expense ratio and an assumed redemption fees, if any. Therefore, the
entire period October 1, 2006, through rate of return of 5% per year before hypothetical information is useful in
March 31, 2007. expenses, which is not the Fund's actual comparing ongoing costs only, and will not
return. The Fund's actual cumulative total help you determine the relative total
ACTUAL EXPENSES returns at net asset value after expenses costs of owning different funds. In
for the six months ended March 31, 2007, addition, if these transaction costs were
The table below provides information about appear in the table "Cumulative Total included, your costs would have been
actual account values and actual expenses. Returns" on page 9. higher.
You may use the information in this table,
====================================================================================================================================
ACTUAL HYPOTHETICAL
(5% ANNUAL RETURN BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/1/06) (3/31/07)(1) PERIOD(2,3) (3/31/07) PERIOD(2,4) RATIO
A $1,000.00 $1,029.00 $3.29 $1,021.69 $3.28 0.65%
B 1,000.00 1,025.20 7.07 1,017.95 7.04 1.40
C 1,000.00 1,026.30 7.07 1,017.95 7.04 1.40
(1) The actual ending account value is based on the actual total return of the Fund for the period October 1, 2006, through March
31, 2007, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense
ratio and a hypothetical annual return of 5% before expenses. The Fund's actual cumulative total returns at net asset value
after expenses for the six months ended March 31, 2007, appear in the table "Cumulative Total Returns" on page 9.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the
period, multiplied by 182/365 to reflect the most recent fiscal half year. Effective on April 1, 2007, the advisor voluntarily
agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses
of Class A, Class B and Class C shares to 0.70%, 1.45% and 1.45% of average daily nets assets, respectively. The annualized
expense ratio restated as if this agreement had been in effect throughout the entire most recent fiscal half year is 0.70%,
1.45%, and 1.45% for the Class A, B and C shares, respectively.
(3) The actual expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal
half year are $3.54, $7.32 and $7.33 for the Class A, B and C shares, respectively.
(4) The hypothetical expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent
fiscal half year are $3.53, $7.29 and $7.29 for the Class A, B and C shares, respectively.
====================================================================================================================================
7
AIM HIGH INCOME MUNICIPAL FUND
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee fees; performance of a market index does change in the value of the investment. In
comparable future results. not. Performance shown in the chart and this chart, each segment represents a
table(s) does not reflect deduction of doubling, or 100% change, in the value of
The data shown in the chart include taxes a shareholder would pay on Fund the investment. In other words, the space
reinvested distributions, applicable distributions or sale of Fund shares. between $5,000 and $10,000 is the same
sales charges, Fund expenses and Performance of the indexes does not size as the space between $10,000 and
management fees. Results for Class B reflect the effects of taxes. $20,000.
shares are calculated as if a hypo-
thetical shareholder had liquidated his This chart, which is a logarithmic
entire investment in the Fund at the close chart, presents the fluctuations in the
of the reporting period and paid the value of the Fund and its indexes. We
applicable contingent deferred sales believe that a logarithmic chart is more
charges. Index results include reinvested effective than other types of charts in
dividends, but they do not reflect sales illustrating changes in value during the
charges. Index results include reinvested early years shown in the chart. The
dividends, but they do not reflect sales vertical axis, the one that indicates the
charges. Performance of an index of funds dollar value of an investment, is
reflects fund expenses and management constructed with each segment representing
a percent
8
================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
INDEX DATA FROM 12/31/97, FUND DATA FROM 1/2/98
AIM HIGH INCOME AIM HIGH INCOME AIM HIGH INCOME LEHMAN BROTHERS LIPPER HIGH YIELD
MUNICIPAL BOND FUND MUNICIPAL BOND FUND MUNICIPAL BOND FUND MUNICIPAL BOND MUNICIPAL DEBT
DATE -CLASS A SHARES -CLASS B SHARES -CLASS C SHARES INDEX(1) FUNDS INDEX(1)
12/31/97 $10000 $10000
1/98 $ 9558 $10024 $10022 10103 10096
2/98 9592 10043 10051 10106 10121
3/98 9624 10080 10078 10115 10137
4/98 9609 10047 10055 10070 10116
5/98 9748 10187 10184 10229 10242
6/98 9819 10255 10252 10269 10298
7/98 9824 10263 10260 10295 10315
8/98 9986 10415 10412 10454 10444
9/98 10088 10526 10523 10584 10532
10/98 10074 10495 10492 10584 10506
11/98 10110 10525 10522 10621 10525
12/98 10125 10535 10532 10648 10556
1/99 10190 10597 10594 10775 10641
2/99 10146 10554 10552 10728 10616
3/99 10202 10607 10604 10742 10641
4/99 10260 10650 10647 10769 10685
5/99 10245 10639 10636 10707 10640
6/99 10118 10490 10487 10553 10523
7/99 10114 10480 10477 10591 10548
8/99 9934 10286 10283 10506 10422
9/99 9837 10178 10175 10511 10403
10/99 9541 9864 9861 10397 10239
11/99 9537 9864 9861 10507 10304
12/99 9354 9657 9665 10429 10171
1/00 9180 9481 9479 10384 10045
2/00 9261 9559 9556 10504 10145
3/00 9408 9703 9701 10734 10298
4/00 9350 9626 9634 10670 10255
5/00 9281 9559 9556 10615 10198
6/00 9420 9694 9702 10896 10341
7/00 9536 9808 9804 11048 10446
8/00 9533 9808 9804 11218 10574
9/00 9529 9797 9793 11160 10548
10/00 9592 9855 9851 11281 10580
11/00 9599 9855 9851 11367 10565
12/00 9708 9947 9955 11648 10651
1/01 9738 9982 9979 11763 10723
2/01 9802 10041 10038 11800 10783
3/01 9889 10135 10132 11906 10859
4/01 9885 10112 10109 11777 10794
5/01 10009 10230 10227 11904 10910
6/01 10121 10338 10335 11983 10990
7/01 10255 10480 10477 12161 11131
8/01 10436 10647 10644 12361 11304
9/01 10347 10550 10547 12320 11222
10/01 10460 10658 10655 12467 11272
11/01 10430 10620 10617 12361 11206
12/01 10376 10559 10556 12245 11117
1/02 10490 10669 10666 12457 11214
2/02 10593 10766 10763 12607 11290
3/02 10525 10690 10687 12360 11184
4/02 10614 10775 10772 12602 11320
5/02 10680 10835 10832 12678 11384
6/02 10784 10934 10931 12812 11477
7/02 10887 11032 11029 12977 11563
8/02 10979 11118 11115 13133 11626
9/02 11071 11205 11202 13421 11746
10/02 10949 11075 11072 13198 11548
11/02 10979 11098 11095 13143 11567
12/02 11124 11238 11235 13421 11752
1/03 11140 11248 11245 13387 11728
2/03 11248 11349 11346 13574 11856
3/03 11240 11335 11331 13582 11807
4/03 11336 11424 11421 13672 11919
5/03 11537 11620 11616 13992 12178
6/03 11541 11617 11614 13932 12183
================================================================================================================
SOURCE: (1) LIPPER INC.
================================================================================================================
[MOUNTAIN CHART]
7/03 11335 11402 11386 13445 11933
8/03 11419 11480 11477 13545 11983
9/03 11597 11652 11649 13943 12274
10/03 11615 11663 11660 13873 12309
11/03 11687 11728 11725 14018 12438
12/03 11774 11806 11804 14134 12553
1/04 11874 11900 11883 14215 12672
2/04 12042 12062 12045 14429 12834
3/04 12060 12072 12070 14378 12816
4/04 11900 11905 11902 14038 12632
5/04 11919 11902 11900 13987 12594
6/04 11994 11983 11981 14038 12642
7/04 12112 12092 12076 14223 12771
8/04 12272 12245 12229 14508 12961
9/04 12348 12313 12311 14585 13051
10/04 12481 12439 12436 14710 13157
11/04 12500 12450 12447 14589 13167
12/04 12663 12604 12602 14767 13333
1/05 12798 12729 12713 14905 13456
2/05 12845 12769 12752 14855 13489
3/05 12849 12765 12762 14762 13476
4/05 13058 12964 12947 14994 13676
5/05 13210 13106 13104 15100 13821
6/05 13333 13219 13202 15194 13957
7/05 13362 13240 13223 15125 14007
8/05 13526 13395 13392 15278 14140
9/05 13480 13342 13324 15175 13998
10/05 13447 13300 13283 15083 13936
11/05 13549 13377 13376 15155 14009
12/05 13667 13501 13499 15286 14179
1/06 13708 13518 13516 15327 14234
2/06 13826 13641 13625 15430 14390
3/06 13867 13674 13657 15324 14388
4/06 13878 13677 13675 15318 14397
5/06 13967 13754 13738 15386 14492
6/06 13946 13726 13724 15329 14514
7/06 14113 13882 13866 15511 14677
8/06 14312 14069 14053 15741 14875
9/06 14434 14181 14164 15851 15002
10/06 14539 14276 14259 15950 15131
11/06 14694 14418 14401 16083 15280
12/06 14689 14405 14388 16026 15272
1/07 14685 14392 14375 15985 15280
2/07 14857 14552 14551 16196 15429
3/07 14846 14643 14531 16156 15418
================================================================================================================
AIM High Income Municipal Fund
==========================================
AVERAGE ANNUAL TOTAL RETURNS THE PERFORMANCE DATA QUOTED REPRESENT AND CLASS B AND CLASS C SHARE PERFORMANCE
PAST PERFORMANCE AND CANNOT GUARANTEE REFLECTS THE APPLICABLE CONTINGENT
As of 3/31/07, including applicable sales COMPARABLE FUTURE RESULTS; CURRENT DEFERRED SALES CHARGE (CDSC) FOR THE
charges PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE PERIOD INVOLVED. THE CDSC ON CLASS B
VISIT AIMINVESTMENTS.COM FOR THE MOST SHARES DECLINES FROM 5% BEGINNING AT THE
AFTER TAXES RECENT MONTH-END PERFORMANCE. PERFORMANCE TIME OF PURCHASE TO 0% AT THE BEGINNING OF
AFTER ON FIGURES REFLECT REINVESTED DISTRIBUTIONS, THE SEVENTH YEAR. THE CDSC ON CLASS C
TAXES DISTRIBUTIONS CHANGES IN NET ASSET VALUE AND THE EFFECT SHARES IS 1% FOR THE FIRST YEAR AFTER
CLASS A BEFORE ON AND SALE OF OF THE MAXIMUM SALES CHARGE UNLESS PURCHASE.
SHARES TAXES DISTRIBUTIONS FUND SHARES OTHERWISE STATED. INVESTMENT RETURN AND
Inception PRINCIPAL VALUE WILL FLUCTUATE SO THAT YOU THE PERFORMANCE OF THE FUND'S SHARE
(1/2/98) 4.37% 4.37% 4.50% MAY HAVE A GAIN OR LOSS WHEN YOU SELL CLASSES WILL DIFFER PRIMARILY DUE TO
5 Years 6.09 6.09 6.02 SHARES. DIFFERENT SALES CHARGE STRUCTURES AND
1 Year 1.99 1.99 2.98 CLASS EXPENSES.
THE TOTAL ANNUAL FUND OPERATING EXPENSE
CLASS B RATIO SET FORTH IN THE MOST RECENT FUND AFTER-TAX RETURNS ARE CALCULATED USING
SHARES PROSPECTUS AS OF THE DATE OF THIS REPORT THE HISTORICAL HIGHEST INDIVIDUAL FEDERAL
Inception FOR CLASS A, CLASS B AND CLASS C SHARES MARGINAL INCOME TAX RATE. THEY DO NOT
(1/2/98) 4.21% 4.21% 4.30% WAS 1.03%, 1.78% AND 1.78%, RESPECTIVELY. REFLECT THE EFFECT OF STATE AND LOCAL
5 Years 6.03 6.02 5.89 (1) THE EXPENSE RATIOS PRESENTED ABOVE MAY TAXES. ACTUAL AFTER-TAX RETURNS DEPEND ON
1 Year 1.31 1.31 2.35 VARY FROM THE EXPENSE RATIOS PRESENTED IN THE INVESTOR'S TAX SITUATION AND MAY
OTHER SECTIONS OF THIS REPORT THAT ARE DIFFER FROM THOSE SHOWN. AFTER-TAX RETURNS
CLASS C BASED ON EXPENSES INCURRED DURING THE SHOWN ARE NOT RELEVANT TO INVESTORS WHO
SHARES PERIOD COVERED BY THIS REPORT. HOLD THEIR SHARES IN TAX-DEFERRED ACCOUNTS
Inception SUCH AS 401(K)S OR IRAS.
(1/2/98) 4.13% 4.13% 4.21% CLASS A SHARE PERFORMANCE REFLECTS THE
5 Years 6.34 6.34 6.16 MAXIMUM 4.75% SALES CHARGE, HAD THE ADVISOR NOT WAIVED FEES AND/OR
1 Year 5.43 5.43 5.03 REIMBURSED EXPENSES, PERFORMANCE WOULD
HAVE BEEN LOWER.
==========================================
CUMULATIVE TOTAL RETURNS
6 months ended 3/31/07, excluding
applicable sales charges
Class A Shares 2.90%
Class B Shares 2.52
Class C Shares 2.63
==========================================
(1) The investment advisor has voluntarily agreed to waive fees and/or reimburse expenses to limit certain Fund expenses. This
agreement can be discontinued or modified at any time without further notice to investors. See the current prospectus for more
information.
Continued from the inside front cover
Organizations based on assessment of the The Fund provides a complete list of its A description of the policies and
credit quality of the individual holdings four times in each fiscal year, procedures that the Fund uses to determine
securities. For non-rated securities in at the quarter ends. For the second and how to vote proxies relating to portfolio
the portfolio the credit quality rating is fourth quarters, the lists appear in the securities is available without charge,
assigned by A I M Advisors, Inc. using Fund's semiannual and annual reports to upon request, from our Client Services
similar criteria. shareholders. For the first and third department at 800-959-4246 or on the AIM
quarters, the Fund files the lists with Web site, AIMinvestments.com. On the home
o The returns shown in the management's the Securities and Exchange Commission page, scroll down and click on AIM Funds
discussion of Fund performance are based (SEC) on Form N-Q. The most recent list of Proxy Policy. The information is also
on net asset values calculated for portfolio holdings is available at available on the SEC Web site, sec.gov.
shareholder transactions. Generally AIMinvestments.com. From our home page,
accepted accounting principles require click on Products & Performance, then Information regarding how the Fund voted
adjustments to be made to the net assets Mutual Funds, then Fund Overview. Select proxies related to its portfolio
of the Fund at period end for financial your Fund from the drop-down menu and securities during the 12 months ended June
reporting purposes, and as such, the net click on Complete Quarterly Holdings. 30, 2006, is available at our Web site. Go
asset values for shareholder transactions Shareholders can also look up the Fund's to AIMinvestments.com, access the About Us
and the returns based on those net asset Forms N-Q on the SEC Web site at sec.gov. tab, click on Required Notices and then
values may differ from the net asset Copies of the Fund's Forms N-Q may be click on Proxy Voting Activity. Next,
values and returns reported in the reviewed and copied at the SEC Public select the Fund from the drop-down menu.
Financial Highlights. Reference Room in Washington, D.C. You can The information is also available on the
obtain information on the operation of the SEC Web site, sec.gov.
Public Reference Room, including
information about duplicating fee charges,
by calling 202-942-8090 or 800-732-0330,
or by electronic request at the
following e-mail address:
publicinfo@sec.gov. The SEC file numbers
for the Fund are 811-07890 and 33-66242.
9
SUPPLEMENT TO ANNUAL REPORT DATED 3/31/07
AIM HIGH INCOME MUNICIPAL FUND
INSTITUTIONAL CLASS SHARES ========================================== HAD THE ADVISOR NOT WAIVED FEES AND/OR
REIMBURSED EXPENSES, PERFORMANCE WOULD
The following information has been AVERAGE ANNUAL TOTAL RETURNS HAVE BEEN LOWER.
prepared to provide Institutional Class
shareholders with a performance overview For periods ended 3/31/07 PLEASE NOTE THAT PAST PERFORMANCE IS
specific to their holdings. Institutional NOT INDICATIVE OF FUTURE RESULTS. MORE
Class shares are offered exclusively to AFTER RECENT RETURNS MAY BE MORE OR LESS THAN
institutional investors, including defined TAXES ON THOSE SHOWN. ALL RETURNS ASSUME
contribution plans that meet certain DISTRIBUTIONS REINVESTMENT OF DISTRIBUTIONS AT NAV.
criteria. AFTER TAXES AND SALE INVESTMENT RETURN AND PRINCIPAL VALUE
BEFORE ON OF WILL FLUCTUATE SO YOUR SHARES, WHEN
TAXES DISTRIBUTIONS FUND SHARES REDEEMED, MAY BE WORTH MORE OR LESS THAN
Inception 4.95% 4.95% 5.02% THEIR ORIGINAL COST. SEE FULL REPORT FOR
5 Years 7.19 7.19 7.00 INFORMATION ON COMPARATIVE BENCHMARKS.
1 Year 7.40 7.40 6.65 PLEASE CONSULT YOUR FUND PROSPECTUS FOR
6 Months* 3.14 3.14 2.94 MORE INFORMATION. FOR THE MOST CURRENT
MONTH-END PERFORMANCE, PLEASE CALL
* Cumulative total return that has not 800-451-4246 OR VISIT AIMINVESTMENTS.COM.
been annualized
==========================================
INSTITUTIONAL CLASS SHARES' INCEPTION DATE
IS JULY 31, 2006. RETURNS SINCE THAT DATE
ARE HISTORICAL RETURNS. ALL OTHER RETURNS
ARE BLENDED RETURNS OF HISTORICAL
INSTITUTIONAL CLASS SHARE PERFORMANCE AND
RESTATED CLASS A SHARE PERFORMANCE (FOR
PERIODS PRIOR TO THE INCEPTION DATE OF
INSTITUTIONAL CLASS SHARES) AT NET ASSET
VALUE (NAV), WHICH STATED CLASS A PERFORM-
ANCE REFLECTS THE FEES APPLICABLE TO CLASS
A SHARES. CLASS A SHARES' INCEPTION DATE
IS JANUARY 2, 1998.
INSTITUTIONAL CLASS SHARES HAVE NO
SALES CHARGE; THEREFORE, PERFORMANCE IS AT
NAV. PERFORMANCE OF INSTITUTIONAL CLASS
SHARES WILL DIFFER FROM PERFORMANCE OF
OTHER SHARE CLASSES PRIMARILY DUE TO
DIFFERING SALES CHARGES AND CLASS
EXPENSES.
==========================================
NASDAQ Symbol AHMIX
==========================================
Over for information on your Fund's expenses.
================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND
PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES
AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
================================================================================
FOR INSTITUTIONAL INVESTOR USE ONLY
This material is for institutional investor use only and may not be quoted,
reproduced or shown to the public, nor used in written form as sales literature
for public use.
AIMinvestments.com HIM-INS-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
--REGISTERED TRADEMARK--
Information about your Fund's expenses
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE divide your account value by $1,000 (for The hypothetical account values and
example, an $8,600 account value divided expenses may not be used to estimate the
As a shareholder of the Fund, you incur by $1,000 = 8.6), then multiply the result actual ending account balance or expenses
ongoing costs, including management fees by the number in the table under the you paid for the period. You may use this
and other Fund expenses. This example is heading entitled "Actual Expenses Paid information to compare the ongoing costs
intended to help you understand your During Period" to estimate the expenses of investing in the Fund and other funds.
ongoing costs (in dollars) of investing in you paid on your account during this To do so, compare this 5% hypothetical
the Fund and to compare these costs with period. example with the 5% hypothetical examples
ongoing costs of investing in other mutual that appear in the shareholder reports of
funds. The example is based on an HYPOTHETICAL EXAMPLE FOR COMPARISON the other funds.
investment of $1,000 invested at the PURPOSES
beginning of the period and held for the Please note that the expenses shown in
entire period October 1, 2006, through The table below also provides information the table are meant to highlight your
March 31, 2007. about hypothetical account values and ongoing costs only. Therefore, the
hypothetical expenses based on the hypothetical information is useful in
ACTUAL EXPENSES Fund's actual expense ratio and an assumed comparing ongoing costs only, and will not
rate of return of 5% per year before help you determine the relative total
The table below provides information about expenses, which is not the Fund's actual costs of owning different funds.
actual account values and actual expenses. return. The Fund's actual cumulative
You may use the information in this table, total return after expenses for the six
together with the amount you invested, to months ended March 31, 2007, appears in
estimate the expenses that you paid over the table on the front of this supplement.
the period. Simply
====================================================================================================================================
ACTUAL HYPOTHETICAL
(5% ANNUAL RETURN BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/1/06) (3/31/07)(1) PERIOD(2,3) (3/31/07) PERIOD(2,4) RATIO
Institutional $1,000.00 $1,031.40 $2.03 $1,022.94 $2.02 0.40%
(1) The actual ending account value is based on the actual total return of the Fund for the period October 1, 2006, through March
31, 2007, after actual expenses and will differ from the hypothetical ending account value, which is based on the Fund's
expense ratio and a hypothetical annual return of 5% before expenses. The Fund's actual cumulative total return after expenses
for the six months ended March 31, 2007, appears in the table on the front of this supplement.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the
period, multiplied by 182/365 to reflect the most recent fiscal half year. Effective on April 1, 2007, the advisor voluntarily
agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual fund operating expenses
of Institutional shares to 0.45% of average daily nets assets. The annualized expense ratio restated as if this agreement had
been in effect throughout the entire most recent fiscal half year is 0.45% for Institutional Class shares.
(3) The actual expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal
half year is $2.28.
(4) The hypothetical expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent
fiscal half year is $2.27.
====================================================================================================================================
AIMinvestments.com HIM-INS-1 A I M Distributors, Inc.
AIM High Income Municipal Fund
SCHEDULE OF INVESTMENTS
March 31, 2007
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-99.26%
ALASKA-0.59%
Alaska Industrial Development & Export
Authority (Boys and Girls Home); Series
2007, RB,
5.70%, 12/01/17(a) $1,000 $ 1,005,903
- -----------------------------------------------------------------------
6.00%, 12/01/36(a) 1,000 1,017,240
- -----------------------------------------------------------------------
Aleutians East (Borough of), Alaska (Aleutian
Pribilof Islands Association, Inc.
Project); Series 2006, RB, (INS-ACA
Financial Guaranty Corp.) 5.50%,
06/01/36(a)(b) 1,000 1,057,390
=======================================================================
3,080,533
=======================================================================
ARIZONA-2.91%
Centerra Community Facilities District;
Series 2005, Unlimited Tax GO, 5.50%,
07/15/29(a) 395 407,292
- -----------------------------------------------------------------------
Maricopa (County of) Industrial Development
Authority (Mayo Clinic); Series 2006,
Health Care Facilities IDR, 5.00%,
11/15/36(a) 1,485 1,547,830
- -----------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Acclaim Charter School Project);
Series 2006, Educational Facility IDR,
5.70%, 12/01/26(a) 2,200 2,206,776
- -----------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Choice Education & Development
Corp. Project); Series 2006, Educational
Facility IDR,
6.25%, 06/01/26(a) 1,000 1,059,630
- -----------------------------------------------------------------------
6.38%, 06/01/36(a) 3,000 3,182,340
- -----------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Desert Heights Charter School);
Series 2003, Educational Facility IDR,
7.25%, 08/01/19(a) 830 869,201
- -----------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Horizon Community Learning
Center); Series 2005, Refunding IDR, 5.25%,
06/01/35(a) 1,500 1,486,590
- -----------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (P.L.C. Charter Schools Project);
Series 2006,
Educational Facilities IDR,
6.50%, 04/01/26(a) 1,000 1,064,780
- -----------------------------------------------------------------------
6.75%, 04/01/36(a) 1,000 1,069,880
- -----------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Paradise Education Center
Project); Series 2006, Refunding
Educational Facilities IDR,
5.88%, 06/01/22(a) 285 293,314
- -----------------------------------------------------------------------
6.00%, 06/01/36(a) 830 852,584
- -----------------------------------------------------------------------
Scottsdale (City of) Industrial Development
Authority (Scottsdale Healthcare); Series
2001, Hospital IDR, 5.80%,
12/01/11(a)(c)(d) 500 546,495
- -----------------------------------------------------------------------
Tucson (City of) Industrial Development
Authority (Arizona AgriBusiness & Equine
Center Inc.); Series 2004 A, Educational
Facilities IDR, 6.13%, 09/01/34(a) 500 518,775
=======================================================================
15,105,487
=======================================================================
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
CALIFORNIA-1.86%
California (State of) Educational Facilities
Authority (Fresno Pacific University);
Series 2000 A, RB, 6.75%, 03/01/19(a) $1,000 $ 1,079,370
- -----------------------------------------------------------------------
California (State of) Educational Facilities
Authority (Keck Graduate Institute); Series
2000, RB, 6.75%, 06/01/10(a)(c)(d) 390 421,918
- -----------------------------------------------------------------------
California (State of) Health Facilities
Authority (Cedars-Sinai Medical Center);
Series 2005, Refunding RB, 5.00%,
11/15/27(a) 1,000 1,041,860
- -----------------------------------------------------------------------
California (State of) Municipal Finance
Authority (American Heritage Education
Foundation Project); Series 2006 A,
Education RB,
5.25%, 06/01/26(a) 1,000 1,041,240
- -----------------------------------------------------------------------
5.25%, 06/01/36(a) 1,150 1,189,629
- -----------------------------------------------------------------------
California (State of) Statewide Communities
Development Authority (Hospice of Napa
Valley Project); Series 2004 A, RB, 7.00%,
01/01/34(a) 900 971,676
- -----------------------------------------------------------------------
California (State of) Statewide Communities
Development Authority (Notre Dame de Namur
University); Series 2003, RB, 6.50%,
10/01/23(a) 1,000 1,094,870
- -----------------------------------------------------------------------
Golden State Tobacco Securitization Corp.;
Series 2007 A-1, Sr. Asset-Backed RB,
5.00%, 06/01/33(a) 1,000 989,850
- -----------------------------------------------------------------------
Turlock (City of) Health Facilities Authority
(Emanuel Medical Center Inc.); Series 2004,
COP,
5.00%, 10/15/24(a) 980 999,698
- -----------------------------------------------------------------------
5.38%, 10/15/34(a) 800 831,328
=======================================================================
9,661,439
=======================================================================
COLORADO-14.51%
Antelope Heights Metropolitan District;
Series 2003, Limited Tax GO, 8.00%,
12/01/23(a) 500 553,115
- -----------------------------------------------------------------------
Arista Metropolitan District; Series 2005,
Limited Tax Series GO, 6.75%, 12/01/35(a) 2,000 2,163,900
- -----------------------------------------------------------------------
Beacon Point Metropolitan District; Series
2005 A, Limited Tax GO, 6.25%, 12/01/35(a) 1,500 1,611,375
- -----------------------------------------------------------------------
Bradburn Metropolitan District No. 3; Series
2003, Limited Tax GO, 7.50%, 12/01/33(a) 500 557,890
- -----------------------------------------------------------------------
Bromley Park Metropolitan District No. 2;
Series 2002 B, Limited Tax GO,
8.05%, 12/01/32(a) 500 542,030
- -----------------------------------------------------------------------
Series 2003, Limited Tax GO,
8.05%, 12/01/32(a) 534 578,888
- -----------------------------------------------------------------------
Buckhorn Valley Metropolitan District No. 2;
Series 2003, Limited Tax GO, 7.00%,
12/01/23(a) 500 510,720
- -----------------------------------------------------------------------
Castle Oaks Metropolitan District; Series
2005,
Limited Tax GO,
6.00%, 12/01/25(a) 1,000 1,041,370
- -----------------------------------------------------------------------
6.13%, 12/01/35(a) 1,500 1,559,100
- -----------------------------------------------------------------------
</Table>
F-1
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
COLORADO-(CONTINUED)
Colorado (State of) Educational & Cultural
Facilities Authority (Academy Charter
School Project); Series 2000, RB, 7.13%,
12/15/10(a)(c)(d) $1,195 $ 1,346,000
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Banning Lewis Ranch
Academy Project); Series 2006, Charter
School RB, 6.13%, 12/15/35 (Acquired
06/16/06-06/20/06; Cost $3,014,730)(a)(e) 3,000 3,115,290
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Brighton School
Project); Series 2006, Charter School RB,
6.00%, 11/01/36(a) 1,695 1,742,765
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Carbon VY Academy);
Series 2006, Charter School RB, 5.63%,
12/01/36(a) 1,180 1,205,936
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Cerebral Palsy of
Colorado Project); Series 2006 A, RB,
6.25%, 05/01/36(a) 3,050 3,218,390
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Academy Inc.
Project); Series 2003 A, Refunding RB,
7.00%, 11/01/23(a) 500 558,985
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Science &
Technology); Series 2004, RB, 5.00%,
12/01/13(a) 750 776,925
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Excel Academy
Project); Series 2003, Charter School RB,
7.30%, 12/01/11(a)(c)(d) 555 625,269
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Heritage Christian
School); Series 2004 A, RB, 7.50%,
06/01/34(a) 1,000 999,270
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Knowledge Quest
Project); Series 2005, Charter School RB,
6.50%, 05/01/36(a) 945 990,729
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Littleton Academy
Building Project); Series 2002, Charter
School RB, 6.00%, 01/15/12(a)(c)(d) 500 549,005
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Peak to Peak
Project); Series 2001, Charter School RB,
7.63%, 08/15/11(a)(c)(d) 500 579,915
- -----------------------------------------------------------------------
Series 2004, Charter School Refunding &
Improvement RB (INS-XL Capital Assurance
Inc.), 5.25%, 08/15/24(a)(b) 500 542,155
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Platte Academy
Project); Series 2002 A, Charter School RB,
7.25%, 03/01/10(a)(c)(d) 500 540,755
- -----------------------------------------------------------------------
7.25%, 03/01/10(a)(c)(d) 500 548,640
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
COLORADO-(CONTINUED)
Colorado (State of) Educational & Cultural
Facilities Authority (Union Colony Charter
School Project); Series 2007, RB, 5.75%,
12/01/37 (Acquired 03/23/07; Cost
$1,105,122)(a)(e) $1,075 $ 1,103,810
- -----------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (University Lab School
Project); Series 2001, Charter School RB,
6.13%, 06/01/11(a)(c)(d) 150 164,195
- -----------------------------------------------------------------------
6.25%, 06/01/11(a)(c)(d) 500 549,705
- -----------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority (Christian Living Communities
Project); Series 2006 A, RB,
5.25%, 01/01/28(a) 1,500 1,511,790
- -----------------------------------------------------------------------
5.75%, 01/01/37(a) 500 524,335
- -----------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority (Portercare Adventist Health);
Series 2001, Hospital RB, 6.50%,
11/15/11(a)(c)(d) 500 564,215
- -----------------------------------------------------------------------
Conservatory Metropolitan District;
Series 2003, Limited Tax GO,
7.50%, 12/01/27(a) 750 846,990
- -----------------------------------------------------------------------
Series 2005, Limited Tax GO,
6.75%, 12/01/34(a) 810 875,440
- -----------------------------------------------------------------------
Copperleaf Metropolitan District No. 2;
Series 2006,
Limited Tax GO,
5.85%, 12/01/26 (Acquired 09/15/06; Cost
$1,000,000)(a)(e) 1,000 1,039,120
- -----------------------------------------------------------------------
5.95%, 12/01/36 (Acquired 09/15/06; Cost
$1,750,000)(a)(e) 1,750 1,818,127
- -----------------------------------------------------------------------
Country Club Village Metropolitan District;
Series 2006, Limited Tax GO, 6.00%,
12/01/34(a) 600 618,954
- -----------------------------------------------------------------------
Denver (City of) Health & Hospital Authority;
Series 2004 A, Refunding Health Care RB,
6.25%, 12/01/33(a) 500 551,355
- -----------------------------------------------------------------------
Denver West Metropolitan District; Series
2005 B, Unlimited Tax GO, 5.25%,
12/01/30(a) 1,000 1,034,770
- -----------------------------------------------------------------------
Douglas (County of) (Crystal Crossing
Metropolitan District); Series 2006,
Limited Tax GO, 6.00%, 12/01/36(a) 600 624,222
- -----------------------------------------------------------------------
Fallbrook Metropolitan District; Series 2006,
Limited Tax GO, 5.63%, 12/01/26(a) 1,200 1,213,812
- -----------------------------------------------------------------------
Grandby Ranch Metropolitan District; Series
2006, Limited Tax GO, 6.75%, 12/01/36(a) 3,000 3,151,080
- -----------------------------------------------------------------------
High Plains Metropolitan District; Series
2005 A,
Limited Tax GO,
6.13%, 12/01/25(a) 750 802,988
- -----------------------------------------------------------------------
6.25%, 12/01/35(a) 750 805,687
- -----------------------------------------------------------------------
Huntington Trails Metropolitan District;
Series 2006, Limited Tax GO, 6.25%,
12/01/36(a) 1,000 1,052,130
- -----------------------------------------------------------------------
Jordan Crossing Metropolitan District; Series
2006, Limited Tax GO, 5.75%, 12/01/36(a) 1,415 1,436,466
- -----------------------------------------------------------------------
Liberty Ranch Metropolitan District; Series
2006, Limited Tax GO, 6.25%, 12/01/36(a) 1,645 1,728,237
- -----------------------------------------------------------------------
</Table>
F-2
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
COLORADO-(CONTINUED)
Madre Metropolitan District No. 2; Series
2007 A, Limited Tax GO, 5.50%, 12/01/36(a) $1,500 $ 1,508,025
- -----------------------------------------------------------------------
Montrose (County of) (Homestead at Montrose
Inc.); Series 2003 A, Health Care
Facilities RB,
5.75%, 02/01/15(a) 250 258,150
- -----------------------------------------------------------------------
6.75%, 02/01/22(a) 200 212,744
- -----------------------------------------------------------------------
7.00%, 02/01/25(a) 800 857,600
- -----------------------------------------------------------------------
Mountain Shadows Metropolitan District;
Series 2007, Limited Tax GO,
5.50%, 12/01/27(a) 1,000 999,300
- -----------------------------------------------------------------------
5.63%, 12/01/37(a) 1,000 999,190
- -----------------------------------------------------------------------
Murphy Creek Metropolitan District No. 3;
Series 2006, Refunding & Improvement
Limited Tax GO,
6.00%, 12/01/26(a) 2,540 2,668,397
- -----------------------------------------------------------------------
6.13%, 12/01/35(a) 2,000 2,104,100
- -----------------------------------------------------------------------
Neu Towne Metropolitan District; Series 2004,
Limited Tax GO, 7.25%, 12/01/34(a) 775 857,065
- -----------------------------------------------------------------------
Northwest Metropolitan District No. 3,
Series 2005, Limited Tax GO,
6.13%, 12/01/25(a) 1,000 1,067,760
- -----------------------------------------------------------------------
6.25%, 12/01/35(a) 2,000 2,138,400
- -----------------------------------------------------------------------
Piney Creek Village Metropolitan District;
Series 2005, Limited Tax GO, 5.50%,
12/01/35(a) 1,200 1,230,756
- -----------------------------------------------------------------------
Riverdale Peaks II Metropolitan District;
Series 2005, Unlimited Tax GO, 6.50%,
12/01/35(a) 1,000 1,064,930
- -----------------------------------------------------------------------
Saddle Rock (City of) South Metropolitan
District No. 2 (Mill Levy Obligation);
Series 2000, Limited Tax GO, 7.20%,
06/01/10(a)(c)(d) 500 553,135
- -----------------------------------------------------------------------
Serenity Ridge Metropolitan District No. 2;
Series 2004, Limited Tax GO, 7.50%,
12/01/34(a) 750 847,507
- -----------------------------------------------------------------------
Silver Peaks Metropolitan District No. 2;
Series 2006, Limited Tax GO, 5.75%,
12/01/36(a) 1,000 1,003,960
- -----------------------------------------------------------------------
Southlands Metropolitan District No. 1;
Series 2004,
Unlimited Tax GO,
6.75%, 12/01/16(a) 500 553,955
- -----------------------------------------------------------------------
7.13%, 12/01/34(a) 500 555,680
- -----------------------------------------------------------------------
Table Rock Metropolitan District; Series
2003, Limited Tax GO, 7.00%,
12/01/13(a)(c)(d) 745 880,866
- -----------------------------------------------------------------------
Tallyns Reach Metropolitan District No. 3;
Series 2007, Limited Tax GO, 5.20%,
12/01/36(a) 500 506,600
- -----------------------------------------------------------------------
University of Colorado Hospital Authority;
Series 2006 A, RB, 5.00%, 11/15/37(a) 500 508,765
- -----------------------------------------------------------------------
University of Northern Colorado (Auxiliary
Facilities System); Series 2001, Refunding
& Improvement RB, (INS-Ambac Assurance
Corp.) 5.00%, 06/01/23(a)(b) 1,000 1,036,740
- -----------------------------------------------------------------------
Wheatlands Metropolitan District No. 2;
Series 2005, Limited Tax GO,
6.00%, 12/01/25(a) 580 605,624
- -----------------------------------------------------------------------
6.13%, 12/01/35(a) 2,000 2,091,400
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
COLORADO-(CONTINUED)
Wyndham Hill Metropolitan District No. 2;
Series 2005, Limited Tax GO,
6.25%, 12/01/25(a) $ 750 $ 791,213
- -----------------------------------------------------------------------
6.38%, 12/01/35(a) 1,000 1,056,420
=======================================================================
75,434,127
=======================================================================
DELAWARE-0.76%
New Castle (County of) (Newark Charter School
Inc. Project); Series 2006, RB, 5.00%,
09/01/30(a) 1,610 1,646,322
- -----------------------------------------------------------------------
Sussex (County of) (Cadbury at Lewes
Project); Series 2006 A, First Mortgage RB,
5.45%, 01/01/16(a) 865 880,483
- -----------------------------------------------------------------------
5.90%, 01/01/26(a) 750 793,823
- -----------------------------------------------------------------------
6.00%, 01/01/35(a) 600 634,650
=======================================================================
3,955,278
=======================================================================
DISTRICT OF COLUMBIA-0.51%
District of Columbia Tobacco Settlement
Financing Corp.; Series 2001, Asset-Backed
RB,
6.25%, 05/15/24(a) 475 506,146
- -----------------------------------------------------------------------
6.50%, 05/15/33(a) 1,785 2,128,755
=======================================================================
2,634,901
=======================================================================
FLORIDA-5.72%
Concorde Estates Community Development
District; Series 2004 B, Capital
Improvement RB, 5.00%, 05/01/11(a) 300 300,228
- -----------------------------------------------------------------------
Cory Lakes Community Development District;
Series 2001 A, Special Assessment RB,
8.38%, 05/01/17(a) 390 446,406
- -----------------------------------------------------------------------
Series 2001 B, Special Assessment RB,
8.38%, 05/01/17(a) 195 200,544
- -----------------------------------------------------------------------
Cypress Lakes Community Development District;
Series 2004 A, Special Assessment RB,
6.00%, 05/01/34(a) 575 607,936
- -----------------------------------------------------------------------
East Homestead Community Development
District; Series 2005, Special Assessment
RB, 5.45%, 11/01/36(a) 875 886,524
- -----------------------------------------------------------------------
Florida (State of) Development Finance Corp.
(Palm Bay Academy Inc. Project);
Series 2006 A, RB, 6.00%, 05/15/36(a) 2,130 2,149,915
- -----------------------------------------------------------------------
Gramercy Farms Community Development
District; Series 2007 B, Special Assessment
RB, 5.10%, 05/01/14(a) 1,000 998,540
- -----------------------------------------------------------------------
Halifax (County of) Hospital Medical Center;
Series 2006 A, Hospital Refunding &
Improvement RB, 5.25%, 06/01/26(a) 1,000 1,050,360
- -----------------------------------------------------------------------
Islands at Doral Southwest Community
Development District; Series 2003, Special
Assessment GO, 6.38%, 05/01/35(a) 500 537,325
- -----------------------------------------------------------------------
Jacksonville (City of) Economic Development
Commission (Mayo Clinic); Series 2006,
Health Care Facilities RB, 5.00%,
11/15/36(a) 4,000 4,169,240
- -----------------------------------------------------------------------
</Table>
F-3
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
FLORIDA-(CONTINUED)
Lee (County of) Industrial Development
Authority (County Community Charter
Schools, LLC Project); Series 2007 A, IDR,
5.25%, 06/15/27(a) $1,000 $ 1,008,970
- -----------------------------------------------------------------------
5.38%, 06/15/37(a) 1,200 1,216,848
- -----------------------------------------------------------------------
Lee (County of) Industrial Development
Authority (Cypress Cove at HealthPark);
Series 2002 A, Health Care Facilities IDR,
6.75%, 10/01/32(a) 1,250 1,350,925
- -----------------------------------------------------------------------
Miami Beach (City of) Health Facilities
Authority (Mount Sinai Medical Center);
Series 2001 A, Hospital RB, 6.70%,
11/15/19(a) 1,000 1,093,800
- -----------------------------------------------------------------------
Series 2004, Refunding Hospital RB, 6.75%,
11/15/29 (Acquired 04/26/04; Cost
$482,320)(a)(e) 500 566,215
- -----------------------------------------------------------------------
Midtown Miami Community Development District
(Parking Garage Project); Series 2004 A,
Special Assessment RB,
6.00%, 05/01/24(a) 1,000 1,078,470
- -----------------------------------------------------------------------
6.25%, 05/01/37(a) 1,000 1,088,370
- -----------------------------------------------------------------------
Mount Dora (City of) Health Facilities
Authority (Waterman Village Project);
Series 2004 A, Refunding RB, 5.75%,
08/15/18(a) 750 758,220
- -----------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Adventist Health System); Series
2002, Hospital RB, 5.63%, 11/15/12(a)(c)(d) 1,065 1,175,547
- -----------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Orlando Lutheran Towers, Inc.);
Series 2005,
Refunding Health Care Facilities RB,
5.38%, 07/01/20(a) 1,100 1,109,746
- -----------------------------------------------------------------------
5.70%, 07/01/26(a) 1,000 1,031,560
- -----------------------------------------------------------------------
Poinciana Community Development District;
Series 2000 A, Special Assessment RB,
7.13%, 05/01/31(a) 900 947,061
- -----------------------------------------------------------------------
Principal One Community Development District;
Series 2005, Special Assessment RB, 5.65%,
05/01/35(a) 655 677,296
- -----------------------------------------------------------------------
Reunion East Community Development District;
Series 2002 A, Special Assessment RB,
7.38%, 05/01/33(a) 1,000 1,109,660
- -----------------------------------------------------------------------
St. Johns (County of) Industrial Development
Authority (Glenmore Project); Series 2006
A, IDR,
5.25%, 01/01/26(a) 1,000 1,015,340
- -----------------------------------------------------------------------
5.38%, 01/01/40(a) 1,000 1,021,400
- -----------------------------------------------------------------------
Urban Orlando Community Development District;
Series 2001 A, Capital Improvement Special
Assessment RB,
6.95%, 05/01/33(a) 990 1,067,636
- -----------------------------------------------------------------------
Series 2004, Capital Improvement Special
Assessment RB,
6.25%, 05/01/34(a) 1,000 1,076,160
=======================================================================
29,740,242
=======================================================================
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
GEORGIA-1.50%
Atlanta (City of) (Atlantic Station Project);
Series 2001,
Tax Allocation RB,
7.90%, 12/01/24(a) $ 750 $ 831,225
- -----------------------------------------------------------------------
Tax Allocation RB,
7.75%, 12/01/14(a) 750 825,052
- -----------------------------------------------------------------------
Atlanta (City of) (Eastside Project); Series
2005 B,
Tax Allocation RB,
5.40%, 01/01/20(a) 1,000 1,033,180
- -----------------------------------------------------------------------
5.60%, 01/01/30(a) 2,000 2,075,640
- -----------------------------------------------------------------------
Atlanta (City of) (Princeton Lakes Project);
Series 2006, Tax Allocation RB, 5.50%,
01/01/31 (Acquired 03/10/06; Cost
$735,000)(a)(e) 735 752,618
- -----------------------------------------------------------------------
Fulton (County of) Residential Care
Facilities Authority (Canterbury Court
Project); Series 2004 A, RB,
6.13%, 02/15/26(a) 500 530,225
- -----------------------------------------------------------------------
6.13%, 02/15/34(a) 200 211,530
- -----------------------------------------------------------------------
Rockdale (County of) Development Authority
(Visy Paper, Inc. Project); Series 1993,
Solid Waste Disposal IDR, 7.50%,
01/01/26(a)(f) 1,500 1,511,685
=======================================================================
7,771,155
=======================================================================
ILLINOIS-7.35%
Chicago (City of) (Chatham Ridge
Redevelopment Project); Series 2002, Tax
Increment Allocation RB,
5.95%, 12/15/12(a) 275 290,114
- -----------------------------------------------------------------------
6.05%, 12/15/13(a) 475 505,452
- -----------------------------------------------------------------------
Chicago (City of) (Lake Shore East Project);
Series 2003, Special Assessment RB,
6.63%, 12/01/22(a) 500 541,640
- -----------------------------------------------------------------------
6.75%, 12/01/32(a) 500 542,105
- -----------------------------------------------------------------------
Dupage (County of) Special Service Area No.
31 (Monarch Landing Project); Series 2006,
Special Tax RB,
5.40%, 03/01/16(a) 250 261,230
- -----------------------------------------------------------------------
5.63%, 03/01/36(a) 1,250 1,308,812
- -----------------------------------------------------------------------
Illinois (State of) Finance Authority (Beacon
Hill); Series 2005 A, Refunding RB,
5.15%, 02/15/13(a) 655 661,596
- -----------------------------------------------------------------------
5.25%, 02/15/14(a) 300 303,150
- -----------------------------------------------------------------------
5.35%, 02/15/15(a) 225 227,828
- -----------------------------------------------------------------------
Illinois (State of) Finance Authority (Clare
Oaks Project); Series 2006 A, RB,
6.00%, 11/15/27(a) 1,000 1,058,360
- -----------------------------------------------------------------------
6.00%, 11/15/39(a) 3,500 3,671,850
- -----------------------------------------------------------------------
Illinois (State of) Finance Authority (Luther
Oaks Project); Series 2006 A, RB,
6.00%, 08/15/26(a) 850 899,895
- -----------------------------------------------------------------------
5.70%, 08/15/28(a) 500 505,750
- -----------------------------------------------------------------------
6.00%, 08/15/39(a) 1,460 1,540,154
- -----------------------------------------------------------------------
</Table>
F-4
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Finance Authority
(Lutheran Hillside Village); Series 2006,
Refunding RB, 5.25%, 02/01/37(a) $1,000 $ 1,046,020
- -----------------------------------------------------------------------
Illinois (State of) Finance Authority (Smith
Village Project); Series 2005 A, RB,
5.70%, 11/15/20(a) 500 511,790
- -----------------------------------------------------------------------
6.25%, 11/15/35(a) 3,000 3,188,640
- -----------------------------------------------------------------------
Illinois (State of) Finance Authority (The
Landing at Plymouth Place Project); Series
2005 A, RB, 6.00%, 05/15/37(a) 3,200 3,414,336
- -----------------------------------------------------------------------
Illinois (State of) Finance Authority (Three
Crowns Park Plaza); Series 2006 A, RB,
5.88%, 02/15/26(a) 1,000 1,056,160
- -----------------------------------------------------------------------
5.88%, 02/15/38(a) 1,500 1,578,765
- -----------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Bethesda Home & Retirement
Center); Series 1999 A, RB, 6.25%,
09/01/14(a) 500 517,380
- -----------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Lutheran Hillside Village
Project); Series 2001 A, RB, 7.38%,
08/15/11(a)(c)(d) 1,000 1,152,360
- -----------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (SwedishAmerican Hospital);
Series 2000, RB, 6.88%, 05/15/10(a)(c)(d) 690 752,217
- -----------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Villa St. Benedict); Series 2003
A-1, RB, 6.90%, 11/15/33(a) 500 553,305
- -----------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority; Series 2003 A, RB, 7.00%,
11/15/32(a) 800 872,616
- -----------------------------------------------------------------------
Lincolnshire (Village of) Special Service
Area No. 1 (Sedgebrook Project); Series
2004,
Special Tax GO,
5.00%, 03/01/11(a) 520 531,950
- -----------------------------------------------------------------------
6.25%, 03/01/34(a) 750 801,398
- -----------------------------------------------------------------------
Lombard (City of) Public Facilities Corp.
(Lombard Conference Center & Hotel); Series
2005 A-1,
First Tier RB,
6.38%, 01/01/15(a) 750 776,018
- -----------------------------------------------------------------------
7.13%, 01/01/36(a) 2,500 2,693,975
- -----------------------------------------------------------------------
Malta (Village of) (Prairie Springs Project);
Series 2006, Tax Increment Allocation RB,
5.75%, 12/30/25 (Acquired 09/14/06; Cost
$2,000,000)(a)(e) 2,000 2,012,660
- -----------------------------------------------------------------------
Metropolitan Pier & Exposition Authority
(McCormick Place Expansion); Series 2002 A,
Dedicated State Tax RB, (INS-MBIA Insurance
Corp.) 5.00%, 12/15/28(a)(b) 1,250 1,301,913
- -----------------------------------------------------------------------
Southwestern Illinois Development Authority
(Eden Retirement Center Inc. Project);
Series 2006,
Senior Care Facility RB,
5.50%, 12/01/26(a) 800 808,904
- -----------------------------------------------------------------------
5.85%, 12/01/36(a) 2,250 2,311,987
=======================================================================
38,200,330
=======================================================================
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
INDIANA-1.21%
Delaware (County of) Hospital Authority
(Cardinal Health System Obligated Group);
Series 2006,
Hospital RB,
5.00%, 08/01/24(a) $1,000 $ 1,026,170
- -----------------------------------------------------------------------
5.13%, 08/01/29(a) 3,000 3,102,030
- -----------------------------------------------------------------------
Petersburg (City of) (Indianapolis Power &
Light Co. Projects); Series 1991, Refunding
PCR, 5.75%, 08/01/21(a) 1,000 1,068,320
- -----------------------------------------------------------------------
St. Joseph (County of) (Holy Cross Village
Notre Dame Project); Series 2006 A,
Economic Development RB, 6.00%, 05/15/26(a) 1,015 1,083,969
=======================================================================
6,280,489
=======================================================================
IOWA-2.36%
Des Moines (City of) (Luther Park Apartments
Inc. Project); Series 2004, Senior Housing
RB, 6.00%, 12/01/23(a) 500 522,740
- -----------------------------------------------------------------------
Iowa (State of) Finance Authority (Bethany
Life Communities Project); Series 2006 A,
Refunding RB,
5.45%, 11/01/26(a) 345 347,280
- -----------------------------------------------------------------------
5.55%, 11/01/41(a) 795 800,430
- -----------------------------------------------------------------------
Iowa (State of) Finance Authority (Boys &
Girls Project); Series 2007, RB, 5.80%,
12/01/22(a) 1,000 998,890
- -----------------------------------------------------------------------
Iowa (State of) Finance Authority (Friendship
Haven Project); Series 2004 A, Retirement
Community RB, 6.13%, 11/15/32(a) 500 516,685
- -----------------------------------------------------------------------
Marion (City of) (Village Place at Marion
Project); Series 2005 A, Multi-Family
Housing RB,
5.65%, 09/01/25(a) 155 157,029
- -----------------------------------------------------------------------
6.00%, 09/01/35(a) 400 408,184
- -----------------------------------------------------------------------
Polk (County of) (Luther Park Health Center
Inc. Project);
Series 2003, Health Care Facilities RB,
6.50%, 10/01/20(a) 750 775,268
- -----------------------------------------------------------------------
Series 2004, Health Care Facilities RB,
6.00%, 10/01/24(a) 290 300,979
- -----------------------------------------------------------------------
6.15%, 10/01/36(a) 600 617,214
- -----------------------------------------------------------------------
Scott (County of) (Ridgecrest Village
Project); Series 2000 A, RB,
7.25%, 11/15/10(a)(c)(d) 750 840,240
- -----------------------------------------------------------------------
Series 2004, Refunding RB,
4.75%, 11/15/12(a) 750 738,878
- -----------------------------------------------------------------------
5.63%, 11/15/18(a) 1,000 1,038,190
- -----------------------------------------------------------------------
Series 2006, Refunding RB,
5.25%, 11/15/21(a) 1,000 1,037,400
- -----------------------------------------------------------------------
5.25%, 11/15/27(a) 1,500 1,550,250
- -----------------------------------------------------------------------
Washington (City of) (United Presbyterian
Home Project); Series 2006 A, Refunding RB,
5.60%, 12/01/36(a) 1,615 1,613,934
=======================================================================
12,263,591
=======================================================================
</Table>
F-5
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
KANSAS-2.37%
Hutchinson (City of) (Wesley Towers, Inc.);
Series 1999 A, Refunding & Improvement
Health Care Facilities RB, 6.25%,
11/15/19(a) $ 750 $ 770,385
- -----------------------------------------------------------------------
Olathe (City of) (Aberdeen Village, Inc.);
Series 2005 A, Refunding Senior Living
Facility RB, 5.60%, 05/15/28(a) 1,500 1,510,560
- -----------------------------------------------------------------------
Olathe (City of) (Catholic Care Campus Inc.
Project); Series 2006 A,
Senior Living Facility RB,
6.00%, 11/15/26(a) 1,000 1,067,720
- -----------------------------------------------------------------------
6.00%, 11/15/38(a) 2,000 2,140,780
- -----------------------------------------------------------------------
Overland Park Development Corp. (Overland
Park Convention Center Hotel Project);
Series 2001 A, First Tier RB, 7.38%,
01/01/32(a) 1,500 1,636,050
- -----------------------------------------------------------------------
Overland Park Transportation Development
District (Grass Creek Project); Series
2006, Special Assessment RB, 5.13%,
09/01/28(a) 1,565 1,589,883
- -----------------------------------------------------------------------
Roeland Park (City of) (Roeland Park
Redevelopment, LLC Project); Series 2005,
Special Obligations Tax Increment
Allocation RB, 5.75%, 08/01/24(a) 920 959,174
- -----------------------------------------------------------------------
Roeland Park (City of) Transportation
Development District (TDD #1 Project);
Series 2005, Sales Tax RB,
5.75%, 12/01/25(a) 525 537,395
- -----------------------------------------------------------------------
Series 2006 A, Sales Tax RB,
5.88%, 12/01/09(a) 40 40,796
- -----------------------------------------------------------------------
5.88%, 12/01/25(a) 1,050 1,069,520
- -----------------------------------------------------------------------
Roeland Park (City of) Transportation
Development District (TDD #2 Project);
Series 2006 B, Sales Tax RB, 5.88%,
12/01/25(a) 1,000 1,018,590
=======================================================================
12,340,853
=======================================================================
KENTUCKY-0.14%
Kentucky (State of) Economic Development
Finance Authority (Christian Church Homes
of Kentucky, Inc.); Series 1998, Health
Care Facilities RB, 5.50%, 11/15/30(a) 700 704,921
=======================================================================
MAINE-0.10%
Maine (State of) Turnpike Authority; Series
2003, Turnpike RB, (INS-Ambac Assurance
Corp.) 5.00%, 07/01/33(a)(b) 500 522,570
=======================================================================
MARYLAND-1.79%
Annapolis (City of) (Park Place Project);
Series 2005 A, Special Obligations RB,
5.35%, 07/01/34(a) 2,000 2,065,440
- -----------------------------------------------------------------------
Anne Arundel (County of) (Parole Town Center
Project); Series 2002, Tax Increment
Allocation Financing RB, 5.00%, 07/01/12(a) 200 202,314
- -----------------------------------------------------------------------
Baltimore (City of) (Strathdale Manor
Project); Series 2003, Special Obligation
RB, 7.00%, 07/01/33(a) 968 1,084,789
- -----------------------------------------------------------------------
Howard (County of); Series 2000 A, Retirement
Community RB, 7.88%, 05/15/10(a)(c)(d) 780 893,529
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
MARYLAND-(CONTINUED)
Maryland (State of) Health & Higher
Educational Facilities Authority
(Edenwald); Series 2006 A, RB, 5.40%,
01/01/31(a) $ 500 $ 522,275
- -----------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority (Medstar
Health); Series 2004, Refunding RB, 5.50%,
08/15/33(a) 1,250 1,323,525
- -----------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority
(University of Maryland Medical System);
Series 2000, RB, 6.75%, 07/01/10(a)(c)(d) 1,000 1,103,110
- -----------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority
(Washington Christian Academy); Series
2006, RB, 5.50%, 07/01/38(a) 1,000 1,029,960
- -----------------------------------------------------------------------
Maryland (State of) Industrial Development
Finance Authority (Our Lady of Good Counsel
High School Facility); Series 2005 A, IDR,
6.00%, 05/01/35(a) 1,000 1,075,080
=======================================================================
9,300,022
=======================================================================
MASSACHUSETTS-0.21%
Massachusetts (State of) Development Finance
Agency (Briarwood); Series 2001 B, RB,
7.50%, 12/01/10(a)(c)(d) 500 566,850
- -----------------------------------------------------------------------
Massachusetts (State of) Health & Educational
Facilities Authority (Christopher House,
Inc.); Series 1999 A, Refunding RB, 6.88%,
01/01/29(a) 500 517,060
=======================================================================
1,083,910
=======================================================================
MICHIGAN-3.61%
Chandler Park Academy; Series 2005, Michigan
Public School Academy RB, 5.13%,
11/01/30(a) 1,050 1,053,213
- -----------------------------------------------------------------------
Detroit Community High School; Series 2005,
Michigan Public School Academy RB,
5.65%, 11/01/25(a) 1,485 1,496,464
- -----------------------------------------------------------------------
5.75%, 11/01/30(a) 1,000 1,010,400
- -----------------------------------------------------------------------
Gaylord (City of) Hospital Finance Authority
(Otsego Memorial Hospital Association);
Series 2004, Refunding Limited Obligation
RB, 6.50%, 01/01/31(a) 700 735,070
- -----------------------------------------------------------------------
Gogebic (County of) Hospital Finance
Authority (Grand View Health System, Inc.);
Series 1999, Refunding RB, 5.88%,
10/01/16(a) 920 934,729
- -----------------------------------------------------------------------
Kent (County of) Hospital Finance Authority
(Metropolitan Hospital Project); Series
2005 A, RB, 5.75%, 07/01/25(a) 500 537,260
- -----------------------------------------------------------------------
Kentwood (City of) Economic Development Corp.
(Holland Home Obligated Group); Series 2006
A, Limited Obligation RB,
5.38%, 11/15/36(a) 1,500 1,565,715
- -----------------------------------------------------------------------
5.38%, 11/15/37(a) 1,750 1,808,555
- -----------------------------------------------------------------------
Mecosta (County of) General Hospital; Series
1999, Refunding Unlimited Tax GO, 6.00%,
05/15/18(a) 500 514,225
- -----------------------------------------------------------------------
</Table>
F-6
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Michigan (State of) Hospital Finance
Authority (Presbyterian Village); Series
2005, Refunding RB,
4.88%, 11/15/16(a) $ 685 $ 695,200
- -----------------------------------------------------------------------
5.25%, 11/15/25(a) 450 462,704
- -----------------------------------------------------------------------
5.50%, 11/15/35(a) 750 780,022
- -----------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority
(YMCA Service Learning Academy Project);
Series 2001, Public School Academy
Facilities Program RB,
7.63%, 10/01/21(a) 700 757,372
- -----------------------------------------------------------------------
7.75%, 10/01/31(a) 500 540,995
- -----------------------------------------------------------------------
Michigan (State of) Strategic Fund (Detroit
Edison Pollution Control); Series 2001 C,
Refunding Limited Obligation PCR, 5.45%,
09/01/29(a) 500 527,155
- -----------------------------------------------------------------------
Monroe (County of) Hospital Finance Authority
(Mercy Memorial Hospital Corp. Obligated
Group); Series 2006, Hospital Refunding RB,
5.38%, 06/01/26(a) 500 525,610
- -----------------------------------------------------------------------
5.50%, 06/01/35(a) 500 526,035
- -----------------------------------------------------------------------
Summit Academy North; Series 2005,
Refunding Michigan Public School Academy
RB,
5.35%, 11/01/25(a) 500 503,910
- -----------------------------------------------------------------------
5.50%, 11/01/30(a) 2,500 2,529,700
- -----------------------------------------------------------------------
Wenonah Park Properties, Inc. (Bay City
Hotel); Series 2002, RB,
7.88%, 04/01/22(a) 500 424,780
- -----------------------------------------------------------------------
7.50%, 04/01/33(a) 1,000 850,130
=======================================================================
18,779,244
=======================================================================
MINNESOTA-10.66%
Apple Valley (City of) Economic Development
Authority (Evercare Senior Living LLC
Projects); Series 2005 A, Health Care RB,
6.13%, 06/01/35(a) 2,240 2,275,459
- -----------------------------------------------------------------------
Becker (City of) (Shepherd of Grace Project);
Series 2006, Senior Housing RB,
5.75%, 05/01/24(a) 715 729,958
- -----------------------------------------------------------------------
5.88%, 05/01/29(a) 1,000 1,025,360
- -----------------------------------------------------------------------
5.88%, 05/01/33(a) 1,000 1,025,300
- -----------------------------------------------------------------------
5.88%, 05/01/41(a) 740 757,938
- -----------------------------------------------------------------------
6.00%, 05/01/41(a) 1,000 1,031,800
- -----------------------------------------------------------------------
Carlton (City of) Health Care & Housing
Facilities (Inter-Faith Care Center
Project); Series 2006, Refunding RB, 5.70%,
04/01/36(a) 1,500 1,530,780
- -----------------------------------------------------------------------
Cloquet (City of) (HADC Cloquet LLC Project);
Series 2005 A, Refunding Housing Facilities
RB, 5.88%, 08/01/35(a) 865 890,933
- -----------------------------------------------------------------------
Cold Spring (City of) (Assumption Home,
Inc.); Series 2005, Nursing Home & Senior
Housing RB,
5.50%, 03/01/25(a) 425 436,641
- -----------------------------------------------------------------------
5.75%, 03/01/35(a) 600 613,164
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
MINNESOTA-(CONTINUED)
Duluth (City of) Economic Development
Authority (Benedictine Health System-St.
Mary's Duluth Clinic); Series 2004, Health
Care Facilities RB, 5.25%, 02/15/33(a) $ 500 $ 520,110
- -----------------------------------------------------------------------
Edina (City of) (Volunteers of America Care
Centers Project); Series 2002 A,
Health Care Facilities RB,
6.63%, 12/01/22(a) 250 271,038
- -----------------------------------------------------------------------
6.63%, 12/01/30(a) 250 270,523
- -----------------------------------------------------------------------
Eveleth (City of) (Manor House and Woodland
Homes Project); Series 2006, Sr.
MultiFamily Housing RB, 5.50%, 10/01/25(a) 510 512,621
- -----------------------------------------------------------------------
Eveleth (City of) (Manor House Woodland);
Series 2006, Sr. Housing MultiFamily RB,
5.70%, 10/01/36(a) 3,000 3,037,290
- -----------------------------------------------------------------------
Fairmont (City of) (Goldfinch
Estates-Governmental and Educational
Assistance Corp. Project); Series 2002 A-1,
Housing Facilities RB,
7.25%, 04/01/22(a) 915 976,387
- -----------------------------------------------------------------------
Series 2005 A, Housing Facilities RB,
6.25%, 10/01/25(a) 2,500 2,582,525
- -----------------------------------------------------------------------
Glencoe (City of) (Glencoe Regional Health
Services Project);
Series 2001, Health Care Facilities RB,
7.40%, 04/01/11(a)(c)(d) 250 282,543
- -----------------------------------------------------------------------
7.50%, 04/01/11(a)(c)(d) 500 566,915
- -----------------------------------------------------------------------
Series 2005, Health Care Facilities RB,
5.00%, 04/01/31(a) 1,000 1,024,480
- -----------------------------------------------------------------------
Inver Grove Heights (City of) (Presbyterian
Homes Bloomington Care Center, Inc.
Project); Series 2006, Refunding Nursing
Home RB,
5.50%, 10/01/33(a) 510 518,900
- -----------------------------------------------------------------------
5.50%, 10/01/41(a) 455 459,873
- -----------------------------------------------------------------------
Maplewood (City of) (Volunteers of America
Care Center Project); Series 2005 A, Health
Care Facilities RB,
5.00%, 10/01/13(a) 775 776,573
- -----------------------------------------------------------------------
5.25%, 10/01/19(a) 1,250 1,259,800
- -----------------------------------------------------------------------
5.38%, 10/01/24(a) 2,500 2,528,225
- -----------------------------------------------------------------------
Minneapolis (City of) (Grant Park Project);
Series 2006, Tax Increment Allocation RB,
5.35%, 02/01/30(a) 300 302,625
- -----------------------------------------------------------------------
Minneapolis (City of) (Shelter Care
Foundation); Series 1999 A, Health Care
Facilities RB, 6.00%, 04/01/10(a) 420 421,369
- -----------------------------------------------------------------------
Minneapolis (City of) (Village at St. Anthony
Falls Project); Series 2004, Refunding Tax
Increment RB, 5.75%, 02/01/27(a) 605 625,122
- -----------------------------------------------------------------------
Moorehead (City of) (Sheyenne Crossing
Project); Series 2006, Senior Housing RB,
5.65%, 04/01/29(a) 2,355 2,403,607
- -----------------------------------------------------------------------
Northfield (City of) Housing and
Redevelopment Authority (Northfield
Retirement Project); Series 2006 A,
Refunding RB, 5.38%, 12/01/36(a) 1,000 994,050
- -----------------------------------------------------------------------
</Table>
F-7
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
MINNESOTA-(CONTINUED)
Northwest Multi-County Housing &
Redevelopment Authority (Pooled Housing
Program); Series 2005 A, Refunding
Governmental Housing RB,
5.35%, 07/01/15(a) $ 70 $ 69,924
- -----------------------------------------------------------------------
6.20%, 07/01/30(a) 2,000 2,038,660
- -----------------------------------------------------------------------
Oakdale (City of) (Oak Meadows Project);
Series 2004, Refunding Senior Housing RB,
6.00%, 04/01/24(a) 1,000 1,050,780
- -----------------------------------------------------------------------
Oronoco (City of) (Wedum Shorewood Campus
Project); Series 2006, Refunding
MultiFamily Housing RB, 5.25%, 06/01/26(a) 1,000 992,170
- -----------------------------------------------------------------------
Owatonna (City of) (Senior Living Project):
Series 2006 A, Senior Housing RB, 5.80%,
10/01/29(a) 800 817,144
- -----------------------------------------------------------------------
Park Rapids (City of) (CDL Homes LLC
Project); Series 2006, Housing & Health
Facilities RB,
5.25%, 08/01/26(a) 140 141,007
- -----------------------------------------------------------------------
5.40%, 08/01/36(a) 650 657,793
- -----------------------------------------------------------------------
Park Rapids (City of) (Mankato Lutheran
Homes, Inc. Project); Series 2006, Health
Facilities RB, 5.60%, 08/01/36(a) 530 536,885
- -----------------------------------------------------------------------
Pine City (City of) (Lakes International
Language Academy Project); Series 2006 A,
Lease RB,
6.00%, 05/01/26(a) 480 489,562
- -----------------------------------------------------------------------
6.25%, 05/01/35(a) 550 561,225
- -----------------------------------------------------------------------
Ramsey (City of) (Pact Charter School
Project); Series 2004 A, Lease RB,
6.50%, 12/01/22(a) 925 992,553
- -----------------------------------------------------------------------
6.75%, 12/01/33(a) 150 161,844
- -----------------------------------------------------------------------
Rochester (City of) (Mayo Clinic); Series
2006, Health Care Facilities RB, 5.00%,
11/15/36(a) 2,760 2,885,221
- -----------------------------------------------------------------------
Rochester (City of) (Samaritan Bethany Inc.
Project); Series 2003 A, Health Care &
Housing RB,
5.38%, 08/01/12(a) 165 167,569
- -----------------------------------------------------------------------
5.50%, 08/01/13(a) 195 198,126
- -----------------------------------------------------------------------
6.25%, 08/01/19(a) 1,100 1,141,668
- -----------------------------------------------------------------------
Roseau (City of) (Oak Crest Project); Series
2006, Senior Housing RB, 5.50%, 11/01/42(a) 2,005 2,016,007
- -----------------------------------------------------------------------
Shakopee (City of) (St. Francis Regional
Medical Center); Series 2004, Health Care
Facilities RB, 5.25%, 09/01/34(a) 500 523,705
- -----------------------------------------------------------------------
St. Cloud (City of) Housing & Redevelopment
Authority (Sterling Heights Apartments
Project); Series 2002, Multi-Family Housing
RB,
7.00%, 10/01/23(a)(f) 495 515,651
- -----------------------------------------------------------------------
7.45%, 10/01/32(a)(f) 155 164,205
- -----------------------------------------------------------------------
St. Louis Park (City of) (Roitenberg Family
Assisted Living Residence Project); Series
2006, Refunding RB, 5.63%, 08/15/33(a) 1,630 1,657,270
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
MINNESOTA-(CONTINUED)
St. Paul (City of) Housing & Redevelopment
Authority (Community of Peace Academy
Project); Series 2001 A, Lease RB, 7.38%,
12/01/10(a)(c)(d) $ 900 $ 1,024,011
- -----------------------------------------------------------------------
St. Paul (City of) Housing & Redevelopment
Authority (Hmong Academy Project); Series
2006 A, Lease RB,
5.75%, 09/01/26(a) 300 309,783
- -----------------------------------------------------------------------
6.00%, 09/01/36(a) 390 403,732
- -----------------------------------------------------------------------
St. Paul (City of) Housing & Redevelopment
Authority (New Spirit Charter School);
Series 2002 A, Lease RB, 7.50%, 12/01/31(a) 890 939,404
- -----------------------------------------------------------------------
St. Paul (City of) Housing & Redevelopment
Authority; Series 2005, Refunding Lease RB,
6.50%, 01/01/22(a)(g)(h) 1,620 713,950
- -----------------------------------------------------------------------
St. Paul (City of) Port Authority (Radisson
Kellogg Project); Series 1999 2, Hotel
Facility RB, 7.38%, 08/01/08(a)(c)(d) 1,225 1,318,320
- -----------------------------------------------------------------------
Vadnais Heights (City of) (Agriculture & Food
Sciences); Series 2004 A, Lease RB,
6.38%, 12/01/24(a) 900 921,411
- -----------------------------------------------------------------------
6.60%, 12/01/34(a) 275 280,976
- -----------------------------------------------------------------------
Woodbury (City of) (Math & Science Academy
Project); Series 2002 A, Refunding Lease
RB,
7.38%, 12/01/24(a) 250 271,813
- -----------------------------------------------------------------------
7.50%, 12/01/31(a) 750 814,597
=======================================================================
55,428,875
=======================================================================
MISSOURI-4.47%
370/Missouri Bottom Road/Tussing Road
Transportation Development District; Series
2002, RB,
7.00%, 05/01/22(a) 750 832,605
- -----------------------------------------------------------------------
7.20%, 05/01/33(a) 500 556,445
- -----------------------------------------------------------------------
Belton (City of) (Belton Town Centre
Project); Series 2006, Tax Increment RB,
5.00%, 03/01/10(a) 50 50,437
- -----------------------------------------------------------------------
5.00%, 03/01/11(a) 155 156,779
- -----------------------------------------------------------------------
5.00%, 03/01/12(a) 125 126,543
- -----------------------------------------------------------------------
5.00%, 03/01/14(a) 175 175,653
- -----------------------------------------------------------------------
5.13%, 03/01/15(a) 125 125,439
- -----------------------------------------------------------------------
5.25%, 03/01/16(a) 100 100,953
- -----------------------------------------------------------------------
5.50%, 03/01/20(a) 250 254,305
- -----------------------------------------------------------------------
5.63%, 03/01/25(a) 600 611,340
- -----------------------------------------------------------------------
Branson (City of) Industrial Development
Authority (Branson Landing-Retail Project);
Series 2005, Limited Obligation Tax
Increment RB, 5.25%, 06/01/21(a) 1,500 1,525,290
- -----------------------------------------------------------------------
Chillicothe (City of) (South U.S. 65
Project); Series 2006, Tax Increment RB,
5.50%, 04/01/21(a) 1,000 1,028,950
- -----------------------------------------------------------------------
5.63%, 04/01/24(a) 1,100 1,136,069
- -----------------------------------------------------------------------
</Table>
F-8
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
MISSOURI-(CONTINUED)
Des Peres (City of) (West County Center
Project); Series 2002 A, Refunding Tax
Increment RB, 5.75%, 04/15/20(a) $1,000 $ 1,028,330
- -----------------------------------------------------------------------
Desloge (City of) (U.S. Highway 67/State
Street Redevelopment Project); Series 2005,
Refunding Tax Increment RB, 5.20%,
04/15/20(a) 845 852,605
- -----------------------------------------------------------------------
Fenton (City of) (Gravois Bluffs Project);
Series 2001 A, Refunding & Improvement Tax
Increment RB, 7.00%, 10/01/11(a)(c)(d) 1,015 1,161,048
- -----------------------------------------------------------------------
Grandview (City of) Industrial Development
Authority (Grandview Crossing Project 1);
Series 2006, Tax Increment IDR, 5.75%,
12/01/28(a) 1,250 1,285,525
- -----------------------------------------------------------------------
Grindstone Plaza Transportation Development
District; Series 2006 A, Transportation
Sales Tax RB,
5.50%, 10/01/31(a) 350 356,349
- -----------------------------------------------------------------------
5.55%, 10/01/31(a) 500 507,780
- -----------------------------------------------------------------------
Hanley Road & North of Folk Ave.
Transportation District; Series 2005,
Transportation Sales Tax RB,
5.00%, 10/01/25(a) 860 874,887
- -----------------------------------------------------------------------
5.40%, 10/01/31(a) 750 765,180
- -----------------------------------------------------------------------
Kansas City (City of) Industrial Development
Authority (The Bishop Spencer Place, Inc.);
Series 2004 A, First Mortgage Health Care
Facilities IDR, 6.25%, 01/01/24(a) 500 527,875
- -----------------------------------------------------------------------
Maplewood (City of) (Maplewood South
Redevelopment Area); Series 2005,
Refunding Tax Increment RB,
5.20%, 11/01/22(a) 500 510,435
- -----------------------------------------------------------------------
5.75%, 11/01/26(a) 1,350 1,395,562
- -----------------------------------------------------------------------
Raymore (City of); Series 2005, Tax Increment
RB,
5.38%, 03/01/20(a) 500 507,055
- -----------------------------------------------------------------------
5.63%, 03/01/28(a) 1,250 1,271,887
- -----------------------------------------------------------------------
Richmond Heights (City of) (Francis Place
Redevelopment Project); Series 2005,
Refunding & Improvement Tax Increment &
Transportation Sales Tax RB, 5.63%,
11/01/25(a) 750 762,210
- -----------------------------------------------------------------------
St. Joseph (City of) Industrial Development
Authority (The Shoppes at North Village
Project);
Series 2005 A, Tax Increment IDR,
5.25%, 11/01/13(a) 500 511,565
- -----------------------------------------------------------------------
5.38%, 11/01/24(a) 500 508,065
- -----------------------------------------------------------------------
5.50%, 11/01/27(a) 750 769,350
- -----------------------------------------------------------------------
Series 2005 B, Tax Increment IDR,
5.38%, 11/01/23(a) 500 508,695
- -----------------------------------------------------------------------
Tax Increment RB,
5.50%, 11/01/27(a) 1,000 1,025,800
- -----------------------------------------------------------------------
St. Louis Industrial Development Authority
(Confluence Academy Project); Series 2007
A, IDR, 5.35%, 06/15/32(a) 750 758,452
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
MISSOURI-(CONTINUED)
Strother Interchange Transportation
Development District (District Road
Improvement Project); Series 2006, RB,
5.00%, 05/01/24(a) $ 675 $ 682,587
=======================================================================
23,252,050
=======================================================================
MONTANA-0.15%
Montana (State of) Facility Finance Authority
(St. Johns Lutheran); Series 2006 A, Senior
Living RB, 6.13%, 05/15/36(a) 750 786,458
=======================================================================
NEVADA-0.33%
Las Vegas Valley Water District; Series 2003
A, Refunding & Water Improvement Limited
Tax GO, (INS-Financial Guaranty Insurance
Co.) 5.00%, 06/01/32(a)(b) 1,150 1,198,196
- -----------------------------------------------------------------------
University and Community College System of
Nevada; Series 2002 A, Universities RB,
(INS-Financial Guaranty Insurance Co.)
5.40%, 07/01/31(a)(b) 500 527,825
=======================================================================
1,726,021
=======================================================================
NEW HAMPSHIRE-0.52%
New Hampshire (State of) Business Finance
Authority (Alice Peck Day Health System);
Series 1999 A, RB, 6.88%, 10/01/19(a) 1,050 1,109,629
- -----------------------------------------------------------------------
New Hampshire (State of) Health & Education
Facilities Authority (The Huntington at
Nashua); Series 2003 A, RB,
6.88%, 05/01/23(a) 750 806,288
- -----------------------------------------------------------------------
6.88%, 05/01/33(a) 750 802,920
=======================================================================
2,718,837
=======================================================================
NEW JERSEY-2.40%
New Jersey (State of) Economic Development
Authority (Arbor); Series 1998 A, Senior
Mortgage RB, 5.88%, 05/15/16(a) 120 123,912
- -----------------------------------------------------------------------
New Jersey (State of) Economic Development
Authority (Cedar Crest Village, Inc.
Facility); Series 2001 A, Retirement
Community RB, 7.25%, 11/15/11(a)(c)(d) 500 575,900
- -----------------------------------------------------------------------
New Jersey (State of) Economic Development
Authority (Continental Airlines, Inc.
Project); Series 1999, Special Facility RB,
6.25%, 09/15/29(a)(f) 1,000 1,034,570
- -----------------------------------------------------------------------
Series 2000, Special Facility RB,
7.00%, 11/15/30(a)(f) 565 605,753
- -----------------------------------------------------------------------
7.20%, 11/15/30(a)(f) 425 458,435
- -----------------------------------------------------------------------
Series 2003, Special Facility RB,
9.00%, 06/01/33(a)(f) 500 611,665
- -----------------------------------------------------------------------
New Jersey (State of) Economic Development
Authority (Lions Gate Project); Series 2005
A,
First Mortgage RB,
5.00%, 01/01/15(a) 825 841,401
- -----------------------------------------------------------------------
5.75%, 01/01/25(a) 710 738,727
- -----------------------------------------------------------------------
5.88%, 01/01/37(a) 1,360 1,425,171
- -----------------------------------------------------------------------
</Table>
F-9
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
NEW JERSEY-(CONTINUED)
New Jersey (State of) Economic Development
Authority (Seashore Gardens Living Center
Project); Series 2001, First Mortgage RB,
8.00%, 04/01/11(a)(c)(d) $ 500 $ 580,725
- -----------------------------------------------------------------------
8.00%, 04/01/11(a)(c)(d) 800 929,160
- -----------------------------------------------------------------------
Series 2006, First Mortgage RB,
5.30%, 11/01/26(a) 1,100 1,116,632
- -----------------------------------------------------------------------
5.38%, 11/01/36(a) 700 713,356
- -----------------------------------------------------------------------
New Jersey (State of) Health Care Facilities
Financing Authority (Raritan Bay Medical
Center); Series 1994, RB,
7.25%, 07/01/14(a) 50 51,583
- -----------------------------------------------------------------------
7.25%, 07/01/27(a) 1,750 1,805,387
- -----------------------------------------------------------------------
New Jersey (State of) Transportation Trust
Fund Authority; Series 2005 B,
Transportation System RB, (INS-Ambac
Assurance Corp.) 5.25%, 12/15/23(a)(b) 750 851,542
=======================================================================
12,463,919
- -----------------------------------------------------------------------
NEW MEXICO-0.30%
Mariposa East Public Improvement District;
Series 2006, Unlimited Tax GO,
5.75%, 09/01/21(a) 500 520,440
- -----------------------------------------------------------------------
6.00%, 09/01/32(a) 1,000 1,044,920
=======================================================================
1,565,360
=======================================================================
NEW YORK-4.25%
East Rochester (Village of) Housing Authority
(Woodland Village Project); Series 2006,
Refunding Senior Living RB, 5.50%,
08/01/33(a) 1,700 1,752,700
- -----------------------------------------------------------------------
Erie (County of) Industrial Development
Agency (Orchard Park CCRC, Inc. Project);
Series 2006 A, IDR,
6.00%, 11/15/26(a) 1,100 1,180,542
- -----------------------------------------------------------------------
6.00%, 11/15/36(a) 2,000 2,138,580
- -----------------------------------------------------------------------
Monroe (County of) Industrial Development
Agency (Woodland Village Project); Series
2000, Civic Facility IDR, 8.55%,
11/15/10(a)(c)(d) 1,000 1,176,520
- -----------------------------------------------------------------------
New York (State of) Dormitory Authority
(Mount Sinai NYU Health Obligated Group);
Series 2000, RB, 5.50%, 07/01/26(a) 500 511,830
- -----------------------------------------------------------------------
New York City (City of) Industrial
Development Agency (Liberty-7 World Trade
Center); Series 2005 A, IDR, 6.25%,
03/01/15(a) 3,000 3,185,760
- -----------------------------------------------------------------------
New York Liberty Development Corp. (Goldman
Sachs Headquarters Issue); Series 2005, RB,
5.25%, 10/01/35(a) 5,000 5,721,950
- -----------------------------------------------------------------------
Onondaga (County of) Industrial Development
Agency (Solvay Paperboard LLC Project);
Series 1998, Refunding Solid Waste Disposal
Facility IDR, 7.00%, 11/01/30(a)(f) 2,000 2,087,140
- -----------------------------------------------------------------------
Orange (County of) Industrial Development
Agency (Arden Hill Life Care Center
Newburgh); Series 2001 C, Civic Facility
IDR, 7.00%, 08/01/31(a) 550 585,909
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
NEW YORK-(CONTINUED)
Suffolk (County of) Industrial Development
Agency (Jefferson's Ferry Project); Series
2006, Refunding Continuing Care Retirement
Community IDR, 5.00%, 11/01/28(a) $1,000 $ 1,022,880
- -----------------------------------------------------------------------
Suffolk (County of) Industrial Development
Agency (Spellman High-Voltage Electronics
Corp. Facility); Series 1997 A, IDR, 6.38%,
12/01/17(a)(f) 340 343,859
- -----------------------------------------------------------------------
Syracuse (City of) Industrial Development
Agency (Jewish Home of Central New York,
Inc.); Series 2001 A, First Mortgage IDR,
7.38%, 03/01/21(a) 350 375,683
- -----------------------------------------------------------------------
7.38%, 03/01/31(a) 500 535,050
- -----------------------------------------------------------------------
Westchester (County of) Industrial
Development Agency (Hebrew Hospital Senior
Housing Inc.); Series 2000 A, Continuing
Care Retirement IDR,
7.00%, 07/01/21(a) 600 641,094
- -----------------------------------------------------------------------
7.38%, 07/01/30(a) 500 537,465
- -----------------------------------------------------------------------
Westchester Tobacco Asset Securitization
Corp.; Series 2005, Tobacco Settlement
Asset-Backed RB, 5.00%, 06/01/26(a) 300 306,837
=======================================================================
22,103,799
=======================================================================
NORTH CAROLINA-0.92%
North Carolina (State of) Medical Care
Commission (Arbor Acres United Methodist
Retirement Community, Inc. Project); Series
2002, First Mortgage Health Care Facilities
RB, 6.38%, 03/01/12(a)(c)(d) 500 555,820
- -----------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (Forest at Duke Project); Series
2002, First Mortgage Retirement Facilities
RB, 6.38%, 09/01/32(a) 250 266,435
- -----------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (Pennybyrn at Maryfield
Project); Series 2005 A, First Mortgage
Health Care Facilities RB, 6.13%,
10/01/35(a) 1,300 1,380,873
- -----------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (Presbyterian); Series 2006 B,
Refunding First Mortgage Retirement
Facilities RB, 5.20%, 10/01/21(a) 1,500 1,546,050
- -----------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (The Presbyterian Homes
Obligated Group); Series 2006, First
Mortgage Health Care Facilities RB, 5.60%,
10/01/36(a) 1,000 1,048,800
=======================================================================
4,797,978
=======================================================================
NORTH DAKOTA-0.58%
Burleigh (County of) (Slope Lutheran Care
Center) Series 2006, Refunding IDR, 5.38%,
11/01/28(a) 750 762,338
- -----------------------------------------------------------------------
</Table>
F-10
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
NORTH DAKOTA-(CONTINUED)
Grand Forks (City of) (4000 Valley Square
Project); Series 1997, Special Term Senior
Housing RB,
6.38%, 12/01/07(a)(c)(d) $ 710 $ 720,387
- -----------------------------------------------------------------------
Series 2006, Refunding Senior Housing RB,
5.13%, 12/01/21(a) 500 503,095
- -----------------------------------------------------------------------
5.30%, 12/01/34(a) 1,005 1,015,502
=======================================================================
3,001,322
=======================================================================
OHIO-2.94%
Adams (County of) (Adams County Hospital
Project); Series 2005, Hospital Facilities
Improvement RB,
5.00%, 09/01/07(a) 340 339,874
- -----------------------------------------------------------------------
5.25%, 09/01/08(a) 355 355,032
- -----------------------------------------------------------------------
5.50%, 09/01/09(a) 375 375,712
- -----------------------------------------------------------------------
5.75%, 09/01/10(a) 395 396,726
- -----------------------------------------------------------------------
Cleveland (City of)-Cuyahoga (County of) Port
Authority (St. Clarence-Governmental and
Educational Assistance Corp., LLC Project);
Series 2006 A, Senior Housing RB,
6.00%, 05/01/21(a) 1,000 1,031,320
- -----------------------------------------------------------------------
6.13%, 05/01/26(a) 700 723,688
- -----------------------------------------------------------------------
6.25%, 05/01/38(a) 2,710 2,831,842
- -----------------------------------------------------------------------
Cleveland (City of)-Cuyahoga (County of) Port
Authority; Series 2001, Special Assessment
Tax Increment RB, 7.35%, 12/01/31(a) 1,000 1,102,920
- -----------------------------------------------------------------------
Cuyahoga (County of) (Canton Inc. Project);
Series 2000, Hospital Facilities RB, 7.50%,
01/01/30(a) 750 831,007
- -----------------------------------------------------------------------
Franklin (County of) (Ohio Presbyterian
Retirement Services);
Series 2001 A, Health Care Facilities RB,
7.13%, 07/01/11(a)(c)(d) 500 570,895
- -----------------------------------------------------------------------
Series 2005 A, Health Care Facilities
Improvement RB,
5.00%, 07/01/26(a) 350 359,247
- -----------------------------------------------------------------------
5.13%, 07/01/35(a) 1,250 1,286,725
- -----------------------------------------------------------------------
Lucas (County of) (Sunset Retirement
Communities); Series 2000 A, Refunding &
Improvement Health Care Facilities RB,
6.50%, 08/15/20(a) 500 535,325
- -----------------------------------------------------------------------
6.55%, 08/15/24(a) 500 535,615
- -----------------------------------------------------------------------
Madison (County of) (Madison County Hospital
Project); Series 1998, Refunding Hospital
Improvement RB, 6.25%, 08/01/08(a)(c)(d) 590 600,998
- -----------------------------------------------------------------------
Norwood (City of) (Cornerstone at Norwood
Project); Series 2006, Tax Increment
Financing RB,
5.25%, 12/01/15(a) 1,080 1,080,292
- -----------------------------------------------------------------------
5.75%, 12/01/20(a) 1,300 1,322,178
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
OHIO-(CONTINUED)
Toledo (City of) & Lucas (County of) Port
Authority (St. Mary Woods Project); Series
2004 A, RB,
6.00%, 05/15/24(a) $ 500 $ 511,365
- -----------------------------------------------------------------------
6.00%, 05/15/34(a) 500 507,650
=======================================================================
15,298,411
=======================================================================
OKLAHOMA-1.45%
Oklahoma (County of) Finance Authority
(Epworth Villa Project); Series 2005 A,
Refunding RB,
5.00%, 04/01/15(a) 1,025 1,011,255
- -----------------------------------------------------------------------
5.70%, 04/01/25(a) 2,500 2,586,425
- -----------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects); Series
2000, Refunding Multi-Family Housing VRD
RB, (CEP-Federal National Mortgage
Association) 3.63%, 07/15/30(i)(j) 3,255 3,255,000
- -----------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority (Comanche County Hospital
Project); Series 2002 B, RB, 6.60%,
07/01/31(a) 625 686,250
=======================================================================
7,538,930
=======================================================================
OREGON-0.67%
Clackamas (County of) Hospital Facility
Authority (Gross-Willamette Falls Project);
Series 2005, Refunding RB, 5.13%,
04/01/26(a) 1,000 1,008,150
- -----------------------------------------------------------------------
Oregon (State of) Health, Housing,
Educational & Cultural Facilities Authority
(Oregon Baptist Retirement Homes); Series
1996, RB, 8.00%, 11/15/26(a) 735 744,614
- -----------------------------------------------------------------------
Yamhill (County of) Hospital Authority
(Friendsview Retirement Community); Series
2003, RB, 7.00%, 12/01/21(a) 1,555 1,731,228
=======================================================================
3,483,992
=======================================================================
PENNSYLVANIA-5.09%
Allegheny (County of) Hospital Development
Authority (Villa Saint Joseph of Baden);
Series 1998, Health Care Facilities RB,
6.00%, 08/15/28(a) 500 504,965
- -----------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority (Propel Schools-Homestead
Project); Series 2004 A, Charter School
IDR, 7.00%, 12/15/15(a) 780 835,676
- -----------------------------------------------------------------------
Blair (County of) Industrial Development
Authority (Village of Pennsylvania State
Project); Series 2002 A, IDR,
6.90%, 01/01/22(a) 500 525,250
- -----------------------------------------------------------------------
7.00%, 01/01/34(a) 500 525,245
- -----------------------------------------------------------------------
Bucks (County of) Industrial Development
Authority (Ann's Choice, Inc. Facility),
Series 2005 A, Retirement Community IDR,
5.90%, 01/01/27(a) 1,000 1,029,880
- -----------------------------------------------------------------------
6.25%, 01/01/35(a) 1,000 1,063,070
- -----------------------------------------------------------------------
</Table>
F-11
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Chartiers Valley Industrial & Commercial
Development Authority (Asbury Health
Center); Series 1999, Refunding First
Mortgage IDR,
6.38%, 12/01/19(a) $1,000 $ 1,041,170
- -----------------------------------------------------------------------
Series 2006, Refunding First Mortgage IDR,
5.13%, 12/01/12(a) 500 500,135
- -----------------------------------------------------------------------
5.25%, 12/01/13(a) 500 503,485
- -----------------------------------------------------------------------
5.25%, 12/01/15(a) 260 261,635
- -----------------------------------------------------------------------
5.38%, 12/01/16(a) 500 506,280
- -----------------------------------------------------------------------
5.75%, 12/01/22(a) 935 972,176
- -----------------------------------------------------------------------
Crawford (County of) Hospital Authority
(Wesbury United Methodist Community);
Series 1999, Senior Living Facilities RB,
6.25%, 08/15/29(a) 750 772,845
- -----------------------------------------------------------------------
Cumberland (County of) Municipal Authority
(Wesley Affiliated Services, Inc.); Series
2002 A,
Retirement Community RB,
6.00%, 01/01/08(a)(c)(d) 705 716,590
- -----------------------------------------------------------------------
7.13%, 01/01/13(a)(c)(d) 700 813,022
- -----------------------------------------------------------------------
Fulton (County of) Industrial Development
Authority (The Fulton County Medical Center
Project); Series 2006, Hospital IDR, 5.88%,
07/01/31(a) 1,500 1,556,190
- -----------------------------------------------------------------------
Harrisburg (City of) Authority (Harrisburg
University of Science); Series 2007 A, RB,
5.40%, 09/01/16(a) 1,000 1,021,050
- -----------------------------------------------------------------------
Series 2007 B, RB,
6.00%, 09/01/36(a) 1,225 1,276,475
- -----------------------------------------------------------------------
Lancaster (County of) Hospital Authority
(Saint Anne's Home); Series 1999, Health
Center RB, 6.63%, 04/01/28(a) 500 516,045
- -----------------------------------------------------------------------
Lancaster (County of) Industrial Development
Authority (Garden Spot Village Project);
Series 2000 A, IDR,
7.60%, 05/01/10(a)(c)(d) 250 280,293
- -----------------------------------------------------------------------
7.63%, 05/01/10(a)(c)(d) 500 560,950
- -----------------------------------------------------------------------
Lawrence (County of) Industrial Development
Authority (Shenango Presbyterian Senior
Care Obligated Group); Series 2001 B,
Senior Health & Housing Facilities IDR,
7.50%, 11/15/31(a) 1,000 1,080,610
- -----------------------------------------------------------------------
Lebanon (County of) Health Facilities
Authority (Pleasant View Retirement);
Series 2005 A, Health Center RB, 5.30%,
12/15/26(a) 1,000 1,021,930
- -----------------------------------------------------------------------
Lehigh (County of) General Purpose Authority
(Bible Fellowship Church Home Inc.); Series
2001, First Mortgage RB,
7.63%, 11/01/21(a) 250 276,435
- -----------------------------------------------------------------------
7.75%, 11/01/33(a) 750 829,740
- -----------------------------------------------------------------------
Montgomery (County of) Higher Education &
Health Authority (Philadelphia Geriatric
Center); Series 1999 A, RB, 7.38%,
12/01/09(a)(c)(d) 1,340 1,477,256
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
PENNSYLVANIA-(CONTINUED)
Montgomery (County of) Higher Education &
Health Authority (Temple Continuing Care
Center); Series 1999, RB,
6.63%, 07/01/19(a)(g)(h) $1,250 $ 37,500
- -----------------------------------------------------------------------
6.75%, 07/01/29(a)(g)(h) 460 13,800
- -----------------------------------------------------------------------
Montgomery (County of) Industrial Development
Authority (Whitemarsh Continuing Care
Retirement Community Project); Series 2005,
Mortgage IDR, 6.25%, 02/01/35(a) 1,000 1,060,190
- -----------------------------------------------------------------------
North Penn (Region of) Health, Hospital &
Education Authority (Maple Village
Project); Series 2000 A, Hospital RB,
8.00%, 04/01/10(a)(c)(d) 300 334,851
- -----------------------------------------------------------------------
Pennsylvania (State of) Economic Development
Financing Authority (Northwestern Human
Services, Inc. Project); Series 1998 A, RB,
5.25%, 06/01/14(a) 1,000 1,001,270
- -----------------------------------------------------------------------
Pennsylvania (State of) Higher Educational
Facilities Authority (Student Association,
Inc. Project at California University of
Pennsylvania); Series 2000 A, Student
Housing RB,
6.75%, 09/01/20(a) 500 542,755
- -----------------------------------------------------------------------
6.75%, 09/01/32(a) 320 346,515
- -----------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority (Cathedral Village Project);
Series 2003 A, IDR, 6.88%, 04/01/34(a) 500 556,350
- -----------------------------------------------------------------------
Westmoreland (County of) Industrial
Development Authority (Redstone
Presbyterian Senior Care Obligated Group);
Series 2005 A, IDR,
5.25%, 01/01/13(a) 500 509,645
- -----------------------------------------------------------------------
5.75%, 01/01/26(a) 1,000 1,055,460
- -----------------------------------------------------------------------
5.88%, 01/01/32(a) 500 529,935
=======================================================================
26,456,669
=======================================================================
RHODE ISLAND-0.05%
Tobacco Settlement Financing Corp.; Series
2002 A, Asset-Backed RB, 6.13%, 06/01/32(a) 240 256,620
=======================================================================
SOUTH CAROLINA-1.55%
South Carolina (State of) Jobs Economic
Development Authority (Palmetto Health
Alliance); Series 2003 A, Refunding
Hospital Facilities RB, 6.13%, 08/01/23(a) 1,500 1,624,185
- -----------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Palmetto Health
Alliance); Series 2000 A, Hospital
Facilities Improvement RB, 7.38%,
12/15/10(a)(c)(d) 800 913,432
- -----------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (South Carolina
Episcopal Home at Still Hopes Project);
Series 2004 A, Residential Care Facilities
RB,
6.25%, 05/15/25(a) 750 778,425
- -----------------------------------------------------------------------
6.38%, 05/15/32(a) 1,250 1,321,575
- -----------------------------------------------------------------------
</Table>
F-12
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of) Jobs-Economic
Development Authority (Wesley Commons
Project); Series 2000, First Mortgage
Health Facilities RB,
7.75%, 10/01/10(a)(c)(d) $ 700 $ 804,279
- -----------------------------------------------------------------------
8.00%, 10/01/10(a)(c)(d) 300 346,917
- -----------------------------------------------------------------------
Series 2006, First Mortgage Health
Facilities RB,
5.13%, 10/01/26(a) 1,000 1,013,140
- -----------------------------------------------------------------------
Tobacco Settlement Revenue Management
Authority; Series 2001 B, Tobacco
Settlement RB, 6.38%, 05/15/28(a) 1,170 1,254,392
=======================================================================
8,056,345
=======================================================================
SOUTH DAKOTA-0.41%
South Dakota (State of) Health & Educational
Facilities Authority (Westhills Village
Retirement Community);
Series 2003, RB,
5.65%, 09/01/23(a) 500 529,020
- -----------------------------------------------------------------------
Series 2006, RB,
5.00%, 09/01/25(a) 750 769,095
- -----------------------------------------------------------------------
5.00%, 09/01/31(a) 830 849,563
=======================================================================
2,147,678
=======================================================================
TENNESSEE-0.77%
Harpeth Valley Utilities District of Davidson
and Williamson Counties Series 2004,
Utilities Improvement RB, (INS-MBIA
Insurance Corp.) 5.00%, 09/01/34(a)(b) 1,000 1,051,090
- -----------------------------------------------------------------------
Johnson City (City of) Health & Educational
Facilities Board (Appalachian Christian
Village Project); Series 2004 A, Retirement
Facilities RB,
6.00%, 02/15/24(a) 500 506,580
- -----------------------------------------------------------------------
6.25%, 02/15/32(a) 350 367,689
- -----------------------------------------------------------------------
Shelby (County of) Health, Educational &
Housing Facilities Board (Trezevant Manor
Project); Series 2006 A, RB,
5.63%, 09/01/26(a) 1,000 1,028,510
- -----------------------------------------------------------------------
5.75%, 09/01/37(a) 1,000 1,028,500
=======================================================================
3,982,369
=======================================================================
TEXAS-6.65%
Abilene (City of) Health Facilities
Development Corp. (Sears Methodist
Retirement System Obligated Group Report);
Series 2003 A, Retirement Facility RB,
7.00%, 11/15/33(a) 1,000 1,108,250
- -----------------------------------------------------------------------
Alliance Airport Authority (American Airlines
Inc. Project); Series 2007, Refunding RB,
5.25%, 12/01/29(a)(f) 750 729,413
- -----------------------------------------------------------------------
Atlanta (City of) Hospital Authority; Series
1999, Hospital Facility RB, 6.70%,
08/01/19(a) 500 523,070
- -----------------------------------------------------------------------
Bexar (County of) Health Facilities
Development Corp. (Army Retirement
Residence Project); Series 2002, RB, 6.30%,
07/01/12(a)(c)(d) 500 564,245
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
TEXAS-(CONTINUED)
Bexar (County of) Housing Finance Corp.
(American Opportunity Housing); Series 2002
A-1, Sr. Multi-Family Housing RB, 6.85%,
12/01/23(a) $ 750 $ 811,035
- -----------------------------------------------------------------------
Board of Regents of the University of Texas
System; Series 2001 C, Financing System RB,
5.00%, 08/15/11(a)(c)(d) 1,000 1,053,550
- -----------------------------------------------------------------------
Series 2003 B, Financing System RB,
5.00%, 08/15/33(a) 1,500 1,562,085
- -----------------------------------------------------------------------
Comal (County of) Health Facilities
Development Corp. (McKenna Memorial
Hospital Project); Series 2002 A,
Healthcare System RB, 6.25%, 02/01/32(a) 1,000 1,098,170
- -----------------------------------------------------------------------
Corpus Christi (Port of) Industrial
Development Corp. (Valero); Series 1997 C,
Refunding IDR, 5.40%, 04/01/18(a) 605 624,130
- -----------------------------------------------------------------------
Dallas-Fort Worth International Airport
Facility Improvement Corp.; Series 2000
A-3, Refunding RB, 9.13%, 05/01/29(a)(f) 500 628,445
- -----------------------------------------------------------------------
Decatur (City of) Hospital Authority (Wise
Regional Health System); Series 2004 A,
Hospital RB,
5.63%, 09/01/13(a) 1,735 1,774,055
- -----------------------------------------------------------------------
7.00%, 09/01/25(a) 825 906,881
- -----------------------------------------------------------------------
7.13%, 09/01/34(a) 905 997,310
- -----------------------------------------------------------------------
Gulf Coast Waste Disposal Authority (Valero
Energy Corp. Project); Series 2001, RB,
6.65%, 04/01/32(a)(f) 900 978,885
- -----------------------------------------------------------------------
Harris (County of) Health Facilities
Development Corp. (Memorial Hermann Health
Care); Series 2001 A, Hospital RB, 6.38%,
06/01/11(a)(c)(d) 500 555,785
- -----------------------------------------------------------------------
Harris (County of) Health Facilities
Development Corp. (Saint Luke's Episcopal
Hospital); Series 2001 A, RB, 5.63%,
08/15/11(a)(c)(d) 750 808,275
- -----------------------------------------------------------------------
Harris (County of); Series 2002, Refunding
Limited Tax GO, 5.13%, 08/15/12(a)(c)(d) 370 395,423
- -----------------------------------------------------------------------
HFDC of Central Texas, Inc. (Villa de San
Antonio Project); Series 2004 A, RB, 6.00%,
05/15/25(a) 500 510,230
- -----------------------------------------------------------------------
HFDC of Central Texas, Inc.; Series 2006 A,
Retirement Facilities RB,
5.63%, 11/01/26(a) 750 777,622
- -----------------------------------------------------------------------
5.50%, 11/01/31(a) 500 505,825
- -----------------------------------------------------------------------
5.75%, 11/01/36(a) 1,000 1,038,530
- -----------------------------------------------------------------------
Hidalgo (County of) Health Services Corp.
(Mission Hospital, Inc. Project); Series
2005, Hospital RB,
5.00%, 08/15/15(a) 500 512,220
- -----------------------------------------------------------------------
5.00%, 08/15/19(a) 700 712,978
- -----------------------------------------------------------------------
Houston (City of) (Continental Airlines, Inc.
Terminal E Project); Series 2001 E, Airport
System Special Facilities RB, 6.75%,
07/01/29(a)(f) 500 535,765
- -----------------------------------------------------------------------
</Table>
F-13
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
TEXAS-(CONTINUED)
Houston (City of) Health Facilities
Development Corp. (Buckingham Senior Living
Community); Series 2004 A, Retirement
Facilities RB,
7.00%, 02/15/23(a) $ 300 $ 335,544
- -----------------------------------------------------------------------
7.00%, 02/15/26(a) 750 837,015
- -----------------------------------------------------------------------
7.13%, 02/15/34(a) 450 503,132
- -----------------------------------------------------------------------
Meadow Parc Development, Inc. (Meadow Parc
Apartments Project); Series 1998,
Multi-Family Housing RB, 6.50%, 12/01/30(a) 1,200 1,220,592
- -----------------------------------------------------------------------
Mesquite (City of) Health Facilities
Development Corp. (Christian Care Centers,
Inc. Project); Series 2005, RB, 5.63%,
02/15/35(a) 1,000 1,054,650
- -----------------------------------------------------------------------
Midlothian Development Authority; Series
1999,
Tax Increment Contract RB,
6.70%, 11/15/07(a)(c)(d) 700 725,144
- -----------------------------------------------------------------------
Series 2001, Tax Increment Contract RB,
7.88%, 05/15/11(a)(c)(d) 1,000 1,161,060
- -----------------------------------------------------------------------
Series 2004, Tax Increment Contract RB,
6.20%, 11/15/29 (Acquired 12/02/04; Cost
$1,000,000)(a)(e) 1,000 1,071,330
- -----------------------------------------------------------------------
Tarrant (County of) Cultural Education
Facilities Finance Corp. (Northwest Senior
Housing Corp.-Edgemere Project); Series
2006 A,
Retirement Facility RB,
6.00%, 11/15/26(a) 700 755,139
- -----------------------------------------------------------------------
6.00%, 11/15/36(a) 2,000 2,144,560
- -----------------------------------------------------------------------
Texas (State of) Public Finance Authority
(School Excellence Education Project);
Series 2004 A, Charter School Finance Corp.
RB, 7.00%, 12/01/34 (Acquired 12/02/04;
Cost $987,580)(a)(e) 1,000 1,106,230
- -----------------------------------------------------------------------
Travis (County of) Health Facilities
Development Corp. (Querencia Barton Creek
Project); Series 2005, Retirement
Facilities RB,
5.50%, 11/15/25(a) 1,650 1,688,544
- -----------------------------------------------------------------------
5.65%, 11/15/35(a) 1,250 1,287,737
- -----------------------------------------------------------------------
Woodhill Public Facility Corp. (Woodhill
Apartments Project); Series 1999,
Multi-Family Housing RB, 7.50%, 12/01/29(a) 1,000 991,780
=======================================================================
34,594,634
=======================================================================
UTAH-0.53%
Provo (City of) (Freedom Academy Foundation);
Series 2007, Charter School RB, 5.50%,
06/15/37(a) 1,450 1,449,869
- -----------------------------------------------------------------------
Spanish Fork (City of) (American Leadership
Academy); Series 2006, Charter School RB,
5.70%, 11/15/36(a) 1,250 1,289,988
=======================================================================
2,739,857
=======================================================================
VIRGINIA-2.73%
Chesterfield (County of) Health Center
Commission (Lucy Corr Village); Series
2005, Refunding Mortgage RB, 5.38%,
12/01/28(a) 2,250 2,276,235
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
VIRGINIA-(CONTINUED)
Henrico (County of) Economic Development
Authority (Virginia United Methodist
Homes); Series 2002 A, Refunding
Residential Care Facility RB, 6.50%,
06/01/22(a) $ 750 $ 803,445
- -----------------------------------------------------------------------
James City (County of) Economic Development
Authority (Williamsburg Lodging); Series
2005 A, First Mortgage Residential Care
Facilities RB, 5.50%, 09/01/34(a) 750 778,665
- -----------------------------------------------------------------------
Lynchburg (City of) Industrial Development
Authority (The Summit); Series 2002 A,
Residential Care Facility Mortgage IDR,
6.25%, 01/01/28(a) 500 517,980
- -----------------------------------------------------------------------
Norfolk Redevelopment & Housing Authority
(Fort Norfolk Retirement Community, Inc.-
Harbor's Edge Project); Series 2004 A,
First Mortgage Retirement Community RB,
6.00%, 01/01/25(a) 500 527,140
- -----------------------------------------------------------------------
6.13%, 01/01/35(a) 1,100 1,161,061
- -----------------------------------------------------------------------
Peninsula Ports Authority (Virginia Baptist
Homes); Series 2003 A,
Residential Care Facility RB,
7.38%, 12/01/13(a)(c)(d) 500 604,250
- -----------------------------------------------------------------------
Series 2006 C,
Refunding Residential Care Facility RB,
5.38%, 12/01/26(a) 1,000 1,037,720
- -----------------------------------------------------------------------
5.40%, 12/01/33(a) 1,000 1,036,510
- -----------------------------------------------------------------------
The Farms of New Kent Community Development
Authority;
Series 2006 A,
Special Assessment RB,
5.13%, 03/01/36(a) 1,500 1,520,070
- -----------------------------------------------------------------------
Series 2006 B,
Special Assessment RB,
5.45%, 03/01/36(a) 1,000 1,011,330
- -----------------------------------------------------------------------
Tobacco Settlement Financing Corp.; Series
2005,
Asset-Backed RB,
5.50%, 06/01/26(a) 500 530,640
- -----------------------------------------------------------------------
5.63%, 06/01/37(a) 2,250 2,394,225
=======================================================================
14,199,271
=======================================================================
WASHINGTON-0.15%
Skagit (County of) Public Hospital District
No. 1 (Skagit Valley Hospital); Series
2005, RB, 5.50%, 12/01/30(a) 750 789,503
=======================================================================
WISCONSIN-4.09%
Badger Tobacco Asset Securitization Corp.;
Series 2002, Tobacco Settlement
Asset-Backed RB, 6.13%, 06/01/27(a) 2,165 2,316,983
- -----------------------------------------------------------------------
Milwaukee (City of) Redevelopment Authority
(Milwaukee Science Education Consortium,
Inc. Project); Series 2005 A, RB,
5.63%, 08/01/25(a) 2,000 2,037,520
- -----------------------------------------------------------------------
5.75%, 08/01/35(a) 1,815 1,849,794
- -----------------------------------------------------------------------
</Table>
F-14
AIM High Income Municipal Fund
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
WISCONSIN-(CONTINUED)
Waukesha (City of) Redevelopment Authority
(Kirkland Crossings Project); Series 2006,
Refunding Sr. Housing RB,
5.50%, 07/01/31(a) $1,460 $ 1,492,251
- -----------------------------------------------------------------------
5.60%, 07/01/41(a) 1,000 1,028,570
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals, Inc. Project); Series 2004 A,
RB,
6.50%, 08/15/26(a) 250 272,875
- -----------------------------------------------------------------------
6.75%, 08/15/34(a) 950 1,039,234
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Community Memorial
Hospital, Inc. Project); Series 2003, RB,
7.13%, 01/15/22(a) 1,085 1,176,097
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Community
Rehabilitation Providers Facilities
Acquisition Program); Series 1998, RB,
6.88%, 12/01/23(a) 200 208,542
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Eastcastle Place,
Inc. Project); Series 2004, RB,
6.00%, 12/01/24(a) 500 517,400
- -----------------------------------------------------------------------
6.13%, 12/01/34(a) 1,000 1,029,900
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (FH Healthcare
Development Inc. Project); Series 1999, RB,
6.25%, 11/15/09(a)(c)(d) 1,250 1,341,137
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (New Castle Place
Project); Series 2001 A, RB, 7.00%,
12/01/31(a) 250 261,350
- -----------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
AMOUNT
(000) VALUE
- -----------------------------------------------------------------------
<Caption>
WISCONSIN-(CONTINUED)
Wisconsin (State of) Health & Educational
Facilities Authority (Oakwood Village
Project); Series 2000 A, RB, 7.63%,
08/15/30(a)(c) $1,000 $ 1,085,380
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Tomah Memorial
Hospital, Inc. Project);
Series 2003, RB,
6.00%, 07/01/15(a) 100 104,758
- -----------------------------------------------------------------------
6.13%, 07/01/16(a) 150 157,785
- -----------------------------------------------------------------------
6.63%, 07/01/28(a) 750 794,460
- -----------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wisconsin Illinois
Senior Housing, Inc.); Series 2006,
Refunding RB,
5.50%, 08/01/16(a) 2,020 2,057,269
- -----------------------------------------------------------------------
5.80%, 08/01/29(a) 2,400 2,469,912
=======================================================================
21,241,217
=======================================================================
WYOMING-0.10%
Teton (County of) Hospital District (Saint
John's Medical Center); Series 2002,
Hospital RB, 6.75%, 12/01/22(a) 500 535,010
=======================================================================
TOTAL INVESTMENTS-99.26% (Cost $495,105,696) 516,024,217
=======================================================================
OTHER ASSETS LESS LIABILITIES-0.74% 3,846,894
=======================================================================
NET ASSETS-100.00% $519,871,111
_______________________________________________________________________
=======================================================================
</Table>
Investment Abbreviations:
<Table>
CEP - Credit Enhancement Provider IDR
COP - Certificates of Participation INS
GO - General Obligation Bonds PCR
CEP - Industrial Development Revenue Bonds RB
COP - Insurer Sr.
GO - Pollution Control Revenue Bonds VRD
CEP - Revenue Bonds
COP - Senior
GO - Variable Rate Demand
</Table>
Notes to Schedule of Investments:
(a) In accordance with the procedures established by the Board of Trustees,
security fair valued based on an evaluated quote provided by an independent
pricing service. The aggregate value of these securities at March 31, 2007
was $512,769,217, which represented 98.63% of the Fund's Net Assets. See
Note 1A.
(b) Principal and/or interest payments are secured by the bond insurance company
listed.
(c) Advance refunded; secured by an escrow fund of U.S. Government obligations
or other highly rated collateral.
(d) Security has an irrevocable call by the issuer or mandatory put by the
holder. Maturity date reflects such call or put.
(e) 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 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 value of these securities at March 31, 2007 was $12,585,400,
which represented 2.42% of the Fund's Net Assets. Unless otherwise
indicated, these securities are not considered to be illiquid.
(f) Security subject to the alternative minimum tax.
(g) Security considered to be illiquid. The Fund is limited to investing 15% of
net assets in illiquid securities at the time of purchase. The aggregate
value of these securities considered illiquid at March 31, 2007 was
$765,250, which represented 0.15% of the Fund's Net Assets.
(h) Defaulted security. Currently, the issuer is in default with respect to
interest payments. The value of this security at March 31, 2007 represented
0.15% of the Fund's Net Assets.
(i) Demand security payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined periodically.
Rate shown is rate in effect on March 31, 2007.
(j) Security is considered a cash equivalent.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-15
AIM High Income Municipal Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2007
<Table>
ASSETS:
Investments, at value (cost $495,105,696) $516,024,217
- -----------------------------------------------------------
Receivables for:
Investments sold 1,956,210
- -----------------------------------------------------------
Fund shares sold 633,776
- -----------------------------------------------------------
Interest 9,119,450
- -----------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 41,743
- -----------------------------------------------------------
Other assets 44,406
===========================================================
Total assets 527,819,802
___________________________________________________________
===========================================================
LIABILITIES:
Payables for:
Investments purchased 6,104,824
- -----------------------------------------------------------
Fund shares reacquired 567,233
- -----------------------------------------------------------
Dividends 905,502
- -----------------------------------------------------------
Trustee deferred compensation and
retirement plans 58,543
- -----------------------------------------------------------
Fund expenses advanced 15,661
- -----------------------------------------------------------
Accrued distribution fees 176,595
- -----------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 5,655
- -----------------------------------------------------------
Accrued transfer agent fees 47,539
- -----------------------------------------------------------
Accrued operating expenses 67,139
===========================================================
Total liabilities 7,948,691
===========================================================
Net assets applicable to shares outstanding $519,871,111
___________________________________________________________
===========================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $512,134,843
- -----------------------------------------------------------
Undistributed net investment income 432,780
- -----------------------------------------------------------
Undistributed net realized gain (loss) (13,615,033)
- -----------------------------------------------------------
Unrealized appreciation 20,918,521
===========================================================
$519,871,111
___________________________________________________________
===========================================================
NET ASSETS:
Class A $348,602,175
___________________________________________________________
===========================================================
Class B $ 39,065,911
___________________________________________________________
===========================================================
Class C $ 80,702,003
___________________________________________________________
===========================================================
Institutional Class $ 51,501,022
___________________________________________________________
===========================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 38,089,408
___________________________________________________________
===========================================================
Class B 4,264,055
___________________________________________________________
===========================================================
Class C 8,814,873
___________________________________________________________
===========================================================
Institutional Class 5,623,650
___________________________________________________________
===========================================================
Class A:
Net asset value per share $ 9.15
- -----------------------------------------------------------
Offering price per share
(Net asset value of $9.15 divided by
95.25%) $ 9.61
___________________________________________________________
===========================================================
Class B:
Net asset value and offering price per
share $ 9.16
___________________________________________________________
===========================================================
Class C:
Net asset value and offering price per
share $ 9.16
___________________________________________________________
===========================================================
Institutional Class:
Net asset value and offering price per
share $ 9.16
___________________________________________________________
===========================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-16
AIM High Income Municipal Fund
STATEMENT OF OPERATIONS
For the year ended March 31, 2007
<Table>
INVESTMENT INCOME:
Interest $26,967,306
=========================================================================
EXPENSES:
Advisory fees 2,869,785
- -------------------------------------------------------------------------
Administrative services fees 136,693
- -------------------------------------------------------------------------
Custodian fees 21,308
- -------------------------------------------------------------------------
Distribution fees:
Class A 829,470
- -------------------------------------------------------------------------
Class B 431,497
- -------------------------------------------------------------------------
Class C 763,659
- -------------------------------------------------------------------------
Transfer agent fees -- A, B and C 207,787
- -------------------------------------------------------------------------
Transfer agent fees -- Institutional 16,545
- -------------------------------------------------------------------------
Trustees' and officer's fees and benefits 29,828
- -------------------------------------------------------------------------
Other 341,154
=========================================================================
Total expenses 5,647,726
=========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement (1,709,821)
=========================================================================
Net expenses 3,937,905
=========================================================================
Net investment income 23,029,401
=========================================================================
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) from investment securities (417,485)
=========================================================================
Change in net unrealized appreciation of investment
securities 9,796,598
=========================================================================
Net realized and unrealized gain 9,379,113
=========================================================================
Net increase in net assets resulting from operations $32,408,514
_________________________________________________________________________
=========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-17
AIM High Income Municipal Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2007 and 2006
<Table>
<Caption>
2007 2006
- ------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 23,029,401 $ 15,537,540
- ------------------------------------------------------------------------------------------
Net realized gain (loss) (417,485) (587,339)
- ------------------------------------------------------------------------------------------
Change in net unrealized appreciation 9,796,598 6,527,185
==========================================================================================
Net increase in net assets resulting from operations 32,408,514 21,477,386
==========================================================================================
Distributions to shareholders from net investment income:
Class A (16,166,751) (11,133,947)
- ------------------------------------------------------------------------------------------
Class B (1,801,747) (2,178,384)
- ------------------------------------------------------------------------------------------
Class C (3,144,576) (2,320,323)
- ------------------------------------------------------------------------------------------
Institutional Class (1,376,018) --
==========================================================================================
Decrease in net assets resulting from distributions (22,489,092) (15,632,654)
==========================================================================================
Share transactions-net:
Class A 94,302,703 110,505,800
- ------------------------------------------------------------------------------------------
Class B (7,237,612) (2,111,842)
- ------------------------------------------------------------------------------------------
Class C 22,367,731 22,703,084
- ------------------------------------------------------------------------------------------
Institutional Class 51,037,884 --
==========================================================================================
Net increase in net assets resulting from share
transactions 160,470,706 131,097,042
==========================================================================================
Net increase in net assets 170,390,128 136,941,774
==========================================================================================
NET ASSETS:
Beginning of year 349,480,983 212,539,209
==========================================================================================
End of year (including undistributed net investment income
of $432,780 and $(107,529), respectively) $519,871,111 $349,480,983
__________________________________________________________________________________________
==========================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-18
AIM High Income Municipal Fund
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM High Income Municipal Fund (the "Fund") is a series portfolio of AIM
Tax-Exempt Funds (the "Trust"). The Trust is a Delaware statutory trust
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of three
separate portfolios, each authorized to issue an unlimited number of shares of
beneficial interest. The Fund currently consists of multiple classes of shares.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio. The assets, liabilities and operations of each
portfolio or class are accounted for separately. Information presented in these
financial statements pertains only to the Fund.
The Fund's investment objective is to achieve a high level of current income
that is exempt from federal income taxes.
The following is a summary of the significant accounting policies followed
by the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
Securities are fair valued using an evaluated quote provided by an
independent pricing service approved by the Board of Trustees. Evaluated
quotes provided by the pricing service may be determined without exclusive
reliance on quoted prices and may reflect appropriate factors such as
institution-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
with maturities of 60 days or less are recorded at amortized cost which
approximates value. Securities with a demand feature exercisable within one
to seven days are valued at par.
Securities for which market quotations either are not readily available
or are unreliable are valued at fair value as determined in good faith by
or under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Some of the factors which may be
considered in determining fair value are fundamental analytical data
relating to the investment; the nature and duration of any restrictions on
transferability or disposition; trading in similar securities by the same
issuer or comparable companies; relevant political, economic or issuer
specific news; and other relevant factors under the circumstances.
B. 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 is recorded on the accrual basis from settlement
date. Dividend income is recorded on the ex-dividend date. Bond premiums
and discounts are amortized and/or accreted for financial reporting
purposes.
The Fund may receive proceeds from litigation settlements involving Fund
investments. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
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.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to treat a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable and tax-exempt earnings to shareholders. As such, the Fund
will not be subject to federal income taxes on otherwise taxable income
(including net realized capital gain) that is distributed to shareholders.
Therefore, no provision for federal income taxes is recorded in the
financial statements.
In addition, the Fund intends to invest in such municipal securities to
allow it to qualify to pay shareholders "exempt-interest dividends", as
defined in the Internal Revenue Code.
F-19
AIM High Income Municipal Fund
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund are charged to the operations of such class. Transfer
agency fees and expenses and other shareholder recordkeeping fees and
expenses attributable to the Institutional Class are charged to such class.
Transfer agency fees and expenses and other shareholder recordkeeping fees
and expenses relating to all other classes are allocated among those
classes based on relative net assets. All other expenses are allocated
among the classes based on relative net assets.
F. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
G. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
H. LOWER-RATED SECURITIES -- The Fund normally invests at least 80% of its net
assets in lower-quality debt securities, i.e., "junk bonds". Investments in
lower-rated securities or unrated securities of comparable quality tend to
be more sensitive to economic conditions than higher rated securities. Junk
bonds involve a greater risk of default by the issuer because such
securities are generally unsecured and are often subordinated to other
creditors' claims.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS ANNUAL RATE
- -------------------------------------------------------------------------
First $500 million 0.60%
- -------------------------------------------------------------------------
Over $500 million up to and including $1 billion 0.55%
- -------------------------------------------------------------------------
Over $1 billion up to and including $1.5 billion 0.50%
- -------------------------------------------------------------------------
Over $1.5 billion 0.45%
________________________________________________________________________
=========================================================================
</Table>
AIM had voluntarily agreed to waive advisory fees and/or reimburse expenses
to the extent necessary to limit total annual operating expenses (excluding
certain items discussed below) of Class A, Class B, Class C and Institutional
Class shares to 0.65%, 1.40%, 1.40% and 0.40% of average daily net assets,
respectively. Effective April 1, 2007, AIM has voluntarily agreed to waive
advisory fees and/or reimburse expenses to the extent necessary to limit total
annual operating expenses (excluding certain items discussed below) of Class A,
Class B, Class C and Institutional Class shares to 0.70%, 1.45%, 1.45% and 0.45%
of average daily net assets, respectively. In determining the advisor's
obligation to waive advisory fees and/or reimburse expenses, the following
expenses are not taken into account, and could cause the net annual operating
expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii)
dividend expense on short sales; (iv) extraordinary items; (v) expenses related
to a merger or reorganization, as approved by the Fund's Board of Trustees; and
(vi) expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement. Currently, in addition to the expense reimbursement
arrangement with AMVESCAP PLC ("AMVESCAP") described more fully below, the
expense offset arrangements from which the Fund may benefit are in the form of
credits that the Fund receives from banks where the Fund or its transfer agent
has deposit accounts in which it holds uninvested cash. Those credits are used
to pay certain expenses incurred by the Fund. Voluntary fee waivers or
reimbursements may be modified or discontinued at any time upon consultation
with the Board of Trustees without further notice to investors.
For the year ended March 31, 2007, AIM waived advisory fees of $1,482,736
and reimbursed class specific expenses of $142,915, $18,587, $32,894 and $16,545
for Class A, Class B, Class C and Institutional Class shares, respectively.
At the request of the Trustees of the Trust, AMVESCAP agreed to reimburse
expenses incurred by the Fund in connection with market timing matters in the
AIM Funds, which may include legal, audit, shareholder reporting, communications
and trustee expenses. These expenses along with the related expense
reimbursement are included in the Statement of Operations. For the year ended
March 31, 2007, AMVESCAP reimbursed expenses of the Fund in the amount of
$2,753.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
March 31, 2007, expenses incurred under the agreement are shown in the Statement
of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended March 31, 2007,
expenses incurred under the agreement are shown in the Statement of Operations
as transfer agent fees.
F-20
AIM High Income Municipal Fund
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B,
Class C and Institutional Class shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A,
Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the
Plans, pays ADI compensation at the annual rate of 0.25% of the Fund's average
daily net assets of Class A shares and 1.00% of the average daily net assets of
Class B and Class C shares. Of the Plan payments, up to 0.25% of the average
daily net assets of each class of shares may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under the Plans would constitute
an asset-based sales charge. National Association of Securities Dealers ("NASD")
Rules impose a cap on the total sales charges, including asset-based sales
charges that may be paid by any class of shares of the Fund. For the year ended
March 31, 2007, expenses incurred under the Plans are shown in the Statement of
Operations as distribution fees.
Front-end sales commissions and contingent deferred sales charges ("CDSC")
(collectively the "sales charges") are not recorded as expenses of the Fund.
Front-end sales commissions are deducted from proceeds from the sales of Fund
shares prior to investment in Class A shares of the Fund. CDSC are deducted from
redemption proceeds prior to remittance to the shareholder. During the year
ended March 31, 2007, ADI advised the Fund that it retained $154,015 in
front-end sales commissions from the sale of Class A shares and $58,187, $36,099
and $25,948 from Class A, Class B and Class C shares, respectively, for CDSC
imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--EXPENSE OFFSET ARRANGEMENT
The expense offset arrangement is comprised of transfer agency credits which
result from balances in Demand Deposit Accounts (DDA) used by the transfer agent
for clearing shareholder transactions. For the year ended March 31, 2007, the
Fund received credits from this arrangement, which resulted in the reduction of
the Fund's total expenses of $13,391.
NOTE 4--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2007, the Fund paid legal fees of $5,404 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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 participates in an uncommitted unsecured revolving credit facility
with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the
lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
credit facility can borrow on a first come, first served basis. Principal on
each loan outstanding shall bear interest at the bid rate quoted by SSB at the
time of the request for the loan.
During the year ended March 31, 2007, the Fund did not borrow or lend under
the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds as a compensating balance in the account so the custodian
bank can be compensated by earning the additional interest; or (ii) compensate
by paying the custodian bank at a rate agreed upon by the custodian bank and
AIM, not to exceed the contractually agreed upon rate.
F-21
AIM High Income Municipal Fund
NOTE 6--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years ended March 31, 2007
and 2006 was as follows:
<Table>
<Caption>
2007 2006
- ----------------------------------------------------------------------------------------
Distributions paid from ordinary income-tax exempt $22,489,092 $15,632,654
________________________________________________________________________________________
========================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS:
As of March 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ----------------------------------------------------------------------------
Undistributed ordinary income $ 482,681
- ----------------------------------------------------------------------------
Net unrealized appreciation -- investments 20,920,016
- ----------------------------------------------------------------------------
Temporary book/tax differences (51,408)
- ----------------------------------------------------------------------------
Capital loss carryover (13,453,959)
- ----------------------------------------------------------------------------
Post-October capital loss deferral (161,062)
- ----------------------------------------------------------------------------
Shares of beneficial interest 512,134,843
============================================================================
Total net assets $519,871,111
____________________________________________________________________________
============================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation difference is attributable primarily to losses on wash sales, the
treatment of bond premiums and the treatment of defaulted bonds.
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 the trustee deferral of compensation,
retirement plan benefits, bond premiums and defaulted bonds.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions. The Fund has a capital loss carryforward as of March 31, 2007
which expires as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
March 31, 2008 $ 995,895
- -----------------------------------------------------------------------------
March 31, 2009 3,558,416
- -----------------------------------------------------------------------------
March 31, 2010 3,255,459
- -----------------------------------------------------------------------------
March 31, 2011 972,821
- -----------------------------------------------------------------------------
March 31, 2012 1,072,111
- -----------------------------------------------------------------------------
March 31, 2013 2,599,981
- -----------------------------------------------------------------------------
March 31, 2014 376,854
- -----------------------------------------------------------------------------
March 31, 2015 622,422
=============================================================================
Total capital loss carryforward $13,453,959
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
NOTE 7--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2007 was $203,205,005 and $43,642,790,
respectively.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- -------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $23,670,957
- -------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (2,750,941)
===============================================================================
Net unrealized appreciation of investment securities $20,920,016
_______________________________________________________________________________
===============================================================================
Cost of investments for tax purposes is $495,104,201.
</Table>
F-22
AIM High Income Municipal Fund
NOTE 8--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of expired capital loss
carryforwards, on March 31, 2007, undistributed net realized gain (loss) was
increased by $11,396 and shares of beneficial interest decreased by $11,396.
This reclassification had no effect on the net assets of the Fund.
NOTE 9--SHARE INFORMATION
The Fund currently consists of four different classes of shares: Class A, Class
B, Class C and Institutional Class. Class A shares are sold with a front-end
sales charge unless certain waiver criteria are met and under certain
circumstances load waiver shares may be subject to a CDSC. Class B shares and
Class C shares are sold with a CDSC. Institutional Class shares are sold at net
asset value. Generally, Class B shares will automatically convert to Class A
shares on or about the month-end which is at least eight years after the date of
purchase.
The Fund is offered on a limited basis to certain investors. The limited
offering is subject to the terms and conditions set forth in the prospectus, and
the Fund may cease the limited offering and/or resume sales to other new
investors on a future date if the advisor determines it is appropriate and the
Board of Trustees approves.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
--------------------------------------------------------
2007(A) 2006
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
Sold:
Class A 16,596,537 $149,511,636 16,412,872 $146,400,389
- ----------------------------------------------------------------------------------------------------------------------
Class B 383,714 3,455,549 907,455 8,092,871
- ----------------------------------------------------------------------------------------------------------------------
Class C 3,663,066 32,997,731 3,468,145 30,910,153
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class(b) 5,689,567 51,640,436 -- --
======================================================================================================================
Issued as reinvestment of dividends:
Class A 1,003,723 9,114,243 682,811 6,105,016
- ----------------------------------------------------------------------------------------------------------------------
Class B 78,603 713,946 95,517 854,541
- ----------------------------------------------------------------------------------------------------------------------
Class C 221,714 2,014,084 153,210 1,370,226
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class(b) 89,182 817,494 -- --
======================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 379,605 3,447,224 202,313 1,809,673
- ----------------------------------------------------------------------------------------------------------------------
Class B (379,251) (3,447,224) (202,145) (1,809,673)
======================================================================================================================
Reacquired:
Class A (7,459,810) (67,770,400) (4,907,340) (43,809,278)
- ----------------------------------------------------------------------------------------------------------------------
Class B (877,610) (7,959,883) (1,035,598) (9,249,581)
- ----------------------------------------------------------------------------------------------------------------------
Class C (1,396,106) (12,644,084) (1,072,717) (9,577,295)
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class(b) (155,099) (1,420,046) -- --
======================================================================================================================
17,837,835 $160,470,706 14,704,523 $131,097,042
______________________________________________________________________________________________________________________
======================================================================================================================
</Table>
(a) There are four entities that are each record owners of more than 5% of
the outstanding shares of the Fund and in the aggregate they own 39% of
the outstanding shares of the Fund. ADI has an agreement with these
entities to sell Fund shares. The Fund, AIM, and/or AIM affiliates may
make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, AIM, and/or AIM affiliates
including but not limited to services such as, securities brokerage,
distribution, third party record keeping and account servicing. The
Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Institutional Class shares commenced sales on July 31, 2006.
NOTE 10--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management is currently
assessing the impact of FIN 48, if any, on the Fund's financial statements and
currently intends for the Fund to adopt FIN 48 provisions during the fiscal year
ending March 31, 2008.
F-23
AIM High Income Municipal Fund
NOTE 11--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
---------------------------------------------------------
YEAR ENDED MARCH 31,
---------------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.97 $ 8.76 $ 8.73 $ 8.64 $ 8.59
- -----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.45 0.47 0.51 0.51 0.54
- -----------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.17 0.21 0.04 0.10 0.03
=======================================================================================================================
Total from investment operations 0.62 0.68 0.55 0.61 0.57
=======================================================================================================================
Less dividends from net investment income (0.44) (0.47) (0.52) (0.52) (0.52)
=======================================================================================================================
Net asset value, end of period $ 9.15 $ 8.97 $ 8.76 $ 8.73 $ 8.64
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(a) 7.11% 7.92% 6.51% 7.30% 6.81%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $348,602 $247,296 $132,996 $94,657 $77,998
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.65%(b) 0.56% 0.55% 0.55% 0.55%
- -----------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.01%(b) 1.03% 1.08% 1.07% 1.05%
=======================================================================================================================
Ratio of net investment income to average net assets 4.99%(b) 5.18% 5.83% 5.91% 6.22%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 10% 16% 12% 12% 14%
_______________________________________________________________________________________________________________________
=======================================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(b) Ratios are based on average daily net assets of $331,788,100.
<Table>
<Caption>
CLASS B
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.98 $ 8.77 $ 8.74 $ 8.65 $ 8.60
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.38 0.40 0.44 0.45 0.47
- --------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.18 0.21 0.05 0.10 0.04
====================================================================================================================
Total from investment operations 0.56 0.61 0.49 0.55 0.51
====================================================================================================================
Less dividends from net investment income (0.38) (0.40) (0.46) (0.46) (0.46)
====================================================================================================================
Net asset value, end of period $ 9.16 $ 8.98 $ 8.77 $ 8.74 $ 8.65
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(a) 6.31% 7.12% 5.73% 6.51% 6.02%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $39,066 $45,422 $46,429 $45,026 $42,699
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.40%(b) 1.31% 1.30% 1.30% 1.30%
- --------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.76%(b) 1.78% 1.83% 1.82% 1.80%
====================================================================================================================
Ratio of net investment income to average net assets 4.24%(b) 4.43% 5.08% 5.16% 5.47%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 10% 16% 12% 12% 14%
____________________________________________________________________________________________________________________
====================================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(b) Ratios are based on average daily net assets of $43,149,703.
F-24
AIM High Income Municipal Fund
NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS C
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.97 $ 8.77 $ 8.74 $ 8.65 $ 8.60
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.38 0.40 0.44 0.45 0.47
- --------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.19 0.20 0.05 0.10 0.04
====================================================================================================================
Total from investment operations 0.57 0.60 0.49 0.55 0.51
====================================================================================================================
Less dividends from net investment income (0.38) (0.40) (0.46) (0.46) (0.46)
====================================================================================================================
Net asset value, end of period $ 9.16 $ 8.97 $ 8.77 $ 8.74 $ 8.65
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(a) 6.43% 7.01% 5.73% 6.51% 6.02%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $80,702 $56,763 $33,114 $18,339 $13,496
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.40%(b) 1.31% 1.30% 1.30% 1.30%
- --------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.76%(b) 1.78% 1.83% 1.82% 1.80%
====================================================================================================================
Ratio of net investment income to average net assets 4.24%(b) 4.43% 5.08% 5.16% 5.47%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 10% 16% 12% 12% 14%
____________________________________________________________________________________________________________________
====================================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(b) Ratios are based on average daily net assets of $76,365,853.
<Table>
<Caption>
INSTITUTIONAL CLASS
-------------------
JULY 31, 2006
(DATE SALES
COMMENCED) TO
MARCH 31,
2007
- -----------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.98
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.32
- -----------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.17
===================================================================================
Total from investment operations 0.49
===================================================================================
Less dividends from net investment income (0.31)
===================================================================================
Net asset value, end of period $ 9.16
___________________________________________________________________________________
===================================================================================
Total return(a) 5.53%
___________________________________________________________________________________
===================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $51,501
___________________________________________________________________________________
===================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.40%(b)
- -----------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 0.77%(b)
===================================================================================
Ratio of net investment income to average net assets 5.24%(b)
___________________________________________________________________________________
===================================================================================
Portfolio turnover rate(c) 10%
___________________________________________________________________________________
===================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(b) Ratios are annualized and based on average daily net assets of
$40,380,081.
(c) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
NOTE 12--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment
advisor to certain AIM Funds), AIM and A I M Distributors, Inc. ("ADI") (the
distributor of the retail AIM Funds) reached final settlements with certain
regulators, including the Securities and Exchange Commission ("SEC"), the New
York Attorney General and the Colorado Attorney General, to resolve civil
enforcement actions and/or investigations related to market timing and
F-25
AIM High Income Municipal Fund
NOTE 12--LEGAL PROCEEDINGS--(CONTINUED)
related activity in the AIM Funds, including those formerly advised by IFG. As
part of the settlements, a $325 million fair fund ($110 million of which is
civil penalties) has been created to compensate shareholders harmed by market
timing and related activity in funds formerly advised by IFG. Additionally, AIM
and ADI created a $50 million fair fund ($30 million of which is civil
penalties) to compensate shareholders harmed by market timing and related
activity in funds advised by AIM, which was done pursuant to the terms of the
settlement. These two fair funds may increase as a result of contributions from
third parties who reach final settlements with the SEC or other regulators to
resolve allegations of market timing and/or late trading that also may have
harmed applicable AIM Funds. These two fair funds will be distributed in
accordance with a methodology to be determined by AIM's independent distribution
consultant, in consultation with AIM and the independent trustees of the AIM
Funds and acceptable to the staff of the SEC. Management of AIM and the Fund are
unable to estimate the impact, if any, that the distribution of these two fair
funds may have on the Fund or whether such distribution will have an impact on
the Fund's financial statements in the future.
At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs and an
"administrative assessment," to be determined by the Commissioner. Initial
research indicates that these damages could be limited or capped by statute. By
agreement with the Commissioner of Securities, AIM's time to respond to that
Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds;
- that certain AIM Funds inadequately employed fair value pricing; and
- that the defendants improperly used the assets of the AIM Funds to pay
brokers to aggressively promote the sale of the AIM Funds over other
mutual funds and that the defendants concealed such payments from
investors by disguising them as brokerage commissions.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid, an accounting of all fund-related fees,
commissions and soft dollar payments, restitution of all commissions and fees
paid, and prospective relief in the form of reduced fees.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in AMVESCAP's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the AMVESCAP defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
F-26
AIM High Income Municipal Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Tax-Exempt Funds
and Shareholders of AIM High Income Municipal Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM High Income Municipal Fund (one
of the funds constituting AIM Tax-Exempt Funds, hereafter referred to as the
"Fund") at March 31, 2007, the results of its operations for the year then ended
and the changes in its net assets for each of the two years in the period then
ended and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2007 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The financial highlights for each of the periods ended on or before
March 31, 2005 were audited by another independent registered public accounting
firm whose report dated May 18, 2005 expressed an unqualified opinion on those
statements.
PRICEWATERHOUSECOOPERS LLP
May 18, 2007
Houston, Texas
F-27
AIM High Income Municipal Fund
TAX INFORMATION
Form 1099-INT and other year-end tax information provide shareholders with
actual calendar year amounts that should be included in their tax returns.
Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended March 31,
2007:
<Table>
<Caption>
FEDERAL INCOME TAX
------------------
Tax-Exempt Interest Dividends* 100%
</Table>
* The above percentage is based on income dividends paid to shareholders
during the Fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2006, September 30, 2006, December 31, 2006 and
March 31, 2007 are 99.84%, 99.99%, 99.86%, and 99.88%, respectively.
F-28
AIM High Income Municipal Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Tax-Exempt Funds (the "Trust"),
is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 105
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Column two below includes length of time served with predecessor
entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, AMVESCAP PLC (parent of AIM
and a global investment management
firm); Chairman, A I M Advisors, Inc.
(registered investment advisor); and
Director, Chairman, Chief Executive
Officer and President, AVZ Inc. (holding
company); INVESCO North American
Holdings, Inc. (holding company);
Chairman and President, AMVESCAP Group
Services, Inc. (service provider);
Trustee, The AIM Family of Funds(R);
Chairman, Investment Company Institute;
and Member of Executive Board, SMU Cox
School of Business
Formerly: President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(2) -- 1946 1993 Trustee and Vice Chair of The AIM Family None
Trustee and Vice Chair of Funds--Registered Trademark--
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors,
Inc. (registered broker dealer), AIM
Investment Services, Inc., (registered
transfer agent), and Fund Management
Company (registered broker dealer);
Chief Executive Officer, AMVESCAP
PLC -- Managed Products; President and
Principal Executive Officer of The AIM
Family of Funds--Registered Trademark--;
Director and Chairman, A I M Management
Group Inc. (financial services holding
company); Director and Vice Chairman,
AMVESCAP PLC; and Chairman, AMVESCAP
PLC -- AIM Division
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(3) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, A I M Management Group Inc.,
Principal AIM Mutual Fund Dealer Inc. (registered
Executive Officer broker dealer), A I M Advisors, Inc.,
AIM Funds Management Inc. d/b/a AMVESCAP
Enterprise Services (registered
investment advisor) and 1371 Preferred
Inc. (holding company); Director,
Chairman, Chief Executive Officer and
President, A I M Capital Management
Inc.; Director and President, A I M
Advisors, Inc., INVESCO Funds Group,
Inc. (registered investment advisor and
register transfer agent) and AIM GP
Canada Inc. (general partner for a
limited partnership); Director, A I M
Distributors, Inc.; Director and
Chairman, AIM Investment Services, Inc.,
Fund Management Company and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, AVZ Callco Inc. (holding
company); AMVESCAP Inc. (holding
company) and AIM Canada Holdings Inc.
(holding company); Director and Chief
Executive Officer, AIM Trimark Corporate
Class Inc. (formerly AIM Trimark Global
Fund Inc.) (corporate mutual fund
company) and AIM Trimark Canada Fund
Inc. (corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
Powershares Capital Management LLC
Formerly: President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company (2 portfolios))
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company (7 portfolios)); Annuity and
Life Re (Holdings), Ltd. (insurance
company); CompuDyne Corporation
(provider of products and services to
the public security market); and
Homeowners of America Holding
Corporation (property casualty company)
Formerly: Director, President and Chief
Executive Officer, Volvo Group North
America, Inc.; Senior Vice President, AB
Volvo; and Director of various
affiliated Volvo companies; and
Director, Magellan Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff, and Discovery Global
Trustee Century Group, Inc. (government affairs Education Fund
company); and Owner, Dos Angelos Ranch, (non-profit)
L.P.
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Director, Reich & Tang Funds (7
Trustee Naftalis and Frankel LLP portfolios))
- -------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA None
Trustee of the USA
- -------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired Director, Mainstay VP Series
Trustee Formerly: Partner, Deloitte & Touche Funds, Inc. (21 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
AMVESCAP PLC, parent of the advisor to the Trust.
(2) Mr. Graham is considered an interested person of the Trust because of his
previous positions with AMVESCAP PLC, parent of the advisor to the Trust.
(3) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
F-29
TRUSTEES AND OFFICERS--(CONTINUED)
AIM High Income Municipal Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
INVESCO Distributors, Inc.; Vice
President and Secretary, A I M Capital
Management, Inc., AIM Investment
Services, Inc., and Fund Management
Company; Senior Vice President and
Secretary, A I M Distributors, Inc.;
Director and Vice President, INVESCO
Funds Group Inc.; Senior Vice President,
Chief Legal Officer and Secretary of The
AIM Family of Funds--Registered
Trademark--; and Manager, Powershares
Capital Management LLC
Formerly: Vice President, A I M Capital
Management, Inc.; Chief Operating
Officer, Senior Vice President, General
Counsel, and Secretary, Liberty Ridge
Capital, Inc. (an investment adviser);
Vice President and Secretary, PBHG Funds
(an investment company); Vice President
and Secretary, PBHG Insurance Series
Fund (an investment company); General
Counsel and Secretary, Pilgrim Baxter
Value Investors (an investment adviser);
Chief Operating Officer, General Counsel
and Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, AMVESCAP N/A
Vice President PLC; and Vice President of The AIM
Family of Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, AMVESCAP PLC; Director, INVESCO
Funds Group, Inc.; and Vice President of
The AIM Family of Funds--Registered
Trademark--
Formerly: Director, Vice President and N/A
General Counsel, Fund Management
Company; Director, Senior Vice
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Director and Vice
President, INVESCO Distributors, Inc.;
Senior Vice President, A I M
Distributors, Inc.; Vice President,
A I M Capital Management, Inc. and AIM
Investment Services, Inc.; Senior Vice
President, Chief Legal Officer and
Secretary of The AIM Family of
Funds--Registered Trademark--; Chief
Executive Officer and President, INVESCO
Funds Group, Inc.; and Senior Vice
President, and General Counsel, Liberty
Financial Companies, Inc. and Senior
Vice President and General Counsel
Liberty Funds Group, LLC
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President and Fund Treasurer, A I M N/A
Vice President, Principal Advisors, Inc.; and Vice President,
Financial Officer and Treasurer and Principal Officer of The
Treasurer AIM Family of Funds--Registered
Trademark--
Formerly: Senior Vice President, AIM
Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Director of Cash Management and Senior N/A
Vice President Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Director
and President, Fund Management Company;
Vice President, The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); and
President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust Only)
Formerly: Chief Cash Management Officer
and Managing Director, A I M Capital
Management, Inc.; Vice President, A I M
Advisors, Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Patrick J.P. Farmer -- 1962 2007 Head of North American Retail N/A
Vice President Investments, Director, Chief Investment
Officer and Executive Vice President,
AIM Funds Management Inc. d/b/a AIM
Trimark Investments; Senior Vice
President and Head of Equity
Investments, A I M Advisors, Inc. and
A I M Capital Management, Inc.; and Vice
President, The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Trimark Trust
- -------------------------------------------------------------------------------------------------------------------------
Stephen M. Johnson -- 1961 2007 Chief Investment Officer of INVESCO N/A
Vice President Fixed Income and Vice President, INVESCO
Institutional (N.A.), Inc; Senior Vice
President and Fixed Income Chief
Investment Officer, A I M Advisors, Inc.
and A I M Capital Management, Inc.; and
Vice President, The AIM Family of
Funds--Registered Trademark--
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc., Fund Management
Company and The AIM Family of
Funds--Registered Trademark--
Formerly: Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc.; and Vice
President, A I M Distributors, Inc., AIM
Investment Services, Inc. and Fund
Management Company
Formerly: Vice President, A I M Capital
Management, Inc.; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; Chief Compliance Officer
and Deputy General Counsel,
AIG-SunAmerica Asset Management; and
Chief Compliance Officer, Chief
Operating Officer and Deputy General
Counsel, American General Investment
Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment The Bank of New York
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. 2 Hanson Place
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Brooklyn, NY 11217-1431
Floor 1177 Avenue of the Houston, TX 77210-4739
Philadelphia, PA 19103-7599 Americas
New York, NY 10036-2714
</Table>
F-30
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[YOUR GOALS. OUR SOLUTIONS.]
--REGISTERED TRADEMARK--
===================================================================================
Mutual Exchange- Retirement Annuities College Separately Offshore Cash [AIM INVESTMENTS LOGO]
Funds Traded Products Savings Managed Products Management --REGISTERED TRADEMARK--
Funds Plans Accounts
===================================================================================
AIM TAX-EXEMPT CASH FUND
Annual Report to Shareholders o March 31, 2007
[COVER GLOBE IMAGE]
FIXED INCOME
Cash Equivalents
Table of Contents
Supplemental Information ................. 2
Letters to Shareholders .................. 3
Fund Yields
and Portfolio Composition ................ 5
Fund Expenses ............................ 6
Schedule of Investments .................. F-1
Financial Statements ..................... F-5
Notes to Financial Statements ............ F-8
Financial Highlights ..................... F-11
Auditor's Report ......................... F-13
Tax Information .......................... F-14
Trustees and Officers .................... F-15
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- --Registered Trademark--
AIM TAX-EXEMPT CASH FUND
AIM TAX-EXEMPT CASH FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE AS HIGH A LEVEL OF
TAX-EXEMPT INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL AND
LIQUIDITY.
o Unless otherwise stated, information presented in this report is as of March
31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management
Group Inc.
ABOUT SHARE CLASSES o The prices of and the income generated The Fund provides a complete list of its
by securities held by the Fund may decline holdings four times in each fiscal year,
o Investor Class shares are closed to most in response to certain factors, including at the quarter-ends. For the second and
investors. For more information on who may some directly involving the issuers (or, fourth quarters, the lists appear in the
continue to invest in Investor Class in the case of industrial development Fund's semiannual and annual reports to
shares, please see the prospectus. revenue bonds, the company for whose shareholders. For the first and third
benefit the bonds are issued). These quarters, the Fund files the lists with
PRINCIPAL RISKS OF INVESTING IN THE FUND factors include general economic and the Securities and Exchange Commission
market conditions, regional or global (SEC) on Form N-Q. The most recent list of
o The Fund may invest in debt securities economic instability and interest rate portfolio holdings is available at
such as notes and bonds that carry fluctuations. AIMinvestments.com. From our home page,
interest rate risk and credit risk. click on Products & Performance, then
o The tax-exempt character of the interest Mutual Funds, then Fund Overview. Select
o There is no guarantee that the paid on synthetic municipal securities is your Fund from the drop-down menu and
investment techniques and risk analyses based on the tax-exempt income stream from click on Complete Quarterly Holdings.
used by the Fund's managers will produce the collateral. The Internal Revenue Shareholders can also look up the Fund's
the desired results. Service has not ruled on this issue and Forms N-Q on the SEC Web site at sec.gov.
could deem income derived from synthetic Copies of the Fund's Forms N-Q may be
o The value of, payment of interest and municipal securities to be taxable. reviewed and copied at the SEC Public
repayment of principal by, and the ability Reference Room in Washington, D.C. You can
of the Fund to sell a municipal security o U.S. dollar denominated securities which obtain information on the operation of the
may be affected by constitutional carry foreign credit exposure may be Public Reference Room, including
amendments, legislative enactments, affected by unfavorable political, information about duplicating fee charges,
executive orders, administrative economic or governmental developments by calling 202-942-8090 or 800-732-0330,
regulations and voter initiatives as well that could affect the repayment of or by electronic request at the
as the economies of the regions in which principal or the payment of interest. following e-mail address:
the Fund invests. publicinfo@sec.gov. The SEC file numbers
for the Fund are 811-07890 and 033-66242.
o Because the Fund may invest a relatively
high percentage of its total assets in A description of the policies and
municipal securities issued by entities procedures that the Fund uses to determine
having similar characteristics, the value how to vote proxies relating to portfolio
of your shares may rise and fall more than securities is available without charge,
the shares of a fund that invests in a upon request, from our Client Services
broader range of securities. department at 800-959-4246 or on the AIM
Web site, AIMinvestments.com. On the home
o The Fund's yield will vary as short-term page, scroll down and click on AIM Funds
securities in its portfolio mature and the Proxy Policy. The information is also
proceeds are reinvested in securities available on the SEC Web site, sec.gov.
with different interest rates.
Information regarding how the Fund voted
proxies related to its portfolio
securities during the 12 months ended June
30, 2006, is available at our Web site. Go
to AIMinvestments.com, access the About Us
tab, click on Required Notices and then
click on Proxy Voting Activity. Next,
select the Fund from the drop-down menu.
The information is also available on the
SEC Web site, sec.gov.
======================================================================================= ==========================================
PERFORMANCE QUOTED IS PAST PERFORMANCE AND CANNOT GUARANTEE COMPARABLE FUTURE RESULTS; FUND NASDAQ SYMBOLS
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. VISIT AIMINVESTMENTS.COM FOR THE MOST
RECENT MONTH-END PERFORMANCE. Class A Shares ACSXX
======================================================================================= Investor Class Shares TEIXX
AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE ==========================================
CORPORATION OR ANY OTHER GOVERNMENT AGENCY AND IS NOT A DEPOSIT OR OTHER OBLIGATION OF,
OR GUARANTEED BY, A DEPOSITORY INSTITUTION. ALTHOUGH THE FUND SEEKS TO PRESERVE THE
VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING
IN THE FUND.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS,
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
=======================================================================================
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
AIMINVESTMENTS.COM
2
AIM TAX-EXEMPT CASH FUND
DEAR FELLOW AIM FUND SHAREHOLDERS:
Your AIM Funds Board started 2007 committed to continue working with management
at A I M Advisors, Inc. (AIM) with the goal of improving performance and
[CROCKETT lowering shareholder expenses for the AIM Funds.
PHOTO]
The progress made to date is encouraging. Following the general trends of
global equity markets and the U.S. stock market, the asset-weighted absolute
Bruce L. Crockett performance for all the money market, equity and fixed-income AIM Funds improved
for the one-year period ended December 31, 2006, as compared to the one-year
period ended December 31, 2005, and the one-year period ended December 31,
2004.(1)
In November, your Board approved, subject to shareholder vote, four more AIM
Fund consolidations. As always, these decisions were made to benefit existing
shareholders and were driven by a desire to improve the merged funds'
performance, attract new assets and reduce costs. The asset class subcommittees
of your Board's Investments Committee are meeting frequently with portfolio
managers to identify how performance might be further improved.
On the expense side, both AMVESCAP, the parent company of AIM, and AIM
continue to take advantage of opportunities for operational consolidation,
outsourcing and new technologies to improve cost efficiencies for your benefit.
Your Board, for example, takes advantage of effective software solutions that
enable us to save money through electronic information sharing. Additional
cost-saving steps are under way. I'll report more on these steps once they're
completed.
Another major Board initiative for early 2007 is the revision of the AIM
Funds' proxy voting guidelines, a project begun by a special Board task force
late last year. We expect to have new procedures in place for the 2007 spring
proxy season that will improve the ability of the AIM Funds to cast votes that
are in the best interests of all fund shareholders.
While your Board recognizes that additional work lies ahead, we are gratified
that some key external sources have recognized changes at AIM and the AIM Funds
in the past two years. An article in the November 21, 2006, issue of Morningstar
Report (Morningstar, Inc. is a leading provider of independent mutual fund
investment research) included a review of AIM's progress, highlighting lower
expenses, stronger investment teams and an improved sales culture, as well as
areas for continued improvement. I'm looking forward to a return visit to
Morningstar this year to review AIM Funds' performance and governance ratings.
Your Board thanks Mark Williamson, former President and CEO of AIM
Investments, who retired from your Board in 2006. He has been succeeded on your
Board by Phil Taylor, President of AIM Funds. We extend a warm welcome to Phil.
I'd like to hear from you. Please write to me at AIM Investments, AIM
Investments Tower, 11 Greenway Plaza, Suite 100, Houston TX 77046. Let me know
your thoughts on how your Board is doing and how we might serve you better.
Sincerely,
/s/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board
May 17, 2007
Sources: A I M Management Group Inc. and Lipper Inc.
(1) Past performance is no guarantee of future results. Please visit
AIMinvestments.com for the most recent month-end performance for all AIM
funds.
3
AIM TAX-EXEMPT CASH FUND
DEAR SHAREHOLDERS OF THE AIM FAMILY OF FUNDS --REGISTERED TRADEMARK--:
We are pleased to present this annual report on the performance of AIM
Tax-Exempt Cash Fund for the 12 months ended March 31, 2007. The seven-day SEC
yields (and their taxable equivalents) for the Fund's two share classes as of
[TAYLOR the close of the fiscal year are shown on page 5. As of March 31, 2007, the
PHOTO] Fund's weighted average maturity stood at 23 days and its total net assets were
$51.00 million.
Philip Taylor HOW WE INVEST
We seek to provide as high a level of tax-exempt income as is consistent with
preservation of capital and maintenance of liquidity. We invest in high-quality,
short-term municipal obligations, focusing on:
o Safety, or preservation of capital, through rigorous credit analysis.
o Liquidity, through a combination of short-term cash management vehicles and
selective use of longer maturity investments.
o Yield that is exempt from federal income tax.
The overall portfolio's structure depends on the supply and availability of
municipal securities. Liquidity is managed using daily and weekly variable-rate
demand notes. We may sell a security when there has been a negative change in an
issuer's credit quality or because we can earn a higher yield elsewhere.
One of the goals of money market funds, including AIM Tax-Exempt Cash Fund,
is to preserve the value of an investment by maintaining a $1.00 per share net
asset value. However, the Fund's shares are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency, so it is
possible to lose money by investing in the Fund.
MARKET CONDITIONS AFFECTING MONEY MARKET FUNDS
The U.S. economy expanded throughout the period covered by this report. Gross
domestic product (GDP) rose at an annualized rate of 2.6%, 2.0% and 2.5% in the
second, third and fourth quarters of 2006, respectively.(1) Early estimates put
first-quarter 2007 GDP growth at an annualized rate of 1.3%.(1)
In June 2006, the U.S. Federal Reserve Board (the Fed) raised its federal
funds target rate by 25 basis points (0.25%)--concluding a two-year tightening
cycle that saw the federal funds target rate rise from 1.0% to 5.25%.(2) From
August 2006 to the close of the fiscal year, the Fed kept this key rate
unchanged.(2) Increases in the federal funds target rate are reflected fairly
rapidly in the yields of money market funds and other fixed income funds that
invest primarily in short-term securities.
At their meeting in March 2007, Fed officials noted that while recent
economic indicators were mixed, "the economy seems likely to continue to expand
at a moderate pace over coming quarters."(2) They also noted that "recent
readings on core inflation have been somewhat elevated" and that they remained
concerned that inflation will fail to moderate as expected.(2)
Economic uncertainty contributed to an inverted yield curve for most of the
fiscal year--meaning that short-term U.S. Treasury bonds generally yielded more
than long-term Treasuries, a reversal of the norm. At the close of the fiscal
year, three-month Treasury securities yielded 5.03% while 30-year Treasury bonds
yielded 4.84%.(3)
4
AIM TAX-EXEMPT CASH FUND
IN CONCLUSION
All of us at AIM Investments are committed to the goals of safety, liquidity and
yield in money market fund management. We are also dedicated to excellence in customer
service. Should you have questions about your account, please contact one of our highly
trained client services representatives at 800-959-4246.
Sincerely,
/s/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
May 17, 2007
Sources: (1) Bureau of Economic Analysis; (2) U.S. Federal Reserve Board; (3)
Lehman Brothers Inc.
The views and opinions expressed in this letter are those of A I M Advisors,
Inc. These views and opinions are subject to change at any time based on factors
such as market and economic conditions. These views and opinions may not be
relied upon as investment advice or recommendations, or as an offer for a
particular security. Statements of fact are from sources considered reliable,
but A I M Advisors, Inc. makes no representation or warranty as to their
completeness or accuracy. Although historical performance is no guarantee of
future results, these insights may help you understand our investment management
philosophy.
================================================================================
AIM TAX-EXEMPT CASH FUND SEVEN-DAY SEC YIELDS
As of 3/31/07
Taxable
Equivalent
7-Day SEC 7-Day SEC
Yield Had Yield Had
Fees Not Fees Not
Taxable Been Waived Been Waived
7-Day Equivalent and/or and/or
SEC 7-Day Expenses Expenses
Yield SEC Yield* Reimbursed Reimbursed*
Class A Shares 2.75% 4.23% 2.61% 4.02%
Investor Class Shares 2.85 4.38 2.85 4.38
*Based on the highest personal income tax rate in effect on March 31, 2007--35%.
Yields will fluctuate. Had the advisor not waived fees and/or reimbursed
expenses on Class A shares, performance would have been lower.
================================================================================
==========================================
PORTFOLIO COMPOSITION BY MATURITY
In days, as of 3/31/07
1-7 84.2%
8-30 0.0
31-60 4.2
61-90 5.3 The number of days to maturity of each
91-120 1.2 holding is determined in accordance with
121-180 1.0 the provisions of Rule 2a-7 under the
181+ 4.1 Investment Company Act of 1940.
==========================================
5
AIM TAX-EXEMPT CASH FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE mate the expenses that you paid over the The hypothetical account values and
period. Simply divide your account value expenses may not be used to estimate the
As a shareholder of the Fund, you incur by $1,000 (for example, an $8,600 account actual ending account balance or expenses
ongoing costs, including management fees; value divided by $1,000 = 8.6), then you paid for the period. You may use this
distribution and/or service (12b-1) fees; multiply the result by the number in the information to compare the ongoing costs
and other Fund expenses. This example is table under the heading entitled "Actual of investing in the Fund and other funds.
intended to help you understand your Expenses Paid During Period" to estimate To do so, compare this 5% hypothetical
ongoing costs (in dollars) of investing in the expenses you paid on your account example with the 5% hypothetical
the Fund and to compare these costs with during this period. examples that appear in the shareholder
ongoing costs of investing in other mutual reports of the other funds.
funds. The example is based on an HYPOTHETICAL EXAMPLE FOR COMPARISON
investment of $1,000 invested at the PURPOSES Please note that the expenses shown in
beginning of the period and held for the the table are meant to highlight your
entire period October 1, 2006, through The table below also provides information ongoing costs only. Therefore, the
March 31, 2007. about hypothetical account values and hypothetical information is useful in
hypothetical expenses based on the Fund's comparing ongoing costs only, and will not
ACTUAL EXPENSES actual expense ratio and an assumed rate help you determine the relative total
of return of 5% per year before expenses, costs of owning different funds.
The table below provides information about which is not the Fund's actual return.
actual account values and actual expenses.
You may use the information in this table,
together with the amount you invested, to
esti-
====================================================================================================================================
ACTUAL HYPOTHETICAL
(5% ANNUAL RETURN BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/1/06) (3/31/07)(1) PERIOD(2) (3/31/07) PERIOD(2) RATIO
A $1,000.00 $1,013.40 $5.17 $1,019.80 $5.19 1.03%
Investor 1,000.00 1,013.90 4.67 1,020.29 4.68 0.93
(1) The actual ending account value is based on the actual total return of the Fund for the period October 1, 2006, through March
31, 2007, after actual expenses and will differ from the hypothetical ending account value, which is based on the Fund's
expense ratio and a hypothetical annual return of 5% before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the
period, multiplied by 182/365 to reflect the most recent fiscal half year.
====================================================================================================================================
6
AIM Tax-Exempt Cash Fund
SCHEDULE OF INVESTMENTS
March 31, 2007
<Table>
<Caption>
PRINCIPAL
RATINGS(A) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-98.78%
ALABAMA-5.39%
Oxford (City of); Series 2003, Unlimited Tax
VRD GO Wts. (LOC-Branch Banking & Trust
Co.) 3.75%, 07/01/15(b)(c) -- VMIG-1 $2,765 $ 2,765,000
========================================================================================
COLORADO-2.73%
Arvada (City of); Series 2001, Water
Enterprise VRD RB (INS-Financial Securities
Assurance Inc.) 3.70%, 11/01/20(c)(d) A-1+ -- 700 700,000
- ----------------------------------------------------------------------------------------
Concord (Metropolitan District of); Series
2004, Refunding & Improvement Unlimited Tax
VRD GO (LOC-Wells Fargo Bank, N.A.) 3.75%,
12/01/29(b)(c) A-1+ -- 700 700,000
========================================================================================
1,400,000
========================================================================================
DISTRICT OF COLUMBIA-5.25%
District of Columbia (National Academy of
Sciences Project); Series 1999 B,
Commercial Paper Variable Rate RB
(INS-Ambac Assurance Corp.) 3.57%,
04/04/07(c)(d) A-1+ -- 750 750,000
- ----------------------------------------------------------------------------------------
District of Columbia (Resources for the
Future Inc.); Series 1998, VRD RB
(LOC-Citibank N.A.) (Acquired 01/03/06;
Cost $1,945,000) 3.68%,
08/01/29(b)(c)(e)(f) -- -- 1,945 1,945,000
========================================================================================
2,695,000
========================================================================================
FLORIDA-1.66%
JEA Water and Sewer System; Series 2002 B, RB
(INS-Financial Security Assurance Inc.)
5.25%, 10/01/07(d) AAA Aaa 250 252,036
- ----------------------------------------------------------------------------------------
Seminole (County of) Industrial Development
Authority (Florida Living Nursing Center,
Inc); Series 1991, Multi-Modal Health
Facilities VRD IDR (LOC-Bank of America,
N.A.) 3.85%, 02/01/11(b)(c) -- VMIG-1 600 600,000
========================================================================================
852,036
========================================================================================
</Table>
<Table>
PRINCIPAL
RATINGS(A) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
GEORGIA-5.07%
Atlanta (City of) Series 2006-1, Water &
Wastewater Revenue; Commercial Paper Notes
(Multi LOC's-Bank of America, N.A., Dexia
Group S.A., Lloyds Bank, JPMorgan Chase
Bank, N.A.) 3.66%, 11/02/07(b)(g) A-1+ P-1 $ 300 $ 300,000
- ----------------------------------------------------------------------------------------
Floyd (County of) Development Authority
(Shorter College Project); Series 1998, VRD
RB (LOC-SunTrust Bank) 3.70%,
06/01/17(b)(c) A-1+ -- 1,100 1,100,000
- ----------------------------------------------------------------------------------------
Tallapoosa (City of) Development Authority
(U.S. Can Co. Project); Series 1994,
Refunding VRD IDR (LOC-Deutsche Bank A.G.)
3.95%, 02/01/15(b)(c)(g) A-1 -- 1,200 1,200,000
========================================================================================
2,600,000
========================================================================================
IDAHO-1.56%
Custer (County of) Pollution Control (Amoco
Oil Co.-Standard Oil Industry Project);
Series 1983, VRD PCR
3.55%, 10/01/09(c)(g) A-1+ -- 800 800,000
========================================================================================
ILLINOIS-8.35%
Cook (County of) Community College District
No. 524-Moraine Valley Community College
Series 2007 A, Unlimited Tax GO 5.00%,
12/01/07 -- Aa1 500 504,537
- ----------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (Countryside Montessori Schools,
Inc. Project); Series 1997, VRD IDR
(LOC-LaSalle Bank, N.A.) (Acquired
02/09/07; Cost $780,000) 3.73%,
06/01/17(b)(c)(f) A-1 -- 780 780,000
- ----------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (Institute of Gas Technology
Project); Series 1999, VRD IDR (LOC-Harris
N.A.) 3.75%, 09/01/24(b)(c) A-1+ -- 1,900 1,900,000
- ----------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Lake County Family YMCA); Series
2000, VRD RB (LOC-Harris N.A.) 3.73%,
11/01/30(b)(c) A-1+ -- 1,100 1,100,000
========================================================================================
4,284,537
========================================================================================
</Table>
F-1
AIM Tax-Exempt Cash Fund
<Table>
<Caption>
PRINCIPAL
RATINGS(A) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
INDIANA-3.02%
Fort Wayne (City of) (Health Quest Realty X
Issue) Series 1993 A, Indiana Health Care
Facilities Refunding VRD RB (CEP-Federal
Housing Administration) 3.83%, 08/01/13(c) -- VMIG-1 $ 655 $ 655,000
- ----------------------------------------------------------------------------------------
Indiana (State of) Health Facility Financing
Authority (Stone Belt Arc, Inc. Project);
Series 2005, VRD RB (LOC-JPMorgan Chase
Bank, N.A.)
3.95%, 02/01/25(b)(c) -- VMIG-1 895 895,000
========================================================================================
1,550,000
========================================================================================
IOWA-5.16%
Iowa (State of) Finance Authority (YMCA
Project); Series 2000, Economic Development
VRD RB (LOC-Wells Fargo Bank, N.A.) 3.75%,
06/01/10(b)(c)(e) -- -- 2,650 2,650,000
========================================================================================
KENTUCKY-7.74%
Ewing (City of) Kentucky Area Development
Districts Financing Trust; Series 2000,
Lease Acquisition Program VRD RB
(LOC-Wachovia Bank, N.A.) 3.76%,
06/01/33(b)(c)(h) A-1+ -- 3,969 3,969,000
========================================================================================
MARYLAND-5.72%
Baltimore (County of) (Blue Circle Inc.
Project); Series 1992, Economic Development
Refunding VRD RB (LOC-BNP Paribas) 3.73%,
12/01/17(b)(c)(g)(h) -- VMIG-1 2,030 2,030,000
- ----------------------------------------------------------------------------------------
Queen Anne's (County of) (Safeway Inc.
Project); Series 1994, Economic Development
Refunding VRD RB (LOC-Deutsche Bank A.G.)
3.85%, 12/01/09(b)(c)(g) A-1 -- 905 905,000
========================================================================================
2,935,000
========================================================================================
MASSACHUSETTS-0.49%
Massachusetts (Commonwealth of); Series 1997
C, Consolidated Loan Refunding Limited Tax
GO 5.00%, 08/01/07(i)(j) AAA Aaa 250 253,601
========================================================================================
MICHIGAN-7.09%
Detroit (City of); Series 2001 A-1, Unlimited
Tax GO (INS-MBIA Insurance Corp.) 4.00%,
04/01/07(d) AAA Aaa 500 500,000
- ----------------------------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
RATINGS(A) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
MICHIGAN-(CONTINUED)
Kalamazoo (County of) Public Schools; Series
2006, School Building and Site Refunding
Unlimited Tax GO (INS-Financial Securities
Assurance Inc.) 4.00%, 05/01/07(d) AAA Aaa $ 390 $ 390,086
- ----------------------------------------------------------------------------------------
Oakland (County of) Economic Development
Corp. (Rochester College Project); Series
2001, Limited Obligation VRD RB
(LOC-JPMorgan Chase Bank, N.A.)
3.73%, 08/01/21(b)(c)(h) -- VMIG-1 2,406 2,406,000
- ----------------------------------------------------------------------------------------
Warren (City of) Consolidated Schools
District; Series 2003, Limited Tax GO
(INS-Financial Guaranty Insurance Co.)
5.00%, 05/01/07(d) AAA Aaa 340 340,465
========================================================================================
3,636,551
========================================================================================
MISSOURI-0.20%
Kansas City (City of) Industrial Development
Authority (Ewing Marion Kauffman
Foundation); Series 1997 B, RB
5.70%, 04/01/07(i)(j) AAA -- 100 100,000
========================================================================================
NEW YORK-0.20%
New York (State of) Thruway Authority;
Highway and Bridge Trust Fund Series 1997
A, RB 5.25%, 04/01/07(i)(j) AAA Aaa 100 102,000
========================================================================================
NORTH DAKOTA-8.26%
Fargo (City of) (Cass Oil Co. Project);
Series 1984, Commercial Development VRD RB
(LOC-U.S. Bank N.A.) 3.83%, 12/01/14(b)(c) A-1+ -- 4,240 4,240,000
========================================================================================
OKLAHOMA-2.44%
Tulsa (County of) Industrial Authority;
Series 2003 A,
Capital Improvements VRD RB 3.60%,
05/15/17(c) A-1+ -- 650 650,000
- ----------------------------------------------------------------------------------------
Series 2006 D,
Capital Improvements RB (INS-Financial
Securities Assurance Inc.)
4.25%, 07/01/07(d) AAA -- 600 601,006
========================================================================================
1,251,006
========================================================================================
</Table>
F-2
AIM Tax-Exempt Cash Fund
<Table>
<Caption>
PRINCIPAL
RATINGS(A) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
PENNSYLVANIA-0.58%
Cumberland (County of) Municipal Authority
(Dickinson College); Series 1996 B, VRD RB
(LOC-Citizens Bank of Pennsylvania) 3.63%,
11/01/26(b)(c) A-1+ -- $ 300 $ 300,000
========================================================================================
TENNESSEE-3.50%
Hawkins (County of) Industrial Development
Board (Leggett & Platt Inc.); Series 1988
B, Refunding VRD IDR (LOC-Wachovia Bank,
N.A.) 3.81%, 10/01/27(b)(c)(e) -- -- 1,450 1,450,000
- ----------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority;
Series 1995 A-1, Local Government Public
Improvement VRD RB (INS-Ambac Assurance
Corp.)
3.69%, 06/01/15(c)(d)(h) -- VMIG-1 347 347,000
========================================================================================
1,797,000
========================================================================================
TEXAS-12.27%
Denton (County of) Upper Trinity Regional
Water District; Series A Commercial Paper
Notes (LOC-Bank of America, N.A.) 3.57%,
06/18/07(b) A-1+ P-1 800 800,000
- ----------------------------------------------------------------------------------------
Garland (City of) Industrial Development
Authority, Inc. (Carroll Co. Project);
Series 1984, VRD IDR (LOC-Wells Fargo Bank,
N.A.) (Acquired 09/12/05; Cost $2,800,000)
3.73%, 12/01/14(b)(c)(f) -- Aaa 2,800 2,800,000
- ----------------------------------------------------------------------------------------
Harris (County of); Series A-1, General
Obligation Commercial Paper Notes
3.70%, 06/18/07 A-1+ P-1 250 250,000
- ----------------------------------------------------------------------------------------
Houston (City of); Series 2004 D General
Obligation Commercial Paper Notes
3.60%, 05/23/07 A-1+ P-1 750 750,000
- ----------------------------------------------------------------------------------------
Series 2003 E General Obligation Commercial
Paper Notes
3.65%, 06/13/07 A-1+ P-1 750 750,000
- ----------------------------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
RATINGS(A) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
TEXAS-(CONTINUED)
Sherman (City of) Higher Education Finance
Corp. (Austin College Project); Series
1997, Higher Education VRD RB (LOC-Bank of
America, N.A.) 3.71%, 01/01/18(b)(c)(h) A-1+ -- $ 694 $ 694,000
- ----------------------------------------------------------------------------------------
Texas (State of); Series 2006, TRAN 4.50%,
08/31/07 SP-1+ MIG-1 250 250,869
========================================================================================
6,294,869
========================================================================================
WASHINGTON-9.14%
Seattle (Port of) Industrial Development
Corp. (Sysco Food Services of Seattle, Inc.
Project); Series 1994, Refunding VRD IDR
3.78%, 11/01/25(c)(h) A-1+ VMIG-1 2,187 2,187,000
- ----------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority (Swedish Health Services); Series
2006, VRD RB (LOC-Citibank N.A.) (Acquired
01/01/07; Cost $2,500,000) 3.75%,
11/15/26(b)(c)(f)(h) A-1+ VMIG-1 2,500 2,500,000
========================================================================================
4,687,000
========================================================================================
WISCONSIN-2.96%
Kimberly (Village of) (Fox Cities YMCA
Project); Series 2002, VRD RB (LOC-M&I
Marshall & Ilsley Bank)
3.78%, 04/01/32(b)(c) -- VMIG-1 1,520 1,520,000
========================================================================================
TOTAL INVESTMENTS-98.78% (Cost
$50,682,600)(k)(l) 50,682,600
========================================================================================
OTHER ASSETS LESS
LIABILITIES-1.22% 626,562
========================================================================================
NET ASSETS-100.00% $51,309,162
________________________________________________________________________________________
========================================================================================
</Table>
F-3
AIM Tax-Exempt Cash Fund
Investment Abbreviations:
<Table>
CEP - Credit Enhancement Provider
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
INS - Insurer
LOC - Letter of Credit
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service. Inc. ("Moody's"), except as indicated in note (e) below.
Ratings are not covered by the Report of Independent Registered Public
Accounting Firm.
(b) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(c) Demand security payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined periodically.
Rate shown is the rate in effect on March 31, 2007.
(d) Principal and/or interest payments are secured by the bond insurance company
listed.
(e) Unrated security; determined by the investment advisor to be of comparable
quality to the rated securities in which the Fund may invest pursuant to
guidelines of quality adopted by the Board of Trustees and followed by the
investment advisor.
(f) 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 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 value of these securities at March 31, 2007 was $8,025,000,
which represented 15.64% of the Fund's Net Assets. Unless otherwise
indicated, these securities are not considered to be illiquid.
(g) The security is credit guaranteed, enhanced or has credit risk by a foreign
entity. No concentration of any single foreign country was greater than 5%.
(h) In accordance with the procedures established by the Board of Trustees,
investments 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.
(i) Advance refunded; secured by an escrow fund of U.S. Government obligations.
(j) Security has an irrevocable call by the issuer or mandatory put by the
holder. Maturity date reflects such call or put.
(k) This table provides a listing of those entities that have either issued,
guaranteed, backed or otherwise enhanced the credit quality of more than 5%
of the securities held in the portfolio. In instances where the entity has
guaranteed, backed or otherwise enhanced the credit quality of a security,
it is not primarily responsible for the issuer's obligations but may be
called upon to satisfy the issuer's obligations.
<Table>
<Caption>
ENTITIES PERCENTAGE
------------------------------------------------------------------------
Wells Fargo Bank, N.A. 12.0%
------------------------------------------------------------------------
Wachovia Bank, N.A. 10.6
------------------------------------------------------------------------
Citibank N.A. 8.7
------------------------------------------------------------------------
U.S. Bank, N.A. 8.3
------------------------------------------------------------------------
JPMorgan Chase Bank, N.A. 6.6
------------------------------------------------------------------------
Harris N.A. 5.8
------------------------------------------------------------------------
Branch Banking & Trust Co. 5.4
________________________________________________________________________
========================================================================
</Table>
(l) Also represents cost for federal income tax purposes.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-4
AIM Tax-Exempt Cash Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2007
<Table>
ASSETS:
Investments, at value (cost $50,682,600) $50,682,600
- -----------------------------------------------------------
Receivables for:
Investments sold 220,000
- -----------------------------------------------------------
Fund shares sold 226,402
- -----------------------------------------------------------
Interest 275,226
- -----------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 68,322
- -----------------------------------------------------------
Other assets 20,076
===========================================================
Total assets 51,492,626
___________________________________________________________
===========================================================
LIABILITIES:
Payables for:
Fund shares reacquired 35,245
- -----------------------------------------------------------
Dividends 2,516
- -----------------------------------------------------------
Trustee deferred compensation and retirement
plans 74,682
- -----------------------------------------------------------
Accrued distribution fees 3,253
- -----------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 3,967
- -----------------------------------------------------------
Accrued transfer agent fees 16,181
- -----------------------------------------------------------
Accrued operating expenses 47,620
===========================================================
Total liabilities 183,464
===========================================================
Net assets applicable to shares outstanding $51,309,162
___________________________________________________________
===========================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $51,287,630
- -----------------------------------------------------------
Undistributed net investment income 21,532
===========================================================
$51,309,162
___________________________________________________________
===========================================================
NET ASSETS:
Class A $38,105,682
___________________________________________________________
===========================================================
Investor Class $13,203,480
___________________________________________________________
===========================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES AUTHORIZED:
Class A 38,098,155
___________________________________________________________
===========================================================
Investor Class 13,228,631
___________________________________________________________
===========================================================
Net asset value, offering and redemption
price per share for each class $ 1.00
___________________________________________________________
===========================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-5
AIM Tax-Exempt Cash Fund
STATEMENT OF OPERATIONS
For the year ended March 31, 2007
<Table>
INVESTMENT INCOME:
Interest $1,808,638
========================================================================
EXPENSES:
Advisory fees 173,484
- ------------------------------------------------------------------------
Administrative services fees 50,000
- ------------------------------------------------------------------------
Custodian fees 3,174
- ------------------------------------------------------------------------
Distribution fees -- Class A 90,653
- ------------------------------------------------------------------------
Transfer agent fees 83,485
- ------------------------------------------------------------------------
Trustees' and officer's fees and benefits 17,267
- ------------------------------------------------------------------------
Registration and filing fees 51,555
- ------------------------------------------------------------------------
Professional services fees 54,033
- ------------------------------------------------------------------------
Other 30,769
========================================================================
Total expenses 554,420
========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement (59,369)
========================================================================
Net expenses 495,051
========================================================================
Net investment income 1,313,587
========================================================================
Net increase in net assets resulting from operations $1,313,587
________________________________________________________________________
========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-6
AIM Tax-Exempt Cash Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2007 and 2006
<Table>
<Caption>
2007 2006
- -----------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,313,587 $ 1,077,521
=========================================================================================
Distributions to shareholders from net investment income:
Class A (950,591) (774,642)
- -----------------------------------------------------------------------------------------
Investor Class (362,996) (302,879)
=========================================================================================
Decrease in net assets resulting from distributions (1,313,587) (1,077,521)
=========================================================================================
Share transactions-net:
Class A 277,094 (9,085,283)
- -----------------------------------------------------------------------------------------
Investor Class (1,201,141) (2,810,363)
=========================================================================================
Net increase (decrease) in net assets resulting from
share transactions (924,047) (11,895,646)
=========================================================================================
Net increase (decrease) in net assets (924,047) (11,895,646)
=========================================================================================
NET ASSETS:
Beginning of year 52,233,209 64,128,855
=========================================================================================
End of year (including undistributed net investment income
of $21,532 and $21,532, respectively) $51,309,162 $ 52,233,209
_________________________________________________________________________________________
=========================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-7
AIM Tax-Exempt Cash Fund
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Cash Fund (the "Fund") is a series portfolio of AIM Tax-Exempt
Funds (the "Trust"). The Trust is a Delaware statutory trust registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of three separate portfolios,
each authorized to issue an unlimited number of shares of beneficial interest.
The Fund currently consists of multiple classes of shares. Matters affecting
each portfolio or class will be voted on exclusively by the shareholders of such
portfolio. The assets, liabilities and operations of each portfolio or class 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 tax-exempt
income as is consistent with the preservation of capital and maintenance of
liquidity.
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 recorded on the basis of
amortized cost which approximates value as permitted by Rule 2a-7 under 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. 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 may receive proceeds from litigation settlements involving Fund
investments. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized gain (loss) from
investment securities reported in the Statement of Operations and the
Statement of Changes in Net Assets and the realized net gains (losses) on
securities per share in the Financial Highlights. Transaction costs are
included in the calculation of the Fund's net asset value and, accordingly,
they reduce the Fund's total returns. These transaction costs are not
considered operating expenses and are not reflected in net investment
income reported in the Statement of Operations and Statement of Changes in
Net Assets, or the net investment income per share and ratios of expenses
and net investment income reported in the Financial Highlights, nor are
they limited by any expense limitation arrangements between the Fund and
the advisor.
The Fund allocates realized 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.
C. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, AIM may
determine the country in which an issuer is located and/or credit risk
exposure based on various factors. These factors include the laws of the
country under which the issuer is organized, where the issuer maintains a
principal office, the country in which the issuer derives 50% or more of
its total revenues and the country that has the primary market for the
issuer's securities, as well as other criteria. Among the other criteria
that may be evaluated for making this determination are the country in
which the issuer maintains 50% or more of its assets, the type of security,
financial guarantees and enhancements, the nature of the collateral and the
sponsor organization. Country of issuer and/or credit risk exposure has
been determined to be the United States of America unless otherwise noted.
D. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to treat a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable and tax-exempt earnings to shareholders. As such, the Fund
will not be subject to federal income taxes on otherwise taxable income
(including net realized capital gain) that is distributed to shareholders.
Therefore, no provision for federal income taxes is recorded in the
financial statements.
In addition, the Fund intends to invest in such municipal securities to
allow it to qualify to pay shareholders "exempt-interest dividends", as
defined in 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.
G. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
F-8
AIM Tax-Exempt Cash Fund
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.35% of the Fund's
average daily net assets.
At the request of the Trustees of the Trust, AMVESCAP PLC ("AMVESCAP")
agreed to reimburse expenses incurred by the Fund in connection with market
timing matters in the AIM Funds, which may include legal, audit, shareholder
reporting, communications and trustee expenses. These expenses along with the
related expense reimbursement are included in the Statement of Operations. For
the year ended March 31, 2007, AMVESCAP reimbursed expenses of the Fund in the
amount of $2,574.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
March 31, 2007, expenses incurred under the agreement are shown in the Statement
of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended March 31, 2007,
expenses incurred under the agreement are shown in the Statement of Operations
as transfer agent fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A and
Investor Class shares of the Fund. The Trust has adopted plans pursuant to Rule
12b-1 under the 1940 Act with respect to the Fund's Class A and Investor Class
shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays ADI
compensation up to a maximum annual rate of 0.25% of the Fund's average daily
net assets of Class A shares. Of the Rule 12b-1 payments, up to 0.25% of the
average daily net assets of Class A shares may be paid to furnish continuing
personal shareholder services to customers who purchase and own the shares of
such classes. Any amounts not paid as a service fee under the Plans would
constitute an asset-based sales charge. National Association of Securities
Dealers ("NASD") Rules also impose a cap on the total sales charges, including
asset-based sales charges that may be paid by any class of shares of the Fund.
ADI has contractually agreed to waive 0.15% of the Rule 12b-1 plan fees of Class
A shares through at least June 30, 2007. Pursuant to the Plans, for the year
ended March 31, 2007, the Class A shares paid $36,261 after ADI waived Plan fees
of $54,392.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM Funds under specified conditions outlined in procedures adopted by the Board
of Trustees of the Trust. The procedures have been designed to ensure that any
purchase or sale of securities by the Fund from or to another fund or portfolio
that is or could be considered an affiliate by virtue of having a common
investment advisor (or affiliated investment advisors), common Trustees and/or
common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined
under the procedures, each transaction is effected at the current market price.
Pursuant to these procedures, for the year ended March 31, 2007, the Fund
engaged in securities sales of $220,000.
NOTE 4--EXPENSE OFFSET ARRANGEMENT
The expense offset arrangement is comprised of transfer agency credits which
result from balances in Demand Deposit Accounts (DDA) used by the transfer agent
for clearing shareholder transactions. For the year ended March 31, 2007, the
Fund received credits from this arrangement, which resulted in the reduction of
the Fund's total expenses of $2,403.
NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2007, the Fund paid legal fees of $4,008 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
F-9
AIM Tax-Exempt Cash Fund
NOTE 6--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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
March 31, 2007.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds as a compensating balance in the account so the custodian
bank can be compensated by earning the additional interest; or (ii) compensate
by paying the custodian bank at a rate agreed upon by the custodian bank and
AIM, not to exceed the contractually agreed upon rate.
NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years March 31, 2007 and 2006
was as follows:
<Table>
<Caption>
2007 2006
- --------------------------------------------------------------------------------------
Distributions paid from Ordinary income -- tax exempt $1,313,587 $1,077,521
______________________________________________________________________________________
======================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS:
As of March 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ---------------------------------------------------------------------------
Undistributed ordinary income-tax exempt $ 76,396
- ---------------------------------------------------------------------------
Temporary book/tax differences (54,864)
- ---------------------------------------------------------------------------
Shares of beneficial interest 51,287,630
===========================================================================
Total net assets $51,309,162
___________________________________________________________________________
===========================================================================
</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 the trustee deferral of compensation and
retirement plan benefits.
The Fund does not have a capital loss carryforward as of March 31, 2007.
NOTE 8--SHARE INFORMATION
The Fund currently consists of two different classes of shares: Class A and
Investor Class. Investor Class shares of the Fund are offered only to certain
grandfathered investors. Class A shares and Investor Class shares are sold at
net asset value.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
----------------------------------------------------------
2007(A) 2006
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 54,951,857 $ 54,951,857 44,179,844 $ 44,179,844
- ------------------------------------------------------------------------------------------------------------------------
Investor Class 8,045,415 8,045,415 13,035,687 13,035,687
========================================================================================================================
Issued as reinvestment of dividends:
Class A 922,101 922,101 663,775 663,775
- ------------------------------------------------------------------------------------------------------------------------
Investor Class 350,054 350,054 290,845 290,845
========================================================================================================================
Reacquired:
Class A (55,596,864) (55,596,864) (53,928,902) (53,928,902)
- ------------------------------------------------------------------------------------------------------------------------
Investor Class (9,596,610) (9,596,610) (16,136,895) (16,136,895)
========================================================================================================================
(924,047) $ (924,047) (11,895,646) $(11,895,646)
________________________________________________________________________________________________________________________
========================================================================================================================
</Table>
(a) There are three individuals that are each record owners of more than 5% of
the outstanding shares of the Fund and they own 32% of the outstanding
shares of the Fund. The Trust has no knowledge as to whether all or any
portion of the shares owned of record by these shareholders are also owned
beneficially.
F-10
AIM Tax-Exempt Cash Fund
NOTE 9--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management is currently
assessing the impact of FIN 48, if any, on the Fund's financial statements and
currently intends for the Fund to adopt FIN 48 provisions during the fiscal year
ending March 31, 2008.
NOTE 10--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
---------------------------------------------------------
YEAR ENDED MARCH 31,
---------------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 0.03 0.02 0.01 0.004 0.01
- -----------------------------------------------------------------------------------------------------------------------
Less dividends from net investment income (0.03) (0.02) (0.01) (0.004) (0.01)
=======================================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(a) 2.66% 1.88% 0.72% 0.41% 0.77%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $38,106 $37,828 $46,914 $75,547 $66,342
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.03%(b) 0.94% 0.80% 0.76% 0.79%
- -----------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.19%(b) 1.09% 1.00% 0.91% 0.94%
=======================================================================================================================
Ratio of net investment income to average net assets 2.62%(b) 1.84% 0.68% 0.40% 0.76%
_______________________________________________________________________________________________________________________
=======================================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions.
(b) Ratios are based on average daily net assets of $36,261,149.
<Table>
<Caption>
INVESTOR CLASS
---------------------------------------------------------
SEPTEMBER 30, 2003
(DATE SALES
YEAR ENDED MARCH 31, COMMENCED) TO
-------------------------------- MARCH 31,
2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 0.03 0.02 0.01 0.002
- -----------------------------------------------------------------------------------------------------------------------
Less dividends from net investment income (0.03) (0.02) (0.01) (0.002)
=======================================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(a) 2.76% 1.98% 0.82% 0.23%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $13,203 $14,405 $17,215 $20,169
=======================================================================================================================
Ratio of expenses to average net assets 0.93%(b)(c) 0.84% 0.70%(c) 0.67%(d)
=======================================================================================================================
Ratio of net investment income to average net assets 2.72%(b) 1.94% 0.78% 0.49%(d)
_______________________________________________________________________________________________________________________
=======================================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(b) Ratios are based on average daily net assets of $13,305,692.
(c) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 0.94% and 0.75% for the years ended March 31, 2007 and March 31,
2005, respectively.
(d) Annualized.
F-11
AIM Tax-Exempt Cash Fund
NOTE 11--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment
advisor to certain AIM Funds), AIM and A I M Distributors, Inc. ("ADI") (the
distributor of the retail AIM Funds) reached final settlements with certain
regulators, including the Securities and Exchange Commission ("SEC"), the New
York Attorney General and the Colorado Attorney General, to resolve civil
enforcement actions and/or investigations related to market timing and related
activity in the AIM Funds, including those formerly advised by IFG. As part of
the settlements, a $325 million fair fund ($110 million of which is civil
penalties) has been created to compensate shareholders harmed by market timing
and related activity in funds formerly advised by IFG. Additionally, AIM and ADI
created a $50 million fair fund ($30 million of which is civil penalties) to
compensate shareholders harmed by market timing and related activity in funds
advised by AIM, which was done pursuant to the terms of the settlement. These
two fair funds may increase as a result of contributions from third parties who
reach final settlements with the SEC or other regulators to resolve allegations
of market timing and/or late trading that also may have harmed applicable AIM
Funds. These two fair funds will be distributed in accordance with a methodology
to be determined by AIM's independent distribution consultant, in consultation
with AIM and the independent trustees of the AIM Funds and acceptable to the
staff of the SEC. Management of AIM and the Fund are unable to estimate the
impact, if any, that the distribution of these two fair funds may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs and an
"administrative assessment," to be determined by the Commissioner. Initial
research indicates that these damages could be limited or capped by statute. By
agreement with the Commissioner of Securities, AIM's time to respond to that
Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds;
- that certain AIM Funds inadequately employed fair value pricing; and
- that the defendants improperly used the assets of the AIM Funds to pay
brokers to aggressively promote the sale of the AIM Funds over other
mutual funds and that the defendants concealed such payments from
investors by disguising them as brokerage commissions.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid, an accounting of all fund-related fees,
commissions and soft dollar payments, restitution of all commissions and fees
paid, and prospective relief in the form of reduced fees.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in AMVESCAP's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the AMVESCAP defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
F-12
AIM Tax-Exempt Cash Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Tax-Exempt Funds
and Shareholders of AIM Tax-Exempt Cash Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Tax-Exempt Cash Fund, (one of
the funds constituting AIM Tax-Exempt Funds, hereafter referred to as the
"Fund") at March 31, 2007, the results of its operations for the year then
ended, the changes in its net assets and the financial highlights for each of
the two years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 2007 by correspondence with the
custodian and brokers, provides a reasonable basis for our opinion. The
financial highlights for each of the periods ended on or before March 31, 2005
were audited by another independent registered public accounting firm whose
report dated May 18, 2005 expressed an unqualified opinion on those statements.
PRICEWATERHOUSECOOPERS LLP
May 18, 2007
Houston, Texas
F-13
AIM Tax-Exempt Cash Fund
TAX INFORMATION
Form 1099-INT and other year-end tax information provide shareholders with
actual calendar year amounts that should be included in their tax returns.
Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code.
The Fund designates the following amounts or, if subsequently determined to
be different, the maximum amount allowable for its fiscal year ended March 31,
2007:
FEDERAL INCOME TAX
Tax-Exempt Interest Dividends* 100%
*The above percentage is based on income dividends paid to shareholders
during the Fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2006, September 30, 2006, December 31, 2006 and
March 31, 2007 are 99.89%, 99.89%, 99.89%, and 97.90%, respectively.
F-14
AIM Tax-Exempt Cash Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Tax-Exempt Funds (the "Trust"),
is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 105
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Column two below includes length of time served with predecessor
entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, AMVESCAP PLC (parent of AIM
and a global investment management
firm); Chairman, A I M Advisors, Inc.
(registered investment advisor); and
Director, Chairman, Chief Executive
Officer and President, AVZ Inc. (holding
company); INVESCO North American
Holdings, Inc. (holding company);
Chairman and President, AMVESCAP Group
Services, Inc. (service provider);
Trustee, The AIM Family of Funds(R);
Chairman, Investment Company Institute;
and Member of Executive Board, SMU Cox
School of Business
Formerly: President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(2) -- 1946 1993 Trustee and Vice Chair of The AIM Family None
Trustee and Vice Chair of Funds--Registered Trademark--
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors,
Inc. (registered broker dealer), AIM
Investment Services, Inc., (registered
transfer agent), and Fund Management
Company (registered broker dealer);
Chief Executive Officer, AMVESCAP
PLC -- Managed Products; President and
Principal Executive Officer of The AIM
Family of Funds--Registered Trademark--;
Director and Chairman, A I M Management
Group Inc. (financial services holding
company); Director and Vice Chairman,
AMVESCAP PLC; and Chairman, AMVESCAP
PLC -- AIM Division
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(3) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, A I M Management Group Inc.,
Principal AIM Mutual Fund Dealer Inc. (registered
Executive Officer broker dealer), A I M Advisors, Inc.,
AIM Funds Management Inc. d/b/a AMVESCAP
Enterprise Services (registered
investment advisor) and 1371 Preferred
Inc. (holding company); Director,
Chairman, Chief Executive Officer and
President, A I M Capital Management
Inc.; Director and President, A I M
Advisors, Inc., INVESCO Funds Group,
Inc. (registered investment advisor and
register transfer agent) and AIM GP
Canada Inc. (general partner for a
limited partnership); Director, A I M
Distributors, Inc.; Director and
Chairman, AIM Investment Services, Inc.,
Fund Management Company and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, AVZ Callco Inc. (holding
company); AMVESCAP Inc. (holding
company) and AIM Canada Holdings Inc.
(holding company); Director and Chief
Executive Officer, AIM Trimark Corporate
Class Inc. (formerly AIM Trimark Global
Fund Inc.) (corporate mutual fund
company) and AIM Trimark Canada Fund
Inc. (corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
Powershares Capital Management LLC
Formerly: President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company (2 portfolios))
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company (7 portfolios)); Annuity and
Life Re (Holdings), Ltd. (insurance
company); CompuDyne Corporation
(provider of products and services to
the public security market); and
Homeowners of America Holding
Corporation (property casualty company)
Formerly: Director, President and Chief
Executive Officer, Volvo Group North
America, Inc.; Senior Vice President, AB
Volvo; and Director of various
affiliated Volvo companies; and
Director, Magellan Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff, and Discovery Global
Trustee Century Group, Inc. (government affairs Education Fund
company); and Owner, Dos Angelos Ranch, (non-profit)
L.P.
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Director, Reich & Tang Funds (7
Trustee Naftalis and Frankel LLP portfolios))
- -------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA None
Trustee of the USA
- -------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired Director, Mainstay VP Series
Trustee Formerly: Partner, Deloitte & Touche Funds, Inc. (21 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
AMVESCAP PLC, parent of the advisor to the Trust.
(2) Mr. Graham is considered an interested person of the Trust because of his
previous positions with AMVESCAP PLC, parent of the advisor to the Trust.
(3) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
F-15
TRUSTEES AND OFFICERS--(CONTINUED)
AIM Tax-Exempt Cash Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
INVESCO Distributors, Inc.; Vice
President and Secretary, A I M Capital
Management, Inc., AIM Investment
Services, Inc., and Fund Management
Company; Senior Vice President and
Secretary, A I M Distributors, Inc.;
Director and Vice President, INVESCO
Funds Group Inc.; Senior Vice President,
Chief Legal Officer and Secretary of The
AIM Family of Funds--Registered
Trademark--; and Manager, Powershares
Capital Management LLC
Formerly: Vice President, A I M Capital
Management, Inc.; Chief Operating
Officer, Senior Vice President, General
Counsel, and Secretary, Liberty Ridge
Capital, Inc. (an investment adviser);
Vice President and Secretary, PBHG Funds
(an investment company); Vice President
and Secretary, PBHG Insurance Series
Fund (an investment company); General
Counsel and Secretary, Pilgrim Baxter
Value Investors (an investment adviser);
Chief Operating Officer, General Counsel
and Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, AMVESCAP N/A
Vice President PLC; and Vice President of The AIM
Family of Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, AMVESCAP PLC; Director, INVESCO
Funds Group, Inc.; and Vice President of
The AIM Family of Funds--Registered
Trademark--
Formerly: Director, Vice President and N/A
General Counsel, Fund Management
Company; Director, Senior Vice
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Director and Vice
President, INVESCO Distributors, Inc.;
Senior Vice President, A I M
Distributors, Inc.; Vice President,
A I M Capital Management, Inc. and AIM
Investment Services, Inc.; Senior Vice
President, Chief Legal Officer and
Secretary of The AIM Family of
Funds--Registered Trademark--; Chief
Executive Officer and President, INVESCO
Funds Group, Inc.; and Senior Vice
President, and General Counsel, Liberty
Financial Companies, Inc. and Senior
Vice President and General Counsel
Liberty Funds Group, LLC
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President and Fund Treasurer, A I M N/A
Vice President, Principal Advisors, Inc.; and Vice President,
Financial Officer and Treasurer and Principal Officer of The
Treasurer AIM Family of Funds--Registered
Trademark--
Formerly: Senior Vice President, AIM
Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Director of Cash Management and Senior N/A
Vice President Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Director
and President, Fund Management Company;
Vice President, The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); and
President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust Only)
Formerly: Chief Cash Management Officer
and Managing Director, A I M Capital
Management, Inc.; Vice President, A I M
Advisors, Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Patrick J.P. Farmer -- 1962 2007 Head of North American Retail N/A
Vice President Investments, Director, Chief Investment
Officer and Executive Vice President,
AIM Funds Management Inc. d/b/a AIM
Trimark Investments; Senior Vice
President and Head of Equity
Investments, A I M Advisors, Inc. and
A I M Capital Management, Inc.; and Vice
President, The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Trimark Trust
- -------------------------------------------------------------------------------------------------------------------------
Stephen M. Johnson -- 1961 2007 Chief Investment Officer of INVESCO N/A
Vice President Fixed Income and Vice President, INVESCO
Institutional (N.A.), Inc; Senior Vice
President and Fixed Income Chief
Investment Officer, A I M Advisors, Inc.
and A I M Capital Management, Inc.; and
Vice President, The AIM Family of
Funds--Registered Trademark--
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc., Fund Management
Company and The AIM Family of
Funds--Registered Trademark--
Formerly: Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc.; and Vice
President, A I M Distributors, Inc., AIM
Investment Services, Inc. and Fund
Management Company
Formerly: Vice President, A I M Capital
Management, Inc.; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; Chief Compliance Officer
and Deputy General Counsel,
AIG-SunAmerica Asset Management; and
Chief Compliance Officer, Chief
Operating Officer and Deputy General
Counsel, American General Investment
Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment The Bank of New York
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. 2 Hanson Place
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Brooklyn, NY 11217-1431
Floor 1177 Avenue of the Houston, TX 77210-4739
Philadelphia, PA 19103-7599 Americas
New York, NY 10036-2714
</Table>
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AIM Tax-Free Intermediate Fund
Annual Report to Shareholders - March 31, 2007
[COVER GLOBE IMAGE]
FIXED INCOME
Tax-Free Investment Grade
Table of Contents
Supplemental Information ................. 2
Letters to Shareholders .................. 3
Performance Summary ...................... 5
Management Discussion .................... 5
Fund Expenses ............................ 7
Long-term Fund Performance ............... 8
Schedule of Investments .................. F-1
Financial Statements ..................... F-6
Notes to Financial Statements ............ F-9
Financial Highlights ..................... F-13
Auditor's Report ......................... F-17
Tax Information .......................... F-18
Trustees and Officers .................... F-19
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- --REGISTERED TRADEMARK--
AIM Tax-Free Intermediate Fund
AIM TAX-FREE INTERMEDIATE FUND's investment objective is to generate as high a
level of tax-exempt income as is consistent with preservation of capital.
o Unless otherwise stated, information presented in this report is as of March
31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management
Group Inc.
ABOUT SHARE CLASSES o The tax-exempt character of the interest OTHER INFORMATION
paid on synthetic municipal securities is
o As of the close of business October 30, based on the tax-exempt income stream from o Revenue bonds are issued to finance
2002, Class A shares were closed to new the collateral. The Internal Revenue public works projects and are supported
investors. Service has not ruled on this issue and directly by the project's revenues.
could deem income derived from synthetic General obligation bonds are backed by the
PRINCIPAL RISKS OF INVESTING IN THE FUND municipal securities to be taxable. full faith and credit (including the
taxing and further borrowing power) of a
o The Fund may invest in debt securities o There is no guarantee that the state or municipality. Revenue bonds often
such as notes and bonds that carry investment techniques and risk analyses are considered more attractive, since many
interest rate risk and credit risk. used by the Fund's managers will produce publicworks projects (water and sewer
the desired results. About indexes used in improvements, for example) are
o The Fund may invest in lower quality this report necessities, and demand for them remains
debt securities, commonly known as "junk constant regardless of economic
bonds." Compared to higher quality debt ABOUT INDEXES USED IN THIS REPORT conditions. Shareholders may benefit from
securities, junk bonds involve greater their consistent income in the event of an
risk of default or price changes due to o The unmanaged LEHMAN BROTHERS MUNICIPAL economic slow down. Escrowed and
changes in credit quality of the issuer, BOND INDEX, which represents the pre-refunded bonds are bonds whose
because they are generally unsecured and performance of investment-grade municipal repayment is guaranteed by the funds from
because they may be subordinated to other bonds, is compiled by Lehman Brothers, a a second bond issue, which are usually
creditors' claims. Credit ratings of junk global investment bank. invested in U.S. Treasury bonds.
bonds do not necessarily reflect their
actual market risk. o The MERRILL LYNCH 3-7 YEAR MUNICIPAL o The average credit quality of the Fund's
INDEX is a domestic bond index that holds holdings as of the close of the reporting
o The value of, payment of interest and investment-grade municipal bonds with period represents the weighted average
repayment of principal by, and the ability maturities that range between 3 and 7 quality rating of the securities in the
of the Fund to sell a municipal security years. portfolio as assigned by Nationally
may be affected by constitutional Recognized Statistical Rating
amendments, legislative enactments, o The unmanaged LIPPER INTERMEDIATE Organizations based on assessment of the
executive orders, administrative MUNICIPAL DEBT FUNDS INDEX represents an credit quality of the individual
regulations and voter initiatives as well average of the largest intermediate-term securities. For non-rated securities in
as the economies of the regions in which municipal-bond funds tracked by Lipper the portfolio the credit quality rating is
the Fund invests. Inc., an independent mutual fund assigned by A I M Advisors, Inc. using
performance monitor. similar criteria.
o Because the Fund may invest a relatively
high percentage of its total assets in o The Fund is not managed to track the o The returns shown in the management's
municipal securities issued by entities performance of any particular index, discussion of Fund performance are based
having similar characteristics, the value including the indexes defined here, and on net asset values calculated for
of your shares may rise and fall more than consequently, the performance of the Fund shareholder transactions. Generally
the shares of a fund that invests in a may deviate significantly from the accepted accounting principles require
broader range of securities. performance of the indexes. adjustments to be made to the net assets
of the Fund at period end for financial
o The prices of and the income generated o A direct investment cannot be made in an reporting purposes, and as such, the net
by securities held by the Fund may decline index. Unless otherwise indicated, index asset values for shareholder transactions
in response to certain factors, including results include reinvested dividends, and and the returns based on those net asset
some directly involving the issuers (or, they do not reflect sales charges. values may differ from the net asset
in the case of industrial development Performance of an index of funds reflects values and returns reported in the
revenue bonds, the company for whose fund expenses; performance of a market Financial Highlights.
benefit the bonds are issued). These index does not.
factors include general economic and Continued on page 9
market conditions, regional or global
economic instability and interest rate
fluctuations.
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class A Shares AITFX
======================================================================================= Class A3 Shares ATFAX
==========================================
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
AIMINVESTMENTS.COM
2
AIM TAX-FREE INTERMEDIATE FUND
DEAR SHAREHOLDERS OF THE AIM FAMILY OF FUNDS --REGISTERED TRADEMARK--:
I'm pleased to provide you with this report, which includes a discussion of how
your Fund was managed during the period under review, and what factors affected
[TAYLOR its performance. The following pages contain important information that answers
PHOTO] questions you may have about your investment.
Most major stock market indexes, in the U.S. and overseas, performed well
Philip Taylor for the 12 months ended March 31, 2007, as did major fixed-income indexes.(1)
Reasons for their positive performance included continued economic expansion and
a cessation of interest rate increases by the U.S. Federal Reserve Board, among
other factors.(2)
As the period covered by this report drew to a close, however, stock market
volatility returned. In late February, Asian markets sold off, triggering a
global decline. Additional volatility followed in March, partly due to
uncertainty about the health of the U.S. housing market and rising concern about
the ability of sub-prime borrowers to repay their mort gages. By mid-April,
after the close of the period covered by this report, U.S. and foreign markets
had largely resumed their upward trend, helped by good economic growth and a
rash of corporate buyouts.
At AIM Investments --REGISTERED TRADEMARK--, we know that market conditions
change--often suddenly and some-times dramatically. We can help you deal with
market volatility by offering a broad range of mutual funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds
and PowerShares --REGISTERED TRADEMARK-- exchange-traded funds--with risk/return
characteristics that change as your target retirement date nears
We believe in the value of working with a trusted financial advisor. Your
financial advisor can recommend various AIM funds that, together, can create a
portfolio that's appropriate for your investment goals, time horizon and risk
tolerance. Market volatility can be disconcerting--but your financial advisor
can help you keep on track with your investment program, making periodic
adjustments as market conditions and your changing investment goals warrant.
In conclusion
Our highly trained, courteous client service representatives are eager to answer
your questions, provide you with product information or assist you with account
transactions. I encourage you to give us an opportunity to serve you by calling
us at 800-959-4246.
Of course, you can access your account information, review your Fund's
performance, learn more about your Fund's investment strategies and obtain
general investing information when it's convenient for you by visiting our Web
site, AIMinvestments.com.
All of us at AIM are committed to helping you achieve your financial goals.
We work every day to earn your trust, and we're grateful for the confidence
you've placed in us.
Sincerely,
/s/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
May 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc.
A I M Advisors, Inc. and A I M Capital Management, Inc. are the investment
advisors. A I M Distributors, Inc. is the distributor for the retail mutual
funds represented by AIM Investments and the PowerShares Exchange-Traded Fund
Trust.
Sources: (1) Lipper Inc.; (2) U.S. Federal Reserve Board
3
AIM TAX-FREE INTERMEDIATE FUND
DEAR FELLOW AIM FUND SHAREHOLDERS:
Your AIM Funds Board started 2007 committed to continue working with management
[CROCKETT at A I M Advisors, Inc. (AIM) with the goal of improving performance and
PHOTO] lowering shareholder expenses for the AIM Funds.
The progress made to date is encouraging. Following the general trends of
Bruce L. Crockett global equity markets and the U.S. stock market, the asset-weighted absolute
performance for all the money market, equity and fixed-income AIM Funds im-
proved for the one-year period ended December 31, 2006, as compared to the
one-year period ended December 31, 2005, and the one-year period ended December
31, 2004.(1)
In November, your Board approved, subject to shareholder vote, four more
AIM Fund consolidations. As always, these decisions were made to benefit
existing shareholders and were driven by a desire to improve the merged funds'
performance, attract new assets and reduce costs. The asset class
subcommittees of your Board's Investments Committee are meeting frequently with
portfolio managers to identify how performance might be further improved.
On the expense side, both AMVESCAP, the parent company of AIM, and AIM
continue to take advantage of opportunities for operational consolidation,
outsourcing and new technologies to improve cost efficiencies for your benefit.
Your Board, for example, takes advantage of effective software solutions that
enable us to save money through electronic information sharing. Additional
cost-saving steps are under way. I'll report more on these steps once they're
completed.
Another major Board initiative for early 2007 is the revision of the AIM
Funds' proxy voting guidelines, a project begun by a special Board task force
late last year. We expect to have new procedures in place for the 2007 spring
proxy season that will improve the ability of the AIM Funds to cast votes that
are in the best interests of all fund shareholders.
While your Board recognizes that additional work lies ahead, we are
gratified that some key external sources have recognized changes at AIM and the
AIM Funds in the past two years. An article in the November 21, 2006, issue of
Morningstar Report (Morningstar, Inc. is a leading provider of independent
mutual fund investment research) included a review of AIM's progress,
highlighting lower expenses, stronger investment teams and an improved sales
culture, as well as areas for continued improvement. I'm looking forward to a
return visit to Morningstar this year to review AIM Funds' performance and
governance ratings.
Your Board thanks Mark Williamson, former President and CEO of AIM
Investments, who retired from your Board in 2006. He has been succeeded on your
Board by Phil Taylor, President of AIM Funds. We extend a warm welcome to Phil.
I'd like to hear from you. Please write to me at AIM Investments, AIM
Investments Tower, 11 Greenway Plaza, Suite 100, Houston TX 77046. Let me know
your thoughts on how your Board is doing and how we might serve you better.
Sincerely,
/s/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board
May 17, 2007
Sources: A I M Management Group Inc. and Lipper Inc.
(1) Past performance is no guarantee of future results. Please visit
AIMinvestments.com for the most recent month-end performance for all AIM
funds.
4
AIM TAX-FREE INTERMEDIATE FUND
MANAGEMENT'S DISCUSSION well as investing up to 20% of the Fund's
OF FUND PERFORMANCE total net assets in below-investment-grade
======================================================================================= issues. Finally, the Fund generally does
PERFORMANCE SUMMARY not invest in bonds that pay interest
subject to the alternative minimum tax.
For the fiscal year ended March 31, 2007, and excluding applicable sales charges, Class
A shares of AIM Tax-Free Intermediate Fund underperformed the Fund's broad market and We generally invest in revenue bonds,
style-specific indexes, the Lehman Brothers Municipal Bond Index and the Merrill Lynch which are municipal bonds issued to
3-7 Year Municipal Index, respectively. 1 The Fund's underperformance was primarily finance specific public works, such as
attributable to its investments in shorter duration municipal securities, as the bridges or sewer systems. Proceeds
longer portion of the tax-exempt bond yield curve outper formed the short-er maturity generated by those specific projects are
portion during the year. 2 In addition, our investments in high-rated bonds detracted used to pay interest and principal on the
from performance, given lower credit quality municipal bonds outperformed the higher bonds. We also prefer to invest in insured
quality sector.(2) municipal bonds, which offer competitive
yields with greater safety and liquidity
Your Fund's long-term performance appears on pages 8 and 9. than similar uninsured municipal bonds.
FUND VS. INDEXES We typically purchase and hold
municipal bonds to maturity to avoid
Total returns, 3/31/06-3/31/07, excluding applicable sales charges. If sales charges selling-related capital gains. However,
were included, returns would be lower. there are times when we will sell
securities based on the following factors:
Class A Shares 3.49%
Class A3 Shares 3.23 o A downgrade in credit quality
Lehman Brothers Municipal Bond Index(1) (Broad Market Index) 5.43
Merrill Lynch 3-7 Year Municipal Index(1) (Style-Specific Index) 4.37 o A decision to shorten or lengthen the
Lipper Intermediate Municipal Debt Funds Index(1) (Peer Group Index) 4.55
Fund's duration
Sources: (1)Lipper Inc.; (2)Lehman Brothers Inc.
======================================================================================= o A decision to limit or reduce the Fund's
exposure to a particular sector or issuer
HOW WE INVEST which include revenue and general
obligation bonds. The Fund is permitted to MARKET CONDITIONS AND YOUR FUND
We believe that actively managed portfolio purchase bonds of different maturity
of municipal bonds can provide a steady structures to better capitalize on Gross domestic product, a measure of
stream of tax-exempt income while seeking movements of interest rates and to manage economic growth, declined from an
to protect principal. Through active effectively its duration for preserva- annualized rate of 2.5% in the fourth
management, we strive to avoid capital tion of capital purposes. Effective July quarter of 2006 to 1.3% in the first
gains and ordinary income, which are 20, 2006, the Fund's investment strategies quarter of 2007.1 While consumer spending
taxable to shareholders, while providing were modified to reflect our need for remained healthy, reduced investments in
competitive income in all market further diversification of managed housing, businesses and inventories
environments. assets by investing in BBB-rated or inhibited more robust growth in the last
equivalent municipal bonds as quarter of 2006. Economic activity in the
We invest primarily in municipal bonds,
(continued)
PORTFOLIO COMPOSITION
By credit quality as of 3/31/07
========================================== =======================================================================================
[PIE CHART TOP FIVE FIXED INCOME HOLDINGS
AA 18.4% % OF NET
A 5.2% COUPON MATURITY ASSETS
BBB/NR 0.3%
AAA 76.1% 1. Chicago (City of) 6.50% 12/1/08 4.4%
========================================== 2. Energy Northwest 5.50 7/1/11 4.3
The Fund's holdings are subject to change,
and there is no assurance that the Fund 3. New Jersey (State of) Transportation Trust Fund
will continue to hold any particular Authority 5.50 6/15/10 4.0
security.
4. San Antonio (City of) 5.25 2/1/10 3.1
5. Washington (State of) 4.75 4/1/11 2.9
=======================================================================================
Total Net Assets $186.93 million
Total Number of Holdings 90
Average Credit Quality Rating AA+
Weighted Average Maturity 3.65 years
Average Duration 2.86 years
=======================================================================================
5
AIM Tax-Free Intermediate Fund
manufacturing sector expanded in March The 10-year and longer maturity portion THE VIEWS AND OPINIONS EXPRESSED IN
2007 for the second consecutive month, of the municipal market performed better MANAGEMENT'S DISCUSSION OF FUND
while the overall economy had grown 65 than the shorter maturity portion during PERFORMANCE ARE THOSE OF A I M ADVISORS,
consecutive months by the end of the the year. (5) Despite the most recent INC. THESE VIEWS AND OPINIONS ARE SUBJECT
fiscal year.(2) steepening of the municipal bond yield TO CHANGE AT ANY TIME BASED ON FACTORS
curve, when yields at the longer end of SUCH AS MARKET AND ECONOMIC CONDITIONS.
In early 2007, high inventory levels and the curve increased more than at the THESE VIEWS AND OPINIONS MAY NOT BE RELIED
stress in the sub-prime mortgage market shorter end, the Fund's overall short UPON AS INVESTMENT ADVICE OR
added an element of risk to the housing duration/short maturity positioning had RECOMMENDATIONS, OR AS AN OFFER FOR A
sector's stability. In addition, measures a negative impact on performance.(5) PARTICULAR SECURITY. THE INFORMATION IS
of manufactur-ers' inventory levels had NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF
decreased, putting downward pressure on Our emphasis on thorough credit ANY MARKET, COUNTRY, INDUSTRY, SECURITY OR
economic growth. On the other hand, labor research helped us build a portfolio of THE FUND. STATEMENTS OF FACT ARE FROM
markets remained relatively strong in municipal bonds with higher credit SOURCES CONSIDERED RELIABLE, BUT A I M
January and February, generally offsetting quality. Based on historical comparisons, ADVISORS, INC. MAKES NO REPRESENTATION OR
the weakening of other economic we viewed current yields earned on lower WARRANTY AS TO THEIR COMPLETENESS OR
indicators. quality issues as insufficiently com- ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
pensatory for the risks associated with IS NO GUARANTEE OF FUTURE RESULTS, THESE
these investments. As a result, we INSIGHTS MAY HELP YOU UNDERSTAND OUR
As a result, recent mixed economic generally remained invested in higher INVESTMENT MANAGEMENT PHILOSOPHY.
signals prompted markets to scale back quality municipal bonds with AAA and AA
their expectations for a potential credit ratings. Given that lower rated See important Fund and index
interest rate cut by the U.S. Federal tax-exempt issues generally outperformed disclosures on the inside front cover.
Reserve Board (the Fed) in the first half higher quality municipal bonds during the
of 2007. On March 21, 2007, as widely year, the Fund's relative performance was Richard A. Berry
anticipated by financial markets, the Fed negatively affected.(5) Chartered Financial Analyst,
decided to keep the federal funds target [BERRY senior portfolio manager, is
rate at 5.25%.(3) This was the sixth We maintained the Fund's sector PHOTO] co-manager of AIM Tax-Free
consecutive meeting at which the Fed left allocation strategy relatively constant Intermediate Fund. Mr. Berry
the rate unchanged after 17 consecutive throughout the year, favoring insured joined AIM in 1987 and has been
increases.(3) municipal bonds over uninsured bonds. in the investment industry
Insured bonds generally offer competitive since 1968. He has served as president
The interest rate environment continued yields with greater safety and liquidity and director of the Dallas Association of
to be defined by a flat to slightly than similarly structured uninsured Investment Analysts, chairman of the
inverted yield curve, as yields of the municipal securities. The insured sector board of regents of the Financial
two-year Treasury were higher than the performed relatively well for the year. As Analysts Seminar and a trustee of
10-year Treasury for the most of the a result, our large allocation to these Lancaster Independent School District. He
reporting period.(4) The yield curve shows types of bonds reflected positively on earned his B.B.A. and M.B.A. from Texas
the yields of bonds of the same quality, performance. Christian University.
but differing maturities.
The Fund had a significant weighting in
By historical standards, municipal bonds issued by Texas entities. During the
bonds remained attractively valued year, tax-exempt bonds issued in Texas, as
throughout the fiscal year; however, their a group, underperformed the national Stephen D. Turman
performance generally lagged the taxable benchmark, the Lehman Brothers Municipal Chartered Financial Analyst,
bond sector. Bond Index, which had a negative impact on [TURMAN senior portfolio manager, is
the Fund's relative performance. PHOTO] co-manager of AIM Tax-Free
Demand for higher yield continued to Intermediate Fund. Mr. Turman
drive performance in the municipal bond We appreciate your continued began his career in the
market. Investors sought extra yield in participation in AIM Tax-Free Intermediate investment business in 1983 and joined
the lower-rated segment of the market, Fund. AIM as a trader in 1985. Prior to joining
which outperformed higher quality AIM, he worked in institutional sales.
municipal bonds during the 12-month Sources: (1) Bureau of Economic Analysis; Mr. Turman earned a B.B. A. in finance
period.(5) (2) Institute for Supply Management; (3) from The University of Texas at
U.S. Federal Reserve Board; (4) U.S. Arlington.
During the year, the Fund maintained a Treasury Department; (5)Lehman Brothers Inc.
defensive positioning by holding the Assisted by the Municipal Bond Team
portfolio's duration short--2.86 years by
the end of the year. In consideration to FOR A PRESENTATION OF YOUR FUND'S
the Fund's maturities structure, we were LONG-TERM PERFORMANCE, PLEASE SEE PAGES 8
invested in the shorter end of the AND 9.
maturity range as well.
6
AIM TAX-FREE INTERMEDIATE FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE together with the amount you invested, to The hypothetical account values and
estimate the expenses that you paid over expenses may not be used to estimate the
As a shareholder of the Fund, you incur the period. Simply divide your account actual ending account balance or expenses
two types of costs: (1) transaction costs, value by $1,000 (for example, an $8,600 you paid for the period. You may use this
which may include sales charges (loads) on account value divided by $1,000 = 8.6), information to compare the ongoing costs
purchase payments or contingent deferred then multiply the result by the number in of investing in the Fund and other funds.
sales charges on redemptions, and the table under the heading entitled To do so, compare this 5% hypothetical
redemption fees, if any; and (2) ongoing "Actual Expenses Paid During Period" to example with the 5% hypothetical examples
costs, including management fees; estimate the expenses you paid on your that appear in the shareholder reports of
distribution and/or service (12b-1) fees; account during this period. the other funds
and other Fund expenses. This example is
intended to help you understand your Please note that the expenses shown in
ongoing costs (in dollars) of investing in HYPOTHETICAL EXAMPLE FOR COMPARISON the table are meant to highlight your
the Fund and to compare these costs with PURPOSES ongoing costs only and do not reflect any
ongoing costs of investing in other mutual transaction costs, such as sales charges
funds. The example is based on an The table below also provides information (loads) on purchase payments, contingent
investment of $1,000 invested at the about hypothetical account values and deferred sales charges on redemptions, and
beginning of the period and held for the hypothetical expenses based on the Fund's redemption fees, if any. Therefore, the
entire period October 1, 2006, through actual expense ratio and an assumed rate hypothetical information is useful in
March 31, 2007. of return of 5% per year before expenses, comparing ongoing costs only, and will not
which is not the Fund's actual return. The help you determine the relative total
ACTUAL EXPENSES Fund's actual cumulative total returns at costs of owning different funds. In
net asset value after expenses for the six addition, if these transaction costs were
The table below provides information about months ended March 31, 2007, appear in the included, your costs would have been
actual account values and actual expenses. table "Cumulative Total Returns" on page higher.
You may use the information in this table, 9.
====================================================================================================================================
ACTUAL HYPOTHETICAL
(5% ANNUAL RETURN BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/1/06) (3/31/07)(1) PERIOD(2) (3/31/07) PERIOD(2) RATIO
A $1,000.00 $1,013.90 $2.51 $1,022.44 $2.52 0.50%
A3 1,000.00 1,012.60 3.76 1,021.19 3.78 0.75
(1) The actual ending account value is based on the actual total return of the Fund for the period October 1, 2006, through March
31, 2007, after actual expenses and will differ from the hypothetical ending account value, which is based on the Fund's
expense ratio and a hypothetical annual return of 5% before expenses. The Fund's actual cumulative total returns at net asset
value after expenses for the six months ended March 31, 2007, appear in the table "Cumulative Total Returns" on page 9.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the
period, multiplied by 182/365 to reflect the most recent fiscal half year.
====================================================================================================================================
7
AIM TAX-FREE INTERMEDIATE FUND
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee This chart, which is a logarithmic
comparable future results. chart, presents the fluctuations in the
value of the Fund and its indexes. We
The data shown in the chart include believe that a logarithmic chart is more
rein vested distributions, applicable effective than other types of charts in
sales charges, Fund expenses and illustrating changes in value during the
management fees. Index results include early years shown in the chart. The
reinvested dividends, but they do not vertical axis, the one that indicates the
reflect sales charges. Performance of an dollar value of an investment, is
index of funds reflects fund expenses and constructed with each segment representing
management fees; performance of a market a percent change in the value of the
index does not. Performance shown in the investment. In this chart, each segment
chart and table(s) does not reflect represents a doubling, or 100% change, in
deduction of taxes a shareholder would pay the value of the investment. In other
on Fund distributions or sale of Fund words, the space between $5,000 and
shares. Performance of the indexes does $10,000 is the same size as the space
not reflect the effects of taxes. between $10,000 and $20,000, and so on.
8
=====================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
INDEX DATA FROM 4/30/87, FUND DATA FROM 5/11/87
AIM TAX-FREE LEHMAN BROTHERS LIPPER INTERMEDIATE
INTERMEDIATE FUND MUNICIPAL BOND MUNICIPAL DEBT FUNDS
DATE -CLASS A SHARES INDEX(1) INDEX(1)
04/30/87 $10000 $10000 11/92 14551 16504 15278
05/87 $ 9813 9950 9978 12/92 14682 16672 15413
06/87 9896 10243 10180 01/93 14842 16866 15591
07/87 9993 10347 10304 02/93 15213 17476 16059
08/87 9958 10370 10318 03/93 15074 17291 15876
09/87 9694 9988 9998 04/93 15186 17466 16004
10/87 9746 10023 10028 05/93 15242 17564 16057
11/87 9853 10285 10243 06/93 15427 17857 16275
12/87 10052 10434 10390 07/93 15399 17880 16269
01/88 10284 10806 10711 08/93 15641 18253 16558
02/88 10416 10920 10765 09/93 15827 18461 16747
03/88 10308 10793 10665 10/93 15855 18497 16774
04/88 10346 10875 10718 11/93 15798 18333 16671
05/88 10303 10844 10713 12/93 16008 18720 16945
06/88 10387 11002 10802 01/94 16168 18934 17119
07/88 10483 11074 10856 02/94 15892 18444 16756
08/88 10442 11084 10863 03/94 15599 17693 16286
09/88 10596 11284 10994 04/94 15688 17843 16355
10/88 10691 11483 11132 05/94 15792 17997 16484
11/88 10615 11378 11062 06/94 15762 17887 16436
12/88 10709 11495 11151 07/94 15910 18215 16641
01/89 10862 11732 11284 08/94 15969 18278 16705
02/89 10772 11598 11214 09/94 15864 18010 16533
03/89 10746 11571 11182 10/94 15759 17691 16351
04/89 10945 11846 11374 11/94 15639 17370 16108
05/89 10971 12091 11551 12/94 15780 17753 16348
06/89 11195 12256 11681 01/95 16007 18260 16665
07/89 11312 12423 11821 02/95 16266 18791 17011
08/89 11225 12301 11761 03/95 16405 19007 17162
09/89 11183 12264 11738 04/95 16482 19030 17199
10/89 11320 12414 11843 05/95 16760 19637 17602
11/89 11397 12631 11998 06/95 16730 19465 17547
12/89 11614 12735 12103 07/95 16874 19649 17707
01/90 11590 12675 12057 08/95 17002 19899 17880
02/90 11681 12788 12161 09/95 17053 20025 17969
03/90 11670 12791 12162 10/95 17171 20316 18139
04/90 11671 12699 12074 11/95 17320 20653 18332
05/90 11815 12976 12301 12/95 17391 20851 18450
06/90 11902 13090 12401 01/96 17511 21009 18594
07/90 11999 13283 12564 02/96 17487 20867 18536
08/90 12002 13090 12451 03/96 17398 20600 18350
09/90 12023 13098 12494 04/96 17389 20542 18318
10/90 12173 13336 12659 05/96 17413 20534 18317
11/90 12314 13604 12862 06/96 17502 20758 18431
12/90 12378 13663 12912 07/96 17604 20946 18594
01/91 12505 13846 13065 08/96 17625 20941 18601
02/91 12627 13967 13172 09/96 17745 21234 18769
03/91 12644 13972 13192 10/96 17863 21474 18953
04/91 12750 14158 13348 11/96 18083 21867 19234
05/91 12835 14284 13439 12/96 18054 21775 19183
06/91 12847 14270 13429 01/97 18125 21816 19231
07/91 12953 14444 13571 02/97 18230 22016 19376
08/91 13104 14634 13717 03/97 18150 21723 19179
09/91 13218 14825 13871 04/97 18238 21905 19278
10/91 13326 14958 13993 05/97 18446 22234 19505
11/91 13383 15000 14031 06/97 18587 22471 19686
12/91 13599 15322 14311 07/97 18916 23094 20113
01/92 13664 15357 14349 08/97 18817 22877 19957
02/92 13722 15362 14363 09/97 18994 23148 20169
03/92 13705 15368 14335 10/97 19064 23298 20264
04/92 13808 15504 14448 11/97 19135 23435 20343
05/92 13942 15687 14606 12/97 19363 23776 20603
06/92 14113 15950 14810 01/98 19539 24022 20777
07/92 14475 16428 15226 02/98 19541 24029 20787
08/92 14372 16268 15073 03/98 19560 24050 20801
09/92 14458 16374 15162 04/98 19457 23942 20704
10/92 14367 16213 15025 05/98 19690 24321 20982
=====================================================================================================
SOURCE: (1) LIPPER INC.
=====================================================================================================
[MOUNTAIN CHART]
07/98 19818 24478 21102 05/05 26957 35903 28750
08/98 20072 24856 21406 06/05 27079 36126 28892
09/98 20273 25166 21638 07/05 26960 35963 28738
10/98 20311 25165 21645 08/05 27081 36326 28984
11/98 20368 25253 21692 09/05 27035 36081 28835
12/98 20425 25317 21761 10/05 26951 35862 28685
01/99 20664 25618 22005 11/05 27013 36034 28800
02/99 20575 25506 21888 12/05 27113 36344 28998
03/99 20596 25541 21882 01/06 27189 36442 29073
04/99 20653 25605 21943 02/06 27216 36687 29199
05/99 20581 25457 21813 03/06 27143 36434 29027
06/99 20340 25091 21516 04/06 27194 36421 29017
07/99 20473 25182 21616 05/06 27270 36584 29154
08/99 20399 24980 21516 06/06 27221 36446 29039
09/99 20476 24990 21529 07/06 27374 36879 29342
10/99 20364 24720 21378 08/06 27576 37427 29723
11/99 20537 24983 21559 09/06 27703 37687 29899
12/99 20444 24796 21462 10/06 27781 37923 30039
01/00 20350 24688 21368 11/06 27853 38239 30224
02/00 20448 24975 21532 12/06 27836 38104 30120
03/00 20738 25521 21840 01/07 27833 38007 30056
04/00 20643 25370 21748 02/07 28012 38507 30376
05/00 20548 25238 21658 03/07 28086 38413 30346
06/00 20998 25907 22105
07/00 21235 26267 22356
08/00 21492 26672 22633
09/00 21456 26533 22567
10/00 21636 26823 22755
11/00 21718 27026 22863
12/00 22120 27694 23323
01/01 22403 27968 23593
02/01 22466 28057 23669
03/01 22630 28308 23850
04/01 22429 28001 23636
05/01 22653 28303 23878
06/01 22775 28492 24027
07/01 23019 28914 24316
08/01 23325 29391 24684
09/01 23365 29292 24650
10/01 23584 29641 24886
11/01 23327 29391 24628
12/01 23110 29113 24442
01/02 23533 29618 24797
02/02 23830 29975 25075
03/02 23308 29388 24619
04/02 23860 29962 25098
05/02 23970 30144 25234
06/02 24272 30463 25491
07/02 24544 30855 25786
08/02 24816 31225 26023
09/02 25238 31909 26477
10/02 24933 31380 26075
11/02 24821 31250 25969
12/02 25334 31909 26483
01/03 25312 31828 26387
02/03 25613 32273 26752
03/03 25610 32293 26745
04/03 25761 32506 26915
05/03 26266 33267 27463
06/03 26177 33126 27334
07/03 25447 31967 26508
08/03 25622 32205 26706
09/03 26268 33152 27390
10/03 26110 32985 27258
11/03 26243 33329 27476
12/03 26401 33605 27638
01/04 26491 33797 27742
02/04 26806 34306 28132
03/04 26645 34186 27959
04/04 26165 33377 27375
05/04 26095 33256 27340
06/04 26139 33377 27408
07/04 26346 33816 27682
08/04 26738 34494 28139
09/04 26784 34677 28227
10/04 26899 34975 28379
11/04 26710 34687 28151
12/04 26897 35110 28426
01/05 26924 35438 28549
02/05 26809 35321 28427
03/05 26645 35098 28217
04/05 26885 35651 28587
=====================================================================================================
AIM TAX-FREE INTERMEDIATE FUND
========================================== ==========================================
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS BE LOWER OR HIGHER. PLEASE VISIT
AIMINVESTMENTS.COM FOR THE MOST RECENT
As of 3/31/07, including applicable Six months ended 3/31/07, excluding MONTH-END PERFORMANCE. PERFORMANCE FIGURES
sales charges applicable sales charges REFLECT REINVESTED DISTRIBUTIONS, CHANGES
IN NET ASSET VALUE AND THE EFFECT OF THE
CLASS A SHARES Class A Shares 1.39% MAXIMUM APPLICABLE SALES CHARGE UNLESS
Class A3 Shares 1.26 OTHERWISE STATED. INVESTMENT RETURN AND
Inception (5/11/87) 5.33% ========================================== PRINCIPAL VALUE WILL FLUCTUATE SO THAT YOU
10 Years 4.36 MAY HAVE A GAIN OR LOSS WHEN YOU SELL
5 Years 3.59 CLASS A SHARE PERFORMANCE REFLECTS THE SHARES.
1 Year 2.46 MAXIMUM 1.00% SALES CHARGE. CLASS A3
SHARES DO NOT HAVE A FRONT-END SALES THE PERFORMANCE OF THE FUND'S SHARE
CLASS A3 SHARES CHARGE OR A CDSC; THEREFORE, PERFORMANCE CLASSES WILL DIFFER PRIMARILY DUE TO
10 Years 4.10% QUOTED IS AT NET ASSET VALUE. THE DIFFERENT SALES CHARGE STRUCTURES AND
5 Years 3.45 INCEPTION DATE OF CLASS A SHARES IS MAY CLASS EXPENSES.
1 Year 3.23 11, 1987.
========================================== HAD THE ADVISOR NOT WAIVED FEES AND/OR
THE TOTAL ANNUAL FUND OPERATING EXPENSE REIMBURSED EXPENSES IN THE PAST,
THE INCEPTION DATE OF CLASS A3 SHARES RATIO SET FORTH IN THE MOST RECENT FUND PERFORMANCE WOULD HAVE BEEN LOWER.
IS OCTOBER 31, 2002. RETURNS SINCE PROSPECTUS AS OF THE DATE OF THIS REPORT
THAT DATE ARE HISTORICAL RETURNS. ALL FOR CLASS A AND CLASS A3 SHARES WAS 0.46%
OTHER RETURNS ARE THE BLENDED RETURNS AND 0.71%, RESPECTIVELY. THE EXPENSE
OF THE HISTORICAL PERFORMANCE OF THE RATIOS PRESENTED ABOVE MAY VARY FROM THE
FUND'S CLASS A3 SHARES SINCE THEIR EXPENSE RATIOS PRESENTED IN OTHER SECTIONS
INCEPTION AND THE RESTATED HISTORICAL OF THIS REPORT THAT ARE BASED ON EXPENSES
PERFORMANCE OF THE FUND'S CLASS A INCURRED DURING THE PERIOD COVERED BY THIS
SHARES (FOR PERIODS PRIOR TO THE REPORT.
INCEPTION OF CLASS A3 SHARES) AT NET
ASSET VALUE, ADJUSTED TO REFLECT RULE THE PERFORMANCE DATA QUOTED REPRESENT
12B-1 FEES APPLICABLE TO CLASS A3 PAST PERFORMANCE AND CANNOT GUARANTEE
SHARES. THE INCEPTION DATE OF CLASS A COMPARABLE FUTURE RESULTS; CURRENT
SHARES IS MAY 11, 1987. PERFORMANCE MAY
Continued from inside front cover
o The Chartered Financial Analyst and third quarters, the Fund files the that the Fund uses to determine how to
- --REGISTERED TRADEMARK--(CFA --REGISTERED lists with the Securities and Exchange vote proxies relating to portfolio
TRADEMARK--) designation is a globally Commission (SEC) on Form N-Q. The most securities is available without charge,
recognized standard for measuring the recent list of portfolio holdings is upon request, from our Client Services
competence and integrity of investment available at AIMinvestments.com. From our department at 800-959-4246 or on the AIM
professionals. home page, click on Products & Web site, AIMinvestments.com. On the home
Performance, then Mutual Funds, then Fund page, scroll down and click on AIM Funds
o Weighted average maturity is the Overview. Select your Fund from the Proxy Policy. The information is also
weighted average of the remaining terms to drop-down menu and click on Complete available on the SEC Web site, sec.gov.
maturity of the securities underlying the Quarterly Holdings. Shareholders can also
collateral pool at the date of issue, look up the Fund's Forms N-Q on the SEC
using the balances of the securities as of Web site at sec.gov. Copies of the Fund's Information regarding how the Fund voted
the issue date as the weighting factor. Forms N-Q may be reviewed and copied at proxies related to its portfolio
the SEC Public Reference Room in securities during the 12 months ended June
The Fund provides a complete list of its Washington, D.C. You can obtain 30, 2006, is available at our Web site. Go
holdings four times in each fiscal year, information on the operation of the Public to AIMinvestments.com, access the About Us
at the quarter-ends. For the second and Reference Room, including information tab, click on Required Notices and then
fourth quarters, the lists appear in the about duplicating fee charges, by calling click on Proxy Voting Activity. Next,
Fund's semiannual and annual reports to 202-942-8090 or 800-732-0330, or by elec- select the Fund from the drop-down menu.
shareholders. For the first tronic request at the following e-mail The information is also available on the
address: publicinfo@sec.gov. The SEC file SEC Web site, sec.gov.
numbers for the Fund are 811-07890 and
033-66242.
A description of the policies and
procedures
9
Supplement to Annual Report dated 3/31/07
AIM TAX-FREE INTERMEDIATE FUND
INSTITUTIONAL CLASS SHARES ========================================== PLEASE NOTE THAT PAST PERFORMANCE IS
AVERAGE ANNUAL TOTAL RETURNS NOT INDICATIVE OF FUTURE RESULTS. MORE
The following information has been RECENT RETURNS MAY BE MORE OR LESS THAN
prepared to provide Institutional Class For periods ended 3/31/07 THOSE SHOWN. ALL RETURNS ASSUME
shareholders with a performance overview REINVESTMENT OF DISTRIBUTIONS AT NAV.
specific to their holdings. Institutional 10 Years 4.46% INVESTMENT RETURN AND PRINCIPAL VALUE WILL
Class shares are offered exclusively to 5 Years 3.79 FLUCTUATE SO YOUR SHARES, WHEN REDEEMED,
institutional investors, including defined 1 Year 3.43 MAY BE WORTH MORE OR LESS THAN THEIR
contribution plans that meet certain 6 Months* 1.39 ORIGINAL COST. SEE FULL REPORT FOR
criteria. INFORMATION ON COMPARATIVE BENCHMARKS.
* Cumulative total return that has not PLEASE CONSULT YOUR FUND PROSPECTUS FOR
been annualized MORE INFORMATION. FOR THE MOST CURRENT
========================================== MONTH-END PERFORMANCE, PLEASE CALL
800-451-4246 OR VISIT AIMINVESTMENTS.COM.
INSTITUTIONAL CLASS SHARES' INCEPTION DATE
IS JULY 30, 2004. RETURNS SINCE THAT DATE
ARE HISTORICAL RETURNS. ALL OTHER RETURNS
ARE BLENDED RETURNS OF HISTORICAL
INSTITUTIONAL CLASS SHARE PERFORMANCE AND
RESTATED CLASS A SHARE PERFORMANCE (FOR
PERIODS PRIOR TO THE INCEPTION DATE OF
INSTITUTIONAL CLASS SHARES) AT NET ASSET
VALUE (NAV) AND REFLECT THE HIGHER RULE
12B-1 FEES APPLICABLE TO CLASS A SHARES.
CLASS A SHARES' INCEPTION DATE IS MAY 11,
1987.
INSTITUTIONAL CLASS SHARES HAVE NO
SALES CHARGE; THEREFORE, PERFORMANCE IS AT
NAV. PERFORMANCE OF INSTITUTIONAL CLASS
SHARES WILL DIFFER FROM PERFORMANCE OF
OTHER SHARE CLASSES PRIMARILY DUE TO
DIFFERING SALES CHARGES AND CLASS
EXPENSES.
HAD THE ADVISOR NOT WAIVED FEES AND/OR
REIMBURSED EXPENSES IN THE PAST,
PERFORMANCE WOULD HAVE BEEN LOWER.
==========================================
NASDAQ Symbol ATFIX
==========================================
Over for information on your Fund's expenses.
================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND
PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES
AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
================================================================================
FOR INSTITUTIONAL INVESTOR USE ONLY
This material is for institutional investor use only and may not be quoted,
reproduced or shown to the public, nor used in written form as sales literature
for public use.
AIMinvestments.com TFI-INS-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
--Registered Trademark--
Information about your Fund's expenses
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE example, an $8,600 account value divided THE HYPOTHETICAL ACCOUNT VALUES AND
by $1,000 = 8.6), then multiply the result EXPENSES MAY NOT BE USED TO ESTIMATE THE
As a shareholder of the Fund, you incur by the number in the table under the ACTUAL ENDING ACCOUNT BALANCE OR EXPENSES
ongoing costs, including management fees heading entitled "Actual Expenses Paid YOU PAID FOR THE PERIOD. YOU MAY USE THIS
and other Fund expenses. This example is During Period" to estimate the expenses INFORMATION TO COMPARE THE ONGOING COSTS
intended to help you understand your you paid on your account during this OF INVESTING IN THE FUND AND OTHER FUNDS.
ongoing costs (in dollars) of investing in period. TO DO SO, COMPARE THIS 5% HYPOTHETICAL
the Fund and to compare these costs with EXAMPLE WITH THE 5% HYPOTHETICAL EXAMPLES
ongoing costs of investing in other mutual HYPOTHETICAL EXAMPLE FOR COMPARISON THAT APPEAR IN THE SHAREHOLDER REPORTS OF
funds. The example is based on an PURPOSES THE OTHER FUNDS.
investment of $1,000 invested at the
beginning of the period and held for the The table below also provides information Please note that the expenses shown in
entire period October 1, 2006, through about hypothetical account values and the table are meant to highlight your
March 31, 2007. hypothetical expenses based on the Fund's ongoing costs only. Therefore, the
actual expense ratio and an assumed rate hypothetical information is useful in
ACTUAL EXPENSES of return of 5% per year before expenses, comparing ongoing costs only, and will not
which is not the Fund's actual return. The help you determine the relative total
The table below provides information about Fund's actual cumulative total return costs of owning different funds.
actual account values and actual expenses. after expenses for the six months ended
You may use the information in this table, March 31, 2007, appears in the table on
together with the amount you invested, to the front of this supplement.
estimate the expenses that you paid over
the period. Simply divide your account
value by $1,000 (for
====================================================================================================================================
ACTUAL HYPOTHETICAL
(5% ANNUAL RETURN BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/1/06) (3/31/07)(1) PERIOD(2) (3/31/07) PERIOD(2) RATIO
Institutional $1,000.00 $1,013.90 $2.51 $1,022.44 $2.52 0.50%
(1) The actual ending account value is based on the actual total return of the Fund for the period October 1, 2006, through March
31, 2007, after actual expenses and will differ from the hypothetical ending account value, which is based on the Fund's
expense ratio and a hypothetical annual return of 5% before expenses. The Fund's actual cumulative total return after expenses
for the six months ended March 31, 2007, appears in the table on the front of this supplement.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the
period, multiplied by 182/365 to reflect the most recent fiscal half year.
====================================================================================================================================
AIMinvestments.com TFI-INS-1 A I M Distributors, Inc.
AIM Tax Free Intermediate Fund
SCHEDULE OF INVESTMENTS
March 31, 2007
<Table>
<Caption>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-98.96%
ALABAMA-2.44%
Birmingham (City of) Waterworks & Sewer
Board; Sub. Series 2007 A, Water & Sewer RB
(INS-Ambac Assurance Corp.) 4.38%,
01/01/24(b)(c) AAA Aaa $1,500 $ 1,483,245
- ----------------------------------------------------------------------------------------
Birmingham (City of); Series 2001 B,
Refunding Unlimited Tax GO Wts.
(INS-Financial Security Assurance Inc.)
5.25%, 07/01/10(b)(c) AAA Aaa 1,950 2,044,458
- ----------------------------------------------------------------------------------------
Jefferson (County of); Series 2000, School RB
Wts. (INS-Financial Security Assurance
Inc.) 5.05%, 02/15/09(b)(c) AAA Aaa 1,000 1,024,960
========================================================================================
4,552,663
========================================================================================
ARIZONA-1.71%
Phoenix (City of) Civic Improvements Corp.;
Series 2001, Refunding Wastewater System
Jr. Lien RB (INS-Financial Guaranty
Insurance Co.) 5.25%, 07/01/11(b)(c) AAA Aaa 3,000 3,189,300
========================================================================================
ARKANSAS-0.94%
Little Rock (City of) School District; Series
2001 C, Limited Tax GO (INS-Financial
Security Assurance Inc.) 5.00%,
02/01/10(b)(c) -- Aaa 1,695 1,757,190
========================================================================================
COLORADO-0.56%
Northwest Parkway Public Highway Authority;
Sr. Series 2001 A, RB (INS-Financial
Security Assurance Inc.) 5.00%,
06/15/11(b)(c) AAA Aaa 1,000 1,053,240
========================================================================================
CONNECTICUT-0.55%
Connecticut (State of) Resources Recovery
Authority (Bridgeport Resco Co. L.P.
Project); Series 1999, Refunding RB
(INS-MBIA Insurance Corp.) 5.13%,
01/01/09(b)(c) AAA Aaa 1,000 1,024,960
========================================================================================
</Table>
<Table>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
DISTRICT OF COLUMBIA-2.32%
District of Columbia;
Series 1993 B-1, Refunding Unlimited Tax GO
(INS-Ambac Assurance Corp.) 5.50%,
06/01/09(b)(c) AAA Aaa $1,250 $ 1,297,512
- ----------------------------------------------------------------------------------------
Series 1999 B, Refunding Unlimited Tax GO
(INS-Financial Security Assurance Inc.)
5.50%, 06/01/10(b)(c) AAA Aaa 1,415 1,490,618
- ----------------------------------------------------------------------------------------
Washington Convention Center Authority;
Series 1998, Sr. Lien Dedicated Tax RB
5.25%, 10/01/08(b)(d)(e) AAA Aaa 1,500 1,549,845
========================================================================================
4,337,975
========================================================================================
FLORIDA-1.20%
Florida (State of) Board of Education; Series
2000 B, Lottery RB (INS-Financial Guaranty
Insurance Co.) 5.75%, 07/01/10(b)(c) AAA Aaa 1,000 1,063,910
- ----------------------------------------------------------------------------------------
Village Center Community Development
District; Series 1998 A, Refunding
Recreational RB (INS-MBIA Insurance Corp.)
5.50%, 11/01/10(b)(c) AAA Aaa 1,105 1,173,278
========================================================================================
2,237,188
========================================================================================
GEORGIA-1.95%
Dalton (City of); Series 1999, Combined
Utilities RB (INS-Financial Security
Assurance Inc.) 5.75%, 01/01/10(b)(c) AAA Aaa 1,015 1,070,064
- ----------------------------------------------------------------------------------------
Georgia (State of);
Series 1992 B, Unlimited Tax GO 6.30%,
03/01/09(b) AAA Aaa 1,425 1,495,552
- ----------------------------------------------------------------------------------------
6.30%, 03/01/10(b) AAA Aaa 1,000 1,074,170
========================================================================================
3,639,786
========================================================================================
HAWAII-0.56%
Hawaii (State of); Series 1993 CA, Unlimited
Tax GO (INS-MBIA Insurance Corp.) 5.75%,
01/01/10(b)(c) AAA Aaa 1,000 1,054,250
========================================================================================
ILLINOIS-6.80%
Chicago (City of) (Central Loop
Redevelopment); Sub. Series 2000 A, Tax
Increment Allocation RB (INS-ACA Financial
Guaranty Corp.) 6.50%, 12/01/08(b)(c) A -- 8,000 8,317,280
- ----------------------------------------------------------------------------------------
</Table>
F-1
AIM Tax Free Intermediate Fund
<Table>
<Caption>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of); First Series 2001,
Refunding Unlimited Tax GO (INS-Financial
Security Assurance Inc.) 5.25%,
10/01/11(b)(c) AAA Aaa $1,790 $ 1,908,426
- ----------------------------------------------------------------------------------------
Madison & Saint Clair (Counties of) School
District No. 10 (Collinsville School
Building); Series 2001, Unlimited Tax GO
(INS-Financial Guaranty Insurance Co.)
5.00%, 02/01/11(b)(c) AAA Aaa 1,150 1,204,476
- ----------------------------------------------------------------------------------------
McHenry (County of) Community Consolidated
School District No. 47 (Crystal Lake);
Series 1999, Unlimited Tax GO
(INS-Financial Security Assurance Inc.)
5.13%, 02/01/10(b)(c) -- Aaa 1,250 1,282,650
========================================================================================
12,712,832
========================================================================================
INDIANA-0.80%
Zionsville (City of) Community Schools
Building Corp.; Series 2002, First Mortgage
RB 5.00%, 07/15/11(b)(d) AAA Aaa 1,420 1,488,515
========================================================================================
KANSAS-2.35%
Johnson (County of) Water District No. 1;
Series 2001, RB 5.00%, 06/01/11(b) AAA Aaa 1,770 1,863,420
- ----------------------------------------------------------------------------------------
Wyandotte (County of) & Kansas City (City of)
Unified Government (Redevelopment
Project-Area B); Series 2001, Special
Obligation RB (INS-Ambac Assurance Corp.)
5.00%, 12/01/10(b)(c) AAA Aaa 620 648,824
- ----------------------------------------------------------------------------------------
Wyandotte (County of) School District No.
500; Series 2001, Unlimited Tax GO
(INS-Financial Security Assurance Inc.)
5.50%, 09/01/11(b)(c) AAA Aaa 1,750 1,878,450
========================================================================================
4,390,694
========================================================================================
LOUISIANA-1.43%
Louisiana (State of) Energy & Power Authority
(Power Project); Series 2000, Refunding RB
(INS-Financial Security Assurance Inc.)
5.75%, 01/01/11(b)(c) AAA Aaa 2,500 2,678,300
========================================================================================
MASSACHUSETTS-2.77%
Massachusetts (State of); Series 2000 A,
Consumer Lien Limited Tax GO 5.75%,
02/01/09(b) AA Aa2 5,000 5,185,250
========================================================================================
</Table>
<Table>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
MICHIGAN-3.01%
Detroit (City of); Series 1997 B, Refunding
Unlimited Tax GO (INS-MBIA Insurance Corp.)
5.38%, 04/01/10(b)(c) AAA Aaa $1,630 $ 1,673,831
- ----------------------------------------------------------------------------------------
Hartland (City of) Consolidated School
District; Series 2001, Refunding Unlimited
Tax GO (CEP-Michigan School Bond Loan Fund)
5.50%, 05/01/11(b) AA Aa2 1,000 1,067,480
- ----------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Detroit
Edison Co.); Series 1995 CC, Refunding
Limited Obligation RB (INS-Ambac Assurance
Corp.) 4.85%, 09/01/11(b)(c)(e) -- Aaa 1,000 1,036,460
- ----------------------------------------------------------------------------------------
Taylor (City of); Series 2001, COP (INS-Ambac
Assurance Corp.) 5.00%, 02/01/11(b)(c) AAA Aaa 495 518,809
- ----------------------------------------------------------------------------------------
Troy (City of) Downtown Development
Authority; Series 2001, Refunding &
Development Tax Allocation RB (INS-MBIA
Insurance Corp.) 5.00%, 11/01/10(b)(c) AAA Aaa 1,265 1,323,013
========================================================================================
5,619,593
========================================================================================
MINNESOTA-1.44%
Western Minnesota Municipal Power Agency;
Series 2001 A, Refunding RB (INS-Ambac
Assurance Corp.) 5.50%, 01/01/10(b)(c) -- Aaa 1,245 1,306,491
- ----------------------------------------------------------------------------------------
5.50%, 01/01/11(b)(c) -- Aaa 1,300 1,387,074
========================================================================================
2,693,565
========================================================================================
MISSISSIPPI-0.92%
Rankin (County of) School District; Series
2001, Unlimited Tax GO (INS-Financial
Security Assurance Inc.) 5.00%,
10/01/11(b)(c) AAA Aaa 1,625 1,712,360
========================================================================================
MISSOURI-0.60%
Missouri (State of) Health & Educational
Facilities Authority (Webster University);
Series 2001, Educational Facilities RB
(INS-MBIA Insurance Corp.) 5.00%,
04/01/11(b)(c) -- Aaa 1,075 1,128,858
========================================================================================
NEVADA-0.83%
Nevada (State of); Series 1999 A, Capital
Improvement & Cultural Affairs Limited Tax
GO 5.00%, 02/01/10(b) AA+ Aa1 1,500 1,548,870
========================================================================================
</Table>
F-2
AIM Tax Free Intermediate Fund
<Table>
<Caption>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
NEW JERSEY-5.76%
Hudson (County of); Series 2006, Unlimited
Tax GO (INS-CIFG Assurance North America)
4.25%, 09/01/15(b)(c) AAA Aaa $2,500 $ 2,556,725
- ----------------------------------------------------------------------------------------
New Jersey (State of) Transportation Trust
Fund Authority; Series 1999 A,
Transportation System RB
5.50%, 06/15/10(b)(d) AAA Aaa 7,060 7,452,536
- ----------------------------------------------------------------------------------------
5.50%, 06/15/10(b) AA- A1 720 757,807
========================================================================================
10,767,068
========================================================================================
NEW YORK-3.40%
New York (State of) Dormitory Authority
(Frances Schervier Obligated Group); Series
1997, RB (INS-Financial Security Assurance
Inc.) 5.50%, 07/01/10(b)(c) AAA Aaa 1,205 1,270,986
- ----------------------------------------------------------------------------------------
New York (State of) Local Government
Assistance Corp.; Series 1996 A, Refunding
RB (INS-Ambac Assurance Corp.) 5.13%,
04/01/10(b)(c) AAA Aaa 5,000 5,087,400
========================================================================================
6,358,386
========================================================================================
NORTH CAROLINA-6.06%
Charlotte (City of); Series 1998, Refunding
Unlimited Tax GO 5.25%, 02/01/10(b) AAA Aaa 5,000 5,118,450
- ----------------------------------------------------------------------------------------
North Carolina (State of) Eastern Municipal
Power Agency; Series 1993 B, Refunding
Power System RB (INS-MBIA Insurance Corp.)
7.00%, 01/01/08(b)(c) AAA Aaa 1,000 1,024,590
- ----------------------------------------------------------------------------------------
North Carolina (State of); Series 1999 A,
Public Improvements Unlimited Tax GO 5.25%,
03/01/09(b)(d)(e) AAA Aaa 5,000 5,174,000
========================================================================================
11,317,040
========================================================================================
NORTH DAKOTA-0.93%
Burleigh (County of) (Medcenter One, Inc.);
Series 1999, Refunding Health Care RB
(INS-MBIA Insurance Corp.) 5.25%,
05/01/09(b)(c) AAA Aaa 1,695 1,745,596
========================================================================================
OHIO-0.68%
Delaware (County of) Sanitary Sewer System;
Series 2007, Refunding RB (INS-Financial
Security Assurance Inc.) 4.50%,
12/01/19(b)(c) AAA Aaa 250 258,018
- ----------------------------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
OHIO-(CONTINUED)
Sugarcreek (City of) Local School District;
Series 2006, Refunding School Improvement
Unlimited Tax GO (INS-Financial Security
Assurance Inc.) 4.50%, 12/01/23(b)(c) -- Aaa $1,000 $ 1,009,320
========================================================================================
1,267,338
========================================================================================
OKLAHOMA-2.33%
Grady (County of) Industrial Authority;
Series 1999, Correctional Facilities Lease
RB (INS-MBIA Insurance Corp.) 5.38%,
11/01/09(b)(c) AAA Aaa 230 234,517
- ----------------------------------------------------------------------------------------
Grand River Dam Authority; Series 1993,
Refunding RB (INS-Ambac Assurance Corp.)
5.50%, 06/01/09(b)(c) AAA Aaa 2,000 2,075,600
- ----------------------------------------------------------------------------------------
Mustang (City of) Improvement Authority;
Series 1999, Utility RB (INS-Financial
Security Assurance Inc.) 5.25%,
10/01/09(b)(c) -- Aaa 750 779,422
- ----------------------------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects); Series
2000, Refunding Multi-Family Housing VRD RB
(CEP-Federal National Mortgage Association)
3.68%, 07/15/30(f)(g) A-1+ -- 903 903,000
- ----------------------------------------------------------------------------------------
Okmulgee (County of) Governmental Building
Authority; Series 2000, First Mortgage
Sales Tax RB 5.60%, 03/01/08(b)(d)(e) NRR Aaa 355 366,197
========================================================================================
4,358,736
========================================================================================
OREGON-0.54%
Oregon (District of) Tri-County Metropolitan
Transportation; Series 2006, Payroll Tax &
Grant Receipt RB (INS-MBIA Insurance Corp.)
4.00%, 05/01/14(b)(c) AAA Aaa 1,000 1,004,330
========================================================================================
PENNSYLVANIA-0.27%
Harrisburg (City of) Authority (Harrisburg
University of Science); Series 2007 A, RB
5.40%, 09/01/16(b)(h) -- -- 500 510,525
========================================================================================
RHODE ISLAND-0.47%
Woonsocket (City of); Series 2000, Unlimited
Tax GO (INS-Financial Guaranty Insurance
Co.) 5.25%, 10/01/10(b)(c) -- Aaa 840 884,528
========================================================================================
</Table>
F-3
AIM Tax Free Intermediate Fund
<Table>
<Caption>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
SOUTH CAROLINA-1.13%
South Carolina (State of) Public Service
Authority; Series 1999 A, RB (INS-MBIA
Insurance Corp.) 5.50%, 01/01/10(b)(c) AAA Aaa $1,000 $ 1,047,260
- ----------------------------------------------------------------------------------------
South Carolina (State of); Series 2001 B,
Capital Improvements Unlimited Tax GO
5.50%, 04/01/11(b) AA+ Aaa 1,000 1,070,060
========================================================================================
2,117,320
========================================================================================
TEXAS-25.27%
Amarillo (City of) Health Facilities Corp.
(Baptist St. Anthony's Hospital); Series
1998, RB (INS-Financial Security Assurance
Inc.) 5.50%, 01/01/10(b)(c) -- Aaa 1,275 1,331,865
- ----------------------------------------------------------------------------------------
Austin (City of); Series 2001, Limited Tax
Certificates GO 5.00%, 09/01/11(b) AA+ Aa1 1,900 2,001,137
- ----------------------------------------------------------------------------------------
Canadian (City of) River Municipal Water
Authority; Series 1999, Conjunctive Use
Contract RB 5.00%, 02/15/09(b)(d)(e) AAA Aaa 2,245 2,299,845
- ----------------------------------------------------------------------------------------
Dallas (City of) Waterworks & Sewer System;
Series 1999, Refunding RB 5.50%,
10/01/09(b) AA+ Aa2 1,500 1,565,160
- ----------------------------------------------------------------------------------------
Garland (City of); Series 2001, Limited Tax
Certificates GO (INS-MBIA Insurance Corp.)
5.25%, 02/15/11(b)(c) AAA Aaa 2,435 2,572,310
- ----------------------------------------------------------------------------------------
Harris (County of) Health Facilities
Development Corp. (Memorial Hermann
Hospital System Project); Series 1998,
Hospital RB (INS-Financial Security
Assurance Inc.) 5.50%, 06/01/09(b)(c) AAA Aaa 2,500 2,591,350
- ----------------------------------------------------------------------------------------
Houston (City of) Convention & Entertainment
Facilities Department;
Series 2001 A, Refunding Hotel Occupancy
Tax Special RB (INS-Ambac Assurance Corp.)
5.50%, 09/01/10(b)(c) AAA Aaa 1,500 1,587,135
- ----------------------------------------------------------------------------------------
5.50%, 09/01/11(b)(c) AAA Aaa 4,000 4,291,920
- ----------------------------------------------------------------------------------------
Series 2001 B, Hotel Occupancy Tax Special
RB (INS-Ambac Assurance Corp.) 5.25%,
09/01/10(b)(c) AAA Aaa 2,865 3,008,680
- ----------------------------------------------------------------------------------------
5.25%, 09/01/11(b)(c) AAA Aaa 2,360 2,508,444
- ----------------------------------------------------------------------------------------
5.50%, 09/01/11(b)(c) AAA Aaa 2,460 2,639,531
- ----------------------------------------------------------------------------------------
Katy (City of) Independent School District;
Series 1999 A, Unlimited Tax GO (CEP-Texas
Permanent School Fund) 5.20%, 02/15/10(b) AAA Aaa 1,285 1,320,286
- ----------------------------------------------------------------------------------------
</Table>
<Table>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
TEXAS-(CONTINUED)
Lower Colorado River Authority; Series 1999
B, Refunding RB (INS-Financial Security
Assurance Inc.) 6.00%, 05/15/10(b)(c) AAA Aaa $1,460 $ 1,542,957
- ----------------------------------------------------------------------------------------
North Texas Municipal Water District; Series
2001, Water System RB (INS-MBIA Insurance
Corp.) 5.00%, 09/01/11(b)(c) AAA Aaa 1,040 1,095,796
- ----------------------------------------------------------------------------------------
San Antonio (City of);
Series 1994, Electric & Gas RB 5.00%,
02/01/12(b) AA Aa1 2,375 2,509,093
- ----------------------------------------------------------------------------------------
Series 1998 A, Electric & Gas RB 5.00%,
02/01/11(b) AA+ Aa2 1,490 1,525,134
- ----------------------------------------------------------------------------------------
5.25%, 02/01/09(b)(d)(e) AAA NRR 2,960 3,071,503
- ----------------------------------------------------------------------------------------
5.25%, 02/01/10(b) AA Aa1 5,540 5,750,686
- ----------------------------------------------------------------------------------------
Texas Tech University; Series 1999 6th,
Revenue Financing System RB (INS-Ambac
Assurance Corp.) 5.25%, 02/15/11(b)(c) AAA Aaa 3,910 4,020,848
========================================================================================
47,233,680
========================================================================================
UTAH-0.59%
Tooele (County of) School District; Series
2001, Unlimited Tax GO (CEP-Utah School
Bond Guaranty) 4.50%, 06/01/11(b) AAA Aaa 1,075 1,110,335
========================================================================================
VIRGINIA-1.58%
Harrisonburg (City of) Industrial Development
Authority (Rockingham Memorial Hospital);
Series 2006, Hospital Facilities RB
(INS-Ambac Assurance Corp.) 4.25%,
08/15/23(b)(c) AAA Aaa 1,000 979,160
- ----------------------------------------------------------------------------------------
Norton (City of) Industrial Development
Authority (Norton Community Hospital);
Series 2001, Refunding & Improvement
Hospital RB (INS-ACA Financial Guaranty
Corp.) 5.13%, 12/01/10(b)(c) A -- 1,315 1,337,473
- ----------------------------------------------------------------------------------------
Salem (City of); Series 2007 A, Refunding
Public Improvement Unlimited GO 4.50%,
01/01/23(b) -- Aa3 625 631,375
========================================================================================
2,948,008
========================================================================================
WASHINGTON-13.66%
Energy Northwest (Project #3); Series 2001 A,
Refunding Electric RB (INS-Financial
Security Assurance Inc.)
5.50%, 07/01/10(b)(c) AAA Aaa 2,000 2,110,780
- ----------------------------------------------------------------------------------------
5.50%, 07/01/11(b)(c) AAA Aaa 7,500 8,028,075
- ----------------------------------------------------------------------------------------
</Table>
F-4
AIM Tax Free Intermediate Fund
<Table>
<Caption>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Seattle (City of); Series 2001, Refunding
Municipal Light & Power Improvements RB
(INS-Financial Security Assurance Inc.)
5.25%, 03/01/11(b)(c) AAA Aaa $3,000 $ 3,168,780
- ----------------------------------------------------------------------------------------
Snohomish (County of); Series 2001, Limited
Tax GO 5.25%, 12/01/11(b) AA Aa3 2,685 2,862,640
- ----------------------------------------------------------------------------------------
Spokane (City of); Series 1999 B, Unlimited
Tax GO 5.40%, 01/01/10(b) AA- A2 2,075 2,102,432
- ----------------------------------------------------------------------------------------
Washington (State of) Department of Ecology
(State Office Building Project); Series
2001, Refunding COP (INS-Ambac Assurance
Corp.) 4.75%, 04/01/11(b)(c) AAA Aaa 5,310 5,448,325
- ----------------------------------------------------------------------------------------
Washington (State of); Series 2001 R-A,
Refunding Unlimited Tax GO 5.00%,
09/01/10(b) AA Aa1 1,745 1,818,656
========================================================================================
25,539,688
========================================================================================
</Table>
<Table>
PRINCIPAL
RATINGS(a) AMOUNT
S&P MOODY'S (000) VALUE
- ----------------------------------------------------------------------------------------
<Caption>
WISCONSIN-3.11%
Fond du Lac (City of) School District; Series
2000, Refunding Unlimited Tax GO 5.25%,
04/01/10(b)(d)(e) NRR Aaa $1,000 $ 1,044,950
- ----------------------------------------------------------------------------------------
Wisconsin (State of);
Series 1993 2, Refunding Unlimited Tax GO
5.13%, 11/01/11(b) AA- Aa3 2,000 2,119,740
- ----------------------------------------------------------------------------------------
Series 1999 C,
Unlimited Tax GO 5.75%, 05/01/10(b) AA- Aa3 2,500 2,648,325
========================================================================================
5,813,015
========================================================================================
TOTAL INVESTMENTS-98.96% (Cost $179,735,107) 184,980,982
========================================================================================
OTHER ASSETS LESS LIABILITIES-1.04% 1,952,954
========================================================================================
NET ASSETS-100.00% $186,933,936
________________________________________________________________________________________
========================================================================================
</Table>
Investment Abbreviations:
<Table>
CEP - Credit Enhancement Provider
COP - Certificates of Participation
GO - General Obligation Bonds
INS - Insurer
Jr. - Junior
NRR - Not Re-Rated
RB - Revenue Bonds
Sr. - Senior
Sub. - Subordinated
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"). NRR indicates a security that is not
re-rated subsequent to funding of an escrow fund (consisting of U.S.
Treasury obligations held by a bank custodian or other highly rated
collateral); this funding is pursuant to an advance refunding of this
security. Ratings are not covered by the Report of Independent Registered
Public Accounting Firm.
(b) In accordance with the procedures established by the Board of Trustees,
security fair valued based on an evaluated quote provided by an independent
pricing service. The aggregate value of these securities at March 31, 2007
was $184,077,982, which represented 98.47% of the Fund's Net Assets. See
Note 1A.
(c) Principal and/or interest payments are secured by the bond insurance company
listed.
(d) Advance refunded; secured by an escrow fund of U.S. Government obligations
or other highly rated collateral.
(e) Security has an irrevocable call by the issuer or mandatory put by the
holder. Maturity date reflects such call or put.
(f) Demand security payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined periodically.
Rate shown is rate in effect on March 31, 2007.
(g) In accordance with the procedures established by the Board of Trustees,
investments 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.
(h) Unrated security; determined by the investment advisor to be of comparable
quality to the rated securities in which the Fund may invest pursuant to
guidelines of quality adopted by the Board of Trustees and followed by the
investment advisor.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-5
AIM Tax Free Intermediate Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2007
<Table>
ASSETS:
Investments, at value (cost $179,735,107) $184,980,982
- -----------------------------------------------------------
Receivables for:
Fund shares sold 43,042
- -----------------------------------------------------------
Interest 2,421,135
- -----------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 63,418
- -----------------------------------------------------------
Other assets 13,519
===========================================================
Total assets 187,522,096
___________________________________________________________
===========================================================
LIABILITIES:
Payables for:
Fund shares reacquired 96,889
- -----------------------------------------------------------
Dividends 302,161
- -----------------------------------------------------------
Trustee deferred compensation and
retirement plans 97,133
- -----------------------------------------------------------
Accrued distribution fees -- Class A3 8,078
- -----------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 5,274
- -----------------------------------------------------------
Accrued transfer agent fees 13,376
- -----------------------------------------------------------
Accrued operating expenses 65,249
===========================================================
Total liabilities 588,160
===========================================================
Net assets applicable to shares outstanding $186,933,936
___________________________________________________________
===========================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $180,283,369
- -----------------------------------------------------------
Undistributed net investment income 168,300
- -----------------------------------------------------------
Undistributed net realized gain 1,236,392
- -----------------------------------------------------------
Unrealized appreciation 5,245,875
===========================================================
$186,933,936
___________________________________________________________
===========================================================
NET ASSETS:
Class A $145,563,262
___________________________________________________________
===========================================================
Class A3 $ 38,155,892
___________________________________________________________
===========================================================
Institutional Class $ 3,214,782
___________________________________________________________
===========================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 13,529,676
___________________________________________________________
===========================================================
Class A3 3,546,554
___________________________________________________________
===========================================================
Institutional Class 298,952
___________________________________________________________
===========================================================
Class A:
Net asset value per share $ 10.76
- -----------------------------------------------------------
Offering price per share
(Net asset value of $10.76 divided by
99.00% $ 10.87
___________________________________________________________
===========================================================
Class A3:
Net asset value and offering price per
share $ 10.76
___________________________________________________________
===========================================================
Institutional Class:
Net asset value and offering price per
share $ 10.75
___________________________________________________________
===========================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-6
AIM Tax Free Intermediate Fund
STATEMENT OF OPERATIONS
For the year ended March 31, 2007
<Table>
INVESTMENT INCOME:
Interest $13,157,939
=========================================================================
EXPENSES:
Advisory fees 831,943
- -------------------------------------------------------------------------
Administrative services fees 83,783
- -------------------------------------------------------------------------
Custodian fees 13,561
- -------------------------------------------------------------------------
Distribution fees -- Class A3 186,522
- -------------------------------------------------------------------------
Transfer agent fees -- A and A3 162,213
- -------------------------------------------------------------------------
Transfer agent fees -- Institutional 29,188
- -------------------------------------------------------------------------
Trustees' and officer's fees and benefits 24,985
- -------------------------------------------------------------------------
Other 254,779
=========================================================================
Total expenses 1,586,974
=========================================================================
Less: Expenses reimbursed and expense offset arrangement (14,744)
=========================================================================
Net expenses 1,572,230
=========================================================================
Net investment income 11,585,709
=========================================================================
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain from Investment securities 2,441,043
- -------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) from
investment securities (4,901,735)
=========================================================================
Net realized and unrealized gain (loss) (2,460,692)
=========================================================================
Net increase in net assets resulting from operations $ 9,125,017
_________________________________________________________________________
=========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-7
AIM Tax Free Intermediate Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2007 and 2006
<Table>
<Caption>
2007 2006
- -------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 11,585,709 $ 15,370,791
- -------------------------------------------------------------------------------------------
Net realized gain (loss) 2,441,043 (7,589)
- -------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (4,901,735) (8,713,679)
===========================================================================================
Net increase in net assets resulting from operations 9,125,017 6,649,523
===========================================================================================
Distributions to shareholders from net investment income:
Class A (7,486,154) (10,063,891)
- -------------------------------------------------------------------------------------------
Class A3 (3,104,073) (4,597,512)
- -------------------------------------------------------------------------------------------
Institutional Class (1,475,051) (1,848,410)
===========================================================================================
Total distributions from net investment income (12,065,278) (16,509,813)
===========================================================================================
Distributions to shareholders from net realized gains:
Class A (785,291) --
- -------------------------------------------------------------------------------------------
Class A3 (322,792) --
- -------------------------------------------------------------------------------------------
Institutional Class (88,881) --
===========================================================================================
Total distributions from net realized gains (1,196,964) --
===========================================================================================
Decrease in net assets resulting from distributions (13,262,242) (16,509,813)
===========================================================================================
Share transactions-net:
Class A (46,461,251) (46,750,295)
- -------------------------------------------------------------------------------------------
Class A3 (89,526,320) 34,334,113
- -------------------------------------------------------------------------------------------
Institutional Class (43,405,745) 15,365,238
===========================================================================================
Net increase (decrease) in net assets resulting from
share transactions (179,393,316) 2,949,056
===========================================================================================
Net increase (decrease) in net assets (183,530,541) (6,911,234)
===========================================================================================
NET ASSETS:
Beginning of year 370,464,477 377,375,711
===========================================================================================
End of year (including undistributed net investment income
of $168,300 and $647,869, respectively) $ 186,933,936 $370,464,477
___________________________________________________________________________________________
===========================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
F-8
AIM Tax Free Intermediate Fund
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Free Intermediate Fund (the "Fund") is a series portfolio of AIM
Tax-Exempt Funds (the "Trust"). The Trust is a Delaware statutory trust
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of three
separate portfolios, each authorized to issue an unlimited number of shares of
beneficial interest. The Fund currently consists of multiple classes of shares.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio. The assets, liabilities and operations of each
portfolio or class are accounted for separately. Information presented in these
financial statements pertains only to the Fund.
The Fund's investment objective is to generate as a high a level of
tax-exempt income as is consistent with preservation of capital.
The following is a summary of the significant accounting policies followed
by the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
Securities are fair valued using an evaluated quote provided by an
independent pricing service approved by the Board of Trustees. Evaluated
quotes provided by the pricing service may be determined without exclusive
reliance on quoted prices and may reflect appropriate factors such as
institution-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
with maturities of 60 days or less are recorded at amortized cost which
approximates value. Securities with a demand feature exercisable within one
to seven days are valued at par.
Securities for which market quotations either are not readily available
or are unreliable are valued at fair value as determined in good faith by
or under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Some of the factors which may be
considered in determining fair value are fundamental analytical data
relating to the investment; the nature and duration of any restrictions on
transferability or disposition; trading in similar securities by the same
issuer or comparable companies; relevant political, economic or issuer
specific news; and other relevant factors under the circumstances.
B. 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 may receive proceeds from litigation settlements involving Fund
investments. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized gain (loss) from
investment securities reported in the Statement of Operations and the
Statement of Changes in Net Assets and the realized net gains (losses) on
securities per share in the Financial Highlights. Transaction costs are
included in the calculation of the Fund's net asset value and, accordingly,
they reduce the Fund's total returns. These transaction costs are not
considered operating expenses and are not reflected in net investment
income reported in the Statement of Operations and Statement of Changes in
Net Assets, or the net investment income per share and ratios of expenses
and net investment income reported in the Financial Highlights, nor are
they limited by any expense limitation arrangements between the Fund and
the advisor.
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.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to treat a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable and tax-exempt earnings to shareholders. As such, the Fund
will not be subject to federal income taxes on otherwise taxable income
(including net realized capital gain) that is distributed to shareholders.
Therefore, no provision for federal income taxes is recorded in the
financial statements.
In addition, the Fund intends to invest in such municipal securities to
allow it to qualify to pay shareholders "exempt-interest dividends", as
defined in the Internal Revenue Code.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund are charged to the operations of such class. Transfer
agency fees and expenses and other shareholder recordkeeping fees and
expenses attributable to the Institutional Class are charged to such class.
Transfer agency fees and expenses and other shareholder recordkeeping fees
and expenses relating to all other classes are allocated among those
classes based on relative net assets. All other expenses are allocated
among the classes based on relative net assets.
F. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
F-9
AIM Tax Free Intermediate Fund
G. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS ANNUAL RATE
- -------------------------------------------------------------------------
First $500 million 0.30%
- -------------------------------------------------------------------------
Over $500 million up to and including $1 billion 0.25%
- -------------------------------------------------------------------------
Over $1 billion 0.20%
________________________________________________________________________
=========================================================================
</Table>
At the request of the Trustees of the Trust, AMVESCAP PLC ("AMVESCAP")
agreed to reimburse expenses incurred by the Fund in connection with market
timing matters in the AIM Funds, which may include legal, audit, shareholder
reporting, communications and trustee expenses. These expenses along with the
related expense reimbursement are included in the Statement of Operations. For
the year ended March 31, 2007, AMVESCAP reimbursed expenses of the Fund in the
amount of $3,696.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
March 31, 2007, expenses incurred under the agreement are shown in the Statement
of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended March 31, 2007,
expenses incurred under the agreement are shown in the Statement of Operations
as transfer agency fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class A3
and Institutional Class shares of the Fund. The Trust has adopted plans pursuant
to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A3 shares (the
"Plan"). The Fund, pursuant to the Plan, pays ADI compensation at the annual
rate of 0.25% of the Fund's average daily net assets of Class A3 shares. Of the
Plan payments, up to 0.25% of the average daily net assets of each class of
shares may be paid to furnish continuing personal shareholder services to
customers who purchase and own Class A3 shares of the Fund. Any amounts not paid
as a service fee under the Plan would constitute an asset-based sales charge.
National Association of Securities Dealers ("NASD") Rules also impose a cap on
the total sales charges, including asset-based sales charges that may be paid by
any class of shares of the Fund. For the year ended March 31, 2007, expenses
incurred under the Plans are shown in the Statement of Operations as
distribution fees.
Front-end sales commissions and contingent deferred sales charges ("CDSC")
(collectively the "sales charges") are not recorded as expenses of the Fund.
Front-end sales commissions are deducted from proceeds from the sales of Fund
shares prior to investment in Class A shares of the Fund. CDSC are deducted from
redemption proceeds prior to remittance to the shareholder. During the year
ended March 31, 2007, ADI advised the Fund that it retained $1,629 in front-end
sales commissions from the sale of Class A shares and $335 from Class A shares
for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--EXPENSE OFFSET ARRANGEMENT
The expense offset arrangement is comprised of transfer agency credits which
result from balances in Demand Deposit Accounts (DDA) used by the transfer agent
for clearing shareholder transactions. For the year ended March 31, 2007, the
Fund received credits from this arrangement, which resulted in the reduction of
the Fund's total expenses of $11,048.
F-10
AIM Tax Free Intermediate Fund
NOTE 4--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2007, the Fund paid legal fees of $4,952 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources exceed
10% of the Fund's total assets. 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 participates in an uncommitted unsecured revolving credit facility
with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the
lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
credit facility can borrow on a first come, first served basis. Principal on
each loan outstanding shall bear interest at the bid rate quoted by SSB at the
time of the request for the loan.
During the year ended March 31, 2007, the Fund did not borrow or lend under
the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds as a compensating balance in the account so the custodian
bank can be compensated by earning the additional interest; or (ii) compensate
by paying the custodian bank at a rate agreed upon by the custodian bank and
AIM, not to exceed the contractually agreed upon rate.
NOTE 6--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years ended March 31, 2007
and 2006 was as follows:
<Table>
<Caption>
2007 2006
- ----------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income -- tax-exempt $12,065,278 $16,509,813
- ----------------------------------------------------------------------------------------
Long-term capital gain 1,196,964 --
========================================================================================
Total distributions $13,262,242 $16,509,813
________________________________________________________________________________________
========================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS:
As of March 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ----------------------------------------------------------------------------
Undistributed ordinary income -- taxable $ 56,373
- ----------------------------------------------------------------------------
Undistributed ordinary income -- tax-exempt 254,593
- ----------------------------------------------------------------------------
Undistributed long-term gain 1,180,019
- ----------------------------------------------------------------------------
Net unrealized appreciation -- investments 5,245,875
- ----------------------------------------------------------------------------
Temporary book/tax differences (86,293)
- ----------------------------------------------------------------------------
Shares of beneficial interest 180,283,369
============================================================================
Total net assets $186,933,936
____________________________________________________________________________
============================================================================
</Table>
F-11
AIM Tax Free Intermediate Fund
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 the trustee deferral of compensation and
retirement plan benefits.
The Fund utilized $7,687 of capital loss carryforward in the current period
to offset net realized capital gain for federal income tax purposes. The Fund
does not have a capital loss carryforward as of March 31, 2007
NOTE 7--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2007 was $30,627,464 and $207,547,485,
respectively.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $5,300,843
- ------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (54,968)
==============================================================================
Net unrealized appreciation of investment securities $5,245,875
______________________________________________________________________________
==============================================================================
Investments have the same cost for tax and financial statement purposes.
</Table>
NOTE 8--SHARE INFORMATION
The Fund currently consists of three different classes of shares: Class A, Class
A3 and Institutional Class. As of the close of business on October 30, 2002,
Class A shares were closed to new investors. Class A shares are sold with a
front-end sales charge unless certain waiver criteria are met and under certain
circumstances load waiver shares may be subject to a CDSC. Class A3 shares and
Institutional Class shares are sold at net asset value.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
----------------------------------------------------------
2007(A) 2006
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 366,754 $ 3,991,807 743,535 $ 8,275,792
- ------------------------------------------------------------------------------------------------------------------------
Class A3 2,941,323 31,974,925 7,121,674 79,126,007
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class 1,118,894 12,129,926 1,817,804 20,221,931
========================================================================================================================
Issued as reinvestment of dividends:
Class A 409,615 4,440,618 515,018 5,727,204
- ------------------------------------------------------------------------------------------------------------------------
Class A3 260,803 2,830,051 366,495 4,067,670
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class 59,030 641,450 10,939 119,563
========================================================================================================================
Reacquired:
Class A (5,057,106) (54,893,676) (5,469,192) (60,753,291)
- ------------------------------------------------------------------------------------------------------------------------
Class A3 (11,459,691) (124,331,296) (4,393,205) (48,859,564)
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class (5,182,942) (56,177,121) (448,837) (4,976,256)
========================================================================================================================
(16,543,320) $(179,393,316) 264,231 $ 2,949,056
________________________________________________________________________________________________________________________
========================================================================================================================
</Table>
(a) There are three entities that are each a record owner of more than 5% of
the outstanding shares of the Fund and in the aggregate they own 26% of
the outstanding shares of the Fund. ADI has an agreement with these
entities to sell Fund shares. The Fund, AIM and/or AIM affiliates may
make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, AIM and/or AIM affiliates
including but not limited to services such as, securities brokerage,
distribution, third party record keeping and account servicing. There is
also one individual that is a record owner of more than 5% of the
outstanding shares of the Fund and owns 11% of the outstanding shares of
the Fund. The Trust has no knowledge as to whether all or any portion of
the shares owned of record are also owned beneficially.
NOTE 9--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management is currently
assessing the impact of FIN 48, if any, on the Fund's financial statements and
currently intends for the Fund to adopt FIN 48 provisions during the fiscal year
ending March 31, 2008.
F-12
AIM Tax Free Intermediate Fund
NOTE 10--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
---------------------------------------------------------------
YEAR ENDED MARCH 31,
---------------------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.92 $ 11.21 $ 11.69 $ 11.70 $ 11.06
- -----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.46 0.47 0.49 0.47(a) 0.48
- -----------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.09) (0.26) (0.49) (0.01) 0.60
=============================================================================================================================
Total from investment operations 0.37 0.21 (0.00) 0.46 1.08
=============================================================================================================================
Less distributions:
Dividends from net investment income (0.48) (0.50) (0.48) (0.47) (0.44)
- -----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.05) -- -- -- --
=============================================================================================================================
Total distributions (0.53) (0.50) (0.48) (0.47) (0.44)
=============================================================================================================================
Net asset value, end of period $ 10.76 $ 10.92 $ 11.21 $ 11.69 $ 11.70
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Total return(b) 3.49% 1.87% (0.01)% 4.04% 9.86%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $145,563 $194,526 $246,946 $390,903 $539,679
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Ratio of expenses to average net assets 0.50%(c) 0.46% 0.43%(d) 0.42% 0.38%
=============================================================================================================================
Ratio of net investment income to average net assets 4.24%(c) 4.16% 4.09% 3.98% 4.10%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Portfolio turnover rate 11% 9% 4% 6% 7%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $169,736,043.
(d) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 0.44% for the year ended March 31, 2005.
F-13
AIM Tax Free Intermediate Fund
NOTE 10--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS A3
----------------------------------------------------------------------
OCTOBER 31, 2002
(DATE SALES
YEAR ENDED MARCH 31, COMMENCED) TO
------------------------------------------------ MARCH 31,
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.92 $ 11.21 $ 11.69 $ 11.70 $ 11.59
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.46 0.42 0.43 0.43(a) 0.18
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.12) (0.24) (0.47) (0.01) 0.10
=================================================================================================================================
Total from investment operations 0.34 0.18 (0.04) 0.42 0.28
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.45) (0.47) (0.44) (0.43) (0.17)
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.05) -- -- -- --
=================================================================================================================================
Total distributions (0.50) (0.47) (0.44) (0.43) (0.17)
=================================================================================================================================
Net asset value, end of period $ 10.76 $ 10.92 $ 11.21 $ 11.69 $ 11.70
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) 3.23% 1.57% (0.37)% 3.67% 2.47%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $38,156 $128,946 $97,651 $101,312 $29,320
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 0.75%(c) 0.73% 0.78%(d) 0.77% 0.73%(e)
=================================================================================================================================
Ratio of net investment income to average net assets 3.99%(c) 3.89% 3.74% 3.63% 3.75%(e)
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate(f) 11% 9% 4% 6% 7%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $74,608,857.
(d) After fees waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 0.79% for the year ended March 31, 2005.
(e) Annualized.
(f) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
F-14
AIM Tax Free Intermediate Fund
NOTE 10--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
INSTITUTIONAL CLASS
--------------------------------------
JULY 30, 2004
YEAR ENDED (DATE SALES
MARCH 31, COMMENCED) TO
---------------------- MARCH 31,
2007 2006 2005
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.92 $ 11.21 $ 11.40
- ----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.46 0.45 0.32(a)
- ----------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.10) (0.24) (0.19)
====================================================================================================
Total from investment operations 0.36 0.21 0.13
====================================================================================================
Less distributions:
Dividends from net investment income (0.48) (0.50) (0.32)
- ----------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.05) -- --
====================================================================================================
Total distributions (0.53) (0.50) (0.32)
====================================================================================================
Net asset value, end of period $ 10.75 $ 10.92 $ 11.21
____________________________________________________________________________________________________
====================================================================================================
Total return(b) 3.43% 1.91% 1.13%
____________________________________________________________________________________________________
====================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 3,215 $46,992 $32,779
____________________________________________________________________________________________________
====================================================================================================
Ratio of expenses to average net assets 0.52%(c) 0.41% 0.42%(d)(e)
====================================================================================================
Ratio of net investment income to average net assets 4.22%(c) 4.21% 4.10%(e)
____________________________________________________________________________________________________
====================================================================================================
Portfolio turnover rate(f) 11% 9% 4%
____________________________________________________________________________________________________
====================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $32,969,298.
(d) After fees waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 0.43% (annualized) for the period ended March 31, 2005.
(e) Annualized.
(f) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
NOTE 11--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment
advisor to certain AIM Funds), AIM and A I M Distributors, Inc. ("ADI") (the
distributor of the retail AIM Funds) reached final settlements with certain
regulators, including the Securities and Exchange Commission ("SEC"), the New
York Attorney General and the Colorado Attorney General, to resolve civil
enforcement actions and/or investigations related to market timing and related
activity in the AIM Funds, including those formerly advised by IFG. As part of
the settlements, a $325 million fair fund ($110 million of which is civil
penalties) has been created to compensate shareholders harmed by market timing
and related activity in funds formerly advised by IFG. Additionally, AIM and ADI
created a $50 million fair fund ($30 million of which is civil penalties) to
compensate shareholders harmed by market timing and related activity in funds
advised by AIM, which was done pursuant to the terms of the settlement. These
two fair funds may increase as a result of contributions from third parties who
reach final settlements with the SEC or other regulators to resolve allegations
of market timing and/or late trading that also may have harmed applicable AIM
Funds. These two fair funds will be distributed in accordance with a methodology
to be determined by AIM's independent distribution consultant, in consultation
with AIM and the independent trustees of the AIM Funds and acceptable to the
staff of the SEC. Management of AIM and the Fund are unable to estimate the
impact, if any, that the distribution of these two fair funds may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs
F-15
AIM Tax Free Intermediate Fund
NOTE 11--LEGAL PROCEEDINGS--(CONTINUED)
and an "administrative assessment," to be determined by the Commissioner.
Initial research indicates that these damages could be limited or capped by
statute. By agreement with the Commissioner of Securities, AIM's time to respond
to that Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds;
- that certain AIM Funds inadequately employed fair value pricing; and
- that the defendants improperly used the assets of the AIM Funds to pay
brokers to aggressively promote the sale of the AIM Funds over other
mutual funds and that the defendants concealed such payments from
investors by disguising them as brokerage commissions.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid, an accounting of all fund-related fees,
commissions and soft dollar payments, restitution of all commissions and fees
paid, and prospective relief in the form of reduced fees.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in AMVESCAP's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the AMVESCAP defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
F-16
AIM Tax Free Intermediate Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Tax-Exempt Funds
and Shareholders of AIM Tax-Free Intermediate Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Tax-Free Intermediate Fund (one
of the funds constituting AIM Tax-Exempt Funds, hereafter referred to as the
"Fund") at March 31, 2007, the results of its operations for the year then ended
and the changes in its net assets and the financial highlights for each of the
two years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 2007 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion. The financial
highlights for each of the periods ended on or before March 31, 2005 were
audited by another independent registered public accounting firm whose report
dated May 18, 2005 expressed an unqualified opinion on those statements.
PRICEWATERHOUSECOOPERS LLP
May 18, 2007
Houston, Texas
F-17
AIM Tax Free Intermediate Fund
TAX INFORMATION
Form 1099-INT and other year -- end tax information provide shareholders with
actual calendar year amounts that should be included in their tax returns.
Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code.
The Fund designates the following amounts or, if subsequently determined to
be different, the maximum amount allowable for its fiscal year ended March 31,
2007:
<Table>
<Caption>
FEDERAL INCOME TAX
Long-Term Capital Gain
Distributions $1,196,964
Tax-Exempt Interest Dividends* 100%
</Table>
* The above percentage is based on income dividends paid to shareholders
during the Fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2006, September 30, 2006, December 31, 2006 and
March 31, 2007 are 99.96%, 99.98%, 99.98%, and 99.97%, respectively.
F-18
AIM Tax Free Intermediate Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Tax-Exempt Funds (the "Trust"),
is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 105
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Column two below includes length of time served with predecessor
entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, AMVESCAP PLC (parent of AIM
and a global investment management
firm); Chairman, A I M Advisors, Inc.
(registered investment advisor); and
Director, Chairman, Chief Executive
Officer and President, AVZ Inc. (holding
company); INVESCO North American
Holdings, Inc. (holding company);
Chairman and President, AMVESCAP Group
Services, Inc. (service provider);
Trustee, The AIM Family of Funds(R);
Chairman, Investment Company Institute;
and Member of Executive Board, SMU Cox
School of Business
Formerly: President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Robert H. Graham(2) -- 1946 1993 Trustee and Vice Chair of The AIM Family None
Trustee and Vice Chair of Funds--Registered Trademark--
Formerly: President and Chief Executive
Officer, A I M Management Group Inc.;
Director, Chairman and President, A I M
Advisors, Inc. (registered investment
advisor); Director and Chairman, A I M
Capital Management, Inc. (registered
investment advisor), A I M Distributors,
Inc. (registered broker dealer), AIM
Investment Services, Inc., (registered
transfer agent), and Fund Management
Company (registered broker dealer);
Chief Executive Officer, AMVESCAP
PLC -- Managed Products; President and
Principal Executive Officer of The AIM
Family of Funds--Registered Trademark--;
Director and Chairman, A I M Management
Group Inc. (financial services holding
company); Director and Vice Chairman,
AMVESCAP PLC; and Chairman, AMVESCAP
PLC -- AIM Division
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(3) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, A I M Management Group Inc.,
Principal AIM Mutual Fund Dealer Inc. (registered
Executive Officer broker dealer), A I M Advisors, Inc.,
AIM Funds Management Inc. d/b/a AMVESCAP
Enterprise Services (registered
investment advisor) and 1371 Preferred
Inc. (holding company); Director,
Chairman, Chief Executive Officer and
President, A I M Capital Management
Inc.; Director and President, A I M
Advisors, Inc., INVESCO Funds Group,
Inc. (registered investment advisor and
register transfer agent) and AIM GP
Canada Inc. (general partner for a
limited partnership); Director, A I M
Distributors, Inc.; Director and
Chairman, AIM Investment Services, Inc.,
Fund Management Company and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, AVZ Callco Inc. (holding
company); AMVESCAP Inc. (holding
company) and AIM Canada Holdings Inc.
(holding company); Director and Chief
Executive Officer, AIM Trimark Corporate
Class Inc. (formerly AIM Trimark Global
Fund Inc.) (corporate mutual fund
company) and AIM Trimark Canada Fund
Inc. (corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
Powershares Capital Management LLC
Formerly: President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1993 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company (2 portfolios))
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company (7 portfolios)); Annuity and
Life Re (Holdings), Ltd. (insurance
company); CompuDyne Corporation
(provider of products and services to
the public security market); and
Homeowners of America Holding
Corporation (property casualty company)
Formerly: Director, President and Chief
Executive Officer, Volvo Group North
America, Inc.; Senior Vice President, AB
Volvo; and Director of various
affiliated Volvo companies; and
Director, Magellan Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff, and Discovery Global
Trustee Century Group, Inc. (government affairs Education Fund
company); and Owner, Dos Angelos Ranch, (non-profit)
L.P.
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1993 Partner, law firm of Kramer Levin Director, Reich & Tang Funds (7
Trustee Naftalis and Frankel LLP portfolios))
- -------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA None
Trustee of the USA
- -------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 1993 Partner, law firm of Pennock & Cooper None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Ruth H. Quigley -- 1935 2001 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired Director, Mainstay VP Series
Trustee Formerly: Partner, Deloitte & Touche Funds, Inc. (21 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
AMVESCAP PLC, parent of the advisor to the Trust.
(2) Mr. Graham is considered an interested person of the Trust because of his
previous positions with AMVESCAP PLC, parent of the advisor to the Trust.
(3) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
F-19
TRUSTEES AND OFFICERS--(CONTINUED)
AIM Tax Free Intermediate Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
INVESCO Distributors, Inc.; Vice
President and Secretary, A I M Capital
Management, Inc., AIM Investment
Services, Inc., and Fund Management
Company; Senior Vice President and
Secretary, A I M Distributors, Inc.;
Director and Vice President, INVESCO
Funds Group Inc.; Senior Vice President,
Chief Legal Officer and Secretary of The
AIM Family of Funds--Registered
Trademark--; and Manager, Powershares
Capital Management LLC
Formerly: Vice President, A I M Capital
Management, Inc.; Chief Operating
Officer, Senior Vice President, General
Counsel, and Secretary, Liberty Ridge
Capital, Inc. (an investment adviser);
Vice President and Secretary, PBHG Funds
(an investment company); Vice President
and Secretary, PBHG Insurance Series
Fund (an investment company); General
Counsel and Secretary, Pilgrim Baxter
Value Investors (an investment adviser);
Chief Operating Officer, General Counsel
and Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, AMVESCAP N/A
Vice President PLC; and Vice President of The AIM
Family of Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, AMVESCAP PLC; Director, INVESCO
Funds Group, Inc.; and Vice President of
The AIM Family of Funds--Registered
Trademark--
Formerly: Director, Vice President and N/A
General Counsel, Fund Management
Company; Director, Senior Vice
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Director and Vice
President, INVESCO Distributors, Inc.;
Senior Vice President, A I M
Distributors, Inc.; Vice President,
A I M Capital Management, Inc. and AIM
Investment Services, Inc.; Senior Vice
President, Chief Legal Officer and
Secretary of The AIM Family of
Funds--Registered Trademark--; Chief
Executive Officer and President, INVESCO
Funds Group, Inc.; and Senior Vice
President, and General Counsel, Liberty
Financial Companies, Inc. and Senior
Vice President and General Counsel
Liberty Funds Group, LLC
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President and Fund Treasurer, A I M N/A
Vice President, Principal Advisors, Inc.; and Vice President,
Financial Officer and Treasurer and Principal Officer of The
Treasurer AIM Family of Funds--Registered
Trademark--
Formerly: Senior Vice President, AIM
Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 1993 Director of Cash Management and Senior N/A
Vice President Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Director
and President, Fund Management Company;
Vice President, The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); and
President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust Only)
Formerly: Chief Cash Management Officer
and Managing Director, A I M Capital
Management, Inc.; Vice President, A I M
Advisors, Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Patrick J.P. Farmer -- 1962 2007 Head of North American Retail N/A
Vice President Investments, Director, Chief Investment
Officer and Executive Vice President,
AIM Funds Management Inc. d/b/a AIM
Trimark Investments; Senior Vice
President and Head of Equity
Investments, A I M Advisors, Inc. and
A I M Capital Management, Inc.; and Vice
President, The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Trimark Trust
- -------------------------------------------------------------------------------------------------------------------------
Stephen M. Johnson -- 1961 2007 Chief Investment Officer of INVESCO N/A
Vice President Fixed Income and Vice President, INVESCO
Institutional (N.A.), Inc; Senior Vice
President and Fixed Income Chief
Investment Officer, A I M Advisors, Inc.
and A I M Capital Management, Inc.; and
Vice President, The AIM Family of
Funds--Registered Trademark--
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc., Fund Management
Company and The AIM Family of
Funds--Registered Trademark--
Formerly: Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc.; and Vice
President, A I M Distributors, Inc., AIM
Investment Services, Inc. and Fund
Management Company
Formerly: Vice President, A I M Capital
Management, Inc.; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; Chief Compliance Officer
and Deputy General Counsel,
AIG-SunAmerica Asset Management; and
Chief Compliance Officer, Chief
Operating Officer and Deputy General
Counsel, American General Investment
Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment The Bank of New York
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. 2 Hanson Place
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Brooklyn, NY 11217-1431
Floor 1177 Avenue of the Houston, TX 77210-4739
Philadelphia, PA 19103-7599 Americas
New York, NY 10036-2714
</Table>
F-20
[EDELIVERY
GO PAPERLESS
AIMINVESTMENTS.COM/EDELIVERY
GRAPHIC]
REGISTER FOR EDELIVERY
eDelivery is the process of receiving your If used after July 20, 2007, this report must be accompanied by a Fund
fund and account information via e-mail. Performance & Commentary or by an AIM Quarterly Performance Review for the most
Once your quarterly statements, tax forms, recent quarter-end. Mutual funds and exchange-traded funds distributed by A I M
fund reports, and prospectuses are Distributors, Inc.
available, we will send you an e-mail
notification containing links to these A I M Management Group Inc. has provided leadership in the investment management
documents. For security purposes, you will industry since 1976. AIM Investment Services, Inc. is the transfer agent for the
need to log in to your account to view products and services represented by AIM Investments. AIM is a subsidiary of
your statements and tax forms. AMVESCAP PLC, one of the world's largest independent financial services
companies with $471 billion in assets under management as of March 31, 2007.
WHY SIGN UP?
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Register for eDelivery to: CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY.
FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR
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complete the consent process.
This AIM service is provided by AIM
Investment Services, Inc.
AIMinvestments.com TFI-AR-1 A I M Distributors, Inc.
[YOUR GOALS. OUR SOLUTIONS.]
--REGISTERED TRADEMARK--
Mutual Exchange- Retirement Annuities College Separately Offshore Cash [AIM INVESTMENTS LOGO]
Funds Traded Products Savings Managed Products Management --REGISTERED TRADEMARK--
Funds Plans Accounts
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the Registrant had
adopted a code of ethics (the "Code") that applies to the Registrant's
principal executive officer ("PEO") and principal financial officer
("PFO"). There were no amendments to the Code during the period
covered by the report. The Registrant did not grant any waivers,
including implicit waivers, from any provisions of the Code to the PEO
or PFO during the period covered by this report.
..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 Raymond Stickel, Jr. Mr.
Stickel is "independent" within the meaning of that term as used in
Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
FEES BILLED BY PRINCIPAL ACCOUNTANT RELATED TO THE REGISTRANT
PWC billed the Registrant aggregate fees for services rendered to the
Registrant for the last two fiscal years as follows:
Percentage of Fees
Billed Applicable Percentage of Fees
to Non-Audit Billed Applicable to
Services Provided Non-Audit Services
Fees Billed for for fiscal year end Provided for fiscal
Services Rendered 2007 Pursuant to Fees Billed for year end 2006
to the Registrant Waiver of Services Rendered to Pursuant to Waiver
for fiscal year Pre-Approval the Registrant for of Pre-Approval
end 2007 Requirement(1) fiscal year end 2006 Requirement(1)
----------------- ------------------- -------------------- --------------------
Audit Fees $ 92,585 N/A $84,103 N/A
Audit-Related Fees $ 0 0% $ 0 0%
Tax Fees(2) $ 15,524 0% $14,460 0%
All Other Fees $ 0 0% $ 0 0%
-------- -------
Total Fees $108,109 0% $98,563 0%
PWC billed the Registrant aggregate non-audit fees of $15,524 for the fiscal
year ended 2007, and $14,460 for the fiscal year ended 2006, for non-audit
services rendered to the Registrant.
- ----------
(1) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by the Registrant at the
time of engagement, (ii) the aggregate amount of all such services provided
is no more than 5% of the aggregate audit and non-audit fees paid by the
Registrant during a fiscal year; and (iii) such services are promptly
brought to the attention of the Registrant's Audit Committee and approved
by the Registrant's Audit Committee prior to the completion of the audit.
(2) Tax Fees for the fiscal year end March 31, 2007 includes fees billed for
reviewing tax returns and consultation services. Tax fees for fiscal year
end March 31, 2006 includes fees billed for reviewing tax returns.
FEES BILLED BY PRINCIPAL ACCOUNTANT RELATED TO AIM AND AIM AFFILIATES
PWC billed A I M Advisors, Inc. ("AIM"), the Registrant's adviser, and any
entity controlling, controlled by or under common control with AIM that provides
ongoing services to the Registrant ("AIM Affiliates") aggregate fees for
pre-approved non-audit services rendered to AIM and AIM Affiliates as follows:
Fees Billed for Fees Billed for
Non-Audit Services Percentage of Fees Non-Audit Services Percentage of Fees
Rendered to AIM and Billed Applicable to Rendered to AIM and Billed Applicable to
AIM Affiliates for Non-Audit Services AIM Affiliates for Non-Audit Services
fiscal year end 2007 Provided for fiscal fiscal year end 2006 Provided for fiscal
That Were Required year end 2007 That Were Required year end 2006
to be Pre-Approved Pursuant to Waiver to be Pre-Approved Pursuant to Waiver of
by the Registrant's of Pre-Approval by the Registrant's Pre-Approval
Audit Committee Requirement(1) Audit Committee Requirement(1)
-------------------- -------------------- -------------------- ---------------------
Audit-Related Fees $0 0% $0 0%
Tax Fees $0 0% $0 0%
All Other Fees $0 0% $0 0%
-- --
Total Fees(2) $0 0% $0 0%
- ----------
(1) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by the Registrant at the
time of engagement, (ii) the aggregate amount of all such services provided
is no more than 5% of the aggregate audit and non-audit fees paid by the
Registrant, AIM and AIM Affiliates during a fiscal year; and (iii) such
services are promptly brought to the attention of the Registrant's Audit
Committee and approved by the Registrant's Audit Committee prior to the
completion of the audit.
(2) Including the fees for services not required to be pre-approved by the
registrant's audit committee, PWC billed AIM and AIM Affiliates aggregate
non-audit fees of $0 for the fiscal year ended 2007, and $0 for the fiscal
year ended 2006, for non-audit services rendered to AIM and AIM Affiliates.
The Audit Committee also has considered whether the provision of non-audit
services that were rendered to AIM and AIM Affiliates that were not
required to be pre-approved pursuant to SEC regulations, if any, is
compatible with maintaining the principal accountant's independence.
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As adopted by the Audit Committees of
the AIM Funds (the "Funds")
Last Amended September 18, 2006
I. STATEMENT OF PRINCIPLES
Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and
Exchange Commission ("SEC") ("Rules"), the Audit Committees of the Funds' (the
"Audit Committee") Board of Trustees (the "Board") are responsible for the
appointment, compensation and oversight of the work of independent accountants
(an "Auditor"). As part of this responsibility and to assure that the Auditor's
independence is not impaired, the Audit Committees pre-approve the audit and
non-audit services provided to the Funds by each Auditor, as well as all
non-audit services provided by the Auditor to the Funds' investment adviser and
to affiliates of the adviser that provide ongoing services to the Funds
("Service Affiliates") if the services directly impact the Funds' operations or
financial reporting. The SEC Rules also specify the types of services that an
Auditor may not provide to its audit client. The following policies and
procedures comply with the requirements for pre-approval and provide a mechanism
by which management of the Funds may request and secure pre-approval of audit
and non-audit services in an orderly manner with minimal disruption to normal
business operations.
Proposed services either may be pre-approved without consideration of specific
case-by-case services by the Audit Committees ("general pre-approval") or
require the specific pre-approval of the Audit Committees ("specific
pre-approval"). As set forth in these policies and procedures, unless a type of
service has received general pre-approval, it will require specific pre-approval
by the Audit Committees. Additionally, any fees exceeding 110% of estimated
pre-approved fee levels provided at the time the service was pre-approved will
also require specific approval by the Audit Committees before payment is made.
The Audit Committees will also consider the impact of additional fees on the
Auditor's independence when determining whether to approve any additional fees
for previously pre-approved services.
The Audit Committees will annually review and generally pre-approve the services
that may be provided by each Auditor without obtaining specific pre-approval
from the Audit Committee. The term of any general pre-approval runs from the
date of such pre-approval through September 30th of the following year, unless
the Audit Committees consider a different period and state otherwise. The Audit
Committees will add to or subtract from the list of general pre-approved
services from time to time, based on subsequent determinations.
The purpose of these policies and procedures is to set forth the guidelines to
assist the Audit Committees in fulfilling their responsibilities.
II. DELEGATION
The Audit Committees may from time to time delegate pre-approval authority to
one or more of its members who are Independent Trustees. All decisions to
pre-approve a service by a delegated member shall be reported to the Audit
Committee at its next quarterly meeting.
III. AUDIT SERVICES
The annual audit services engagement terms will be subject to specific
pre-approval of the Audit Committees. Audit services include the annual
financial statement audit and other procedures such as tax provision work that
is required to be performed by the independent auditor to be able to form an
opinion on the Funds' financial statements. The Audit Committee will obtain,
review and consider sufficient information concerning the proposed Auditor to
make a reasonable evaluation of the Auditor's qualifications and independence.
In addition to the annual Audit services engagement, the Audit Committees may
grant either general or specific pre-approval of other audit services, which are
those services that only the independent auditor reasonably can provide. Other
Audit services may include services such as issuing consents for the inclusion
of audited financial statements with SEC registration statements, periodic
reports and other documents filed with the SEC or other documents issued in
connection with securities offerings.
IV. NON-AUDIT SERVICES
The Audit Committees may provide either general or specific pre-approval of any
non-audit services to the Funds and its Service Affiliates if the Audit
Committees believe that the provision of the service will not impair the
independence of the Auditor, is consistent with the SEC's Rules on auditor
independence, and otherwise conforms to the Audit Committee's general principles
and policies as set forth herein.
AUDIT-RELATED SERVICES
"Audit-related services" are assurance and related services that are reasonably
related to the performance of the audit or review of the Fund's financial
statements or that are traditionally performed by the independent auditor.
Audit-related services include, among others, accounting consultations related
to accounting, financial reporting or disclosure matters not classified as
"Audit services"; assistance with understanding and implementing new accounting
and financial reporting guidance from rulemaking authorities; and agreed-upon
procedures related to mergers, compliance with ratings agency requirements and
interfund lending activities.
TAX SERVICES
"Tax services" include, but are not limited to, the review and signing of the
Funds' federal tax returns, the review of required distributions by the Funds
and consultations regarding tax matters such as the tax treatment of new
investments or the impact of new regulations. The Audit Committee will
scrutinize carefully the retention of the Auditor in connection with a
transaction initially recommended by the Auditor, the major business purpose of
which may be tax avoidance or the tax treatment of which may not be supported in
the Internal Revenue Code and related regulations. The Audit Committee will
consult with the Funds' Treasurer (or his or her designee) and may consult with
outside counsel or advisors as necessary to ensure the consistency of Tax
services rendered by the Auditor with the foregoing policy.
No Auditor shall represent any Fund or any Service Affiliate before a tax court,
district court or federal court of claims.
Under rules adopted by the Public Company Accounting Oversight Board and
approved by the SEC, in connection with seeking Audit Committee pre-approval of
permissible Tax services, the Auditor shall:
1. Describe in writing to the Audit Committees, which writing may be in
the form of the proposed engagement letter:
a. The scope of the service, the fee structure for the
engagement, and any side letter or amendment to the
engagement letter, or any other agreement between the
Auditor and the Fund, relating to the service; and
b. Any compensation arrangement or other agreement, such as a
referral agreement, a referral fee or fee-sharing
arrangement, between the Auditor and any person (other than
the Fund) with respect to the promoting, marketing, or
recommending of a transaction covered by the service;
2. Discuss with the Audit Committees the potential effects of the
services on the independence of the Auditor; and
3. Document the substance of its discussion with the Audit Committees.
ALL OTHER AUDITOR SERVICES
The Audit Committees may pre-approve non-audit services classified as "All other
services" that are not categorically prohibited by the SEC, as listed in Exhibit
1 to this policy.
V. PRE-APPROVAL FEE LEVELS OR ESTABLISHED AMOUNTS
Pre-approval of estimated fees or established amounts for services to be
provided by the Auditor under general or specific pre-approval policies will be
set periodically by the Audit Committees. Any proposed fees exceeding 110% of
the maximum estimated pre-approved fees or established amounts for pre-approved
audit and non-audit services will be reported to the Audit Committees at the
quarterly Audit Committees meeting and will require specific approval by the
Audit Committees before payment is made. The Audit Committee will always factor
in the overall relationship of fees for audit and non-audit services in
determining whether to pre-approve any such services and in determining whether
to approve any additional fees exceeding 110% of the maximum pre-approved fees
or established amounts for previously pre-approved services.
VI. PROCEDURES
On an annual basis, A I M Advisors, Inc. ("AIM") will submit to the Audit
Committees for general pre-approval, a list of non-audit services that the Funds
or Service Affiliates of the Funds may request from the Auditor. The list will
describe the non-audit services in reasonable detail and will include an
estimated range of fees and such other information as the Audit Committee may
request.
Each request for services to be provided by the Auditor under the general
pre-approval of the Audit Committees will be submitted to the Funds' Treasurer
(or his or her designee) and must include a detailed description of the services
to be rendered. The Treasurer or his or her designee will ensure that such
services are included within the list of services that have received the general
pre-approval of the Audit Committees. The Audit Committees will be informed at
the next quarterly scheduled Audit Committees meeting of any such services for
which the Auditor rendered an invoice and whether such services and fees had
been pre-approved and if so, by what means.
Each request to provide services that require specific approval by the Audit
Committees shall be submitted to the Audit Committees jointly by the Fund's
Treasurer or his or her designee and the Auditor, and must include a joint
statement that, in their view, such request is consistent with the policies and
procedures and the SEC Rules.
Each request to provide tax services under either the general or specific
pre-approval of the Audit Committees will describe in writing: (i) the scope of
the service, the fee structure for the engagement, and any side letter or
amendment to the engagement letter, or any other agreement between the Auditor
and the audit client, relating to the service; and (ii) any compensation
arrangement or other agreement between the Auditor and any person (other than
the audit client) with respect to the promoting, marketing, or recommending of a
transaction covered by the service. The Auditor will discuss with the Audit
Committees the potential effects of the services on the Auditor's independence
and will document the substance of the discussion.
Non-audit services pursuant to the de minimis exception provided by the SEC
Rules will be promptly brought to the attention of the Audit Committees for
approval, including documentation that each of the conditions for this
exception, as set forth in the SEC Rules, has been satisfied.
On at least an annual basis, the Auditor will prepare a summary of all the
services provided to any entity in the investment company complex as defined in
section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of
the engagement and the fees associated with those services.
The Audit Committees have designated the Funds' Treasurer to monitor the
performance of all services provided by the Auditor and to ensure such services
are in compliance with these policies and procedures. The Funds' Treasurer will
report to the Audit Committee on a periodic basis as to the results of such
monitoring. Both the Funds' Treasurer and management of AIM will immediately
report to the chairman of the Audit Committee any breach of these policies and
procedures that comes to the attention of the Funds' Treasurer or senior
management of AIM.
EXHIBIT 1 TO PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES POLICIES AND
PROCEDURES
CONDITIONALLY PROHIBITED NON-AUDIT SERVICES (NOT PROHIBITED IF THE FUND CAN
REASONABLY CONCLUDE THAT THE RESULTS OF THE SERVICE WOULD NOT BE SUBJECT TO
AUDIT PROCEDURES IN CONNECTION WITH THE AUDIT OF THE FUND'S FINANCIAL
STATEMENTS)
- Bookkeeping or other services related to the accounting records or
financial statements of the audit client
- Financial information systems design and implementation
- Appraisal or valuation services, fairness opinions, or
contribution-in-kind reports
- Actuarial services
- Internal audit outsourcing services
CATEGORICALLY PROHIBITED NON-AUDIT SERVICES
- Management functions
- Human resources
- Broker-dealer, investment adviser, or investment banking services
- Legal services
- Expert services unrelated to the audit
- Any other service that the Public Company Oversight Board determines
by regulation is impermissible.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Investments in securities of unaffiliated issuers is included as part
of the reports to stockholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of March 15, 2007 an evaluation was performed under the supervision and
with the participation of the officers of the Registrant, including the PEO
and 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 March 15, 2007, the Registrant's disclosure controls and
procedures were reasonably designed to ensure: (1) that information
required to be
disclosed by the Registrant on Form N-CSR 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 second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
12(a)(1) Code of Ethics.
12(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.
12(a)(3) Not applicable.
12(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: AIM Tax-Exempt Funds
By: /s/ PHILIP A. TAYLOR
---------------------------------
Philip A. Taylor
Principal Executive Officer
Date: June 7, 2007
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ PHILIP A. TAYLOR
---------------------------------
Philip A. Taylor
Principal Executive Officer
Date: June 7, 2007
By: /s/ SIDNEY M. DILGREN
---------------------------------
Sidney M. Dilgren
Principal Financial Officer
Date: June 7, 2007
EXHIBIT INDEX
12(a)(1) Code of Ethics.
12(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.
12(a)(3) Not applicable.
12(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act
of 1940.