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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: 9/30/08
Item 1. Reports to Stockholders.
[INVESCO AIM LOGO]
- -- SERVICE MARK --
AIM HIGH INCOME MUNICIPAL FUND
Semiannual Report to Shareholders o September 30, 2008
[MOUNTAIN GRAPHIC]
2 Letter to Shareholders
3 Fund Performance
4 Schedule of Investments
26 Financial Statements
29 Notes to Financial Statements
34 Financial Highlights
36 Fund Expenses
37 Approval of Investment Advisory Agreement
For the most current month-end Fund performance and commentary, please visit
invescoaim.com.
Unless otherwise noted, all data provided by Invesco Aim.
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
Dear Fellow Shareholders:
As I write this letter, turbulent financial markets are causing considerable investor anxiety, reminding us
[CROCKETT again that markets are cyclical and the correction of excess is often painful, at least in the short term.
PHOTO] Your Board of Trustees believes in the wisdom of a long-term perspective and consistent investment
discipline. We continue to put your interests first in the effort to improve investment performance,
Bruce Crockett contain shareholder costs and uphold the highest ethical standards.
We remain enthusiastic about the global reach and investment expertise that Invesco, a leading
independent global investment management company, brings to the management of AIM Funds as the parent
company of the advisors. The diverse investment strategies deployed throughout the worldwide network of
Invesco investment centers has helped strengthen the management of many AIM Funds. The rebranding of the
Funds' management company as Invesco Aim was followed by the launch of an upgraded, investor-friendly
website (invescoaim.com); a new mountain logo using a Himalayan peak to symbolize stability, endurance, strength and longevity; and
a new ad campaign. Emphasizing Invesco Aim's focus and investment quality, the ads will appear in financial publications such as
Barron's and Investment News through the end of 2008.
At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim
Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click
on "Investment Advisory Agreement Renewals."
We have recently completed another active proxy voting season during which we acted on your behalf to double the number of votes
in favor of separating the roles of chairman and CEO at the companies whose shares your Funds hold. We also continued to support the
movement for shareholders to have a bigger role in approving executive compensation, initiatives known as "say on pay." Like
virtually all other mutual fund complexes, AIM Funds abstain from voting on social issues as a matter of policy, and I would be
interested to hear your thoughts on this policy.
As always, you are welcome to email your questions or comments to me at bruce@brucecrockett.com. The dialogue that has been
established in this way has been instructive for your Board, and we want it to continue. Although the production schedule for Fund
annual reports and prospectuses allows me to write these letters of general report and response just twice a year, please be assured
that your comments are received, welcomed and heard in the interim.
We look forward to hearing from you and to representing you.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
2 AIM HIGH INCOME MUNICIPAL FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
=======================================================================================
PERFORMANCE SUMMARY VALUE AND THE EFFECT OF THE MAXIMUM SALES
CHARGE UNLESS OTHERWISE STATED.
FUND VS. INDEXES PERFORMANCE FIGURES DO NOT REFECT
DEDUCTION OF TAXES A SHAREHOLDER WOULD PAY
Cumulative total returns, 3/31/08 to 9/30/08, at net asset value (NAV). Performance ON FUND DISTRIBUTIONS OR SALE OF FUND
shown does not include applicable contingent deferred sales charges (CDSC) or front-end SHARES. INVESTMENT RETURN AND PRINCIPAL
sales charges, which would have reduced performance. VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL SHARES.
Class A Shares -4.12%
Class B Shares -4.47 THE NET ANNUAL FUND OPERATING EXPENSE
Class C Shares -4.36 RATIO SET FORTH IN THE MOST RECENT FUND
Barclays Capital Municipal Bond Index#* (Broad Market Index) -2.59 PROSPECTUS AS OF THE DATE OF THIS REPORT
Barclays Capital High Yield Municipal Bond Index(square)* (Style-Specifc Index) -4.64 FOR CLASS A, CLASS B AND CLASS C SHARES
Lipper High Yield Municipal Debt Funds Index(triangle) (Peer Group Index) -5.64 WAS 0.75%, 1.50% AND 1.50%,
RESPECTIVELY.(1) THE TOTAL ANNUAL FUND
# Lipper Inc.; (square) Invesco Aim, Barclays Capital OPERATING EXPENSE RATIO SET FORTH IN THE
MOST RECENT FUND PROSPECTUS AS OF THE DATE
* Effective 11/3/08, the Lehman Brothers indexes were rebranded as Barclays OF THIS REPORT FOR CLASS A, CLASS B AND
Capital indexes CLASS C SHARES WAS 0.98%, 1.73% AND 1.73%,
RESPECTIVELY. THE EXPENSE RATIOS PRESENTED
The BARCLAYS CAPITAL MUNICIPAL BOND INDEX covers municipal bonds with a minimum ABOVE MAY VARY FROM THE EXPENSE RATIOS
credit rating of Baa, an outstanding par value of at least $5 million and issued PRESENTED IN OTHER SECTIONS OF THIS REPORT
as a part of a transaction of at least $50 million USD. The bonds must have been THAT ARE BASED ON EXPENSES INCURRED DURING
issued after December 31, 1990, and have a remaining maturity of at least one THE PERIOD COVERED BY THIS REPORT.
year.
CLASS A SHARE PERFORMANCE REFECTS THE
The BARCLAYS CAPITAL HIGH YIELD MUNICIPAL BOND INDEX includes bonds that are MAXIMUM 4.75% SALES CHARGE, AND CLASS B
non-rated or rated Ba1 or below. They must have an outstanding par value of at least $3 AND CLASS C SHARE PERFORMANCE REFECTS THE
million and be issued as part of a transaction of at least $20 million. The bonds must APPLICABLE CONTINGENT DEFERRED SALES
have a dated-date after December 31, 1990, and must be at least one year from their CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE
maturity date. CDSC ON CLASS B SHARES DECLINES FROM 5%
BEGINNING AT THE TIME OF PURCHASE TO 0% AT
The LIPPER HIGH YIELD MUNICIPAL DEBT FUNDS INDEX is an equally weighted THE BEGINNING OF THE SEVENTH YEAR. THE
representation of the largest funds in the Lipper High Yield Municipal Debt Funds CDSC ON CLASS C SHARES IS 1% FOR THE FIRST
category. These funds invest at least 50% of their assets in lower rated municipal debt YEAR AFTER PURCHASE.
issue.
THE PERFORMANCE OF THE FUND'S SHARE
The Fund is not managed to track the performance of any particular index, including CLASSES WILL DIFFER PRIMARILY DUE TO
the indexes defined here, and consequently, the performance of the Fund may deviate DIFFERENT SALES CHARGE STRUCTURES AND
signifcantly from the performance of the indexes. CLASS EXPENSES.
A direct investment cannot be made in an index. Unless otherwise indicated, index AFTER-TAX RETURNS ARE CALCULATED USING
results include reinvested dividends, and they do not refect sales charges. Performance THE HISTORICAL HIGHEST INDIVIDUAL FEDERAL
of an index of funds refects fund expenses; performance of a market index does not. MARGINAL INCOME TAX RATE. THEY DO NOT
REFECT THE EFFECT OF STATE AND LOCAL
======================================================================================= TAXES. ACTUAL AFTER-TAX RETURNS DEPEND ON
THE INVESTOR'S TAX SITUATION AND MAY
======================================================================================= DIFFER FROM THOSE SHOWN. AFTER-TAX RETURNS
AVERAGE ANNUAL TOTAL RETURNS SHOWN ARE NOT RELEVANT TO INVESTORS WHO
HOLD THEIR SHARES IN TAX-DEFERRED ACCOUNTS
As of 9/30/08, including maximum applicable sales charges SUCH AS 401(K)S OR IRAS.
AFTER TAXES HAD THE ADVISOR NOT WAIVED FEES AND/OR
ON DISTRIBUTIONS REIMBURSED EXPENSES, PERFORMANCE WOULD
AFTER TAXES AND SALE OF HAVE BEEN LOWER.
BEFORE TAXES ON DISTRIBUTIONS FUND SHARES
------------ ---------------- ---------------- (1) Total annual operating expenses less
CLASS A SHARES any voluntary fee waivers and/or
Inception (1/2/98) 2.78% 2.78% 3.17% expense reimbursements by the advisor.
10 Years 2.40 2.40 2.85 Voluntary arrangements can be
5 Years 1.98 1.98 2.53 discontinued or modified at any time
1 Year -12.74 -12.74 -6.55 without further notice to investors.
See current prospectus for more
CLASS B SHARES information.
Inception (1/2/98) 2.65% 2.65% 3.00%
10 Years 2.28 2.28 2.68
5 Years 1.89 1.89 2.36
1 Year -13.30 -13.30 -7.09
CLASS C SHARES
Inception (1/2/98) 2.47% 2.47% 2.82%
10 Years 2.13 2.13 2.53
5 Years 2.21 2.21 2.64
1 Year -9.82 -9.82 -4.84
=======================================================================================
THE PERFORMANCE DATA QUOTED REPRESENT PAST PLEASE VISIT INVESCOAIM. COM FOR THE MOST
PERFORMANCE AND CANNOT GUARANTEE RECENT MONTH-END PERFORMANCE. PERFORMANCE
COMPARABLE FUTURE RESULTS; CURRENT FIGURES REFECT REINVESTED DISTRIBUTIONS,
PERFORMANCE MAY BE LOWER OR HIGHER. CHANGES IN NET ASSET
3 AIM HIGH INCOME MUNICIPAL FUND
PORTFOLIO COMPOSITION
By credit quality
as of September 30, 2008
<Table>
- -------------------------------------------------------------------------
AAA 12.9%
- -------------------------------------------------------------------------
AA 2.8
- -------------------------------------------------------------------------
A 2.9
- -------------------------------------------------------------------------
BBB 12.0
- -------------------------------------------------------------------------
BB 3.1
- -------------------------------------------------------------------------
B 0.4
- -------------------------------------------------------------------------
CCC 0.1
- -------------------------------------------------------------------------
Not rated 65.8
_________________________________________________________________________
=========================================================================
</Table>
SCHEDULE OF INVESTMENTS
September 30, 2008
(Unaudited)
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-98.66%
ALASKA-0.51%
Alaska Industrial Development & Export Authority
(Boys & Girls Home);
Series 2007, RB(a) 5.70% 12/01/17 $1,000 $ 899,350
- -----------------------------------------------------------------------------------------------------
Series 2007, RB(a) 6.00% 12/01/36 3,000 2,367,810
=====================================================================================================
3,267,160
=====================================================================================================
ARIZONA-3.41%
Arizona (State of) Health Facilities Authority
(Banner Health); Series 2008 D, RB(a) 5.50% 01/01/38 2,000 1,775,340
- -----------------------------------------------------------------------------------------------------
Centerra Community Facilities District; Series
2005, Unlimited Tax GO(a) 5.50% 07/15/29 376 307,575
- -----------------------------------------------------------------------------------------------------
Maricopa (County of) Industrial Development
Authority (Mayo Clinic); Series 2006, Health
Care Facilities IDR(a) 5.00% 11/15/36 1,485 1,284,451
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Acclaim Charter School); Series
2006, Educational Facilities IDR(a) 5.70% 12/01/26 2,200 1,825,494
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Choice Education & Development
Corp.);
Series 2006, Educational Facilities IDR(a) 6.25% 06/01/26 1,000 885,710
- -----------------------------------------------------------------------------------------------------
Series 2006, Educational Facilities IDR(a) 6.38% 06/01/36 3,000 2,588,160
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Coral Academy Science);
Series 2008 A, Educational Facilities IDR(a) 7.13% 12/01/28 2,120 2,003,082
- -----------------------------------------------------------------------------------------------------
Series 2008 A, Educational Facilities IDR(a) 7.25% 12/01/38 1,100 1,033,593
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Desert Heights Charter School);
Series 2003, Educational Facilities IDR(a) 7.25% 08/01/19 830 845,288
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Horizon Community Learning
Center); Series 2005, Ref. Educational
Facilities IDR(a) 5.25% 06/01/35 1,500 1,207,650
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (P.L.C. Charter Schools);
Series 2006, Educational Facilities IDR(a) 6.50% 04/01/26 1,000 904,310
- -----------------------------------------------------------------------------------------------------
Series 2006, Educational Facilities IDR(a) 6.75% 04/01/36 1,000 897,800
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Paradise Education Center);
Series 2006, Ref. Educational Facilities
IDR(a) 5.88% 06/01/22 535 467,601
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. Educational Facilities
IDR(a) 6.00% 06/01/36 830 659,070
- -----------------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Valley Academy); Series 2008,
Educational Facilities IDR(a) 6.50% 07/01/38 2,815 2,590,363
- -----------------------------------------------------------------------------------------------------
Pinal (County of) Electric District No. 4;
Series 2008, RB(a) 6.00% 12/01/38 1,650 1,503,348
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
4 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
ARIZONA-(CONTINUED)
Scottsdale (City of) Industrial Development
Authority (Scottsdale Healthcare); Series
2001, Hospital IDR(a)(b)(c) 5.80% 12/01/11 $ 500 $ 545,180
- -----------------------------------------------------------------------------------------------------
Tucson (City of) Industrial Development
Authority (Arizona AgriBusiness & Equine
Center Inc.); Series 2004 A, Educational
Facilities IDR(a) 6.13% 09/01/34 500 441,490
=====================================================================================================
21,765,505
=====================================================================================================
CALIFORNIA-1.50%
Abag Finance Authority for Nonprofit Corps.
(Hamlin School); Series 2007, RB(a) 5.00% 08/01/37 3,000 2,302,680
- -----------------------------------------------------------------------------------------------------
California (State of) Educational Facilities
Authority (Fresno Pacific University); Series
2000 A, RB(a) 6.75% 03/01/19 1,000 1,034,630
- -----------------------------------------------------------------------------------------------------
California (State of) Educational Facilities
Authority (Keck Graduate Institute); Series
2000, RB(a)(b)(c) 6.75% 06/01/10 390 420,397
- -----------------------------------------------------------------------------------------------------
California (State of) Municipal Finance
Authority (American Heritage Education
Foundation); Series 2006 A, Education RB(a) 5.25% 06/01/36 1,150 918,183
- -----------------------------------------------------------------------------------------------------
California (State of) Statewide Communities
Development Authority (Drew School); Series
2007, RB(a) 5.30% 10/01/37 500 376,300
- -----------------------------------------------------------------------------------------------------
California (State of) Statewide Communities
Development Authority (Front Porch
Communities & Services); Series 2007 A,
RB(a)(d) 5.13% 04/01/37 2,000 1,574,380
- -----------------------------------------------------------------------------------------------------
California (State of) Statewide Communities
Development Authority (Hospice of Napa
Valley); Series 2004 A, RB(a) 7.00% 01/01/34 900 889,362
- -----------------------------------------------------------------------------------------------------
California (State of) Statewide Communities
Development Authority (Huntington Park
Charter School); Series 2007 A, Educational
Facilities RB(a) 5.25% 07/01/42 1,500 1,108,740
- -----------------------------------------------------------------------------------------------------
California (State of) Statewide Communities
Development Authority (Notre Dame de Namur
University); Series 2003, RB(a) 6.50% 10/01/23 1,000 926,070
=====================================================================================================
9,550,742
=====================================================================================================
COLORADO-10.97%
Antelope Heights Metropolitan District; Series
2003, Limited Tax GO(a)(b)(c) 8.00% 12/01/13 500 601,930
- -----------------------------------------------------------------------------------------------------
Arista Metropolitan District; Series 2005,
Limited Tax GO(a) 6.75% 12/01/35 2,000 1,685,880
- -----------------------------------------------------------------------------------------------------
Beacon Point Metropolitan District; Series 2005
A, Limited Tax GO(a) 6.25% 12/01/35 1,500 1,183,260
- -----------------------------------------------------------------------------------------------------
Bradburn Metropolitan District No. 3; Series
2003, Limited Tax GO(a) 7.50% 12/01/33 500 465,380
- -----------------------------------------------------------------------------------------------------
Bromley Park Metropolitan District No. 2;
Series 2002 B, Limited Tax GO(a)(b)(c) 8.05% 12/01/12 500 596,070
- -----------------------------------------------------------------------------------------------------
Series 2003, Limited Tax GO(a)(b)(c) 8.05% 12/01/12 534 636,603
- -----------------------------------------------------------------------------------------------------
Buckhorn Valley Metropolitan District No. 2;
Series 2003, Limited Tax GO(a) 7.00% 12/01/23 60 54,773
- -----------------------------------------------------------------------------------------------------
Castle Oaks Metropolitan District;
Series 2005, Limited Tax GO(a) 6.00% 12/01/25 1,000 810,890
- -----------------------------------------------------------------------------------------------------
Series 2005, Limited Tax GO(a) 6.13% 12/01/35 1,500 1,162,980
- -----------------------------------------------------------------------------------------------------
Colorado (State of) E-470 Public Highway
Authority; Series 2007 B1, RB(a) 5.50% 09/01/24 500 469,980
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Academy Charter
School); Series 2000, RB(a)(b)(c) 7.13% 12/15/10 1,195 1,320,033
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Banning Lewis Ranch
Academy); Series 2006, Charter School
RB(a)(d) 6.13% 12/15/35 3,000 2,529,840
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Brighton School);
Series 2006, Charter School RB(a) 6.00% 11/01/36 1,695 1,331,897
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Carbon Valley Academy);
Series 2006, Charter School RB(a) 5.63% 12/01/36 1,160 902,979
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Cerebral Palsy of
Colorado); Series 2006 A, RB(a) 6.25% 05/01/36 3,050 2,579,324
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Community Leadership);
Series 2008, Charter School RB(a) 6.25% 07/01/28 650 571,721
- -----------------------------------------------------------------------------------------------------
Series 2008, Charter School RB(a) 6.50% 07/01/38 1,000 875,050
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Academy Inc.);
Series 2003 A, Ref. RB(a) 7.00% 11/01/23 500 509,550
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Science &
Technology); Series 2004, RB(a) 5.00% 12/01/13 750 751,035
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Excel Academy); Series
2003, Charter School RB(a)(b)(c) 7.30% 12/01/11 535 594,931
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
5 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Colorado (State of) Educational & Cultural
Facilities Authority (Flagstaff);
Series 2008 A, Charter School RB(a) 6.75% 08/01/28 $1,215 $ 1,135,150
- -----------------------------------------------------------------------------------------------------
Series 2008 A, Charter School RB(a) 7.00% 08/01/38 1,500 1,394,160
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Knowledge Quest);
Series 2005, Charter School RB(a) 6.50% 05/01/36 930 817,330
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Littleton Academy
Building); Series 2002, Charter School
RB(a)(b)(c) 6.00% 01/15/12 500 543,220
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Monument Academy);
Series 2007 A, Charter School RB(a) 5.88% 10/01/27 2,500 2,116,550
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Charter School RB(a) 6.00% 10/01/37 1,635 1,341,714
- -----------------------------------------------------------------------------------------------------
Series 2008 A, Charter School RB(a) 7.25% 10/01/39 500 469,130
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (New Vision Charter
School); Series 2008, RB(a)(d) 6.75% 04/01/40 1,860 1,710,010
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Northeast Academy);
Series 2007 A, Charter School RB(a)(d) 5.75% 05/15/37 2,580 2,055,950
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Peak to Peak); Series
2001, Charter School RB(a)(b)(c) 7.63% 08/15/11 500 564,805
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Platte Academy);
Series 2002 A, Charter School RB(a)(b)(c) 7.25% 03/01/10 500 523,765
- -----------------------------------------------------------------------------------------------------
Series 2002 A, Charter School RB(a)(b)(c) 7.25% 03/01/10 500 533,135
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Union Colony Charter
School); Series 2007, RB(a)(d) 5.75% 12/01/37 1,075 834,705
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (University Lab School);
Series 2001, Charter School RB(a)(b)(c) 6.13% 06/01/11 150 161,976
- -----------------------------------------------------------------------------------------------------
Series 2001, Charter School RB(a)(b)(c) 6.25% 06/01/11 500 541,505
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Vail Christian); Series
2007, Independent School Improvement RB(a)(d) 5.50% 06/01/37 2,000 1,593,740
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Windsor Academy);
Series 2007, Charter School RB(a)(d) 5.70% 05/01/37 1,600 1,273,632
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities Authority
(Christian Living Communities); Series 2006
A, RB(a) 5.25% 01/01/28 1,500 1,183,215
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities Authority
(Portercare Adventist Health); Series 2001,
Hospital RB(a)(b)(c) 6.50% 11/15/11 500 554,970
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities Authority
(Valley View Hospital Association); Series
2008, Ref. Hospital RB(a) 5.75% 05/15/36 1,000 843,790
- -----------------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities Authority
(Volunteers of America Care); Series 2007 A,
Health & Residential Care Facilities RB(a) 5.20% 07/01/22 1,270 1,086,104
- -----------------------------------------------------------------------------------------------------
Colorado Springs (City of) (University Village
Colorado); Series 2008 A, Tax Increment
Allocation RB(a) 7.00% 12/01/29 3,000 2,637,900
- -----------------------------------------------------------------------------------------------------
Confluence Metropolitan District;
Series 2007, Tax Supported RB(a) 5.25% 12/01/17 790 697,515
- -----------------------------------------------------------------------------------------------------
Series 2007, Tax Supported RB(a) 5.45% 12/01/34 1,465 1,150,435
- -----------------------------------------------------------------------------------------------------
Conservatory Metropolitan District (Arapahoe
County);
Series 2003, Limited Tax GO(a)(b)(c) 7.50% 12/01/13 750 895,140
- -----------------------------------------------------------------------------------------------------
Series 2005, Limited Tax GO(a)(b)(c) 6.75% 12/01/13 810 940,078
- -----------------------------------------------------------------------------------------------------
Copperleaf Metropolitan District No. 2;
Series 2006, Limited Tax GO(a) 5.85% 12/01/26 1,000 775,920
- -----------------------------------------------------------------------------------------------------
Series 2006, Limited Tax GO(a) 5.95% 12/01/36 1,750 1,296,977
- -----------------------------------------------------------------------------------------------------
Country Club Village Metropolitan District;
Series 2006, Limited Tax GO(a) 6.00% 12/01/34 600 458,598
- -----------------------------------------------------------------------------------------------------
Denver (City of) Health & Hospital Authority;
Series 2004 A, Ref. RB(a)(b)(c) 6.25% 12/01/14 500 569,935
- -----------------------------------------------------------------------------------------------------
Grandby Ranch Metropolitan District; Series
2006, Limited Tax GO(a) 6.75% 12/01/36 3,000 2,524,200
- -----------------------------------------------------------------------------------------------------
Huntington Trails Metropolitan District; Series
2006, Limited Tax GO(a) 6.25% 12/01/36 1,000 764,800
- -----------------------------------------------------------------------------------------------------
Jordan Crossing Metropolitan District; Series
2006, Limited Tax GO(a) 5.75% 12/01/36 1,415 1,035,992
- -----------------------------------------------------------------------------------------------------
Liberty Ranch Metropolitan District; Series
2006, Limited Tax GO(a) 6.25% 12/01/36 1,645 1,258,096
- -----------------------------------------------------------------------------------------------------
Madre Metropolitan District No. 2; Series 2007
A, Limited Tax GO(a) 5.50% 12/01/36 500 342,340
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
6 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Montrose (County of) (Homestead at Montrose
Inc.);
Series 2003 A, Health Care Facilities RB(a) 5.75% 02/01/15 $ 250 $ 241,870
- -----------------------------------------------------------------------------------------------------
Series 2003 A, Health Care Facilities RB(a) 6.75% 02/01/22 300 297,624
- -----------------------------------------------------------------------------------------------------
Series 2003 A, Health Care Facilities RB(a) 7.00% 02/01/25 800 800,064
- -----------------------------------------------------------------------------------------------------
Murphy Creek Metropolitan District No. 3; Series
2006, Ref. & Improvement Limited Tax GO(a) 6.13% 12/01/35 2,000 1,507,500
- -----------------------------------------------------------------------------------------------------
Northwest Metropolitan District No. 3;
Series 2005, Limited Tax GO(a) 6.13% 12/01/25 1,000 818,410
- -----------------------------------------------------------------------------------------------------
Series 2005, Limited Tax GO(a) 6.25% 12/01/35 1,000 788,840
- -----------------------------------------------------------------------------------------------------
Piney Creek Village Metropolitan District;
Series 2005, Limited Tax GO(a) 5.50% 12/01/35 1,200 957,996
- -----------------------------------------------------------------------------------------------------
Reata South Metropolitan District; Series 2007
A, Limited Tax GO(a) 7.25% 06/01/37 1,000 885,620
- -----------------------------------------------------------------------------------------------------
Riverdale Peaks II Metropolitan District; Series
2005, Limited Tax GO(a) 6.50% 12/01/35 1,000 771,980
- -----------------------------------------------------------------------------------------------------
Saddle Rock (City of) South Metropolitan
District No. 2 (Mill Levy Obligation); Series
2000, Limited Tax GO(a)(b)(c) 7.20% 06/01/10 500 537,330
- -----------------------------------------------------------------------------------------------------
Silver Peaks Metropolitan District No. 2; Series
2006, Limited Tax GO(a) 5.75% 12/01/36 1,000 732,150
- -----------------------------------------------------------------------------------------------------
Southlands Metropolitan District No. 1;
Series 2004, Unlimited Tax GO(a)(b)(c) 6.75% 12/01/14 500 562,960
- -----------------------------------------------------------------------------------------------------
Series 2004, Unlimited Tax GO(a)(b)(c) 7.13% 12/01/14 500 592,335
- -----------------------------------------------------------------------------------------------------
Table Rock Metropolitan District; Series 2003,
Limited Tax GO(a)(b)(c) 7.00% 12/01/13 740 854,833
- -----------------------------------------------------------------------------------------------------
University of Northern Colorado (Auxiliary
Facilities System); Series 2001, Ref. &
Improvement RB (INS-Ambac Assurance
Corp.)(a)(e) 5.00% 06/01/23 1,000 967,630
- -----------------------------------------------------------------------------------------------------
Valagua Metropolitan District; Series 2008,
Limited Tax GO(a) 7.75% 12/01/37 1,000 939,740
- -----------------------------------------------------------------------------------------------------
Wyndham Hill Metropolitan District No. 2;
Series 2005, Limited Tax GO(a) 6.25% 12/01/25 750 622,417
- -----------------------------------------------------------------------------------------------------
Series 2005, Limited Tax GO(a) 6.38% 12/01/35 1,000 802,370
=====================================================================================================
69,942,257
=====================================================================================================
DELAWARE-0.50%
New Castle (County of) (Newark Charter School
Inc.); Series 2006, RB(a) 5.00% 09/01/30 1,610 1,288,403
- -----------------------------------------------------------------------------------------------------
Sussex (County of) (Cadbury at Lewes);
Series 2006 A, First Mortgage RB(a) 5.45% 01/01/16 865 799,277
- -----------------------------------------------------------------------------------------------------
Series 2006 A, First Mortgage RB(a) 5.90% 01/01/26 750 634,815
- -----------------------------------------------------------------------------------------------------
Series 2006 A, First Mortgage RB(a) 6.00% 01/01/35 600 490,842
=====================================================================================================
3,213,337
=====================================================================================================
DISTRICT OF COLUMBIA-0.88%
District of Columbia (Children's Hospital
Obligation Group); Series 2008, Hospital
RB(a) 5.25% 07/15/38 1,000 904,060
- -----------------------------------------------------------------------------------------------------
District of Columbia Tobacco Settlement
Financing Corp.;
Series 2001, Asset-Backed RB(a) 6.25% 05/15/24 405 385,228
- -----------------------------------------------------------------------------------------------------
Series 2001, Asset-Backed RB(a) 6.50% 05/15/33 1,785 1,597,736
- -----------------------------------------------------------------------------------------------------
District of Columbia; Series 1998, RB
(INS-Financial Security Assurance Inc.)(a)(e) 5.00% 08/15/38 3,000 2,704,080
=====================================================================================================
5,591,104
=====================================================================================================
FLORIDA-5.91%
Alachua (County of) (North Florida Retirement
Village, Inc.); Series 2007 A, IDR(a) 5.88% 11/15/36 3,000 2,424,270
- -----------------------------------------------------------------------------------------------------
Concorde Estates Community Development District;
Series 2004 B, Capital Improvement RB(a) 5.00% 05/01/11 300 283,647
- -----------------------------------------------------------------------------------------------------
Cory Lakes Community Development District;
Series 2001 A, Special Assessment RB(a) 8.38% 05/01/17 365 380,231
- -----------------------------------------------------------------------------------------------------
Series 2001 B, Special Assessment RB(a) 8.38% 05/01/17 185 192,720
- -----------------------------------------------------------------------------------------------------
Cypress Lakes Community Development District;
Series 2004 A, Special Assessment RB(a) 6.00% 05/01/34 550 512,655
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
7 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
East Homestead Community Development District;
Series 2005, Special Assessment RB(a) 5.45% 05/01/36 $ 775 $ 601,958
- -----------------------------------------------------------------------------------------------------
Florida (State of) Development Finance Corp.
(Palm Bay Academy Inc.);
Series 2006 A, RB(a) 6.00% 05/15/36 2,130 1,711,732
- -----------------------------------------------------------------------------------------------------
Series 2007 A, RB(a) 6.13% 05/15/37 1,855 1,513,569
- -----------------------------------------------------------------------------------------------------
Florida (State of) Development Finance Corp.
(Sculptor Charter School); Series 2008 A,
RB(a) 7.25% 10/01/38 2,710 2,696,856
- -----------------------------------------------------------------------------------------------------
Gramercy Farms Community Development District;
Series 2007 B, Special Assessment RB(a) 5.10% 05/01/14 1,000 774,200
- -----------------------------------------------------------------------------------------------------
Islands at Doral Southwest Community Development
District; Series 2003, Special Assessment
RB(a)(b)(c) 6.38% 05/01/13 500 551,445
- -----------------------------------------------------------------------------------------------------
Jacksonville (City of) Economic Development
Commission (Mayo Clinic); Series 2006, Health
Care Facilities RB(a) 5.00% 11/15/36 2,500 2,164,500
- -----------------------------------------------------------------------------------------------------
Lakeland (City of) (Retirement Community);
Series 2008, Ref. First Mortgage RB(a)(d) 6.25% 01/01/28 500 463,595
- -----------------------------------------------------------------------------------------------------
Series 2008, Ref. First Mortgage RB(a)(d) 6.38% 01/01/43 1,500 1,373,145
- -----------------------------------------------------------------------------------------------------
Lee (County of) Industrial Development Authority
(Cypress Cove at HealthPark); Series 2002 A,
Health Care Facilities IDR(a) 6.75% 10/01/32 1,250 1,178,712
- -----------------------------------------------------------------------------------------------------
Miami Beach (City of) Health Facilities
Authority (Mount Sinai Medical Center);
Series 2001 A, Hospital RB(a) 6.70% 11/15/19 1,000 929,990
- -----------------------------------------------------------------------------------------------------
Series 2004, Ref. Hospital RB(a) 6.75% 11/15/29 500 453,500
- -----------------------------------------------------------------------------------------------------
Miami-Dade (County of) Educational Facilities
Authority (University of Miami); Series 2008
A, RB(a) 5.50% 04/01/38 2,000 1,880,840
- -----------------------------------------------------------------------------------------------------
Midtown Miami Community Development District;
Series 2004 A, Special Assessment RB(a) 6.00% 05/01/24 985 866,889
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Special Assessment RB(a) 6.25% 05/01/37 1,000 858,750
- -----------------------------------------------------------------------------------------------------
Mount Dora (City of) Health Facilities Authority
(Waterman Village); Series 2004 A, Ref. RB(a) 5.75% 08/15/18 750 667,913
- -----------------------------------------------------------------------------------------------------
Orange (County of) Health Facilities Authority
(Adventist Health System); Series 2002,
Hospital RB(a)(b)(c) 5.63% 11/15/12 1,065 1,162,394
- -----------------------------------------------------------------------------------------------------
Orange (County of) Health Facilities Authority
(Orlando Lutheran Towers, Inc.);
Series 2005, Ref. Health Care Facilities
RB(a) 5.38% 07/01/20 1,100 932,294
- -----------------------------------------------------------------------------------------------------
Series 2005, Ref. Health Care Facilities
RB(a) 5.70% 07/01/26 1,000 824,810
- -----------------------------------------------------------------------------------------------------
Series 2007, First Mortgage RB(a) 5.50% 07/01/32 1,000 778,690
- -----------------------------------------------------------------------------------------------------
Series 2007, First Mortgage RB(a) 5.50% 07/01/38 1,000 757,340
- -----------------------------------------------------------------------------------------------------
Orlando (City of) Urban Community Development
District;
Series 2001 A, Capital Improvement Special
Assessment RB(a)(b)(c) 6.95% 05/01/11 900 979,119
- -----------------------------------------------------------------------------------------------------
Series 2004, Capital Improvement Special
Assessment RB(a) 6.25% 05/01/34 1,000 853,580
- -----------------------------------------------------------------------------------------------------
Poinciana Community Development District; Series
2000 A, Special Assessment RB(a) 7.13% 05/01/31 800 797,704
- -----------------------------------------------------------------------------------------------------
Port St. Lucie (City of) Southwest Annexation
District No. 1; Series 2001 B, Special
Assessment RB (INS-MBIA Insurance
Corp.)(a)(e) 5.00% 07/01/40 2,000 1,830,940
- -----------------------------------------------------------------------------------------------------
Reunion East Community Development District;
Series 2002 A, Special Assessment RB(a) 7.38% 05/01/33 1,000 1,010,510
- -----------------------------------------------------------------------------------------------------
Sarasota (County of) Health Facilities Authority
(Village on the Isle);
Series 2007, Ref. Retirement Facilities RB(a) 5.00% 01/01/17 1,500 1,324,500
- -----------------------------------------------------------------------------------------------------
Series 2007, Ref. Retirement Facilities RB(a) 5.50% 01/01/27 1,500 1,247,025
- -----------------------------------------------------------------------------------------------------
Series 2007, Ref. Retirement Facilities RB(a) 5.50% 01/01/32 1,500 1,198,365
- -----------------------------------------------------------------------------------------------------
St. Johns (County of) Industrial Development
Authority (Glenmoor);
Series 2006 A, Health Care IDR(a) 5.25% 01/01/26 1,000 782,080
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Health Care IDR(a) 5.38% 01/01/40 1,000 720,990
=====================================================================================================
37,681,458
=====================================================================================================
GEORGIA-1.46%
Atlanta (City of) (Atlantic Station);
Series 2001, Tax Allocation RB(a)(b)(c) 7.75% 12/01/11 650 718,640
- -----------------------------------------------------------------------------------------------------
Series 2001, Tax Allocation RB(a)(b)(c) 7.90% 12/01/11 750 866,085
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
8 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
GEORGIA-(CONTINUED)
Atlanta (City of) (Eastside);
Series 2005 B, Tax Allocation RB(a) 5.40% 01/01/20 $1,000 $ 901,950
- -----------------------------------------------------------------------------------------------------
Series 2005 B, Tax Allocation RB(a) 5.60% 01/01/30 2,000 1,657,920
- -----------------------------------------------------------------------------------------------------
Atlanta (City of) (Princeton Lakes); Series
2006, Tax Allocation RB(a) 5.50% 01/01/31 730 600,235
- -----------------------------------------------------------------------------------------------------
Fulton (County of) (Canterbury Court);
Series 2004 A, Residential Care Facilities
RB(a) 6.13% 02/15/26 500 443,520
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Residential Care Facilities
RB(a) 6.13% 02/15/34 200 171,174
- -----------------------------------------------------------------------------------------------------
Rockdale (County of) Development Authority (Visy
Paper); Series 2007 A, RB(a)(f) 6.13% 01/01/34 4,500 3,946,725
=====================================================================================================
9,306,249
=====================================================================================================
IDAHO-0.33%
Idaho (State of) Housing & Finance Association
(Liberty Charter School); Series 2008 A,
Nonprofit Facilities RB(a) 6.00% 06/01/38 750 673,822
- -----------------------------------------------------------------------------------------------------
Idaho (State of) Housing & Finance Association;
Series 2008 A, Nonprofit Facilities RB(a) 6.13% 07/01/38 1,580 1,416,818
=====================================================================================================
2,090,640
=====================================================================================================
ILLINOIS-9.45%
Belleville (City of) (Frank Scott Parkway
Redevelopment); Series 2007 A, Ref. Tax
Increment Allocation RB(a) 5.70% 05/01/36 1,000 786,610
- -----------------------------------------------------------------------------------------------------
Chicago (City of) (Chatham Ridge Redevelopment);
Series 2002, Tax Increment Allocation RB(a) 5.95% 12/15/12 275 269,379
- -----------------------------------------------------------------------------------------------------
Series 2002, Tax Increment Allocation RB(a) 6.05% 12/15/13 475 463,790
- -----------------------------------------------------------------------------------------------------
Chicago (City of) (Lake Shore East);
Series 2003, Special Assessment RB(a) 6.63% 12/01/22 500 481,520
- -----------------------------------------------------------------------------------------------------
Series 2003, Special Assessment RB(a) 6.75% 12/01/32 500 472,160
- -----------------------------------------------------------------------------------------------------
Du Page (County of) Special Service Area No. 31
(Monarch Landing);
Series 2006, Special Tax RB(a) 5.40% 03/01/16 250 231,640
- -----------------------------------------------------------------------------------------------------
Series 2006, Special Tax RB(a) 5.63% 03/01/36 1,250 984,912
- -----------------------------------------------------------------------------------------------------
Hillside (City of) (Mannheim Redevelopment);
Series 2008, Senior Lien Tax Increment
Allocation RB(a) 6.55% 01/01/20 1,000 944,500
- -----------------------------------------------------------------------------------------------------
Series 2008, Senior Lien Tax Increment
Allocation RB(a) 7.00% 01/01/28 5,000 4,632,400
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Dominican University); Series 2000
B, VRD RB (LOC-Allied Irish Banks PLC)(g)(h) 5.57% 10/01/30 2,125 2,125,000
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Beacon
Hill);
Series 2005 A, Ref. RB(a) 5.15% 02/15/13 655 623,318
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Ref. RB(a) 5.25% 02/15/14 300 283,452
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Ref. RB(a) 5.35% 02/15/15 225 210,359
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Central
Baptist Village);
Series 2007, RB(a) 5.38% 11/15/27 1,000 795,130
- -----------------------------------------------------------------------------------------------------
Series 2007, RB(a) 5.38% 11/15/39 1,600 1,181,840
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Children's Memorial Hospital); Series 2008
A, RB(a) 5.25% 08/15/47 1,500 1,310,355
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Clare
Oaks);
Series 2006 A, RB(a) 6.00% 11/15/27 1,000 849,710
- -----------------------------------------------------------------------------------------------------
Series 2006 A, RB(a) 6.00% 11/15/39 3,500 2,842,105
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Fairview
Obligation Group);
Series 2008 A, RB(a) 6.13% 08/15/28 1,000 859,000
- -----------------------------------------------------------------------------------------------------
Series 2008 A, RB(a) 6.25% 08/15/35 1,000 862,400
- -----------------------------------------------------------------------------------------------------
Series 2008 A, RB(a) 6.25% 08/15/40 1,000 836,680
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Luther
Oaks);
Series 2006 A, RB(a) 6.00% 08/15/26 850 729,972
- -----------------------------------------------------------------------------------------------------
Series 2006 A, RB(a) 5.70% 08/15/28 500 405,170
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Series 2006 A, RB(a) 6.00% 08/15/39 $1,460 $ 1,193,477
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Monarch
Landing Inc. Facility) Series 2007 A, RB(a) 7.00% 12/01/27 2,000 1,864,380
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Sedgebrook, Inc. Facilities);
Series 2007 A, RB(a) 5.63% 11/15/17 1,345 1,236,754
- -----------------------------------------------------------------------------------------------------
Series 2007 A, RB(a) 6.00% 11/15/27 2,000 1,708,440
- -----------------------------------------------------------------------------------------------------
Series 2007 A, RB(a) 6.00% 11/15/37 4,000 3,285,240
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Smith
Village);
Series 2005 A, RB(a) 5.70% 11/15/20 500 433,040
- -----------------------------------------------------------------------------------------------------
Series 2005 A, RB(a) 6.13% 11/15/25 1,000 867,650
- -----------------------------------------------------------------------------------------------------
Series 2005 A, RB(a) 6.25% 11/15/35 3,000 2,525,280
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (The
Landing at Plymouth Place); Series 2005 A,
RB(a) 6.00% 05/15/37 3,200 2,599,328
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Three
Crowns Park Plaza);
Series 2006 A, RB(a) 5.88% 02/15/26 1,000 869,540
- -----------------------------------------------------------------------------------------------------
Series 2006 A, RB(a) 5.88% 02/15/38 1,500 1,226,535
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities Authority
(Bethesda Home & Retirement Center); Series
1999 A, RB(a) 6.25% 09/01/14 500 491,025
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities Authority
(Lutheran Senior Ministries Obligation);
Series 2001 A, RB(a)(b)(c) 7.38% 08/15/11 1,000 1,122,910
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities Authority
(Swedish-American Hospital); Series 2000,
RB(a)(b)(c) 6.88% 05/15/10 685 729,388
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities Authority
(Villa St. Benedict); Series 2003 A-1, RB(a) 6.90% 11/15/33 2,000 1,516,200
- -----------------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities Authority;
Series 2003 A, RB(a) 7.00% 11/15/32 800 780,824
- -----------------------------------------------------------------------------------------------------
Lincolnshire (Village of) Special Service Area
No. 1 (Sedgebrook);
Series 2004, Special Tax RB(a) 5.00% 03/01/11 385 376,006
- -----------------------------------------------------------------------------------------------------
Series 2004, Special Tax RB(a) 6.25% 03/01/34 750 664,208
- -----------------------------------------------------------------------------------------------------
Lombard (City of) Public Facilities Corp.
(Lombard Conference Center & Hotel);
Series 2005 A-1, First Tier RB(a) 6.38% 01/01/15 750 713,393
- -----------------------------------------------------------------------------------------------------
Series 2005 A-1, First Tier RB(a) 7.13% 01/01/36 2,500 2,399,775
- -----------------------------------------------------------------------------------------------------
Malta (Village of) (Prairie Springs); Series
2006, Tax Increment Allocation RB(a)(d) 5.75% 12/30/25 2,000 1,671,060
- -----------------------------------------------------------------------------------------------------
Metropolitan Pier & Exposition Authority
(McCormick Place Expansion); Series 2002 A,
Dedicated State Tax RB (INS-MBIA Insurance
Corp.)(a)(e) 5.00% 12/15/28 1,250 1,151,337
- -----------------------------------------------------------------------------------------------------
Southwestern Illinois Development Authority
(City of Collinsville Limited Incremental
Sales Tax); Series 2007, RB(a) 5.35% 03/01/31 1,000 832,320
- -----------------------------------------------------------------------------------------------------
Southwestern Illinois Development Authority
(Eden Retirement Center Inc.);
Series 2006, Senior Care Facilities RB(a) 5.50% 12/01/26 800 643,232
- -----------------------------------------------------------------------------------------------------
Series 2006, Senior Care Facilities RB(a) 5.85% 12/01/36 3,000 2,437,410
- -----------------------------------------------------------------------------------------------------
St. Charles (City of) (Zylstra);
Series 2008, Incremental Sales Tax RB(a)(i) 6.95% 01/01/21 2,000 1,883,420
- -----------------------------------------------------------------------------------------------------
Series 2008, Incremental Sales Tax RB(a)(i) 6.95% 01/01/25 2,000 1,846,120
=====================================================================================================
60,249,694
=====================================================================================================
INDIANA-0.82%
Indiana (State of) Health & Educational
Facilities Financing Authority (Community
Foundation Northwest Indiana);
Series 2007, Hospital RB(a) 5.50% 03/01/27 3,000 2,605,050
- -----------------------------------------------------------------------------------------------------
Series 2007, Hospital RB(a) 5.50% 03/01/37 1,000 829,780
- -----------------------------------------------------------------------------------------------------
Petersburg (City of) (Indianapolis Power & Light
Co.); Series 1991, Ref. PCR(a) 5.75% 08/01/21 1,000 949,470
- -----------------------------------------------------------------------------------------------------
St. Joseph (County of) (Holy Cross Village Notre
Dame); Series 2006 A, Economic Development
RB(a) 6.00% 05/15/26 1,015 872,656
=====================================================================================================
5,256,956
=====================================================================================================
IOWA-2.08%
Des Moines (City of) (Luther Park Apartments
Inc.); Series 2004, Senior Housing RB(a) 6.00% 12/01/23 500 442,160
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
IOWA-(CONTINUED)
Iowa (State of) Finance Authority (Bethany Life
Communities);
Series 2006 A, Ref. Senior Housing RB(a) 5.45% 11/01/26 $ 345 $ 275,255
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Ref. Senior Housing RB(a) 5.55% 11/01/41 795 596,409
- -----------------------------------------------------------------------------------------------------
Iowa (State of) Finance Authority (Boys &
Girls); Series 2007, Community Provider RB(a) 5.80% 12/01/22 1,000 864,040
- -----------------------------------------------------------------------------------------------------
Iowa (State of) Finance Authority (Friendship
Haven); Series 2004 A, Retirement Community
RB(a) 6.13% 11/15/32 500 432,730
- -----------------------------------------------------------------------------------------------------
Iowa (State of) Finance Authority (Wedum Walnut
Ridge LLC);
Series 2007 A, Senior Housing RB(a) 5.50% 12/01/32 2,000 1,532,840
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Senior Housing RB(a) 5.63% 12/01/45 3,000 2,235,690
- -----------------------------------------------------------------------------------------------------
Marion (City of) (Village Place at Marion);
Series 2005 A, MFH RB(a) 5.65% 09/01/25 155 130,901
- -----------------------------------------------------------------------------------------------------
Series 2005 A, MFH RB(a) 6.00% 09/01/35 400 331,788
- -----------------------------------------------------------------------------------------------------
Polk (County of) (Luther Park Health Center
Inc.);
Series 2004, Health Care Facilities RB(a) 6.00% 10/01/24 290 254,501
- -----------------------------------------------------------------------------------------------------
Series 2004, Health Care Facilities RB(a) 6.15% 10/01/36 600 499,224
- -----------------------------------------------------------------------------------------------------
Scott (County of) (Ridgecrest Village);
Series 2000 A, RB(a)(b)(c) 7.25% 11/15/10 750 823,297
- -----------------------------------------------------------------------------------------------------
Series 2004, Ref. RB(a) 4.75% 11/15/12 750 741,210
- -----------------------------------------------------------------------------------------------------
Series 2004, Ref. RB(a) 5.63% 11/15/18 2,000 1,904,280
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. RB(a) 5.25% 11/15/21 1,000 866,800
- -----------------------------------------------------------------------------------------------------
Washington (City of) (United Presbyterian Home);
Series 2006 A, Ref. Senior Housing RB(a) 5.60% 12/01/36 1,615 1,313,108
=====================================================================================================
13,244,233
=====================================================================================================
KANSAS-2.41%
Hutchinson (City of) (Wesley Towers, Inc.);
Series 1999 A, Ref. & Improvement Health Care
Facilities RB(a) 6.25% 11/15/19 750 697,642
- -----------------------------------------------------------------------------------------------------
Labette (County of);
Series 2007 A, Ref. & Improvement Hospital
RB(a) 5.75% 09/01/29 1,000 862,720
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Ref. & Improvement Hospital
RB(a) 5.75% 09/01/37 1,100 930,358
- -----------------------------------------------------------------------------------------------------
Lenexa (City of); Series 2007, Ref. &
Improvement Health Care Facilities RB(a) 5.38% 05/15/27 1,000 844,190
- -----------------------------------------------------------------------------------------------------
Olathe (City of) (Aberdeen Village, Inc); Series
2005 A, Ref. Senior Living Facilities RB(a) 5.60% 05/15/28 1,500 1,206,300
- -----------------------------------------------------------------------------------------------------
Olathe (City of) (Catholic Care Campus Inc.);
Series 2006 A, Senior Living Facilities RB(a) 6.00% 11/15/26 1,000 875,820
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Senior Living Facilities RB(a) 6.00% 11/15/38 2,000 1,657,620
- -----------------------------------------------------------------------------------------------------
Olathe (City of) (West Village Center);
Series 2007, Special Obligation Tax Increment
Allocation RB(a) 5.30% 09/01/17 500 475,075
- -----------------------------------------------------------------------------------------------------
Series 2007, Special Obligation Tax Increment
Allocation RB(a) 5.45% 09/01/22 1,160 1,039,673
- -----------------------------------------------------------------------------------------------------
Series 2007, Special Obligation Tax Increment
Allocation RB(a) 5.50% 09/01/26 1,000 855,370
- -----------------------------------------------------------------------------------------------------
Overland Park Development Corp. (Overland Park
Convention Center Hotel); Series 2001 A,
First Tier RB(a)(b)(c) 7.38% 01/01/11 1,500 1,645,215
- -----------------------------------------------------------------------------------------------------
Overland Park Transportation Development
District (Grass Creek); Series 2006, Special
Assessment RB(a) 5.13% 09/01/28 1,565 1,248,620
- -----------------------------------------------------------------------------------------------------
Roeland Park (City of) (Roeland Park
Redevelopment, LLC); Series 2005, Special
Obligation Tax Increment Allocation RB(a) 5.75% 08/01/24 920 827,117
- -----------------------------------------------------------------------------------------------------
Roeland Park (City of) Transportation
Development District (TDD #1);
Series 2005, Sales Tax RB(a) 5.75% 12/01/25 445 395,565
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Sales Tax RB(a) 5.88% 12/01/09 25 25,457
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Sales Tax RB(a) 5.88% 12/01/25 985 887,879
- -----------------------------------------------------------------------------------------------------
Roeland Park (City of) Transportation
Development District (TDD #2); Series 2006 B,
Sales Tax RB(a) 5.88% 12/01/25 1,000 901,400
=====================================================================================================
15,376,021
=====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
KENTUCKY-1.14%
Louisville & Jefferson (Counties of)
Metropolitan Government (Jewish Hospital &
St. Mary's Healthcare); Series 2008, RB(a) 6.13% 02/01/37 $4,000 $ 3,784,880
- -----------------------------------------------------------------------------------------------------
Newport (City of) Kentucky League of Cities
Funding Trust; Series 2002, Lease Program VRD
RB (LOC-U.S. Bank, N.A.)(g)(h) 5.78% 04/01/32 3,500 3,500,000
=====================================================================================================
7,284,880
=====================================================================================================
LOUISIANA-0.21%
Louisiana (State of) Local Government
Environmental Facilities & Community
Development Authority (Westlake Chemical
Corp.); Series 2007, RB(a) 6.75% 11/01/32 1,500 1,319,790
=====================================================================================================
MAINE-0.07%
Maine (State of) Turnpike Authority; Series
2003, RB (INS-Ambac Assurance Corp.)(a)(e) 5.00% 07/01/33 500 462,685
=====================================================================================================
MARYLAND-1.36%
Annapolis (City of) (Park Place); Series 2005 A,
Special Obligations RB(a) 5.35% 07/01/34 2,000 1,565,140
- -----------------------------------------------------------------------------------------------------
Anne Arundel (County of) (Parole Town Center);
Series 2002, Tax Increment Allocation
Financing RB(a) 5.00% 07/01/12 200 199,782
- -----------------------------------------------------------------------------------------------------
Baltimore (City of) (Strathdale Manor); Series
2003, Special Obligation RB(a) 7.00% 07/01/33 968 947,817
- -----------------------------------------------------------------------------------------------------
Howard (County of); Series 2000 A, Retirement
Community RB(a)(b)(c) 7.88% 05/15/10 780 868,202
- -----------------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher Educational
Facilities Authority (Medstar Health); Series
2004, Ref. RB(a) 5.50% 08/15/33 1,250 1,105,463
- -----------------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher Educational
Facilities Authority (University of Maryland
Medical System); Series 2000, RB(a)(b)(c) 6.75% 07/01/10 1,000 1,080,020
- -----------------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher Educational
Facilities Authority (Washington County
Hospital);
Series 2008, RB(a) 5.75% 01/01/38 500 422,590
- -----------------------------------------------------------------------------------------------------
Series 2008, RB(a) 6.00% 01/01/43 750 648,615
- -----------------------------------------------------------------------------------------------------
Maryland (State of) Industrial Development
Finance Authority (Our Lady of Good Counsel
High School Facilities); Series 2005 A,
Economic Development IDR(a) 6.00% 05/01/35 2,000 1,808,860
=====================================================================================================
8,646,489
=====================================================================================================
MASSACHUSETTS-1.30%
Massachusetts (State of) Development Finance
Agency (Briarwood); Series 2001 B,
RB(a)(b)(c) 7.50% 12/01/10 500 555,420
- -----------------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency (Linden Ponds Inc.);
Series 2007 A, Facilities RB(a) 5.00% 11/15/14 1,000 913,770
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Facilities RB(a) 5.50% 11/15/27 1,680 1,293,600
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Facilities RB(a) 5.75% 11/15/35 1,000 760,120
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Facilities RB(a) 5.75% 11/15/42 1,000 743,420
- -----------------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency (New England Conservatory of Music);
Series 2008, RB(a) 5.25% 07/01/38 2,500 2,210,100
- -----------------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency (Reeds Landing-Accredited Investors);
Series 2006, Ref. First Mortgage RB(a) 5.75% 10/01/31 1,815 1,376,242
- -----------------------------------------------------------------------------------------------------
Massachusetts (State of) Health & Educational
Facilities Authority (Christopher House,
Inc.); Series 1999 A, Ref. RB(a) 6.88% 01/01/29 500 473,595
=====================================================================================================
8,326,267
=====================================================================================================
MICHIGAN-1.49%
Advanced Technology Academy; Series 2008, Public
School RB(a) 6.00% 11/01/37 1,000 893,350
- -----------------------------------------------------------------------------------------------------
Chandler Park Academy; Series 2005, Public
School Academy RB(a) 5.13% 11/01/30 1,050 844,284
- -----------------------------------------------------------------------------------------------------
Detroit (City of) Community High School;
Series 2005, Public School Academy RB(a) 5.65% 11/01/25 1,485 1,211,611
- -----------------------------------------------------------------------------------------------------
Series 2005, Public School Academy RB(a) 5.75% 11/01/30 1,000 789,100
- -----------------------------------------------------------------------------------------------------
Gaylord (City of) Hospital Finance Authority
(Otsego Memorial Hospital Association);
Series 2004, Ref. Limited Obligation RB(a) 6.50% 01/01/31 700 621,943
- -----------------------------------------------------------------------------------------------------
Gogebic (County of) Hospital Finance Authority
(Grand View Health System, Inc.); Series
1999, Ref. RB(a) 5.88% 10/01/16 920 875,858
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Kent (County of) Hospital Finance Authority
(Metropolitan Hospital); Series 2005 A, RB(a) 5.75% 07/01/25 $ 500 $ 436,195
- -----------------------------------------------------------------------------------------------------
Mecosta (County of) General Hospital; Series
1999, Ref. Unlimited Tax GO(a) 6.00% 05/15/18 500 469,350
- -----------------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance Authority
(Presbyterian Village);
Series 2005, Ref. RB(a) 4.88% 11/15/16 685 590,340
- -----------------------------------------------------------------------------------------------------
Series 2005, Ref. RB(a) 5.25% 11/15/25 450 354,132
- -----------------------------------------------------------------------------------------------------
Series 2005, Ref. RB(a) 5.50% 11/15/35 750 576,368
- -----------------------------------------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority
(YMCA Service Learning Academy);
Series 2001, Public School Academy Facilities
Program RB(a) 7.63% 10/01/21 700 713,874
- -----------------------------------------------------------------------------------------------------
Series 2001, Public School Academy Facilities
Program RB(a) 7.75% 10/01/31 500 505,500
- -----------------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Detroit
Edison Pollution Control); Series 2001 C,
Ref. Limited Obligation PCR(a) 5.45% 09/01/29 725 613,988
=====================================================================================================
9,495,893
=====================================================================================================
MINNESOTA-10.27%
Apple Valley (City of) Economic Development
Authority (Evercare Senior Living LLC);
Series 2005 A, Health Care RB(a) 6.13% 06/01/35 2,240 1,941,811
- -----------------------------------------------------------------------------------------------------
Baytown (Town of) (St. Croix Preparatory
Academy);
Series 2008, Lease RB(a) 6.75% 08/01/28 1,000 919,700
- -----------------------------------------------------------------------------------------------------
Series 2008, Lease RB(a) 7.00% 08/01/38 700 646,751
- -----------------------------------------------------------------------------------------------------
Becker (City of) (Shepherd of Grace);
Series 2006, Senior Housing RB(a) 5.75% 05/01/24 715 628,807
- -----------------------------------------------------------------------------------------------------
Series 2006, Senior Housing RB(a) 5.88% 05/01/29 1,000 869,880
- -----------------------------------------------------------------------------------------------------
Series 2006, Senior Housing RB(a) 5.88% 05/01/33 1,000 851,780
- -----------------------------------------------------------------------------------------------------
Series 2006, Senior Housing RB(a) 5.88% 05/01/41 740 615,362
- -----------------------------------------------------------------------------------------------------
Series 2006, Senior Housing RB(a) 6.00% 05/01/41 1,000 849,880
- -----------------------------------------------------------------------------------------------------
Carlton (City of) (Inter-Faith Care Center);
Series 2006, Ref. Health Care & Housing
Facilities RB(a) 5.70% 04/01/36 1,500 1,233,690
- -----------------------------------------------------------------------------------------------------
Chippewa (County of) (Montevideo Hospital);
Series 2007, RB(a) 5.50% 03/01/27 1,000 885,620
- -----------------------------------------------------------------------------------------------------
Series 2007, RB(a) 5.50% 03/01/37 2,000 1,687,860
- -----------------------------------------------------------------------------------------------------
Cloquet (City of) (HADC Cloquet LLC); Series
2005 A, Ref. Housing Facilities RB(a) 5.88% 08/01/35 865 734,515
- -----------------------------------------------------------------------------------------------------
Cold Spring (City of) (Assumption Home, Inc.);
Series 2005, Nursing Home & Senior Housing
RB(a) 5.50% 03/01/25 425 366,303
- -----------------------------------------------------------------------------------------------------
Series 2005, Nursing Home & Senior Housing
RB(a) 5.75% 03/01/35 600 505,806
- -----------------------------------------------------------------------------------------------------
Dakota (County of) Community Development Agency
(Highview Hills); Series 2008 A, Senior MFH
RB(a) 7.00% 08/01/45 2,000 1,903,880
- -----------------------------------------------------------------------------------------------------
Dakota (County of) Community Development Agency
(River Heights Assisted Living); Series 2007
A, Ref. MFH RB(a) 5.30% 11/01/30 2,330 1,794,403
- -----------------------------------------------------------------------------------------------------
Edina (City of) (Volunteers of America Care
Centers);
Series 2002 A, Health Care Facilities RB(a) 6.63% 12/01/22 250 245,030
- -----------------------------------------------------------------------------------------------------
Series 2002 A, Health Care Facilities RB(a) 6.63% 12/01/30 250 234,820
- -----------------------------------------------------------------------------------------------------
Eveleth (City of) (Manor House Woodland);
Series 2006 A-1, Senior MFH RB(a) 5.50% 10/01/25 510 431,501
- -----------------------------------------------------------------------------------------------------
Series 2006 A-1, Senior MFH RB(a) 5.70% 10/01/36 3,000 2,374,500
- -----------------------------------------------------------------------------------------------------
Fairmont (City of) (Goldfinch Estates-
Governmental and Educational Assistance
Corp.);
Series 2002 A-1, Housing Facilities RB(a) 7.25% 04/01/22 915 919,465
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Housing Facilities RB(a) 6.25% 10/01/25 2,500 2,217,800
- -----------------------------------------------------------------------------------------------------
Falcon Heights (City of) (Kaleidoscope Charter
School);
Series 2007 A, Lease RB(a) 6.00% 11/01/27 400 343,564
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Lease RB(a) 6.00% 11/01/37 550 451,220
- -----------------------------------------------------------------------------------------------------
Glencoe (City of) (Glencoe Regional Health
Services);
Series 2001, Health Care Facilities
RB(a)(b)(c) 7.40% 04/01/11 250 277,980
- -----------------------------------------------------------------------------------------------------
Series 2001, Health Care Facilities
RB(a)(b)(c) 7.50% 04/01/11 500 557,155
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
Hopkins (City of) Housing & Redevelopment
Authority (Excelsior Crossings);
Series 2008, Tax Increment Allocation RB(a) 5.60% 02/01/28 $ 250 $ 227,453
- -----------------------------------------------------------------------------------------------------
Series 2008, Tax Increment Allocation RB(a) 5.65% 02/01/30 280 253,308
- -----------------------------------------------------------------------------------------------------
Inver Grove Heights (City of) (Presbyterian
Homes Bloomington Care Center, Inc.);
Series 2006, Ref. Nursing Home RB(a) 5.50% 10/01/33 1,425 1,253,245
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. Nursing Home RB(a) 5.50% 10/01/41 650 555,906
- -----------------------------------------------------------------------------------------------------
Maple Grove (City of) (Maple Grove Hospital
Corp.); Series 2007, Health Care System RB(a) 5.25% 05/01/37 1,000 855,210
- -----------------------------------------------------------------------------------------------------
Maplewood (City of) (Volunteers of America Care
Center);
Series 2005 A, Ref. Health Care Facilities
RB(a) 5.00% 10/01/13 775 732,336
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Ref. Health Care Facilities
RB(a) 5.25% 10/01/19 1,250 1,114,062
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Ref. Health Care Facilities
RB(a) 5.38% 10/01/24 2,500 2,124,800
- -----------------------------------------------------------------------------------------------------
Meeker (County of) (Memorial Hospital); Series
2007, Hospital Facilities RB(a) 5.75% 11/01/37 1,000 864,230
- -----------------------------------------------------------------------------------------------------
Minneapolis (City of) (Grant Park); Series 2006,
Tax Increment Allocation RB(a) 5.35% 02/01/30 1,450 1,189,580
- -----------------------------------------------------------------------------------------------------
Minneapolis (City of) (Shelter Care Foundation);
Series 1999 A, Health Care Facilities
RB(a)(b)(c) 6.00% 04/01/09 205 210,182
- -----------------------------------------------------------------------------------------------------
Minneapolis (City of) (Village at St. Anthony
Falls); Series 2004, Ref. Tax Increment
Allocation RB(a) 5.75% 02/01/27 605 528,056
- -----------------------------------------------------------------------------------------------------
Monticello (City of) (FiberNet Monticello);
Series 2008, Telecommunications RB(a) 6.75% 06/01/31 2,000 1,803,380
- -----------------------------------------------------------------------------------------------------
Moorhead (City of) (Sheyenne Crossing); Series
2006, Senior Housing RB(a) 5.65% 04/01/29 2,355 2,016,186
- -----------------------------------------------------------------------------------------------------
North Oaks (City of) (Presbyterian Homes of
North Oaks, Inc.);
Series 2007, Senior Housing RB(a) 6.13% 10/01/39 1,000 892,100
- -----------------------------------------------------------------------------------------------------
Series 2007, Senior Housing RB(a) 6.25% 10/01/47 2,000 1,805,220
- -----------------------------------------------------------------------------------------------------
Series 2007, Senior Housing RB(a) 6.50% 10/01/47 1,000 938,490
- -----------------------------------------------------------------------------------------------------
Northwest Multi-County Housing & Redevelopment
Authority (Pooled Housing Program);
Series 2005 A, Ref. Governmental Housing
RB(a) 5.35% 07/01/15 70 68,406
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Ref. Governmental Housing
RB(a) 6.20% 07/01/30 2,000 1,816,140
- -----------------------------------------------------------------------------------------------------
Oakdale (City of) (Oak Meadows); Series 2004,
Ref. Senior Housing RB(a) 6.00% 04/01/24 1,000 909,820
- -----------------------------------------------------------------------------------------------------
Oronoco (City of) (Wedum Shorewood Campus);
Series 2006, Ref. MFH RB(a) 5.25% 06/01/26 2,000 1,666,680
- -----------------------------------------------------------------------------------------------------
Owatonna (City of) (Senior Living): Series 2006
A, Senior Housing RB(a) 5.80% 10/01/29 800 695,184
- -----------------------------------------------------------------------------------------------------
Park Rapids (City of) (CDL Homes LLC); Series
2006, Housing & Health Facilities RB(a) 5.40% 08/01/36 650 512,571
- -----------------------------------------------------------------------------------------------------
Pine City (City of) (Lakes International
Language Academy);
Series 2006 A, Lease RB(a) 6.00% 05/01/26 480 413,611
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Lease RB(a) 6.25% 05/01/35 550 464,068
- -----------------------------------------------------------------------------------------------------
Ramsey (City of) (Pact Charter School);
Series 2004 A, Lease RB(a) 6.50% 12/01/22 925 886,141
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Lease RB(a) 6.75% 12/01/33 150 139,161
- -----------------------------------------------------------------------------------------------------
Rochester (City of) (Mayo Clinic); Series 2006,
Health Care Facilities RB(a) 5.00% 11/15/36 2,760 2,404,954
- -----------------------------------------------------------------------------------------------------
Rochester (City of) (Samaritan Bethany Inc.);
Series 2003 A, Health Care & Housing RB(a) 5.38% 08/01/12 165 161,169
- -----------------------------------------------------------------------------------------------------
Series 2003 A, Health Care & Housing RB(a) 5.50% 08/01/13 195 188,959
- -----------------------------------------------------------------------------------------------------
Series 2003 A, Health Care & Housing RB(a) 6.25% 08/01/19 1,100 1,036,343
- -----------------------------------------------------------------------------------------------------
Shakopee (City of) (St. Francis Regional Medical
Center); Series 2004, Health Care Facilities
RB(a) 5.25% 09/01/34 500 417,250
- -----------------------------------------------------------------------------------------------------
St. Cloud (City of) Housing & Redevelopment
Authority (Sterling Heights Apartments);
Series 2002, MFH RB(a)(f) 7.00% 10/01/23 495 461,988
- -----------------------------------------------------------------------------------------------------
Series 2002, MFH RB(a)(f) 7.45% 10/01/32 155 145,029
- -----------------------------------------------------------------------------------------------------
St. Paul (City of) Housing & Redevelopment
Authority (Community of Peace Academy);
Series 2001 A, Lease RB(a)(b)(c) 7.38% 12/01/10 900 1,001,574
- -----------------------------------------------------------------------------------------------------
St. Paul (City of) Housing & Redevelopment
Authority (Hmong Academy);
Series 2006 A, Lease RB(a) 5.75% 09/01/26 300 254,703
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
14 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
Series 2006 A, Lease RB(a) 6.00% 09/01/36 $ 390 $ 324,702
- -----------------------------------------------------------------------------------------------------
St. Paul (City of) Housing & Redevelopment
Authority (New Spirit Charter School); Series
2002 A, Lease RB(a) 7.50% 12/01/31 890 882,141
- -----------------------------------------------------------------------------------------------------
St. Paul (City of) Housing & Redevelopment
Authority (Rossy & Richard Shaller);
Series 2007 A, RB(a) 5.05% 10/01/27 1,750 1,374,467
- -----------------------------------------------------------------------------------------------------
Series 2007 A, RB(a) 5.15% 10/01/42 275 203,442
- -----------------------------------------------------------------------------------------------------
Series 2007 A, RB(a) 5.25% 10/01/42 1,000 755,610
- -----------------------------------------------------------------------------------------------------
Vadnais Heights (City of) (Agriculture & Food
Sciences);
Series 2004 A, Lease RB(a) 6.38% 12/01/24 900 803,223
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Lease RB(a) 6.60% 12/01/34 275 238,692
- -----------------------------------------------------------------------------------------------------
Washington (County of) Housing & Redevelopment
Authority (Birchwood & Woodbury);
Series 2007 A, Health Care & Housing RB(a) 5.00% 12/01/14 1,000 949,480
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Health Care & Housing RB(a) 5.55% 12/01/27 1,000 868,530
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Health Care & Housing RB(a) 5.63% 06/01/37 2,000 1,660,500
- -----------------------------------------------------------------------------------------------------
Woodbury (City of) (Math & Science Academy);
Series 2002 A, Ref. Lease RB(a) 7.38% 12/01/24 250 253,203
- -----------------------------------------------------------------------------------------------------
Series 2002 A, Ref. Lease RB(a) 7.50% 12/01/31 750 756,127
- -----------------------------------------------------------------------------------------------------
Worthington (City of) Housing Authority (Meadows
Worthington); Series 2007 A, RB(a) 5.25% 11/01/28 1,175 935,664
=====================================================================================================
65,502,359
=====================================================================================================
MISSOURI-3.44%
370/Missouri Bottom Road/Tussing Road
Transportation Development District;
Series 2002, RB(a) 7.00% 05/01/22 750 761,347
- -----------------------------------------------------------------------------------------------------
Series 2002, RB(a) 7.20% 05/01/33 500 501,730
- -----------------------------------------------------------------------------------------------------
Branson (City of) Industrial Development
Authority (Branson Landing-Retail); Series
2005, Tax Increment Allocation IDR(a) 5.25% 06/01/21 1,455 1,253,133
- -----------------------------------------------------------------------------------------------------
Branson Hills Infrastructure Facilities
Community Improvement District;
Series 2007 A, Special Assessment RB(a) 5.00% 04/01/11 550 545,545
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Special Assessment RB(a) 5.00% 04/01/13 300 291,762
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Special Assessment RB(a) 5.00% 04/01/15 500 470,325
- -----------------------------------------------------------------------------------------------------
Cass (County of); Series 2007, Hospital RB(a) 5.63% 05/01/38 1,000 840,000
- -----------------------------------------------------------------------------------------------------
Chillicothe (City of) (South U.S. 65); Series
2006, Tax Increment Allocation RB(a) 5.50% 04/01/21 1,000 887,050
- -----------------------------------------------------------------------------------------------------
Des Peres (City of) (West County Center); Series
2002 A, Ref. Tax Increment Allocation RB(a) 5.75% 04/15/20 1,000 928,230
- -----------------------------------------------------------------------------------------------------
Desloge (City of) (U.S. Highway 67/State Street
Redevelopment); Series 2005, Ref. Tax
Increment Allocation RB(a) 5.20% 04/15/20 645 594,767
- -----------------------------------------------------------------------------------------------------
Fenton (City of) (Gravois Bluffs); Series 2001,
Ref. & Improvement Tax Increment Allocation
RB(a)(b)(c) 7.00% 10/01/11 1,015 1,138,800
- -----------------------------------------------------------------------------------------------------
Grandview (City of) Industrial Development
Authority (Grandview Crossing 1); Series
2006, Tax Increment Allocation IDR(a) 5.75% 12/01/28 1,250 750,000
- -----------------------------------------------------------------------------------------------------
Hanley Road & North of Folk Avenue
Transportation District;
Series 2005, Transportation Sales Tax RB(a) 5.00% 10/01/25 740 648,899
- -----------------------------------------------------------------------------------------------------
Series 2005, Transportation Sales Tax RB(a) 5.40% 10/01/31 750 633,653
- -----------------------------------------------------------------------------------------------------
Kansas City (City of) Industrial Development
Authority (The Bishop Spencer Place, Inc.);
Series 2004 A, First Mortgage Health Care
Facilities IDR(a) 6.25% 01/01/24 500 448,295
- -----------------------------------------------------------------------------------------------------
Kansas City (City of) Tax Increment Financing
Commission (Maincor); Series 2007 A, Tax
Increment Allocation RB(a) 5.25% 03/01/18 500 461,095
- -----------------------------------------------------------------------------------------------------
Maplewood (City of) (Maplewood South
Redevelopment Area); Series 2005, Ref. Tax
Increment RB(a) 5.75% 11/01/26 1,350 1,157,314
- -----------------------------------------------------------------------------------------------------
Platte (County of) Industrial Development
Authority (Zona Rosa Phase II); Series 2007,
Transition RB(a) 6.85% 04/01/29 3,500 3,212,510
- -----------------------------------------------------------------------------------------------------
Polk (County of) Industrial Development
Authority (Citizen's Memorial Health Care
Federation); Series 2008, IDR(a) 6.50% 01/01/33 2,000 1,855,300
- -----------------------------------------------------------------------------------------------------
Richmond Heights (City of) (Francis Place
Redevelopment); Series 2005, Ref. &
Improvement Tax Increment & Transportation
Sales Tax RB(a) 5.63% 11/01/25 750 650,782
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
15 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
St. Joseph (City of) Industrial Development
Authority (The Shoppes at North Village);
Series 2005 A, Tax Increment Allocation
IDR(a) 5.25% 11/01/13 $ 500 $ 492,540
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Tax Increment Allocation
IDR(a) 5.50% 11/01/27 750 622,830
- -----------------------------------------------------------------------------------------------------
Series 2005 B, Tax Increment Allocation
IDR(a) 5.50% 11/01/27 1,000 830,440
- -----------------------------------------------------------------------------------------------------
St. Louis (City of) Industrial Development
Authority (Confluence Academy); Series 2007
A, IDR(a) 5.35% 06/15/32 750 567,743
- -----------------------------------------------------------------------------------------------------
St. Louis (County of) Industrial Development
Authority (St. Andrew's Resources for
Seniors) Series 2007 A, Senior Living
Facilities IDR(a) 6.38% 12/01/41 1,000 847,020
- -----------------------------------------------------------------------------------------------------
Strother Interchange Transportation Development
District (Lees Summit); Series 2006, RB(a) 5.00% 05/01/24 675 547,547
=====================================================================================================
21,938,657
=====================================================================================================
MONTANA-0.10%
Montana (State of) Facilities Finance Authority
(St. John's Lutheran Church); Series 2006 A,
Senior Living RB(a) 6.13% 05/15/36 750 641,160
=====================================================================================================
NEVADA-0.25%
Las Vegas Valley Water District; Series 2003 A,
Ref. & Water Improvement Limited Tax GO
(INS-Financial Guaranty Insurance Co.)(a)(e) 5.00% 06/01/32 1,150 1,069,006
- -----------------------------------------------------------------------------------------------------
University and Community College System of
Nevada; Series 2002 A, RB (INS-Financial
Guaranty Insurance Co.)(a)(e) 5.40% 07/01/31 500 500,965
=====================================================================================================
1,569,971
=====================================================================================================
NEW HAMPSHIRE-0.41%
New Hampshire (State of) Business Finance
Authority (Alice Peck Day Health System);
Series 1999 A, RB(a)(b)(c) 6.88% 10/01/09 1,050 1,109,955
- -----------------------------------------------------------------------------------------------------
New Hampshire (State of) Health & Education
Facilities Authority (The Huntington at
Nashua);
Series 2003 A, RB(a) 6.88% 05/01/23 750 751,305
- -----------------------------------------------------------------------------------------------------
Series 2003 A, RB(a) 6.88% 05/01/33 750 739,703
=====================================================================================================
2,600,963
=====================================================================================================
NEW JERSEY-1.68%
Burlington (County of) Bridge Commission (The
Evergreens) Series 2007, Economic Development
RB(a) 5.63% 01/01/38 2,400 1,947,168
- -----------------------------------------------------------------------------------------------------
New Jersey (State of) Economic Development
Authority (Cedar Crest Village, Inc.
Facilities); Series 2001 A, Retirement
Community RB(a)(b)(c) 7.25% 11/15/11 500 563,710
- -----------------------------------------------------------------------------------------------------
New Jersey (State of) Economic Development
Authority (Continental Airlines, Inc.);
Series 1999, Special Facilities RB(a)(f) 6.25% 09/15/29 1,000 762,480
- -----------------------------------------------------------------------------------------------------
Series 2000, Special Facilities RB(a)(f) 7.00% 11/15/30 565 467,018
- -----------------------------------------------------------------------------------------------------
Series 2000, Special Facilities RB(a)(f) 7.20% 11/15/30 425 359,520
- -----------------------------------------------------------------------------------------------------
Series 2003, Special Facilities RB(a)(f) 9.00% 06/01/33 500 501,375
- -----------------------------------------------------------------------------------------------------
New Jersey (State of) Economic Development
Authority (Lions Gate);
Series 2005 A, First Mortgage RB(a) 5.00% 01/01/15 825 774,246
- -----------------------------------------------------------------------------------------------------
Series 2005 A, First Mortgage RB(a) 5.75% 01/01/25 710 612,517
- -----------------------------------------------------------------------------------------------------
Series 2005 A, First Mortgage RB(a) 5.88% 01/01/37 1,360 1,116,206
- -----------------------------------------------------------------------------------------------------
New Jersey (State of) Economic Development
Authority (Seashore Gardens Living Center);
Series 2001, First Mortgage RB(a)(b)(c) 8.00% 04/01/11 800 906,952
- -----------------------------------------------------------------------------------------------------
Series 2001, First Mortgage RB(a)(b)(c) 8.00% 04/01/11 500 566,845
- -----------------------------------------------------------------------------------------------------
Series 2006, First Mortgage RB(a) 5.30% 11/01/26 1,100 864,831
- -----------------------------------------------------------------------------------------------------
Series 2006, First Mortgage RB(a) 5.38% 11/01/36 700 526,043
- -----------------------------------------------------------------------------------------------------
New Jersey (State of) Transportation Trust Fund
Authority; Series 2005 B, Transportation
System RB (INS-Ambac Assurance Corp.)(a)(e) 5.25% 12/15/23 750 730,793
=====================================================================================================
10,699,704
=====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
16 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
NEW MEXICO-0.19%
Mariposa East Public Improvement District;
Series 2006, Unlimited Tax GO(a) 5.75% 09/01/21 $ 500 $ 431,710
- -----------------------------------------------------------------------------------------------------
Series 2006, Unlimited Tax GO(a) 6.00% 09/01/32 1,000 795,320
=====================================================================================================
1,227,030
=====================================================================================================
NEW YORK-3.62%
Broome (County of) Industrial Development Agency
(Good Shepherd Village);
Series 2008 A, Continuing Care Retirement
IDR(a) 6.15% 07/01/18 500 473,700
- -----------------------------------------------------------------------------------------------------
Series 2008 A, Continuing Care Retirement
IDR(a) 6.75% 07/01/28 600 555,948
- -----------------------------------------------------------------------------------------------------
Series 2008 A, Continuing Care Retirement
IDR(a) 6.88% 07/01/40 1,000 926,590
- -----------------------------------------------------------------------------------------------------
East Rochester (City of) Housing Authority
(Woodland Village); Series 2006, Ref. Senior
Living RB(a) 5.50% 08/01/33 1,700 1,339,957
- -----------------------------------------------------------------------------------------------------
Erie (County of) Industrial Development Agency
(Orchard Park CCRC, Inc.);
Series 2006 A, IDR(a) 6.00% 11/15/26 1,100 945,582
- -----------------------------------------------------------------------------------------------------
Series 2006 A, IDR(a) 6.00% 11/15/36 2,000 1,630,400
- -----------------------------------------------------------------------------------------------------
Monroe (County of) Industrial Development Agency
(Woodland Village); Series 2000, Civic
Facilities IDR(a)(b)(c) 8.55% 11/15/10 1,000 1,133,670
- -----------------------------------------------------------------------------------------------------
Nassau (County of) Industrial Development Agency
(Amsterdam at Harborside); Series 2007 A,
Continuing Care Retirement IDR(a) 6.50% 01/01/27 1,000 955,710
- -----------------------------------------------------------------------------------------------------
New York (State of) Dormitory Authority (Mount
Sinai NYU Health Obligated Group); Series
2000, RB(a) 5.50% 07/01/26 500 467,915
- -----------------------------------------------------------------------------------------------------
New York City (City of) Industrial Development
Agency (Liberty-7 World Trade Center); Series
2005 A, IDR(a) 6.25% 03/01/15 3,000 2,999,820
- -----------------------------------------------------------------------------------------------------
New York Liberty Development Corp. (Goldman
Sachs Headquarters Issue); Series 2005, RB(a) 5.25% 10/01/35 5,000 4,134,000
- -----------------------------------------------------------------------------------------------------
Onondaga (County of) Industrial Development
Agency (Solvay Paperboard LLC); Series 1998,
Ref. Solid Waste Disposal Facilities
IDR(a)(f) 7.00% 11/01/30 2,000 1,950,520
- -----------------------------------------------------------------------------------------------------
Syracuse (City of) Industrial Development Agency
(Jewish Home of Central New York, Inc.);
Series 2001 A, First Mortgage IDR(a) 7.38% 03/01/21 350 357,157
- -----------------------------------------------------------------------------------------------------
Series 2001 A, First Mortgage IDR(a) 7.38% 03/01/31 500 509,845
- -----------------------------------------------------------------------------------------------------
Ulster (County of) Industrial Development
Agency, Series 2007 A, Civic Facilities
IDR(a) 6.00% 09/15/27 2,000 1,787,880
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Civic Facilities IDR(a) 6.00% 09/15/37 2,000 1,731,140
- -----------------------------------------------------------------------------------------------------
Westchester (County of) Industrial Development
Agency (Hebrew Hospital Senior Housing Inc.);
Series 2000 A, Continuing Care Retirement
IDR(a)(b)(c) 7.00% 07/01/10 600 653,280
- -----------------------------------------------------------------------------------------------------
Series 2000 A, Continuing Care Retirement
IDR(a)(b)(c) 7.38% 07/01/10 500 547,400
=====================================================================================================
23,100,514
=====================================================================================================
NORTH CAROLINA-0.85%
North Carolina (State of) Medical Care
Commission (Arbor Acres United Methodist
Retirement Community, Inc.); Series 2002,
First Mortgage Health Care Facilities
RB(a)(b)(c) 6.38% 03/01/12 500 549,775
- -----------------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (Forest at Duke); Series 2002,
First Mortgage Retirement Facilities
RB(a)(b)(c) 6.38% 09/01/12 250 275,188
- -----------------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (Pennybyrn at Maryfield); Series
2005 A, Health Care Facilities RB(a) 6.13% 10/01/35 1,300 1,077,518
- -----------------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (Southminister); Series 2007 A,
First Mortgage Retirement Facilities RB(a) 5.75% 10/01/37 1,500 1,301,685
- -----------------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (The Presbyterian Homes Obligated
Group);
Series 2006, First Mortgage Health Care
Facilities RB(a) 5.60% 10/01/36 1,000 847,370
- -----------------------------------------------------------------------------------------------------
Series 2006 B, Ref. First Mortgage Health
Care Facilities RB(a) 5.20% 10/01/21 1,500 1,345,170
=====================================================================================================
5,396,706
=====================================================================================================
NORTH DAKOTA-0.54%
Grand Forks (City of) (4000 Valley Square);
Series 2006, Ref. Senior Housing RB(a) 5.13% 12/01/21 500 402,555
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. Senior Housing RB(a) 5.30% 12/01/34 855 635,658
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
17 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
NORTH DAKOTA-(CONTINUED)
Traill (County of) (Hillsboro Medical Center);
Series 2007, Health Care RB(a) 5.25% 05/01/20 $ 500 $ 424,570
- -----------------------------------------------------------------------------------------------------
Series 2007, Health Care RB(a) 5.50% 05/01/26 1,520 1,252,617
- -----------------------------------------------------------------------------------------------------
Series 2007, Health Care RB(a) 5.50% 05/01/42 1,000 737,730
=====================================================================================================
3,453,130
=====================================================================================================
OHIO-3.51%
Adams (County of) (Adams County Hospital);
Series 2005, Hospital Facilities Improvement
RB(a) 5.50% 09/01/09 375 369,109
- -----------------------------------------------------------------------------------------------------
Series 2005, Hospital Facilities Improvement
RB(a) 5.75% 09/01/10 395 382,554
- -----------------------------------------------------------------------------------------------------
Buckeye (City of) Tobacco Settlement Financing
Authority;
Series 2007 A-2, Sr. Asset-Backed RB(a) 5.88% 06/01/30 1,000 819,520
- -----------------------------------------------------------------------------------------------------
Series 2007 A-2, Sr. Asset-Backed RB(a) 5.75% 06/01/34 1,000 763,830
- -----------------------------------------------------------------------------------------------------
Centerville (City of) (Bethany Lutheran Village
Continuing Care Facilities Expansion), Series
2007 A, Health Care RB(a) 5.75% 11/01/22 1,000 855,900
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Health Care RB(a) 6.00% 11/01/27 2,000 1,690,820
- -----------------------------------------------------------------------------------------------------
Cleveland (City of)-Cuyahoga (County of) Port
Authority (St. Clarence-Governmental and
Educational Assistance Corp., LLC); Series
2006 A, Senior Housing RB(a) 6.25% 05/01/38 2,710 2,072,201
- -----------------------------------------------------------------------------------------------------
Cleveland (City of)-Cuyahoga (County of) Port
Authority; Series 2001, Special Assessment
Tax Increment RB(a) 7.35% 12/01/31 1,000 1,015,300
- -----------------------------------------------------------------------------------------------------
Cuyahoga (County of) (Canton Inc.); Series 2000,
Hospital Facilities RB(a) 7.50% 01/01/30 750 766,418
- -----------------------------------------------------------------------------------------------------
Cuyahoga (County) (Eliza Jennings Senior Care
Network), Series 2007 A, Health Care &
Independent Living Facilities RB(a) 5.75% 05/15/27 1,000 824,480
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Health Care & Independent
Living Facilities RB(a) 6.00% 05/15/37 1,000 817,220
- -----------------------------------------------------------------------------------------------------
Franklin (County of) (Ohio Presbyterian
Retirement Services);
Series 2001 A, Health Care Facilities
RB(a)(b)(c) 7.13% 07/01/11 500 558,805
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Health Care Facilities
Improvement RB(a) 5.13% 07/01/35 1,250 989,600
- -----------------------------------------------------------------------------------------------------
Hickory Chase Community Authority;
Series 2008, Infrastructure Improvement RB(a) 6.75% 12/01/27 2,000 1,836,160
- -----------------------------------------------------------------------------------------------------
Series 2008, Infrastructure Improvement RB(a) 7.00% 12/01/38 1,500 1,383,915
- -----------------------------------------------------------------------------------------------------
Lucas (County of) (Sunset Retirement
Communities);
Series 2000 A, Ref. & Improvement Health Care
Facilities RB(a) 6.50% 08/15/20 500 508,680
- -----------------------------------------------------------------------------------------------------
Series 2000 A, Ref. & Improvement Health Care
Facilities RB(a) 6.55% 08/15/24 500 502,925
- -----------------------------------------------------------------------------------------------------
Norwood (City of) (Cornerstone at Norwood);
Series 2006, Tax Increment Financing RB(a) 5.25% 12/01/15 1,080 1,021,831
- -----------------------------------------------------------------------------------------------------
Series 2006, Tax Increment Financing RB(a) 5.75% 12/01/20 1,300 1,175,109
- -----------------------------------------------------------------------------------------------------
Ross (County of) (Adena Health System); Series
2008, Ref. Hospital Facilities RB(a) 5.75% 12/01/35 1,500 1,333,680
- -----------------------------------------------------------------------------------------------------
Toledo (City of) & Lucas (County of) Port
Authority (St. Mary Woods);
Series 2004 A, RB(a) 6.00% 05/15/24 1,750 1,509,147
- -----------------------------------------------------------------------------------------------------
Series 2004 A, RB(a) 6.00% 05/15/34 1,500 1,202,400
=====================================================================================================
22,399,604
=====================================================================================================
OKLAHOMA-0.57%
Oklahoma (County of) Finance Authority (Epworth
Villa);
Series 2005 A, Ref. RB(a) 5.00% 04/01/15 1,025 929,316
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Ref. RB(a) 5.70% 04/01/25 2,500 2,098,800
- -----------------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority (Comanche County Hospital); Series
2002 B, RB(a) 6.60% 07/01/31 625 616,950
=====================================================================================================
3,645,066
=====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
18 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
OREGON-0.56%
Clackamas (County of) Hospital Facilities
Authority (Gross-Willamette Falls); Series
2005, Ref. RB(a) 5.13% 04/01/26 $1,000 $ 858,480
- -----------------------------------------------------------------------------------------------------
Clackamas (County of) Hospital Facilities
Authority (Odd Fellows Home); Series 1998 A,
Ref. RB(a) 5.88% 09/15/21 230 192,439
- -----------------------------------------------------------------------------------------------------
Oregon (State of) Health Housing Educational &
Cultural Facilities Authority (Oregon Baptist
Retirement Homes); Series 1996, RB(a) 8.00% 11/15/26 735 735,404
- -----------------------------------------------------------------------------------------------------
Yamhill (County of) Hospital Authority
(Friendsview Retirement Community); Series
2003, RB(a)(b)(c) 7.00% 12/01/13 1,555 1,796,476
=====================================================================================================
3,582,799
=====================================================================================================
PENNSYLVANIA-4.71%
Allegheny (County of) Hospital Development
Authority (Villa St. Joseph of Baden); Series
1998, Health Care Facilities RB(a) 6.00% 08/15/28 500 427,210
- -----------------------------------------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority (Propel Schools-Homestead); Series
2004 A, Charter School IDR(a) 7.00% 12/15/15 760 774,790
- -----------------------------------------------------------------------------------------------------
Blair (County of) Industrial Development
Authority (Village of Pennsylvania State);
Series 2002 A, IDR(a) 6.90% 01/01/22 500 483,365
- -----------------------------------------------------------------------------------------------------
Series 2002 A, IDR(a) 7.00% 01/01/34 500 483,850
- -----------------------------------------------------------------------------------------------------
Bucks (County of) Industrial Development
Authority (Ann's Choice, Inc. Facilities),
Series 2005 A, Retirement Community IDR(a) 5.90% 01/01/27 1,250 1,010,300
- -----------------------------------------------------------------------------------------------------
Series 2005 A, Retirement Community IDR(a) 6.25% 01/01/35 1,000 814,560
- -----------------------------------------------------------------------------------------------------
Chartiers Valley Industrial & Commercial
Development Authority (Asbury Health Center);
Series 1999, Ref. First Mortgage IDR(a) 6.38% 12/01/19 1,000 943,870
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. First Mortgage IDR(a) 5.13% 12/01/12 500 471,365
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. First Mortgage IDR(a) 5.25% 12/01/13 500 469,540
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. First Mortgage IDR(a) 5.25% 12/01/15 260 236,166
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. First Mortgage IDR(a) 5.38% 12/01/16 500 449,750
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. First Mortgage IDR(a) 5.75% 12/01/22 935 818,340
- -----------------------------------------------------------------------------------------------------
Chester (County of) Industrial Development
Authority (Avon Grove Charter School); Series
2007 A, IDR(a) 6.25% 12/15/27 1,000 898,010
- -----------------------------------------------------------------------------------------------------
Crawford (County of) Hospital Authority (Wesbury
United Methodist Community); Series 1999,
Senior Living Facilities RB(a) 6.25% 08/15/29 750 652,507
- -----------------------------------------------------------------------------------------------------
Cumberland (County of) Municipal Authority
(Messiah Village); Series 2008 A, RB(a) 6.00% 07/01/35 1,000 882,980
- -----------------------------------------------------------------------------------------------------
Cumberland (County of) Municipal Authority
(Presbyterian Homes Obligations);
Series 2008 A, RB(a) 5.00% 01/01/17 2,000 1,901,160
- -----------------------------------------------------------------------------------------------------
Series 2008 A, RB(a) 5.35% 01/01/20 515 486,248
- -----------------------------------------------------------------------------------------------------
Series 2008 A, RB(a) 5.45% 01/01/21 885 831,431
- -----------------------------------------------------------------------------------------------------
Cumberland (County of) Municipal Authority
(Wesley Affiliated Services, Inc.); Series
2002 A, Retirement Community RB(a)(b)(c) 7.13% 01/01/13 700 809,053
- -----------------------------------------------------------------------------------------------------
Fulton (County of) Industrial Development
Authority (The Fulton County Medical Center);
Series 2006, Hospital IDR(a) 5.88% 07/01/31 1,500 1,256,310
- -----------------------------------------------------------------------------------------------------
Harrisburg (City of) Authority (Harrisburg
University of Science);
Series 2007 A, University RB(a) 5.40% 09/01/16 950 916,750
- -----------------------------------------------------------------------------------------------------
Series 2007 B, University RB(a) 6.00% 09/01/36 1,225 1,058,228
- -----------------------------------------------------------------------------------------------------
Lancaster (County of) Hospital Authority (Saint
Anne's Home); Series 1999, Health Center
RB(a) 6.63% 04/01/28 500 465,040
- -----------------------------------------------------------------------------------------------------
Lancaster (County of) Industrial Development
Authority (Garden Spot Village);
Series 2000 A, IDR(a)(b)(c) 7.60% 05/01/10 250 271,852
- -----------------------------------------------------------------------------------------------------
Series 2000 A, IDR(a)(b)(c) 7.63% 05/01/10 500 543,895
- -----------------------------------------------------------------------------------------------------
Lawrence (County of) Industrial Development
Authority (Shenango Presbyterian Senior Care
Obligated Group); Series 2001 B, Senior
Health & Housing Facilities IDR(a)(b)(c) 7.50% 11/15/11 1,000 1,137,400
- -----------------------------------------------------------------------------------------------------
Lehigh (County of) General Purpose Authority
(Bible Fellowship Church Home Inc.);
Series 2001, First Mortgage RB(a) 7.63% 11/01/21 250 255,308
- -----------------------------------------------------------------------------------------------------
Series 2001, First Mortgage RB(a) 7.75% 11/01/33 750 772,530
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
19 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Montgomery (County of) Higher Education & Health
Authority (Philadelphia Geriatric Center);
Series 1999 A, RB(a)(b)(c) 7.38% 12/01/09 $1,340 $ 1,437,552
- -----------------------------------------------------------------------------------------------------
North Penn (Region of) Health Hospital &
Education Authority (Maple Village); Series
2000 A, Hospital RB(a)(b)(c) 8.00% 04/01/10 300 323,100
- -----------------------------------------------------------------------------------------------------
Pennsylvania (State of) Economic Development
Financing Authority (Northwestern Human
Services, Inc.); Series 1998 A, RB(a) 5.25% 06/01/14 1,000 920,030
- -----------------------------------------------------------------------------------------------------
Pennsylvania (State of) Higher Educational
Facilities Authority (Student Association,
Inc. at California University of
Pennsylvania);
Series 2000 A, Student Housing RB(a) 6.75% 09/01/20 500 510,775
- -----------------------------------------------------------------------------------------------------
Series 2000 A, Student Housing RB(a) 6.75% 09/01/32 320 319,597
- -----------------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority (Cathedral Village); Series 2003 A,
IDR(a) 6.88% 04/01/34 500 480,470
- -----------------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority (Russell Byers Charter School);
Series 2007 A, IDR(a) 5.15% 05/01/27 1,000 825,520
- -----------------------------------------------------------------------------------------------------
Series 2007 A, IDR(a) 5.25% 05/01/37 1,000 782,900
- -----------------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority; Series 2007 A, IDR(a) 5.50% 09/15/37 2,700 2,188,944
- -----------------------------------------------------------------------------------------------------
Westmoreland (County of) Industrial Development
Authority (Redstone Presbyterian Senior Care
Obligated Group);
Series 2005 A, IDR(a) 5.25% 01/01/13 500 475,090
- -----------------------------------------------------------------------------------------------------
Series 2005 A, IDR(a) 5.75% 01/01/26 1,000 835,010
- -----------------------------------------------------------------------------------------------------
Series 2005 A, IDR(a) 5.88% 01/01/32 500 412,570
=====================================================================================================
30,033,366
=====================================================================================================
RHODE ISLAND-0.03%
Tobacco Settlement Financing Corp.; Series 2002
A, Asset-Backed RB(a) 6.13% 06/01/32 240 213,338
=====================================================================================================
SOUTH CAROLINA-1.81%
South Carolina (State of) Jobs-Economic
Development Authority (Lutheran Homes);
Series 2007, Ref. First Mortgage Health Care
Facilities RB(a) 5.38% 05/01/21 1,500 1,271,910
- -----------------------------------------------------------------------------------------------------
Series 2007, Ref. First Mortgage Health Care
Facilities RB(a) 5.00% 05/01/14 1,035 956,785
- -----------------------------------------------------------------------------------------------------
Series 2007, Ref. First Mortgage Health Care
Facilities RB(a) 5.50% 05/01/28 1,100 886,512
- -----------------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Palmetto Health
Alliance);
Series 2000 A, Hospital Facilities
Improvement RB(a)(b)(c) 7.38% 12/15/10 800 891,832
- -----------------------------------------------------------------------------------------------------
Series 2003 A, Ref. Hospital Facilities RB(a) 6.13% 08/01/23 1,500 1,494,780
- -----------------------------------------------------------------------------------------------------
Series 2003 A, Ref. Hospital Facilities RB(a) 6.25% 08/01/31 1,570 1,514,422
- -----------------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (South Carolina
Episcopal Home at Still Hopes);
Series 2004 A, Residential Care Facilities
RB(a) 6.25% 05/15/25 750 674,798
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Residential Care Facilities
RB(a) 6.38% 05/15/32 1,250 1,107,825
- -----------------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (The Woodlands at
Furman); Series 2007 A, RB(a) 6.00% 11/15/37 2,000 1,632,640
- -----------------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Wesley Commons);
Series 2000, First Mortgage Health Facilities
RB(a)(b)(c) 7.75% 10/01/10 700 782,334
- -----------------------------------------------------------------------------------------------------
Series 2000, First Mortgage Health Facilities
RB(a)(b)(c) 8.00% 10/01/10 300 336,420
=====================================================================================================
11,550,258
=====================================================================================================
SOUTH DAKOTA-0.72%
Minnehaha (County of) (Bethany Lutheran); Series
2007, Ref. Health Facilities RB(a) 5.50% 12/01/35 500 381,845
- -----------------------------------------------------------------------------------------------------
Sioux Falls (City of); Series 2008 A, Tax
Increment Allocation RB(a) 5.75% 01/15/28 1,300 1,108,523
- -----------------------------------------------------------------------------------------------------
South Dakota (State of) Health & Educational
Facilities Authority (Avera Health);
Series 2008 B, RB(a) 5.50% 07/01/35 2,000 1,786,980
- -----------------------------------------------------------------------------------------------------
Series 2008 B, RB(a) 5.25% 07/01/38 1,000 852,470
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
20 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
SOUTH DAKOTA-(CONTINUED)
South Dakota (State of) Health & Educational
Facilities Authority (Westhills Village
Retirement Community); Series 2003, RB(a) 5.65% 09/01/23 $ 500 $ 492,550
=====================================================================================================
4,622,368
=====================================================================================================
TENNESSEE-0.68%
Blount (County of) Health & Educational
Facilities Board (Asbury Inc.); Series 2007
A, Ref. RB(a) 5.13% 04/01/23 1,690 1,376,235
- -----------------------------------------------------------------------------------------------------
Davidson and Williamson (Counties of) Harpeth
Valley Utilities District; Series 2004,
Utilities Improvement RB (INS-MBIA Insurance
Corp.)(a)(e) 5.00% 09/01/34 1,000 929,460
- -----------------------------------------------------------------------------------------------------
Johnson City (City of) Health & Educational
Facilities Board (Appalachian Christian
Village);
Series 2004 A, Retirement Facilities RB(a) 6.00% 02/15/24 500 435,890
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Retirement Facilities RB(a) 6.25% 02/15/32 350 301,721
- -----------------------------------------------------------------------------------------------------
Shelby (County of) Health Educational & Housing
Facilities Board (Trezevant Manor);
Series 2006 A, RB(a) 5.63% 09/01/26 1,000 859,200
- -----------------------------------------------------------------------------------------------------
Series 2006 A, RB(a) 5.75% 09/01/37 500 414,375
=====================================================================================================
4,316,881
=====================================================================================================
TEXAS-7.01%
Abilene (City of) Health Facilities Development
Corp. (Sears Methodist Retirement System
Obligated Group Report); Series 2003 A,
Retirement Facilities RB(a) 7.00% 11/15/33 1,000 980,210
- -----------------------------------------------------------------------------------------------------
Atlanta (City of) Hospital Authority; Series
1999, RB(a) 6.70% 08/01/19 500 473,660
- -----------------------------------------------------------------------------------------------------
Bexar (County of) Health Facilities Development
Corp. (Army Retirement Residence); Series
2002, RB(a)(b)(c) 6.30% 07/01/12 500 555,885
- -----------------------------------------------------------------------------------------------------
Bexar (County of) Housing Finance Corp.
(American Opportunity Housing); Sr. Series
2002 A-1, MFH RB(a) 6.85% 12/01/23 750 671,250
- -----------------------------------------------------------------------------------------------------
Board of Regents of the University of Texas
System;
Series 2001 C, Financing System RB(a)(b)(c) 5.00% 08/15/11 1,000 1,056,480
- -----------------------------------------------------------------------------------------------------
Series 2003 B, Financing System RB(a)(b)(c) 5.00% 08/15/13 1,500 1,572,435
- -----------------------------------------------------------------------------------------------------
Comal (County of) Health Facilities Development
Corp. (McKenna Memorial Hospital); Series
2002 A, Health Care System RB(a)(b)(c) 6.25% 02/01/13 1,000 1,113,740
- -----------------------------------------------------------------------------------------------------
Corpus Christi (Port of) Industrial Development
Corp. (Valero); Series 1997 C, Ref. IDR(a) 5.40% 04/01/18 605 572,312
- -----------------------------------------------------------------------------------------------------
Dallas-Fort Worth (Cities of) International
Airport Facilities Improvement Corp.; Series
2000 A-3, Ref. RB(a)(f) 9.13% 05/01/29 500 329,180
- -----------------------------------------------------------------------------------------------------
Decatur (City of) Hospital Authority (Wise
Regional Health System);
Series 2004 A, Hospital RB(a) 5.63% 09/01/13 1,735 1,672,332
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Hospital RB(a) 7.00% 09/01/25 2,825 2,688,016
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Hospital RB(a) 7.13% 09/01/34 905 883,732
- -----------------------------------------------------------------------------------------------------
Gulf Coast Waste Disposal Authority (Valero
Energy Corp.); Series 2001, RB(a)(f) 6.65% 04/01/32 900 854,028
- -----------------------------------------------------------------------------------------------------
Harris (County of) Health Facilities Development
Corp. (Memorial Hermann Health Care); Series
2001 A, Hospital RB(a)(b)(c) 6.38% 06/01/11 500 546,370
- -----------------------------------------------------------------------------------------------------
Harris (County of) Health Facilities Development
Corp. (St. Luke's Episcopal Hospital); Series
2001 A, RB(a)(b)(c) 5.63% 08/15/11 750 801,960
- -----------------------------------------------------------------------------------------------------
Harris (County of); Series 2002, Ref. Limited
Tax GO(a)(b)(c) 5.13% 08/15/12 370 395,697
- -----------------------------------------------------------------------------------------------------
HFDC of Central Texas, Inc. (Villa de San
Antonio); Series 2004 A, RB(a) 6.00% 05/15/25 500 418,120
- -----------------------------------------------------------------------------------------------------
HFDC of Central Texas, Inc.;
Series 2006 A, Retirement Facilities RB(a) 5.63% 11/01/26 750 597,698
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Retirement Facilities RB(a) 5.50% 11/01/31 500 380,760
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Retirement Facilities RB(a) 5.75% 11/01/36 1,000 770,500
- -----------------------------------------------------------------------------------------------------
Hidalgo (County of) Health Services Corp.
(Mission Hospital, Inc.);
Series 2005, Hospital RB(a) 5.00% 08/15/15 500 474,160
- -----------------------------------------------------------------------------------------------------
Series 2005, Hospital RB(a) 5.00% 08/15/19 700 636,825
- -----------------------------------------------------------------------------------------------------
Hopkins (County of) Hospital District;
Series 2008, RB(a) 6.00% 02/15/33 1,000 904,220
- -----------------------------------------------------------------------------------------------------
Series 2008, RB(a) 6.00% 02/15/38 1,000 891,830
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
21 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Houston (City of) (Continental Airlines, Inc.
Terminal E); Series 2001 E, Airport System
Special Facilities RB(a)(f) 6.75% 07/01/29 $ 500 $ 407,390
- -----------------------------------------------------------------------------------------------------
Houston (City of) Health Facilities Development
Corp. (Buckingham Senior Living Community);
Series 2004 A, Retirement Facilities
RB(a)(b)(c) 7.00% 02/15/14 300 347,535
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Retirement Facilities
RB(a)(b)(c) 7.00% 02/15/14 750 868,837
- -----------------------------------------------------------------------------------------------------
Series 2004 A, Retirement Facilities
RB(a)(b)(c) 7.13% 02/15/14 450 524,007
- -----------------------------------------------------------------------------------------------------
La Vernia Higher Education Finance Corp., Series
2008 A, RB(a) 6.25% 02/15/17 1,245 1,191,764
- -----------------------------------------------------------------------------------------------------
Series 2008 A, RB(a) 7.13% 02/15/38 2,000 1,821,580
- -----------------------------------------------------------------------------------------------------
La Vernia Higher Education Finance Corp. (Amigos
Por Vida/ Friends for Life); Series 2008,
RB(a) 6.38% 02/15/37 1,635 1,407,228
- -----------------------------------------------------------------------------------------------------
Lufkin (City of) Health Facilities Development
Corp. (Memorial Health System of East Texas);
Series 2007, RB(a) 5.50% 02/15/37 1,000 829,630
- -----------------------------------------------------------------------------------------------------
Meadow Parc Development, Inc. (Meadow Parc
Apartments); Series 1998, MFH RB(a) 6.50% 12/01/30 1,135 1,046,334
- -----------------------------------------------------------------------------------------------------
Mesquite (City of) Health Facilities Development
Corp. (Christian Care Centers, Inc.); Series
2005, Retirement Facilities RB(a) 5.63% 02/15/35 1,000 820,080
- -----------------------------------------------------------------------------------------------------
Midlothian Development Authority;
Series 2001, Tax Increment Contract
Allocation RB(a)(b)(c) 7.88% 05/15/11 1,000 1,142,170
- -----------------------------------------------------------------------------------------------------
Series 2004, Tax Increment Contract
Allocation RB(a) 6.20% 11/15/29 1,000 916,440
- -----------------------------------------------------------------------------------------------------
Tarrant (County of) Cultural Education
Facilities Finance Corp. (Buckingham Senior
Living Community, Inc.);
Series 2007, Retirement Facilities RB(a) 5.63% 11/15/27 1,500 1,239,405
- -----------------------------------------------------------------------------------------------------
Series 2007, Retirement Facilities RB(a) 5.75% 11/15/37 3,500 2,788,975
- -----------------------------------------------------------------------------------------------------
Tarrant (County of) Cultural Education
Facilities Finance Corp. (C.C. Young Memorial
Home);
Series 2007, Retirement Facilities RB(a) 5.25% 02/15/17 1,150 1,021,303
- -----------------------------------------------------------------------------------------------------
Series 2007, Retirement Facilities RB(a) 5.75% 02/15/25 1,500 1,261,515
- -----------------------------------------------------------------------------------------------------
Series 2007, Retirement Facilities RB(a) 5.75% 02/15/29 1,600 1,287,136
- -----------------------------------------------------------------------------------------------------
Tarrant (County of) Cultural Education
Facilities Finance Corp. (Northwest Senior
Housing Corp.-Edgemere);
Series 2006 A, Retirement Facilities RB(a) 6.00% 11/15/26 700 625,373
- -----------------------------------------------------------------------------------------------------
Series 2006 A, Retirement Facilities RB(a) 6.00% 11/15/36 2,000 1,720,580
- -----------------------------------------------------------------------------------------------------
Travis (County of) Health Facilities Development
Corp. (Querencia Barton Creek);
Series 2005, Retirement Facilities RB(a) 5.50% 11/15/25 1,650 1,359,369
- -----------------------------------------------------------------------------------------------------
Series 2005, Retirement Facilities RB(a) 5.65% 11/15/35 1,250 990,600
- -----------------------------------------------------------------------------------------------------
Woodhill Public Facilities Corp. (Woodhill
Apartments); Series 1999, MFH RB(a) 7.50% 12/01/29 1,000 872,520
=====================================================================================================
44,731,171
=====================================================================================================
UTAH-3.04%
Provo (City of) (Freedom Academy Foundation);
Series 2007, Charter School RB(a) 5.50% 06/15/37 1,450 1,112,614
- -----------------------------------------------------------------------------------------------------
Spanish Fork (City of) (American Leadership
Academy); Series 2006, Charter School RB(a) 5.70% 11/15/36 1,400 1,108,940
- -----------------------------------------------------------------------------------------------------
Utah (County of) (Lakeview Academy); Series 2007
A, Charter School RB(a) 5.63% 07/15/37 2,200 1,730,696
- -----------------------------------------------------------------------------------------------------
Utah (County of) (Renaissance Academy);
Series 2007 A, Charter School RB(a) 5.35% 07/15/17 1,000 925,060
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Charter School RB(a) 5.63% 07/15/37 1,350 1,055,457
- -----------------------------------------------------------------------------------------------------
Utah (County of) (Ronald Wilson Reagan);
Series 2007 A, Charter School RB(a) 5.75% 02/15/22 340 303,443
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Charter School RB(a) 6.00% 02/15/38 2,710 2,232,796
- -----------------------------------------------------------------------------------------------------
Utah (State of) Charter School Finance Authority
(Channing Hall);
Series 2007 A, RB(a)(d) 5.88% 07/15/27 780 664,388
- -----------------------------------------------------------------------------------------------------
Series 2007 A, RB(a)(d) 6.00% 07/15/37 700 578,123
- -----------------------------------------------------------------------------------------------------
Utah (State of) Charter School Finance Authority
(George Washington Academy);
Series 2008 A, RB(a) 6.75% 07/15/28 1,340 1,245,450
- -----------------------------------------------------------------------------------------------------
Series 2008 A, RB(a) 7.00% 07/15/40 1,690 1,566,867
- -----------------------------------------------------------------------------------------------------
Utah (State of) Charter School Finance Authority
(Rockwell Academy); Series 2008 A, RB(a) 7.00% 08/15/38 2,000 1,858,860
- -----------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
22 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
UTAH-(CONTINUED)
Utah (State of) Charter School Finance Authority
(Summit Academy); Series 2007 A, RB(a) 5.80% 06/15/38 $3,800 $ 3,287,304
- -----------------------------------------------------------------------------------------------------
West Valley City (City of) (Monticello Academy);
Series 2007, Ref. Charter School RB(a)(d) 6.38% 06/01/37 2,000 1,732,940
=====================================================================================================
19,402,938
=====================================================================================================
VERMONT-0.14%
Vermont (State of) Educational & Health
Buildings Financing Agency (Fletcher Allen
Health Care); Series 2004 B, RB
(INS-Financial Security Assurance Inc.)(a)(e) 5.00% 12/01/34 1,000 868,530
=====================================================================================================
VIRGINIA-2.66%
Chesterfield (County of) Health Center
Commission (Lucy Corr Village);
Series 2008 A, Residential Care Facilities
RB(a) 6.13% 12/01/30 2,000 1,804,160
- -----------------------------------------------------------------------------------------------------
Series 2008 A, Residential Care Facilities
RB(a) 6.25% 12/01/38 2,000 1,789,500
- -----------------------------------------------------------------------------------------------------
Henrico (County of) Economic Development
Authority (Virginia United Methodist Homes);
Series 2002 A, Ref. Residential Care
Facilities RB(a) 6.50% 06/01/22 750 730,732
- -----------------------------------------------------------------------------------------------------
James City (County of) Economic Development
Authority (Williamsburg Lodging); Series 2005
A, First Mortgage Residential Care Facilities
RB(a) 5.50% 09/01/34 750 628,733
- -----------------------------------------------------------------------------------------------------
Lexington (City of) Industrial Development
Authority (Kendall at Lexington);
Series 2007 A, Residential Care Facilities
Mortgage IDR(a) 5.25% 01/01/21 895 762,844
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Residential Care Facilities
Mortgage IDR(a) 5.38% 01/01/22 780 663,959
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Residential Care Facilities
Mortgage IDR(a) 5.38% 01/01/23 425 358,543
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Residential Care Facilities
Mortgage IDR(a) 5.38% 01/01/28 750 602,198
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Residential Care Facilities
Mortgage IDR(a) 5.50% 01/01/37 1,300 1,013,935
- -----------------------------------------------------------------------------------------------------
Lynchburg (City of) Industrial Development
Authority (The Summit); Series 2002 A,
Residential Care Facilities Mortgage IDR(a) 6.25% 01/01/28 500 450,860
- -----------------------------------------------------------------------------------------------------
Norfolk Redevelopment & Housing Authority (Fort
Norfolk Retirement Community, Inc.-Harbor's
Edge);
Series 2004 A, First Mortgage RB(a) 6.00% 01/01/25 500 433,100
- -----------------------------------------------------------------------------------------------------
Series 2004 A, First Mortgage RB(a) 6.13% 01/01/35 1,100 928,466
- -----------------------------------------------------------------------------------------------------
Peninsula Ports Authority (Virginia Baptist
Homes);
Series 2003 A, Residential Care Facilities
RB(a)(b)(c) 7.38% 12/01/13 500 590,730
- -----------------------------------------------------------------------------------------------------
Series 2006 C, Ref. Residential Care
Facilities RB(a) 5.38% 12/01/26 1,000 774,290
- -----------------------------------------------------------------------------------------------------
Series 2006 C, Ref. Residential Care
Facilities RB(a) 5.40% 12/01/33 1,000 762,680
- -----------------------------------------------------------------------------------------------------
Peninsula Town Center Community Development
Authority, Series 2007, Special Obligations
RB(a) 6.35% 09/01/28 1,000 853,790
- -----------------------------------------------------------------------------------------------------
Series 2007, Special Obligations RB(a) 6.45% 09/01/37 1,000 835,310
- -----------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp.;
Series 2005, Asset-Backed RB(a)(b)(c) 5.63% 06/01/15 2,250 2,434,477
- -----------------------------------------------------------------------------------------------------
Series 2005, Asset-Backed RB(a)(b) 5.50% 06/01/26 500 528,970
=====================================================================================================
16,947,277
=====================================================================================================
WASHINGTON-1.28%
Klickitat (County of) Public Hospital District
No. 2 (Skyline Hospital); Series 2007,
Hospital RB(a) 6.50% 12/01/38 1,000 871,430
- -----------------------------------------------------------------------------------------------------
Skagit (County of) Public Hospital District No.
1 (Skagit Valley Hospital);
Series 2005, RB(a) 5.50% 12/01/30 750 643,703
- -----------------------------------------------------------------------------------------------------
Series 2007, RB(a) 5.75% 12/01/32 1,000 881,540
- -----------------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority (Multi-Care Health System); Series
2007 B, RB (INS-Financial Security Assurance
Inc.)(a)(e) 5.00% 08/15/41 1,000 867,290
- -----------------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority (Swedish Health Services); Series
2006, VRD RB (LOC-Citibank, N.A.)(g)(h) 5.83% 11/15/26 2,300 2,300,000
- -----------------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority; Series 2007 C, RB (INS-Radian
Asset Assurance, Inc.)(a)(e) 5.50% 08/15/42 3,000 2,574,030
=====================================================================================================
8,137,993
=====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
23 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
WEST VIRGINIA-1.29%
Harrison County (County of) Commission (Charles
Pointe No. 2);
Series 2008 A, Ref. Tax Increment Allocation
RB(a) 7.00% 06/01/35 $1,500 $ 1,399,170
- -----------------------------------------------------------------------------------------------------
Series 2008 B, Ref. Tax Increment Allocation
RB(a) 7.00% 06/01/28 1,000 930,460
- -----------------------------------------------------------------------------------------------------
West Virginia (State of) Hospital Finance
Authority (Thomas Health System);
Series 2008, RB(a) 6.50% 10/01/38 5,000 4,438,850
- -----------------------------------------------------------------------------------------------------
Series 2008, RB(a) 6.75% 10/01/43 1,650 1,491,006
=====================================================================================================
8,259,486
=====================================================================================================
WISCONSIN-3.43%
Badger Tobacco Asset Securitization Corp.;
Series 2002, Tobacco Settlement Asset-Backed
RB(a) 6.13% 06/01/27 1,875 1,892,569
- -----------------------------------------------------------------------------------------------------
Milwaukee (City of) Redevelopment Authority
(Academy of Learning);
Series 2007 A, Education RB(a) 5.50% 08/01/22 300 262,911
- -----------------------------------------------------------------------------------------------------
Series 2007 A, Education RB(a) 5.65% 08/01/37 1,540 1,223,484
- -----------------------------------------------------------------------------------------------------
Milwaukee (City of) Redevelopment Authority
(Milwaukee Science Education Consortium,
Inc.);
Series 2005 A, RB(a) 5.63% 08/01/25 2,000 1,843,440
- -----------------------------------------------------------------------------------------------------
Series 2005 A, RB(a) 5.75% 08/01/35 1,815 1,593,044
- -----------------------------------------------------------------------------------------------------
Waukesha (City of) Redevelopment Authority
(Kirkland Crossings);
Series 2006, Ref. Senior Housing RB(a) 5.50% 07/01/31 1,460 1,231,291
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. Senior Housing RB(a) 5.60% 07/01/41 1,000 828,570
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (AE Nursing Centers);
Series 2008, RB(a) 7.15% 06/01/28 1,120 1,019,077
- -----------------------------------------------------------------------------------------------------
Series 2008, RB(a) 7.25% 06/01/38 1,000 905,880
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals, Inc.);
Series 2004 A, RB(a) 6.50% 08/15/26 250 239,297
- -----------------------------------------------------------------------------------------------------
Series 2004 A, RB(a) 6.75% 08/15/34 950 923,343
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Community Memorial
Hospital, Inc.); Series 2003, RB(a) 7.13% 01/15/22 1,040 1,060,852
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Community
Rehabilitation Providers Facilities
Acquisition Program); Series 1998, RB(a) 6.88% 12/01/23 200 188,278
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Eastcastle Place,
Inc.);
Series 2004, RB(a) 6.00% 12/01/24 500 423,715
- -----------------------------------------------------------------------------------------------------
Series 2004, RB(a) 6.13% 12/01/34 1,000 839,260
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (FH Healthcare
Development Inc.); Series 1999, RB(a)(b)(c) 6.25% 11/15/09 1,250 1,315,437
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (New Castle Place);
Series 2001 A, RB(a) 7.00% 12/01/31 250 237,372
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Oakwood Village);
Series 2000 A, RB(a)(b) 7.63% 08/15/30 1,000 1,094,870
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Tomah Memorial
Hospital, Inc.);
Series 2003, RB(a) 6.00% 07/01/15 100 97,556
- -----------------------------------------------------------------------------------------------------
Series 2003, RB(a) 6.13% 07/01/16 150 145,359
- -----------------------------------------------------------------------------------------------------
Series 2003, RB(a) 6.63% 07/01/28 750 704,580
- -----------------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wisconsin Illinois
Senior Housing, Inc.);
Series 2006, Ref. RB(a) 5.50% 08/01/16 2,020 1,807,900
- -----------------------------------------------------------------------------------------------------
Series 2006, Ref. RB(a) 5.80% 08/01/29 2,400 1,973,040
=====================================================================================================
21,851,125
=====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
24 AIM HIGH INCOME MUNICIPAL FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- -----------------------------------------------------------------------------------------------------
WYOMING-0.07%
Teton (County of) Hospital District (St. John's
Medical Center); Series 2002, RB(a) 6.75% 12/01/22 $ 500 $ 481,655
=====================================================================================================
TOTAL INVESTMENTS(j)-98.66% (Cost $709,463,208) 629,245,409
=====================================================================================================
OTHER ASSETS LESS LIABILITIES-1.34% 8,536,787
=====================================================================================================
NET ASSETS-100.00% $637,782,196
_____________________________________________________________________________________________________
=====================================================================================================
</Table>
Investment Abbreviations:
<Table>
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
INS - Insurer
LOC - Letter of Credit
MFH - Multi-Family Housing
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
Ref. - Refunding
Sr. - Senior
VRD - 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
September 30, 2008 was $621,320,409, which represented 97.42% of the
Fund's Net Assets. See Note 1A.
(b) Advance refunded; secured by an escrow fund of U.S. Government obligations
or other highly rated collateral.
(c) Security has an irrevocable call by the issuer or mandatory put by the
holder. Maturity date reflects such call or put.
(d) Security purchased or received in a transaction exempt from registration
under the Securities Act of 1933, as amended. The security may be resold
pursuant to an exemption from registration under the 1933 Act, typically
to qualified institutional buyers. The aggregate value of these securities
at September 30, 2008 was $18,055,508 which represented 2.83% of the
Fund's Net Assets. Unless otherwise indicated, these securities are not
considered to be illiquid at September 30, 2008.
(e) Principal and/or interest payments are secured by the bond insurance
company listed.
(f) Security subject to the alternative minimum tax.
(g) 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 September 30, 2008.
(h) Security is considered a cash equivalent.
(i) Security purchased on forward commitment basis.
(j) Entities may either issue, guarantee, back or otherwise enhance the credit
quality of a security. The entities are not primarily responsible for the
issuer's obligation but may be called upon to satisfy issuers obligations.
No concentration of any single entity was less than 5%.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
25 AIM HIGH INCOME MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2008
(Unaudited)
<Table>
ASSETS:
Investments, at value (Cost
$709,463,208) $629,245,409
- ------------------------------------------------------
Cash 25,224
- ------------------------------------------------------
Receivables for:
Investments sold 1,191,389
- ------------------------------------------------------
Fund shares sold 1,444,432
- ------------------------------------------------------
Interest 12,745,424
- ------------------------------------------------------
Fund expenses absorbed 17,537
- ------------------------------------------------------
Investment for trustee deferred
compensation and retirement plans 30,874
- ------------------------------------------------------
Other assets 44,677
======================================================
Total assets 644,744,966
______________________________________________________
======================================================
LIABILITIES:
Payables for:
Investments purchased 3,980,405
- ------------------------------------------------------
Fund shares reacquired 1,464,598
- ------------------------------------------------------
Dividends 1,118,931
- ------------------------------------------------------
Accrued fees to affiliates 278,308
- ------------------------------------------------------
Accrued other operating expenses 60,340
- ------------------------------------------------------
Trustee deferred compensation and
retirement plans 60,188
======================================================
Total liabilities 6,962,770
======================================================
Net assets applicable to shares
outstanding $637,782,196
______________________________________________________
======================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $743,617,100
- ------------------------------------------------------
Undistributed net investment income 737,720
- ------------------------------------------------------
Undistributed net realized gain (loss) (26,354,825)
- ------------------------------------------------------
Unrealized appreciation (depreciation) (80,217,799)
======================================================
$637,782,196
______________________________________________________
======================================================
NET ASSETS:
Class A $411,182,315
______________________________________________________
======================================================
Class B $ 23,869,202
______________________________________________________
======================================================
Class C $109,862,509
______________________________________________________
======================================================
Institutional Class $ 92,868,170
______________________________________________________
======================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES AUTHORIZED:
Class A 53,728,240
______________________________________________________
======================================================
Class B 3,115,366
______________________________________________________
======================================================
Class C 14,350,177
______________________________________________________
======================================================
Institutional Class 12,127,548
______________________________________________________
======================================================
Class A:
Net asset value per share $ 7.65
- ------------------------------------------------------
Maximum offering price per share
(Net asset value of $7.65 divided
by 95.25%) $ 8.03
______________________________________________________
======================================================
Class B:
Net asset value and offering price
per share $ 7.66
______________________________________________________
======================================================
Class C:
Net asset value and offering price
per share $ 7.66
______________________________________________________
======================================================
Institutional Class:
Net asset value and offering price
per share $ 7.66
______________________________________________________
======================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
26 AIM HIGH INCOME MUNICIPAL FUND
STATEMENT OF OPERATIONS
For the six months ended September 30, 2008
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $ 19,938,402
================================================================================================
EXPENSES:
Advisory fees 1,923,574
- ------------------------------------------------------------------------------------------------
Administrative services fees 90,240
- ------------------------------------------------------------------------------------------------
Custodian fees 15,684
- ------------------------------------------------------------------------------------------------
Distribution fees:
Class A 527,511
- ------------------------------------------------------------------------------------------------
Class B 133,976
- ------------------------------------------------------------------------------------------------
Class C 550,486
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- A, B and C 126,941
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- Institutional 29,037
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 15,357
- ------------------------------------------------------------------------------------------------
Other 144,834
================================================================================================
Total expenses 3,557,640
================================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (735,223)
================================================================================================
Net expenses 2,822,417
================================================================================================
Net investment income 17,115,985
================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from investment securities (1,299,096)
================================================================================================
Change in net unrealized appreciation (depreciation) (44,364,975)
================================================================================================
Net realized and unrealized gain (loss) (45,664,071)
================================================================================================
Net increase (decrease) in net assets resulting from operations $(28,548,086)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
27 AIM HIGH INCOME MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2008 and the year ended March 31, 2008
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2008 2008
- -------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 17,115,985 $ 30,479,591
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) (1,299,096) (12,431,457)
- -------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (44,364,975) (56,771,345)
=======================================================================================================
Net increase (decrease) in net assets resulting from operations (28,548,086) (38,723,211)
=======================================================================================================
Distributions to shareholders from net investment income:
Class A (11,407,310) (20,468,035)
- -------------------------------------------------------------------------------------------------------
Class B (624,951) (1,468,673)
- -------------------------------------------------------------------------------------------------------
Class C (2,553,785) (4,337,144)
- -------------------------------------------------------------------------------------------------------
Institutional Class (2,690,118) (3,745,754)
=======================================================================================================
Total distributions to shareholders from net investment income (17,276,164) (30,019,606)
=======================================================================================================
Share transactions-net:
Class A 55,352,464 82,481,313
- -------------------------------------------------------------------------------------------------------
Class B (1,754,655) (8,048,601)
- -------------------------------------------------------------------------------------------------------
Class C 20,402,928 27,982,290
- -------------------------------------------------------------------------------------------------------
Institutional Class 9,372,340 46,690,073
=======================================================================================================
Net increase in net assets resulting from share transactions 83,373,077 149,105,075
=======================================================================================================
Net increase in net assets 37,548,827 80,362,258
=======================================================================================================
NET ASSETS:
Beginning of period 600,233,369 519,871,111
=======================================================================================================
End of period (including undistributed net investment income of
$737,720 and $897,899, respectively) $637,782,196 $600,233,369
_______________________________________________________________________________________________________
=======================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
28 AIM HIGH INCOME MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
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 assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. Matters affecting each portfolio or class will be voted on
exclusively by the shareholders of such portfolio or class.
The Fund's investment objective is to achieve a high a level of current income
that is exempt from federal income taxes.
The Fund currently offers 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 contingent deferred sales charges ("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.
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,
having 60 days or less to maturity are recorded at amortized cost which
approximates value. Securities with a demand feature exercisable within
one to seven days are valued at par. Debt securities are subject to
interest rate and credit risks. In addition, all debt securities involve
some risk of default with respect to interest and principal payments.
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.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
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 periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. 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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor 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.
29 AIM HIGH INCOME MUNICIPAL FUND
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.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. 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.
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 by a
significant amount.
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 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.
I. OTHER RISKS -- 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.
The value of, payment of interest on, repayment of principal for and the
ability of the Fund to sell a municipal security may be affected by
constitutional amendments, legislative enactments, executive orders,
administrative regulations, voter initiatives and the economics of the
regions in which the issuers in which the Fund invests are located.
Many municipal securities are issued to finance similar projects,
especially those relating to education, health care, transportation and
utilities, conditions in those sectors can affect the overall municipal
securities market and the Fund.
There is some risk that a portion or all of the interest received from
certain tax-free municipal securities could become taxable as a result of
determinations by the Internal Revenue Service.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
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>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
The Advisor 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 0.75%, 1.50%, 1.50% and 0.50% 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 Invesco Ltd. ("Invesco") 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
30 AIM HIGH INCOME MUNICIPAL FUND
notice to investors. To the extent that the annualized expense ratio does not
exceed the expense limitation, the Advisor will retain its ability to be
reimbursed for such waivers or reimbursements prior to the end of the fiscal
year.
For the six months ended September 30, 2008, the Advisor waived advisory fees
$578,882 and reimbursed class level expenses of $94,887, $6,025, $24,755 and
$29,036 expenses of Class A, Class B, Class C and Institutional Class shares,
respectively.
At the request of the Trustees of the Trust, Invesco 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 six months
ended September 30, 2008, Invesco reimbursed expenses of the Fund in the amount
of $363.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the six months ended September 30, 2008, 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
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS 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 six
months ended September 30, 2008, 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 Invesco Aim
Distributors, Inc. ("IADI") 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 IADI 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. Rules of the Financial Industry
Regulatory Authority ("FINRA") 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 six months ended September 30, 2008, expenses incurred under
the Plans are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and 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 six months ended September 30, 2008,
IADI advised the Fund that IADI retained $110,848 in front-end sales commissions
from the sale of Class A shares and $15,976, $24,065 and $9,554 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
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (level 1) and the lowest priority to significant
unobservable inputs (level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level,
Level 1 -- Quoted prices in an active market for identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, September 30, 2008. The level assigned to the securities
valuations may not be an indication of the risk associated with investing in
those securities. Because of the inherent uncertainties of valuation, the values
reflected in the financial statements may materially differ from the value
received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $ --
- --------------------------------------
Level 2 629,245,409
- --------------------------------------
Level 3 --
======================================
$629,245,409
______________________________________
======================================
</Table>
31 AIM HIGH INCOME MUNICIPAL FUND
NOTE 4--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 six months ended September 30, 2008, the
Fund engaged in securities purchases of $30,747,915 and securities sales of
$29,860,388, which resulted in net realized gains (losses) of $0.
NOTE 5--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 six months ended September 30,
2008, the Fund received credits from this arrangement, which resulted in the
reduction of the Fund's total expenses of $1,275.
NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' 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
Officers' 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 Officers'
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 six months ended September 30, 2008, the Fund paid legal fees of
$3,512 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 7--CASH BALANCES
The Fund may borrow for leveraging in an amount up to 5% of the Fund's total
assets (excluding the amount borrowed) at the time the borrowing is made. In
doing so, the Fund is permitted to temporarily carry a negative or overdrawn
balance in its account with The Bank of New York Mellon, 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
Invesco Aim, not to exceed the contractually agreed upon rate. A Fund may not
purchase additional securities when any borrowings from banks exceeds 5% of the
Fund's total assets.
NOTE 8--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
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 had a capital loss carryforward as of March 31, 2008 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------------------------
March 31, 2009 $ 3,558,415
- -----------------------------------------------------------------------------------------------
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 622,423
- -----------------------------------------------------------------------------------------------
March 31, 2016 4,837,280
===============================================================================================
Total capital loss carryforward $17,295,344
_______________________________________________________________________________________________
===============================================================================================
</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.
32 AIM HIGH INCOME MUNICIPAL FUND
NOTE 9--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 six months ended September 30, 2008 was $122,048,802 and
$26,833,582, respectively. Cost of investments on a tax basis includes the
adjustments for financial reporting purposes as of the most recently completed
Federal income tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 6,424,380
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (86,637,754)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(80,213,374)
________________________________________________________________________________________________
================================================================================================
Cost of investments for tax purposes is $709,458,783.
</Table>
NOTE 10--SHARE INFORMATION
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- -------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2008(a) MARCH 31, 2008
--------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 10,514,417 $ 86,344,308 29,106,407 $ 258,022,679
- -------------------------------------------------------------------------------------------------------------------------
Class B 283,598 2,334,907 516,909 4,619,453
- -------------------------------------------------------------------------------------------------------------------------
Class C 3,841,794 31,588,332 6,121,408 54,574,112
- -------------------------------------------------------------------------------------------------------------------------
Institutional Class 1,363,063 11,159,891 5,635,118 49,107,973
=========================================================================================================================
Issued as reinvestment of dividends:
Class A 883,141 7,155,504 1,360,638 11,814,457
- -------------------------------------------------------------------------------------------------------------------------
Class B 34,256 278,024 70,867 617,692
- -------------------------------------------------------------------------------------------------------------------------
Class C 209,112 1,694,288 320,290 2,780,041
- -------------------------------------------------------------------------------------------------------------------------
Institutional Class 211,070 1,711,070 286,723 2,477,814
=========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 206,639 1,683,069 409,635 3,576,397
- -------------------------------------------------------------------------------------------------------------------------
Class B (206,425) (1,683,069) (409,247) (3,576,397)
=========================================================================================================================
Reacquired:
Class A (4,878,034) (39,830,417) (21,964,011) (190,932,220)
- -------------------------------------------------------------------------------------------------------------------------
Class B (328,420) (2,684,517) (1,110,227) (9,709,349)
- -------------------------------------------------------------------------------------------------------------------------
Class C (1,574,413) (12,879,692) (3,382,887) (29,371,863)
- -------------------------------------------------------------------------------------------------------------------------
Institutional Class (428,308) (3,498,621) (563,768) (4,895,714)
=========================================================================================================================
10,131,490 $ 83,373,077 16,397,855 $ 149,105,075
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) There are entities that are record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate own 35% of the
outstanding shares of the Fund. IADI has an agreement with these entities
to sell Fund shares. The Fund, Invesco Aim, and/or Invesco Aim affiliates
may make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, Invesco Aim, and/or Invesco
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.
33 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>
NET GAINS
(LOSSES) ON
NET ASSET SECURITIES LESS DIVIDENDS NET ASSET
VALUE, NET (BOTH TOTAL FROM FROM NET VALUE, NET ASSETS,
BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT END TOTAL END OF PERIOD
OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME OF PERIOD RETURN(A) (000'S OMITTED)
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A
Six months ended
09/30/08 $8.20 $0.22(c) $(0.55) $(0.33) $(0.22) $7.65 (4.12)% $411,182
Year ended 03/31/08 9.15 0.45 (0.96) (0.51) (0.44) 8.20 (5.70) 385,396
Year ended 03/31/07 8.97 0.45 0.17 0.62 (0.44) 9.15 7.11 348,602
Year ended 03/31/06 8.76 0.47 0.21 0.68 (0.47) 8.97 7.92 247,296
Year ended 03/31/05 8.73 0.51 0.04 0.55 (0.52) 8.76 6.51 132,996
Year ended 03/31/04 8.64 0.51 0.10 0.61 (0.52) 8.73 7.30 94,657
- -----------------------------------------------------------------------------------------------------------------------------
CLASS B
Six months ended
09/30/08 8.21 0.19(c) (0.55) (0.36) (0.19) 7.66 (4.47) 23,869
Year ended 03/31/08 9.16 0.39 (0.96) (0.57) (0.38) 8.21 (6.39) 27,354
Year ended 03/31/07 8.98 0.38 0.18 0.56 (0.38) 9.16 6.31 39,066
Year ended 03/31/06 8.77 0.40 0.21 0.61 (0.40) 8.98 7.12 45,422
Year ended 03/31/05 8.74 0.44 0.05 0.49 (0.46) 8.77 5.73 46,429
Year ended 03/31/04 8.65 0.45 0.10 0.55 (0.46) 8.74 6.51 45,026
- -----------------------------------------------------------------------------------------------------------------------------
CLASS C
Six months ended
09/30/08 8.20 0.19(c) (0.54) (0.35) (0.19) 7.66 (4.36) 109,863
Year ended 03/31/08 9.16 0.38 (0.96) (0.58) (0.38) 8.20 (6.51) 97,388
Year ended 03/31/07 8.97 0.38 0.19 0.57 (0.38) 9.16 6.43 80,702
Year ended 03/31/06 8.77 0.40 0.20 0.60 (0.40) 8.97 7.01 56,763
Year ended 03/31/05 8.74 0.44 0.05 0.49 (0.46) 8.77 5.73 33,114
Year ended 03/31/04 8.65 0.45 0.10 0.55 (0.46) 8.74 6.51 18,339
- -----------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Six months ended
09/30/08 8.20 0.23(c) (0.54) (0.31) (0.23) 7.66 (3.87) 92,868
Year ended 03/31/08 9.16 0.47 (0.96) (0.49) (0.47) 8.20 (5.56) 90,096
Year ended
03/31/07(e) 8.98 0.32 0.17 0.49 (0.31) 9.16 5.53 51,501
_____________________________________________________________________________________________________________________________
=============================================================================================================================
<Caption>
RATIO OF RATIO OF
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE NET RATIO OF NET
NET ASSETS ASSETS WITHOUT INVESTMENT
WITH FEE WAIVERS FEE WAIVERS INCOME TO
AND/OR EXPENSES AND/OR EXPENSES AVERAGE PORTFOLIO
ABSORBED ABSORBED NET ASSETS TURNOVER(B)
- ------------------------------------------------------------------------------------
CLASS A
Six months ended
09/30/08 0.74%(d) 0.96%(d) 5.36%(d) 4%
Year ended 03/31/08 0.70 0.98 5.13 23
Year ended 03/31/07 0.65 1.01 4.99 10
Year ended 03/31/06 0.56 1.03 5.18 16
Year ended 03/31/05 0.55 1.08 5.83 12
Year ended 03/31/04 0.55 1.07 5.91 12
- ------------------------------------------------------------------------------------
CLASS B
Six months ended
09/30/08 1.49(d) 1.71(d) 4.61(d) 4
Year ended 03/31/08 1.45 1.73 4.38 23
Year ended 03/31/07 1.40 1.76 4.24 10
Year ended 03/31/06 1.31 1.78 4.43 16
Year ended 03/31/05 1.30 1.83 5.08 12
Year ended 03/31/04 1.30 1.82 5.16 12
- ------------------------------------------------------------------------------------
CLASS C
Six months ended
09/30/08 1.49(d) 1.71(d) 4.61(d) 4
Year ended 03/31/08 1.45 1.73 4.38 23
Year ended 03/31/07 1.40 1.76 4.24 10
Year ended 03/31/06 1.31 1.78 4.43 16
Year ended 03/31/05 1.30 1.83 5.08 12
Year ended 03/31/04 1.30 1.82 5.16 12
- ------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Six months ended
09/30/08 0.49(d) 0.73(d) 5.61(d) 4
Year ended 03/31/08 0.45 0.75 5.38 23
Year ended
03/31/07(e) 0.40(f) 0.77(f) 5.24(f) 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. Does not include sales charges, and is not annualized for
periods less than one year, if applicable.
(b) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(c) Calculated using average shares outstanding.
(d) Ratios are annualized and based on average daily net assets (000's omitted)
of $420,856, $26,722, $109,796 and $94,741 for Class A, Class B, Class C
and Institutional Class, respectively.
(e) Institutional Class shares commenced on July 31, 2006.
(f) Annualized.
34 AIM HIGH INCOME MUNICIPAL FUND
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 May 23, 2008, the Securities and Exchange Commission ("SEC") publicly posted
its final approval of the Distribution Plans ("Distribution Plans") for the
distribution of monies placed into two separate Fair Funds created pursuant to a
settlement reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"),
Invesco Aim Advisors, Inc. ("Invesco Aim") and Invesco Aim Distributors, Inc.
("IADI") and the SEC (the "Order"). One of the Fair Funds consists of $325
million, plus interest and any contributions by other settling parties, for
distribution to shareholders of certain mutual funds formerly advised by IFG who
may have been harmed by market timing and related activity. The second Fair Fund
consists of $50 million, plus interest and any contributions by other settling
parties, for distribution to shareholders of mutual funds advised by Invesco Aim
who may have been harmed by market timing and related activity. The Distribution
Plans provide for the distribution to all eligible investors to compensate such
investors for injury they may have suffered as a result of market timing in the
affected funds. The Distribution Plans include a provision for any residual
amounts in the Fair Funds to be distributed in the future to the affected funds.
Because the distribution of the Fair Funds has not yet commenced, management of
Invesco Aim and the Fund are unable to estimate the amount of distribution to be
made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"), the
parent company of IFG and Invesco 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 Invesco Aim and IADI (Order No. 05-
1318). The WVASC makes findings of fact that Invesco Aim and IADI 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 Invesco Aim and IADI violated the West Virginia
securities laws. The WVASC orders Invesco Aim and IADI 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, Invesco 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, Invesco Aim, IADI
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; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("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. The case pending in Illinois State Court regarding fair value
pricing was dismissed with prejudice on May 6, 2008.
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 Invesco 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 ERISA
purportedly brought on behalf of participants in the Invesco 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 Invesco
defendants' motion to dismiss the Amended Class Action Complaint for Violations
of ERISA and dismissed such Complaint. Plaintiff appealed this ruling. On June
16, 2008, the Fourth Circuit Court of Appeals reversed the dismissal and
remanded this lawsuit back to the MDL Court for further proceedings.
IFG, Invesco Aim, IADI 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, Invesco Aim and IADI 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, Invesco Aim and/or related entities and individuals in the
future.
At the present time, management of Invesco 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 Invesco Aim, IADI or the Fund.
35 AIM HIGH INCOME MUNICIPAL FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period April 1, 2008, through September 30, 2008.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (04/01/08) (09/30/08)(1) PERIOD(2) (09/30/08) PERIOD(2) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $958.80 $3.63 $1,021.36 $3.75 0.74%
- ---------------------------------------------------------------------------------------------------
B 1,000.00 955.30 7.30 1,017.60 7.54 1.49
- ---------------------------------------------------------------------------------------------------
C 1,000.00 956.40 7.31 1,017.60 7.54 1.49
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period April 1, 2008, through September 30, 2008, 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
183/365 to reflect the most recent fiscal half year.
36 AIM HIGH INCOME MUNICIPAL FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The example is based on
an investment of $1,000 invested at the beginning of the period and held for the
entire period April 1, 2008, through September 30, 2008.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (04/01/08) (09/30/08)(1) PERIOD(2) (09/30/08) PERIOD(2) RATIO
- -----------------------------------------------------------------------------------------------------------
Institutional $1,000.00 $961.30 $2.41 $1,022.61 $2.48 0.49%
- -----------------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period April 1, 2008, through September 30, 2008, 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
183/365 to reflect the most recent fiscal half year.
AIM HIGH INCOME MUNICIPAL FUND
Supplement to Semiannual Report dated 9/30/08
AIM HIGH INCOME MUNICIPAL FUND
=======================================================================================
INSTITUTIONAL CLASS SHARES AVERAGE ANNUAL TOTAL RETURNS
The following information has been For periods ended 9/30/08
prepared to provide Institutional Class
shareholders with a performance overview
specific to their holdings. Institutional
Class shares are offered exclusively to AFTER TAXES ON
institutional investors, including defined AFTER TAXES DISTRIBUTIONS
contribution plans that meet certain ON AND SALE OF
criteria. BEFORE TAXES DISTRIBUTIONS FUND SHARES
10 Years 2.97% 2.97% 3.36%
Institutional Class shares' inception date 5 Years 3.11 3.11 3.54
is July 31, 2006. Returns since that date 1 Year -8.03 -8.03 -3.32
are historical returns. All other returns 6 Months* -3.87 -3.87 -1.51
are blended returns of historical
Institutional Class share performance and * Cumulative total return that has not been annualized
restated Class A share performance (for =======================================================================================
periods prior to the inception date of
Institutional Class shares) at net asset The net annual Fund operating expense than their original cost. See full report
value (NAV) and reflect the Rule 12b-1 ratio set forth in the most recent Fund for information on comparative benchmarks.
fees applicable to Class A shares. Class A prospectus as of the date of this Please consult your Fund prospectus for
shares' inception date is January 2, 1998. supplement for Institutional Class shares more information. For the most current
was 0.50%. month-end performance, please call 800 451
Institutional Class shares have no 4246 or visit invescoaim.com.
sales charge; therefore, performance is at The total annual Fund operating expense
NAV. Performance of Institutional Class ratio set forth in the most recent Fund (1) Total annual operating expenses less
shares will differ from performance of prospectus as of the date of this any voluntary fee waivers and/or
other share classes primarily due to supplement for Institutional Class shares expense reimbursements by the advisor.
differing sales charges and class was 0.75%.(1) The expense ratios presented Voluntary arrangements can be
expenses. above may vary from the expense ratios discontinued or modified at any time
presented in other sections of the actual without further notice to investors.
After-tax returns are calculated using report that are based on expenses incurred See current prospectus for more
the historical highest individual federal during the period covered by the report. information.
marginal income tax rate. They do not
reflect the effect of state and local Had the advisor not waived fees and/or
taxes. Actual after-tax returns depend on expenses, performance would have been
the investor's tax situation and may lower.
differ from those shown. After-tax returns
shown are not relevant to investors who Please note that past performance is
hold their shares in tax-deferred accounts not indicative of future results. More
such as 401(k)s OR IRAS. recent returns may be more or less than
those shown. All returns assume
reinvestment of distributions at NAV.
Investment return and principal value will
fluctuate so your shares, when redeemed,
may be worth more or less
Over for information on your Fund's expenses.
THIS SUPPLEMENT 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 [INVESCO AIM LOGO]
or shown to the public, nor used in written form as sales literature for public use. -- SERVICE MARK --
invescoaim.com HIM-INS-2 Invesco Aim Distributors, Inc.
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
The Board of Trustees (the Board) of AIM their assigned funds. During the contract ated the information provided differently
Tax-Exempt Funds is required under the renewal process, the Trustees receive from one another and attributed different
Investment Company Act of 1940 to approve comparative performance and fee data weight to the various factors. The
annually the renewal of the AIM High regarding the AIM Funds prepared by an Trustees recognized that the advisory
Income Municipal Fund's (the Fund) independent company, Lipper, Inc. arrangements and resulting advisory fees
investment advisory agreement with Invesco (Lipper), under the direction and for the Fund and the other AIM Funds are
Aim Advisors, Inc. (Invesco Aim). During supervision of the independent Senior the result of years of review and
contract renewal meetings held on June Officer who also prepares a separate negotiation between the Trustees and
18-19, 2008, the Board as a whole and the analysis of this information for the Invesco Aim, that the Trustees may focus
disinterested or "independent" Trustees, Trustees. Each Sub-Committee then makes to a greater extent on certain aspects of
voting separately, approved the recommendations to the Investments these arrangements in some years than in
continuance of the Fund's investment Committee regarding the performance, fees others, and that the Trustees'
advisory agreement for another year, and expenses of their assigned funds. The deliberations and conclusions in a
effective July 1, 2008. In doing so, the Investments Committee considers each particular year may be based in part on
Board determined that the Fund's Sub-Committee's recommendations and makes their deliberations and conclusions of
investment advisory agreement is in the its own recommendations regarding the these same arrangements throughout the
best interests of the Fund and its performance, fees and expenses of the AIM year and in prior years.
shareholders and that the compensation to Funds to the full Board. The Investments
Invesco Aim under the Fund's investment Committee also considers each FACTORS AND CONCLUSIONS AND SUMMARY OF
advisory agreement is fair and reasonable. Sub-Committee's recommendations in making INDEPENDENT WRITTEN FEE EVALUATION
its annual recommendation to the Board
The independent Trustees met separately whether to approve the continuance of each The discussion below serves as a summary
during their evaluation of the Fund's AIM Fund's investment advisory agreement of the Senior Officer's independent
investment advisory agreement with and sub-advisory agreements for another written evaluation with respect to the
independent legal counsel from whom they year. Fund's investment advisory agreement as
received independent legal advice, and the well as a discussion of the material
independent Trustees also received The independent Trustees are assisted factors and related conclusions that
assistance during their deliberations from in their annual evaluation of the Fund's formed the basis for the Board's approval
the independent Senior Officer, a investment advisory agreement by the of the Fund's investment advisory
full-time officer of the AIM Funds who independent Senior Officer. One agreement and sub-advisory agreements.
reports directly to the independent responsibility of the Senior Officer is to Unless otherwise stated, information set
Trustees. manage the process by which the AIM Funds' forth below is as of June 19, 2008 and
proposed management fees are negotiated does not reflect any changes that may have
THE BOARD'S FUND EVALUATION PROCESS during the annual contract renewal process occurred since that date, including but
to ensure that they are negotiated in a not limited to changes to the Fund's
The Board's Investments Committee has manner that is at arms' length and performance, advisory fees, expense
established three Sub-Committees that are reasonable. Accordingly, the Senior limitations and/or fee waivers.
responsible for overseeing the management Officer must either supervise a
of a number of the series portfolios of competitive bidding process or prepare an I. Investment Advisory Agreement
the AIM Funds. This Sub-Committee independent written evaluation. The Senior
structure permits the Trustees to focus on Officer has recommended that an A. Nature, Extent and Quality of
the performance of the AIM Funds that have independent written evaluation be provided Services Provided by Invesco Aim
been assigned to them. The Sub-Committees and, at the direction of the Board, has
meet throughout the year to review the prepared an independent written The Board reviewed the advisory services
performance of their assigned funds, and evaluation. provided to the Fund by Invesco Aim under
the Sub-Committees review monthly and the Fund's investment advisory agreement,
quarterly comparative performance During the annual contract renewal the performance of Invesco Aim in
information and periodic asset flow data process, the Board considered the factors providing these services, and the
for their assigned funds. These materials discussed below under the heading "Factors credentials and experience of the officers
are prepared under the direction and and Conclusions and Summary of Independent and employees of Invesco Aim who provide
supervision of the independent Senior Written Fee Evaluation" in evaluating the these services. The Board's review of the
Officer. Over the course of each year, the fairness and reasonableness of the Fund's qualifications of Invesco Aim to provide
Sub-Committees meet with portfolio investment advisory agreement and these services included the Board's
managers for their assigned funds and sub-advisory agreements at the contract consideration of Invesco Aim's portfolio
other members of management and review renewal meetings and at their meetings and product review process, various back
with these individuals the performance, throughout the year as part of their office support functions provided by
investment objective(s), policies, ongoing oversight of the Fund. The Fund's Invesco Aim and its affiliates, and
strategies and limitations of these funds. investment advisory agreement and Invesco Aim's equity and fixed income
sub-advisory agreements were considered trading operations. The Board concluded
In addition to their meetings separately, although the Board also that the nature, extent and quality of the
throughout the year, the Sub-Committees considered the common interests of all of advisory services provided to the Fund by
meet at designated contract renewal the AIM Funds in their deliberations. The Invesco Aim were appropriate and that
meetings each year to conduct an in-depth Board considered all of the information Invesco Aim currently is providing
review of the performance, fees and provided to them and did not identify any satisfactory advisory services in
expenses of particular factor that was controlling. accordance with the terms of the Fund's
Each Trustee may have evalu- investment advisory agreement. In
addition, based on their ongoing meetings
throughout the year
37 AIM HIGH INCOME MUNICIPAL FUND continued
with the Fund's portfolio manager or Fund performance through the most recent or expense limitations. The Board noted
managers, the Board concluded that these calendar year, the Board also reviewed that the Fund's contractual advisory fee
individuals are competent and able to more recent Fund performance and this schedule includes three breakpoints and
continue to carry out their review did not change their conclusions. that the level of the Fund's advisory
responsibilities under the Fund's fees, as a percentage of the Fund's net
investment advisory agreement. C. Advisory Fees and Fee Waivers assets, has decreased as net assets
The Board compared the Fund's contractual increased because of the breakpoints.
In determining whether to continue the advisory fee rate to the contractual Based on this information, the Board
Fund's investment advisory agreement, the advisory fee rates of funds in the Fund's concluded that the Fund's advisory fees
Board considered the prior relationship Lipper expense group that are not managed appropriately reflect economies of scale
between Invesco Aim and the Fund, as well by Invesco Aim, at a common asset level at current asset levels. The Board also
as the Board's knowledge of Invesco Aim's and as of the end of the past calendar noted that the Fund shares directly in
operations, and concluded that it was year. The Board noted that the Fund's economies of scale through lower fees
beneficial to maintain the current contractual advisory fee rate was above charged by third party service providers
relationship, in part, because of such the median contractual advisory fee rate based on the combined size of all of the
knowledge. The Board also considered the of funds in its expense group. The Board AIM Funds and affiliates.
steps that Invesco Aim and its affiliates also reviewed the methodology used by
have taken over the last several years to Lipper in determining contractual fee E. Profitability and Financial Re
improve the quality and efficiency of the rates. The Board noted that Invesco Aim sources of Invesco Aim
services they provide to the AIM Funds in does not serve as an advisor to other
the areas of investment performance, mutual funds or other clients with The Board reviewed information from
product line diversification, investment strategies comparable to those Invesco Aim concerning the costs of the
distribution, fund operations, shareholder of the Fund. advisory and other services that Invesco
services and compliance. The Board Aim and its affiliates provide to the Fund
concluded that the quality and efficiency The Board noted that Invesco Aim has and the profitability of Invesco Aim and
of the services Invesco Aim and its voluntarily agreed to waive fees and/or its affiliates in providing these
affiliates provide to the AIM Funds in limit expenses of the Fund in an amount services. The Board also reviewed
each of these areas generally have necessary to limit total annual operating information concerning the financial
improved, and support the Board's approval expenses to a specified percentage of condition of Invesco Aim and its
of the continuance of the Fund's average daily net assets for each class of affiliates. The Board also reviewed with
investment advisory agreement. the Fund. The Board considered the Invesco Aim the methodology used to
voluntary nature of this fee prepare the profitability information. The
B. Fund Performance waiver/expense limitation and noted that Board considered the overall profitability
it can be terminated at any time by of Invesco Aim, as well as the
The Board compared the Fund's performance Invesco Aim without further notice to profitability of Invesco Aim in connection
during the past one, three and five investors. The Board also considered the with managing the Fund. The Board noted
calendar years to the performance of funds effect this expense limitation would have that Invesco Aim continues to operate at a
in the Fund's performance group that are on the Fund's estimated total expenses. net profit, although increased expenses in
not managed by Invesco Aim, and against recent years have reduced the
the performance of all funds in the Lipper The Board concluded that it was not profitability of Invesco Aim and its
High Yield Municipal Debt Funds Index. The necessary at this time to discuss with affiliates. The Board concluded that the
Board also reviewed the criteria used by Invesco Aim whether to implement any Fund's fees were fair and reasonable, and
Invesco Aim to identify the funds in the additional fee waivers or expense that the level of profits realized by
Fund's performance group for inclusion in limitations because the Fund's total Invesco Aim and its affiliates from
the Lipper reports. The Board noted that expenses were below the median total providing services to the Fund was not
the Fund's performance was in the third expenses of the funds in the Fund's Lipper excessive in light of the nature, quality
quintile of its performance group for the expense group that are not managed by and extent of the services provided. The
one and five year periods, and the first Invesco Aim. Board considered whether Invesco Aim is
quintile for the three year period (the financially sound and has the resources
first quintile being the best performing After taking account of the Fund's necessary to perform its obligations under
funds and the fifth quintile being the contractual advisory fee rate, as well as the Fund's investment advisory agreement,
worst performing funds). The Board noted the comparative advisory fee information and concluded that Invesco Aim has the
that the Fund's performance was above the and the expense limitation discussed financial resources necessary to fulfill
performance of the Index for the one, above, the Board concluded that the Fund's these obligations.
three and five year periods. The Board advisory fees were fair and reasonable.
also considered the steps Invesco Aim has
taken over the last several years to D. Economies of Scale and Break points F. Independent Written Evaluation of
improve the quality and efficiency of the the Fund's Senior Officer
services that Invesco Aim provides to the The Board considered the extent to which
AIM Funds. The Board concluded that there are economies of scale in Invesco The Board noted that, at their direction,
Invesco Aim continues to be responsive to Aim's provision of advisory services to the Senior Officer of the Fund, who is
the Board's focus on fund performance. the Fund. The Board also considered independent of Invesco Aim and Invesco
Although the independent written whether the Fund benefits from such Aim's affiliates, had prepared an
evaluation of the Fund's Senior Officer economies of scale through contractual independent written evaluation to assist
only considered breakpoints in the Fund's advisory fee the Board in determining the
schedule or through advisory fee waivers reasonableness of the proposed management
fees of the AIM Funds, including the Fund.
The Board noted that they had relied upon
38 AIM HIGH INCOME MUNICIPAL FUND continued
the Senior Officer's written evaluation The Board noted that Invesco Aim will B. Fund Performance
instead of a competitive bidding process. receive advisory fees from these
In determining whether to continue the affiliated money market funds attributable The Board did not view Fund performance as
Fund's investment advisory agreement, the to such investments, although Invesco Aim a relevant factor in considering whether
Board considered the Senior Officer's has contractually agreed to waive through to approve the sub-advisory agreements for
written evaluation. at least June 30, 2009, the advisory fees the Fund, as no Affiliated Sub-Adviser
payable by the Fund in an amount equal to served as a sub-adviser to the Fund prior
G. Collateral Benefits to Invesco Aim 100% of the net advisory fees Invesco Aim to May 1,2008.
and its Affiliates receives from the affiliated money market
funds with respect to the Fund's C. Sub-Advisory Fees
The Board considered various other investment of uninvested cash, but not
benefits received by Invesco Aim and its cash collateral. The Board considered the The Board considered the services to be
affiliates resulting from Invesco Aim's contractual nature of this fee waiver and provided by the Affiliated Sub-Advisers
relationship with the Fund, including the noted that it remains in effect until at pursuant to the sub-advisory agreements
fees received by Invesco Aim and its least June 30, 2009. The Board concluded and the services to be provided by Invesco
affiliates for their provision of that the Fund's investment of uninvested Aim pursuant to the Fund's investment
administrative, transfer agency and cash and cash collateral from any advisory agreement, as well as the
distribution services to the Fund. The securities lending arrangements in the allocation of fees between Invesco Aim and
Board considered the performance of affiliated money market funds is in the the Affiliated Sub-Advisers pursuant to
Invesco Aim and its affiliates in best interests of the Fund and its the sub-advisory agreements. The Board
providing these services and the shareholders. noted that the sub-advisory fees have no
organizational structure employed by direct effect on the Fund or its
Invesco Aim and its affiliates to provide II. Sub-Advisory Agreements shareholders, as they are paid by Invesco
these services. The Board also considered Aim to the Affiliated Sub-Advisers, and
that these services are provided to the A. Nature, Extent and Quality of that Invesco Aim and the Affiliated
Fund pursuant to written contracts which Services Provided by Affiliated Sub-Advisers are affiliates. After taking
are reviewed and approved on an annual Sub-Advisors account of the Fund's contractual
basis by the Board. The Board concluded sub-advisory fee rate, as well as other
that Invesco Aim and its affiliates were The Board reviewed the services to be relevant factors, the Board concluded that
providing these services in a satisfactory provided by Invesco Trimark Ltd., Invesco the Fund's sub-advisory fees were fair and
manner and in accordance with the terms of Asset Management Deutschland, GmbH, reasonable.
their contracts, and were qualified to Invesco Asset Management Limited, Invesco
continue to provide these services to the Asset Management (Japan) Limited, Invesco D. Financial Resources of the
Fund. Australia Limited, Invesco Global Asset Affiliated Sub-Advisers
Management (N.A.), Inc., Invesco Hong Kong
The Board considered the benefits Limited, Invesco Institutional (N.A.), The Board considered whether each
realized by Invesco Aim as a result of Inc. and Invesco Senior Secured Affiliated Sub-Adviser is financially
portfolio brokerage transactions executed Management, Inc. (collectively, the sound and has the resources necessary to
through "soft dollar" arrangements. Under "Affiliated Sub-Advisers") under the perform its obligations under its
these arrangements, portfolio brokerage sub-advisory agreements and the respective sub-advisory agreement, and
commissions paid by the Fund and/or other credentials and experience of the officers concluded that each Affiliated Sub-Adviser
funds advised by Invesco Aim are used to and employees of the Affiliated has the financial resources necessary to
pay for research and execution services. Sub-Advisers who will provide these fulfill these obligations.
The Board noted that soft dollar services. The Board concluded that the
arrangements shift the payment obligation nature, extent and QUALITY of the services
for the research and execution services to be provided by the Affiliated
from Invesco Aim to the funds and Sub-Advisers were appropriate. The Board
therefore may reduce Invesco Aim's noted that the Affiliated Sub-Advisers,
expenses. The Board also noted that which have offices and personnel that are
research obtained through soft dollar geographically dispersed in financial
arrangements may be used by Invesco Aim in centers around the world, have been formed
making investment decisions for the Fund in part for the purpose of researching and
and may therefore benefit Fund compiling information and making
shareholders. The Board concluded that recommendations on the markets and
Invesco Aim's soft dollar arrangements economies of various countries and
were appropriate. The Board also concluded securities of companies located in such
that, based on their review and countries or on various types of
representations made by Invesco Aim, these investments and investment techniques, and
arrangements were consistent with providing investment advisory services.
regulatory requirements. The Board concluded that the sub-advisory
agreements will benefit the Fund and its
The Board considered the fact that the shareholders by permitting Invesco Aim to
Fund's uninvested cash and cash collateral utilize the additional resources and
from any securities lending arrangements talent of the Affiliated Sub-Advisers in
may be invested in money market funds managing the Fund.
advised by Invesco Aim pursuant to
procedures approved by the Board.
39 AIM HIGH INCOME MUNICIPAL FUND
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FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the 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 email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811-07890 and 033-66242.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website,
invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website,
sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008, is
available at our website. Go to invescoaim.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 website, sec.gov.
If used after January 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly
Performance Review for the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service mark of Invesco
Aim Management Group, Inc. Invesco Aim [INVESCO AIM LOGO] - SERVICE MARK - Advisors, Inc., Invesco Aim Capital
Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are
the investment advisors for the products and services represented by Invesco Aim; they each provide investment [INVESCO AIM LOGO]
advisory services to individual and institutional clients and do not sell securities. Invesco Institutional -- SERVICE MARK --
(N.A.), Inc., Invesco Senior Secured Management, Inc., Invesco Global Asset Management (N.A.), Inc., Invesco
Trimark Ltd., Invesco Asset Management (Japan) Ltd., Invesco Hong Kong Ltd., Invesco Australia Limited, Invesco
Asset Management Limited and Invesco Asset Management Deutschland GmbH are affiliated investment advisors that
serve as subadvisors to many of the products and services represented by Invesco Aim. Invesco Aim Distributors,
Inc. is the distributor for the retail mutual funds, exchange-traded funds and U.S. institutional money market
funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd.
invescoaim.com HIM-SAR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO]
- -- SERVICE MARK --
AIM TAX-EXEMPT CASH FUND
Semiannual Report to Shareholders o September 30, 2008
[MOUNTAIN GRAPHIC]
2 Letter to Shareholders
3 Market Conditions and Fund Performance
4 Schedule of Investments
8 Financial Statements
11 Notes to Financial Statements
14 Financial Highlights
16 Fund Expenses
17 Approval of Investment Advisory Agreement
For the most current month-end Fund performance and commentary, please visit
invescoaim.com.
Unless otherwise noted, all data provided by Invesco Aim.
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
Dear Fellow Shareholders:
As I write this letter, turbulent financial markets are causing considerable investor anxiety, reminding us
[CROCKETT again that markets are cyclical and the correction of excess is often painful, at least in the short term.
PHOTO] Your Board of Trustees believes in the wisdom of a long-term perspective and consistent investment
discipline. We continue to put your interests first in the effort to improve investment performance,
Bruce Crockett contain shareholder costs and uphold the highest ethical standards.
We remain enthusiastic about the global reach and investment expertise that Invesco, a leading
independent global investment management company, brings to the management of AIM Funds as the parent
company of the advisors. The diverse investment strategies deployed throughout the worldwide network of
Invesco investment centers has helped strengthen the management of many AIM Funds. The rebranding of the
Funds' management company as Invesco Aim was followed by the launch of an upgraded, investor-friendly
website (invescoaim.com); a new mountain logo using a Himalayan peak to symbolize stability, endurance, strength and longevity; and
a new ad campaign. Emphasizing Invesco Aim's focus and investment quality, the ads will appear in financial publications such as
Barron's and Investment News through the end of 2008.
At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim
Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click
on "Investment Advisory Agreement Renewals."
We have recently completed another active proxy voting season during which we acted on your behalf to double the number of votes
in favor of separating the roles of chairman and CEO at the companies whose shares your Funds hold. We also continued to support the
movement for shareholders to have a bigger role in approving executive compensation, initiatives known as "say on pay." Like
virtually all other mutual fund complexes, AIM Funds abstain from voting on social issues as a matter of policy, and I would be
interested to hear your thoughts on this policy.
As always, you are welcome to email your questions or comments to me at bruce@brucecrockett.com. The dialogue that has been
established in this way has been instructive for your Board, and we want it to continue. Although the production schedule for Fund
annual reports and prospectuses allows me to write these letters of general report and response just twice a year, please be assured
that your comments are received, welcomed and heard in the interim.
We look forward to hearing from you and to representing you.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
2 AIM TAX-EXEMPT CASH FUND
=======================================================================================
MARKET CONDITIONS
Throughout the period covered by this report, equity, fixed income and credit markets
experienced unprecedented volatility. This volatility was largely the result of years
of lax credit practices in the mortgage market. Over the last several years, mortgage
loans were extended to homebuyers of questionable creditworthiness. Those mortgages, in
turn, were often bundled into difficult-to-understand securities which were traded
among financial institutions.
In 2008, these complex and obscure securities declined sharply in value. While
financial institutions sought to sell them, virtually no one was willing to buy them,
and this created a liquidity crisis or "credit crunch" of historic severity that
quickly threatened to undermine the entire financial system. The ensuing "flight to
safety" by investors caused yields on U.S. Treasury securities to plummet and yields on
other securities - including state and local municipal issues, in which the Fund
invests - to rise significantly in September.
In response to these developments, the U.S. Federal Reserve, the U.S. Department of
the Treasury, Congress, the administration and others initiated programs to increase
liquidity in the credit markets and restore public trust in the financial markets
generally, and money market funds specifically. Those programs included:
- - The $700 billion rescue plan - the Troubled Assets Relief Plan
- - The ABCP Money Market Mutual Fund Liquidity Facility
- - The Temporary Guarantee Program for Money Market Funds
- - The Commercial Paper Funding Facility
Also, the U.S. government continues to work closely with other governments and
central banks around the world to address the many interconnected issues associated
with the current credit crunch and economic weakness.
At Invesco Aim, safety is of paramount importance to our money market investment
process. Our conservative investment philosophy, which has been in place for more than
27 years, will always focus on our commitment to provide safety, liquidity and yield -
in that order - to our money market fund investors.
=======================================================================================
FUND PERFORMANCE
AIM TAX-EXEMPT CASH FUND 7-DAY SEC YIELDS
As of 9/30/08
TAXABLE
EQUIVALENT
7-DAY SEC 7-DAY SEC
YIELDS YIELDS
HAD FEES NOT HAD FEES NOT
TAXABLE BEEN WAIVED BEEN WAIVED
EQUIVALENT AND/OR AND/OR
7-DAY SEC 7-DAY SEC EXPENSES EXPENSES
YIELDS YIELDS* REIMBURSED REIMBURSED*
--------- ---------- ------------ ------------
Class A Shares 5.94% 9.14% 5.79% 8.91%
Investor Class Shares 6.04 9.29 6.04 9.29
* Based on the highest personal income tax rate in effect on September 30, 2008 - 35%.
Yields will fluctuate. Had the distributor not waived fees and/or reimbursed expenses
on Class A shares, performance would have been lower.
====================================================================================================================================
PERFORMANCE QUOTED IS PAST PERFORMANCE AND CANNOT GUARANTEE COMPARABLE FUTURE RESULTS; CURRENT PERFORMANCE MAY BE LOWER OR HIGHER.
VISIT INVESCOAIM.COM FOR THE MOST RECENT MONTH-END PERFORMANCE.
====================================================================================================================================
====================================================================================================================================
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.
====================================================================================================================================
3 AIM TAX-EXEMPT CASH FUND
PORTFOLIO COMPOSITION*
Number of days to Maturity
as of September 30, 2008
<Table>
- -------------------------------------------------------------------------
1-7 86.3%
- -------------------------------------------------------------------------
8-30 0.0
- -------------------------------------------------------------------------
31-90 8.8
- -------------------------------------------------------------------------
91-180 2.9
- -------------------------------------------------------------------------
181+ 2.0
_________________________________________________________________________
=========================================================================
</Table>
* The number of days to maturity of each holding is determined in accordance
with the provisions of Rule 2a-7 of the Investment Company Act of 1940.
SCHEDULE OF INVESTMENTS
September 30, 2008
(Unaudited)
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-96.36%
ALABAMA-4.98%
Greater Montgomery Educational Building
Authority (Saint James School (The)); Series
2003-A, VRD RB (LOC-Regions Bank)(a)(b) 8.01% 06/01/23 $ 260 $ 260,000
- ----------------------------------------------------------------------------------------------------
Oxford (City of); Series 2003, VRD Unlimited Tax
GO Wts. (LOC-Branch Banking & Trust
Co.)(a)(b) 8.50% 07/01/15 2,040 2,040,000
====================================================================================================
2,300,000
====================================================================================================
ALASKA-2.42%
Alaska (State of) Municipal Bond Bank; Series
1998 A, GO(c)(d) 4.75% 10/01/08 115 115,000
- ----------------------------------------------------------------------------------------------------
Wachovia MERLOTs (Alaska (State of) Housing
Finance Corp.); Series 1999 D, VRD
RB(b)(e)(f) 5.79% 06/01/49 1,000 1,000,000
====================================================================================================
1,115,000
====================================================================================================
COLORADO-3.03%
Concord Metropolitan District; Series 2004, Ref.
& Improvement VRD Unlimited Tax GO (LOC-Wells
Fargo Bank, N.A.)(a)(b) 3.50% 12/01/29 600 600,000
- ----------------------------------------------------------------------------------------------------
Cornerstar Metropolitan District; Series 2007,
VRD Special RB (LOC-Banco Bilbao Vizcaya
Argentaria, S.A.)(a)(b)(g) 8.10% 12/01/37 800 800,000
====================================================================================================
1,400,000
====================================================================================================
FLORIDA-6.14%
Jacksonville (City of) Health Facilities
Authority (University of Florida Jacksonville
Physicians, Inc.); Series 2002,
VRD RB (LOC-Bank of America, N.A.)(a)(b) 7.55% 06/01/22 2,134 2,134,000
- ----------------------------------------------------------------------------------------------------
Jupiter Island (Town of) (South Martin Regional
Utility); Series 1998, Utility System
RB(c)(d) 5.00% 10/01/08 300 303,000
- ----------------------------------------------------------------------------------------------------
Seminole (County of) Industrial Development
Authority (Florida Living Nursing Center,
Inc.); Series 1991, VRD Health Facilities IDR
(LOC-Bank of America, N.A.)(a)(b) 8.16% 02/01/11 400 400,000
====================================================================================================
2,837,000
====================================================================================================
GEORGIA-4.98%
DeKalb (County of) Housing Authority (Clairmont
Crest); Series 1995, Ref. VRD MFH RB
(CEP-Federal National Mortgage
Association)(b) 8.20% 06/15/25 1,100 1,100,000
- ----------------------------------------------------------------------------------------------------
Tallapoosa (City of) Development Authority
(United States Can Co.); Series 1994, Ref.
VRD IDR (LOC-Deutsche Bank A.G.)(a)(b)(g) 8.95% 02/01/15 1,200 1,200,000
====================================================================================================
2,300,000
====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
4 AIM TAX-EXEMPT CASH FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------
ILLINOIS-8.94%
Glenview (Village of); Series 2001, Unlimited
Tax GO 4.00% 12/01/08 $ 275 $ 275,903
- ----------------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (Radiological Society of North
America, Inc.); Series 1997, VRD RB
(LOC-JPMorgan Chase Bank, N.A.)(a)(b)(e) 8.10% 06/01/17 700 700,000
- ----------------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Dominican University); Series 2000
B, VRD RB (LOC-Allied Irish Banks
PLC)(a)(b)(g) 7.92% 10/01/30 2,400 2,400,000
- ----------------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Pooled Financing Program); Series
2002, Commercial Paper RN (LOC-Northern Trust
Corp.)(a) 1.60% 12/05/08 500 500,000
- ----------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Advocate
Health Care Network); Series 2008 A-2, VRD
RB(b) 1.90% 11/01/30 250 250,000
====================================================================================================
4,125,903
====================================================================================================
INDIANA-7.79%
Indiana (State of) Development Finance Authority
(Youth Opportunity Center, Inc.);
Series 1998, VRD Educational Facilities RB
(LOC-JPMorgan Chase Bank, N.A.)(a)(b) 8.95% 01/01/24 1,500 1,500,000
- ----------------------------------------------------------------------------------------------------
Series 1999, VRD IDR (LOC-JPMorgan Chase
Bank, N.A.)(a)(b) 8.95% 01/01/29 1,300 1,300,000
- ----------------------------------------------------------------------------------------------------
Indiana (State of) Health Facility Financing
Authority (Stone Belt Arc, Inc.); Series
2005, VRD RB (LOC-JPMorgan Chase Bank,
N.A.)(a)(b) 8.95% 02/01/25 795 795,000
====================================================================================================
3,595,000
====================================================================================================
IOWA-4.57%
Iowa (State of) Finance Authority (YMCA of
Greater Des Moines); Series 2000, VRD
Economic Development RB (LOC-Wells Fargo
Bank, N.A)(a)(b) 8.15% 06/01/10 2,110 2,110,000
====================================================================================================
KENTUCKY-2.38%
Newport (City of) (Kentucky League of Cities
Funding Trust); Series 2002, VRD Lease
Program RB (LOC-U.S. Bank, N.A.)(a)(b) 8.00% 04/01/32 1,100 1,100,000
====================================================================================================
MASSACHUSETTS-0.78%
Massachusetts (State of) Development Finance
Agency (MassDevelopment CP Program 5 Issue);
Series 2007, Commercial Paper RN (LOC-TD
Banknorth, N.A.)(a)(g) 1.75% 10/01/08 359 359,000
====================================================================================================
MICHIGAN-1.82%
Wachovia MERLOTs (Detroit (City of)); Series
2000 D, Sr. Lien VRD Water Supply System
RB(b)(e)(f) 5.61% 07/01/29 840 840,000
====================================================================================================
MINNESOTA-0.44%
Minnesota (State of) Rural Water Finance
Authority; Series 2008, Public Construction
RN 2.75% 06/01/09 200 200,915
====================================================================================================
NORTH DAKOTA-4.33%
Fargo (City of) (Case Oil Co.); Series 1984, VRD
Commercial Development RB (LOC-U.S. Bank
N.A.)(a)(b) 8.40% 12/01/14 2,000 2,000,000
====================================================================================================
OKLAHOMA-8.00%
Oklahoma (County of) Finance Authority (Oxford
Oaks, Watersedge & Gardens at Reding
Apartments); Series 2000,
Ref. VRD MFH RB (CEP-Federal National
Mortgage Association)(b) 8.02% 07/15/30 1,900 1,900,000
- ----------------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority (St. John Health System); Series
1999, Ref. RB(c)(d) 6.00% 02/15/09 300 307,391
- ----------------------------------------------------------------------------------------------------
Oklahoma (State of) Water Resources Board;
Series 1997, VRD State Loan Program RB(b) 1.65% 09/01/26 240 240,000
- ----------------------------------------------------------------------------------------------------
Series 2003A, VRD State Loan Program RB(b) 1.88% 10/01/36 245 245,000
- ----------------------------------------------------------------------------------------------------
Tulsa (County of) Industrial Authority; Series
2003 A, VRD Capital Improvement RB(b) 2.00% 05/15/17 1,000 1,000,000
====================================================================================================
3,692,391
====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
5 AIM TAX-EXEMPT CASH FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------
PENNSYLVANIA-6.36%
Chartiers Valley (Community of) Industrial &
Commercial Development Authority (Asbury
Villas); Series 2000 B, VRD IDR (LOC-Fifth
Third Bank)(a)(b) 10.00% 12/01/30 $2,650 $ 2,650,000
- ----------------------------------------------------------------------------------------------------
New Castle Area School District; Series 2003 B,
Unlimited Tax GO(c)(d) 4.75% 03/01/09 285 288,559
====================================================================================================
2,938,559
====================================================================================================
TENNESSEE-3.79%
Hawkins (County of) Industrial Development Board
(Leggett & Platt Inc.); Series 1988 B, Ref.
VRD IDR (LOC-Wachovia Bank, N.A.)(a)(b) 8.30% 10/01/27 1,750 1,750,000
====================================================================================================
TEXAS-4.88%
Bell (County of) Health Facilities Development
Corp. (Buckner Retirement Services, Inc.
Obligated Group); Series 1998, RB(c)(d) 5.25% 11/15/08 300 304,024
- ----------------------------------------------------------------------------------------------------
Harris (County of) Cultural Education Facilities
Finance Corp. (The Methodist Hospital
System); Sub. Series 2008 C-3, VRD RB(b) 1.60% 12/01/32 500 500,000
- ----------------------------------------------------------------------------------------------------
Highland Park (City of) Independent School
District; Series 1999, School Building
Unlimited Tax GO(c)(d) 5.75% 02/15/09 200 202,955
- ----------------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development Corp.
(AMOCO); Series 1985, VRD PCR(b)(g) 2.00% 11/01/19 240 240,000
- ----------------------------------------------------------------------------------------------------
San Antonio (City of); Series 2005 A, Water
System Commercial Paper Notes 1.68% 12/04/08 500 500,000
- ----------------------------------------------------------------------------------------------------
Texas (State of); Series 2008, TRAN 3.00% 08/28/09 500 506,112
====================================================================================================
2,253,091
====================================================================================================
WASHINGTON-13.17%
Seattle (Port of) Industrial Development Corp.
(Sysco Food Services of Seattle, Inc.);
Series 1994, Ref. VRD IDR(b) 8.08% 11/01/25 1,750 1,750,000
- ----------------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority (Swedish Health Services); Series
2006, VRD RB (LOC-Citibank, N.A.)(a)(b)(e) 8.03% 11/15/26 3,830 3,830,000
- ----------------------------------------------------------------------------------------------------
Washington (State of) Housing Finance Commission
(YMCA of Columbia-Willamette); Series 1999,
VRD Non-Profit RB (LOC-U.S. Bank, N.A.)(a)(b) 8.13% 08/01/24 500 500,000
====================================================================================================
6,080,000
====================================================================================================
WISCONSIN-2.14%
Madison (City of) Community Development
Authority (Hamilton Point Apartments); Series
1997 A, Ref. VRD MFH RB (LOC-JPMorgan Chase
Bank, N.A.)(a)(b)(e) 8.17% 10/01/22 785 785,000
- ----------------------------------------------------------------------------------------------------
Wisconsin (State of); Series 1999 A, Unlimited
Tax GO(c)(d) 5.00% 05/01/09 200 203,371
====================================================================================================
988,371
====================================================================================================
WYOMING-5.42%
Gillette (City of) (Pacificorp); Series 1988,
Ref. VRD PCR (LOC-Barclays Bank PLC)(a)(b)(g) 7.75% 01/01/18 2,500 2,500,000
====================================================================================================
TOTAL INVESTMENTS(h)(i)-96.36% (Cost $44,485,230) 44,485,230
====================================================================================================
OTHER ASSETS LESS LIABILITIES-3.64% 1,682,511
====================================================================================================
NET ASSETS-100.00% $46,167,741
____________________________________________________________________________________________________
====================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
6 AIM TAX-EXEMPT CASH FUND
Investment Abbreviations:
<Table>
CEP - Credit Enhancement Provider
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
LOC - Letter of Credit
MERLOTs - Municipal Exempt Receipts Liquidity Option Tender
MFH - Multi-Family Housing
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
Ref. - Refunding
RN - Revenue Notes
Sr. - Senior
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(b) 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 September 30, 2008.
(c) Security has an irrevocable call by the issuer or mandatory put by the
holder. Maturity date reflects such call or put.
(d) Advance refunded; secured by an escrow fund of U.S. Government
obligations.
(e) Security purchased or received in a transaction exempt from registration
under the Securities Act of 1933, as amended. The security may be resold
pursuant to an exemption from registration under the 1933 Act, typically
to qualified institutional buyers. The aggregate value of these securities
at September 30, 2008 was $7,155,000, which represented 15.50% of the
Fund's Net Assets. Unless otherwise indicated, these securities are not
considered to be illiquid at September 30, 2008.
(f) Synthetic municipal instruments; involves the deposit into a trust of one
or more long-term tax-exempt bonds or notes ("Underlying Bonds."), a sale
of certificates evidencing interests in the trust to investors such as the
Fund. The trustee receives the long-term fixed interest payments on the
Underlying Bonds, and pays certificate holders variable rate interest
payments based upon a short-term reset periodically.
(g) The security is credit guaranteed, enhanced or has credit risk by a
foreign entity. The foreign credit exposure to countries other than the
United States of America (as a percentage of net assets) is summarized as
follows: United Kingdom: 6.0%; Ireland: 5.2%; other countries less than
5%: 5.1%.
(h) 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
-------------------------------------------------------------------------
JP Morgan Chase Bank, N.A. 11.0%
-------------------------------------------------------------------------
Citibank, N.A. 8.3
-------------------------------------------------------------------------
U.S. Bank, N.A. 7.8
-------------------------------------------------------------------------
Federal National Mortgage Association 6.5
-------------------------------------------------------------------------
Wells Fargo Bank, N.A. 5.9
-------------------------------------------------------------------------
Fifth Third Bank 5.7
-------------------------------------------------------------------------
Bank of America, N.A. 5.5
-------------------------------------------------------------------------
Barclays Bank PLC 5.4
-------------------------------------------------------------------------
Allied Irish Bank PLC 5.2
_________________________________________________________________________
=========================================================================
</Table>
(i) Also represents cost for federal income tax purposes.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
7 AIM TAX-EXEMPT CASH FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2008
(Unaudited)
<Table>
ASSETS:
Investments, at value and cost $44,485,230
- ------------------------------------------------------
Cash 19,973
- ------------------------------------------------------
Receivables for:
Investments sold 1,236,192
- ------------------------------------------------------
Fund shares sold 324,810
- ------------------------------------------------------
Interest 197,444
- ------------------------------------------------------
Investment for trustee deferred
compensation and retirement plans 45,762
- ------------------------------------------------------
Other assets 37,629
======================================================
Total assets 46,347,040
______________________________________________________
======================================================
LIABILITIES:
Payables for:
Fund shares reacquired 96,560
- ------------------------------------------------------
Dividends 3,049
- ------------------------------------------------------
Accrued fees to affiliates 4,293
- ------------------------------------------------------
Accrued other operating expenses 22,484
- ------------------------------------------------------
Trustee deferred compensation and
retirement plans 52,913
======================================================
Total liabilities 179,299
======================================================
Net assets applicable to shares
outstanding $46,167,741
______________________________________________________
======================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $46,145,830
- ------------------------------------------------------
Undistributed net investment income 21,911
======================================================
$46,167,741
______________________________________________________
======================================================
NET ASSETS:
Class A $32,921,922
______________________________________________________
======================================================
Investor Class $13,245,819
______________________________________________________
======================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES AUTHORIZED:
Class A 32,914,579
______________________________________________________
======================================================
Investor Class 13,270,786
______________________________________________________
======================================================
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.
8 AIM TAX-EXEMPT CASH FUND
STATEMENT OF OPERATIONS
For the six months ended September 30, 2008
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $535,338
==============================================================================================
EXPENSES:
Advisory fees 75,956
- ----------------------------------------------------------------------------------------------
Administrative services fees 25,068
- ----------------------------------------------------------------------------------------------
Custodian fees 2,087
- ----------------------------------------------------------------------------------------------
Distribution fees -- Class A 36,980
- ----------------------------------------------------------------------------------------------
Transfer agent fees 25,205
- ----------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 8,201
- ----------------------------------------------------------------------------------------------
Registration and filing fees 22,806
- ----------------------------------------------------------------------------------------------
Reports to shareholders 12,696
- ----------------------------------------------------------------------------------------------
Other 15,613
==============================================================================================
Total expenses 224,612
==============================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (22,838)
==============================================================================================
Net expenses 201,774
==============================================================================================
Net investment income 333,564
==============================================================================================
Net increase in net assets resulting from operations $333,564
______________________________________________________________________________________________
==============================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM TAX-EXEMPT CASH FUND
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2008 and the year ended March 31, 2008
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2008 2008
- ------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 333,564 $ 1,264,127
======================================================================================================
Distributions to shareholders from net investment income:
Class A (223,785) (904,833)
- ------------------------------------------------------------------------------------------------------
Investor Class (109,779) (359,294)
======================================================================================================
Distributions from net investment income (333,564) (1,264,127)
======================================================================================================
Share transactions-net:
Class A 1,109,788 (6,293,364)
- ------------------------------------------------------------------------------------------------------
Investor Class (713,459) 755,614
======================================================================================================
Net increase (decrease) in net assets resulting from share
transactions 396,329 (5,537,750)
======================================================================================================
Net increase (decrease) in net assets 396,329 (5,537,750)
______________________________________________________________________________________________________
======================================================================================================
NET ASSETS:
Beginning of period 45,771,412 51,309,162
- ------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income of
$21,911 and $21,911, respectively) $46,167,741 $45,771,412
______________________________________________________________________________________________________
======================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM TAX-EXEMPT CASH FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
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 assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. Matters affecting each portfolio or class will be voted on exclusively
by the shareholders of such portfolio or class.
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 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. Under certain circumstances, Class A shares are subject to
contingent deferred sales charges ("CDSC").
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.
Because of the inherent uncertainties of valuation, the values reflected
in the financial statements may materially differ from the value received
upon actual sale of those investments.
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 periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. 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, the investment
advisor 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.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
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
11 AIM TAX-EXEMPT CASH FUND
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 by a significant amount.
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 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.
I. OTHER RISKS -- The value of, payment of interest on, repayment of
principal for and the ability to sell a municipal security may be affected
by constitutional amendments, legislative enactments, executive orders,
administrative regulations, voter initiatives and the economics of the
regions in which the issuers are located.
Since, many municipal securities are issued to finance similar projects,
especially those relating to education, health care, transportation and
utilities, conditions in those sectors can affect the overall municipal
securities market and a Fund's investments in municipal securities.
There is some risk that a portion or all of the interest received from
certain tax-free municipal securities could become taxable as a result of
determinations by the Internal Revenue Service.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor at
the annual rate of 0.35% of the Fund's average daily net assets.
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") 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 six
months ended September 30, 2008, Invesco reimbursed expenses of the Fund in the
amount of $209.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the six months ended September 30, 2008, 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
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS 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 six
months ended September 30, 2008, 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 Invesco Aim
Distributors, Inc. ("IADI") 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 IADI
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. Rules of the Financial Industry
Regulatory Authority ("FINRA") 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. IADI has contractually agreed to waive 0.15% of the Rule 12b-1 plan
fees of Class A shares through June 30, 2009. 12b-1 fees before fee waivers
under this agreement are shown as distribution fees in the Statement of
Operations. Fees incurred after fee waivers for Class A shares were $14,792.
Front-end sales commissions and 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 six months ended September 30, 2008,
IADI advised the Fund that IADI retained $7,526 from Class A shares for CDSC
imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (level 1) and the lowest priority to significant
unobservable inputs (level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level,
12 AIM TAX-EXEMPT CASH FUND
Level 1 -- Quoted prices in an active market for identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, September 30, 2008. The level assigned to the securities
valuations may not be an indication of the risk associated with investing in
those securities. Because of the inherent uncertainties of valuation, the values
reflected in the financial statements may materially differ from the value
received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $ --
- --------------------------------------
Level 2 44,485,230
- --------------------------------------
Level 3 --
======================================
$44,485,230
______________________________________
======================================
</Table>
NOTE 4--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 six months ended September 30, 2008, the
Fund engaged in securities purchases of $24,741,168 and securities sales of
$15,001,839, which resulted in net realized gain/loss of $0.
NOTE 5--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 six months ended September 30,
2008, the Fund received credits from this arrangement, which resulted in the
reduction of the Fund's total expenses of $441.
NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' 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
Officers' 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 Officers'
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 six months ended September 30, 2008, the Fund paid legal fees of
$2,450 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 7--CASH BALANCES
The Fund is permitted temporarily to overdraft or leave balances in its account
with its custodian bank, The Bank of New York Mellon. The parties compensate one
another for any overdraft or remaining balance in the account by either earning
the interest that accrues on the overdrawn or balance amount in the account or
by paying the other party a contractually agreed upon fee.
NOTE 8--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
The Fund did not have a capital loss carryforward as of March 31, 2008.
13 AIM TAX-EXEMPT CASH FUND
NOTE 9--SHARE INFORMATION
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- -------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2008(a) MARCH 31, 2008
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 39,093,807 $ 39,093,807 66,669,421 $ 66,669,421
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 2,834,118 2,834,118 8,550,193 8,550,193
=========================================================================================================================
Issued as reinvestment of dividends:
Class A 215,527 215,527 878,146 878,146
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 106,096 106,096 347,849 347,849
=========================================================================================================================
Reacquired:
Class A (38,199,546) (38,199,546) (73,840,931) (73,840,931)
- -------------------------------------------------------------------------------------------------------------------------
Investor Class (3,653,673) (3,653,673) (8,142,428) (8,142,428)
=========================================================================================================================
396,329 $ 396,329 (5,537,750) $ (5,537,750)
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) There is an entity that is a record owner of more than 5% of the
outstanding shares of the Fund and owns 17% 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 this entity are also owned beneficially.
NOTE 10--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
NET ASSET
VALUE, NET
BEGINNING INVESTMENT DIVIDENDS FROM NET NET ASSET VALUE,
OF PERIOD INCOME INVESTMENT INCOME END OF PERIOD TOTAL RETURN(a)
- ----------------------------------------------------------------------------------------------------------------
CLASS A
Six months ended 09/30/08 $1.00 $0.01(b) $(0.01) $1.00 0.75%
Year ended 03/31/08 1.00 0.03 (0.03) 1.00 2.62
Year ended 03/31/07 1.00 0.03 (0.03) 1.00 2.66
Year ended 03/31/06 1.00 0.02 (0.02) 1.00 1.88
Year ended 03/31/05 1.00 0.01 (0.01) 1.00 0.72
Year ended 03/31/04 1.00 0.00 (0.00) 1.00 0.41
- ----------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Six months ended 09/30/08 1.00 0.01(b) (0.01) 1.00 0.80
Year ended 03/31/08 1.00 0.03 (0.03) 1.00 2.72
Year ended 03/31/07 1.00 0.03 (0.03) 1.00 2.76
Year ended 03/31/06 1.00 0.02 (0.02) 1.00 1.98
Year ended 03/31/05 1.00 0.01 (0.01) 1.00 0.82
Year ended 03/31/04(d) 1.00 0.00 (0.00) 1.00 0.23
________________________________________________________________________________________________________________
================================================================================================================
<Caption>
RATIO OF EXPENSES RATIO OF EXPENSES
TO AVERAGE NET TO AVERAGE NET RATIO OF NET
NET ASSETS, END OF ASSETS WITH FEE ASSETS WITHOUT FEE INVESTMENT INCOME
PERIOD (000S WAIVERS AND/OR WAIVERS AND/OR TO AVERAGE NET
OMITTED) EXPENSES ABSORBED EXPENSES ABSORBED ASSETS
- ----------------------------------------------------------------------------------------------------------------
CLASS A
Six months ended 09/30/08 $32,922 0.96%(c) 1.11%(c) 1.50%(c)
Year ended 03/31/08 31,812 0.92 1.07 2.58
Year ended 03/31/07 38,106 1.03 1.19 2.62
Year ended 03/31/06 37,828 0.94 1.09 1.84
Year ended 03/31/05 46,914 0.80 1.00 0.68
Year ended 03/31/04 75,547 0.76 0.91 0.40
- ----------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Six months ended 09/30/08 13,246 0.86(c) 0.86(c) 1.60(c)
Year ended 03/31/08 13,959 0.82 0.82 2.68
Year ended 03/31/07 13,203 0.93 0.94 2.72
Year ended 03/31/06 14,405 0.84 0.84 1.94
Year ended 03/31/05 17,215 0.70 0.75 0.78
Year ended 03/31/04(d) 20,169 0.67(e) 0.67(e) 0.49(e)
________________________________________________________________________________________________________________
================================================================================================================
</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 and is not annualized for
periods less than one year, if applicable.
(b) Calculated using average shares outstanding.
(c) Ratios are annualized and based on average daily net assets (000's omitted)
of $29,503 and $13,782 for Class A and Investor Class shares, respectively.
(d) Investor Class shares commenced on September 20, 2003.
(e) Annualized.
NOTE 11--SUBSEQUENT EVENT
On October 6, 2008, the Board of Trustees approved the participation of the
Fund in the U.S. Department of Treasury's Temporary Guarantee Program for Money
Market Funds (the "Program"). Under the Program, the Treasury Department will
guarantee shareholders in a Fund that they will receive $1 for each Fund share
held by them as of the close of business on September 19, 2008, in the event
that such Fund (in which they were invested as of September 19, 2008) liquidates
and the per share value at the time of liquidation is less than $0.995.
Participation in the Program until December 18, 2008 requires a payment to the
Treasury Department in the amount of 0.01% of the share value of the Fund as of
September 19, 2008. This expense will be borne by the Fund.
The Program will be in effect until December 18, 2008. The Secretary of the
Treasury may extend the Program beyond its initial three-month term through the
close of business on September 19, 2009. If extended, the Fund, if eligible,
will consider whether to continue to participate in the Program, which may
require further payment.
14 AIM TAX-EXEMPT CASH FUND
NOTE 12--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
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 Invesco Aim and IADI (Order No. 05-
1318). The WVASC makes findings of fact that Invesco Aim and IADI 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 Invesco Aim and IADI violated the West Virginia
securities laws. The WVASC orders Invesco Aim and IADI 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, Invesco 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, Invesco Funds Group,
Inc. ("IFG"), Invesco Aim, IADI 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; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("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. The case pending in Illinois State Court regarding fair value
pricing was dismissed with prejudice on May 6, 2008.
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 Invesco 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 ERISA
purportedly brought on behalf of participants in the Invesco 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 Invesco
defendants' motion to dismiss the Amended Class Action Complaint for Violations
of ERISA and dismissed such Complaint. Plaintiff appealed this ruling. On June
16, 2008, the Fourth Circuit Court of Appeals reversed the dismissal and
remanded this lawsuit back to the MDL Court for further proceedings.
IFG, Invesco Aim, IADI 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, Invesco Aim and IADI 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, Invesco Aim and/or related entities and individuals in the
future.
At the present time, management of Invesco 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 Invesco Aim, IADI or the Fund.
15 AIM TAX-EXEMPT CASH FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period April 1, 2008, through September 30, 2008.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (04/01/08) (09/30/08)(1) PERIOD(2) (09/30/08) PERIOD(2) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $1,007.50 $4.83 $1,020.26 $4.86 0.96%
- ---------------------------------------------------------------------------------------------------
Investor 1,000.00 1,008.00 4.33 1,020.76 4.36 0.86
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period April 1, 2008, through September 30, 2008, 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 183/365
to reflect the most recent fiscal half year.
16 AIM TAX-EXEMPT CASH FUND
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
The Board of Trustees (the Board) of AIM their assigned funds. During the contract ated the information provided differently
Tax-Exempt Funds is required under the renewal process, the Trustees receive from one another and attributed different
Investment Company Act of 1940 to approve comparative performance and fee data weight to the various factors. The
annually the renewal of the AIM Tax-Exempt regarding the AIM Funds prepared by an Trustees recognized that the advisory
Cash Fund's (the Fund) investment advisory independent company, Lipper, Inc. arrangements and resulting advisory fees
agreement with Invesco Aim Advisors, Inc. (Lipper), under the direction and for the Fund and the other AIM Funds are
(Invesco Aim). During contract renewal supervision of the independent Senior the result of years of review and
meetings held on June 18-19, 2008, the Officer who also prepares a separate negotiation between the Trustees and
Board as a whole and the disinterested or analysis of this information for the Invesco Aim, that the Trustees may focus
"independent" Trustees, voting separately, Trustees. Each Sub-Committee then makes to a greater extent on certain aspects of
approved the continuance of the Fund's recommendations to the Investments these arrangements in some years than in
investment advisory agreement for another Committee regarding the performance, fees others, and that the Trustees'
year, effective July 1, 2008. In doing so, and expenses of their assigned funds. The deliberations and conclusions in a
the Board determined that the Fund's Investments Committee considers each particular year may be based in part on
investment advisory agreement is in the Sub-Committee's recommendations and makes their deliberations and conclusions of
best interests of the Fund and its its own recommendations regarding the these same arrangements throughout the
shareholders and that the compensation to performance, fees and expenses of the AIM year and in prior years.
Invesco Aim under the Fund's investment Funds to the full Board. The Investments
advisory agreement is fair and reasonable. Committee also considers each FACTORS AND CONCLUSIONS AND SUMMARY OF
Sub-Committee's recommendations in making INDEPENDENT WRITTEN FEE EVALUATION
The independent Trustees met separately its annual recommendation to the Board
during their evaluation of the Fund's whether to approve the continuance of each The discussion below serves as a
investment advisory agreement with AIM Fund's investment advisory agreement summary of the Senior Officer's
independent legal counsel from whom they and sub-advisory agreements for another independent written evaluation with
received independent legal advice, and the year. respect to the Fund's investment advisory
independent Trustees also received agreement as well as a discussion of the
assistance during their deliberations from The independent Trustees are assisted material factors and related conclusions
the independent Senior Officer, a in their annual evaluation of the Fund's that formed the basis for the Board's
full-time officer of the AIM Funds who investment advisory agreement by the approval of the Fund's investment advisory
reports directly to the independent independent Senior Officer. One agreement and sub-advisory agreements.
Trustees. responsibility of the Senior Officer is to Unless otherwise stated, information set
manage the process by which the AIM Funds' forth below is as of June 19, 2008 and
THE BOARD'S FUND EVALUATION PROCESS proposed management fees are negotiated does not reflect any changes that may have
during the annual contract renewal process occurred since that date, including but
The Board's Investments Committee has to ensure that they are negotiated in a not limited to changes to the Fund's
established three Sub-Committees that are manner that is at arms' length and performance, advisory fees, expense
responsible for overseeing the management reasonable. Accordingly, the Senior limitations and/or fee waivers.
of a number of the series portfolios of Officer must either supervise a
the AIM Funds. This Sub-Committee competitive bidding process or prepare an I. Investment Advisory Agreement
structure permits the Trustees to focus on independent written evaluation. The Senior
the performance of the AIM Funds that have Officer has recommended that an A. Nature, Extent and Quality of
been assigned to them. The Sub-Committees independent written evaluation be provided Services Provided by Invesco Aim
meet throughout the year to review the and, at the direction of the Board, has
performance of their assigned funds, and prepared an independent written The Board reviewed the advisory services
the Sub-Committees review monthly and evaluation. provided to the Fund by Invesco Aim under
quarterly comparative performance the Fund's investment advisory agreement,
information and periodic asset flow data During the annual contract renewal the performance of Invesco Aim in
for their assigned funds. These materials process, the Board considered the factors providing these services, and the
are prepared under the direction and discussed below under the heading "Factors credentials and experience of the officers
supervision of the independent Senior and Conclusions and Summary of Independent and employees of Invesco Aim who provide
Officer. Over the course of each year, the Written Fee Evaluation" in evaluating the these services. The Board's review of the
Sub-Committees meet with portfolio fairness and reasonableness of the Fund's qualifications of Invesco Aim to provide
managers for their assigned funds and investment advisory agreement and these services included the Board's
other members of management and review sub-advisory agreements at the contract consideration of Invesco Aim's portfolio
with these individuals the performance, renewal meetings and at their meetings and product review process, various back
investment objective(s), policies, throughout the year as part of their office support functions provided by
strategies and limitations of these funds. ongoing oversight of the Fund. The Fund's Invesco Aim and its affiliates, and
investment advisory agreement and Invesco Aim's equity and fixed income
In addition to their meetings sub-advisory agreements were considered trading operations. The Board concluded
throughout the year, the Sub-Committees separately, although the Board also that the nature, extent and quality of the
meet at designated contract renewal considered the common interests of all of advisory services provided to the Fund by
meetings each year to conduct an in-depth the AIM Funds in their deliberations. The Invesco Aim were appropriate and that
review of the performance, fees and Board considered all of the information Invesco Aim currently is providing
expenses of provided to them and did not identify any satisfactory advisory services in
particular factor that was controlling. accordance with the terms of the Fund's
Each Trustee may have evalu- investment advisory agreement. In
addition, based on their ongoing meetings
throughout the year
17 AIM TAX-EXEMPT CASH FUND continued
with the Fund's portfolio manager or monitor more closely the performance of advisory fee structures of comparable
managers, the Board concluded that these the Fund. Although the independent written funds, it was reasonable to structure the
individuals are competent and able to evaluation of the Fund's Senior Officer advisory fee without breakpoints. Based on
continue to carry out their only considered Fund performance through this review, the Board concluded that it
responsibilities under the Fund's the most recent calendar year, the Board was not necessary to add breakpoints to
investment advisory agreement. also reviewed more recent Fund performance the Fund's advisory fee schedule. Based on
and this review did not change their this information, the Board concluded
In determining whether to continue the conclusions. that, absent breakpoints, the Fund's
Fund's investment advisory agreement, the contractual advisory fees remain constant
Board considered the prior relationship C. Advisory Fees and Fee Waivers and do not reflect economies of scale. The
between Invesco Aim and the Fund, as well Board also noted that the Fund shares
as the Board's knowledge of Invesco Aim's The Board compared the Fund's contractual directly in economies of scale through
operations, and concluded that it was advisory fee rate to the contractual lower fees charged by third party service
beneficial to maintain the current advisory fee rates of funds in the Fund's providers based on the combined size of
relationship, in part, because of such Lipper expense group that are not managed all of the AIM Funds and affiliates.
knowledge. The Board also considered the by Invesco Aim, at a common asset level
steps that Invesco Aim and its affiliates and as of the end of the past calendar E. Profitability and Financial
have taken over the last several years to year. The Board noted that the Fund's Resources of Invesco Aim
improve the quality and efficiency of the contractual advisory fee rate was below
services they provide to the AIM Funds in the median contractual advisory fee rate The Board reviewed information from
the areas of investment performance, of funds in its expense group. The Board Invesco Aim concerning the costs of the
product line diversification, also reviewed the methodology used by advisory and other services that Invesco
distribution, fund operations, shareholder Lipper in determining contractual fee Aim and its affiliates provide to the Fund
services and compliance. The Board rates. and the profitability of Invesco Aim and
concluded that the quality and efficiency its affiliates in providing these
of the services Invesco Aim and its The Board also compared the Fund's services. The Board also reviewed
affiliates provide to the AIM Funds in effective fee rate (the advisory fee after information concerning the financial
each of these areas have generally any advisory fee waivers and before any condition of Invesco Aim and its
improved, and support the Board's approval expense limitations/ waivers) to the affiliates. The Board also reviewed with
of the continuance of the Fund's advisory fee rates of other clients of Invesco Aim the methodology used to
investment advisory agreement. Invesco Aim and its affiliates with prepare the profitability information. The
investment strategies comparable to those Board considered the overall profitability
B. Fund Performance of the Fund, including one mutual fund of Invesco Aim, as well as the
advised by Invesco Aim. The Board noted profitability of Invesco Aim in connection
The Board compared the Fund's performance that the Fund's rate was above the rate with managing the Fund. The Board noted
during the past one, three and five for the other mutual fund. that Invesco Aim continues to operate at a
calendar years to the performance of funds net profit, although increased expenses in
in the Fund's performance group that are The Board noted that Invesco Aim has recent years have reduced the
not managed by Invesco Aim, and against not proposed any advisory fee waivers or profitability of Invesco Aim and its
the performance of all funds in the Lipper expense limitations for the Fund. The affiliates. The Board concluded that the
Tax-Exempt Money Market Funds Index. The Board concluded that it was not necessary Fund's fees were fair and reasonable, and
Board also reviewed the criteria used by at this time to discuss with Invesco Aim that the level of profits realized by
Invesco Aim to identify the funds in the whether to implement any such waivers or Invesco Aim and its affiliates from
Fund's performance group for inclusion in expense limitations. providing services to the Fund was not
the Lipper reports. The Board noted that excessive in light of the nature, quality
the Fund's performance was in the fifth After taking account of the Fund's and extent of the services provided. The
quintile of its performance group for the contractual advisory fee rate, as well as Board considered whether Invesco Aim is
one, three and five year periods (the the comparative advisory fee information financially sound and has the resources
first quintile being the best performing discussed above, the Board concluded that necessary to perform its obligations under
funds and the fifth quintile being the the Fund's advisory fees were fair and the Fund's investment advisory agreement,
worst performing funds). The Board noted reasonable. and concluded that Invesco Aim has the
that the Fund's performance was below the financial resources necessary to fulfill
performance of the Index for the one, D. Economies of Scale and Breakpoints these obligations.
three and five year periods. The Board
also considered the steps Invesco Aim has The Board considered the extent to which F. Independent Written Evaluation of
taken over the last several years to there are economies of scale in Invesco the Fund's Senior Officer
improve the quality and efficiency of the Aim's provision of advisory services to
services that Invesco Aim provides to the the Fund. The Board also considered The Board noted that, at their direction,
AIM Funds. The Board concluded that whether the Fund benefits from such the Senior Officer of the Fund, who is
Invesco Aim continues to be responsive to economies of scale through contractual independent of Invesco Aim and Invesco
the Board's focus on fund performance. breakpoints in the Fund's advisory fee Aim's affiliates, had prepared an
However, due to the Fund's schedule or through advisory fee waivers independent written evaluation to assist
underperformance, the Board also concluded or expense limitations. The Board noted the Board in determining the
that it would be appropriate for the Board that the Fund's contractual advisory fee reasonableness of the proposed management
to continue to schedule does not include any breakpoints. fees of the AIM Funds, including the Fund.
The Board considered whether it would be The Board noted that they had relied upon
appropriate to add advisory fee the Senior Officer's written evaluation
breakpoints for the Fund or whether, due
to the nature of the Fund and the
18 AIM TAX-EXEMPT CASH FUND continued
instead of a competitive bidding process. The Board noted that Invesco Aim will Fund.
In determining whether to continue the receive advisory fees from these
Fund's investment advisory agreement, the affiliated money market funds attributable B. Fund Performance
Board considered the Senior Officer's to such investments, although Invesco Aim
written evaluation. has contractually agreed to waive through The Board did not view Fund performance as
at least June 30, 2009, the advisory fees a relevant factor in considering whether
G. Collateral Benefits to Invesco Aim payable by the Fund in an amount equal to to approve the sub-advisory agreements for
and its Affiliates 100% of the net advisory fees Invesco Aim the Fund, as no Affiliated Sub-Adviser
receives from the affiliated money market served as a sub-adviser to the Fund prior
The Board considered various other funds with respect to the Fund's to May 1, 2008.
benefits received by Invesco Aim and its investment of uninvested cash, but not
affiliates resulting from Invesco Aim's cash collateral. The Board considered the C. Sub-Advisory Fees
relationship with the Fund, including the contractual nature of this fee waiver and
fees received by Invesco Aim and its noted that it remains in effect until at The Board considered the services to be
affiliates for their provision of least June 30, 2009. The Board concluded provided by the Affiliated Sub-Advisers
administrative, transfer agency and that the Fund's investment of uninvested pursuant to the sub-advisory agreements
distribution services to the Fund. The cash and cash collateral from any and the services to be provided by Invesco
Board considered the performance of securities lending arrangements in the Aim pursuant to the Fund's investment
Invesco Aim and its affiliates in affiliated money market funds is in the advisory agreement, as well as the
providing these services and the best interests of the Fund and its allocation of fees between Invesco Aim and
organizational structure employed by shareholders. the Affiliated Sub-Advisers pursuant to
Invesco Aim and its affiliates to provide the sub-advisory agreements. The Board
these services. The Board also considered II. Sub-Advisory Agreements noted that the sub-advisory fees have no
that these services are provided to the direct effect on the Fund or its
Fund pursuant to written contracts which A. Nature, Extent and Quality of shareholders, as they are paid by Invesco
are reviewed and approved on an annual Services Provided by Affiliated Aim to the Affiliated Sub-Advisers, and
basis by the Board. The Board concluded Sub-Advisors that Invesco Aim and the Affiliated
that Invesco Aim and its affiliates were Sub-Advisers are affiliates. After taking
providing these services in a satisfactory The Board reviewed the services to be account of the Fund's contractual
manner and in accordance with the terms of provided by Invesco Trimark Ltd., Invesco sub-advisory fee rate, as well as other
their contracts, and were qualified to Asset Management Deutschland, GmbH, relevant factors, the Board concluded that
continue to provide these services to the Invesco Asset Management Limited, Invesco the Fund's sub-advisory fees were fair and
Fund. Asset Management (Japan) Limited, Invesco reasonable.
Australia Limited, Invesco Global Asset
The Board considered the benefits Management (N.A.), Inc., Invesco Hong Kong D. Financial Resources of the
realized by Invesco Aim as a result of Limited, Invesco Institutional (N.A.), Affiliated Sub-Advisers
portfolio brokerage transactions executed Inc. and Invesco Senior Secured
through "soft dollar" arrangements. Under Management, Inc. (collectively, the The Board considered whether each
these arrangements, portfolio brokerage "Affiliated Sub-Advisers") under the Affiliated Sub-Adviser is financially
commissions paid by the Fund and/or other sub-advisory agreements and the sound and has the resources necessary to
funds advised by Invesco Aim are used to credentials and experience of the officers perform its obligations under its
pay for research and execution services. and employees of the Affiliated respective sub-advisory agreement, and
The Board noted that soft dollar Sub-Advisers who will provide these concluded that each Affiliated Sub-Adviser
arrangements shift the payment obligation services. The Board concluded that the has the financial resources necessary to
for the research and execution services nature, extent and quality of the services fulfill these obligations.
from Invesco Aim to the funds and to be provided by the Affiliated
therefore may reduce Invesco Aim's Sub-Advisers were appropriate. The Board
expenses. The Board also noted that noted that the Affiliated Sub-Advisers,
research obtained through soft dollar which have offices and personnel that are
arrangements may be used by Invesco Aim in geographically dispersed in financial
making investment decisions for the Fund centers around the world, have been formed
and may therefore benefit Fund in part for the purpose of researching and
shareholders. The Board concluded that compiling information and making
Invesco Aim's soft dollar arrangements recommendations on the markets and
were appropriate. The Board also concluded economies of various countries and
that, based on their review and securities of companies located in such
representations made by Invesco Aim, these countries or on various types of
arrangements were consistent with investments and investment techniques, and
regulatory requirements. providing investment advisory services.
The Board concluded that the sub-advisory
The Board considered the fact that the agreements will benefit the Fund and its
Fund's uninvested cash and cash collateral shareholders by permitting Invesco Aim to
from any securities lending arrangements utilize the additional resources and
may be invested in money market funds talent of the Affiliated Sub-Advisers in
advised by Invesco Aim pursuant to managing the
procedures approved by the Board.
19 AIM TAX-EXEMPT CASH FUND
[GO PAPERLESS
GRAPHIC]
====================================================================================================================================
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about eeees:
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- - ECONOMICAL. Help reduce your fund's printing and delivery - EASY. Download, save and print files using your home
expenses and put more capital back in your fund's returns. computer with a few clicks of your mouse.
This service is provided by Invesco Aim Investment Services, Inc.
====================================================================================================================================
FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the 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 email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811-07890 and 033-66242.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website,
invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website,
sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008, is
available at our website. Go to invescoaim.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 website, sec.gov.
If used after January 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly
Performance Review for the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service mark of Invesco
Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for
the products and services represented by Invesco Aim; they each provide investment advisory services to [INVESCO AIM LOGO]
individual and institutional clients and do not sell securities. Invesco Institutional (N.A.), Inc., Invesco -- SERVICE MARK --
Senior Secured Management, Inc., Invesco Global Asset Management (N.A.), Inc., Invesco Trimark Ltd., Invesco
Asset Management (Japan) Ltd., Invesco Hong Kong Ltd., Invesco Australia Limited, Invesco Asset Management
Limited and Invesco Asset Management Deutschland GmbH are affiliated investment advisors that serve as
subadvisors to many of the products and services represented by Invesco Aim. Invesco Aim Distributors, Inc. is
the distributor for the retail mutual funds, exchange-traded funds and U.S. institutional money market funds
represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd.
invescoaim.com TEC-SAR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO]
- -- SERVICE MARK --
AIM TAX-FREE INTERMEDIATE FUND
Semiannual Report to Shareholders o September 30, 2008
[MOUNTAIN GRAPHIC]
2 Letter to Shareholders
3 Fund Performance
4 Schedule of Investments
12 Financial Statements
14 Notes to Financial Statements
18 Financial Highlights
20 Fund Expenses
21 Approval of Investment Advisory Agreement
For the most current month-end Fund performance and commentary, please visit
invescoaim.com.
Unless otherwise noted, all data provided by Invesco Aim.
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
Dear Fellow Shareholders:
As I write this letter, turbulent financial markets are causing considerable investor anxiety, reminding us
[CROCKETT again that markets are cyclical and the correction of excess is often painful, at least in the short term.
PHOTO] Your Board of Trustees believes in the wisdom of a long-term perspective and consistent investment
discipline. We continue to put your interests first in the effort to improve investment performance,
Bruce Crockett contain shareholder costs and uphold the highest ethical standards.
We remain enthusiastic about the global reach and investment expertise that Invesco, a leading
independent global investment management company, brings to the management of AIM Funds as the parent
company of the advisors. The diverse investment strategies deployed throughout the worldwide network of
Invesco investment centers has helped strengthen the management of many AIM Funds. The rebranding of the
Funds' management company as Invesco Aim was followed by the launch of an upgraded, investor-friendly
website (invescoaim.com); a new mountain logo using a Himalayan peak to symbolize stability, endurance, strength and longevity; and
a new ad campaign. Emphasizing Invesco Aim's focus and investment quality, the ads will appear in financial publications such as
Barron's and Investment News through the end of 2008.
At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim
Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click
on "Investment Advisory Agreement Renewals."
We have recently completed another active proxy voting season during which we acted on your behalf to double the number of votes
in favor of separating the roles of chairman and CEO at the companies whose shares your Funds hold. We also continued to support the
movement for shareholders to have a bigger role in approving executive compensation, initiatives known as "say on pay." Like
virtually all other mutual fund complexes, AIM Funds abstain from voting on social issues as a matter of policy, and I would be
interested to hear your thoughts on this policy.
As always, you are welcome to email your questions or comments to me at bruce@brucecrockett.com. The dialogue that has been
established in this way has been instructive for your Board, and we want it to continue. Although the production schedule for Fund
annual reports and prospectuses allows me to write these letters of general report and response just twice a year, please be assured
that your comments are received, welcomed and heard in the interim.
We look forward to hearing from you and to representing you.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
2 AIM TAX-FREE INTERMEDIATE FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
=======================================================================================
PERFORMANCE SUMMARY
FUND VS. INDEXES
Cumulative total returns, 3/31/08 to 9/30/08, at net asset value (NAV). Performance
shown does not include applicable contingent deferred sales charges (CDSC) or front-end
sales charges, which would have reduced performance.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
Class A Shares -0.60%
Class A3 Shares -0.73
Barclays Capital Municipal Bond Index#* (Broad Market Index) -2.59
Merrill Lynch 3-7 Year Municipal Index# (Style-Specific Index) -0.24
Lipper Intermediate Municipal Debt Funds Index# (Peer Group Index) -2.11
# Lipper Inc.
* Effective 11/3/08, the Lehman Brothers indexes were rebranded as Barclays Capital
indexes
The BARCLAYS CAPITAL MUNICIPAL BOND INDEX covers municipal bonds with a minimum credit
rating of Baa, an outstanding par value of at least $5 million and issued as a part of
a transaction of at least $50 million USD. The bonds must have been issued after
December 31, 1990, and have a remaining maturity of at least one year.
The MERRILL LYNCH 3-7 YEAR MUNICIPAL INDEX is a domestic bond index that holds
municipal bonds with maturities that range between three and seven years.
The LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS INDEX is an equally weighted
representation of the largest funds in the Lipper Intermediate Municipal Debt Funds
category. These funds invest in municipal debt issues with dollar-weighted average
maturities of five to ten years.
The Fund is not managed to track the performance of any particular index, including
the indexes defined here, and consequently, the performance of the Fund may deviate
significantly from the performance of the indexes.
A direct investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends, and they do not reflect sales charges.
Performance of an index of funds reflects fund expenses; performance of a market index
does not.
=======================================================================================
========================================== GUARANTEE COMPARABLE FUTURE RESULTS; END SALES CHARGE OR CDSC; THEREFORE,
AVERAGE ANNUAL TOTAL RETURNS CURRENT PERFORMANCE MAY BE LOWER OR PERFORMANCE QUOTED IS AT NET ASSET
As of 9/30/08, including maximum HIGHER. PLEASE VISIT INVESCOAIM.COM FOR VALUE.
applicable sales THE MOST RECENT MONTH-END PERFORMANCE.
PERFORMANCE FIGURES REFLECT REINVESTED THE PERFORMANCE OF THE FUND'S SHARE
charges DISTRIBUTIONS, CHANGES IN NET ASSET VALUE CLASSES WILL DIFFER PRIMARILY DUE TO
AND THE EFFECT OF THE MAXIMUM APPLICABLE DIFFERENT SALES CHARGE STRUCTURES AND
CLASS A SHARES SALES CHARGE UNLESS OTHERWISE STATED. CLASS EXPENSES.
Inception (5/11/87) 5.13% PERFORMANCE FIGURES DO NOT REFLECT
10 Years 3.60 DEDUCTION OF TAXES A SHAREHOLDER WOULD PAY HAD THE ADVISOR NOT WAIVED FEES AND/
5 Years 1.92 ON FUND DISTRIBUTIONS OR SALE OF FUND OR REIMBURSED EXPENSES ON CLASS A
1 Year 1.00 SHARES. INVESTMENT RETURN AND PRINCIPAL SHARES IN THE PAST, PERFORMANCE WOULD
VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE HAVE BEEN LOWER.
CLASS A3 SHARES A GAIN OR LOSS WHEN YOU SELL SHARES.
10 Years 3.36%
5 Years 1.82 THE TOTAL ANNUAL FUND OPERATING EXPENSE
1 Year 1.77 RATIO SET FORTH IN THE MOST RECENT FUND
========================================== PROSPECTUS AS OF THE DATE OF THIS REPORT
FOR CLASS A AND CLASS A3 SHARES WAS 0.48%
AND 0.73%, RESPECTIVELY. THE EXPENSE
THE INCEPTION DATE OF CLASS A3 SHARES IS RATIOS PRESENTED ABOVE MAY VARY FROM THE
OCTOBER 31, 2002. RETURNS SINCE THAT DATE EXPENSE RATIOS PRESENTED IN OTHER SECTIONS
ARE HISTORICAL RETURNS. ALL OTHER RETURNS OF THIS REPORT THAT ARE BASED ON EXPENSES
ARE THE BLENDED RETURNS OF THE HISTORICAL INCURRED DURING THE PERIOD COVERED BY THIS
PERFORMANCE OF THE FUND'S CLASS A3 SHARES REPORT.
SINCE THEIR INCEPTION AND THE RESTATED
HISTORICAL PERFORMANCE OF THE FUND'S CLASS CLASS A SHARE PERFORMANCE REFLECTS THE
A SHARES (FOR PERIODS PRIOR TO THE MAXIMUM 1.00% SALES CHARGE. CLASS A3
INCEPTION OF CLASS A3 SHARES) AT NET ASSET SHARES DO NOT HAVE A FRONT-
VALUE, ADJUSTED TO REFLECT THE RULE 12B-1
FEES APPLICABLE TO CLASS A3 SHARES. CLASS
A SHARES INCEPTION DATE IS MAY 11, 1987.
THE PERFORMANCE DATA QUOTED
REPRESENTPAST PERFORMANCE AND CANNOT
3 AIM TAX-FREE INTERMEDIATE FUND
PORTFOLIO COMPOSITION
By credit quality, based on Net Assets
as of September 30, 2008
<Table>
- -------------------------------------------------------------------------
AAA 44.1%
- -------------------------------------------------------------------------
AA 25.4
- -------------------------------------------------------------------------
A 21.8
- -------------------------------------------------------------------------
BBB 8.7
_________________________________________________________________________
=========================================================================
</Table>
SCHEDULE OF INVESTMENTS
September 30, 2008
(Unaudited)
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-95.04%
ALABAMA-1.69%
Birmingham (City of); Series 2001 B, Ref.
Unlimited Tax GO Wts. (INS-Financial Security
Assurance Inc.)(a)(b) 5.25% 07/01/10 $1,950 $ 2,038,862
- --------------------------------------------------------------------------------------------------
Jefferson (County of); Series 2000, School RB
Wts. (INS-Financial Security Assurance
Inc.)(a)(b) 5.05% 02/15/09 1,000 998,070
- --------------------------------------------------------------------------------------------------
Mobile (City of) Industrial Development Board
(Alabama Power Co.); Series 2007 C, Pollution
Control IDR(b)(c) 5.00% 03/19/15 2,100 2,087,379
==================================================================================================
5,124,311
==================================================================================================
ARIZONA-3.40%
Nanotechnology Research LLC (Arizona State
University Project); Series 2004 A, VRD RB
(INS-MBIA Insurance Corp.)(a)(d)(e) 10.00% 03/01/34 6,000 6,000,000
- --------------------------------------------------------------------------------------------------
Phoenix (City of) Civic Improvement Corp.;
Series 2001, Ref. Wastewater System Jr. Lien
RB (INS-Financial Guaranty Insurance
Co.)(a)(b) 5.25% 07/01/11 3,000 3,173,970
- --------------------------------------------------------------------------------------------------
Pima (County of) Unified School District No. 1
(Tucson School Improvement Project); Series
2004 D, Unlimited Tax GO (INS-Financial
Security Assurance Inc.)(a)(b) 4.25% 07/01/22 500 446,535
- --------------------------------------------------------------------------------------------------
Yuma (City of) Municipal Property Corp.; Series
2007 D, Municipal Facilities RB (INS-XL
Capital Assurance Inc.)(a)(b) 5.00% 07/01/24 750 699,548
==================================================================================================
10,320,053
==================================================================================================
ARKANSAS-0.92%
Bentonville (City of); Series 2007, Sales & Use
Tax RB (INS-Ambac Assurance Corp.)(a)(b) 4.38% 11/01/25 1,000 886,050
- --------------------------------------------------------------------------------------------------
Independence (County of) (Entergy Mississippi,
Inc.); Series 1999, Pollution Control RB
(INS-Ambac Assurance Corp.)(a)(b) 4.90% 07/01/22 1,000 886,170
- --------------------------------------------------------------------------------------------------
Little Rock (City of) School District; Series
2001 C, Limited Tax GO (INS-Financial
Security Assurance Inc.)(a)(b) 5.00% 02/01/10 1,000 1,025,140
==================================================================================================
2,797,360
==================================================================================================
CALIFORNIA-3.48%
California Statewide Communities Development
Authority (Enloe Medical Center);
Series 2008 A, RB (INS-Cal-Mortgage)(a)(b) 5.00% 08/15/17 385 388,546
- --------------------------------------------------------------------------------------------------
Series 2008 A, RB (INS-Cal-Mortgage)(a)(b) 5.25% 08/15/19 325 324,977
- --------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority (Henry Mayo Newhall Memorial)
Series 2007 B, RB (INS-Ambac Assurance
Corp.)(a)(b) 5.05% 10/01/28 1,500 1,317,270
- --------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority; Series 2006 A, Ref. Pollution
Control RB (INS-XL Capital Assurance
Inc.)(a)(b)(c) 4.10% 04/01/13 1,000 966,960
- --------------------------------------------------------------------------------------------------
Los Angeles (City of) Department of Airports
(Los Angeles International Airport); Series
2008 C, RB(b) 5.00% 05/15/28 1,000 910,450
- --------------------------------------------------------------------------------------------------
Madera (City of) Irrigation District; Series
2008, Ref. RB(b) 5.00% 01/01/23 1,250 1,125,700
- --------------------------------------------------------------------------------------------------
Monrovia (City of) Financing Authority
(Library); Series 2007, Lease RB (INS-Ambac
Assurance Corp.)(a)(b) 4.63% 12/01/32 1,000 828,690
- --------------------------------------------------------------------------------------------------
Rancho Mirage (City of) Joint Powers Financing
Authority (Eisenhower Medical Center); Series
2007 A, RB(b) 5.00% 07/01/21 1,000 952,300
- --------------------------------------------------------------------------------------------------
Redlands (City of) Unified School District;
Series 2008, Unlimited Tax GO (INS-Financial
Security Assurance Inc.)(a)(b) 5.00% 07/01/25 1,000 952,520
- --------------------------------------------------------------------------------------------------
Santa Ana (City of) (Local Street Improvement
Project); Series 2007, Gas Tax Revenue COP
(INS-MBIA Insurance Corp.)(a)(b) 4.38% 01/01/24 1,000 835,100
- --------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
4 AIM TAX-FREE INTERMEDIATE FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
CALIFORNIA-(CONTINUED)
West Contra Costa Unified School District;
Series 2005 B, Unlimited Tax GO(b) 6.00% 08/01/27 $1,000 $ 971,380
- --------------------------------------------------------------------------------------------------
West Sacramento (City of) Area Flood Control
Agency; Series 2008, Special Assessment RB(b) 5.13% 09/01/23 1,075 981,249
==================================================================================================
10,555,142
==================================================================================================
COLORADO-2.03%
Aurora (City of) (The Children's Hospital);
Series 2004 D, RB (INS-Financial Security
Assurance Inc.)(a)(b) 5.00% 12/01/20 1,000 996,330
- --------------------------------------------------------------------------------------------------
Northwest Parkway Public Highway Authority; Sr.
Series 2001 A, RB(b)(f) 5.00% 06/15/11 1,000 1,050,660
- --------------------------------------------------------------------------------------------------
Public Authority for Colorado Energy;
Series 2008, Natural Gas RB(b) 6.13% 11/15/23 1,000 886,760
- --------------------------------------------------------------------------------------------------
Series 2008, Natural Gas RB(b) 6.25% 11/15/28 2,000 1,735,220
- --------------------------------------------------------------------------------------------------
University of Colorado Hospital Authority;
Series 1997 A, Ref. RB (INS-Ambac Assurance
Corp.)(a)(b) 5.25% 11/15/22 1,470 1,475,086
==================================================================================================
6,144,056
==================================================================================================
CONNECTICUT-0.63%
Connecticut (State of) Resources Recovery
Authority (Bridgeport Resco Co. L.P.); Series
1999, Ref. RB (INS-MBIA Insurance
Corp.)(a)(b) 5.13% 01/01/09 1,000 1,003,530
- --------------------------------------------------------------------------------------------------
New Haven (City of) Solid Waste Authority;
Series 2008, RB(b) 5.13% 06/01/23 1,000 920,370
==================================================================================================
1,923,900
==================================================================================================
DISTRICT OF COLUMBIA-1.35%
District of Columbia (Georgetown University);
Series 2001 C, RB(b)(c) 5.25% 04/01/23 2,000 1,783,540
- --------------------------------------------------------------------------------------------------
District of Columbia;
Series 1993 B-1, Ref. Unlimited Tax GO (INS-
Ambac Assurance Corp.)(a)(b) 5.50% 06/01/09 1,250 1,274,550
- --------------------------------------------------------------------------------------------------
Series 1999 B, Ref. Unlimited Tax GO
(INS-Financial Security Assurance Inc.)(a)(b) 5.50% 06/01/10 1,000 1,046,310
==================================================================================================
4,104,400
==================================================================================================
FLORIDA-1.80%
Citizens Property Insurance Corp.; Series 2008
A-1, Sr. Sec. High Risk RB(b) 5.00% 06/01/11 1,000 1,015,860
- --------------------------------------------------------------------------------------------------
Florida (State of) Board of Education; Series
2000 B, Lottery RB (INS-Financial Guaranty
Insurance Co.)(a)(b) 5.75% 07/01/10 1,000 1,043,740
- --------------------------------------------------------------------------------------------------
Florida Hurricane Catastrophe Fund; Series 2008
A, RB(b) 5.00% 07/01/13 1,000 1,013,830
- --------------------------------------------------------------------------------------------------
Hillsborough (County of) Industrial Development
Authority (Tampa Electric); Series 2007 B,
Pollution Control IDR(b)(c) 5.15% 09/01/13 500 484,125
- --------------------------------------------------------------------------------------------------
Miami-Dade (County of) Health Facilities
Authority (The Children's Hospital); Series
1994, RB (INS-MBIA Insurance Corp.)(a)(b)(c) 4.55% 08/01/13 250 244,898
- --------------------------------------------------------------------------------------------------
Port St. Lucie (City of); Series 2008, Ref.
Master Lease/Municipal Complex COP
(INS-Assured Guaranty Corp.)(a)(b) 6.25% 09/01/27 500 503,635
- --------------------------------------------------------------------------------------------------
Village Center Community Development District;
Series 1998 A, Ref. Recreational RB (INS-MBIA
Insurance Corp.)(a)(b) 5.50% 11/01/10 1,105 1,155,211
==================================================================================================
5,461,299
==================================================================================================
GEORGIA-4.21%
Burke (County of) Development Authority (Georgia
Power Co.); Series 1995, Pollution Control
RB(b)(c) 3.75% 10/01/12 4,000 3,946,480
- --------------------------------------------------------------------------------------------------
Dalton (City of); Series 1999, Combined
Utilities RB (INS-Financial Security
Assurance Inc.)(a)(b) 5.75% 01/01/10 1,015 1,052,717
- --------------------------------------------------------------------------------------------------
Georgia (State of);
Series 1992 B, Unlimited Tax GO(b) 6.30% 03/01/09 1,425 1,448,612
- --------------------------------------------------------------------------------------------------
Series 1992 B, Unlimited Tax GO(b) 6.30% 03/01/10 1,000 1,053,480
- --------------------------------------------------------------------------------------------------
Glynn-Brunswick Memorial Hospital Authority;
Series 2008 A, RAC(b) 5.00% 08/01/20 1,000 930,470
- --------------------------------------------------------------------------------------------------
Series 2008 A, RAC(b) 5.25% 08/01/23 1,000 916,380
- --------------------------------------------------------------------------------------------------
South Regional Joint Development Authority
(Valdosta State University);
Series 2007, Parking & Health RB (INS-XL
Capital Assurance Inc.)(a)(b) 5.00% 08/01/20 1,385 1,382,452
- --------------------------------------------------------------------------------------------------
Series 2007, Parking & Health RB (INS-XL
Capital Assurance Inc.)(a)(b) 5.00% 08/01/21 1,490 1,460,886
- --------------------------------------------------------------------------------------------------
Series 2007, Parking & Health RB (INS-XL
Capital Assurance Inc.)(a)(b) 5.00% 08/01/22 605 582,990
==================================================================================================
12,774,467
==================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
5 AIM TAX-FREE INTERMEDIATE FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
HAWAII-0.34%
Hawaii (State of); Series 1993 CA, Unlimited Tax
GO (INS-MBIA Insurance Corp.)(a)(b) 5.75% 01/01/10 $1,000 $ 1,037,660
==================================================================================================
IDAHO-1.25%
Caldwell (City of) Urban Renewal Agency; Series
2008, Tax Allocation RB(b) 4.00% 09/01/19 1,205 1,083,837
- --------------------------------------------------------------------------------------------------
Idaho (State of) Housing & Finance Association;
Series 2008 D, Class III, Single Family
Mortgage RB (INS-Financial Security Assurance
Inc.)(b) 5.35% 01/01/29 1,000 959,460
- --------------------------------------------------------------------------------------------------
University of Idaho; Series 2007 B, RB
(INS-Financial Security Assurance
Inc.)(a)(b)(c) 4.50% 04/01/18 1,750 1,734,005
==================================================================================================
3,777,302
==================================================================================================
ILLINOIS-5.45%
Chicago (City of) (Central Loop Redevelopment);
Sub. Series 2000 A, Tax Increment Allocation
RB (INS-ACA Financial Guaranty Corp.)(a)(b) 6.50% 12/01/08 8,000 8,025,920
- --------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Children's Memorial Hospital); Series 2008
A, RB (INS-Assured Guaranty Ltd.)(a)(b) 5.25% 08/15/33 1,000 909,440
- --------------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Resurrection Health Care); Series 1999 A, RB
(INS-Financial Security Assurance Inc.)(a)(b) 5.00% 05/15/17 2,000 2,011,020
- --------------------------------------------------------------------------------------------------
Illinois (State of); First Series 2001, Ref.
Unlimited Tax GO (INS-Financial Security
Assurance Inc.)(a)(b) 5.25% 10/01/11 1,790 1,899,244
- --------------------------------------------------------------------------------------------------
Kendall-Grundy, Kane & Will (Counties of) High
School District No. 18; Series 2007 A, Ref.
Unlimited Tax GO (INS-Financial Guaranty
Insurance Co.)(a)(b) 4.38% 10/01/21 1,000 913,640
- --------------------------------------------------------------------------------------------------
Madison & Saint Clair (Counties of) School
District No. 10 (Collinsville School
Building); Series 2001, Unlimited Tax GO
(INS-Financial Guaranty Insurance Co.)(a)(b) 5.00% 02/01/11 1,150 1,187,927
- --------------------------------------------------------------------------------------------------
McHenry (County of) Community School District
No. 47 (Crystal Lake); Series 1999, Unlimited
Tax GO (INS-Financial Security Assurance
Inc.)(a)(b) 5.13% 02/01/10 610 614,898
- --------------------------------------------------------------------------------------------------
Northern Municipal Power Agency (Prairie St.
Power Project); Series 2007 A, RB (INS-MBIA
Insurance Corp.)(a)(b) 5.00% 01/01/19 1,000 983,410
==================================================================================================
16,545,499
==================================================================================================
INDIANA-1.24%
Portage (City of) Redevelopment District; Series
2008, Ref. Tax Increment Allocation RB
(INS-CIFG Guaranty, Ltd.)(a)(b) 5.00% 01/15/22 2,470 2,283,614
- --------------------------------------------------------------------------------------------------
Zionsville (City of) Community Schools Building
Corp.; Series 2002, First Mortgage RB(b)(f) 5.00% 07/15/11 1,420 1,478,887
==================================================================================================
3,762,501
==================================================================================================
KANSAS-1.23%
Johnson (County of) Water District No. 1; Series
2001, Water RB(b) 5.00% 06/01/11 1,770 1,866,801
- --------------------------------------------------------------------------------------------------
Wyandotte (County of), School District No. 500;
Series 2001, Unlimited Tax GO (INS-Financial
Security Assurance Inc.)(a)(b) 5.50% 09/01/11 1,750 1,870,540
==================================================================================================
3,737,341
==================================================================================================
KENTUCKY-1.27%
Christian (County of) (Jennie Stuart Medical
Center); Series 2006, RB (INS-Assured
Guaranty Corp.)(a)(b) 5.25% 02/01/28 1,500 1,381,590
- --------------------------------------------------------------------------------------------------
Kentucky (State of) Economic Development Finance
Authority (Catholic Health Initiatives);
Series 2004 D, RB(b)(c) 3.50% 11/10/10 1,000 982,600
- --------------------------------------------------------------------------------------------------
Kentucky (State of) Economic Development Finance
Authority (Louisville Arena Project); Sub.
Series 2008 A-1, RB (INS-Assured Guaranty
Corp.)(a)(b) 5.75% 12/01/28 500 478,690
- --------------------------------------------------------------------------------------------------
Louisville & Jefferson (County of) Metropolitan
Government (Jewish Hospital & St. Mary's
Healthcare); Series 2008, RB(b) 6.00% 02/01/22 1,000 995,370
==================================================================================================
3,838,250
==================================================================================================
LOUISIANA-1.97%
Louisiana (State of) Energy & Power Authority;
Series 2000, Ref. Power Project RB
(INS-Financial Security Assurance Inc.)(a)(b) 5.75% 01/01/11 2,500 2,641,875
- --------------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities Authority
(Baton Rouge General Medical Center); Series
2004, RB (INS-MBIA Insurance Corp.)(b) 5.00% 07/01/14 1,000 1,028,050
- --------------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities Authority
(Black & Gold Facilities Project);
Series 2007 A, RB (INS-CIFG Guaranty,
Ltd.)(a)(b) 5.00% 07/01/22 500 440,580
- --------------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities Authority
(Hurricane Recovery Program); Series 2007, RB
(INS-Ambac Assurance Corp.)(a)(b) 5.00% 06/01/18 1,000 1,016,810
- --------------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities Authority
(Nineteenth Judicial District Court); Series
2007, RB (INS-Financial Guaranty Insurance
Co.)(a)(b) 4.50% 06/01/21 1,000 859,940
==================================================================================================
5,987,255
==================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
6 AIM TAX-FREE INTERMEDIATE FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
MARYLAND-1.95%
Maryland (State of) Health & Higher Educational
Facilities Authority (Lifebridge Health);
Series 2008, RB(b) 5.00% 07/01/18 $1,000 $ 1,001,330
- --------------------------------------------------------------------------------------------------
Series 2008, RB (INS-Assured Guaranty
Corp.)(a)(b) 5.00% 07/01/20 1,000 1,008,380
- --------------------------------------------------------------------------------------------------
Series 2008, RB (INS-Assured Guaranty
Corp.)(a)(b) 5.00% 07/01/22 1,005 986,317
- --------------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher Educational
Facilities Authority (The Johns Hopkins
Hospital);
Series 2008, Health System RB(b)(c) 5.00% 05/15/13 1,000 1,023,100
- --------------------------------------------------------------------------------------------------
Series 2008, Health System RB(b)(c) 5.00% 05/15/15 500 507,285
- --------------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher Educational
Facilities Authority (University of Maryland
Medical System);
Series 2008 F, Health System RB(b) 5.00% 07/01/17 500 498,210
- --------------------------------------------------------------------------------------------------
Series 2008 F, Health System RB(b) 4.50% 07/01/20 500 455,020
- --------------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher Educational
Facilities Authority (Washington County
Hospital); Series 2008, RB(b) 5.00% 01/01/20 500 440,770
==================================================================================================
5,920,412
==================================================================================================
MASSACHUSETTS-2.54%
Massachusetts (State of);
Series 2000 A, Construction Loan Limited Tax
GO(b) 5.75% 02/01/09 5,000 5,050,750
- --------------------------------------------------------------------------------------------------
Series 2001 D, Construction Loan Limited Tax
GO(b)(c)(f) 5.25% 11/01/11 2,500 2,658,075
==================================================================================================
7,708,825
==================================================================================================
MICHIGAN-2.08%
Hartland (City of) Consolidated School District;
Series 2001, Ref. Unlimited Tax GO
(CEP-Michigan School Bond Loan Fund)(b) 5.50% 05/01/11 1,000 1,062,570
- --------------------------------------------------------------------------------------------------
Kent (County of) (Kent County International
Airport); Series 1999, Ref. Airport
Facilities RB(b) 5.00% 01/01/25 500 480,075
- --------------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance Authority
(McLaren Health Care); Series 2008, RB(b) 5.25% 05/15/18 1,100 1,075,591
- --------------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Detroit
Edison Co.); Series 1995 CC, Ref. Limited
Obligation RB (INS-Ambac Assurance
Corp.)(a)(b)(c) 4.85% 09/01/11 1,800 1,867,158
- --------------------------------------------------------------------------------------------------
Taylor (City of); Series 2001, COP (INS-Ambac
Assurance Corp.)(a)(b) 5.00% 02/01/11 495 516,849
- --------------------------------------------------------------------------------------------------
Troy (City of) Downtown Development Authority;
Series 2001, Ref. & Development Tax
Allocation RB (INS-MBIA Insurance
Corp.)(a)(b) 5.00% 11/01/10 1,265 1,321,027
==================================================================================================
6,323,270
==================================================================================================
MINNESOTA-2.19%
Minneapolis (City of) Fairview Health Services;
Series 2005 B, Ref. VRD RB (INS-Ambac
Assurance Corp.)(a)(d)(e) 10.00% 11/15/29 4,000 4,000,000
- --------------------------------------------------------------------------------------------------
Western Minnesota Municipal Power Agency;
Series 2001 A, Ref. RB (INS-Ambac Assurance
Corp.)(a)(b) 5.50% 01/01/10 1,245 1,280,209
- --------------------------------------------------------------------------------------------------
Series 2001 A, Ref. RB (INS-Ambac Assurance
Corp.)(a)(b) 5.50% 01/01/11 1,300 1,362,751
==================================================================================================
6,642,960
==================================================================================================
MISSISSIPPI-0.96%
Mississippi (State of) Development Bank (Lowndes
County Industrial Development Project);
Series 2007, Special Obligation IDR
(INS-Financial Security Assurance Inc.)(a)(b) 5.00% 07/01/19 1,160 1,182,133
- --------------------------------------------------------------------------------------------------
Rankin (County of) School District; Series 2001,
Unlimited Tax GO (INS-Financial Security
Assurance Inc.)(a)(b) 5.00% 10/01/11 1,625 1,717,414
==================================================================================================
2,899,547
==================================================================================================
MISSOURI-1.56%
Cass (County of); Series 2007, Hospital RB(b) 5.00% 05/01/17 500 467,145
- --------------------------------------------------------------------------------------------------
Kansas City (City of); Series 2008 A, Ref.
General Improvement Airport RB(b) 4.00% 09/01/14 1,500 1,459,620
- --------------------------------------------------------------------------------------------------
Ladue School District; Series 2007, Ref. &
Improvement Unlimited Tax GO(b) 5.00% 03/01/25 1,250 1,223,925
- --------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
7 AIM TAX-FREE INTERMEDIATE FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
Missouri (State of) Health & Educational
Facilities Authority (Webster University);
Series 2001, Educational Facilities RB
(INS-MBIA Insurance Corp.)(a)(b) 5.00% 04/01/11 $1,075 $ 1,125,772
- --------------------------------------------------------------------------------------------------
Missouri (State of) Housing Development
Commission; Series 2008 B2, Single Family
Mortgage RB (CEP-GNMA/FNMA/FHLMC)(b) 5.10% 03/01/28 500 458,020
==================================================================================================
4,734,482
==================================================================================================
MONTANA-0.62%
Montana (State of) Facility Finance Authority
(Glendive Medical Center);
Series 2008 A, Master Loan Program RB(b) 4.63% 07/01/18 1,010 995,527
- --------------------------------------------------------------------------------------------------
Series 2008 A, Master Loan Program RB(b) 4.75% 07/01/28 1,000 878,870
==================================================================================================
1,874,397
==================================================================================================
NEBRASKA-0.29%
Nebraska (State of) Elementary & Secondary
School Finance Authority (Boys Town Project);
Series 2008, Educational Facilities RB(b) 4.75% 09/01/28 1,000 879,460
==================================================================================================
NEVADA-0.94%
Nevada (State of); Series 1999 A, Capital
Improvement & Cultural Affairs Limited Tax
GO(b) 5.00% 02/01/10 1,500 1,526,115
- --------------------------------------------------------------------------------------------------
Reno (City of) (Washoe Medical Center); Series
2005 A, RB (INS-Financial Security Assurance
Inc.)(a)(b) 5.25% 06/01/17 1,300 1,339,117
==================================================================================================
2,865,232
==================================================================================================
NEW HAMPSHIRE-0.23%
New Hampshire (State of) Housing Financing
Authority;
Series 2008 E, Single Family Mortgage RB(b) 5.05% 07/01/23 500 469,815
- --------------------------------------------------------------------------------------------------
Series 2008 E, Single Family Mortgage RB(b) 5.30% 07/01/28 250 231,980
==================================================================================================
701,795
==================================================================================================
NEW JERSEY-2.69%
New Jersey (State of) Transportation Trust Fund
Authority;
Series 1999 A, Transportation System RB(b)(f) 5.50% 06/15/10 7,060 7,407,705
- --------------------------------------------------------------------------------------------------
Series 1999 A, Transportation System RB(b) 5.50% 06/15/10 720 750,924
==================================================================================================
8,158,629
==================================================================================================
NEW YORK-0.42%
New York (State of) Dormitory Authority (Frances
Schervier Obligated Group); Series 1997, RB
(INS-Financial Security Assurance Inc.)(a)(b) 5.50% 07/01/10 1,205 1,263,744
==================================================================================================
NORTH CAROLINA-3.35%
Charlotte-Mecklenburg Hospital Authority
(Carolinas Healthcare);
Series 2007 A, Ref. Health Care System RB(b) 5.00% 01/15/19 1,000 1,009,380
- --------------------------------------------------------------------------------------------------
Series 2008 A, Ref. Health Care System RB(b) 4.63% 01/15/26 1,000 886,030
- --------------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission (East Carolina University); Series
2006 B, Health Systems VRD RB (INS-Ambac
Assurance Corp.)(a)(d)(e) 9.00% 12/01/28 1,000 1,000,000
- --------------------------------------------------------------------------------------------------
North Carolina (State of); Series 1999 A, Public
Improvements Unlimited Tax GO(b)(c)(f) 5.25% 03/01/09 5,000 5,085,650
- --------------------------------------------------------------------------------------------------
Oak Island (Town of) (Waste Water Project);
Series 2008 A, Enterprise System RB (INS-MBIA
Insurance Corp.)(a)(b) 5.00% 06/01/20 1,065 1,052,891
- --------------------------------------------------------------------------------------------------
Series 2008 A, Enterprise System RB (INS-MBIA
Insurance Corp.)(a)(b) 5.00% 06/01/23 1,210 1,127,333
==================================================================================================
10,161,284
==================================================================================================
NORTH DAKOTA-0.57%
Burleigh (County of), (Medcenter One, Inc.);
Series 1999, Ref. Health Care RB (INS-MBIA
Insurance Corp.)(a)(b) 5.25% 05/01/09 1,695 1,717,916
==================================================================================================
OHIO-0.20%
Buckeye (City of) Tobacco Settlement Financing
Authority; Series 2007 A-2, Sr. Asset-Backed
RB(b) 5.38% 06/01/24 680 595,150
==================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
8 AIM TAX-FREE INTERMEDIATE FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
OKLAHOMA-4.10%
Grand River Dam Authority; Series 1993, Ref. RB
(INS-Ambac Assurance Corp.)(a)(b) 5.50% 06/01/09 $2,000 $ 2,039,020
- --------------------------------------------------------------------------------------------------
Mustang (City of) Improvement Authority; Series
1999, Utility RB (INS-Financial Security
Assurance Inc.)(a)(b) 5.25% 10/01/09 275 279,744
- --------------------------------------------------------------------------------------------------
Oklahoma (State of) Industries Authority
(Oklahoma Medical Research Foundation);
Series 2008, RB(b) 5.50% 07/01/29 1,250 1,127,275
- --------------------------------------------------------------------------------------------------
Payne (County of) Economic Development Authority
(Oklahoma State University Foundation Phase
III Student Housing, LLC Project); Series
2002, Student Housing VRD RB (INS-Ambac
Assurance Corp.)(a)(d)(e) 8.25% 07/01/32 9,000 9,000,000
==================================================================================================
12,446,039
==================================================================================================
PENNSYLVANIA-0.51%
Harrisburg (City of) Authority (Harrisburg
University of Science); Series 2007 A,
University RB(b) 5.40% 09/01/16 450 434,250
- --------------------------------------------------------------------------------------------------
Pennsylvania (State of) Higher Educational
Facilities Authority; Series 2008, Ref. RB(b) 4.38% 06/15/23 1,250 1,117,225
==================================================================================================
1,551,475
==================================================================================================
PUERTO RICO-0.33%
Puerto Rico (Commonwealth of); Series 2003 C-7,
Ref. Sub. Unlimited Tax GO (INS-MBIA
Insurance Corp.)(a)(b) 6.00% 07/01/27 1,000 1,006,490
==================================================================================================
RHODE ISLAND-0.61%
Rhode Island (State of) Health & Educational
Building Corp. (Public Schools Financing
Program); Series 2007 B, RB (INS-Ambac
Assurance Corp.)(a)(b) 5.00% 05/15/21 1,000 976,190
- --------------------------------------------------------------------------------------------------
Woonsocket (City of); Series 2000, Unlimited Tax
GO (INS-Financial Guaranty Insurance
Co.)(a)(b) 5.25% 10/01/10 840 872,852
==================================================================================================
1,849,042
==================================================================================================
SOUTH CAROLINA-3.22%
Piedmont Municipal Power Agency; Series 1993,
Electric RB (INS-MBIA Insurance Corp.)(a)(b) 5.60% 01/01/09 1,000 1,004,380
- --------------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Palmetto Health
Alliance); Series 2005 A, Ref. RB
(INS-Financial Security Assurance Inc.)(a)(b) 4.00% 08/01/17 1,500 1,394,715
- --------------------------------------------------------------------------------------------------
South Carolina (State of) Public Service
Authority; Series 1999 A, RB (INS-MBIA
Insurance Corp.)(a)(b) 5.50% 01/01/10 1,000 1,035,490
- --------------------------------------------------------------------------------------------------
South Carolina (State of) Transportation
Infrastructure Bank; Series 2004 A, RB (INS-
Ambac Assurance Corp.)(a)(b) 5.25% 10/01/22 1,390 1,360,365
- --------------------------------------------------------------------------------------------------
South Carolina (State of); Series 2001 B,
Capital Improvements Unlimited Tax GO(b) 5.50% 04/01/11 1,000 1,064,120
- --------------------------------------------------------------------------------------------------
Spartanburg (County of) Regional Health Services
District;
Series 2003 A, RB (INS-Assured Guaranty
Ltd.)(a)(b) 4.50% 04/15/27 1,735 1,470,499
- --------------------------------------------------------------------------------------------------
Series 2008 D, Ref. RB (INS-Assured Guaranty
Ltd.)(a)(b) 5.25% 04/15/20 1,000 1,005,190
- --------------------------------------------------------------------------------------------------
Tobacco Settlement Revenue Management Authority;
Series 2008, Ref. RB(b) 5.00% 06/01/18 1,500 1,430,100
==================================================================================================
9,764,859
==================================================================================================
TENNESSEE-1.57%
Jackson (City of) (Jackson-Madison County
General Hospital Project); Series 2008, Ref.
& Improvement RB(b) 5.25% 04/01/23 1,000 920,960
- --------------------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority;
Series 1998 A-3 Class III, Local Government
VRD RB (INS-Ambac Assurance Corp.)(a)(d)(e) 8.50% 06/01/19 2,800 2,800,000
- --------------------------------------------------------------------------------------------------
Shelby (County of) Health Educational & Housing
Facilities Board (Methodist
Healthcare-University Hospital); Series 2004
B, RB (INS-Financial Security Assurance
Inc.)(a)(b) 5.00% 09/01/17 1,000 1,034,850
==================================================================================================
4,755,810
==================================================================================================
TEXAS-18.55%
Amarillo (City of) Health Facilities Corp.
(Baptist St. Anthony's Hospital); Series
1998, RB (INS-Financial Security Assurance
Inc.)(a)(b) 5.50% 01/01/10 1,275 1,293,870
- --------------------------------------------------------------------------------------------------
Austin (City of); Series 2001, Limited Tax
Certificates GO(b) 5.00% 09/01/11 1,900 2,006,761
- --------------------------------------------------------------------------------------------------
Canadian River Municipal Water Authority; Series
1999, Conjunctive Use Contract RB(b)(c)(f) 5.00% 02/15/09 1,000 1,009,580
- --------------------------------------------------------------------------------------------------
Dallas (County of) Utility & Reclamation
District, Series 2005 A, Ref. Unlimited Tax
GO (INS-Ambac Assurance Corp.)(a)(b) 5.00% 02/15/19 1,000 997,540
- --------------------------------------------------------------------------------------------------
Series 2005 A, Ref. Unlimited Tax GO (INS-
Ambac Assurance Corp.)(a)(b) 5.15% 02/15/21 3,000 2,930,130
- --------------------------------------------------------------------------------------------------
Garland (City of); Series 2001, Limited Tax
Certificates GO (INS-MBIA Insurance
Corp.)(a)(b) 5.25% 02/15/11 2,435 2,562,594
- --------------------------------------------------------------------------------------------------
Harris (County of) Cultural Education Facilities
Finance Corp. (Baylor College of Medicine);
Series 2008 D, Ref. RB(b) 5.13% 11/15/23 750 659,768
- --------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM TAX-FREE INTERMEDIATE FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Harris (County of) Health Facilities Development
Corp. (Memorial Hermann Hospital System
Project); Series 1998, Hospital RB
(INS-Financial Security Assurance Inc.)(a)(b) 5.50% 06/01/09 $2,500 $ 2,546,450
- --------------------------------------------------------------------------------------------------
Houston (City of) Convention & Entertainment
Facilities Department;
Series 2001 A, Ref. Hotel Occupancy and
Special Tax RB (INS-Ambac Assurance
Corp.)(a)(b) 5.50% 09/01/10 1,000 1,043,230
- --------------------------------------------------------------------------------------------------
Series 2001 A, Ref. Hotel Occupancy and
Special Tax RB (INS-Ambac Assurance
Corp.)(a)(b) 5.50% 09/01/11 4,000 4,220,600
- --------------------------------------------------------------------------------------------------
Series 2001 B, Hotel Occupancy and Special
Tax RB (INS-Ambac Assurance Corp.)(a)(b) 5.25% 09/01/10 1,000 1,038,620
- --------------------------------------------------------------------------------------------------
Series 2001 B, Hotel Occupancy and Special
Tax RB (INS-Ambac Assurance Corp.)(a)(b) 5.25% 09/01/11 2,360 2,473,964
- --------------------------------------------------------------------------------------------------
Series 2001 B, Hotel Occupancy and Special
Tax RB (INS-Ambac Assurance Corp.)(a)(b) 5.50% 09/01/11 2,460 2,595,669
- --------------------------------------------------------------------------------------------------
Katy (City of) Independent School District;
Series 1999 A, Unlimited Tax GO (CEP-Texas
Permanent School Fund)(b) 5.20% 02/15/10 1,285 1,296,629
- --------------------------------------------------------------------------------------------------
Lake Worth (City of); Series 2008, Limited Tax
Certificates GO (INS-Assured Guaranty
Ltd.)(a)(b) 5.00% 10/01/27 1,230 1,169,201
- --------------------------------------------------------------------------------------------------
Lower Colorado River Authority;
Series 1999 A, Ref. RB (INS-Financial
Security Assurance Inc.)(a)(b) 5.88% 05/15/14 2,665 2,722,004
- --------------------------------------------------------------------------------------------------
Series 1999 B, Ref. RB (INS-Financial
Security Assurance Inc.)(a)(b) 6.00% 05/15/10 1,460 1,499,289
- --------------------------------------------------------------------------------------------------
North Texas Municipal Water District; Series
2001, Water System RB (INS-MBIA Insurance
Corp.)(a)(b) 5.00% 09/01/11 1,040 1,093,383
- --------------------------------------------------------------------------------------------------
North Texas Tollway Authority;
Series 2008 E-3, Ref. First Tier System
RB(b)(c) 5.75% 01/01/16 1,000 1,012,290
- --------------------------------------------------------------------------------------------------
Series 2008 G, Ref. First Tier System
RB(b)(c) 5.00% 01/01/10 1,000 1,007,480
- --------------------------------------------------------------------------------------------------
Series 2008 H, Ref. First Tier RB(b)(c) 5.00% 01/01/13 3,150 3,136,676
- --------------------------------------------------------------------------------------------------
San Antonio (City of);
Series 1994, Electric & Gas RB(b) 5.00% 02/01/12 2,375 2,509,591
- --------------------------------------------------------------------------------------------------
Series 1998 A, Electric & Gas RB(b)(c)(f) 5.25% 02/01/09 2,960 3,017,098
- --------------------------------------------------------------------------------------------------
Series 1998 A, Electric & Gas RB(b) 5.25% 02/01/10 5,540 5,642,213
- --------------------------------------------------------------------------------------------------
Series 1998 A, Ref. Limited Tax GO(b) 5.00% 02/01/11 1,490 1,500,132
- --------------------------------------------------------------------------------------------------
Texas Tech University; 6th Series 1999,
Financing System RB (INS-Ambac Assurance
Corp.)(a)(b) 5.25% 02/15/11 3,910 3,943,196
- --------------------------------------------------------------------------------------------------
Texas Woman's University; Series 2008, Revenue
Financing System RB(b) 5.13% 07/01/26 1,500 1,362,735
==================================================================================================
56,290,693
==================================================================================================
UTAH-0.52%
Salt Lake Valley Fire Service Area; Series 2008,
Lease RB(b) 5.00% 04/01/22 500 460,005
- --------------------------------------------------------------------------------------------------
Tooele (County of) School District; Series 2001,
Unlimited Tax GO (CEP-Utah School Bond
Guaranty)(b) 4.50% 06/01/11 1,075 1,118,430
==================================================================================================
1,578,435
==================================================================================================
VERMONT-0.31%
Vermont (State of) Educational & Health
Buildings Financing Agency (Fletcher Allen
Heath Care); Series 2004 B, RB (INS-Financial
Security Assurance Inc.)(a)(b) 5.00% 12/01/22 1,000 933,970
==================================================================================================
VIRGINIA-2.10%
Norton (City of) Industrial Development
Authority (Norton Community Hospital); Series
2001, Ref. & Improvement Hospital IDR
(INS-ACA Financial Guaranty Corp.)(a)(b) 5.13% 12/01/10 1,315 1,300,009
- --------------------------------------------------------------------------------------------------
Virginia (State of) Resources Authority (Clean
Water) Series 2008, Sub. Short-Term Revolving
RB(b) 5.00% 10/01/29 1,315 1,270,224
- --------------------------------------------------------------------------------------------------
Virginia Commonwealth University; Series 2005 B,
Health Systems VRD RB (INS-Ambac Assurance
Corp.)(a)(d)(e) 6.00% 07/01/30 3,800 3,800,000
==================================================================================================
6,370,233
==================================================================================================
WASHINGTON-7.97%
Energy Northwest (Project #3);
Series 2001 A, Ref. Electric RB
(INS-Financial Security Assurance Inc.)(a)(b) 5.50% 07/01/10 1,000 1,049,800
- --------------------------------------------------------------------------------------------------
Series 2001 A, Ref. Electric RB
(INS-Financial Security Assurance Inc.)(a)(b) 5.50% 07/01/11 7,500 7,996,200
- --------------------------------------------------------------------------------------------------
Marysville (City of) Water & Sewer; Series 2005,
RB (INS-MBIA Insurance Corp.)(a)(b) 5.00% 04/01/26 1,000 919,840
- --------------------------------------------------------------------------------------------------
Seattle (City of); Series 2001, Ref. Municipal
Light & Power Improvements RB (INS-Financial
Security Assurance Inc.)(a)(b) 5.25% 03/01/11 3,000 3,145,080
- --------------------------------------------------------------------------------------------------
Snohomish (County of); Series 2001, Limited Tax
GO(b) 5.25% 12/01/11 2,685 2,862,452
- --------------------------------------------------------------------------------------------------
Washington (State of) (Department of Ecology);
Series 2001, Refunding COP (INS-Ambac
Assurance Corp.)(a)(b) 4.75% 04/01/11 5,310 5,433,829
- --------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM TAX-FREE INTERMEDIATE FUND
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Washington (State of) Health Care Facilities
Authority; Series 2008, RB (CEP-FHA)(b) 5.25% 08/01/23 $1,000 $ 948,420
- --------------------------------------------------------------------------------------------------
Washington (State of); Series 2001 R-A, Ref.
Unlimited Tax GO(b) 5.00% 09/01/10 1,745 1,819,564
==================================================================================================
24,175,185
==================================================================================================
WEST VIRGINIA-0.36%
West Virginia (State of) Hospital Finance
Authority; Series 2003 D, Improvement RB
(INS-Financial Security Assurance Inc.)(a)(b) 5.38% 06/01/28 1,200 1,104,864
==================================================================================================
WISCONSIN-1.73%
Fond du Lac (City of) School District; Series
2000, Ref. Unlimited Tax GO(b)(c)(f) 5.25% 04/01/10 1,000 1,038,300
- --------------------------------------------------------------------------------------------------
Wisconsin (State of);
Series 1993 2, Ref. Unlimited Tax GO(b) 5.13% 11/01/11 2,000 2,119,180
- --------------------------------------------------------------------------------------------------
Series 1999 C, Unlimited Tax GO(b) 5.75% 05/01/10 2,000 2,094,820
==================================================================================================
5,252,300
==================================================================================================
WYOMING-0.31%
Wyoming (State of) Municipal Power Agency;
Series 2008 A, RB(b) 5.38% 01/01/25 1,000 936,930
==================================================================================================
TOTAL INVESTMENTS(g)-95.04% (Cost $291,288,288) 288,354,224
==================================================================================================
OTHER ASSETS LESS LIABILITIES-4.96% 15,052,151
==================================================================================================
NET ASSETS-100.00% $303,406,375
__________________________________________________________________________________________________
==================================================================================================
</Table>
Investment Abbreviations:
<Table>
CEP - Credit Enhancement Provider
COP - Certificates of Participation
FHLMC - Federal Home Loan Mortgage Corp.
FHA - Federal Housing Administration
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
INS - Insurer
Jr. - Junior
LOC - Letter of Credit
RAC - Revenue Anticipation Certificates
RB - Revenue Bonds
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Principal and/or interest payments are secured by the bond insurance
company listed.
(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
September 30, 2008 was $261,754,224, which represented 86.27% of the
Fund's Net Assets. See Note 1A.
(c) Security has an irrevocable call by the issuer or mandatory put by the
holder. Maturity date reflects such call or put.
(d) 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 September 30, 2008.
(e) Security is considered a cash equivalent.
(f) Advance refunded; secured by an escrow fund of U.S. Government obligations
or other highly rated collateral.
(g) This table, as of September 30, 2008, provides a listing of those entities
that have either 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
borrower's obligations but may be called upon to satisfy the borrower's
obligations.
<Table>
<Caption>
ENTITIES PERCENTAGE
- -------------------------------------------------------------------------------------------
Ambac Assurance Corp. 20.55%
- -------------------------------------------------------------------------------------------
Financial Security Assurance Inc. 16.74
- -------------------------------------------------------------------------------------------
MBIA Insurance Corp. 8.65
___________________________________________________________________________________________
===========================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM TAX-FREE INTERMEDIATE FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2008
(Unaudited)
<Table>
ASSETS:
Investments, at value (Cost $291,288,288) $288,354,224
- --------------------------------------------------------------------------------
Cash 28,312
- --------------------------------------------------------------------------------
Receivables for:
Investments sold 13,768,468
- --------------------------------------------------------------------------------
Fund shares sold 1,321,273
- --------------------------------------------------------------------------------
Interest 3,597,084
- --------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 42,218
- --------------------------------------------------------------------------------
Other assets 47,472
================================================================================
Total assets 307,159,051
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Investments purchased 2,720,948
- --------------------------------------------------------------------------------
Fund shares reacquired 425,010
- --------------------------------------------------------------------------------
Dividends 424,219
- --------------------------------------------------------------------------------
Accrued fees to affiliates 41,479
- --------------------------------------------------------------------------------
Accrued other operating expenses 61,868
- --------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 79,152
================================================================================
Total liabilities 3,752,676
================================================================================
Net assets applicable to shares outstanding $303,406,375
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $305,542,261
- --------------------------------------------------------------------------------
Undistributed net investment income 757,434
- --------------------------------------------------------------------------------
Undistributed net realized gain 40,744
- --------------------------------------------------------------------------------
Unrealized appreciation (depreciation) (2,934,064)
================================================================================
$303,406,375
________________________________________________________________________________
================================================================================
NET ASSETS:
Class A $162,209,245
________________________________________________________________________________
================================================================================
Class A3 $140,227,966
________________________________________________________________________________
================================================================================
Institutional Class $ 969,164
________________________________________________________________________________
================================================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 15,563,788
________________________________________________________________________________
================================================================================
Class A3 13,457,325
________________________________________________________________________________
================================================================================
Institutional Class 93,132
________________________________________________________________________________
================================================================================
Class A:
Net asset value per share $ 10.42
- --------------------------------------------------------------------------------
Maximum offering price per share
(Net asset value of $10.42 divided by 99.00%) $ 10.53
================================================================================
Class A3:
Net asset value and offering price per share $ 10.42
================================================================================
Institutional Class:
Net asset value and offering price per share $ 10.41
________________________________________________________________________________
================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM TAX-FREE INTERMEDIATE FUND
STATEMENT OF OPERATIONS
For the six months ended September 30, 2008
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $ 6,472,092
================================================================================================
EXPENSES:
Advisory fees 388,314
- ------------------------------------------------------------------------------------------------
Administrative services fees 39,798
- ------------------------------------------------------------------------------------------------
Custodian fees 8,980
- ------------------------------------------------------------------------------------------------
Distribution Fees -- Class A3 106,847
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- A and A3 41,813
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- Institutional 467
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 10,931
- ------------------------------------------------------------------------------------------------
Other 75,404
================================================================================================
Total expenses 672,554
================================================================================================
Less: Expenses reimbursed and expense offset arrangement(s) (819)
================================================================================================
Net expenses 671,735
================================================================================================
Net investment income 5,800,357
================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from investment securities (81,042)
================================================================================================
Change in net unrealized appreciation (depreciation) of investment securities (8,475,753)
================================================================================================
Net realized and unrealized gain (loss) (8,556,795)
================================================================================================
Net increase (decrease) in net assets resulting from operations $(2,756,438)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13 AIM TAX-FREE INTERMEDIATE FUND
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2008 and the year ended March 31, 2008
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2008 2008
- --------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 5,800,357 $ 7,631,218
- --------------------------------------------------------------------------------------------------------
Net realized gain (loss) (81,042) 128,579
- --------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (8,475,753) 295,814
========================================================================================================
Net increase (decrease) in net assets resulting from operations (2,756,438) 8,055,611
========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A (3,513,819) (6,318,225)
- --------------------------------------------------------------------------------------------------------
Class A3 (1,613,248) (1,343,377)
- --------------------------------------------------------------------------------------------------------
Institutional Class (19,659) (34,682)
========================================================================================================
Total distributions from net investment income (5,146,726) (7,696,284)
========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS:
Class A -- (1,011,322)
- --------------------------------------------------------------------------------------------------------
Class A3 -- (228,067)
- --------------------------------------------------------------------------------------------------------
Institutional Class -- (3,784)
========================================================================================================
Total distributions from net realized gains -- (1,243,173)
========================================================================================================
SHARE TRANSACTIONS-NET:
Class A (748,050) 22,498,645
- --------------------------------------------------------------------------------------------------------
Class A3 105,815,095 (98,673)
- --------------------------------------------------------------------------------------------------------
Institutional Class 116,559 (2,324,127)
========================================================================================================
Net increase in net assets resulting from share transactions 105,183,604 20,075,845
========================================================================================================
Net increase in net assets 97,280,440 19,191,999
________________________________________________________________________________________________________
========================================================================================================
NET ASSETS:
Beginning of period 206,125,935 186,933,936
========================================================================================================
End of period (includes undistributed net investment income of
$757,434 and $103,803, respectively) $303,406,375 $206,125,935
________________________________________________________________________________________________________
========================================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
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 assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. Matters affecting each portfolio or class will be voted on
exclusively by the shareholders of such portfolio or class.
The Fund's investment objective is to generate as high a level of tax-exempt
income as is consistent with preservation of capital.
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 contingent deferred
sales charges ("CDSC"). Class A3 shares and Institutional Class shares are sold
at net asset value.
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-
14 AIM TAX-FREE INTERMEDIATE FUND
term obligations, including commercial paper, having 60 days or less to
maturity are recorded at amortized cost which approximates value.
Securities with a demand feature exercisable within one to seven days are
valued at par. Debt securities are subject to interest rate and credit
risks. In addition, all debt securities involve some risk of default with
respect to interest and principal payments.
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.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
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 periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. 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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor 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.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. 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.
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 by a
significant amount.
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 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.
I. OTHER RISKS -- The value of, payment of interest on, repayment of
principal for and the ability to sell a municipal security may be affected
by constitutional amendments, legislative enactments, executive orders,
administrative regulations, voter initiatives and the economics of the
regions in which the issuers are located.
Since, many municipal securities are issued to finance similar projects,
especially those relating to education, health care, transportation and
utilities, conditions in those sectors can affect the overall municipal
securities market and a Fund's investments in municipal securities.
There is some risk that a portion or all of the interest received from
certain tax-free municipal securities could become taxable as a result of
determinations by the Internal Revenue Service.
15 AIM TAX-FREE INTERMEDIATE FUND
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
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>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") 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 six
months ended September 30, 2008, Invesco reimbursed expenses of the Fund in the
amount of $235.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the six months ended September 30, 2008, 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
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS 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 six
months ended September 30, 2008, 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 Invesco Aim
Distributors, Inc. ("IADI") 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 IADI 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. Rules of the Financial Industry Regulatory Authority ("FINRA")
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 six months
ended September 30, 2008, expenses incurred under the Plans are shown in the
Statement of Operations as distribution fees.
Front-end sales commissions and 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 six months ended September 30, 2008,
IADI advised the Fund that IADI retained $619 in front-end sales commissions
from the sale of Class A shares and $0 from Class A shares for CDSC imposed upon
redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (level 1) and the lowest priority to significant
unobservable inputs (level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level,
Level 1 -- Quoted prices in an active market for identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
16 AIM TAX-FREE INTERMEDIATE FUND
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, September 30, 2008. The level assigned to the securities
valuations may not be an indication of the risk associated with investing in
those securities. Because of the inherent uncertainties of valuation, the values
reflected in the financial statements may materially differ from the value
received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $ --
- --------------------------------------
Level 2 288,354,224
- --------------------------------------
Level 3 --
======================================
$288,354,224
______________________________________
======================================
</Table>
NOTE 4--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 six months ended September 30, 2008, the
Fund engaged in securities purchases of $39,846,472 and securities sales of
$9,753,144, which resulted in net realized gains (losses) of $0.
NOTE 5--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 six months ended September 30,
2008, the Fund received credits from this arrangement, which resulted in the
reduction of the Fund's total expenses of $584.
NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' 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
Officers' 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 Officers'
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 six months ended September 30, 2008, the Fund paid legal fees of
$2,726 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 7--CASH BALANCES
The Fund may borrow for leveraging in an amount up to 5% of the Fund's total
assets (excluding the amount borrowed) at the time the borrowing is made. In
doing so, the Fund is permitted to temporarily carry a negative or overdrawn
balance in its account with The Bank of New York Mellon, 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
Invesco Aim, not to exceed the contractually agreed upon rate. A Fund may not
purchase additional securities when any borrowings from banks exceeds 5% of the
Fund's total assets.
NOTE 8--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
The Fund did not have a capital loss carryforward as of March 31, 2008.
NOTE 9--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 six months ended September 30, 2008 was $82,657,743 and
$13,869,784, respectively. Cost of investments on a tax basis includes the
adjustments for financial reporting purposes as of the most recently completed
Federal income tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 3,754,478
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (6,688,542)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(2,934,064)
________________________________________________________________________________________________
================================================================================================
Investments have the same cost for tax and financial statement purposes.
</Table>
17 AIM TAX-FREE INTERMEDIATE FUND
NOTE 10--SHARE INFORMATION
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2008(a) MARCH 31, 2008
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 1,503,667 $ 16,067,715 6,548,626 $ 70,248,412
- ------------------------------------------------------------------------------------------------------------------------
Class A3 12,060,151 128,638,091 1,506,817 16,135,522
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class 27,897 296,812 81,238 870,244
========================================================================================================================
Issued as reinvestment of dividends:
Class A 121,730 1,292,220 322,507 3,450,087
- ------------------------------------------------------------------------------------------------------------------------
Class A3 124,629 1,320,538 117,252 1,254,125
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class 1,854 19,659 2,121 22,645
========================================================================================================================
Reacquired:
Class A (1,697,997) (18,107,985) (4,764,421) (51,199,854)
- ------------------------------------------------------------------------------------------------------------------------
Class A3 (2,265,305) (24,143,534) (1,632,773) (17,488,320)
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class (18,888) (199,912) (300,042) (3,217,016)
========================================================================================================================
9,857,738 $105,183,604 1,881,325 $ 20,075,845
________________________________________________________________________________________________________________________
========================================================================================================================
</Table>
(a) There are entities that are record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate own 36% of the
outstanding shares of the Fund. IADI has an agreement with these entities
to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates
may make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, Invesco Aim and/or Invesco
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.
NOTE 11--FINANCIAL HIGHLIGHTS
<Table>
<Caption>
NET GAINS
NET ASSET (LOSSES) DIVIDENDS
VALUE, NET ON SECURITIES (BOTH TOTAL FROM FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT FROM NET TOTAL
OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME REALIZED GAINS DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------
CLASS A
Six months ended
09/30/08 $10.70 $0.24(c) $(0.30) $(0.06) $(0.22) $ -- $(0.22)
Year ended 03/31/08 10.76 0.45(c) 0.02 0.47 (0.45) (0.08) (0.53)
Year ended 03/31/07 10.92 0.46 (0.09) 0.37 (0.48) (0.05) (0.53)
Year ended 03/31/06 11.21 0.47 (0.26) 0.21 (0.50) -- (0.50)
Year ended 03/31/05 11.69 0.49 (0.49) (0.00) (0.48) -- (0.48)
Year ended 03/31/04 11.70 0.47(c) (0.01) 0.46 (0.47) -- (0.47)
- ------------------------------------------------------------------------------------------------------------------------
CLASS A3
Six months ended
09/30/08 10.70 0.23(c) (0.31) (0.08) (0.20) -- (0.20)
Year ended 03/31/08 10.76 0.43(c) 0.02 0.45 (0.43) (0.08) (0.51)
Year ended 03/31/07 10.92 0.46 (0.12) 0.34 (0.45) (0.05) (0.50)
Year ended 03/31/06 11.21 0.42 (0.24) 0.18 (0.47) -- (0.47)
Year ended 03/31/05 11.69 0.43 (0.47) (0.04) (0.44) -- (0.44)
Year ended 03/31/04 11.70 0.43(c) (0.01) 0.42 (0.43) -- (0.43)
- ------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Six months ended
09/30/08 10.69 0.24(c) (0.31) (0.07) (0.21) -- (0.21)
Year ended 03/31/08 10.75 0.45(c) 0.02 0.47 (0.45) (0.08) (0.53)
Year ended 03/31/07 10.92 0.46 (0.10) 0.36 (0.48) (0.05) (0.53)
Year ended 03/31/06 11.21 0.45 (0.24) 0.21 (0.50) -- (0.50)
Year ended
03/31/05(e) 11.40 0.32 (0.19) 0.13 (0.32) -- (0.32)
________________________________________________________________________________________________________________________
========================================================================================================================
<Caption>
RATIO OF
EXPENSES TO RATIO OF
AVERAGE NET EXPENSES TO
ASSETS WITH AVERAGE NET ASSETS RATIO OF NET
NET ASSETS, FEE WAIVERS WITHOUT FEE INVESTMENT
NET ASSET END OF AND/OR WAIVERS INCOME TO
VALUE, END TOTAL PERIOD (000S EXPENSES AND/OR EXPENSES AVERAGE NET PORTFOLIO
OF PERIOD RETURN(a) OMITTED) ABSORBED ABSORBED ASSETS TURNOVER(b)
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A
Six months ended
09/30/08 $10.42 (0.60)% $162,209 0.44%(d) 0.44%(d) 4.56%(d) 6%
Year ended 03/31/08 10.70 4.50 167,381 0.48 0.48 4.18 19
Year ended 03/31/07 10.76 3.49 145,563 0.50 0.50 4.24 11
Year ended 03/31/06 10.92 1.87 194,526 0.46 0.46 4.16 9
Year ended 03/31/05 11.21 (0.01) 246,946 0.43 0.44 4.09 4
Year ended 03/31/04 11.69 4.04 390,903 0.42 0.42 3.98 6
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A3
Six months ended
09/30/08 10.42 (0.73) 140,228 0.69(d) 0.69(d) 4.31(d) 6
Year ended 03/31/08 10.70 4.24 37,865 0.73 0.73 3.93 19
Year ended 03/31/07 10.76 3.23 38,156 0.75 0.75 3.99 11
Year ended 03/31/06 10.92 1.57 128,946 0.73 0.73 3.89 9
Year ended 03/31/05 11.21 (0.37) 97,651 0.78 0.79 3.74 4
Year ended 03/31/04 11.69 3.67 101,312 0.77 0.77 3.63 6
- ---------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Six months ended
09/30/08 10.41 (0.63) 969 0.50(d) 0.50(d) 4.50(d) 6
Year ended 03/31/08 10.69 4.46 879 0.53 0.53 4.13 19
Year ended 03/31/07 10.75 3.43 3,215 0.52 0.52 4.22 11
Year ended 03/31/06 10.92 1.91 46,992 0.41 0.41 4.21 9
Year ended
03/31/05(e) 11.21 1.13 32,779 0.42(f) 0.43(f) 4.10(f) 4
___________________________________________________________________________________________________________________________
===========================================================================================================================
</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 and is not annualized for
periods less than one year, if applicable.
(b) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(c) Calculated using average shares outstanding.
(d) Ratios are annualized and based on average daily net assets (000's omitted)
of $171,936, $85,244, and $988 for Class A, Class A3 and Institutional
Class shares, respectively.
(e) Commencement date of July 30, 2004.
(f) Annualized.
18 AIM TAX-FREE INTERMEDIATE FUND
NOTE 12--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
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 Invesco Aim and IADI (Order No. 05-
1318). The WVASC makes findings of fact that Invesco Aim and IADI 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 Invesco Aim and IADI violated the West Virginia
securities laws. The WVASC orders Invesco Aim and IADI 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, Invesco 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, Invesco Funds Group,
Inc. ("IFG"), Invesco Aim, IADI 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; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("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. The case pending in Illinois State Court regarding fair value
pricing was dismissed with prejudice on May 6, 2008.
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 Invesco 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 ERISA
purportedly brought on behalf of participants in the Invesco 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 Invesco
defendants' motion to dismiss the Amended Class Action Complaint for Violations
of ERISA and dismissed such Complaint. Plaintiff appealed this ruling. On June
16, 2008, the Fourth Circuit Court of Appeals reversed the dismissal and
remanded this lawsuit back to the MDL Court for further proceedings.
IFG, Invesco Aim, IADI 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, Invesco Aim and IADI 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, Invesco Aim and/or related entities and individuals in the
future.
At the present time, management of Invesco 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 Invesco Aim, IADI or the Fund.
19 AIM TAX-FREE INTERMEDIATE FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period April 1, 2008, through September 30, 2008.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (04/01/08) (09/30/08)(1) PERIOD(2) (09/30/08) PERIOD(2) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $994.00 $2.20 $1,022.86 $2.23 0.44%
- ---------------------------------------------------------------------------------------------------
A3 1,000.00 992.70 3.45 1,021.61 3.50 0.69
- ---------------------------------------------------------------------------------------------------
</Table>
((1) The actual ending account value is based on the actual total return of the
Fund for the period April 1, 2008, through September 30, 2008, 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
183/365 to reflect the most recent fiscal half year.
20 AIM TAX-FREE INTERMEDIATE FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The example is based on
an investment of $1,000 invested at the beginning of the period and held for the
entire period April 1, 2008, through September 30, 2008.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (04/01/08) (09/30/08)(1) PERIOD(2) (09/30/08) PERIOD(2) RATIO
- ---------------------------------------------------------------------------------------------------
Institutional $1,000.00 $993.70 $2.50 $1,022.56 $2.54 0.50%
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period April 1, 2008, through September 30, 2008, 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
183/365 to reflect the most recent fiscal half year.
AIM TAX-FREE INTERMEDIATE FUND
Supplement to Semiannual Report dated 9/30/08
AIM TAX-FREE INTERMEDIATE FUND
==========================================
INSTITUTIONAL CLASS SHARES AVERAGE ANNUAL TOTAL RETURNS Please note that past performance is
not indicative of future results. More
The following information has been For periods ended 9/30/08 recent returns may be more or less than
prepared to provide Institutional Class those shown. All returns assume
shareholders with a performance overview 10 Years 3.69% reinvestment of distributions at NAV.
specific to their holdings. Institutional 5 Years 2.10 Investment return and principal value will
Class shares are offered exclusively to 1 YEAR 1.97 fluctuate so your shares, when redeemed,
institutional investors, including defined 6 Months* -0.63 may be worth more or less than their
contribution plans that meet certain original cost. See full report for
criteria. * Cumulative total return that has not information on comparative benchmarks.
been annualized Please consult your Fund prospectus for
========================================== more information. For the most current
month-end performance, please call 800 451
Institutional Class shares' inception date 4246 or visit invescoaim.com.
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 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.
The total annual Fund operating expense
ratio set forth in the most recent Fund
prospectus as of the date of this
supplement for Institutional Class shares
was 0.53%. The expense ratios presented
above may vary from the expense ratios
presented in other sections of the actual
report that are based on expenses incurred
during the period covered by the report.
Over for information on your Fund's expenses.
THIS SUPPLEMENT 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, [INVESCO AIM LOGO]
reproduced or shown to the public, nor used in written form as sales literature -- SERVICE MARK --
for public use.
invescoaim.com TFI-INS-2 Invesco Aim Distributors, Inc.
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
The Board of Trustees (the Board) of AIM their assigned funds. During the contract ated the information provided differently
Tax- Exempt Funds is required under the renewal process, the Trustees receive from one another and attributed different
Investment Company Act of 1940 to approve comparative performance and fee data weight to the various factors. The
annually the renewal of the AIM Tax-Free regarding the AIM Funds prepared by an Trustees recognized that the advisory
Intermediate Fund's (the Fund) investment independent company, Lipper, Inc. arrangements and resulting advisory fees
advisory agreement with Invesco Aim (Lipper), under the direction and for the Fund and the other AIM Funds are
Advisors, Inc. (Invesco Aim). During supervision of the independent Senior the result of years of review and
contract renewal meetings held on June Officer who also prepares a separate negotiation between the Trustees and
18-19, 2008, the Board as a whole and the analysis of this information for the Invesco Aim, that the Trustees may focus
disinterested or "independent" Trustees, Trustees. Each Sub-Committee then makes to a greater extent on certain aspects of
voting separately, approved the recommendations to the Investments these arrangements in some years than in
continuance of the Fund's investment Committee regarding the performance, fees others, and that the Trustees'
advisory agreement for another year, and expenses of their assigned funds. The deliberations and conclusions in a
effective July 1, 2008. In doing so, the Investments Committee considers each particular year may be based in part on
Board determined that the Fund's Sub-Committee's recommendations and makes their deliberations and conclusions of
investment advisory agreement is in the its own recommendations regarding the these same arrangements throughout the
best interests of the Fund and its performance, fees and expenses of the AIM year and in prior years.
shareholders and that the compensation to Funds to the full Board. The Investments
Invesco Aim under the Fund's investment Committee also considers each FACTORS AND CONCLUSIONS AND SUMMARY OF
advisory agreement is fair and reasonable. Sub-Committee's recommendations in making INDEPENDENT WRITTEN FEE EVALUATION
its annual recommendation to the Board
The independent Trustees met separately whether to approve the continuance of each The discussion below serves as a summary
during their evaluation of the Fund's AIM Fund's investment advisory agreement of the Senior Officer's independent
investment advisory agreement with and sub-advisory agreements for another written evaluation with respect to the
independent legal counsel from whom they year. Fund's investment advisory agreement as
received independent legal advice, and the well as a discussion of the material
independent Trustees also received The independent Trustees are assisted factors and related conclusions that
assistance during their deliberations from in their annual evaluation of the Fund's formed the basis for the Board's approval
the independent Senior Officer, a investment advisory agreement by the of the Fund's investment advisory
full-time officer of the AIM Funds who independent Senior Officer. One agreement and sub-advisory agreements.
reports directly to the independent responsibility of the Senior Officer is to Unless otherwise stated, information set
Trustees. manage the process by which the AIM Funds' forth below is as of June 19, 2008 and
proposed management fees are negotiated does not reflect any changes that may have
THE BOARD'S FUND EVALUATION PROCESS during the annual contract renewal process occurred since that date, including but
to ensure that they are negotiated in a not limited to changes to the Fund's
The Board's Investments Committee has manner that is at arms' length and performance, advisory fees, expense
established three Sub-Committees that are reasonable. Accordingly, the Senior limitations and/or fee waivers.
responsible for overseeing the management Officer must either supervise a
of a number of the series portfolios of competitive bidding process or prepare an I. Investment Advisory Agreement
the AIM Funds. This Sub-Committee independent written evaluation. The Senior
structure permits the Trustees to focus on Officer has recommended that an A. Nature, Extent and Quality of
the performance of the AIM Funds that have independent written evaluation be provided Services Provided by Invesco Aim
been assigned to them. The Sub-Committees and, at the direction of the Board, has
meet throughout the year to review the prepared an independent written The Board reviewed the advisory services
performance of their assigned funds, and evaluation. provided to the Fund by Invesco Aim under
the Sub-Committees review monthly and the Fund's investment advisory agreement,
quarterly comparative performance During the annual contract renewal the performance of Invesco Aim in
information and periodic asset flow data process, the Board considered the factors providing these services, and the
for their assigned funds. These materials discussed below under the heading "Factors credentials and experience of the officers
are prepared under the direction and and Conclusions and Summary of Independent and employees of Invesco Aim who provide
supervision of the independent Senior Written Fee Evaluation" in evaluating the these services. The Board's review of the
Officer. Over the course of each year, the fairness and reasonableness of the Fund's qualifications of Invesco Aim to provide
Sub-Committees meet with portfolio investment advisory agreement and these services included the Board's
managers for their assigned funds and sub-advisory agreements at the contract consideration of Invesco Aim's portfolio
other members of management and review renewal meetings and at their meetings and product review process, various back
with these individuals the performance, throughout the year as part of their office support functions provided by
investment objective(s), policies, ongoing oversight of the Fund. The Fund's Invesco Aim and its affiliates, and
strategies and limitations of these funds. investment advisory agreement and Invesco Aim's equity and fixed income
sub-advisory agreements were considered trading operations. The Board concluded
In addition to their meetings separately, although the Board also that the nature, extent and quality of the
throughout the year, the Sub-Committees considered the common interests of all of advisory services provided to the Fund by
meet at designated contract renewal the AIM Funds in their deliberations. The Invesco Aim were appropriate and that
meetings each year to conduct an in-depth Board considered all of the information Invesco Aim currently is providing
review of the performance, fees and provided to them and did not identify any satisfactory advisory services in
expenses of particular factor that was controlling. accordance with the terms of the Fund's
Each Trustee may have evalu- investment advisory agreement. In
addition, based on their ongoing meetings
throughout the year
21 AIM TAX-FREE INTERMEDIATE FUND continued
with the Fund's portfolio manager or provides to the AIM Funds. The Board the breakpoints. Based on this
managers, the Board concluded that these concluded that Invesco Aim continues to be information, the Board concluded that the
individuals are competent and able to responsive to the Board's focus on fund Fund's advisory fees would reflect
continue to carry out their performance. Although the independent economies of scale at higher asset levels.
responsibilities under the Fund's written evaluation of the Fund's Senior The Board also noted that the Fund shares
investment advisory agreement. Officer only considered Fund performance directly in economies of scale through
through the most recent calendar year, the lower fees charged by third party service
In determining whether to continue the Board also reviewed more recent Fund providers based on the combined size of
Fund's investment advisory agreement, the performance and this review did not change all of the AIM Funds and affiliates.
Board considered the prior relationship their conclusions.
between Invesco Aim and the Fund, as well E. Profitability and Financial
as the Board's knowledge of Invesco Aim's C. Advisory Fees and Fee Waivers Resources of Invesco Aim
operations, and concluded that it was
beneficial to maintain the current The Board compared the Fund's contractual The Board reviewed information from
relationship, in part, because of such advisory fee rate to the contractual Invesco Aim concerning the costs of the
knowledge. The Board also considered the advisory fee rates of funds in the Fund's advisory and other services that Invesco
steps that Invesco Aim and its affiliates Lipper expense group that are not managed Aim and its affiliates provide to the Fund
have taken over the last several years to by Invesco Aim, at a common asset level and the profitability of Invesco Aim and
improve the quality and efficiency of the and as of the end of the past calendar its affiliates in providing these
services they provide to the AIM Funds in year. The Board noted that the Fund's services. The Board also reviewed
the areas of investment performance, contractual advisory fee rate was below information concerning the financial
product line diversification, the median contractual advisory fee rate condition of Invesco Aim and its
distribution, fund operations, shareholder of funds in its expense group. The Board affiliates. The Board also reviewed with
services and compliance. The Board also reviewed the methodology used by Invesco Aim the methodology used to
concluded that the quality and efficiency Lipper in determining contractual fee prepare the profitability information. The
of the services Invesco Aim and its rates. The Board noted that Invesco Aim Board considered the overall profitability
affiliates provide to the AIM Funds in does not serve as an advisor to other of Invesco Aim, as well as the
each of these areas have generally mutual funds or other clients with profitability of Invesco Aim in connection
improved, and support the Board's approval investment strategies comparable to those with managing the Fund. The Board noted
of the continuance of the Fund's of the Fund. that Invesco Aim continues to operate at a
investment advisory agreement. net profit, although increased expenses in
The Board noted that Invesco Aim has recent years have reduced the
B. Fund Performance not proposed any advisory fee waivers or profitability of Invesco Aim and its
expense limitations for the Fund. The affiliates. The Board concluded that the
The Board compared the Fund's performance Board concluded that it was not necessary Fund's fees were fair and reasonable, and
during the past one, three and five at this time to discuss with Invesco Aim that the level of profits realized by
calendar years to the performance of funds whether to implement any such waivers or Invesco Aim and its affiliates from
in the Fund's performance group that are expense limitations because the Fund's providing services to the Fund was not
not managed by Invesco Aim, and against total expenses for most classes were was excessive in light of the nature, quality
the performance of all funds in the Lipper below the median total expenses of the and extent of the services provided. The
Intermediate Municipal Debt Funds Index. funds in the Fund's expense group that are Board considered whether Invesco Aim is
The Board also reviewed the criteria used not managed by Invesco Aim. financially sound and has the resources
by Invesco Aim to identify the funds in necessary to perform its obligations under
the Fund's performance group for inclusion After taking account of the Fund's the Fund's investment advisory agreement,
in the Lipper reports. The Board noted contractual advisory fee rate, as well as and concluded that Invesco Aim has the
that the Fund's performance was in the the comparative advisory fee information financial resources necessary to fulfill
first quintile of its performance group discussed above, the Board concluded that these obligations.
for the one year period, and in the fifth the Fund's advisory fees were fair and
quintile for the three and five year reasonable. F. Independent Written Evaluation of
periods (the first quintile being the best the Fund's Senior Officer
performing funds and the fifth quintile D. Economies of Scale and Breakpoints
being the worst performing funds). The The Board noted that, at their direction,
Board noted that the Fund's performance The Board considered the extent to which the Senior Officer of the Fund, who is
was above the performance of the Index for there are economies of scale in Invesco independent of Invesco Aim and Invesco
the one year period, and below the Aim's provision of advisory services to Aim's affiliates, had prepared an
performance of the Index for the three and the Fund. The Board also considered independent written evaluation to assist
five year periods. The Board noted that whether the Fund benefits from such the Board in determining the
Invesco Aim made changes to the Fund's economies of scale through contractual reasonableness of the proposed management
strategies in 2006 to address the Fund's breakpoints in the Fund's advisory fee fees of the AIM Funds, including the Fund.
underperformance and will continue to schedule or through advisory fee waivers The Board noted that they had relied upon
monitor the Fund. The Board also or expense limitations. The Board noted the Senior Officer's written evaluation
considered the steps Invesco Aim has taken that the Fund's contractual advisory fee instead of a competitive bidding process.
over the last several years to improve the schedule includes two breakpoints but In determining whether to continue the
quality and efficiency of the services that, due to the Fund's asset level at the Fund's investment advisory agreement, the
that Invesco Aim end of the past calendar year and the way Board considered the Senior Officer's
in which the breakpoints have been written evaluation.
structured, the Fund has yet to benefit
from
22 AIM TAX-FREE INTERMEDIATE FUND continued
G. Collateral Benefits to Invesco Aim to 100% of the net advisory fees Invesco C. Sub-Advisory Fees
and its Affiliates Aim receives from the affiliated money
market funds with respect to the Fund's The Board considered the services to be
The Board considered various other investment of uninvested cash, but not provided by the Affiliated Sub-Advisers
benefits received by Invesco Aim and its cash collateral. The Board considered the pursuant to the sub-advisory agreements
affiliates resulting from Invesco Aim's contractual nature of this fee waiver and and the services to be provided by Invesco
relationship with the Fund, including the noted that it remains in effect until at Aim pursuant to the Fund's investment
fees received by Invesco Aim and its least June 30, 2009. The Board concluded advisory agreement, as well as the
affiliates for their provision of that the Fund's investment of uninvested allocation of fees between Invesco Aim and
administrative, transfer agency and cash and cash collateral from any the Affiliated Sub-Advisers pursuant to
distribution services to the Fund. The securities lending arrangements in the the sub-advisory agreements. The Board
Board considered the performance of affiliated money market funds is in the noted that the sub-advisory fees have no
Invesco Aim and its affiliates in best interests of the Fund and its direct effect on the Fund or its
providing these services and the shareholders. shareholders, as they are paid by Invesco
organizational structure employed by Aim to the Affiliated Sub-Advisers, and
Invesco Aim and its affiliates to provide II. Sub-Advisory Agreements that Invesco Aim and the Affiliated
these services. The Board also considered Sub-Advisers are affiliates. After taking
that these services are provided to the A. Nature, Extent and Quality of account of the Fund's contractual
Fund pursuant to written contracts which Services Provided by Affiliated sub-advisory fee rate, as well as other
are reviewed and approved on an annual Sub-Advisors relevant factors, the Board concluded that
basis by the Board. The Board concluded the Fund's sub-advisory fees were fair and
that Invesco Aim and its affiliates were The Board reviewed the services to be reasonable.
providing these services in a satisfactory provided by Invesco Trimark Ltd., Invesco
manner and in accordance with the terms of Asset Management Deutschland, GmbH, D. Financial Resources of the
their contracts, and were qualified to Invesco Asset Management Limited, Invesco Affiliated Sub-Advisers
continue to provide these services to the Asset Management (Japan) Limited, Invesco
Fund. Australia Limited, Invesco Global Asset The Board considered whether each
Management (N.A.), Inc., Invesco Hong Kong Affiliated Sub-Adviser is financially
The Board considered the benefits Limited, Invesco Institutional (N.A.), sound and has the resources necessary to
realized by Invesco Aim as a result of Inc. and Invesco Senior Secured perform its obligations under its
portfolio brokerage transactions executed Management, Inc. (collectively, the respective sub-advisory agreement, and
through "soft dollar" arrangements. Under "Affiliated Sub-Advisers") under the concluded that each Affiliated Sub-Adviser
these arrangements, portfolio brokerage sub-advisory agreements and the has the financial resources necessary to
commissions paid by the Fund and/or other credentials and experience of the officers fulfill these obligations.
funds advised by Invesco Aim are used to and employees of the Affiliated
pay for research and execution services. Sub-Advisers who will provide these
The Board noted that soft dollar services. The Board concluded that the
arrangements shift the payment obligation nature, extent and quality of the services
for the research and execution services to be provided by the Affiliated
from Invesco Aim to the funds and Sub-Advisers were appropriate. The Board
therefore may reduce Invesco Aim's noted that the Affiliated Sub-Advisers,
expenses. The Board also noted that which have offices and personnel that are
research obtained through soft dollar geographically dispersed in financial
arrangements may be used by Invesco Aim in centers around the world, have been formed
making investment decisions for the Fund in part for the purpose of researching and
and may therefore benefit Fund compiling information and making
shareholders. The Board concluded that recommendations on the markets and
Invesco Aim's soft dollar arrangements economies of various countries and
were appropriate. The Board also concluded securities of companies located in such
that, based on their review and countries or on various types of
representations made by Invesco Aim, these investments and investment techniques, and
arrangements were consistent with providing investment advisory services.
regulatory requirements. The Board concluded that the sub-advisory
agreements will benefit the Fund and its
The Board considered the fact that the shareholders by permitting Invesco Aim to
Fund's uninvested cash and cash collateral utilize the additional resources and
from any securities lending arrangements talent of the Affiliated Sub-Advisers in
may be invested in money market funds managing the Fund.
advised by Invesco Aim pursuant to
procedures approved by the Board. The B. Fund Performance
Board noted that Invesco Aim will receive
advisory fees from these affiliated money The Board did not view Fund performance as
market funds attributable to such a relevant factor in considering whether
investments, although Invesco Aim has to approve the sub-advisory agreements for
contractually agreed to waive through at the Fund, as no Affiliated Sub-Adviser
least June 30, 2009, the advisory fees served as a sub-adviser to the Fund prior
payable by the Fund in an amount equal to May 1, 2008.
23 AIM TAX-FREE INTERMEDIATE FUND
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FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and
fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third
quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of
portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds,
then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also
look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the
SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the 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 email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07890 and 033-66242.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website,
invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website,
sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008, is
available at our website. Go to invescoaim.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 website, sec.gov.
If used after January 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly
Performance Review for the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service mark of Invesco
Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for
the products and services represented by Invesco Aim; they each provide investment advisory services to [INVESCO AIM LOGO]
individual and institutional clients and do not sell securities. Invesco Institutional (N.A.), Inc., Invesco -- SERVICE MARK --
Senior Secured Management, Inc., Invesco Global Asset Management (N.A.), Inc., Invesco Trimark Ltd., Invesco
Asset Management (Japan) Ltd., Invesco Hong Kong Ltd., Invesco Australia Limited, Invesco Asset Management
Limited and Invesco Asset Management Deutschland GmbH are affiliated investment advisors that serve as
subadvisors to many of the products and services represented by Invesco Aim. Invesco Aim Distributors, Inc. is
the distributor for the retail mutual funds, exchange-traded funds and U.S. institutional money market funds
represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd.
invescoaim.com TFI-SAR-1 Invesco Aim Distributors, Inc.
ITEM 2. CODE OF ETHICS.
There were no amendments to the Code of Ethics (the "Code") that
applies to the Registrant's Principal Executive Officer ("PEO") and
Principal Financial Officer ("PFO") 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.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
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 INVESTMENT 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 September 24, 2008, an evaluation was performed under the supervision
and with the participation of the officers of the Registrant, including the
Principal Executive Officer ("PEO") and Principal Financial Officer
("PFO"), to assess the effectiveness of the Registrant's disclosure
controls and procedures, as that term is defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (the "Act"), as amended. Based on that
evaluation, the Registrant's officers, including the PEO and PFO, concluded
that, as of September 24, 2008, 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 the
report that has materially affected, or is reasonably likely to materially
affect, the Registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
12(a) (1) Not applicable.
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: December 5, 2008
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: December 5, 2008
By: /s/ Sheri Morris
---------------------------------
Sheri Morris
Principal Financial Officer
Date: December 5, 2008
EXHIBIT INDEX
12(a) (1) Not applicable.
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.