UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-21914
RIVERSOURCE SHORT TERM INVESTMENTS SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 7/31
Date of reporting period: 1/31
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
SHORT-TERM CASH FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2009
RIVERSOURCE SHORT-TERM CASH FUND SEEKS TO PROVIDE
SHAREHOLDERS WITH MAXIMUM CURRENT INCOME CONSISTENT
WITH LIQUIDITY AND STABILITY OF PRINCIPAL.
Shares of the Fund are issued solely in private placement transactions that
do not involve any public offering within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the 1933 Act). Investments in the Fund
may be made only by investment companies, common or commingled trust funds
or similar organizations or persons that are accredited investors within the
meaning of the 1933 Act.
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 3
Portfolio of Investments........... 4
Statement of Assets and
Liabilities...................... 8
Statement of Operations............ 9
Statements of Changes in Net
Assets........................... 10
Financial Highlights............... 11
Notes to Financial Statements...... 12
Proxy Voting....................... 20
</Table>
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RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
PORTFOLIO COMPOSITION (at Jan. 31, 2009; % of portfolio assets)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Certificates of Deposit 2.7%
- ------------------------------------------------------------
Commercial Paper 27.3%
- ------------------------------------------------------------
Floating Rate Notes 5.6%
- ------------------------------------------------------------
Investments of Cash Collateral Received for
Securities on Loan 3.9%
- ------------------------------------------------------------
U.S. Government Agencies 60.5%
- ------------------------------------------------------------
</Table>
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2 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
FUND EXPENSES EXAMPLE ---------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur ongoing costs which may include
custodian fees and other nonadvisory expenses. This example is intended to help
you understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended Jan. 31, 2009.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,007.50 $0.04 .01%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,025.03 $0.04 .01%
- ------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 183/365 (to reflect the one-half year period).
(b) Based on the actual return of +0.75% for the six months ended Jan. 31, 2009.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 3
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2009 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
U.S. GOVERNMENT AGENCIES (63.0%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Federal Home Loan Bank Disc Nts
02-02-09 0.10% $100,000,000(d) $99,999,166
02-06-09 0.06 50,000,000 49,999,417
02-26-09 0.05 78,000,000 77,997,183
02-27-09 0.10 100,000,000 99,992,499
03-02-09 0.09 100,000,000 99,992,500
03-03-09 0.13 50,000,000 49,994,403
03-04-09 0.10 100,000,000 99,991,111
03-05-09 0.10 100,000,000 99,990,833
03-11-09 0.20 50,000,000 49,989,167
03-16-09 0.25 50,000,000 49,984,722
03-17-09 0.27 100,000,000 99,966,250
03-18-09 0.25 50,000,000 49,984,028
03-19-09 0.27 50,000,000 49,982,375
03-20-09 0.27 50,000,000 49,982,000
03-25-09 0.07 75,000,000 74,992,271
03-27-09 0.31 100,000,000 99,952,639
03-30-09 0.07 50,000,000 49,994,361
Federal Home Loan Mtge Corp Disc Nts
02-02-09 0.03 30,000,000 29,999,917
02-09-09 0.91 75,000,000 74,981,250
02-17-09 1.97 29,700,000 29,671,109
03-10-09 1.11 25,000,000 24,970,339
Federal Natl Mtge Assn Disc Nts
02-23-09 0.97 80,000,000 79,948,889
03-09-09 0.08 50,000,000 49,995,889
- -------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCIES
(Cost: $1,542,352,318) $1,542,352,318
- -------------------------------------------------------------------------------------
<Caption>
CERTIFICATES OF DEPOSIT (2.8%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Canadian Imperial Bank of Commerce
02-02-09 0.19% $67,400,000 $67,400,000
- -------------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $67,400,000) $67,400,000
- -------------------------------------------------------------------------------------
<Caption>
FLOATING RATE NOTES (5.8%)(b)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Federal Home Loan Bank Disc Nts
07-07-09 0.57% $42,000,000 $42,000,000
Federal Home Loan Mtge Corp Disc Nts
04-27-09 1.16 30,000,000 30,000,000
Wells Fargo & Co
09-18-09 0.51 70,000,000 70,000,000
- -------------------------------------------------------------------------------------
TOTAL FLOATING RATE NOTES
(Cost: $142,000,000) $142,000,000
- -------------------------------------------------------------------------------------
<Caption>
COMMERCIAL PAPER (28.4%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (18.2%)
Bryant Park Funding LLC
03-12-09 0.30% $45,000,000 $44,985,000
Chariot Funding LLC
02-18-09 0.29 50,000,000 49,992,500
Enterprise Funding LLC
02-20-09 0.30 50,000,000 49,991,389
Falcon Asset Securitization LLC
02-11-09 0.93 20,000,000 19,993,889
03-06-09 0.30 50,000,000 49,985,833
Kitty Hawk Funding
02-17-09 0.30 25,000,000 24,996,340
Ranger Funding LLC
03-13-09 0.32 25,000,000 24,990,889
Salisbury Receivables LLC
02-19-09 0.29 45,000,000(c) 44,992,875
03-06-09 0.34 30,000,000(c) 29,990,083
</Table>
See accompanying Notes to Portfolio of Investments.
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4 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMERCIAL PAPER (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (CONT.)
Sheffield Receivables
02-17-09 0.29% $30,000,000(c) $29,995,750
02-19-09 0.48 25,000,000(c) 24,993,403
Thunder Bay Funding LLC
03-02-09 0.32 50,000,000 49,986,250
---------------
Total 444,894,201
- -------------------------------------------------------------------------------------
BANKING (3.7%)
Bank of Scotland
02-17-09 0.33 30,000,000 29,995,183
Royal Bank of Scotland
02-06-09 0.30 30,000,000 29,998,251
02-13-09 0.27 30,000,000 29,996,858
---------------
Total 89,990,292
- -------------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING (3.0%)
General Electric
02-02-09 0.18 75,000,000 74,998,917
- -------------------------------------------------------------------------------------
ELECTRIC (1.2%)
FPL Fuels
02-10-09 0.28 29,400,000 29,397,550
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OTHER FINANCIAL INSTITUTIONS (2.3%)
BNP Paribas Finance
02-02-09 0.17 57,100,000 57,099,207
- -------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost: $696,380,167) $696,380,167
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (4.1%)
SHARES VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime Money Market Fund 100,000,000 $100,000,000
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL
RECEIVED FOR SECURITIES ON LOAN
(Cost: $100,000,000) $100,000,000
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,548,132,485)(e) $2,548,132,485
=====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Jan. 31,
2009. The maturity date disclosed represents the final maturity. For
purposes of Rule 2a-7, maturity is the later of the next put or interest
rate reset date.
(c) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors." This security has been determined to be liquid
under guidelines established by the Fund's Board of Directors. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers. At Jan. 31, 2009, the value of these
securities amounted to $129,972,111 or 5.3% of net assets.
(d) At Jan. 31, 2009, security was partially or fully on loan. See Note 4 to
the financial statements.
(e) Also represents the cost of securities for federal income tax purposes at
Jan. 31, 2009.
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RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 5
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS
Statement of Financial Accounting Standards No. 157 (SFAS 157) seeks to
implement more uniform reporting relating to the fair valuation of securities
for financial statement purposes. Mutual funds are required to implement the
requirements of this standard for fiscal years beginning after Nov. 15, 2007.
While uniformity of presentation is the objective of the standard, it is likely
that there may be a range of practices utilized and it may be some period of
time before industry practices become more uniform. For this reason care should
be exercised in interpreting this information and/or using it for comparison
with other mutual funds.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:
- Level 1 -- quoted prices in active markets for identical securities
- Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risks,
etc.)
- Level 3 -- significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
Observable inputs are those based on market data obtained from sources
independent of the fund, and unobservable inputs reflect the fund's own
assumptions based on the best information available. The input levels are not
necessarily an indication of the risk or liquidity associated with investments
at that level.
The following table is a summary of the inputs used to value the Fund's
investments as of Jan. 31, 2009:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2009
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- -------------------------------------------------------------------------------------
Investments in
securities $100,000,000 $2,448,132,485 $-- $2,548,132,485
</Table>
Short-term securities are valued using amortized cost, as permitted under Rule
2a-7 of the Investment Company Act of 1940. Generally, amortized cost
approximates the current fair value of these securities, but because the value
is not obtained from a quoted price in an active market, such securities are
reflected as Level 2.
- --------------------------------------------------------------------------------
6 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
is available upon request by calling (888) 791-3380.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 7
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities*, at value (identified cost
$2,448,132,485) $2,448,132,485
Investments of cash collateral received for securities on loan
(identified cost $100,000,000) 100,000,000
- ---------------------------------------------------------------------------------
Total investments in securities (identified cost $2,548,132,485) 2,548,132,485
- ---------------------------------------------------------------------------------
Cash 36,038
Accrued interest receivable 231,683
- ---------------------------------------------------------------------------------
Total assets 2,548,400,206
- ---------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 1,039,155
Payable upon return of securities loaned 100,000,000
Other accrued expenses 60,150
- ---------------------------------------------------------------------------------
Total liabilities 101,099,305
- ---------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $2,447,300,901
- ---------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 24,473,221
Additional paid-in capital 2,422,848,927
Excess of distributions over net investment income (309,877)
Accumulated net realized gain (loss) 288,630
- ---------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $2,447,300,901
- ---------------------------------------------------------------------------------
Shares outstanding 2,447,322,148
- ---------------------------------------------------------------------------------
Net asset value per share of outstanding capital stock $ 1.00
- ---------------------------------------------------------------------------------
*Including securities on loan, at value $ 100,000,000
- ---------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
8 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Interest 22,605,506
Income from securities lending 341,374
- -------------------------------------------------------------------------------
Total income 22,946,880
- -------------------------------------------------------------------------------
Expenses:
Custodian fees 86,360
Printing and postage 6,887
Professional fees 15,125
Other 17,670
- -------------------------------------------------------------------------------
Total expenses 126,042
Earnings and bank fee credits on cash balances (394)
- -------------------------------------------------------------------------------
Total net expenses 125,648
- -------------------------------------------------------------------------------
Investment income (loss) -- net 22,821,232
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (38,829,807)
Reimbursement from affiliate 39,122,218
- -------------------------------------------------------------------------------
Net realized gain (loss) on investments 292,411
- -------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 23,113,643
- -------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 9
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 22,821,232 $ 128,637,668
Net realized gain (loss) on investments 292,411 (3,781)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 23,113,643 128,633,887
- -----------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (23,131,109) (128,637,668)
- -----------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS AT A CONSTANT $1 NET ASSET VALUE
Proceeds from sales of shares 10,729,024,853 34,092,040,785
Net asset value of shares issued for reinvestment of
distributions 22,799,850 130,978,218
Payments for redemptions of shares (11,524,427,319) (34,231,937,417)
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (772,602,616) (8,918,414)
- -----------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (772,620,082) (8,922,195)
Net assets at beginning of period 3,219,920,983 3,228,843,178
- -----------------------------------------------------------------------------------------------------
Net assets at end of period $ 2,447,300,901 $ 3,219,920,983
- -----------------------------------------------------------------------------------------------------
Undistributed (excess of distributions over) net investment
income $ (309,877) $ --
- -----------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
10 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007(b)
Net asset value, beginning of period $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(c) .04 .04
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.01) (.04) (.04)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.01) (.04) (.04)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $2,447 $3,220 $3,229
- --------------------------------------------------------------------------------------------------------------
Total expenses(d) .01%(e) .01% .01%(e)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.62%(e) 3.93% 5.37%(e)
- --------------------------------------------------------------------------------------------------------------
Total return .75%(f),(g) 4.07% 4.66%(f)
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Sept. 26, 2006 (date the Fund became available) to July
31, 2007.
(c) Per share amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(e) Adjusted to an annual basis.
(f) Not annualized.
(g) During the six months ended Jan. 31, 2009, the Fund received a reimbursement
from an affiliate. Had the Fund not received this reimbursement, the total
return would have been lower by 1.12%.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 11
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO JAN. 31, 2009)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Short-Term Cash Fund (the Fund) is a series of RiverSource Short
Term Investments Series, Inc. and is registered under the Investment Company Act
of 1940 (as amended) (the 1940 Act) as a diversified, open-end management
investment company. RiverSource Short Term Investments Series, Inc. has 100
billion authorized shares of capital stock that can be allocated among the
separate series as designated by the Board of Directors (the Board). The Fund
invests primarily in money market instruments.
Investments in the Fund may be made only by investment companies, common or
commingled trust funds or similar organizations or persons that are accredited
investors within the meaning of the Securities Act of 1933 (as amended).
At Jan. 31, 2009, the affiliated RiverSource Funds owned 100% of the Fund's
outstanding shares.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
Effective Aug. 1, 2008, the Fund adopted Statement of Financial Accounting
Standards No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. There was no impact to the
Fund's net assets or results of operations upon adoption. The fair valuation
measurements disclosure can be found following the Notes to Portfolio of
Investments.
Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at
amortized cost, which approximates market value, in order to maintain a constant
net asset value of $1 per share.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be
- --------------------------------------------------------------------------------
12 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
made against the Fund cannot be determined and the Fund has no historical basis
for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to the shareholders. No provision for income or excise
taxes is thus required. The Fund is treated as a separate entity for federal
income tax purposes.
Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes" clarifies the accounting for
uncertainty in income taxes recognized in accordance with FASB Statement 109,
"Accounting for Income Taxes." FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in the
financial statements. Management of the Fund has concluded that there are no
significant uncertain tax positions that would require recognition in the
financial statements. Generally, the tax authorities can examine all the tax
returns filed for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of post-October losses.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. Also, due to the timing of dividend distributions,
the fiscal year in which amounts are distributed may differ from the year that
the income or realized gains (losses) were recorded by the Fund.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared daily and payable monthly, are
reinvested in additional shares of the Fund at net asset value or payable in
cash.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including amortization of premium and discount, is
recognized daily.
2. EXPENSES
INVESTMENT MANAGEMENT SERVICES
Under the Investment Management Services Agreement, RiverSource Investments, LLC
(the Investment Manager), subject to the policies set by the Board, provides
investment management services. The Fund does not pay the Investment Manager a
fee for services, but it does pay taxes, brokerage commissions and nonadvisory
expenses.
- --------------------------------------------------------------------------------
RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 13
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
COMPENSATION OF BOARD MEMBERS
The Fund does not pay compensation to the board members. Compensation and
certain other core expenses are paid directly by the other RiverSource funds
that invest in this Fund.
EARNINGS CREDITS AND CUSTODIAN FEES
During the six months ended Jan. 31, 2009, the Fund's custodian fees were
reduced by $394 as a result of earnings credits from overnight cash balances.
Effective Dec. 15, 2008, the Fund pays custodian fees to JPMorgan Chase Bank,
N.A. Prior to Dec. 15, 2008, the Fund paid custodian fees amounting to $95,891
to Ameriprise Trust Company, a subsidiary of Ameriprise Financial, Inc.
(Ameriprise Financial), parent company of the Investment Manager.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities aggregated
$68,653,983,939 and $69,445,116,694, respectively, for the six months ended Jan.
31, 2009. Realized gains and losses are determined on an identified cost basis.
4. LENDING OF PORTFOLIO SECURITIES
Effective Dec. 1, 2008, the Fund has entered into a Master Securities Lending
Agreement ("the Agreement") with JPMorgan Chase Bank, N.A. ("JPMorgan"). The
Agreement authorizes JPMorgan as lending agent to lend securities to authorized
borrowers on behalf of the Fund. Pursuant to the Agreement, all loaned
securities are initially collateralized in an amount equivalent to 102% (for
securities denominated in U.S. dollars) or 105% (for all other securities) of
the value of the loaned securities, including accrued interest in the case of
fixed income securities. Collateral is maintained over the life of the loan
thereafter in an amount not less than 100% of the market value of loaned
securities, as determined at the close of each business day, except to the
extent that a collateral shortfall is due to a diminution in the market value of
authorized investments in which cash collateral is invested. Any additional
collateral required to maintain those levels due to market fluctuations of the
loaned securities is delivered the following business day. Collateral is either
in the form of cash or U.S. government securities. Cash collateral received is
invested by the lending agent on behalf of the Fund into authorized investments
pursuant to the Agreement. The investments made with the cash collateral are
listed on the Portfolio of Investments and the value of cash collateral received
at period end is disclosed on the Statement of Assets and Liabilities along with
the related obligation to return the collateral upon return of the securities
loaned. At Jan. 31, 2009, securities valued at $100,000,000 were on loan secured
by cash collateral of $100,000,000 invested in short-term securities or cash
equivalents.
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14 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Income of
$341,374 earned from securities lending from Dec. 1, 2008 through Jan. 31, 2009
is included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Prior to Dec. 1, 2008, RiverSource Investments, LLC served as securities lending
agent for the Fund under the Securities Lending Agency Agreement. For the period
from Aug. 1, 2008 to Nov. 30, 2008, the Fund had no securities on loan.
5. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
16, 2008, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other RiverSource
funds, severally and not jointly, permits collective borrowings up to $475
million. The borrowers shall have the right, upon written notice to the
Administrative Agent to request an increase of up to $175 million in the
aggregate amount of the credit facility from new or existing lenders, provided
that the aggregate amount of the credit facility shall at no time exceed $650
million. Participation in such increase by any existing lender shall be at such
lender's sole discretion. Interest is charged to each Fund based on its
borrowings at a rate equal to the federal funds rate plus 0.75%. Each borrowing
under the credit facility matures no later than 60 days after the date of
borrowing. The Fund also pays a commitment fee equal to its pro rata share of
the amount of the credit facility at a rate of 0.06% per annum, in addition to
an upfront fee equal to its pro rata share of 0.02% of the amount of the credit
facility. The Fund had no borrowings during the six months ended Jan. 31, 2009.
Under the prior credit facility which was effective until Oct. 15, 2008, the
Fund had entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A., whereby the Fund was permitted to borrow
for the
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RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 15
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility agreement, which was a collective agreement
between the Fund and certain other RiverSource funds, severally and not jointly,
permitted collective borrowings up to $500 million. Interest was charged to each
Fund based on its borrowings at a rate equal to the federal funds rate plus
0.30%. Each borrowing under the credit facility matured no later than 60 days
after the date of borrowing. The Fund also paid a commitment fee equal to its
pro rata share of the amount of the credit facility at a rate of 0.06% per
annum.
6. REIMBURSEMENT FROM AFFILIATE
On Sept. 15, 2008, Lehman Brothers Holdings Inc. (Lehman Brothers) filed a
Chapter 11 bankruptcy petition. At that time, the Fund owned $50 million in
medium term commercial paper issued by Lehman Brothers (the Lehman Notes). The
value of the Lehman Notes declined following Lehman Brothers filing of its
bankruptcy petition. From Sept. 16, 2008 through Sept. 30, 2008, Ameriprise
Financial purchased the total $50 million par of the Lehman Notes from the Fund
for cash at a price equal to amortized cost plus accrued interest in accordance
with Rule 17a-9 of the 1940 Act. The amount shown in the Fund's Statement of
Operations as a reimbursement from affiliate is equal to the difference between
the fair value of the Lehman Notes at purchase date and the cash received from
Ameriprise Financial.
7. CAPITAL LOSS CARRY-OVER AND POST-OCTOBER LOSS
For federal income tax purposes, the Fund had a capital loss carry-over of
$1,875 at July 31, 2008, that if not offset by capital gains will expire in
2016.
Because the measurement periods for a regulated investment company's income are
different for excise tax purposes verses income tax purposes, special rules are
in place to protect the amount of earnings and profits needed to support excise
tax distributions. As a result, the Fund is permitted to treat net capital
losses realized between Nov. 1, 2007 and its fiscal year end ("post-October
loss") as occurring on the first day of the following tax year. At July 31,
2008, the Fund had a post-October loss of $1,906 that is treated for income tax
purposes as occurring on Aug. 1, 2008.
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires.
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16 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
8. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003,
Seligman conducted an extensive internal review concerning mutual fund trading
practices. Seligman's review, which covered the period 2001-2003, noted one
arrangement that permitted frequent trading in certain open-end registered
investment companies managed by Seligman (the Seligman Funds); this arrangement
was in the process of being closed down by Seligman before September 2003.
Seligman identified three other arrangements that permitted
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RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 17
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
frequent trading, all of which had been terminated by September 2002. In January
2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements
to its clients and to shareholders of the Seligman Funds. Seligman also provided
information concerning mutual fund trading practices to the SEC and the Office
of the Attorney General of the State of New York (NYAG). In September 2005, the
New York staff of the SEC indicated that it was considering recommending to the
Commissioners of the SEC the instituting of a formal action against Seligman and
the distributor of the Seligman Funds, Seligman Advisors, Inc., (which is now
known as RiverSource Fund Distributors, Inc.), relating to frequent trading in
the Seligman Funds. Seligman responded to the staff in October 2005 that it
believed that any action would be both inappropriate and unnecessary, especially
in light of the fact that Seligman had previously resolved the underlying issue
with the Independent Directors of the Seligman Funds and made recompense to the
affected Seligman Funds.
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., Seligman Data Corp. and Brian
T. Zino (collectively, the Seligman Parties), alleging, in substance, that the
Seligman Parties permitted various persons to engage in frequent trading and, as
a result, the prospectus disclosure used by the registered investment companies
then managed by Seligman is and has been misleading. The NYAG included other
related claims and also claimed that the fees charged by Seligman to the
Seligman Funds were excessive. On March 13, 2009, without admitting or denying
any violations of law or wrongdoing, the Seligman Parties entered into a
stipulation of settlement with the NYAG and settled the claims made by the NYAG.
Under the terms of the settlement, Seligman will pay $11.3 million to four
Seligman Funds. This settlement resolved all outstanding matters between the
Seligman Parties and the NYAG. In addition to the foregoing matter, the New York
staff of the SEC indicated in September 2005 that it was considering
recommending to the Commissioners of the SEC the instituting of a formal action
against Seligman and Seligman Advisors, Inc. relating to frequent trading in the
Seligman Funds. Seligman responded to the staff in October 2005 that it believed
that any action would be both inappropriate and unnecessary, especially in light
of the fact that Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the
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18 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Funds or the ability of Ameriprise Financial or its affiliates to perform under
their contracts with the Funds. Ameriprise Financial is required to make 10-Q,
10-K and, as necessary, 8-K filings with the Securities and Exchange Commission
on legal and regulatory matters that relate to Ameriprise Financial and its
affiliates. Copies of these filings may be obtained by accessing the SEC website
at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
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RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT 19
PROXY VOTING -------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; or searching the website of the Securities and Exchange Commission
(SEC) at http://www.sec.gov. Information regarding how the Fund voted proxies
relating to portfolio securities is filed with the SEC by August 31 for the most
recent 12-month period ending June 30 of that year, and is available without
charge by visiting riversource.com/funds; or searching the website of the SEC at
www.sec.gov.
S-6284 D (4/09)
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20 RIVERSOURCE SHORT-TERM CASH FUND -- 2009 SEMIANNUAL REPORT
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual
reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. The complete schedule of investments is included in Item 1 of this Form
N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not
applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of matters to a vote of security holders. Not applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's Principal Financial Officer and Principal Executive Officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) Separate certification for the Registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached
as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RiverSource Short Term Investments Series, Inc.
By /s/ Patrick T. Bannigan
-----------------------------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date April 1, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By /s/ Patrick T. Bannigan
-----------------------------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date April 1, 2009
By /s/ Jeffrey P. Fox
-----------------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date April 1, 2009