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 811-2591
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RIVERSOURCE MONEY MARKET SERIES, INC.
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(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
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(Address of principal executive offices) (Zip code)
Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810, Minneapolis, MN 55402-3268
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(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 330-9283
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Date of fiscal year end: 7/31
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Date of reporting period: 7/31
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Annual Report
RIVERSOURCE [LOGO](SM)
INVESTMENTS
RIVERSOURCE(SM)
CASH MANAGEMENT FUND
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ANNUAL REPORT FOR
THE PERIOD ENDED
JULY 31, 2006
> RIVERSOURCE CASH MANAGEMENT
FUND SEEKS TO PROVIDE
SHAREHOLDERS WITH MAXIMUM
CURRENT INCOME CONSISTENT WITH
LIQUIDITY AND STABILITY OF
PRINCIPAL.
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TABLE OF CONTENTS
Fund Snapshot .......................................................... 3
Performance Summary .................................................... 4
Questions & Answers with Portfolio Management .......................... 6
Investments in Securities .............................................. 8
Financial Statements ................................................... 12
Notes to Financial Statements .......................................... 15
Report of Independent Registered Public Accounting Firm ................ 27
Federal Income Tax Information ......................................... 28
Fund Expenses Example .................................................. 31
Board Members and Officers ............................................. 33
Approval of Investment Management Services Agreement ................... 36
Proxy Voting ........................................................... 36
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2 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
FUND SNAPSHOT AT JULY 31, 2006
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FUND OVERVIEW
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RiverSource Cash Management Fund invests in money market securities, such as
high quality commercial paper, banker's acceptances and CDs, to provide
current income.
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SECTOR BREAKDOWN
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Percentage of portfolio assets
Commercial Paper 86.6%
Certificates of Deposit 10.6% [PIE CHART]
U.S. Government Obligations & Agencies 2.8%
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STYLE MATRIX
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[chart] Shading within the style matrix indicates areas in which the Fund
generally invests.
DURATION
SHORT INT. LONG
X HIGH
MEDIUM QUALITY
LOW
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and serves as a guideline for helping
you build a portfolio.
Investment products involve risks including possible loss of principal and
fluctuation in value.
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FUND FACTS
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TICKER SYMBOL INCEPTION DATE
Class A IDSXX 10/6/75
Class B ACBXX 3/20/95
Class C -- 6/26/00
Class I RCIXX 3/4/04
Class Y IDYXX 3/20/95
Total net assets $ 3.945 billion
Number of holdings 137
Weighted average maturity 52 days
AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO MAINTAIN THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
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RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 3
PERFORMANCE SUMMARY
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FUND PERFORMANCE
For the year ended July 31, 2006
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.]
+3.82% RiverSource Cash Management Fund Class A
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth
more or less than their original cost. Current performance may be lower or
higher than the performance information shown. You may obtain performance
information current to the most recent month-end by contacting your financial
institution or visiting riversource.com/funds.
The Fund is neither insured nor guaranteed by the FDIC (Federal Deposit
Insurance Corporation) or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1 per share, it is possible to
lose money by investing in the Fund. Yields will fluctuate. The seven-day
current yield more closely reflects the current earnings of the Fund than the
total return. The performance of other classes may vary from that shown
because of differences in expenses.
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4 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
PERFORMANCE SUMMARY
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AVERAGE ANNUAL TOTAL RETURNS
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CLASS A CLASS B CLASS C CLASS I CLASS Y
(INCEPTION DATES) (10/6/75) (3/20/95) (6/26/00) (3/4/04) (3/20/95)
AFTER AFTER
NAV(1) NAV(2) CDSC(3) NAV(2) CDSC(4) NAV(1) NAV(1)
AT JULY 31, 2006
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1 year +3.82% +3.14% -1.86% +3.14% +2.14% +4.16% +3.95%
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3 years +1.92% +1.38% +0.07% +1.38% +1.38% N/A +2.05%
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5 years +1.69% +1.10% +0.71% +1.10% +1.10% N/A +1.78%
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10 years +3.44% +2.75% +2.75% N/A N/A N/A +3.49%
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Since inception +6.16% +2.98% +2.98% +1.76% +1.76% +2.69% +3.73%
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AT JUNE 30, 2006
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1 year +3.61% +2.94% -2.06% +2.94% +1.94% +3.97% +3.75%
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3 years +1.80% +1.27% -0.05% +1.27% +1.27% N/A +1.93%
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5 years +1.67% +1.07% +0.69% +1.08% +1.08% N/A +1.76%
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10 years +3.43% +2.75% +2.75% N/A N/A N/A +3.49%
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Since inception +6.16% +2.97% +2.97% +1.73% +1.73% +2.60% +3.72%
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(1) Sales charge is not applicable to these shares. Class I and Class Y
shares available to institutional investors only.
(2) Excluding sales charge.
(3) Returns at maximum contingent deferred sales charge (CDSC). CDSC applies
as follows:
first year 5%; second and third year 4%; fourth year 3%; fifth year 2%;
sixth year 1%; no sales charge thereafter.
(4) 1% CDSC applies to redemptions made within the first year of purchase.
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RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 5
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below is the discussion of RiverSource Cash Management Fund's results and
positioning for the 12 months ended July 31, 2006.
Q: How did RiverSource Cash Management Fund perform for the annual period?
A: RiverSource Cash Management Fund's Class A shares returned 3.82% for the
12 months ended July 31, 2006. The Fund's seven-day annualized simple
yield was 4.84%, while its seven-day annualized compound yield was 4.96%
as of July 31, 2006. The Fund serves as a conservative, shorter-term
investment choice for individuals seeking current income.
Q: What factors most significantly affected the Fund's performance?
A: An increase in short-term rates had the greatest effect on the Fund's
annual results. The Federal Reserve Board (the Fed) raised interest
rates by 0.25% eight additional times during the 12 months, bringing the
targeted federal funds rate, an interest rate that affects short-term
rates, to 5.25%. As the Fed raised rates, money market yields also moved
higher.
While concern about whether the Fed would continue its "measured" pace
of rate increases was always present in the market, debate as to when
and at what level the Fed might stop raising rates tended to rise over
the course of the 12-month reporting period. Because we had anticipated
a continuation of rate tightening due to the generally positive economic
backdrop, we positioned the Fund to take advantage of a rising rate
environment.
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BECAUSE WE HAD ANTICIPATED A CONTINUATION OF RATE TIGHTENING DUE TO THE
GENERALLY POSITIVE ECONOMIC BACKDROP, WE POSITIONED THE FUND TO TAKE
ADVANTAGE OF A RISING RATE ENVIRONMENT.
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6 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
QUESTIONS & ANSWERS
Q: What changes did you make to the Fund's portfolio during the period?
A: Throughout the period, we were alert to changes in the details of
economic releases that could provide opportunities to adjust the
portfolio. As changing expectations of Fed actions were priced into or
out of the market, we adjusted the Fund's duration to maximize yield.
The Fund was generally focused on one- to three-month maturities, but we
opportunistically added three-month and longer fixed-rate securities to
maximize yield. As of July 31, 2006, the average weighted maturity of
the Fund was 52 days, compared to 40 days at July 31, 2005.
During much of the fiscal year, we focused the Fund's holdings on
floating rate securities. This strategy reflected our belief that
floating rate issues, which are reset in line with changes in market
rates, were attractively valued relative to fixed rate products in a
rising interest rate environment. Indeed, these floating securities
enabled the Fund to capture higher rates through the frequent resets of
these securities' yields. However, toward the end of the reporting
period, we began lengthening the Fund's duration in anticipation of the
Fed nearing an end to its current tightening cycle. In implementing this
strategy, we favored longer-dated fixed rate securities that enabled the
Fund to lock in higher yields vs. floating rate securities.
Q: How do you intend to manage the Fund in the coming months?
A: As mentioned, we believe the Fed is nearing an end to its current
tightening cycle. Thus, we intend to increase the Fund's allocation to
fixed rate securities during the coming months, seeking to lock in
higher rates. As we add fixed rate securities to the portfolio, we
expect the Fund's weighted average maturity to lengthen somewhat
further.
We will continue to closely monitor economic data, Fed policy and any
shifts in the money market yield curve, striving to strategically adjust
the Fund's portfolio positioning accordingly. We intend to continue to
focus on high-quality investments with minimal credit risk while seeking
competitive yields.
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RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 7
INVESTMENTS IN SECURITIES
JULY 31, 2006
(Percentages represent value of investments compared to net assets)
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CERTIFICATES OF DEPOSIT (10.5%)
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AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
CERTIFICATE OF DEPOSIT
AmSouth Bank
11-10-06 5.15% $24,000,000 $ 24,000,000
Bank of New York
02-14-07 4.90 20,000,000 20,000,000
Canadian Imperial Bank of Commerce NY
01-29-07 4.71 20,000,000 20,000,000
Citibank NA
08-28-06 5.13 37,000,000 37,000,000
09-07-06 5.20 32,000,000 32,000,000
Citigroup Funding
09-20-06 5.37 37,000,000 37,000,000
Credit Suisse First Boston NY
09-26-06 5.43 25,000,000(b) 25,000,000
03-29-07 5.12 22,000,000 22,000,000
06-26-07 5.68 40,000,000 40,000,000
DEPFA Bank
01-26-07 5.23 25,000,000 25,000,000
Deutsche Bank
01-16-07 4.68 20,000,000 20,000,000
Natexis Banques Populair NY
01-23-07 4.71 20,000,000 20,000,000
05-03-07 5.25 20,000,000 20,000,000
SunTrust Banks
08-22-06 5.35 42,000,000(b) 42,000,000
Wells Fargo Bank
08-09-06 5.28 10,000,000 10,000,000
05-03-07 5.20 20,000,000(b) 20,000,000
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TOTAL CERTIFICATES OF DEPOSIT
(Cost: $414,000,000) $ 414,000,000
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COMMERCIAL PAPER (86.2%)
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AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (60.7%)
Amstel Funding
09-27-06 4.93% $12,000,000(c) $ 11,905,380
09-29-06 5.37 32,000,000(c) 31,716,276
10-12-06 5.38 14,000,000(c) 13,848,800
11-03-06 5.09 24,000,000(c) 23,681,653
Amsterdam Funding
08-14-06 4.93 30,000,000(c) 29,942,583
Beta Finance
09-15-06 5.22 30,000,000 29,801,250
Bryant Park Funding LLC
08-04-06 3.97 42,000,000(c) 41,981,503
08-10-06 4.78 24,000,000(c) 23,968,200
08-15-06 4.97 35,000,000(c) 34,927,725
08-24-06 5.15 17,000,000(c) 16,941,784
CHARTA LLC
08-08-06 4.64 30,000,000(c) 29,969,083
09-12-06 5.30 15,000,000(c) 14,905,675
Chesham Finance LLC
08-01-06 5.30 1,600,000 1,600,000
09-15-06 5.34 40,000,000 39,729,000
Cheyne Finance LLC
08-23-06 5.13 25,000,000 24,918,264
04-20-07 5.34 23,000,000(b) 22,997,489
Citibank Credit Card Dakota Nts
08-16-06 4.93 81,000,000(c) 80,822,812
09-11-06 5.15 60,000,000(c) 59,641,933
10-16-06 5.38 16,000,000(c) 15,817,938
Cullinan Finance
08-11-06 4.83 34,000,000 33,949,850
10-05-06 5.37 56,000,000 55,454,000
10-12-06 5.38 39,000,000 38,578,800
03-15-07 5.33 25,000,000(b) 24,996,817
Deer Valley Funding LLC
08-01-06 5.16 40,000,000 40,000,000
08-11-06 4.83 15,687,000 15,663,905
08-15-06 4.98 60,000,000 59,875,867
08-22-06 5.12 40,000,000 39,875,167
See accompanying notes to investments in securities.
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8 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
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COMMERCIAL PAPER (CONTINUED)
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AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (CONT.)
Ebury Finance LLC
08-02-06 2.66% $40,000,000 $ 39,994,100
08-04-06 3.98 37,000,000 36,983,628
08-11-06 4.85 50,000,000 49,925,972
01-16-07 5.54 28,000,000 27,290,480
Emerald Ctfs MBNA MCCT
08-10-06 4.79 42,000,000(c) 41,944,245
08-16-06 4.99 35,000,000(c) 34,922,563
08-24-06 5.14 27,000,000(c) 26,907,885
08-30-06 5.21 25,000,000(c) 24,891,854
10-25-06 5.40 27,000,000(c) 26,656,388
Fairway Finance
08-09-06 4.72 10,000,000(c) 9,988,222
08-10-06 4.78 12,400,000(c) 12,383,570
10-12-06 5.31 36,000,000(b) 35,998,584
FCAR Owner Trust 1
08-08-06 4.62 33,000,000 32,966,184
Five Finance
08-11-06 4.84 26,237,000 26,198,228
08-18-06 4.89 10,000,000 9,975,586
08-21-06 4.95 10,000,000 9,971,222
10-04-06 5.35 38,000,000 37,636,551
10-06-06 5.33 1,000,000 990,173
10-10-06 5.38 16,000,000 15,832,000
Galaxy Funding
08-29-06 5.18 24,000,000(c) 23,900,227
09-07-06 5.09 22,800,000(c) 22,678,264
Gemini Securitization
08-09-06 4.71 48,000,000(c) 47,943,573
10-12-06 5.38 16,700,000(c) 16,519,640
Grampian Funding LLC
08-03-06 3.28 22,000,000(c) 21,993,987
08-07-06 4.23 27,000,000(c) 26,977,815
09-08-06 4.79 15,000,000(c) 14,922,575
10-10-06 5.03 12,000,000(c) 11,882,167
11-01-06 5.10 26,000,000(c) 25,661,798
K2 (USA) LLC
09-13-06 5.16 13,000,000 12,918,479
10-30-06 5.11 20,000,000 19,745,000
10-31-06 5.10 10,000,000 9,871,336
Kitty Hawk Funding
08-02-06 2.66 30,230,000(c) 30,225,541
08-15-06 4.97 20,000,000(c) 19,958,700
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COMMERCIAL PAPER (CONTINUED)
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AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (CONT.)
Nieuw Amsterdam
08-14-06 4.94% $26,000,000(c) $ 25,950,145
08-24-06 5.14 30,000,000(c) 29,897,650
09-15-06 5.22 24,000,000(c) 23,841,000
12-11-06 5.36 13,000,000(c) 12,747,367
Park Granada LLC
08-01-06 5.09 32,000,000(c) 32,000,000
10-02-06 5.34 39,000,000(c) 38,638,643
10-10-06 5.38 50,000,000(c) 49,475,000
01-05-07 5.53 16,000,000(c) 15,621,107
Park Sienna LLC
08-08-06 4.64 25,000,000(c) 24,974,236
Ranger Funding LLC
08-07-06 4.53 23,000,000(c) 22,979,760
Scaldis Capital LLC
09-01-06 5.01 40,000,000(c) 39,822,611
10-06-06 5.02 11,000,000(c) 10,898,158
10-23-06 5.37 23,000,000(c) 22,715,241
10-30-06 5.37 45,000,000(c) 44,397,000
Sedna Finance
08-07-06 4.53 24,000,000 23,978,880
08-15-06 5.13 39,000,000(b) 38,999,924
05-08-07 5.33 32,000,000 32,000,000
Solitaire Funding LLC
08-03-06 3.52 48,000,000(c) 47,985,920
08-08-06 4.51 14,000,000(c) 13,985,981
08-14-06 4.71 23,000,000(c) 22,957,974
08-23-06 5.05 30,000,000(c) 29,903,567
11-21-06 5.17 9,000,000(c) 8,856,360
White Pine Finance LLC
08-01-06 5.11 35,000,000 35,000,000
08-08-06 4.63 30,000,000 29,969,142
08-25-06 4.92 10,000,000 9,965,933
09-06-06 5.29 40,000,000(b) 39,999,605
10-31-06 5.10 1,445,000 1,426,408
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Total 2,393,155,903
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See accompanying notes to investments in securities.
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RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 9
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COMMERCIAL PAPER (CONTINUED)
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AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
BANKING (14.2%)
ANZ Delaware
10-05-06 4.99% $ 8,000,000 $ 7,927,417
Bank of America
10-11-06 5.05 38,000,000 37,620,032
10-27-06 5.08 25,000,000 24,693,083
DekaBank Deutsche Girozentrale
08-17-07 5.51 26,000,000(b) 25,999,912
DEPFA Bank
06-15-07 5.37 50,000,000(b) 50,000,000
Irish Life & Permanent
10-18-06 5.08 60,000,000(c) 59,338,517
04-04-07 5.62 25,550,000(c) 24,601,094
08-21-07 5.40 35,000,000(b) 34,997,525
Natexis Banques Populair
08-13-07 5.35 27,000,000(b) 27,000,000
Noredea North America
10-02-06 4.99 22,000,000 21,809,419
Northern Rock
07-09-07 5.35 59,300,000(b) 59,300,000
08-03-07 5.39 15,000,000(b) 15,000,000
Skandinaviska Enskilda Banken
08-06-07 5.33 20,000,000(b) 20,000,000
08-18-07 5.36 30,000,000(b) 30,000,000
Societe Generale North America
10-18-06 5.09 42,000,000 41,536,355
Wells Fargo Bank
08-31-07 5.34 20,000,000 20,000,000
Westpac Banking
07-11-07 5.34 59,300,000(b) 59,300,000
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Total 559,123,354
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BROKERAGE (7.3%)
Bear Stearns Companies
10-13-06 5.33 50,000,000(b) 50,000,000
01-12-07 5.34 34,000,000(b) 34,000,000
08-15-07 5.41 25,000,000(b) 25,000,000
08-27-07 5.44 30,000,000(b) 30,000,000
Goldman Sachs Group
08-15-07 5.39 25,000,000(b) 25,000,000
Lehman Brothers Holdings
07-25-07 5.20 25,000,000(b,c) 25,000,000
08-20-07 5.49 42,000,000(b) 42,000,000
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COMMERCIAL PAPER (CONTINUED)
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AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
BROKERAGE (CONT.)
Merrill Lynch & Co
07-27-07 5.37% $25,000,000(b) $ 25,000,000
08-15-07 5.35 30,000,000(b) 30,000,000
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Total 286,000,000
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NON CAPTIVE CONSUMER (2.1%)
SLM
08-15-07 5.37 42,500,000(b) 42,500,000
08-20-07 5.38 40,000,000(b) 40,000,000
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Total 82,500,000
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NON CAPTIVE DIVERSIFIED (0.6%)
General Electric Capital
08-04-06 3.95 6,000,000 5,997,370
08-17-07 5.36 10,000,000(b) 10,000,000
General Electric Capital Services
09-13-06 5.18 7,000,000 6,955,937
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Total 22,953,307
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OTHER FINANCIAL INSTITUTIONS (0.6%)
HSBC Finance
08-24-07 5.43 25,000,000(b) 25,000,000
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PHARMACEUTICALS (0.8%)
Eli Lilly
09-01-07 5.32 30,000,000(b) 30,000,000
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TOTAL COMMERCIAL PAPER
(Cost: $3,398,732,564) $3,398,732,564
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BONDS (2.8%)
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COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
U.S. GOVERNMENT OBLIGATIONS & AGENCIES
U.S. Treasury Inflation-Indexed Bond
01-15-07 3.38% $110,923,456(d) $ 111,126,917
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TOTAL BONDS
(Cost: $111,126,917) $ 111,126,917
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TOTAL INVESTMENTS IN SECURITIES
(Cost: $3,923,859,481)(e) $ 3,923,859,481
==============================================================================
See accompanying notes to investments in securities.
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10 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
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NOTES TO INVESTMENTS IN SECURITIES
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(a) Securities are valued by 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
July 31, 2006. 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 July 31, 2006, the value
of these securities amounted to $1,497,017,690 or 38.0% of net assets.
(d) Inflation-indexed bonds are securities in which the principal amount is
adjusted for inflation and the semiannual interest payments equal a
fixed percentage of the inflation-adjusted principal amount.
(e) Also represents the cost of securities for federal income tax purposes
at July 31, 2006.
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, can be found at riversource.com/funds.
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RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 11
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2006
ASSETS
Investments in securities, at value (Note 1)
(identified cost $3,923,859,481) $ 3,923,859,481
Cash in bank on demand deposit 10,944,750
Capital shares receivable 4,172,179
Accrued interest receivable 9,005,449
- -----------------------------------------------------------------------------------------------------------
Total assets 3,947,981,859
- -----------------------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 2,578,332
Accrued investment management services fee 94,232
Accrued distribution fee 36,756
Accrued transfer agency fee 32,985
Accrued administrative services fee 16,024
Other accrued expenses 520,017
- -----------------------------------------------------------------------------------------------------------
Total liabilities 3,278,346
- -----------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 3,944,703,513
===========================================================================================================
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 39,429,911
Additional paid-in capital 3,903,504,095
Undistributed net investment income 1,769,508
Accumulated net realized gain (loss) (1)
- -----------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital stock $ 3,944,703,513
===========================================================================================================
Net assets applicable to outstanding shares: Class A $ 3,692,186,974
Class B $ 102,977,657
Class C $ 2,505,203
Class I $ 63,330,870
Class Y $ 83,702,809
Net asset value per share of outstanding capital stock: Class A shares 3,690,335,608 $ 1.00
Class B shares 103,122,495 $ 1.00
Class C shares 2,504,691 $ 1.00
Class I shares 63,304,092 $ 1.00
Class Y shares 83,724,233 $ 1.00
- -----------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
12 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2006
INVESTMENT INCOME
Income:
Interest $154,353,672
- ----------------------------------------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 10,801,723
Distribution fee
Class A 3,205,933
Class B 820,043
Class C 16,368
Transfer agency fee 9,734,856
Incremental transfer agency fee
Class A 843,898
Class B 34,400
Class C 753
Administrative services fees and expenses 1,741,492
Compensation of board members 27,763
Custodian fees 332,080
Printing and postage 1,296,639
Registration fees 198,080
Audit fees 39,000
Other 67,234
- ----------------------------------------------------------------------------------------------------------
Total expenses 29,160,262
Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) (2,785,284)
- ----------------------------------------------------------------------------------------------------------
26,374,978
Earnings and bank fee credits on cash balances (Note 2) (923,047)
- ----------------------------------------------------------------------------------------------------------
Total net expenses 25,451,931
- ----------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 128,901,741
- ----------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Reimbursement from affiliate (Note 2) 2,228,011
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $131,129,752
==========================================================================================================
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 13
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31, 2006 2005
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 128,901,741 $ 58,401,921
Net realized gain (loss) on investments -- 7,225
Reimbursement from affiliate 2,228,011 --
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 131,129,752 58,409,146
- -------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (120,543,466) (52,351,323)
Class B (3,346,291) (1,396,268)
Class C (67,050) (24,726)
Class I (1,312,882) (178,347)
Class Y (4,098,348) (4,451,257)
- -------------------------------------------------------------------------------------------------------------
Total distributions (129,368,037) (58,401,921)
- -------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS AT CONSTANT $1 NET ASSET VALUE
Proceeds from sales
Class A shares (Note 2) 5,730,467,995 4,887,009,614
Class B shares 192,945,487 210,343,122
Class C shares 5,371,287 6,916,934
Class I shares 79,544,919 8,702,782
Class Y shares 34,687,539 423,393,174
Reinvestment of distributions at net asset value
Class A shares 115,652,944 51,326,424
Class B shares 3,099,540 1,340,779
Class C shares 61,435 23,481
Class I shares 1,268,943 177,156
Class Y shares 4,049,831 4,417,983
Payments for redemptions
Class A shares (5,209,174,714) (5,564,771,727)
Class B shares (Note 2) (222,366,108) (262,086,267)
Class C shares (Note 2) (5,098,008) (8,234,019)
Class I shares (29,609,173) (636,149)
Class Y shares (94,609,608) (497,190,019)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions 606,292,309 (739,266,732)
- -------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 608,054,024 (739,259,507)
Net assets at beginning of year 3,336,649,489 4,075,908,996
- -------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 3,944,703,513 $ 3,336,649,489
=============================================================================================================
Undistributed net investment income $ 1,769,508 $ 568
- -------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
14 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of RiverSource Money Market Series, Inc. (formerly AXP
Money Market 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 Money Market Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board. The Fund invests primarily in money market
instruments.
The Fund offers Class A, Class B, Class C and Class Y shares.
o Class A shares have no sales charge.
o Class B shares may be subject to a contingent deferred sales charge
(CDSC) and automatically convert to Class A shares during the ninth year
of ownership.
o Class C shares may be subject to a CDSC.
o Class Y shares have no sales charge and are offered only to qualifying
institutional investors.
The Fund offers an additional class of shares, Class I, exclusively to certain
institutional investors. Class I shares have no sales charge and are made
available through a separate prospectus supplement provided to investors
eligible to purchase the shares. At July 31, 2006, Ameriprise Financial, Inc.
(Ameriprise Financial) and the affiliated fund-of-funds owned 100% of Class I
shares, which represents 1.61% of the Fund's net assets.
All classes of shares have identical voting, dividend and liquidation rights.
The distribution fee and transfer agency fees (class specific expenses) differ
among classes. Income, expenses (other than class specific expenses) and
realized and unrealized gains or losses on investments are allocated to each
class of shares based upon its relative net assets.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 15
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
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 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 shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes. The character of distributions made
during the year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax purposes. Also,
due to the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized gains
(losses) were recorded by the Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, undistributed net investment income has been
increased by $2,235,236 and accumulated net realized gain has been decreased
by $2,235,236.
- ------------------------------------------------------------------------------
16 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
The tax character of distributions paid for the years indicated is as follows:
YEAR ENDED JULY 31, 2006 2005
- ------------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income ........................ $ 120,543,466 $ 52,351,323
Long-term capital gain ................. -- --
CLASS B
Distributions paid from:
Ordinary income ........................ 3,346,291 1,396,268
Long-term capital gain ................. -- --
CLASS C
Distributions paid from:
Ordinary income ........................ 67,050 24,726
Long-term capital gain ................. -- --
CLASS I
Distributions paid from:
Ordinary income ........................ 1,312,882 178,347
Long-term capital gain ................. -- --
CLASS Y
Distributions paid from:
Ordinary income ........................ 4,098,348 4,451,257
Long-term capital gain ................. -- --
At July 31, 2006, the components of distributable earnings on a tax basis are
as follows:
Undistributed ordinary income ................................ $ 4,347,839
Accumulated long-term gain (loss) ............................ $ --
Unrealized appreciation (depreciation). ...................... $ --
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation 48 (FIN 48), "Accounting for Uncertainty in Income Taxes." FIN
48 clarifies the accounting for uncertainty in income taxes recognized in
accordance with FASB Statement 109, "Accounting for Income Taxes." FIN 48
prescribes a two-step process to recognize and measure a tax position taken or
expected to be taken in a tax return. The first step is to determine whether a
tax position has met the more-likely-than-not recognition threshold and the
second step is to measure a tax position that meets the threshold to determine
the amount of benefit to recognize. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. FIN 48 is effective for fiscal years
beginning after Dec. 15, 2006. Tax positions of the Fund are being evaluated
to determine the impact, if any, that will result from the adoption of FIN 48.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 17
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 AND SALES CHARGES
Under an Investment Management Services Agreement, RiverSource Investments,
LLC (the Investment Manager) determines which securities will be purchased,
held or sold. Prior to Oct. 1, 2005, investment services were provided by
Ameriprise Financial. The management fee is a percentage of the Fund's average
daily net assets that declines from 0.33% to 0.15% annually as the Fund's
assets increase. Prior to March 1, 2006, the management fee percentage of the
Fund's average daily net assets declined from 0.36% to 0.25% annually as the
Fund's assets increased.
Under the current Administrative Services Agreement, the Fund pays Ameriprise
Financial a fee for administration and accounting services at a percentage of
the Fund's average daily net assets that declines from 0.06% to 0.03% annually
as the Fund's assets increase. Prior to Oct. 1, 2005, the fee percentage of
the Fund's average daily net assets declined from 0.03% to 0.02% annually as
the Fund's assets increased. A minor portion of additional administrative
service expenses paid by the Fund are consultants' fees and fund office
expenses. Under this agreement, the Fund also pays taxes, audit and certain
legal fees, registration fees for shares, compensation of board members,
corporate filing fees and any other expenses properly payable by the Fund and
approved by the Board.
Under a Deferred Compensation Plan (the Plan), non-interested board members
may defer receipt of their compensation. Deferred amounts are treated as
though equivalent dollar amounts had been invested in shares of the Fund or
other RiverSource funds. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in
accordance with the Plan.
Under a separate Transfer Agency Agreement, RiverSource Service Corporation
(the Transfer Agent) maintains shareholder accounts and records. The Fund pays
the Transfer Agent an annual fee per shareholder account for this service as
follows:
o Class A $22.00
o Class B $23.00
o Class C $22.50
o Class Y $20.00
The incremental transfer agency fee is the amount charged to the specific
classes for the additional expense above the fee for Class Y.
- ------------------------------------------------------------------------------
18 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
Class I pays a transfer agency fee at an annual rate per shareholder account
of $1. This amount is included in the transfer agency fee on the statement of
operations.
The Transfer Agent charges an annual closed account fee of $5 per inactive
account, charged on a pro rata basis for 12 months from the date the account
becomes inactive. These fees are included in the transfer agency fees on the
statement of operations.
The Fund has agreements with Ameriprise Financial Services, Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution pursuant to Rule 12b-1, the Fund pays a fee at an
annual rate up to 0.10% of the Fund's average daily net assets attributable to
Class A shares, up to 0.85% for Class B shares and up to 0.75% for Class C
shares. At July 31, 2006, the Fund paid an annual rate of 0.75% of the Fund's
average daily net assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$716,308 for Class B and $1,939 for Class C for the year ended July 31, 2006.
For the year ended July 31, 2006, the Investment Manager and its affiliates
waived certain fees and expenses to 0.75% for Class A, 1.40% for Class B,
1.41% for Class C and 0.62% for Class Y. Of these waived fees and expenses,
the transfer agency fees waived for Class A, Class B, Class C and Class Y were
$2,622,263, $92,612, $1,783 and $68,626, respectively. Beginning Oct. 1, 2005,
the Investment Manager and its affiliates have agreed to waive certain fees
and expenses until July 31, 2007, unless sooner terminated at the discretion
of the Board, such that net expenses will not exceed 0.73% for Class A, 1.38%
for Class B, 1.39% for Class C, 0.53% for Class I and 0.60% for Class Y of the
Fund's average daily net assets.
During the year ended July 31, 2006, the Fund's custodian and transfer agency
fees were reduced by $923,047 as a result of earnings and bank fee credits
from overnight cash balances. The Fund also pays custodian fees to Ameriprise
Trust Company, an affiliate of Ameriprise Financial.
In addition, the Fund received a one time reimbursement of $2,228,011 by
Ameriprise Financial for additional earnings from overnights cash balances
determined to be owed for prior years. See "Financial highlights" for
additional information.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities aggregated
$16,154,971,478 and $15,555,026,547, respectively, for the year ended July 31,
2006. Realized gains and losses are determined on an identified cost basis.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 19
4. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or
emergency purposes. The agreement went into effect Sept. 20, 2005. The Fund
must maintain asset coverage for borrowings of at least 300%. The agreement,
which enables the Fund to participate with other RiverSource funds, permits
borrowings up to $500 million, collectively. Interest is charged to each Fund
based on its borrowings at a rate equal to either the higher of the Federal
Funds Effective Rate plus 0.40% or the JPMCB Prime Commercial Lending Rate.
Borrowings are payable within 60 days after such loan is executed. The Fund
also pays a commitment fee equal to its pro rata share of the amount of the
credit facility at a rate of 0.07% per annum. Prior to this agreement, the
Fund had a revolving credit agreement that permitted borrowings up to $500
million with The Bank of New York. The Fund had no borrowings outstanding
during the year ended July 31, 2006.
5. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In December 2005, without admitting or denying the allegations, American
Express Financial Corporation (AEFC, which is now known as Ameriprise
Financial, Inc. (Ameriprise Financial)), the parent company of RiverSource
Investments, LLC (RiverSource Investments), entered into settlement agreements
with the Securities and Exchange Commission (SEC) and Minnesota Department of
Commerce (MDOC) related to market timing activities. In connection with these
matters, the SEC and MDOC issued orders (the Orders) alleging that AEFC
violated certain provisions of the federal and Minnesota securities laws by
failing to adequately disclose market timing activities by allowing certain
identified market timers to continue to market time contrary to disclosures in
mutual fund and variable annuity product prospectuses. The Orders also alleged
that AEFC failed to implement procedures to detect and prevent market timing
in 401(k) plans for employees of AEFC and related companies and failed to
adequately disclose that there were no such procedures. Pursuant to the MDOC
Order, the MDOC also alleged that AEFC allowed inappropriate market timing to
occur by failing to have written policies and procedures and failing to
properly supervise its employees.
- ------------------------------------------------------------------------------
20 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to
pay disgorgement of $10 million and civil money penalties of $7 million. AEFC
also agreed to make presentations at least annually to its board of directors
and the relevant mutual funds' board that include an overview of policies and
procedures to prevent market timing, material changes to these policies and
procedures and whether disclosures related to market timing are consistent
with the SEC order and federal securities laws. 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. In addition, AEFC agreed to
complete and submit to the MDOC a compliance review of its procedures
regarding market timing within one year of the MDOC Order, including a summary
of actions taken to ensure compliance with applicable laws and regulations and
certification by a senior officer regarding compliance and supervisory
procedures.
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.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings,
including routine litigation, class actions, and governmental actions,
concerning matters arising in connection with the conduct of their business
activities. Ameriprise Financial believes that the Funds are not currently the
subject of, and that neither Ameriprise Financial nor any of its affiliates
are the subject of, any pending legal, arbitration or regulatory proceedings
that are likely to have a material adverse effect on the Funds or the ability
of Ameriprise Financial or its affiliates to perform under their contracts
with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as
necessary, 8-K filings with the Securities and Exchange Commission on legal
and regulatory matters that relate to Ameriprise Financial and its affiliates.
Copies of these filings may be obtained by accessing the SEC website at
www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 21
6. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating
the Fund's results.
CLASS A
- -------------------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES(a)
- -------------------------------------------------------------------------------------------
Fiscal period ended July 31, 2006 2005 2004 2003 2002
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04 .02 -- .01 .02
- -------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.02) -- (.01) (.02)
- -------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------
Net assets, end of period (in millions) $3,692 $3,054 $3,680 $4,649 $5,766
- -------------------------------------------------------------------------------------------
Ratio of expenses to average daily net
assets(b) .75%(c) .80% .78% .69% .59%
- -------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 3.75% 1.58% .35% .78% 1.89%
- -------------------------------------------------------------------------------------------
Total return(d) 3.82%(e) 1.63% .35% .77% 1.93%
- -------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest
cent.
(b) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances.
(c) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratio of expenses for
Class A would have been 0.83% for the year ended July 31, 2006.
(d) Total return does not reflect payment of a sales charge.
(e) The Fund received a one time reimbursement by Ameriprise Financial for
additional earnings from overnight cash balances determined to be owed
for prior years. Had the Fund not received this reimbursement, the total
return would have been lower by 0.06%.
- ------------------------------------------------------------------------------
22 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
CLASS B
- -----------------------------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES(a)
- -----------------------------------------------------------------------------------------------------
Fiscal period ended July 31, 2006 2005 2004 2003 2002
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .01 -- -- .01
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) (.01) -- -- (.01)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------
Net assets, end of period (in millions) $ 103 $ 129 $ 180 $ 278 $ 380
- -----------------------------------------------------------------------------------------------------
Ratio of expenses to average daily net
assets(b) 1.40%(c) 1.44%(c) 1.07%(c) 1.26%(c) 1.34%
- -----------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 3.05% .91% .05% .21% 1.13%
- -----------------------------------------------------------------------------------------------------
Total return(d) 3.14%(e) .98% .06% .20% 1.13%
- -----------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest
cent.
(b) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances.
(c) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses
for Class B would have been 1.49%, 1.45%, 1.43% and 1.38% for the years
ended July 31, 2006, 2005, 2004 and 2003, respectively.
(d) Total return does not reflect payment of a sales charge.
(e) The Fund received a one time reimbursement by Ameriprise Financial for
additional earnings from overnight cash balances determined to be owed
for prior years. Had the Fund not received this reimbursement, the total
return would have been lower by 0.06%.
- --------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 23
CLASS C
- --------------------------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES(a)
- --------------------------------------------------------------------------------------------------
Fiscal period ended July 31, 2006 2005 2004 2003 2002
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .01 -- -- .01
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) (.01) -- -- (.01)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in millions) $ 3 $ 2 $ 3 $ 4 $ 4
- --------------------------------------------------------------------------------------------------
Ratio of expenses to average daily net
assets(b) 1.41%(c) 1.44%(c) 1.07%(c) 1.27%(c) 1.34%
- --------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 3.05% .91% .06% .21% .99%
- --------------------------------------------------------------------------------------------------
Total return(d) 3.14%(e) .98% .06% .20% 1.14%
- --------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest
cent.
(b) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances.
(c) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses
for Class C would have been 1.49%, 1.45%, 1.43% and 1.38% for the years
ended July 31, 2006, 2005, 2004 and 2003, respectively.
(d) Total return does not reflect payment of a sales charge.
(e) The Fund received a one time reimbursement by Ameriprise Financial for
additional earnings from overnight cash balances determined to be owed
for prior years. Had the Fund not received this reimbursement, the total
return would have been lower by 0.06%.
- ------------------------------------------------------------------------------
24 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
CLASS I
- ------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES(a)
- ------------------------------------------------------------------------------
Fiscal period ended July 31, 2006 2005 2004(b)
Net asset value, beginning of period $1.00 $1.00 $ 1.00
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04 .02 --
- --------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.02) --
- --------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $ 1.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net assets, end of period (in millions) $ 63 $ 12 $ 4
- --------------------------------------------------------------------------------
Ratio of expenses to average daily net
assets(c) .42% .39% .43%(d)
- --------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 4.42% 2.21% .77%(d)
- --------------------------------------------------------------------------------
Total return(e) 4.16%(f) 2.04% .30%(g)
- --------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest
cent.
(b) Inception date is March 4, 2004.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances.
(d) Adjusted to an annual basis.
(e) Total return does not reflect payment of a sales charge.
(f) The Fund received a one time reimbursement by Ameriprise Financial for
additional earnings from overnight cash balances determined to be owed
for prior years. Had the Fund not received this reimbursement, the total
return would have been lower by 0.06%.
(g) Not annualized.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 25
CLASS Y
- -------------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES(a)
- -------------------------------------------------------------------------------------
Fiscal period ended July 31, 2006 2005 2004 2003 2002
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04 .02 -- .01 .02
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.02) -- (.01) (.02)
- -------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------
Net assets, end of period (in millions) $ 84 $ 140 $209 $ 262 $ 203
- -------------------------------------------------------------------------------------
Ratio of expenses to average daily net
assets(b) .62%(c) .66% .65% .62% .57%
- -------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 3.78% 1.55% .47% .82% 1.86%
- -------------------------------------------------------------------------------------
Total return(d) 3.95%(e) 1.76% .48% .85% 1.95%
- -------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest
cent.
(b) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances.
(c) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratio of expenses for
Class Y would have been 0.68% for the year ended July 31, 2006.
(d) Total return does not reflect payment of a sales charge.
(e) The Fund received a one time reimbursement by Ameriprise Financial for
additional earnings from overnight cash balances determined to be owed
for prior years. Had the Fund not received this reimbursement, the total
return would have been lower by 0.06%.
- --------------------------------------------------------------------------------
26 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD AND SHAREHOLDERS
RIVERSOURCE MONEY MARKET SERIES, INC.
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of RiverSource Cash
Management Fund (a series of RiverSource Money Market Series, Inc.) as of July
31, 2006, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year
period ended July 31, 2006, and the financial highlights for each of the years
in the five-year period ended July 31, 2006. These financial statements and
the financial highlights are the responsibility of fund management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of July 31, 2006, by
correspondence with the custodian or by other appropriate auditing procedures.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
RiverSource Cash Management Fund as of July 31, 2006, and the results of its
operations, changes in its net assets, and the financial highlights for each
of the periods stated in the first paragraph above, in conformity with U.S.
generally accepted accounting principles.
KPMG LLP
Minneapolis, Minnesota
September 20, 2006
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 27
FEDERAL INCOME TAX INFORMATION
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its
fiscal year. The dividends listed below are reported to you on Form 1099-DIV,
Dividends and Distributions. Shareholders should consult a tax advisor on how
to report distributions for state and local tax purposes.
Fiscal year ended July 31, 2006
CLASS A
INCOME DISTRIBUTIONS -- taxable as dividend income:
Qualified Dividend Income for individuals .................. 0.00%
Dividends Received Deduction for corporations .............. 0.00%
PAYABLE DATE PER SHARE
Aug. 29, 2005 .................................................... $ 0.00237
Sept. 29, 2005 ................................................... 0.00242
Oct. 27, 2005 .................................................... 0.00240
Nov. 29, 2005 .................................................... 0.00303
Dec. 29, 2005 .................................................... 0.00294
Jan. 26, 2006 .................................................... 0.00279
Feb. 27, 2006 .................................................... 0.00341
March 27, 2006 ................................................... 0.00304
April 26, 2006 ................................................... 0.00339
May 25, 2006 ..................................................... 0.00338
June 26, 2006 .................................................... 0.00390
July 26, 2006 .................................................... 0.00390
Total distributions .............................................. $ 0.03697
- ------------------------------------------------------------------------------
28 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
CLASS B
INCOME DISTRIBUTIONS -- taxable as dividend income:
Qualified Dividend Income for individuals .................. 0.00%
Dividends Received Deduction for corporations .............. 0.00%
PAYABLE DATE PER SHARE
Aug. 29, 2005 .................................................... $ 0.00178
Sept. 29, 2005 ................................................... 0.00186
Oct. 27, 2005 .................................................... 0.00192
Nov. 29, 2005 .................................................... 0.00244
Dec. 29, 2005 .................................................... 0.00240
Jan. 26, 2006 .................................................... 0.00229
Feb. 27, 2006 .................................................... 0.00284
March 27, 2006 ................................................... 0.00253
April 26, 2006 ................................................... 0.00284
May 25, 2006 ..................................................... 0.00286
June 26, 2006 .................................................... 0.00333
July 26, 2006 .................................................... 0.00333
Total distributions .............................................. $ 0.03042
CLASS C
INCOME DISTRIBUTIONS -- taxable as dividend income:
Qualified Dividend Income for individuals .................. 0.00%
Dividends Received Deduction for corporations .............. 0.00%
PAYABLE DATE PER SHARE
Aug. 29, 2005 .................................................... $ 0.00179
Sept. 29, 2005 ................................................... 0.00186
Oct. 27, 2005 .................................................... 0.00192
Nov. 29, 2005 .................................................... 0.00243
Dec. 29, 2005 .................................................... 0.00241
Jan. 26, 2006 .................................................... 0.00228
Feb. 27, 2006 .................................................... 0.00283
March 27, 2006 ................................................... 0.00254
April 26, 2006 ................................................... 0.00284
May 25, 2006 ..................................................... 0.00287
June 26, 2006 .................................................... 0.00332
July 26, 2006 .................................................... 0.00335
Total distributions .............................................. $ 0.03044
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 29
CLASS I
INCOME DISTRIBUTIONS -- taxable as dividend income:
Qualified Dividend Income for individuals .................. 0.00%
Dividends Received Deduction for corporations .............. 0.00%
PAYABLE DATE PER SHARE
Aug. 29, 2005 .................................................... $ 0.00276
Sept. 29, 2005 ................................................... 0.00280
Oct. 27, 2005 .................................................... 0.00263
Nov. 29, 2005 .................................................... 0.00332
Dec. 29, 2005 .................................................... 0.00318
Jan. 26, 2006 .................................................... 0.00300
Feb. 27, 2006 .................................................... 0.00364
March 27, 2006 ................................................... 0.00329
April 26, 2006 ................................................... 0.00365
May 25, 2006 ..................................................... 0.00364
June 26, 2006 .................................................... 0.00419
July 26, 2006 .................................................... 0.00413
Total distributions .............................................. $ 0.04023
CLASS Y
INCOME DISTRIBUTIONS -- taxable as dividend income:
Qualified Dividend Income for individuals .................. 0.00%
Dividends Received Deduction for corporations .............. 0.00%
PAYABLE DATE PER SHARE
Aug. 29, 2005 .................................................... $ 0.00251
Sept. 29, 2005 ................................................... 0.00255
Oct. 27, 2005 .................................................... 0.00249
Nov. 29, 2005 .................................................... 0.00315
Dec. 29, 2005 .................................................... 0.00303
Jan. 26, 2006 .................................................... 0.00288
Feb. 27, 2006 .................................................... 0.00353
March 27, 2006 ................................................... 0.00314
April 26, 2006 ................................................... 0.00349
May 25, 2006 ..................................................... 0.00348
June 26, 2006 .................................................... 0.00401
July 26, 2006 .................................................... 0.00399
Total distributions .............................................. $ 0.03825
- ------------------------------------------------------------------------------
30 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
FUND EXPENSES EXAMPLE
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads); and (2) ongoing costs, including
management fees; distribution and 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 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 July 31, 2006.
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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table 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 transactional
costs were included, your costs would have been higher.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 31
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2006 JULY 31, 2006 THE PERIOD(a) EXPENSE RATIO
- ----------------------------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,021.40 $3.66 .73%
- ----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.17 $3.66 .73%
- ----------------------------------------------------------------------------------------------
Class B
- ----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,018.10 $6.91 1.38%
- ----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.95 $6.90 1.38%
- ----------------------------------------------------------------------------------------------
Class C
- ----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,018.10 $6.96 1.39%
- ----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.90 $6.95 1.39%
- ----------------------------------------------------------------------------------------------
Class I
- ----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,023.00 $2.11 .42%
- ----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,022.71 $2.11 .42%
- ----------------------------------------------------------------------------------------------
Class Y
- ----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,022.00 $3.01 .60%
- ----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.82 $3.01 .60%
- ----------------------------------------------------------------------------------------------
(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 181/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended July 31, 2006:
+2.14% for Class A, +1.81% for Class B, +1.81% for Class C, +2.30% for
Class I and +2.20% for Class Y.
- ------------------------------------------------------------------------------
32 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based
on policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 99
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 52
- ----------------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, Board Services Corporation
901 S. Marquette Ave. since 1999 (provides administrative services
Minneapolis, MN 55402 to boards); former Governor
Age 71 of Minnesota
- ----------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College;
Minneapolis, MN 55402 former Dean, McCallum Graduate
Age 55 School of Business, Bentley
College
- ----------------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 71
- ----------------------------------------------------------------------------------------------------------
Jeffrey Laikind Board member Former Managing Director, American Progressive
901 S. Marquette Ave. since 2005 Shikiar Asset Management Insurance
Minneapolis, MN 55402
Age 70
- ----------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Valmont Industries, Inc.
901 S. Marquette Ave. since 2002 Professor of Economics, (manufactures irrigation
Minneapolis, MN 55402 Carleton College systems)
Age 67
- ----------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 33
INDEPENDENT BOARD MEMBERS (CONTINUED)
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic Distribution,
901 S. Marquette Ave. since 2004 Management, Inc. (private real Inc. (transportation,
Minneapolis, MN 55402 estate and asset management distribution and logistics
Age 54 company) consultants)
- ----------------------------------------------------------------------------------------------------------
Vikki L. Pryor Board member President and Chief Executive
901 S. Marquette Ave. since 2006 Officer, SBLI USA Mutual Life
Minneapolis, MN 55402 Insurance Company, Inc. since 1999
Age 53
- ----------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, Hybridon, Inc.
901 S. Marquette Ave. since 2002 RiboNovix, Inc. since 2003 (biotechnology);
Minneapolis, MN 55402 (biotechnology); former President, American Healthways, Inc.
Age 62 Forester Biotech (health management
programs)
- ----------------------------------------------------------------------------------------------------------
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------
William F. Truscott** Board member President, Ameriprise Certificate
53600 Ameriprise since 2001, Company since 2006; President -
Financial Center Vice President U.S. Asset Management and Chief
Minneapolis, MN 55474 since 2002, Investment Officer, Ameriprise
Age 46 Acting President Financial, Inc. and President,
since 2006 Chairman of the Board and Chief
Investment Officer, RiverSource
Investments, LLC since 2005;
Senior Vice President - Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of
the Board and Chief Investment
Officer, RiverSource Investments,
LLC, 2001-2005
- ----------------------------------------------------------------------------------------------------------
* Interested person by reason of being an officer, director, security
holder and/or employee of RiverSource Investments.
** Paula R. Meyer resigned her position as President for the RiverSource
funds. Mr. Truscott has been appointed Acting President and will be
assuming the responsibilities of President until a permanent replacement
for Ms. Meyer is found.
- ------------------------------------------------------------------------------
34 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President and
Acting President, the Fund's other officers are:
FUND OFFICERS
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer Vice President - Investment Accounting, Ameriprise Financial,
105 Ameriprise since 2002 Inc., since 2002; Vice President - Finance, American Express
Financial Center Company, 2000-2002
Minneapolis, MN 55474
Age 51
- ----------------------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President - Equity and Fixed Income,
172 Ameriprise since 2004 Ameriprise Financial, Inc. and RiverSource Investments, LLC
Financial Center since 2006; Vice President - Investments, Ameriprise
Minneapolis, MN 55474 Certificate Company since 2003; Senior Vice President - Fixed
Age 42 Income, Ameriprise Financial, Inc., 2002-2006 and
RiverSource Investments, LLC, 2004-2006; Managing Director,
Zurich Global Assets, 2001-2002
- ----------------------------------------------------------------------------------------------------------
Leslie L. Ogg Vice President, President of Board Services Corporation
901 S. Marquette Ave. General Counsel,
Minneapolis, MN 55402 and Secretary
Age 68 since 1978
- ----------------------------------------------------------------------------------------------------------
Edward S. Dryden* Acting Chief Chief Compliance Officer, Ameriprise Certificate Company since
1875 Ameriprise Compliance Officer 2006; Vice President - Asset Management Compliance,
Financial Center since 2006 RiverSource Investments, LLC since 2006; Chief Compliance
Minneapolis, MN 55474 Officer - Mason Street Advisors, LLC, 2002-2006
Age 41
- ----------------------------------------------------------------------------------------------------------
Neysa M. Alecu Anti-Money Compliance Director and Anti-Money Laundering Officer,
2934 Ameriprise Laundering Officer Ameriprise Financial, Inc. since 2004; Manager Anti-Money
Financial Center since 2004 Laundering, Ameriprise Financial, Inc., 2003-2004;
Minneapolis, MN 55474 Compliance Director and Bank Secrecy Act Officer,
Age 42 American Express Centurion Bank, 2000-2003
- ----------------------------------------------------------------------------------------------------------
* Beth E. Weimer resigned her position as Chief Compliance Officer for the
RiverSource funds. Mr. Dryden has been appointed Acting Chief Compliance
Officer and will be assuming the responsibilities of Chief Compliance
Officer until a permanent replacement for Ms. Weimer is found.
The SAI has additional information about the Fund's directors and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- ------------------------------------------------------------------------------
RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT 35
APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT
During the period covered by this report, RiverSource Investments, LLC
("RiverSource Investments" or the "investment manager"), a wholly-owned
subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"), served as
the investment manager to RiverSource funds under an Investment Management
Services Agreement ("IMS Agreement").
The Board of Directors (the "Board") annually determines whether to continue
the IMS Agreement and subadvisory agreements, as applicable, by evaluating the
quality and level of services received and the costs associated with those
services. The Board did not make the specific determination this year as each
fund's IMS Agreement was approved by the vote of a majority of the outstanding
voting securities of the funds at a shareholder meeting held on Feb. 15, 2006.
PROXY VOTING
The policy of the Board is to vote all proxies of the companies in which the
Fund holds investments. The procedures are 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; visiting riversource.com/funds; 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 during
the 12-month period ended June 30, 2006 is available without charge by
visiting riversource.com/funds; or searching the website of the SEC at
www.sec.gov.
- ------------------------------------------------------------------------------
36 RIVERSOURCE CASH MANAGEMENT FUND -- 2006 ANNUAL REPORT
RIVERSOURCE(SM) CASH MANAGEMENT FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
riversource.com/funds
This report must be accompanied or preceded by the
Fund's current prospectus. RiverSource(SM) mutual
funds are distributed by RiverSource Distributors,
RIVERSOURCE [LOGO](SM) Inc. and Ameriprise Financial Services, Inc., Members
INVESTMENTS NASD, and managed by RiverSource Investments, LLC.
These companies are part of Ameriprise Financial, Inc.
S-6320 AD (9/06)
Item 2. (a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial
officer. A copy of the code of ethics is filed as an exhibit to this
form N-CSR.
(b) During the period covered by this report, there were not any
amendments to the provisions of the code of ethics adopted in 2(a)
above.
(c) During the period covered by this report, there were not any
implicit or explicit waivers to the provisions of the code of ethics
adopted in 2(a).
Item 3. The Registrant's board of directors has determined that independent
directors Jeffrey Laikind and Anne P. Jones, each qualify as audit
committee financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fund - Related Fees*
(a) Audit Fees. The fees paid for the years ended July 31, to KPMG LLP
for professional services rendered for the audits of the annual
financial statements for RiverSource Money Market Series, Inc. were
as follows:
2006 - $37,000; 2005 - $36,500
(b) Audit - Related Fees. The fees paid for the years ended July 31, to
KPMG LLP for additional professional services rendered in connection
with the registrant's security count pursuant to Rule 17f-2 for
RiverSource Money Market Series, Inc. were as follows:
2006 - $866; 2005 - $806
(c) Tax Fees. The fees paid for the years ended July 31, to KPMG LLP for
tax compliance related services for RiverSource Money Market Series,
Inc. were as follows:
2006 - $2,849; 2005 - $2,639
(d) All Other Fees. The fees paid for the years ended July 31, to KPMG
LLP for additional professional services rendered in connection to
proxy filing for RiverSource Money Market Series, Inc. were as
follows:
2006 - $2,121; 2005 - $958
(e) (1) Audit Committee Pre-Approval Policy. Pursuant to Sarbanes-Oxley
pre-approval requirements, all services to be performed by KPMG LLP
for the registrant and to the registrant's investment adviser and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
must be pre-approved by the audit committee.
(e) (2) 100% of the services performed for items (b) through (d) above
during 2006 and 2005 were pre-approved by the audit committee.
(f) Not applicable.
(g) Non-Audit Fees. The fees paid for the years ended July 31, by the
registrant for non-audit services to KPMG LLP were as follows:
2006 - $34,470; 2005 - $129,047
The fees paid for the years ended July 31, to KPMG LLP by the
registrant's investment adviser, and any entity controlling,
controlled by, or under common control with the adviser that provides
ongoing services to the registrant were as follows:
2006 - $29,500; 2005 - $125,450
(h) 100% of the services performed in item (g) above during 2006 and 2005
were pre-approved by the audit committee.
*2005 represents bills paid 8/1/04 - 7/31/05
2006 represents bills paid 8/1/05 - 7/31/06
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) Code of ethics as applies to the Registrant's principal
executive officer and principal financial officer, as required to be
disclosed under Item 2 of Form N-CSR, is attached as Ex. 99.CODE ETH.
(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 Money Market Series, Inc.
By /s/ William F. Truscott
-----------------------
William F. Truscott
President and Principal Executive Officer
Date October 4, 2006
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/ William F. Truscott
-----------------------
William F. Truscott
President and Principal Executive Officer
Date October 4, 2006
By /s/ Jeffrey P. Fox
------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date October 4, 2006