<PAGE> 1
AMERICAN
AADVANTAGE FUNDS--REGISTERED TRADEMARK--
--------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
[AMR LOGO]
MONEY MARKET FUNDS
MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
MUNICIPAL MONEY MARKET FUND
MANAGED BY AMR INVESTMENTS
<PAGE> 2
ABOUT AMR INVESTMENTS
--------------------------------------------------------------------------------
AMR Investments is an experienced provider of investment advisory services to
institutional and retail markets. We act as manager of the American AAdvantage
Funds, a family of diversified mutual funds, and offer customized fixed income
portfolio management services.
Our clients include defined benefit plans, defined contribution plans,
foundations, endowments, corporations, and other institutional investors.
AMR Investments is a wholly owned subsidiary of AMR Corporation, the parent
company of American Airlines, Inc.
Incorporated in 1986, we are directly responsible for the investment management
and oversight of AMR Corporation's defined benefit and defined contribution
plans, as well as its fixed income investments.
CONTENTS
--------------------------------------------------------------------------------
President's Message................................................1
Financial Highlights
Money Market Fund..............................................16
U.S. Government Money Market Fund..............................18
Municipal Money Market Fund....................................20
Schedules of Investments
Money Market Portfolio.........................................22
U.S. Government Money Market Portfolio.........................24
Municipal Money Market Portfolio...............................25
Additional Information.............................Inside Back Cover
American AAdvantage Funds June 30, 2000
<PAGE> 3
[BILL QUINN PICTURE]
DEAR FELLOW SHAREHOLDER:
We are pleased to present you with the Semi-Annual Report for the American
AAdvantage Money Market Funds for the six months ended June 30, 2000. It gives
us great pleasure to mention that our Money Market Fund -- Institutional Class
sustained its number one ranking for the ten-year period out of 49 Institutional
Money Market Funds. In addition, Lipper Analytical Services also ranked our U.S.
Government Money Market Fund -- Institutional Class number six for the year
ending June 30, 2000 among 99 Institutional U.S. Government Money Market Funds.
All of our Institutional Money Market Funds exceeded their benchmarks for the
1-year, 3-year, 5-year and since inception time periods.
We hope you take the opportunity to visit our newly enhanced web site,
AAFUNDS.COM. We now offer investors access to their account information,
portfolio listings, and the ability to trade fund shares. These are just a few
of the enhancements you will be seeing, along with a more user-friendly format,
which will include market tickers, Fund factors and yields each evening.
Sincerely,
/s/ WILLIAM F. QUINN
William F. Quinn
President
American AAdvantage Funds
1
<PAGE> 4
ECONOMIC OVERVIEW
--------------------------------------------------------------------------------
O ver the past six months, the U.S. economy grew rapidly and the
unemployment rate hovered around its 30-year low of 4 percent.
Historically, these conditions would have caused inflation to accelerate,
causing the Federal Reserve Board to tighten monetary policy. This time it was
no different. To implement this policy, the Fed responded with three rate
increases -- 25 basis points in February, 25 basis points in March and 50 basis
points at the May 16th Federal Open Market Committee meeting. At this time, it
appears that the Fed's actions are beginning to have the desired effect, with
market sentiment reflecting the transition to a possible slowdown in economic
growth.
The shift in market sentiment follows a stream of economic reports that
evidence slowing in various sectors of the economy. Housing sales and
construction, while still robust, have fallen from peak levels. This is not
surprising as higher interest rates have had a direct impact on housing costs.
The moderation in housing activity also affects the demand for furniture and
other household goods, contributing to a slowing in the manufacturing sector.
However, oil prices continue to remain high, even as OPEC promises to raise
production quotas. As a result, although the inflation indicators are ticking up
at the headline level, producer and consumer prices at the core level remain
benign.
Due to the market conditions over the last six months, the Money Market
Funds maintained a short weighted-average maturity during most of the period.
However, when the market sentiment began to shift, the Funds began to extend the
weighted-average maturity in order to establish a more neutral posture toward
the end of June.
2
<PAGE> 5
PERFORMANCE OVERVIEW
AMERICAN AADVANTAGE MONEY MARKET FUND (SM)
--------------------------------------------------------------------------------
For the six months ended June 30, 2000, the total return of the
Institutional Class of the Money Market Fund was 3.02%. The Fund outperformed
the Lipper Institutional Money Market Average return of 2.88% by 14 basis
points. Lipper Analytical Services ranked the Institutional Class of the Fund in
the 10th percentile out of its universe of 206 Institutional Money Market Funds
for the six month period ending June 30, 2000.
INSTITUTIONAL CLASS TOTAL RETURN AS OF OCTOBER 31, 1999(1)
<TABLE>
<S> <C> <C>
1 Year 5.79 5.51
3 Years* 5.56 5.31
5 Years* 5.59 5.34
10 Years* 5.34 5.05
</TABLE>
<TABLE>
<CAPTION>
LIPPER INSTITUTIONAL
AMERICAN AADVANTAGE MONEY MARKET
MONEY MARKET FUND FUND AVERAGE
<S> <C> <C>
1 Year............... 5.79 5.51
3 Years*............. 5.56 5.31
5 Years*............. 5.59 5.34
10 Years*............ 5.34 5.05
</TABLE>
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS
---------------------------
AS OF 6/30/00
---------------------------
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
Institutional
Class(1,2)............ 5.79% 5.59% 5.34%
PlanAhead Class(1,2).... 5.47% 5.26% 5.14%
Platinum Class(1,2)..... 5.00% 4.89% 4.99%
</TABLE>
1 Past performance is not indicative of future performance. An investment
in the American AAdvantage Money Market Fund is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of an
investment at $1.00 per share, it is possible to lose money by investing
in this Fund.
2 Fund performance represents the total returns achieved by the
Institutional Class from 9/1/87 up to 8/1/94, the inception date of the
PlanAhead Class and 11/8/95, the inception date of the Platinum Class and
the returns of the PlanAhead and Platinum Classes since inception of
these Classes. Expenses of the PlanAhead and Platinum Classes are higher
than those of the Institutional Class. Therefore, total returns shown are
higher than they would have been had the PlanAhead and Platinum Classes
been in place since 9/1/87.
PORTFOLIO STATISTICS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
INSTITUTIONAL PLANAHEAD PLATINUM
CLASS CLASS CLASS
------------- --------- --------
<S> <C> <C> <C>
7-day Current Yield* 6.41% 6.11% 5.72%
7-day Effective Yield* 6.61% 6.30% 5.88%
30-day Yield* 6.35% 6.05% 5.64%
Weighted Average Maturity 43 Days 43 Days 43 Days
Fitch Rating AAA AAA AAA
</TABLE>
* Annualized. You may call 1-800-388-3344 to obtain the Fund's
current seven day yield.
TOP TEN HOLDINGS AS OF JUNE 30, 2000
<TABLE>
<S> <C>
National City Bank 5.6%
Merrill Lynch & Company 5.4%
General Electric Capital Corp 5.4%
Goldman Sachs Group LP 5.0%
First Union National Bank 4.9%
General Motors Acceptance Corp 4.7%
GTE Corporation 4.7%
AB Spintab 4.1%
American Honda Finance Corp 4.1%
Banco Popular de Puerto Rico 4.1%
</TABLE>
3
<PAGE> 6
PERFORMANCE OVERVIEW
AMERICAN AADVANTAGE U.S. GOVERNMENT MONEY MARKET FUND (SM)
--------------------------------------------------------------------------------
For the six months ended June 30, 2000, the total return of the
Institutional Class of the U.S. Government Money Market Fund was 2.96%. The Fund
outperformed the Lipper Institutional U.S. Government Money Market Average
return of 2.84% by 12 basis points. Lipper Analytical Services ranked the
Institutional Class of the Fund in the 11th percentile out of its universe of
101 Institutional Government Money Market Funds for the six-month period ending
June 30, 2000.
INSTITUTIONAL CLASS TOTAL RETURN AS OF DECEMBER 31, 1999(1)
<TABLE>
<S> <C> <C>
1 Year 5.67 5.41
3 Years* 5.41 5.21
5 Years* 5.39 5.25
Since Inception* 4.79 4.65
</TABLE>
<TABLE>
<CAPTION>
LIPPER INSTITUTIONAL
AMERICAN AADVANTAGE U.S. GOVERNMENT
U.S. GOVERNMENT MONEY MARKET
MONEY MARKET FUND AVERAGE
<S> <C> <C>
1 Year............... 5.67 5.41
3 Years*............. 5.41 5.21
5 Years*............. 5.39 5.25
Since Inception*..... 4.79 4.65
</TABLE>
<TABLE>
<CAPTION>
ANNUALIZED TOTAL
RETURNS
-------------------------
AS OF 6/30/00
-------------------------
SINCE
1 YEAR 5 YEARS INCEP.
------ ------- ------
<S> <C> <C> <C>
Institutional Class(1,2).... 5.67% 5.39% 4.79%
PlanAhead Class(1,2)........ 5.27% 5.03% 4.52%
Platinum Class(1,2)......... 4.83% 4.66% 4.35%
</TABLE>
1 Past performance is not indicative of future performance. An investment
in the American AAdvantage U.S.-Government Money Market Fund is neither
insured nor guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. Although the Fund seeks to preserve the
value of an investment at $1.00 per share, it is possible to lose money
by investing in this Fund.
2 Fund performance represents the total returns achieved by the
Institutional Class from 3/2/92 up to 8/1/94, the inception date of the
PlanAhead Class and 11/8/95, the inception date of the Platinum Class and
the returns of the PlanAhead and Platinum Classes since inception of
these Classes. Expenses of the PlanAhead and Platinum Classes are higher
than those of the Institutional Class. Therefore, total returns shown are
higher than they would have been had the PlanAhead and Platinum Classes
been in existence since 3/2/92.
PORTFOLIO STATISTICS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
INSTITUTIONAL PLANAHEAD PLATINUM
CLASS CLASS CLASS
------------- --------- --------
<S> <C> <C> <C>
7-day Current Yield* 6.40% 6.07% 5.70%
7-day Effective Yield* 6.61% 6.25% 5.86%
30-day Yield* 6.35% 6.02% 5.63%
Weighted Average Maturity 41 Days 41 Days 41 Days
Fitch Rating AAA AAA AAA
</TABLE>
* Annualized. You may call 1-800-388-3344 to obtain the Fund's
current seven day yield.
4
<PAGE> 7
PERFORMANCE OVERVIEW
AMERICAN AADVANTAGE MUNICIPAL MONEY MARKET FUND (SM)
--------------------------------------------------------------------------------
For the six months ended June 30, 2000, the total return of the
Institutional Class of the American AAdvantage Municipal Money Market Fund was
1.86%. The Fund outperformed the Lipper Institutional Tax-Exempt Money Market
Average return of 1.81% by 5 basis points. Lipper Analytical Services ranked the
Institutional Class of the Fund in the 33rd percentile out of its universe of 92
Institutional Municipal Money Market Funds for the six-month period ending June
30, 2000.
INSTITUTIONAL CLASS TOTAL RETURN AS OF JUNE 30, 2000(1)
<TABLE>
<S> <C> <C>
1 Year 3.46 3.38
3 Years* 3.34 3.23
5 Years* 3.44 3.27
Since Inception* 3.32 3.16
</TABLE>
<TABLE>
<CAPTION>
AMERICAN AADVANTAGE LIPPER INSTITUTIONAL
MUNICIPAL MONEY TAX-EXEMPT MONEY
MARKET FUND MARKET AVERAGE
<S> <C> <C>
1 Year............... 3.46 3.38
3 Years*............. 3.34 3.23
5 Years*............. 3.44 3.27
Since Inception*..... 3.32 3.16
</TABLE>
<TABLE>
<CAPTION>
ANNUALIZED TOTAL
RETURNS
-------------------------
AS OF 6/30/00
-------------------------
SINCE
1 YEAR 5 YEARS INCEP.
------ ------- ------
<S> <C> <C> <C>
Institutional Class(1,2).... 3.46% 3.44% 3.32%
PlanAhead Class(1,2)........ 3.16% 3.14% 3.05%
Platinum Class(1,2)......... 2.77% 2.78% 2.83%
</TABLE>
1 Past performance is not indicative of future performance. An investment
in the American AAdvantage Municipal Money Market Fund is neither
insured nor guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. Although the Fund seeks to preserve the
value of an investment at $1.00 per share, it is possible to lose money
by investing in this Fund.
2 Fund performance represents the total returns achieved by the
Institutional Class from 11/10/93 up to 8/1/94, the inception date of
the PlanAhead Class and 11/8/95, the inception date of the Platinum
Class and the returns of the PlanAhead and Platinum Classes since
inception of these Classes. Expenses of the PlanAhead and Platinum
Classes are higher than those of the Institutional Class. Therefore,
total returns shown are higher than they would have been had the
PlanAhead and Platinum Classes been in place since 11/10/93.
PORTFOLIO STATISTICS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
INSTITUTIONAL PLANAHEAD PLATINUM
CLASS CLASS CLASS
------------- --------- --------
<S> <C> <C> <C>
7-day Current Yield* 4.36% 4.07% 3.67%
7-day Effective Yield* 4.46% 4.15% 3.73%
30-day Yield* 4.04% 3.72% 3.33%
Weighted Average Maturity 6 Days 6 Days 6 Days
Fitch Rating AAA AAA AAA
</TABLE>
* Annualized. You may call 1-800-388-3344 to obtain the Fund's
current seven day yield.
TOP TEN HOLDINGS AS OF JUNE 30, 2000
<TABLE>
<S> <C>
Wisconsin Health Facilities 4.8%
Federated Municipal Obligations Fund 4.7%
Thomaston-Upson County, GA 4.1%
Montgomery County, PA 3.9%
Palm Beach County, FL Hlth Facs 3.9%
Cornell Twp, MI Economic Dev Corp 3.4%
Florida Municipal Power Agency 3.4%
Delaware County, PA Industrial Dev 3.3%
Pierce County, WA Economic Dev Corp 2.9%
Ohio State Air Quality Dev 2.7%
</TABLE>
5
<PAGE> 8
AMERICAN AADVANTAGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
GOVERNMENT MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET
-------------- ------------ ------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C>
ASSETS:
Investment in Portfolio, at value....................... $ 2,160,067 $ 153,748 $ 93,555
Receivable for expense reimbursement.................... - - 1
Receivable for shares of beneficial interest sold....... 133 - -
------------- ----------- -----------
TOTAL ASSETS........................................ 2,160,200 153,748 93,556
------------- ----------- -----------
LIABILITIES:
Dividends payable....................................... 1,060 254 1
Payable for shares of beneficial interest redeemed...... 1,914 - -
Management and administrative services fees payable
(Note 2).............................................. 499 39 40
Other liabilities....................................... 483 33 50
------------- ----------- -----------
TOTAL LIABILITIES................................... 3,956 326 91
------------- ----------- -----------
NET ASSETS.................................................. $ 2,156,244 $ 153,422 $ 93,465
============= =========== ===========
ANALYSIS OF NET ASSETS:
Paid-in-capital......................................... 2,156,244 153,422 93,465
------------- ----------- -----------
NET ASSETS.................................................. $ 2,156,244 $ 153,422 $ 93,465
============= =========== ===========
Shares outstanding (no par value):
Institutional Class..................................... 1,092,222,859 29,319,446 763,770
============= =========== ===========
PlanAhead Class......................................... 234,604,395 52,351,893 9,997,520
============= =========== ===========
Platinum Class.......................................... 829,416,630 71,750,670 82,703,735
============= =========== ===========
Net asset value per share, offering and redemption price per
share:
Institutional Class..................................... $ 1.00 $ 1.00 $ 1.00
============= =========== ===========
PlanAhead Class......................................... $ 1.00 $ 1.00 $ 1.00
============= =========== ===========
Platinum Class.......................................... $ 1.00 $ 1.00 $ 1.00
============= =========== ===========
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
6
<PAGE> 9
AMERICAN AADVANTAGE FUNDS
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET
------------ --------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO:
Interest income......................................... $86,105 $4,748 $1,974
Portfolio expenses...................................... (1,540) (101) (65)
------- ------ ------
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIO...... 84,565 4,647 1,909
------- ------ ------
FUND EXPENSES:
Administrative service fees (Note 2):
Institutional Class................................... 809 12 -
PlanAhead Class....................................... 147 24 6
Platinum Class........................................ 2,364 203 236
Transfer agent fees:
Institutional Class................................... 54 2 -
PlanAhead Class....................................... 90 22 6
Platinum Class........................................ 55 6 5
Professional fees....................................... 31 3 1
Registration fees and expenses.......................... 93 18 20
Distribution fees - Platinum Class (Note 2)............. 1,074 92 107
Service fees - PlanAhead Class (Note 2)................. 367 60 14
Other expenses.......................................... 320 22 29
------- ------ ------
TOTAL FUND EXPENSES................................. 5,404 464 424
------- ------ ------
LESS REIMBURSEMENT OF FUND EXPENSES (NOTE 2)................ - - 6
------- ------ ------
NET FUND EXPENSES........................................... 5,404 464 418
------- ------ ------
NET INVESTMENT INCOME....................................... 79,161 4,183 1,491
------- ------ ------
REALIZED GAIN ALLOCATED FROM PORTFOLIO:
Net realized gain on investments........................ 22 - -
------- ------ ------
NET GAIN ON INVESTMENTS............................. 22 - -
------- ------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $79,183 $4,183 $1,491
======= ====== ======
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
7
<PAGE> 10
AMERICAN AADVANTAGE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET
------------------------------------------
SIX MONTHS
ENDED TWO MONTHS YEAR
JUNE 30, ENDED ENDED
2000 DECEMBER 31, OCTOBER 31,
(UNAUDITED) 1999 1999
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................... $ 79,161 $ 27,696 $ 107,567
Net realized gain on investments........................ 22 - 21
----------- ----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.......................................... 79,183 27,696 107,588
----------- ----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional Class................................... (48,197) (18,403) (56,850)
PlanAhead Class....................................... (8,376) (2,398) (15,089)
Platinum Class........................................ (22,588) (6,895) (35,628)
Net realized gain on investments:
Institutional Class................................... (12) - (10)
PlanAhead Class....................................... (2) - (3)
Platinum Class........................................ (8) - (8)
----------- ----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS..................... (79,183) (27,696) (107,588)
----------- ----------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares........................... 9,948,165 3,666,923 12,428,857
Reinvestment of dividends and distributions............. 62,790 19,382 81,879
Cost of shares redeemed................................. (10,961,624) (3,416,900) (11,948,212)
----------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS.................................. (950,669) 269,405 562,524
----------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS....................... (950,669) 269,405 562,524
NET ASSETS:
Beginning of period..................................... 3,106,913 2,837,508 2,274,984
----------- ----------- ------------
END OF PERIOD........................................... $ 2,156,244 $ 3,106,913 $ 2,837,508
=========== =========== ============
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
8
<PAGE> 11
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET MUNICIPAL MONEY MARKET
---------------------------------------- ----------------------------------------
SIX MONTHS SIX MONTHS
ENDED TWO MONTHS ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED JUNE 30, ENDED YEAR ENDED
2000 DECEMBER 31, OCTOBER 31, 2000 DECEMBER 31, OCTOBER 31,
(UNAUDITED) 1999 1999 (UNAUDITED) 1999 1999
----------- ------------ ----------- ----------- ------------ -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
$ 4,183 $ 1,399 $ 8,957 $ 1,491 $ 428 $ 2,365
- - 5 - - -
--------- --------- --------- --------- -------- ---------
4,183 1,399 8,962 1,491 428 2,365
--------- --------- --------- --------- -------- ---------
(965) (263) (1,752) (14) (4) (22)
(1,331) (495) (3,876) (188) (41) (357)
(1,887) (641) (3,329) (1,289) (383) (1,986)
- - (1) - - -
- - (2) - - -
- - (2) - - -
--------- --------- --------- --------- -------- ---------
(4,183) (1,399) (8,962) (1,491) (428) (2,365)
--------- --------- --------- --------- -------- ---------
276,616 116,145 535,485 108,826 32,849 217,716
2,651 922 4,694 1,489 428 2,307
(301,374) (118,309) (580,692) (101,155) (40,630) (230,537)
--------- --------- --------- --------- -------- ---------
(22,107) (1,242) (40,513) 9,160 (7,353) (10,514)
--------- --------- --------- --------- -------- ---------
(22,107) (1,242) (40,513) 9,160 (7,353) (10,514)
175,529 176,771 217,284 84,305 91,658 102,172
--------- --------- --------- --------- -------- ---------
$ 153,422 $ 175,529 $ 176,771 $ 93,465 $ 84,305 $ 91,658
========= ========= ========= ========= ======== =========
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
9
<PAGE> 12
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
American AAdvantage Funds (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a no-load, open-end management investment company with ten separate
series. The following series are included in this report: American AAdvantage
Money Market, American AAdvantage U.S. Government Money Market and American
AAdvantage Municipal Money Market Funds (each a "Fund" and collectively, the
"Funds"). The Trust commenced sales on August 1, 1994 of a second class of
shares of the Funds, designated as "PlanAhead Class" shares and on November 7,
1995 a third class of shares of the Funds, designated as "Platinum Class"
shares.
Each Fund invests all of its investable assets in the corresponding
portfolio of the AMR Investment Services Trust, an open-end diversified
management investment company, as follows:
<TABLE>
<S> <C> <C>
AMERICAN AADVANTAGE: INVESTS ASSETS IN AMR INVESTMENT SERVICES TRUST:
Money Market Fund Money Market Portfolio
U.S. Government Money Market Fund U.S. Government Money Market Portfolio
Municipal Money Market Fund Municipal Money Market Portfolio
</TABLE>
Each AMR Investment Services Trust Portfolio has the same investment
objectives as its corresponding Fund. The value of such investment reflects each
Fund's proportionate interest in the net assets of the corresponding portfolio
(58.56%, 89.49% and 76.60% at June 30, 2000 of the AMR Investment Services Trust
Money Market, U.S. Government Money Market and Municipal Money Market
Portfolios, respectively) (each a "Portfolio" and collectively the
"Portfolios"). The financial statements of the Portfolios are included elsewhere
in this report and should be read in conjunction with the Funds' financial
statements.
AMR Investment Services, Inc. (the "Manager") is a wholly-owned subsidiary
of AMR Corporation, the parent company of American Airlines, Inc. ("American"),
and was organized in 1986 to provide business management, advisory,
administrative and asset management consulting services to the Trust and other
investors.
The following is a summary of the significant accounting policies followed
by the Funds.
Valuation of Investments
Valuation of securities by the Portfolios is discussed in Note 1 of the
Portfolios' Notes to Financial Statements which are included elsewhere in this
report.
Investment Income and Dividends to Shareholders
Each Fund records its share of net investment income (loss) and realized
gain (loss) in the Portfolio each day. All net investment income (loss) and
realized gain (loss) of each Portfolio is allocated pro rata among the
corresponding Fund and other investors in each Portfolio at the time of such
determination. The Funds generally declare dividends daily from net investment
income and net short-term capital gain, if any, payable monthly.
Dividends are determined in accordance with income tax principles which may
treat certain transactions differently than generally accepted accounting
principles.
--------------------------------------------------------------------------------
10
<PAGE> 13
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Federal Income and Excise Taxes
It is the policy of each of the Funds to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all net investment income as well as any net realized
capital gains on the sale of investments. Therefore, no federal income or excise
tax provision is required.
100% of dividends paid by the Municipal Money Market Fund were
"exempt-interest dividends" which are free of any regular federal income tax.
Approximately 44% of interest earned was derived from investments in certain
private activity bonds for purposes of the federal alternative minimum tax
calculation.
Expenses
Expenses directly attributable to a Fund are charged to that Fund's
operations. Expenses directly attributable to a Class of shares are charged to
that Class. Expenses incurred by the Trust with respect to any two or more of
the Funds are allocated in proportion to the net assets of each Fund, except
where allocations of direct expenses to each Fund can otherwise be made fairly.
Each share of each Fund, regardless of class, bears equally those expenses that
are allocated to the Fund as a whole.
Valuation of Shares
The price per share is calculated separately for each class of each Fund on
each day on which shares are offered for sale and orders accepted or upon
receipt of a redemption request. With respect to a class of a Fund, price per
share is computed by dividing the value of the Class's pro rata allocation of
the Fund's investments and other assets, less liabilities, by the number of
Class shares outstanding.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimated.
2. TRANSACTIONS WITH AFFILIATES
Administrative Services Agreement
The Manager and the Trust entered into an Administrative Service Agreement
which obligates the Manager to provide or oversee administrative and management
services to the Funds. Effective March 1, 2000, as compensation for performing
the duties required under the Administrative Services Agreement, the Manager
receives an annualized fee of .10% of the net assets of each of the Funds. Prior
to March 1, 2000, the fees were as follows:
<TABLE>
<CAPTION>
ANNUALIZED FEE
--------------
<S> <C>
Institutional Class -
Money Market Fund......................................... 0.10%
U.S. Government Money Market Fund......................... 0.01%
Municipal Money Market Fund............................... 0.10%
PlanAhead Class - All Funds................................. 0.10%
Platinum Class - All Funds.................................. 0.10%
</TABLE>
--------------------------------------------------------------------------------
11
<PAGE> 14
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
The Manager and the Trust entered into an additional Administrative Service
Agreement with respect to the Platinum Classes of the Funds. As compensation for
providing administrative services, the Manager receives an annual fee of .45% of
the average daily net assets of each of the Platinum Classes of the Funds.
Distribution Plan
The Trust, except for the Platinum Class of the Funds, has adopted a
"defensive" Distribution Plan (the "Plan") in accordance with Rule 12b-1 under
the Investment Company Act of 1940 (the "Act"), pursuant to which no fees may be
charged to the Funds for distribution purposes. However, the Plan authorizes the
fees received by the Manager and the investment advisers hired by the Manager to
be used for distribution purposes. Under this Plan, the Trust does not intend to
compensate the Manager or any other party, either directly or indirectly, for
the distribution of Trust shares.
A separate Distribution Plan (the "Distribution Plan") has been adopted
pursuant to Rule 12b-1 under the Act for the Platinum Classes of the Funds.
Under the Distribution Plan, as compensation for distribution assistance, the
Manager receives an annual fee of .25% of the average daily net assets of the
Platinum Class. The fee will be payable without regard to whether the amount of
the fee is more or less than the actual expenses incurred in a particular month
by the Manager for distribution assistance. During the six months ended June 30,
2000, the Manager waived distribution fees totaling $5,742 for the Platinum
Class of the Municipal Money Market Fund.
Services Agreement
The Manager and the Trust entered into a Service Agreement which obligates
the Manager to oversee additional shareholder servicing of the PlanAhead Class.
As compensation for performing the duties required under the Service Agreement,
the Manager receives 0.25% based on the daily net assets of the PlanAhead Class.
Other
Certain officers or trustees of the Trust are also current or former
officers or employees of the Manager or American. The Trust makes no direct
payments to its officers. Unaffiliated trustees and their spouses are provided
free unlimited air transportation on American. However, the Trust compensates
each trustee with payments in an amount equal to the trustee's income tax on the
value of this free airline travel. One trustee, as a retiree of American,
already receives flight benefits. Prior to March 1, 2000, the Trust compensated
this trustee up to $10,000 annually to cover his personal flight service charges
and the charges for his three adult children, as well as the income tax charged
on the value of these benefits. Beginning March 1, 2000, the trustee will
receive an annual retainer of $20,000 plus $1,250 for each Board meeting
attended. For the six months ended June 30, 2000, the cost of air transportation
for the trustees was not material to any of the Funds.
--------------------------------------------------------------------------------
12
<PAGE> 15
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
3. CAPITAL SHARE TRANSACTIONS
The tables below summarize the activity in capital shares for each Class of
the Funds (in thousands). Each share is valued at $1.00:
<TABLE>
<CAPTION>
Six Months Ended June 30, 2000
MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
----------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 8,590,791 789,490 567,884
Reinvestment of dividends............................. 31,830 8,364 22,596
Shares redeemed....................................... (9,508,522) (825,998) (627,104)
---------- ---------- ----------
Net decrease in shares outstanding.................... (885,901) (28,144) (36,624)
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
--------------------------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 76,314 149,042 51,260
Reinvestment of dividends............................. 517 248 1,886
Shares redeemed....................................... (84,896) (156,498) (59,980)
---------- ---------- ----------
Net decrease in shares outstanding.................... (8,065) (7,208) (6,834)
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
--------------------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 0 13,483 95,343
Reinvestment of dividends............................. 14 187 1,288
Shares redeemed....................................... 0 (11,152) (90,003)
---------- ---------- ----------
Net increase in shares outstanding.................... 14 2,518 6,628
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Two Months Ended December 31, 1999
MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
----------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 3,491,292 51,915 123,716
Reinvestment of dividends............................. 10,095 2,394 6,893
Shares redeemed....................................... (3,175,587) (135,091) (106,222)
---------- ---------- ----------
Net increase(decrease) in shares outstanding.......... 325,800 (80,782) 24,387
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
--------------------------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 30,565 71,368 14,212
Reinvestment of dividends............................. 162 119 641
Shares redeemed....................................... (25,769) (71,887) (20,653)
---------- ---------- ----------
Net increase (decrease) in shares outstanding......... 4,958 (400) (5,800)
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
--------------------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 0 3,912 28,937
Reinvestment of dividends............................. 4 41 383
Shares redeemed....................................... 0 (6,269) (34,361)
---------- ---------- ----------
Net increase (decrease) in shares outstanding......... 4 (2,316) (5,041)
========== ========== ==========
</TABLE>
--------------------------------------------------------------------------------
13
<PAGE> 16
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended October 31, 1999
MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
----------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 9,673,989 1,260,471 1,494,397
Reinvestment of dividends............................. 33,083 13,768 35,028
Shares redeemed....................................... (9,296,748) (1,219,466) (1,431,998)
---------- ---------- ----------
Net increase in capital shares outstanding............ 410,324 54,773 97,427
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
--------------------------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 168,473 246,538 120,474
Reinvestment of dividends............................. 906 512 3,276
Shares redeemed....................................... (175,956) (286,959) (117,777)
---------- ---------- ----------
Net increase (decrease) in capital shares
outstanding......................................... (6,577) (39,909) 5,973
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET FUND INSTITUTIONAL CLASS PLANAHEAD CLASS PLATINUM CLASS
--------------------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Shares sold........................................... 2,679 45,874 169,163
Reinvestment of dividends............................. 22 326 1,959
Shares redeemed....................................... (2,802) (49,879) (177,856)
---------- ---------- ----------
Net decrease in capital shares outstanding............ (101) (3,679) (6,734)
========== ========== ==========
</TABLE>
--------------------------------------------------------------------------------
14
<PAGE> 17
AMERICAN EAGLE LOGO
--------------------------------------------------------------------------------
15
<PAGE> 18
AMERICAN AADVANTAGE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
-------------------------------------------------------------------------
SIX MONTHS
ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED OCTOBER 31,
2000 DECEMBER 31, ----------------------------------------
(UNAUDITED) 1999 1999 1998 1997
----------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Net investment income.................... 0.03(A) 0.01(A) 0.05(A) 0.06(A) 0.06(A)
Less dividends from net investment
income................................. (0.03) (0.01) (0.05) (0.06) (0.06)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return................................ 3.02%(C) 0.94%(C) 5.09% 5.63% 5.60%
========== ========== ========== ========== ==========
Ratios and supplemental data:
Net assets, end of period (in
thousands)............................. $1,092,223 $1,978,123 $1,652,323 $1,241,999 $1,123,649
Ratios to average net assets
(annualized):
Expenses............................. 0.24%(A) 0.23%(A) 0.24%(A) 0.23%(A) 0.23%(A)
Net investment income................ 5.95%(A) 5.65%(A) 4.99%(A) 5.49%(A) 5.46%(A)
<CAPTION>
INSTITUTIONAL CLASS
-------------------------
YEAR ENDED OCTOBER 31,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Net asset value, beginning of period........ $ 1.00 $ 1.00
---------- ----------
Net investment income.................... 0.05(A) 0.06
Less dividends from net investment
income................................. (0.05) (0.06)
---------- ----------
Net asset value, end of period.............. $ 1.00 $ 1.00
========== ==========
Total return................................ 5.57% 5.96%
========== ==========
Ratios and supplemental data:
Net assets, end of period (in
thousands)............................. $1,406,939 $1,206,041
Ratios to average net assets
(annualized):
Expenses............................. 0.24%(A) 0.23%
Net investment income................ 5.41%(A) 5.79%
</TABLE>
---------------
(A) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the AMR Investment Services Trust Money Market Portfolio.
(B) Total return for the Platinum Class for the period ended October 31, 1996
reflects Institutional Class returns from November 1, 1995 through November
6, 1995 and returns of the Platinum Class from November 7, 1995
(commencement of operations) through October 31, 1996. Due to the different
expense structures between the classes, total return would vary from the
results shown had the Platinum Class been in operation for the entire year.
(C) Not annualized
--------------------------------------------------------------------------------
16
<PAGE> 19
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PLANAHEAD CLASS PLATINUM CLASS
-------------------------------------------------------------------------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED TWO MONTHS ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED OCTOBER 31, JUNE 30, ENDED
2000 DECEMBER 31, ----------------------------------------------------------- 2000 DECEMBER 31,
(UNAUDITED) 1999 1999 1998 1997 1996 1995 (UNAUDITED) 1999
----------- ------------ -------- -------- -------- -------- ------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- ------- -------- --------
0.03 (A) 0.01(A) 0.05(A) 0.05(A) 0.05(A) 0.05(A) 0.05 0.03(A) 0.01(A)
(0.03) (0.01) (0.05) (0.05) (0.05) (0.05) (0.05) (0.03) (0.01)
-------- -------- -------- -------- -------- -------- ------- -------- --------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======= ======== ========
2.87% (C) 0.89%(C) 4.79% 5.31% 5.28% 5.21% 5.60% 2.64%(C) 0.82%(C)
======== ======== ======== ======== ======== ======== ======= ======== ========
$234,604 $262,748 $343,532 $288,759 $189,189 $106,890 $41,989 $829,417 $866,041
0.54% (A) 0.55%(A) 0.53%(A) 0.53%(A) 0.54%(A) 0.58%(A) 0.55% 0.98%(A) 1.00%(A)
5.70% (A) 5.32%(A) 4.69%(A) 5.18%(A) 5.17%(A) 5.06%(A) 5.56% 5.25%(A) 4.87%(A)
<CAPTION>
PLATINUM CLASS
--------------------------------------------------
NOVEMBER 7,
YEAR ENDED OCTOBER 31, 1995 TO
---------------------------------- OCTOBER 31,
1999 1998 1997 1996
-------- -------- -------- -----------
<S> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
0.04(A) 0.05(A) 0.05(A) 0.05(A)
(0.04) (0.05) (0.05) (0.05)
-------- -------- -------- --------
$ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
4.33% 4.89% 4.87% 4.85%(B,C)
======== ======== ======== ========
$841,653 $744,226 $494,413 $119,981
0.97%(A) 0.94%(A) 0.93%(A) 0.94%(A)
4.24%(A) 4.78%(A) 4.80%(A) 4.63%(A)
</TABLE>
--------------------------------------------------------------------------------
17
<PAGE> 20
AMERICAN AADVANTAGE U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
----------------------------------------------------------------------------------------
SIX MONTHS
ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED OCTOBER 31,
2000 DECEMBER 31, -------------------------------------------------------
(UNAUDITED) 1999 1999 1998 1997(B) 1996 1995
----------- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- -------
Net investment income............... 0.03(A) 0.01(A) 0.05(A) 0.05(A) 0.05(A) 0.05(A) 0.06
Less dividends from net investment
income............................ (0.03) (0.01) (0.05) (0.05) (0.05) (0.05) (0.06)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= =======
Total return........................... 2.96%(E) 0.94%(E) 4.94% 5.47% 5.36% 5.29% 5.67%
======= ======= ======= ======= ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in
thousands)........................ $29,319 $37,385 $32,427 $39,004 $29,946 $25,595 $47,184
Ratios to average net assets
(annualized)(D):
Expenses........................ 0.25%(A) 0.18%(A) 0.19%(A) 0.30%(A) 0.27%(A) 0.32%(A) 0.32%
Net investment income........... 5.87%(A) 5.60%(A) 4.83%(A) 5.34%(A) 5.24%(A) 5.16%(A) 5.49%
</TABLE>
---------------
(A) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the AMR Investment Services Trust U.S. Government Money Market Portfolio.
(B) Prior to March 1, 1997, the American AAdvantage U.S. Government Money
Market Fund was known as the American AAdvantage U.S. Treasury Money Market
Fund and operated under different investment policies.
(C) Total return for the Platinum Class for the period ended October 31, 1996
reflects Institutional Class returns from November 1, 1995 through November
6, 1995 and returns of the Platinum Class from November 7, 1995
(commencement of operations) through October 31, 1996. Due to the different
expense structures between the classes, total return would vary from the
results shown had the Platinum Class been in operation for the entire year.
(D) Operating results of the Platinum Class excluded fees waived by the Manager
during the year ended October 31, 1998. The ratio of expenses to average
net assets was 1.02% and the ratio of net investment income to average net
assets was 4.62% prior to expenses waived.
(E) Not annualized
--------------------------------------------------------------------------------
18
<PAGE> 21
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
PLANAHEAD CLASS PLATINUM CLASS
---------------------------------------------------------------------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED TWO MONTHS ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED OCTOBER 31, JUNE 30, ENDED
2000 DECEMBER 31, ------------------------------------------------------- 2000 DECEMBER 31,
(UNAUDITED) 1999 1999 1998 1997(B) 1996 1995 (UNAUDITED) 1999
----------- ------------ ------- ------- ------- ------- ------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- -------
0.03 (A) 0.01(A) 0.05(A) 0.05(A) 0.05(A) 0.05(A) 0.05 0.03(A) 0.01(A)
(0.03) (0.01) (0.05) (0.05) (0.05) (0.05) (0.05) (0.03) (0.01)
------- ------- ------- ------- ------- ------- ------- ------- -------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
2.77% (E) 0.86%(E) 4.56% 5.13% 5.08% 4.94% 5.19% 2.56%(E) 0.80%(E)
======= ======= ======= ======= ======= ======= ======= ======= =======
$52,352 $59,560 $59,960 $99,869 $ 4,046 $ 1,822 $ 530 $71,751 $78,585
0.61% (A) 0.64%(A) 0.56%(A) 0.57%(A) 0.52%(A) 0.67%(A) 0.76% 1.02%(A) 1.02%(A)
5.51% (A) 5.15%(A) 4.45%(A) 5.01%(A) 5.00%(A) 4.74%(A) 5.19% 5.10%(A) 4.77%(A)
<CAPTION>
PLATINUM CLASS
-----------------------------------------------
NOVEMBER 7,
YEAR ENDED OCTOBER 31, 1995 TO
------------------------------- OCTOBER 31,
1999 1998 1997(B) 1996
------- ------- ------- -----------
<S> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
0.04(A) 0.05(A) 0.05(A) 0.04(A)
(0.04) (0.05) (0.05) (0.04)
------- ------- ------- -------
$ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
4.09% 4.71% 4.61%() 4.58%(C,E)
======= ======= ======= =======
$84,385 $78,412 $68,439 $52,153
1.01%(A) 1.01%(A) 0.99%(A) 1.00%(A)
4.01%(A) 4.62%(A) 4.53%(A) 4.35%(A)
</TABLE>
--------------------------------------------------------------------------------
19
<PAGE> 22
AMERICAN AADVANTAGE MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
---------------------------------------------------------------------------
SIX MONTHS
ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED OCTOBER 31,
2000 DECEMBER 31, ---------------------------------------------
(UNAUDITED) 1999 1999 1998 1997 1996 1995
------------ ------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------ ------ ------ ------ ------
Net investment income....................... 0.02(A) 0.01(A) 0.03(A) 0.03(A) 0.04(A) 0.04(A) 0.04
Less dividends from net investment income... (0.02) (0.01) (0.03) (0.03) (0.04) (0.04) (0.04)
------ ------- ------ ------ ------ ------ ------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ====== ====== ====== ====== ======
Total return................................... 1.86%(C) 0.58%(C) 2.92% 3.46% 3.52% 3.59% 3.75%
====== ======= ====== ====== ====== ====== ======
Ratios and supplemental data:
Net assets, end of period (in thousands).... $ 764 $ 750 $ 745 $ 847 $ 369 $ 6 $ 7
Ratios to average net assets (annualized):
Expenses................................ 0.33%(A) 0.35%(A) 0.39%(A) 0.33%(A) 0.31%(A) 0.27% (A) 0.35%
Net investment income................... 3.71%(A) 3.49%(A) 2.91%(A) 3.35%(A) 3.49%(A) 3.49% (A) 3.70%
Decrease reflected in above expense ratio
due to absorption of expenses by the
Manager................................... - - - - 0.01% 0.06% 0.20%
</TABLE>
---------------
(A) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the AMR Investment Services Trust Municipal Money Market Portfolio.
(B) Total return for the Platinum Class for the period ended October 31, 1996
reflects Institutional Class returns from November 1, 1995 through November
6, 1995 and returns of the Platinum Class from November 7, 1995
(commencement of operations) through October 31, 1996. Due to the different
expense structures between the classes, total return would vary from the
results shown had the Platinum Class been in operation for the entire year.
(C) Not annualized.
--------------------------------------------------------------------------------
20
<PAGE> 23
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
PLANAHEAD CLASS PLATINUM CLASS
----------------------------------------------------------------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED TWO MONTHS ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED OCTOBER 31, JUNE 30, ENDED
2000 DECEMBER 31, ---------------------------------------------------- 2000 DECEMBER 31,
(UNAUDITED) 1999 1999 1998 1997 1996 1995 (UNAUDITED) 1999
----------- ------------ ------ ------- ------ ------- ------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------- ------ ------- ------ ------- -------
0.02 (A) 0.01(A) 0.03(A) 0.03(A) 0.03(A) 0.03(A) 0.03 0.02(A) 0.01(A)
(0.02) (0.01) (0.03) (0.03) (0.03) (0.03) (0.03) (0.02) (0.01)
------ ------ ------ ------- ------ ------- ------ ------- -------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======= ====== ======= ====== ======= =======
1.69% (C) 0.52%(C) 2.68% 3.17% 3.24% 3.27% 3.39% 1.50%(C) 0.47%(C)
====== ====== ====== ======= ====== ======= ====== ======= =======
$9,998 $7,479 $9,795 $13,474 $9,590 $ 2,340 $ 129 $82,704 $76,076
0.66% (A) 0.73%(A) 0.65%(A) 0.64%(A) 0.60%(A) 0.62%(A) 0.72% 1.04%(A) 1.05%(A)
3.35% (A) 3.09%(A) 2.61%(A) 3.07%(A) 3.18%(A) 3.12%(A) 3.32% 3.01%(A) 2.77%(A)
- - - - 0.01% 0.05% 0.20% 0.01% 0.03%
<CAPTION>
PLATINUM CLASS
-----------------------------------------------
NOVEMBER 7,
YEAR ENDED OCTOBER 31, 1995 TO
------------------------------- OCTOBER 31,
1999 1998 1997 1996
------- ------- ------- -----------
<S> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
0.02(A) 0.03(A) 0.03(A) 0.03(A)
(0.02) (0.03) (0.03) (0.03)
------- ------- ------- -------
$ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
2.27% 2.75% 2.79% 2.88%(B,C)
======= ======= ======= =======
$81,118 $87,852 $63,883 $49,862
1.04%(A) 1.04%(A) 1.03%(A) 0.97%(A)
2.24%(A) 2.69%(A) 2.75%(A) 2.72%(A)
0.01% 0.03% 0.01% 0.05%
</TABLE>
--------------------------------------------------------------------------------
21
<PAGE> 24
AMR INVESTMENT SERVICES MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
AMOUNT VALUE
-------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
TIME DEPOSITS - 1.61%
Den Danske Bank, 7.06%, Due 7/3/2000........................ $ 21,000 $ 21,000
Societe Generale, 7.00%, Due 7/3/2000....................... 38,426 38,426
----------
TOTAL TIME DEPOSITS..................................... 59,426
----------
VARIABLE RATE CERTIFICATES OF DEPOSIT AND BANK NOTES - 34.60%
FOREIGN BANKS - 10.71%
Landesbank Hessen Thuringen, 6.28%, Due 10/2/2000........... 125,000 124,979
Merita Bank, PLC, 6.23%, Due 1/22/2001...................... 150,000 149,958
Svenska Handelsbanken, 6.28%, Due 10/13/2000................ 120,000 119,968
----------
TOTAL FOREIGN BANKS..................................... 394,905
----------
DOMESTIC BANKS - 23.89%
Banco Popular de Puerto Rico, 6.92%, Due 5/25/2001 (Note
D)........................................................ 150,000 150,000
Bank of America, NA, 6.87%, Due 2/26/2001................... 10,000 10,005
Bank One, NA, 6.25%, Due 10/20/2000......................... 100,000 99,973
Branch Banking & Trust Company, 6.88%, Due 3/9/2001......... 100,000 99,963
First Union National Bank,
6.86%, Due 9/25/2000...................................... 10,000 10,000
6.96%, Due 11/13/2000..................................... 70,000 70,049
6.25%, Due 4/20/2001...................................... 100,000 100,000
Key Bank, NA,
6.64%, Due 11/2/2000...................................... 20,000 20,018
6.94%, Due 12/21/2000..................................... 20,000 20,023
Mellon Bank, NA, 6.82%, Due 8/30/2000....................... 96,000 95,996
National City Bank,
6.82%, Due 8/30/2000...................................... 130,000 129,989
6.97%, Due 12/14/2000..................................... 25,000 25,026
6.79%, Due 3/23/2001...................................... 50,000 50,028
----------
TOTAL DOMESTIC BANKS.................................... 881,070
----------
TOTAL VARIABLE RATE CERTIFICATES OF DEPOSIT AND BANK
NOTES.................................................. 1,275,975
----------
PROMISSORY NOTES - 2.71%
Jackson National Life Insurance Company, Variable Rate,
7.18%, Due 9/1/2000 (Note B).............................. 100,000 100,000
----------
TOTAL PROMISSORY NOTES.................................. 100,000
----------
ASSET-BACKED COMMERCIAL PAPER (NOTE A) - 5.31%
Atlantis One Funding Corporation, 6.62%, Due 10/3/2000...... 28,710 28,214
Enterprise Funding Corporation, 6.69%, Due 8/23/2000........ 20,345 20,145
Govco, Incorporated, 6.65%, Due 9/15/2000................... 50,000 49,298
Moat Funding, LLC, 6.63%, Due 9/28/2000..................... 100,000 98,361
----------
TOTAL ASSET-BACKED COMMERCIAL PAPER..................... 196,018
----------
VARIABLE RATE COMMERCIAL PAPER - 5.42%
General Electric Capital Corporation,
6.74%, Due 9/5/2000....................................... 160,000 160,000
6.58%, Due 11/3/2000...................................... 40,000 40,000
----------
TOTAL VARIABLE RATE COMMERCIAL PAPER.................... 200,000
----------
VARIABLE RATE MEDIUM-TERM NOTES - 49.56%
AB Spintab, 6.81%, Due 9/19/2000............................ 150,000 150,011
Abbey National Treasury Services, 6.44%, Due 8/3/2000....... 25,000 24,998
American Honda Finance Corporation, 144a, (Note E)
6.85%, Due 11/20/2000..................................... 15,000 15,003
6.26%, Due 1/10/2001...................................... 60,000 59,997
6.80%, Due 6/12/2001...................................... 50,000 50,000
6.81%, Due 6/14/2001...................................... 25,000 25,000
AT&T Capital Corporation, 6.44%, Due 4/9/2001............... 81,500 81,627
Bankers Trust Corporation, 6.72%, Due 8/6/2000.............. 28,000 28,000
Caterpillar Financial Services,
6.30%, Due 1/19/2001...................................... 30,000 30,007
6.34%, Due 4/2/2001....................................... 20,000 20,011
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
22
<PAGE> 25
AMR INVESTMENT SERVICES MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
AMOUNT VALUE
-------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Chase Manhattan Corporation,
6.53%, Due 10/13/2000..................................... $ 20,000 $ 20,017
7.07%, Due 11/24/2000..................................... 30,500 30,535
7.08%, Due 11/30/2000..................................... 10,000 10,009
6.35%, Due 4/26/2001...................................... 61,500 61,533
Citicorp Incorporated, 6.76%, Due 11/10/2000................ 15,000 15,000
Commerzbk Overseas Finance, NV, 6.27%, Due 1/30/2001........ 20,000 19,982
Fleet National Bank,
6.67%, Due 8/10/2000...................................... 30,000 29,999
6.37%, Due 10/10/2000..................................... 25,000 25,007
6.88%, Due 11/9/2000...................................... 15,000 15,011
6.41%, Due 1/22/2001...................................... 30,000 30,020
6.47%, Due 2/1/2001....................................... 25,000 25,014
Ford Motor Credit Company,
6.77%, Due 10/2/2000...................................... 105,000 104,978
6.53%, Due 4/12/2001...................................... 10,000 10,022
General Motors Acceptance Corporation,
7.10%, Due 12/11/2000..................................... 25,000 25,032
6.79%, Due 2/11/2002 (Note C)............................. 150,000 150,000
Goldman Sachs Group, L.P.,
6.47%, Due 11/1/2000...................................... 50,000 50,000
7.00%, Due 11/28/2000, 144a, (Note E)..................... 45,000 45,036
6.73%, Due 1/16/2001, 144a, (Note E)...................... 10,000 10,026
6.49%, Due 1/25/2001, 144a, (Note E)...................... 75,000 75,078
7.22%, Due 2/26/2001, 144a, (Note E)...................... 5,000 5,012
GTE Corporation,
6.82%, Due 12/11/2000..................................... 150,000 149,948
6.30%, Due 1/5/2001....................................... 25,000 24,998
Huntington National Bank, 6.44%, Due 2/2/2001............... 64,000 64,030
Merrill Lynch & Company, Incorporated,
6.34%, Due 7/3/2000....................................... 20,000 20,000
6.72%, Due 8/14/2000...................................... 30,000 29,999
6.93%, Due 2/16/2001...................................... 50,000 50,072
6.35%, Due 4/9/2001....................................... 25,000 25,025
6.24%, Due 4/12/2001...................................... 75,000 74,989
Morgan Stanley Dean Witter Company,
7.32%, Due 11/13/2000..................................... 67,000 67,130
6.43%, Due 1/22/2001...................................... 10,000 10,008
6.75%, Due 3/16/2001...................................... 50,000 50,000
Royal Bank of Canada, 6.38%, Due 7/28/2000.................. 10,000 10,000
Sanwa Business Credit Corporation, 6.54%, Due 4/3/2001...... 10,000 10,018
----------
TOTAL VARIABLE RATE MEDIUM-TERM NOTES................... 1,828,182
----------
TOTAL INVESTMENTS - 99.21% (COST $3,659,601)................ 3,659,601
----------
OTHER ASSETS, NET OF LIABILITIES - 0.79%.................... 29,059
----------
TOTAL NET ASSETS - 100%..................................... $3,688,660
==========
</TABLE>
---------------
Based on the cost of investments of $3,659,601 for federal income tax purposes
at June 30, 2000, there was no unrealized appreciation or depreciation of
investments.
(A) Rates associated with money market securities represent discount rate at
time of purchase.
(B) Obligation is subject to an unconditional put back to the issuer with seven
calendar days notice.
(C) Obligation is subject to an unconditional put back to the issuer with ninety
calendar days notice.
(D) Obligation is subject to a credit quality put back to the issuer with seven
calendar days notice.
(E) Security exempt from registration under Rule 144a of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period end,
the value of these securities amounted to $285,152 or 7.73% of net assets.
ABBREVIATION:
LLC - Limited Liability Company
L.P. - Limited Partnership
NA - National Association
NV - Company
PLC - Public Limited Corporation
See accompanying notes
--------------------------------------------------------------------------------
23
<PAGE> 26
AMR INVESTMENT SERVICES U.S. GOVERNMENT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
AMOUNT VALUE
-------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
REPURCHASE AGREEMENTS (NOTES A AND B) - 2.45%
Goldman Sachs Tri-Party Government Repurchase Agreement,
6.85%, Due 7/3/2000 (Collateral held at The Bank of New
York by Federal Home Loan Mortgage Corporation, 7.50%, Due
4/1/2020 - Market Value - $4,270)......................... $ 4,212 $ 4,212
---------
TOTAL REPURCHASE AGREEMENTS............................. 4,212
---------
U.S. GOVERNMENT AGENCY INSTRUMENTS (NOTE A) - 111.49%
Federal Home Loan Bank,
Discount Note, 6.6%, Due 9/15/2000........................ 10,000 9,863
Variable Rate MTN, 6.13%, Due 10/4/2000................... 8,000 8,000
Variable Rate MTN, 6.72%, Due 10/6/2000................... 15,000 14,998
Federal Home Loan Mortgage Corporation
Discount Note, 6.47%, Due 7/11/2000....................... 20,000 19,964
Discount Note, 6.63%, Due 8/17/2000....................... 15,000 14,872
Discount Note, 6.61%, Due 9/21/2000....................... 5,000 4,926
Discount Note, 6.62%, Due 9/28/2000....................... 25,000 24,615
Federal National Mortgage Association,
Discount Note, 6.47%, Due 7/6/2000........................ 1,800 1,798
Variable Rate MTN, 6.47%, Due 8/2/2000.................... 15,000 14,999
Variable Rate MTN, 6.66%, Due 9/6/2000.................... 12,720 12,719
Discount Note, 6.55%, Due 9/7/2000........................ 15,000 14,817
Variable Rate MTN, 6.89%, Due 9/18/2000................... 15,000 14,999
Variable Rate MTN, 6.43%, Due 12/8/2000................... 10,000 9,996
Variable Rate MTN, 6.59%, Due 3/1/2001.................... 25,000 24,987
---------
TOTAL U.S. GOVERNMENT AGENCY INSTRUMENTS................ 191,553
---------
TOTAL INVESTMENTS - 113.94% (COST $195,765)................. 195,765
---------
LIABILITIES, NET OF OTHER ASSETS - (13.94%)................. (23,957)
---------
TOTAL NET ASSETS - 100%..................................... $ 171,808
=========
</TABLE>
---------------
Based on the cost of investments of $195,765 for federal income tax purposes at
June 30, 2000, there was no unrealized appreciation or depreciation of
investments.
(A) Rates associated with money market securities represent yield to maturity,
or coupon to next reset date.
(B) Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities. All collateral is held at the Portfolio's
custodian bank, State Street Bank and Trust Company, or at subcustodian
banks, as indicated. The collateral is monitored daily by the Portfolio so
that its market value exceeds the carrying value of the repurchase
agreement.
ABBREVIATIONS:
MTN - Medium Term Note
See accompanying notes
--------------------------------------------------------------------------------
24
<PAGE> 27
AMR INVESTMENT SERVICES MUNICIPAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
AMOUNT VALUE
--------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
MUNICIPAL OBLIGATIONS - 93.09%
COMMERCIAL PAPER (NOTE A) - 22.10%
City of Brownsville, Texas Pollution Control Revenue Bonds
(Texas Utilities Electric Company Project), 4.45%, Due
7/12/2000, LOC Toronto Dominion........................... $ 1,500 $ 1,500
Delaware County, Pennsylvania, Industrial Development
Authority Pollution Control Bonds (Philadelphia Electric
Project), Series 1998A, 4.50%, Due 7/10/2000, Bonds
Insurance FGIC............................................ 4,000 4,000
The Economic Development Corporation of the Township of
Cornell Michigan Environmental Improvement Revenue Bonds,
(Mead-Escanala Paper Company Project), Series 1986, 3.85%,
Due 7/6/2000, LOC Credit Suisse........................... 4,200 4,200
Florida Municipal Power Agency, (Initial Pooled Loan
Project,), Series A, 4.05%, Due 7/12/2000, LOC ABN-Amro... 4,200 4,200
Montgomery County, Pennsylvania Industrial Development
Pollution Control Revenue Bonds (Peco Energy Project),
Series 1996, 4.30%, Due 7/11/2000, LOC Canadian Imperial
Bank of Commerce.......................................... 4,800 4,800
Palm Beach County, Florida Health Facilities Authority
Pooled Hospital Loan Program, 4.45%, Due 7/10/2000, Bond
Insurance MBIA, SPA Credit Suisse......................... 4,800 4,800
Phenix City, Alabama Industrial Development Board
Environmental Improvements (Mead Board Project), Series
1988, 4.10%, Due 7/12/2000, LOC ABN-Amro.................. 1,000 1,000
Sweetwater County, Wyoming Customized Purchase Pollution
Control Revenue Refunding Bonds (PacifiCorp Project),
Series 1988A, 4.15%, Due 8/1/2000, LOC UBS A.G............ 2,500 2,500
----------
TOTAL COMMERCIAL PAPER.................................. 27,000
----------
VARIABLE RATE DEMAND OBLIGATIONS (NOTE A) - 70.99%
ARIZONA - 6.44%
Arizona Health Facilities Authority Revenue Bonds (Pooled
Loan Program), Bond Insurance - FGIC, 4.95%, Due
10/1/2015, LOC Chase Manhattan Bank....................... 2,660 2,660
Maricopa County, Arizona Pollution Control Corporation
Pollution Control Revenue Bonds (El Paso Electric Company
Project, Palo Verde), 4.90%, Due 12/1/2014, LOC Barclays
Bank...................................................... 2,200 2,200
Mesa, Arizona Industrial Development Authority Variable Rate
Revenue Bonds (Discovery Health Systems Project), Series
1999 B, 4.95%, Due 1/1/2029, MBIA Insured, Chase
Liquidity................................................. 3,000 3,000
----------
TOTAL ARIZONA........................................... 7,860
----------
CALIFORNIA - 1.31%
California Pollution Control Finance Authority Resource
Recovery Revenue Bonds (Wadham Energy Limited
Partnership), Series 1987A, 4.80%, Due 1/11/2017, LOC
Banque Paribas............................................ 1,600 1,600
----------
TOTAL CALIFORNIA........................................ 1,600
----------
COLORADO - 1.56%
Moffat County, Colorado Pollution Control Revenue Bonds (Ute
Electric Company Project), Bond Insurance - AMBAC
Indemnity Corporation, Series 1984, 4.70%, Due 7/1/2010,
SPA Societe Generale...................................... 1,900 1,900
----------
TOTAL COLORADO.......................................... 1,900
----------
FLORIDA - 5.19%
Citrus Park, Florida Community Development District Variable
Rate Demand Bonds, Series 1996, 4.85%, Due 11/1/2016, LOC
Dieschner Bank AG......................................... 1,035 1,035
Florida Housing Financial Agency Housing Revenue Bonds
(Heron Park Project), Series 1996 U, 5.00%, Due 7/12/2000,
LOC Bank of America....................................... 2,400 2,400
Florida Housing Finance Corporation Housing Revenue Bonds
(Club at Vero Apartments Project), Series E, 5.00%, Due
6/1/2017, LOC Bank of America............................. 2,900 2,900
----------
TOTAL FLORIDA........................................... 6,335
----------
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
25
<PAGE> 28
AMR INVESTMENT SERVICES MUNICIPAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
AMOUNT VALUE
--------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
GEORGIA - 6.83%
Clayton County, Georgia Housing Authority (Kimberly Forest
Apartments Project), Series B, Bond Insurance - Financial
Security Assurance, 4.80%, Due 1/1/2021, SPA Societe
Generale.................................................. $ 1,015 $ 1,015
Monroe County, Georgia Industrial Development Revenue Bonds
(Forsyth Inc. Project), Series 1995, 4.95%, Due 11/1/2015,
LOC Bank One.............................................. 2,325 2,325
Thomaston-Upson County Industrial Development Revenue
Authority (Yamaha Music Manufacturing, Incorporated
Project), Series 1988, 5.20%, Due 8/1/2018, LOC Bank of
Tokyo-Mitsubishi, Limited................................. 5,000 5,000
----------
TOTAL GEORGIA........................................... 8,340
----------
ILLINOIS - 2.05%
City of Chicago, Illinois Multi-Family Housing Revenue Bonds
(Waveland Associates Project), Series 1985 A, 4.85%, Due
11/1/2010, LOC Union Bank of Switzerland.................. 1,500 1,500
Illinois Development Finance Authority Pollution Control
Revenue Bonds (Illinois Power Project), Series 1987 D,
5.10%, Due 3/1/2017, LOC Morgan Guaranty.................. 1,000 1,000
----------
TOTAL ILLINOIS.......................................... 2,500
----------
INDIANA - 0.82%
Fort Wayne, Indiana Industrial Economic Development Revenue
Bonds (ND-Tech Corporation Project), Series 1989, 4.80%,
Due 7/1/2009, LOC Societe Generale........................ 1,000 1,000
----------
TOTAL INDIANA........................................... 1,000
----------
IOWA - 2.30%
Dubuque, Iowa Industrial Development Revenue Bonds (Swiss
Valley Farms Company Project), Series 1987, 4.90%, Due
12/1/2001, LOC Rabobank Nederland Bank.................... 750 750
Polk County, Iowa Hospital Equipment and Improvement, Bond
Insurance - MBIA, 4.80%, Due 12/1/2005, SPA Bank of New
York Company, Incorporated................................ 2,065 2,065
----------
TOTAL IOWA.............................................. 2,815
----------
LOUISIANA - 1.72%
Ascension Parish, Louisiana Variable Rate Demand Pollution
Control Revenue Bonds (Borden Incorporated Project),
Series 1992, 4.95%, Due 12/1/2009, LOC Credit Suisse First
Boston.................................................... 2,100 2,100
----------
TOTAL LOUISIANA......................................... 2,100
----------
MARYLAND - 2.46%
Montgomery County, Maryland Housing Opportunities Community
(Draper Lane Apartments), Bond Insurance - FGIC, Series I,
5.05%, Due 2/16/2026, SPA Barclays Bank................... 3,000 3,000
----------
TOTAL MARYLAND.......................................... 3,000
----------
MICHIGAN - 2.58%
City of Detroit, Michigan Sewer Disposal Revenue Bonds, Bond
Insurance - MBIA, Series 1998 B, 4.95%, Due 7/1/2023, SPA
Morgan Guaranty........................................... 1,855 1,855
City of Detroit, Michigan Water Supply System Revenue Bonds,
Bond Insurance - MBIA, Series 1998 B, 5.70%, Due 7/1/2023,
SPA Morgan Guaranty....................................... 1,300 1,300
----------
TOTAL MICHIGAN.......................................... 3,155
----------
NEBRASKA - 0.82%
Lancaster County, Nebraska Industrial Development Revenue
Bonds (Sun Husker Foods, Incorporated Project), Series
1989, 5.20%, Due 8/15/2009, LOC Bank of Tokyo-Mitsubishi,
Limited................................................... 1,000 1,000
----------
TOTAL NEBRASKA.......................................... 1,000
----------
NORTH CAROLINA - 0.82%
Burke County, North Carolina Industrial Facilities &
Pollution Control Authority Industrial Revenue Bonds
(Jobst Institute Incorporated Project), Series 1992,
4.85%, Due 6/1/2002, LOC Wachovia Bank.................... 1,000 1,000
----------
TOTAL NORTH CAROLINA.................................... 1,000
----------
OHIO - 2.70%
Ohio State Air Quality Development Authority Revenue Bonds
(JMG-Funding Limited Partnership Project), Series 1994A,
5.00%, Due 4/01/2029, LOC Societe Generale................ 3,300 3,300
----------
TOTAL OHIO.............................................. 3,300
----------
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
26
<PAGE> 29
AMR INVESTMENT SERVICES MUNICIPAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
AMOUNT VALUE
--------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OREGON - 2.46%
State of Oregon (Toyo Tanso USA), Series CXLVII, 5.18%, Due
2/1/2012, LOC Bank of Tokyo - Mitsubishi, Limited......... $ 3,000 $ 3,000
----------
TOTAL OREGON............................................ 3,000
----------
PENNSYLVANIA - 7.79%
Chartiers Valley, Pennsylvania Industrial & Commercial
Development Authority Commercial Development Bonds
(William Penn Plaza Project), 4.50%, Due 12/1/2016, LOC
PNC Bank.................................................. 1,100 1,100
Gettysburg Area Industrial Development Authority Refunding
Bonds (Dal-Tile Corporation), Series 1987A, 4.85%, Due
3/1/2004, LOC Credit Suisse............................... 300 300
Gettysburg Area Industrial Development Authority Refunding
Bonds (Dal-Tile Corporation), Series 1987B, 4.95%, Due
3/1/2004, LOC Credit Suisse............................... 855 855
Lehigh County, Pennsylvania General Purpose Authority
Adjustable Rate Hospital Revenue Bonds, Lehigh Valley
Hospital Project), Series 1997 A, 4.50%, Due 7/1/2028,
AMBAC Insured Chase Liquidity............................. 2,700 2,700
Northumberland County, Pennsylvania Industrial Development
Authority Resource Recovery Revenue Bonds (Foster Wheeler
Mt. Carmel, Incorporated Project), Series 1987A, 4.90%,
Due 2/1/2010, LOC Union Bank of Switzerland............... 1,000 1,000
Northumberland County, Pennsylvania Industrial Development
Authority Resource Recovery Revenue Bonds (Foster Wheeler
Mt. Carmel, Incorporated Project), Series 1987B, 4.90%,
Due 2/1/2010, LOC Union Bank of Switzerland............... 1,165 1,165
Schuykill County, Pennsylvania Industrial Development
Authority Revenue Bonds, 4.75%, Due 12/1/2002, LOC Mellon
Bank, N.A. ............................................... 2,400 2,400
----------
TOTAL PENNSYLVANIA...................................... 9,520
----------
SOUTH CAROLINA - 1.23%
Florence County, South Carolina, Solid Waste Disposal and
Wastewater Treatment Bonds (Roche Carolina, Incorporated
Project), 4.70%, Due 4/1/2028, LOC Deutsche Bank.......... 1,500 1,500
----------
TOTAL SOUTH CAROLINA.................................... 1,500
----------
TEXAS - 4.24%
City of Midlothian, Texas Industrial Development
Corporation, Exempt Facilities Revenue Bonds (Texas
Industries, Incorporated Project), 4.70%, Due 5/1/2029,
LOC Bank of America....................................... 2,700 2,700
Hunt County, Texas Industrial Development Corporation (Trico
Industries Project), Series 1987, 5.05%, Due 9/1/2006, LOC
ABN-Amro.................................................. 1,930 1,930
Trinity River Industrial Development Authority Industrial
Development Revenue Bonds (Radiation Sterilizers
Incorporated Project), Series B, 4.50%, Due 11/1/2005, LOC
Comerica.................................................. 550 550
----------
TOTAL TEXAS............................................. 5,180
----------
UTAH - 0.82%
Utah State Board of Regents Student Loan Revenue Bonds, Bond
Insurance-AMBAC Indemnity Corporation, Series 1988C,
4.70%, Due 11/1/2013, SPA Dresdner Bank AG................ 1,000 1,000
----------
TOTAL UTAH.............................................. 1,000
----------
VERMONT - 1.23%
Vermont, Industrial Development Authority (Ryegate Project),
Series 1990, 4.90%, Due 12/1/2015, LOC ABN/AMRO Holding,
N.V. ..................................................... 1,500 1,500
----------
TOTAL VERMONT........................................... 1,500
----------
VIRGINIA - 1.88%
King George County, Virginia Industrial Development
Authority ( Birchwood Partners Project), Series B, 4.70%,
Due 12/1/2024, LOC Credit Suisse First Boston............. 2,300 2,300
----------
TOTAL VIRGINIA.......................................... 2,300
----------
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
27
<PAGE> 30
AMR INVESTMENT SERVICES MUNICIPAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
AMOUNT VALUE
--------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
WASHINGTON - 7.16%
Pierce County, Washington Economic Development Corporation
Dock & Wharf Facilities Revenue Bonds (SCS Industries
Project), Series 1995, 4.80%, Due 7/1/2030, LOC Bank of
Nova Scotia............................................... $ 3,585 $ 3,585
Pierce County, Washington Economic Development Corporation
Variable Rate Demand Revenue Bonds (T.C. Products
Incorporated Project), Series 1994, 4.90%, Due 10/1/2014,
LOC First Union........................................... 1,160 1,160
Port Kalama, Washington Public Corp Port Facility Revenue
Bonds (Con Agra Incorporated Project), 4.85%, Due
1/1/2004, LOC Morgan Guaranty Trust....................... 1,005 1,005
Washington State Housing Finance Authority, Community
Nonprofit Housing Revenue Bonds (Nikkei Manor Project),
4.95%, Due 10/1/2021, LOC Bank of America................. 3,000 3,000
----------
TOTAL WASHINGTON........................................ 8,750
----------
WISCONSIN - 6.58%
City of Whitewater, Wisconsin Industrial Development Revenue
Bonds (MacLean-Fogg Company Project), Series 1989, 5.00%,
Due 12/1/2009, LOC Bank of America........................ 525 525
Wisconsin State Health and Education Facilities Authority
Revenue Bonds (Felician Services Project), Bond
Insurance - AMBAC Indemnity Corporation, Series A, 5.60%,
Due 1/1/2020, SPA First Chicago NBD Corporation........... 1,600 1,600
Wisconsin Health Facilities Authority Variable Rate Demand
Bonds (Franciscan Health Care Incorporated - System
Financing), Series 1985-2, 4.95%, Due 1/1/2016, LOC
Dominion.................................................. 5,910 5,910
----------
TOTAL WISCONSIN......................................... 8,035
----------
TOTAL VARIABLE RATE DEMAND OBLIGATIONS.................. 86,690
----------
TOTAL MUNICIPAL OBLIGATIONS............................. 113,690
----------
SHARES
---------
OTHER INVESTMENTS - 6.42%
Federated Municipal Obligations Fund........................ 5,686,217 5,686
Provident Institutional Funds Municipal Cash................ 2,000,178 2,000
Dreyfus Municipal Cash Management Plus...................... 164,613 165
----------
TOTAL OTHER INVESTMENTS................................. 7,851
----------
TOTAL INVESTMENTS - 99.51% (COST $121,541).................. 121,541
----------
OTHER ASSETS, NET OF LIABILITIES - 0.49%.................... 596
----------
TOTAL NET ASSETS - 100%..................................... $ 122,137
==========
</TABLE>
---------------
Based on the cost of investments of $121,541 for federal income tax purposes at
June 30, 2000, there was no unrealized appreciation or depreciation of
investments.
(A) Rates associated with money market securities represent yield to maturity or
yield to next reset date.
ABBREVIATIONS:
AG - Company
FGIC - Financial Guaranty Insurance Company
LOC - Letter of Credit
MBIA - Municipal Bond Investors Assurance
NV - Company
PLC - Public Limited Corporation
SPA - Support Agreement
See accompanying notes
--------------------------------------------------------------------------------
28
<PAGE> 31
AMR INVESTMENT SERVICES TRUST PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET
------------ --------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS:
Investments in securities at value (cost - $3,659,601;
$191,553; $121,541, respectively)...................... $3,659,601 $191,553 $121,541
Repurchase agreements (cost - $0, $4,212, $0,
respectively).......................................... - 4,212 -
Dividends and interest receivable........................ 29,377 700 615
---------- -------- --------
TOTAL ASSETS......................................... 3,688,978 196,465 122,156
---------- -------- --------
LIABILITIES:
Payable for investments purchased........................ - 24,615 -
Management and investment advisory fees payable (Note
2)..................................................... 305 14 8
Accrued organization costs............................... 4 14 10
Other liabilities........................................ 9 14 1
---------- -------- --------
TOTAL LIABILITIES.................................... 318 24,657 19
---------- -------- --------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS.... $3,688,660 $171,808 $122,137
========== ======== ========
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
29
<PAGE> 32
AMR INVESTMENT SERVICES TRUST PORTFOLIOS
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET
------------ --------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......................................... $134,502 $5,544 $2,592
-------- ------ ------
TOTAL INVESTMENT INCOME.............................. 134,502 5,544 2,592
-------- ------ ------
EXPENSES:
Management and investment advisory fees (Note 2)......... 2,160 91 64
Custodian fees........................................... 109 17 14
Professional fees........................................ 54 4 3
Other expenses........................................... 77 6 4
-------- ------ ------
TOTAL EXPENSES....................................... 2,400 118 85
-------- ------ ------
NET INVESTMENT INCOME....................................... 132,102 5,426 2,507
-------- ------ ------
REALIZED GAIN ON INVESTMENTS:
Net realized gain on investments......................... 35 - -
-------- ------ ------
NET GAIN ON INVESTMENTS.............................. 35 - -
-------- ------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $132,137 $5,426 $2,507
======== ====== ======
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
30
<PAGE> 33
[AMERICAN EAGLE LOGO]
--------------------------------------------------------------------------------
31
<PAGE> 34
AMR INVESTMENT SERVICES TRUST PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET
------------------------------------------
SIX MONTHS
ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED
2000 DECEMBER 31, OCTOBER 31,
(UNAUDITED) 1999 1999
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income................................... $ 132,102 $ 34,541 $ 132,222
Net realized gain on investments........................ 35 - 23
------------ ----------- ------------
TOTAL INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 132,137 34,541 132,245
------------ ----------- ------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS:
Contributions........................................... 15,118,339 3,797,759 13,198,063
Withdrawals............................................. (15,213,487) (3,489,471) (12,487,660)
------------ ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS... (95,148) 308,288 710,403
------------ ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS....................... 36,989 342,829 842,648
------------ ----------- ------------
NET ASSETS:
BEGINNING OF PERIOD..................................... 3,651,671 3,308,842 2,466,194
------------ ----------- ------------
END OF PERIOD........................................... $ 3,688,660 $ 3,651,671 $ 3,308,842
============ =========== ============
--------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS:
--------------------------------------------------------------------------------------------------------
RATIOS:
Expenses to average net assets (annualized)............. 0.11% 0.11% 0.11%
Net investment income to average net assets
(annualized).......................................... 6.12% 5.77% 5.11%
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
32
<PAGE> 35
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET MUNICIPAL MONEY MARKET
---------------------------------------- ----------------------------------------
SIX MONTHS SIX MONTHS
ENDED TWO MONTHS ENDED TWO MONTHS
JUNE 30, ENDED YEAR ENDED JUNE 30, ENDED YEAR ENDED
2000 DECEMBER 31, OCTOBER 31, 2000 DECEMBER 31, OCTOBER 31,
(UNAUDITED) 1999 1999 (UNAUDITED) 1999 1999
----------- ------------ ----------- ----------- ------------ -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
$ 5,426 $ 1,873 $ 11,639 $ 2,507 $ 731 $ 4,086
- - 5 - - -
--------- --------- --------- --------- -------- ---------
5,426 1,873 11,644 2,507 731 4,086
--------- --------- --------- --------- -------- ---------
293,470 121,197 567,268 127,413 39,079 284,110
(332,327) (128,994) (619,812) (120,860) (46,877) (295,057)
--------- --------- --------- --------- -------- ---------
(38,857) (7,797) (52,544) 6,553 (7,798) (10,947)
--------- --------- --------- --------- -------- ---------
(33,431) (5,924) (40,900) 9,060 (7,067) (6,861)
--------- --------- --------- --------- -------- ---------
205,239 211,163 252,063 113,077 120,144 127,005
--------- --------- --------- --------- -------- ---------
$ 171,808 $ 205,239 $ 211,163 $ 122,137 $113,077 $ 120,144
========= ========= ========= ========= ======== =========
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
0.13% 0.12% 0.12% 0.14% 0.14% 0.15%
5.98% 5.67% 4.89% 4.25% 3.69% 3.13%
</TABLE>
See accompanying notes
--------------------------------------------------------------------------------
33
<PAGE> 36
AMR INVESTMENT SERVICES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
AMR Investment Services Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a no-load, open-end management
investment company which was organized as a trust under the laws of the State of
New York pursuant to a Declaration of Trust dated as of June 27, 1995 and
amended on August 11, 1995. Beneficial interests in the Trust are divided into
ten separate series, each having distinct investment objectives and policies.
These financial statements relate to the AMR Investment Services Money Market
Portfolio, the AMR Investment Services U.S. Government Money Market Portfolio
and the AMR Investment Services Municipal Money Market Portfolio (each a
"Portfolio" and collectively the "Portfolios"). The assets of each Portfolio
belong only to that Portfolio, and the liabilities of each Portfolio are borne
solely by that Portfolio and no other. The Trust commenced active operations on
November 1, 1995.
AMR Investment Services, Inc. (the "Manager") is a wholly-owned subsidiary
of AMR Corporation, the parent company of American Airlines, Inc. ("American"),
and was organized in 1986 to provide business management, advisory,
administrative and asset management consulting services.
The following is a summary of the significant accounting policies followed
by the Portfolios.
Security Valuation
Securities of the Portfolios are valued using the amortized cost method. In
the event that a deviation of 1/2 of 1% or more exists between the $1.00 per
share price of the Portfolios, calculated at amortized cost, and the price per
share calculated by reference to market quotations, or if there is any other
deviation which the Board believes would result in a material dilution to
shareholders or purchasers, the Board will promptly consider the appropriate
action which should be initiated.
Security Transactions and Investment Income
Security transactions are recorded on the trade date of the security
purchase or sale. Interest income is earned from settlement date, recorded on
the accrual basis, and adjusted, if necessary, for amortization of premiums or
accretion of discounts on investment grade short-term securities and zero coupon
instruments. For financial and tax reporting purposes, realized gains and losses
are determined on the basis of specific lot identification.
Federal Income and Excise Taxes
The Portfolios will be treated as partnerships for federal income tax
purposes. As such, each investor in a Portfolio will be taxed on its share of
the Portfolio's ordinary income and capital gains. It is intended that each
Portfolio's assets will be managed in such a way that an investor in the
Portfolio will be able to satisfy the requirements of sub-chapter M of the
Internal Revenue Code.
Repurchase Agreements
Under the terms of a repurchase agreement, securities are acquired by a
Portfolio from a securities dealer or a bank which are subject to resale at a
later date. Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities. All collateral is held at the Portfolio's
custodian bank, State Street Bank and Trust Company, or at subcustodian banks.
The collateral is monitored daily by each Portfolio so that the collateral's
market value exceeds the carrying value of the repurchase agreement.
--------------------------------------------------------------------------------
34
<PAGE> 37
AMR INVESTMENT SERVICES TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimated.
2. TRANSACTIONS WITH AFFILIATES
Management Agreement
The Trust and the Manager are parties to a Management Agreement which
obligates the Manager to provide or oversee the provision of all administrative,
investment advisory and portfolio management services. The Manager serves as the
sole investment adviser to each of the Portfolios. As compensation for
performing the duties required under the Management Agreement, the Manager
receives from the Portfolios .10% of the average daily net assets of each of the
Portfolios.
Other
Certain officers or trustees of the Trust are also current or former
officers or employees of the Manager or American. The Trust makes no direct
payments to its officers. Unaffiliated trustees and their spouses are provided
free unlimited air transportation on American. However, the Trust compensates
each trustee with payments in an amount equal to the trustee's income tax on the
value of this free airline travel. One trustee, as a retiree of American,
already receives flight benefits. Prior to March 1, 2000, the Trust compensated
this trustee up to $10,000 annually to cover his personal flight service charges
and the charges for his three adult children, as well as the income tax charged
on the value of these benefits. Beginning March 1, 2000, the trustee will
receive an annual retainer of $20,000 plus $1,250 for each Board meeting
attended. For the six months ended June 30, 2000, the cost of air transportation
for the trustees was not material to any of the Portfolios.
--------------------------------------------------------------------------------
35
<PAGE> 38
AMERICAN EAGLE LOGO
<PAGE> 39
AMERICAN
AADVANTAGE FUNDS--REGISTERED TRADEMARK--
--------------------------------------------------------------------------------
TO OBTAIN MORE INFORMATION ABOUT THE FUNDS:
BY E-MAIL: ON THE INTERNET:
American [email protected] Visit our website at www.aafunds.com
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BY TELEPHONE: BY MAIL:
<S> <C> <C> <C>
Institutional Class PlanAhead Class(R) Institutional Class PlanAhead Class(R)
------------------- --------------- -------------------- ---------------
Call (800) 658-5811 Call (800) 388-3344 Platinum Class(SM) American AAdvantage Funds
-------------- P.O. Box 219643
Platinum Class(SM) American AAdvantage Funds Kansas City, MO 64121-6643
-------------- P.O. Box 619003 MD 5645
Call (800) 967-9009 DFW Airport, TX 75261-9003
</TABLE>
FUND SERVICE PROVIDERS:
<TABLE>
<S> <C> <C> <C>
CUSTODIAN TRANSFER AGENT INDEPENDENT AUDITORS DISTRIBUTOR
STATE STREET BANK AND TRUST NATIONAL FINANCIAL DATA SERVICES ERNST & YOUNG LLP SWS FINANCIAL SERVICES
Boston, Massachusetts Kansas City, Missouri Dallas, Texas Dallas, Texas
</TABLE>
This report is prepared for shareholders of the American AAdvantage Mileage
Funds and may be distributed to others only if preceded or accompanied by a
current prospectus.
--------------------------------------------------------------------------------
American Airlines is not responsible for investments made in the American
AAdvantage Mileage Funds. American AAdvantage Mileage Funds and Mileage Class
are registered service marks of AMR Corporation. Platinum Class, American
AAdvantage Money Market Mileage Fund, American AAdvantage U.S. Government Money
Market Mileage Fund, and American AAdvantage Municipal Money Market Mileage Fund
are service marks of AMR Investment Services, Inc.
<PAGE> 40
[BACK COVER]
[GRAPHIC]
