<PAGE>
AMERICAN
ADJUSTABLE RATE
TERM TRUST--1995
* * *
SEMIANNUAL REPORT
1995
<PAGE>
Table of Contents
AMERICAN ADJUSTABLE RATE TERM TRUST 1995
American Adjustable Rate Term Trust 1995 had its scheduled
liquidation and distributed its proceeds on April 17, 1995.
Fund shares stopped trading on the New York Stock Exchange
and Chicago Stock Exchange at the close of business on April
6, 1995.
LETTER TO SHAREHOLDERS . . . . . . . . . . 1
FINANCIAL STATEMENTS AND NOTES . . . . . . 4
INVESTMENTS IN SECURITIES. . . . . . . . . 13
SHAREHOLDER UPDATE . . . . . . . . . . . . 14
<PAGE>
American Adjustable Rate Term Trust 1995
TOTAL RETURN PERFORMANCE
INCEPTION (3/90) THROUGH FEBRUARY 28, 1995
[GRAPH]
NET ASSET VALUE HISTORY
INCEPTION (3/90) THROUGH FEBRUARY 28, 1995
[GRAPH]
THE TOTAL RETURN FIGURE FOR AMERICAN ADJUSTABLE RATE TERM TRUST 1995 (ADJ) IS
BASED ON THE CHANGE IN NET ASSET VALUE (NAV) SINCE THE FUND'S INCEPTION DATE AND
ASSUMES ALL DISTRIBUTIONS WERE REINVESTED. NAV-BASED PERFORMANCE IS USED TO
MEASURE INVESTMENT MANAGEMENT RESULTS.
THE TOTAL RETURN SINCE INCEPTION FIGURE BASED ON THE CHANGE IN MARKET PRICE
RATHER THAN NAV THROUGH FEBRUARY 28, 1995, WAS 30.28%. THIS FIGURE ASSUMES
REINVESTMENT OF DISTRIBUTIONS.
THE LIPPER ARM FUND AVERAGE REPRESENTS THE AVERAGE TOTAL RETURN, WITH DIVIDENDS
REINVESTED, OF 86 OPEN-END MUTUAL FUNDS WHICH INVEST AT LEAST 65% OF THEIR
ASSETS IN ADJUSTABLE RATE MORTGAGE SECURITIES (ARMS) AS CHARACTERIZED BY LIPPER
ANALYTICAL SERVICES.
THE ONE-YEAR CONSTANT MATURITY TREASURY (CMT) IS THE MONTHLY AVERAGE YIELD OF
TREASURY SECURITIES WITH ONE YEAR LEFT TO MATURITY. THIS RETURN IS CALCULATED BY
COMPOUNDING THE MONTH-END ONE-YEAR CMT RATE SINCE THE INCEPTION OF ADJ.
April 17, 1995
Dear Shareholders:
ON APRIL 6, 1995, SHARES OF AMERICAN ADJUSTABLE RATE TERM TRUST 1995 (ADJ)
STOPPED TRADING ON THE NEW YORK STOCK EXCHANGE AND THE CHICAGO STOCK EXCHANGE.
THIS WAS FOLLOWED BY THE FUND'S SCHEDULED LIQUIDATION ON APRIL 17, 1995. As
of the fund's last six-month reporting period through February 28, 1995, its
total return based on change in net asset value (NAV) since inception was
39.05%.* This return was partially due to the $5 million that Piper Jaffray
Companies Inc. infused into the fund to help ensure that the NAV would be at
least $9.75 upon termination. Without the $5 million infusion, the fund's return
would have been 32.54%. As of the fund's liquidation on April 17, 1995, the
final NAV was $9.76922, of which $0.34290 was income and $9.42632 was principal.
*FIGURES SHOWN REFLECT PAST PERFORMANCE. THE RETURNS AND MARKET VALUES OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE AND SHARES, WHEN SOLD, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
1
<PAGE>
AMERICAN ADJUSTABLE RATE TERM TRUST 1995
PORTFOLIO COMPOSITION
FEBRUARY 28, 1995
[GRAPH]
IN JANUARY 1994 ADJ WAS POSITIONED TO MEET ITS $10 PER
SHARE OBJECTIVE; HOWEVER, THE RAPIDLY RISING INTEREST
RATES THROUGHOUT 1994 MADE IT DIFFICULT FOR THE FUND TO
ATTAIN THAT OBJECTIVE. As the Federal Reserve increased
the federal funds rate to 6%, adjustable rate mortgage
securities (ARMs), in which the fund was mainly
invested, lost value. ARMs could not fully adjust to
the higher interest rates because of their periodic
caps and the lag times in their resets. The values of
the fund's non-ARM holdings were reduced by rising
rates as well. This caused a corresponding decline in
the NAV of the fund.
DUE TO THE FUND'S APPROACHING TERMINATION, WE
REPOSITIONED THE FUND TO BE MORE CONSERVATIVE AND TO
ENSURE THAT WE WOULD BE ABLE TO RETURN A NET ASSET
VALUE OF AT LEAST $9.75. As part of our defensive
management strategy, we sold all of the ARMs in the
fund. As of February 28, 1995, the fund was 100%
invested in short-term securities, including money
market securities and short-term U.S. Treasuries or
agencies with maturities by April 17, 1995.
The fund liquidated and distributed its proceeds on
April 17, 1995. If your shares were held in street name
at your brokerage firm, your brokerage account should
have been credited with principal and interest
distributions on April 17, 1995. If you held a physical
certificate, you must have returned your certificate,
along with a Letter of Transmittal, to Investors
Fiduciary Trust Company (IFTC) for cancellation by
April 13, 1995, in order to be mailed your final
principal distribution on the April 17 payable date.
Remember, if you hold a physical
2
<PAGE>
AMERICAN ADJUSTABLE RATE TERM TRUST 1995
certificate, IFTC cannot mail the final principal
distribution until it receives your certificate. If
your certificate is received by IFTC after April 13,
1995, IFTC will mail your principal distribution to you
in the most expedient manner possible. If you have lost
or misplaced your certificate, please contact IFTC at
800-543-1627. You may mail your certificates to the
following address:
INVESTORS FIDUCIARY TRUST COMPANY
210 WEST 10TH STREET, EIGHTH FLOOR
KANSAS CITY, MISSOURI 64105-1716
ATTN: PIPER CLOSED-END FUNDS
Unfortunately, the market environment we experienced
this past year had an extremely negative impact on ADJ,
and we are disappointed that we were unable to meet one
of our dual objectives. However, we have done our best
to manage through these difficult markets and, at all
times, have kept your best interests in mind. We
consider it a privilege to manage your money and thank
you for your investment in American Adjustable Rate
Term Trust 1995.
Sincerely,
William H. Ellis
President, Piper Capital Management
3
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in securities at market value* (note 2) .... $ 105,581,845
Investment in put options (note 5) (cost: $480,200) ...... --
Cash in bank on demand deposit ........................... 2,567
Accrued interest receivable .............................. 37,271
----------------
Total assets ......................................... 105,621,683
----------------
LIABILITIES:
Payable for federal excise taxes (note 2) ................ 126,882
Other accrued expenses ................................... 36,397
----------------
Total liabilities .................................... 163,279
----------------
Net assets applicable to outstanding capital stock ....... $ 105,458,404
----------------
----------------
REPRESENTED BY:
Capital stock - authorized 1 billion shares of $0.01 par
value; outstanding, 10,836,200 shares ................ $ 108,362
Additional paid-in capital ............................... 109,086,579
Undistributed net investment income ...................... 6,651,875
Accumulated net realized loss on investments ............. (9,892,372)
Unrealized depreciation of investments ................... (496,040)
----------------
Total - representing net assets applicable to
outstanding capital stock ........................ $ 105,458,404
----------------
----------------
Net asset value per share of outstanding capital stock ... $ 9.73
----------------
----------------
* Investments in securities at identified cost ........... $ 105,597,685
----------------
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1995
<TABLE>
<S> <C>
INCOME:
Interest ............................................... $ 2,949,979
----------------
EXPENSES (NOTE 3):
Investment management fee ................................ 179,871
Administrative fee ....................................... 77,088
Custodian, accounting and transfer agent fees ............ 52,954
Reports to shareholders .................................. 22,107
Audit and legal fees ..................................... 20,753
Federal excise taxes (note 2) ............................ 126,882
Other expenses ........................................... 7,014
----------------
Total expenses ....................................... 486,669
Less investment management and administrative fees
waived by the adviser and administrator ............ (256,959)
----------------
Total net expenses ................................... 229,710
----------------
Net investment income ................................ 2,720,269
----------------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized loss on investments (note 4) ................ (2,054,250)
Net change in unrealized appreciation or depreciation of
investments ............................................ 1,261,499
----------------
Net loss on investments ................................ (792,751)
----------------
Net increase in net assets resulting from
operations ....................................... $ 1,927,518
----------------
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended 2/28/95 Year Ended
(Unaudited) 8/31/94
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income .................................. $ 2,720,269 7,170,681
Net realized loss on investments ......................... (2,054,250) (7,054,516)
Net change in unrealized appreciation or depreciation of
investments ............................................ 1,261,499 (1,749,435)
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations ........................................... 1,927,518 (1,633,270)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ............................... (1,306,326) (4,245,411)
---------------- ----------------
CAPITAL CONTRIBUTION:
Capital contribution by affiliate (note 8) ............... 5,000,000 --
---------------- ----------------
CAPITAL SHARE TRANSACTIONS:
Payments for retirement of 118,300 and 155,500 shares,
respectively (note 6) .................................. (1,089,990) (1,407,063)
---------------- ----------------
Total increase (decrease) in net assets .............. 4,531,202 (7,285,744)
Net assets at beginning of period .......................... 100,927,202 108,212,946
---------------- ----------------
Net assets at end of period .............................. $ 105,458,404 100,927,202
---------------- ----------------
---------------- ----------------
Undistributed net investment income ...................... $ 6,651,875 5,237,932
---------------- ----------------
---------------- ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) ORGANIZATION
American Adjustable Rate Term Trust - 1995 (ADJ), is registered
under the Investment Company Act of 1940 (as amended) as a
diversified, closed-end management investment company. ADJ
commenced operations on March 29, 1990, upon completion of an
initial public offering of common stock. Shares of the fund are
listed on the New York Stock Exchange and the Chicago Stock
Exchange. Fund shares will stop trading on the exchanges at the
close of business of April 6, 1995. The fund will terminate
operations and distribute all its net assets to shareholders on
April 17, 1995.
(2) SIGNIFICANT
ACCOUNTING
POLICIES
INVESTMENTS IN SECURITIES
The values of fixed income securities are determined using
pricing services or prices quoted by independent brokers.
Exchange-listed options are valued at the last sale price and
open financial futures contracts are valued at the last
settlement price. When market quotations are not readily
available, securities are valued at fair value according to
methods selected in good faith by the board of directors.
Short-term securities with maturities less than 60 days are
valued at amortized cost which approximates market value.
Securities transactions are accounted for on the date the
securities are purchased or sold. Realized gains and losses are
calculated on the identified-cost basis. Interest income,
including amortization of bond discount and premium computed on
a level-yield basis, is accrued daily.
OPTION TRANSACTIONS
For hedging purposes, the fund may buy and sell put and call
options, write covered call options on portfolio securities,
write cash-secured puts, and write call options that are not
covered for cross-hedging purposes. The risk in writing a call
option is that a fund gives up the opportunity for profit if the
market price of the security increases. The risk in writing a
put option is that a fund may incur a loss if the market price
of the security decreases and the option is exercised. The risk
in buying an option is that a fund pays a premium whether or not
the option is exercised. A fund also has the additional risk of
not being able to enter into a closing transaction if a liquid
secondary market does not exist. The fund also may write
over-the-counter options where the completion of the obligation
is dependent upon the credit standing of another party.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Option contracts are valued daily, and unrealized appreciation
or depreciation is recorded. A fund will realize a gain or loss
upon expiration or closing of the option transaction. When an
option is exercised, the proceeds on sales for a written call
option, the purchase cost for a written put option, or the cost
of a security for a purchased put or call option is adjusted by
the amount of premium received or paid.
FEDERAL TAXES
The fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and not be subject to federal income tax. Therefore,
no income tax provision is required. However, the fund incurred
federal excise taxes of $126,882 ($0.012 per share) on income
retained by the fund during the 1994 excise tax year. Net
investment income and net realized gains (losses) may differ for
financial statement and tax purposes and the character of
distributions made during the year from net investment income or
net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income
or realized gains (losses) were recorded by the fund.
DISTRIBUTIONS
The fund pays monthly distributions from net investment income.
Realized capital gains, if any, will be distributed on an annual
basis. These distributions are recorded as of the close of
business on the ex-dividend date. Such distributions are payable
in cash or, pursuant to the fund's dividend reinvestment plan,
reinvested in additional shares of the fund's common stock.
Under the plan, fund shares will be purchased in the open
market. The fund's final monthly income distribution of $0.02
per share is payable March 29, 1995.
(3) EXPENSES
The fund has entered into the following agreement with Piper
Capital Management Incorporated (the adviser and administrator):
The investment advisory agreement provides the adviser with a
monthly investment management fee based on the fund's average
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
weekly net assets computed at the per-annum rate of 0.35%. For
its fee, the adviser provides investment advice and, in general,
conducts the management and investment activity of the fund.
The administration agreement provides the administrator with a
monthly fee in an amount equal to an annualized rate of 0.15% of
the fund's average weekly net assets. For its fee, the
administrator provides certain reporting, regulatory and
record-keeping services for the fund.
For the six months ended February 28, 1995, Piper Capital
voluntarily waived the investment management fee of $179,871 and
the administrative fee of $77,088.
In addition to the investment management fee and the
administrative fee, the fund is responsible for paying most
other operating expenses including outside directors' fees and
expenses, custodian fees, registration fees, printing and
shareholder reports, transfer agent fees and expenses, legal,
auditing and accounting services, insurance, interest, taxes and
other miscellaneous expenses.
(4) SECURITIES
TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other
than temporary investments in short-term securities) for the six
months ended February 28, 1995, were $0 and $78,329,637,
respectively.
(5) INVESTMENT IN
PUT OPTIONS
In order to hedge the value of adjustable rate mortgage
securities under certain interest rate scenarios, the fund
purchased four-year U.S. Treasury note put option contracts. The
fund will be entitled to a cash payment during the exercise
period if at such time yields on the then current four-year U.S.
Treasury notes are in excess of the strike yield specified in
the option contracts.
On February 28, 1995, the yield on the four-year U.S. Treasury
Note was 6.99%. Due to the short time to termination of ADJ, the
put option is expected to expire with no value.
<TABLE>
<S> <C>
Number of contracts ..... 880
Notional value ........ $ 88,000,000
Purchase price ........ $ 480,200
Exercise period ......... 3/15/95-4/15/95
Strike yield ............ 11.25%
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(6) RETIREMENT OF
FUND SHARES
The fund's board of directors has approved a plan to repurchase
shares of the fund in the open market and retire those shares.
Repurchases may only be made when the previous day's closing
market price was trading at a discount from net asset value.
Daily repurchases are limited to 25% of the previous four weeks
average daily trading volume on the New York Stock Exchange.
Under the current plan, cumulative repurchases in the fund
cannot exceed 3% of the total shares originally issued. The
board of directors will review the plan every six months and may
change the amount which may be repurchased. The plan was last
reviewed and reapproved by the board of directors on February 9,
1995. Pursuant to the plan, the fund has cumulatively
repurchased and retired 273,800 shares as of February 28, 1995,
which represents 2.46% of the shares originally issued.
(7) QUARTERLY DATA
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
Net Realized
and
Unrealized Net Increase Distributions
Total Net Gains in Net Assets Capital From Net
Investment Investment (Losses) on Resulting From Contribution Investment
Income Income Investments Operations by Affiliate Income
---------- ---------- ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
11/30/94 $ 1,516,313 1,337,261 (882,564) 454,697 5,000,000 (655,222)
2/28/95 1,433,666 1,383,008 89,813 1,472,821 -- (651,104)
---------- ---------- ------------ -------------- ------------- -------------
$ 2,949,979 2,720,269 (792,751) 1,927,518 5,000,000 (1,306,326)
---------- ---------- ------------ -------------- ------------- -------------
---------- ---------- ------------ -------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
PER-SHARE AMOUNTS
Net Realized
and
Unrealized Net Increase Distributions
Net Gains in Net Assets Capital From Net Quarter End
Investment (Losses) on Resulting From Contribution Investment Net Asset
Income Investments Operations by Affiliate Income Value
---------- ------------ -------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
11/30/94 $ 0.12 (0.08) 0.04 0.46 (0.06) 9.65
2/28/95 0.13 0.01 0.14 -- (0.06) 9.73
--- ----- ----- --- -----
$ 0.25 (0.07) 0.18 0.46 (0.12)
--- ----- ----- --- -----
--- ----- ----- --- -----
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(8) CAPITAL
CONTRIBUTION BY
AFFILIATE
On October 24, 1994, Piper Jaffray Companies Inc. contributed
$5,000,000 to the fund. The voluntary contribution, made for the
benefit of shareholders, is intended to increase the fund's net
asset value.
(9) SUBSEQUENT
EVENT
At the close of business on April 6, 1995, shares of ADJ stopped
trading on the New York and Chicago Stock Exchanges. The
scheduled liquidating distribution, consisting of $0.3429 from
income and $9.42632 from principal, was paid to shareholders on
April 17, 1995.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(10) FINANCIAL
HIGHLIGHTS
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
<TABLE>
<CAPTION>
Six Months Period from
Ended 2/28/95 Year Ended Year Ended Year Ended Year Ended 3/29/90* to
(Unaudited) 8/31/94 8/31/93 8/31/92 8/31/91 8/31/90
------------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 9.21 9.74 9.99 9.76 9.67 9.60
------ ---------- ---------- ---------- ---------- -----------
Operations:
Net investment income........................... 0.25 0.65 0.71 0.89 0.90 0.36
Net realized and unrealized gains (losses) on
investments.................................... (0.07) (0.80) (0.36) 0.12 0.08 0.02
------ ---------- ---------- ---------- ---------- -----------
Total from operations......................... 0.18 (0.15) 0.35 1.01 0.98 0.38
------ ---------- ---------- ---------- ---------- -----------
Distributions to shareholders:
From net investment income...................... (0.12) (0.38) (0.59) (0.77) (0.88) (0.31)
From realized gains............................. -- -- (0.01) (0.01) (0.01) --
------ ---------- ---------- ---------- ---------- -----------
Total distributions to shareholders........... (0.12) (0.38) (0.60) (0.78) (0.89) (0.31)
------ ---------- ---------- ---------- ---------- -----------
Capital contribution by affiliate:................ 0.46 -- -- -- -- --
------ ---------- ---------- ---------- ---------- -----------
Net asset value, end of period ................. $ 9.73 9.21 9.74 9.99 9.76 9.67
------ ---------- ---------- ---------- ---------- -----------
------ ---------- ---------- ---------- ---------- -----------
Per-share market value, end of period .......... $ 9.63 8.88 9.88 10.50 10.13 9.75
------ ---------- ---------- ---------- ---------- -----------
------ ---------- ---------- ---------- ---------- -----------
Total return, net asset value+.................... 6.97% (1.59%) 3.65% 10.75% 10.66% 3.98%
Total return, market value**...................... 9.84% (6.55%) (0.28%) 11.73% 13.24% 0.55%
Net assets at end of period (in millions) $ 105 101 108 111 108 107
Ratio of expenses to average weekly net
assets+++....................................... 0.45%++ 0.27% 0.70% 0.72% 0.73% 0.61%++
Ratio of net investment income to average weekly
net assets+++................................... 5.29%++ 6.78% 7.25% 8.95% 9.45% 9.00%++
Portfolio turnover rate (excluding short-term
securities)..................................... 0% 69% 64% 55% 66% 33%
Amount of borrowings outstanding at end of period
(in millions)*** ............................. $ -- -- 29 29 43 35
Per-share amount of borrowings outstanding at end
of period .................................... $ -- -- 2.64 2.64 3.88 3.13
Per-share asset coverage of borrowings outstanding
at end of period++++ ......................... $ -- -- 12.38 12.63 13.64 12.80
<FN>
* COMMENCEMENT OF OPERATIONS.
** TOTAL RETURN, MARKET VALUE, IS BASED ON THE CHANGE IN MARKET PRICE OF A SHARE DURING THE PERIOD AND ASSUMES REINVESTMENT OF
DISTRIBUTIONS AT ACTUAL PRICES PURSUANT TO THE FUND'S DIVIDEND REINVESTMENT PLAN.
*** SECURITIES PURCHASED ON A WHEN-ISSUED BASIS FOR WHICH HIGH GRADE DEBT OBLIGATIONS ARE MAINTAINED IN A SEGREGATED ACCOUNT ARE
NOT CONSIDERED BORROWINGS.
+ TOTAL RETURN, NET ASSET VALUE, IS BASED ON THE CHANGE IN NET ASSET VALUE OF A SHARE DURING THE PERIOD AND ASSUMES
REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE. ON OCTOBER 24, 1995, AN AFFILIATE CONTRIBUTED $5 MILLION DOLLARS TO THE
FUND. HAD THE AFFILIATE NOT CONTRIBUTED $5 MILLION DOLLARS, THE FUND'S NAV TOTAL RETURN, FOR THE SIX MONTHS ENDED 2/28/95,
WOULD HAVE BEEN 1.97%.
++ ADJUSTED TO AN ANNUAL BASIS.
+++ INCLUDES 0.25% AND 0.05% FROM FEDERAL EXCISE TAXES IN THE SIX MONTHS ENDED FEBRUARY 28, 1995 AND FISCAL YEAR 1994,
RESPECTIVELY. DURING THE SIX MONTHS ENDED FEBRUARY 28, 1995 AND THE FISCAL YEAR 1994, INVESTMENT MANAGEMENT AND
ADMINISTRATIVE FEES WERE WAIVED BY THE ADVISER. HAD FEES NOT BEEN WAIVED, THE RATIOS OF EXPENSES AND NET INVESTMENT INCOME
WOULD HAVE BEEN 0.95%/4.79% AND 0.77%/6.28%, RESPECTIVELY.
++++ REPRESENTS NET ASSETS (EXCLUDING BORROWINGS) DIVIDED BY COMMON SHARES OUTSTANDING.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)
AMERICAN ADJUSTABLE RATE TERM TRUST INC. 1995
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------- ----------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
SHORT-TERM SECURITIES (100.1%):
U.S. TREASURY BILLS (51.6%):
5.30%, 4/13/95 .................................... $ 34,800,000 34,563,381
4.60%, 4/6/95 ....................................... 20,000,000 19,891,800
------------
54,455,181
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES
(2.3%):
5.55%, 3/28/95 ...................................... 2,445,000 2,435,200
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION DISCOUNT NOTES
(46.2%):
5.54%, 4/3/95 ....................................... 15,765,000 15,687,437
5.57%, 4/4/95 ....................................... 33,175,000 33,004,027
------------
48,691,464
------------
Total Short-Term Securities
(cost: $105,597,685) (b) ........................ $ 105,581,845
------------
------------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) ON FEBRUARY 28, 1995, FOR FEDERAL INCOME TAX PURPOSES, THE COST OF
INVESTMENTS IN SECURITIES, INCLUDING THE PUT OPTIONS DESCRIBED IN NOTE 6 TO
THE FINANCIAL STATEMENTS, WAS $106,077,885. THE AGGREGATE GROSS UNREALIZED
APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS
COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION .... $ --
GROSS UNREALIZED DEPRECIATION ...... (496,040)
----------
NET UNREALIZED DEPRECIATION .... $ (496,040)
----------
----------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER UPDATE
ANNUAL MEETING RESULTS
An annual meeting of the fund's shareholders was held on August 22, 1994. Each
matter voted upon at the meeting, as well as the number of votes cast for,
against or withheld, the number of absentions, and the number of broker
non-votes with respect to such matter, are set forth below.
1. The fund's shareholders elected the following eight directors:
<TABLE>
<CAPTION>
Shares
Shares Withholding
Voted Authority
"For" to Vote
---------- -----------
<S> <C> <C>
David T. Bennett.................................. 7,391,199 215,546
Jaye F. Dyer...................................... 7,392,311 214,435
William H. Ellis.................................. 7,387,204 219,541
Karol D. Emmerich................................. 7,393,511 213,235
Luella G. Goldberg................................ 7,377,865 228,882
John T. Golle..................................... 7,387,778 218,968
Edward J. Kohler*................................. 7,388,101 218,645
George Latimer.................................... 7,375,833 230,913
<FN>
</TABLE>
*Mr. Kohler resigned as director of the fund, effective November 30, 1994
2. The fund's shareholders ratified the selection by a majority of the
independent members of the fund's Board of Directors of KPMG Peat
Marwick LLP as the independent public accountants for the fund for the
fiscal year ending August 31, 1994. The following votes were cast
regarding this matter:
<TABLE>
<CAPTION>
Shares Shares Voted Broker
Voted "For" "Against" Absentions Non-Votes
- ----------- ----------------- ----------- ---------------
<S> <C> <C> <C>
7,354,102 60,999 191,645 --
</TABLE>
SHARE REPURCHASE PROGRAM
Your fund's board of directors reapproved a share repurchase program, which
enables each fund to 'buy back' shares of its common stock in the open market.
Repurchases may only be made when the previous day's closing market price per
share was at a discount from net asset value. Repurchases cannot exceed 3% of
the fund's originally issued shares. Results of this program are described in
note 6 to the financial statements.
<PAGE>
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
<TABLE>
<S> <C>
DIRECTORS David T. Bennett, CHAIRMAN, HIGHLAND HOMES, INC., USL
PRODUCTS, INC., KIEFER BUILT, INC., OF COUNSEL, GRAY,
PLANT, MOOTY, MOOTY & BENNETT, P.A.
Jaye F. Dyer, PRESIDENT, DYER MANAGEMENT COMPANY
William H. Ellis, CHAIRMAN OF THE BOARD, PRESIDENT, PIPER
JAFFRAY COMPANIES INC., PIPER CAPITAL MANAGEMENT
INCORPORATED
Karol D. Emmerich, PRESIDENT, THE PARACLETE GROUP
Luella G. Goldberg, DIRECTOR, TCF FINANCIAL, RELIASTAR
FINANCIAL CORP., HORMEL FOODS CORP.
John T. Golle, PRESIDENT AND DIRECTOR, EDUCATION
ALTERNATIVES
George Latimer, DIRECTOR, SPECIAL ACTIONS OFFICE, OFFICE
OF THE SECRETARY, DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
OFFICERS Thomas S. McGlinch, SENIOR VICE PRESIDENT
Douglas J. White, SENIOR VICE PRESIDENT
Amy K. Johnson, VICE PRESIDENT
Robert H. Nelson, VICE PRESIDENT
J. Bradley Stone, VICE PRESIDENT
David E. Rosedahl, SECRETARY
Charles N. Hayssen, TREASURER
INVESTMENT Piper Capital Management Incorporated
ADVISER 222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804
CUSTODIAN AND Investors Fiduciary Trust Company
TRANSFER AGENT 127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
LEGAL COUNSEL Dorsey & Whitney P.L.L.P.
220 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402
</TABLE>
<PAGE>
PIPER CAPITAL
MANAGEMENT
PIPER CAPITAL MANAGEMENT INCORPORATED
222 SOUTH NINTH STREET
MINNEAPOLIS, MN 55402-3804
PIPER JAFFRAY INC., FUND SPONSOR AND NASD MEMBER.
THIS DOCUMENT IS PRINTED ON PAPER MADE FROM
100% TOTAL RECOVERED FIBER, INCLUDING 15% POST-CONSUMER WASTE.
151-95 ADJ-02
