AMERICAN MUNICIPAL TERM TRUST INC, N-30D, 1995-08-31

AMERICAN MUNICIPAL TERM TRUST INC
N-30D, 1995-08-31

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<PAGE>

AMERICAN MUNICIPAL
TERM TRUSTS

* * *

SEMIANNUAL REPORT
1995

<PAGE>

TABLE OF CONTENTS

AVERAGE ANNUALIZED TOTAL RETURNS . . . . 1
FUND PERFORMANCE . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS . . . . . . . . . 3
TAX REFORM PROPOSALS . . . . . . . . . . 9
FINANCIAL STATEMENTS AND NOTES . . . . . 10
INVESTMENTS IN SECURITIES
AXT . . . . . . . . . . . . . . . . . 25
BXT . . . . . . . . . . . . . . . . . 30
CXT . . . . . . . . . . . . . . . . . 34
SHAREHOLDER UPDATE . . . . . . . . . . . 38

AMERICAN MUNICIPAL TERM TRUSTS

American Municipal Term Trust (AXT), American Municipal Term Trust II (BXT),
and American Municipal Term Trust III (CXT) are diversified, closed-end
investment companies. The primary objectives of AXT, BXT and CXT are to
provide high current income exempt from regular federal income tax and to
return $10 per share on or shortly before April 15, 2001; April 15, 2002; and
April 15, 2003, respectively -- although each fund's termination may be
extended up to five years if necessary to assist the fund in reaching its $10
per share objective. To realize their objectives, the funds invest in
high-quality municipal obligations including municipal zero-coupon
securities. As with other investment companies, there can be no assurance
these funds will achieve their objectives. Since each fund's inception, March
27, 1991; September 26, 1991; and November 27, 1992, respectively, they have
been rated AAf by Standard & Poor's Corporation (S&P).* Fund shares trade on
the New York Stock Exchange under the symbols AXT, BXT and CXT, respectively.

*THE FUNDS ARE RATED AAF, WHICH MEANS INVESTMENTS IN EACH FUND HAVE AN OVERALL
CREDIT QUALITY OF AA. CREDIT QUALITIES ARE ASSESSED BY STANDARD & POOR'S MUTUAL
FUNDS RATING GROUP. S&P DOES NOT EVALUATE THE MARKET RISK OF AN INVESTMENT WHEN
ASSIGNING A CREDIT RATING. SEE STANDARD & POOR'S CORPORATE AND MUNICIPAL RATING
DEFINITIONS FOR AN EXPLANATION OF AA.

THE FUNDS ALSO HAVE BEEN GIVEN A MARKET RISK RATING BY S&P, WHICH WE CANNOT
PUBLISH DUE TO NASD REGULATIONS. RISK RATINGS EVALUATE VARIOUS INVESTMENT RISKS
THAT CAN AFFECT THE PERFORMANCE OF A BOND FUND AND INDICATE THE FUNDS' OVERALL
STABILITY AND SENSITIVITY TO CHANGING MARKET CONDITIONS. THESE RATINGS ARE
AVAILABLE BY CALLING S&P AT 1-800-424-FUND.

<PAGE>

AVERAGE ANNUALIZED TOTAL RETURNS

AMERICAN MUNICIPAL TERM TRUST
[graph]

AMERICAN MUNICIPAL TERM TRUST II
[graph]

AMERICAN MUNICIPAL TERM TRUST III
[graph]

Average annualized total return figures are through June 30, 1995, and are based
on the change in net asset value (NAV) and reflect the reinvestment of
distributions but do not reflect the funds' sales charges. NAV-based performance
is used to measure investment management results.

Average annualized total return figures based on the change in market price for
the one-year, three-year and since inception periods ended June 30, 1995, were
7.86%, 5.85% and 6.89% for AXT; 6.45%, 5.71% and 6.03% for BXT; and -0.48%, NA
and 2.07% for CXT; respectively. These figures also assume reinvested
distributions and do not reflect the funds' sales charges.

The Lipper General Municipal Bond Funds: Leveraged Average represents the
average total return, with distributions reinvested, of perpetual and term trust
closed-end municipal bond funds as characterized by Lipper Analytical Services.

The Lehman Brothers 7-Year Municipal Bond Index is an unmanaged index that
represents the 7-year, high-quality, tax-exempt bond market. It assumes all
distributions are reinvested.

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT FUND SHARES, WHEN SOLD,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.

<PAGE>

FUND PERFORMANCE

NET ASSET VALUE SUMMARY PER SHARE

<TABLE>
<CAPTION>
American American American
Municipal Municipal Municipal
Term Trust Term Trust II Term Trust III

INCEPTION INCEPTION INCEPTION
3/27/91 9/26/91 11/27/92
<S> <C> <C> <C>
Initial Offering Price . . . . . . . . . . . . . . . . . . . . . . . . $10.00 $10.00 $10.00
Initial Offering and Underwriting Expenses . . . . . . . . . . . . . . - $0.67 - $0.66 - $0.67
(Common and Preferred Stock)
Accumulated Realized Losses At 6/30/95 . . . . . . . . . . . . . . . . - $0.01 - $0.01 - $0.03
------------ -------------- ---------------
SUBTOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9.32 $9.33 $9.30

Undistributed Net Investment Income (Dividend Reserve) At 6/30/95 . . + $0.53 + $0.50 + $0.31
Unrealized Appreciation on Investments At 6/30/95 . . . . . . . . . . + $1.56 + $1.38 + $0.75
------------ -------------- ---------------
NET ASSET VALUE ON 6/30/95 . . . . . . . . . . . . . . . . . . . . . . $11.41 $11.21 $10.36
</TABLE>

DISTRIBUTION HISTORY

<TABLE>
<CAPTION>
American American American
Municipal Municipal Municipal
Term Trust Term Trust II Term Trust III

INCEPTION INCEPTION INCEPTION
3/27/91 9/26/91 11/27/92
<S> <C> <C> <C>

Total Monthly Income Dividends
(On a Common Share Basis) Through 6/30/95

Paid to Common Shareholders . . . . . . . . . . . . . . . . . . . $2.71 $2.28 $1.43
Paid to Preferred Shareholders . . . . . . . . . . . . . . . . . +$0.66 +$0.55 +$0.36
Total Capital Gains Distributions Through 6/30/95 . . . . . . . . . . +$0.00 +$0.00 +$0.00
------------ -------------- ---------------
TOTAL DISTRIBUTIONS PER SHARE ON 6/30/95 (ON A COMMON SHARE BASIS) . . $3.37 $2.83 $1.79
</TABLE>

<PAGE>

AMERICAN MUNICIPAL TERM TRUSTS

[photo]
DOUG WHITE, CFA, (ABOVE)
SHARES RESPONSIBILITY FOR THE MANAGEMENT OF THE AMERICAN MUNICIPAL TERM TRUSTS.
HE HAS 12 YEARS OF FINANCIAL EXPERIENCE.

[photo]
RON REUSS, (BELOW)
SHARES RESPONSIBILITY FOR THE MANAGEMENT OF THE AMERICAN MUNICIPAL TERM TRUSTS.
HE HAS 26 YEARS OF FINANCIAL EXPERIENCE.

August 15, 1995

Dear Shareholders:

WE ARE PLEASED WITH THE ONGOING PERFORMANCE OF THE AMERICAN MUNICIPAL TERM
TRUSTS (AXT, BXT, CXT). The funds have objectives of providing high current
income exempt from regular federal income tax and returning $10 per share
upon their termination dates. AXT, BXT and CXT have maintained common stock
distribution yields of 6.50%, 6.20% and 5.70%, respectively, which have been
unchanged since each fund's inception.* The chart on the page to the left
shows the history of each fund's net asset value since inception. As of June
30, 1995, AXT, BXT and CXT had net asset values of $11.41, $11.21 and $10.36,
respectively. The other chart on the left shows the history of distributions
paid in the funds since inception.

WE HAVE ADDED THE NET ASSET VALUE SUMMARY AND DISTRIBUTION HISTORY CHARTS TO THE
REPORT BECAUSE WE BELIEVE THEY PROVIDE A MORE COMPLETE PICTURE OF THE FUNDS'
RELATIVE PERFORMANCE. The term trusts are unusual because they have defined
termination dates and because there are very few tax-exempt term trusts. These
factors make it difficult to measure the funds'

*THESE FIGURES REPRESENT ANNUALIZED YIELDS FOR THE SIX MONTHS ENDED JUNE 30,
1995, BASED ON THE INITIAL OFFERING PRICE OF $10 PER SHARE. ACTUAL YIELDS MAY
DIFFER, DEPENDING ON THE INDIVIDUAL SHAREHOLDER'S COST BASIS. THESE YIELD
FIGURES REPRESENT PAST PERFORMANCE. YIELDS ON FUND SHARES WILL FLUCTUATE.

<PAGE>

AMERICAN MUNICIPAL TERM TRUSTS

[pie chart]

performance relative to a benchmark. It is also a challenge to evaluate the
funds' performance because as the funds near their respective termination
dates, we will continue to shorten the portfolios' effective duration to
reduce investment risk. This will likely cause the funds to underperform a
comparable group of funds, such as the Lipper average, because this group
includes both perpetual and term trust funds. Therefore, to help evaluate the
funds' performance as we shorten their effective duration, we will also be
comparing the funds to shorter Lehman Brothers indexes as they near
termination.

WE CONTINUE TO BELIEVE THE MUNICIPAL BOND MARKET REPRESENTS AN ATTRACTIVE
OPPORTUNITY FOR LONG-TERM INVESTORS. Since early 1995, the municipal bond market
has lagged the Treasury bond market due to ongoing concerns about proposed tax
reforms (see page 9 for more information), the Orange County, California, crisis
and competition from a robust stock market. These concerns have resulted in
lower municipal bond prices, making them a relatively good value -- especially
considering the declining supply of new issues. The supply of new issue
municipal bonds decreased by 45% in 1994 compared to 1993 and another 25% in the
first half of 1995 compared to the first six months of 1994. At the same time,
demand for municipal bonds has steadily increased because the Tax Reform Act of
1986 has outlawed most other tax shelters. The term trusts should benefit from
this limited supply and strong demand, as this type of imbalance generally
improves municipal bond prices.

<PAGE>

AMERICAN MUNICIPAL TERM TRUSTS

[pie chart]

THE STRATEGY WE USE TO MANAGE THE TERM TRUSTS CONTINUES TO BE TO REDUCE THE
FUNDS' INVESTMENT RISK AS THEY NEAR THEIR TERMINATION DATES BY GRADUALLY
SHORTENING THE EFFECTIVE DURATION OF THE PORTFOLIOS. We do this by investing in
shorter-term municipal bonds as the funds approach their termination dates. As
the funds near termination, their net asset values will likely decrease since
the market values of many of the bonds in the portfolios are currently higher
than they will be at maturity. As these bonds move closer to maturity, their
market values will likely decline toward their maturity values. Also, each fund
has a dividend reserve (shown on page 2) that may be used to help maintain the
monthly dividend. However, please remember that the dividend reserve is not
guaranteed and may fluctuate.

ANOTHER TECHNIQUE WE USE TO MANAGE THE FUNDS IS TO HOLD BONDS THAT HAVE BEEN
PREREFUNDED. By the end of June, approximately 42% of AXT's, 39% of BXT's, and
15% of CXT's holdings had been prerefunded to their first call date. Because
these prerefunded bonds are backed by U.S. government obligations, credit risk
on this portion of each portfolio is eliminated. Also, interest rate risk on
these bonds is eliminated on their call dates, which is close to the funds'
termination dates, because these holdings effectively mature on those call
dates. Prior to their call dates, these securities are still subject to interest
rate risk and can fluctuate in value. The securities that are not prerefunded
are still susceptible to both interest rate and credit risk until they mature or
are sold.

<PAGE>

AMERICAN MUNICIPAL TERM TRUSTS

[pie chart]

THE FUNDS' ISSUANCE OF PREFERRED STOCK HAS PROVED BENEFICIAL TO COMMON
SHAREHOLDERS DURING THE PAST SIX MONTHS. Long-term interest rates have remained
higher than short-term rates, allowing the funds to earn higher income than the
monthly common stock dividend they are paying out. As a result, we have been
able to add to each fund's dividend reserve. While the reserve is not
guaranteed, it helps to maintain common stock distributions in times when the
fund may be paying higher rates on preferred stock. Rates paid on preferred
stock (3.77% for AXT; 3.77% for BXT; 3.70% for CXT on August 15) are reset every
seven days and are based on short-term, tax-exempt interest rates. Preferred
shareholders accept these short-term rates in exchange for low credit risk
(shares of preferred stock are rated AAA by Moody's and S&P) and high liquidity
(shares of preferred stock trade at par and are remarketed every seven days).
The proceeds from the sale of preferred stock are invested at intermediate- and
long-term tax-exempt rates. Because these intermediate- and longer-term rates
are normally higher than the short-term rates paid on preferred stock, common
shareholders benefit by receiving higher dividends and/or an increase to the
dividend reserve. However, the risk of having preferred stock is that if
short-term rates rise higher than intermediate- and long-term rates, creating an
inverted yield curve, common shareholders may receive a lower rate of return
than if their fund did not have any preferred stock outstanding. This type of
economic environment is unusual and historically has been short-term in nature.
Investors should also be aware that the issuance of preferred stock results

<PAGE>

AMERICAN MUNICIPAL TERM TRUSTS

in the leveraging of common stock which increases the volatility of both the
net asset value of the funds and the market value of shares of common stock.

ALTHOUGH A LARGE PORTION OF EACH PORTFOLIO IS INVESTED IN MUNICIPAL REVENUE
BONDS THAT ARE BACKED SOLELY BY REVENUE GENERATED BY THE PROJECT, WE BELIEVE WE
HAVE BEEN ABLE TO MINIMIZE THE CREDIT RISK ASSOCIATED WITH THESE INVESTMENTS.
Our strategy of managing credit risk, or the risk of failure of an issuer to
make payment, involves extensive due diligence and credit analysis prior to
purchasing these bonds as well as while they are held in the portfolios. This
research which goes beyond the ratings issued by Moody's or S&P, helps ensure we
maintain high-quality portfolios. For example, if a bond is rated A- by Moody's
or S&P and, after completing our research, we believe it should be rated BBB+,
we may sell the bond in anticipation of the bond's rating being downgraded. If a
bond's rating is downgraded, not only does it have a higher risk of default, but
the value of the bond will also fall due to its lower rating. While we have not
experienced any problems associated with payment defaults so far, these funds do
have credit risk and the failure of an issuer to make payments could result in a
decrease in net asset value.

THE FUNDS' GEOGRAPHIC FOCUS CONTINUES TO BE ON THE CENTRAL AND NORTHWESTERN
UNITED STATES WITH ILLINOIS, WASHINGTON, TEXAS AND INDIANA REPRESENTING THE
LARGEST STATE CONCENTRATIONS. In addition, we believe certain areas of the
Northeast have seen the worst of their economic problems and we have made
selected investments in this region. We are also looking at portions of the
Southeast and West -- particularly the Carolinas, Arizona and Nevada -- which
have recently shown substantial economic strength. We continue to be cautious
about the California municipal bond market due to that state's uncertain
fiscal environment and do not currently own any California bonds in AXT, BXT
or CXT.

<PAGE>

AMERICAN MUNICIPAL TERM TRUSTS

WE HAVE BEEN CLOSELY MONITORING THE PORTFOLIOS AND HAVE MADE FEW CHANGES DURING
THE PAST SIX MONTHS BECAUSE WE BELIEVE THEY ARE STRUCTURED APPROPRIATELY GIVEN
THEIR OBJECTIVES AND THE CURRENT ECONOMIC ENVIRONMENT. In addition, we have
maintained their structure in an effort to avoid paying capital gains
distributions which would be generated if we sold a bond at a gain and were
unable to offset that gain by selling another bond at a loss. Capital gains
distributions are taxable. The funds remain fully invested in high-quality,
tax-exempt municipal bonds at yields that are generally higher than yields on
bonds available today with similar quality and maturities. The portfolios'
average call protection continues to extend approximately to the funds'
termination dates. We currently have no plans to make any substantial changes in
the portfolios; however, we will continue to reduce effective duration, when
appropriate, as the funds approach their termination dates.

GOING FORWARD, WE BELIEVE THE CURRENT MARKET ENVIRONMENT SHOULD CONTINUE TO
PROVIDE MUNICIPAL BOND INVESTORS WITH ATTRACTIVE AFTER-TAX RETURNS. For example,
a 6.00% tax-exempt yield for someone in the 36% federal tax bracket represents
the equivalent of a 9.37% taxable yield.+ This compares favorably with the
current inflation rate of 3.00%.

Thank you for your investment in the American Municipal Term Trusts. We consider
it a privilege to manage your money and remain committed to serving your
investment needs.

Sincerely,

/s/ Ronald Reuss /s/ Douglas White
Co-manager Co-manager

+ THIS YIELD IS USED FOR ILLUSTRATIVE PURPOSES ONLY AND IS NOT INDICATIVE OF AN
INVESTMENT IN THE FUNDS.

<PAGE>

TAX REFORM PROPOSALS

Over the past several years, a number of tax changes have been proposed by
politicians responding to public dissatisfaction. Among these tax reform
proposals are a flat tax, a sales tax, a consumed income tax and a progressive
income tax. Although there is no certainty when or even if these changes would
be enacted, they do have important implications for investors and may have
already had some impact on the tax-exempt municipal bond market.

Among the different tax reforms, the flat tax proposal has generated more
interest and publicity than any of the other proposals. The concept behind the
best-known flat tax proposal by Representative Dick Armey is that it recognizes
all taxpayers as equal by taxing all wage or salary income at a flat rate. The
flat tax would also do away with current deductions, exemptions and credits such
as interest on home mortgage loans, charitable contributions, state and local
taxes, and medical expenses. Also under this proposal, Social Security benefits
and income from savings and investments would be granted a tax-exempt status.

While there are many varying flat tax initiatives, they all share some common
elements of which municipal bond investors should be aware. All flat tax
proposals would only tax income from wages and salary and would exempt from
tax the interest, dividends and capital gains earned on investments and real
estate. Proponents of a flat tax argue that this would encourage more people
to save money and would be good for investments. However, opponents of a flat
tax say it would hurt tax-exempt municipal bond investors because municipal
bonds currently have interest yields that are lower than taxable interest
yields since the interest paid on municipal bonds is free from federal income
tax. If all interest income were free of taxes, the advantage of investing in
municipal securities would be eliminated and their prices would likely fall
because municipal bonds pay lower interest yields than taxable bonds with
similar maturities and credit quality. Some analysts believe the possibility
of a flat tax has already turned away some municipal bond investors creating
a scare in the municipal bond market.

In spite of tax reform's increasing popularity, many taxpayers -- including
special interest groups, homeowners and municipal bond investors and issuers,
among others -- have too much to lose not to put up a fight. In addition, it
would take several years for any type of tax reform to be enacted and
implemented and many key members of Congress have already said that any major
reform would need to include a provision that would offset the negative impact
on existing municipal bond investors. Until there is evidence that a major tax
reform is closer to reality, we will maintain our current strategy of managing
the municipal term trusts; however, we will be closely monitoring these tax
change proposals. We encourage investors to keep an eye on the tax reform debate
as well, but strongly suggest they continue to take advantage of the tax-free
income they can earn by investing in municipal bonds.

<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (UNAUDITED)

STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1995

American American
American Municipal Municipal
Municipal Term Trust Term Trust
Term Trust II III
----------- ----------- ----------
<S> <C> <C> <C>
ASSETS:
Investments in securities at market value* (note 2) .... $ 136,405,896 117,533,867 80,226,378
Cash in bank on demand deposit ........................... 66,191 33,521 38,134
Accrued interest receivable .............................. 2,642,176 1,973,464 1,329,203
----------- ----------- ----------
Total assets ......................................... 139,114,263 119,540,852 81,593,715
----------- ----------- ----------

LIABILITIES:
Preferred stock dividends payable (note 3) ............... 9,781 17,233 14,940
Accrued investment management fee ........................ 28,745 24,724 17,027
Accrued remarketing agent fee ............................ 19,185 7,963 9,420
Accrued administrative fee ............................... 17,247 10,450 10,216
Other accrued expenses ................................... 29,433 -- 17,234
----------- ----------- ----------
Total liabilities .................................... 104,391 60,370 68,837
----------- ----------- ----------
Net assets applicable to outstanding capital stock ....... $ 139,009,872 119,480,482 81,524,878
----------- ----------- ----------
----------- ----------- ----------

REPRESENTED BY:
Preferred stock - authorized 1 million shares for each
fund of $25,000 liquidation preference per share;
outstanding, 1,700; 1,480 and 1,064 shares, respectively
(note 3) ............................................... 42,500,000 37,000,000 26,600,000
----------- ----------- ----------
Common stock - authorized 200 million shares for each fund
of $0.01 par value; outstanding, 8,455,000, 7,355,820
and 5,300,000 shares, respectively ..................... 84,550 73,558 53,000
Additional paid-in capital ............................... 78,849,200 68,704,232 49,431,500
Undistributed net investment income ...................... 4,447,830 3,687,393 1,630,296
Accumulated net realized loss on investments ............. (62,488 ) (44,211 ) (134,485 )
Unrealized appreciation of investments ................... 13,190,780 10,059,510 3,944,567
----------- ----------- ----------
Total - representing net assets applicable to
outstanding common stock ........................... 96,509,872 82,480,482 54,924,878
----------- ----------- ----------
Total net assets ................................... $ 139,009,872 119,480,482 81,524,878
----------- ----------- ----------
----------- ----------- ----------

Net asset value per share of outstanding common stock (net
assets divided by 8,455,000, 7,355,820 and 5,300,000
shares of common stock outstanding, respectively) ...... $ 11.41 11.21 10.36
----------- ----------- ----------
----------- ----------- ----------

* Investments in securities at identified cost ........... $ 123,215,116 107,474,357 76,281,811
----------- ----------- ----------
----------- ----------- ----------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

10
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (UNAUDITED)

STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995

American American
American Municipal Municipal
Municipal Term Term
Term Trust Trust II Trust III
---------- --------- ---------
<S> <C> <C> <C>
INCOME:
Interest ............................................... $ 4,376,925 3,695,136 2,461,183
---------- --------- ---------

EXPENSES (NOTE 5):
Investment management fee ................................ 169,391 145,523 99,725
Administrative fee ....................................... 101,635 87,314 59,835
Remarketing agent fee .................................... 53,420 46,506 33,434
Custodian, accounting and transfer agent fees ............ 22,057 17,078 10,709
Reports to shareholders .................................. 10,497 9,567 9,038
Directors' fees .......................................... 5,647 5,648 5,648
Audit and legal fees ..................................... 24,028 24,025 24,032
Other expenses ........................................... 31,436 19,751 25,400
---------- --------- ---------
Total expenses ....................................... 418,111 355,412 267,821
---------- --------- ---------

Net investment income ................................ 3,958,814 3,339,724 2,193,362
---------- --------- ---------

NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain (loss) on investments (note 4) ......... (41,305 ) 16,499 (5,681 )
Net change in unrealized appreciation or depreciation of
investments ............................................ 6,825,470 6,215,533 5,186,428
---------- --------- ---------
Net gain on investments ................................ 6,784,165 6,232,032 5,180,747
---------- --------- ---------

Net increase in net assets resulting from
operations ....................................... $ 10,742,979 9,571,756 7,374,109
---------- --------- ---------
---------- --------- ---------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

11
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN NET ASSETS
AMERICAN MUNICIPAL TERM TRUST

Six Months
Ended 6/30/95 Year Ended
(Unaudited) 12/31/94
------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income .................................. $ 3,958,814 7,901,086
Net realized loss on investments ......................... (41,305) (21,183)
Net change in unrealized appreciation or depreciation of
investments ............................................ 6,825,470 (12,690,038)
------------- -----------

Net increase (decrease) in net assets resulting from
operations ........................................... 10,742,979 (4,810,135)
------------- -----------

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................. (2,291,305) (5,497,953)
Preferred stock dividends .............................. (861,792) (1,264,920)
From net realized gains .................................. -- (1,179)
------------- -----------
Total distributions .................................... (3,153,097) (6,764,052)
------------- -----------
Total increase (decrease) in net assets .............. 7,589,882 (11,574,187)

Net assets at beginning of period .......................... 131,419,990 142,994,177
------------- -----------

Net assets at end of period .............................. $ 139,009,872 131,419,990
------------- -----------
------------- -----------

Undistributed net investment income ...................... $ 4,447,830 3,642,113
------------- -----------
------------- -----------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

12
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN NET ASSETS
AMERICAN MUNICIPAL TERM TRUST II

Six Months
Ended 6/30/95 Year Ended
(Unaudited) 12/31/94
------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income .................................. $ 3,339,724 6,647,805
Net realized gain (loss) on investments .................. 16,499 (17,206)
Net change in unrealized appreciation or depreciation of
investments ............................................ 6,215,533 (11,187,024)
------------- -----------

Net increase (decrease) in net assets resulting from
operations ........................................... 9,571,756 (4,556,425)
------------- -----------

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................. (1,901,479) (4,563,551)
Preferred stock dividends .............................. (750,803) (1,090,550)
------------- -----------
Total distributions .................................. (2,652,282) (5,654,101)
------------- -----------
Total increase (decrease) in net assets ............ 6,919,474 (10,210,526)

Net assets at beginning of period .......................... 112,561,008 122,771,534
------------- -----------

Net assets at end of period .............................. $ 119,480,482 112,561,008
------------- -----------
------------- -----------

Undistributed net investment income ...................... $ 3,687,393 2,999,951
------------- -----------
------------- -----------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

13
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN NET ASSETS
AMERICAN MUNICIPAL TERM TRUST III

Six Months
Ended
6/30/95 Year Ended
(Unaudited) 12/31/94
------------ ----------
<S> <C> <C>
OPERATIONS:
Net investment income .................................. $ 2,193,362 4,394,918
Net realized loss on investments ......................... (5,681) (124,896 )
Net change in unrealized appreciation or depreciation of
investments ............................................ 5,186,428 (9,159,720)
------------ ----------

Net increase (decrease) in net assets resulting from
operations ........................................... 7,374,109 (4,889,698)
------------ ----------

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................. (1,258,750) (3,018,931)
Preferred stock dividends .............................. (524,341) (775,517 )
From net realized gains: ................................. -- (2,069 )
------------ ----------
Total distributions .................................... (1,783,091) (3,796,517)
------------ ----------
Total increase (decrease) in net assets .............. 5,591,018 (8,686,215)

Net assets at beginning of period .......................... 75,933,860 84,620,075
------------ ----------

Net assets at end of period .............................. $ 81,524,878 75,933,860
------------ ----------
------------ ----------

Undistributed net investment income ...................... $ 1,630,296 1,220,025
------------ ----------
------------ ----------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

14
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(1) ORGANIZATION
American Municipal Term Trust, American Municipal Term Trust II,
and American Municipal Term Trust III (the funds) are registered
under the Investment Company Act of 1940 (as amended) as
diversified closed-end investment companies. Shares of the funds
are listed on the New York Stock Exchange. American Municipal
Term Trust, American Municipal Term Trust II, and American
Municipal Term Trust III expect to terminate operations and
distribute all of their net assets to shareholders on or shortly
before April 15, 2001, April 15, 2002, and April 15, 2003,
respectively, although termination may be extended to a date no
later than April 15, 2006, April 15, 2007, and April 15, 2008,
respectively, to assist the funds in meeting their objective of
returning $10 per share on common stock.
(2) SIGNIFICANT
ACCOUNTING
POLICIES
INVESTMENTS IN SECURITIES
The values of fixed income securities are determined using
pricing services or prices quoted by independent brokers. 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 of 60 days or less 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.

FUTURES TRANSACTIONS
In order to gain exposure to or protect against changes in the
market, the funds may buy and sell financial futures contracts
and related options. Risks of entering into futures contracts
and related options include the possibility there may be an
illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the
underlying securities.

Upon entering into a futures contract, the funds are required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments

15
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(variation margin) are made or received by the funds each day.
The variation margin payments are equal to the daily changes in
the contract value and are recorded as unrealized gains and
losses. The funds recognize a realized gain or loss when the
contract is closed or expires.

SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities that have been purchased by
the funds on a forward-commitment or when-issued basis can take
place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to
market fluctuations and may increase or decrease in value prior
to their delivery. The funds maintain, in segregated accounts
with their custodian, assets with a market value equal to the
amount of their purchase commitments. The purchase of securities
on a when-issued or forward-commitment basis may increase the
volatility of the funds' NAVs, to the extent the funds make such
purchases while remaining substantially fully invested. As of
June 30, 1995, the funds had no outstanding when-issued or
forward commitments.

FEDERAL TAXES
The funds intend to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute their taxable income to shareholders. Therefore, no
income tax provision is required. In addition, on a
calendar-year basis, the funds will distribute substantially all
of their taxable net investment income and realized gains, if
any, to avoid the payment of any federal excise taxes.

Net investment income and net realized gains (losses) may differ
for financial statement and tax purposes primarily because of
market discount amortization and the deferral of "wash sale"
losses for tax purposes. The character of distributions made
during the year from net investment income or net realized gains
may also differ from their ultimate characterization for federal
income tax purposes. In addition, 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 funds.

16
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income will be made on a
monthly basis for common shareholders and on a weekly basis for
preferred stock shareholders. Common stock distributions are
recorded as of the close of business on the ex-dividend date and
preferred stock dividends are accrued daily. Realized capital
gains, if any, will be distributed on an annual basis.
Distributions are payable in cash or for common shareholders
pursuant to the funds' dividend reinvestment plans, reinvested
in additional shares of the funds' common stock. Under the
plans, common shares will be purchased in the open market.

(3) REMARKETED
PREFERRED STOCK
American Municipal Term Trust, American Municipal Term Trust II,
and American Municipal Term Trust III have issued and, as of
June 30, 1995, have outstanding 1,700 shares, 1,480 shares, and
1,064 shares, respectively, of remarketed preferred stock
("RP-Registered Trademark-") with a liquidation preference of
$25,000 per share for each fund. The dividend rate on the
RP-Registered Trademark- is adjusted every seven days as
determined by the remarketing agent. On June 30, 1995, the
dividend rates were 4.20%, 4.25% and 4.10% for American
Municipal Term Trust, American Municipal Term Trust II, and
American Municipal Term Trust III, respectively.

(4) INVESTMENT
SECURITY
TRANSACTIONS
Purchases of securities and proceeds from sales, other than
temporary investments in short-term securities, for the six
months ended June 30, 1995 were as follows: $318,948 and
$2,155,436, respectively, for American Municipal Term Trust;
$1,270,708 and $3,206,335, respectively, for American Municipal
Term Trust II; and $2,935,409 and $3,956,302, respectively, for
American Municipal Term Trust III.

(5) FEES AND
EXPENSES
The funds have entered into the following agreements with Piper
Capital Management Incorporated (the adviser and administrator):

The investment advisory agreement provides the adviser with a
monthly investment management fee calculated at the annualized
rate of 0.25% of the funds' average weekly net assets (computed
by subtracting liabilities, which exclude preferred stock, from
the value

17
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
of the total assets of the funds). For its fee, the adviser will
provide investment advice and, in general, will conduct the
management and investment activity of the funds.

The administration agreement provides the administrator with a
monthly fee in an amount equal to an annualized rate of 0.15% of
the funds' average weekly net assets (computed by subtracting
liabilities, which exclude preferred stock, from the value of
the total assets of the funds). For its fee, the administrator
will provide certain reporting, regulatory and record-keeping
services for the funds.

The funds have entered into a remarketing agent agreement with
Merrill Lynch, Pierce, Fenner & Smith (the remarketing agent).
The remarketing agreement provides the remarketing agent with a
monthly fee in an amount equal to an annualized rate of 0.25% of
the fund's average amount of RP-Registered Trademark-
outstanding. For its fee, the remarketing agent will remarket
shares of RP-Registered Trademark- tendered to it, on behalf of
shareholders thereof, and will determine the applicable dividend
rate for each seven-day dividend period.

In addition to the advisory fee, the administrative fee and the
remarketing agent fee, the funds are 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 and other
miscellaneous expenses.

(6) CAPITAL LOSS
CARRYOVER
For federal income tax purposes, American Municipal Term Trust,
American Municipal Term Trust II and American Municipal Term
Trust III had capital loss carryovers of $21,183, $60,710 and
$128,804, respectively, as of December 31, 1994, which, if not
offset by subsequent capital gains, will expire in the years
2000 through 2003. It is unlikely the board of directors will
authorize a distribution of any net realized capital gains until
the available capital loss carryovers have been offset or
expired.

18
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

(7) FINANCIAL
HIGHLIGHTS
Per-share data for a share of common stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST

<TABLE>
<CAPTION>
Six Months Year Ended December 31, Period from
Ended 6/30/95 ------------------------------------- 3/27/91* to
(Unaudited) 1994 1993 1992 12/31/91
------------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ............................ $ 10.52 11.89 10.57 9.99 9.44
------ ----------- ----------- ----------- ------
Operations:
Net investment income ............... 0.47 0.93 0.92 0.92 0.65
Net realized and unrealized gains
(losses) on investments ........... 0.79 (1.50) 1.17 0.47 0.63
------ ----------- ----------- ----------- ------
Total from operations ............. 1.26 (0.57) 2.09 1.39 1.28
------ ----------- ----------- ----------- ------
Distributions to shareholders from net
investment income:
Paid to common shareholders ......... (0.27) (0.65) (0.65) (0.65) (0.49)
Paid to preferred shareholders ...... (0.10) (0.15) (0.12) (0.16) (0.13)
------ ----------- ----------- ----------- ------
Total distributions to
shareholders .................... (0.37) (0.80) (0.77) (0.81) (0.62)
------ ----------- ----------- ----------- ------
Offering costs and underwriting
discounts associated with the
remarketed preferred stock .......... -- -- -- -- (0.11)
------ ----------- ----------- ----------- ------
Net asset value per share of common
stock, end of period .............. $ 11.41 10.52 11.89 10.57 9.99
------ ----------- ----------- ----------- ------
------ ----------- ----------- ----------- ------
Market value per share of common stock,
end of period ..................... $ 10.50 10.00 10.88 10.50 10.13
------ ----------- ----------- ----------- ------
------ ----------- ----------- ----------- ------
Total investment return, common stock,
market value** ...................... 8.33% (2.11%) 9.83 % 10.26 % 6.21 %
Total investment return, common stock,
net asset value+ .................... 11.96 % (6.34 %) 18.98 % 12.68 % 11.25 %
Net assets at end of period (in
millions) ......................... $ 139 131 143 132 127
Ratio of expenses to average weekly net
assets .............................. 0.62 %++ 0.58 % 0.59 % 0.62 % 0.56 %++
Ratio of net investment income to
average weekly net assets ........... 5.84 %++ 5.80 % 5.65 % 6.03 % 6.27 %++
Portfolio turnover rate (excluding
short-term securities) .............. 0 % 1 % 2 % 4 % 24 %
Remarketed preferred stock, liquidation
preference of $25,000 for each of
1,700 shares outstanding (in
millions) ......................... $ 43 43 43 43 43
Asset coverage for remarketed preferred
stock *** ........................... 327 % 309 % 336 % 310 % 299 %

<FN>

* COMMENCEMENT OF OPERATIONS.
** TOTAL INVESTMENT RETURN, MARKET VALUE, IS BASED ON THE CHANGE IN MARKET
PRICE OF A COMMON SHARE DURING THE PERIOD AND ASSUMES REINVESTMENT OF
DISTRIBUTIONS AT ACTUAL PRICES PURSUANT TO THE FUND'S DIVIDEND REINVESTMENT
PLAN.
*** REPRESENTS TOTAL NET ASSETS DIVIDED BY REMARKETED PREFERRED STOCK.
+ TOTAL INVESTMENT RETURN, NET ASSET VALUE, IS BASED ON THE CHANGE IN NET
ASSET VALUE OF A COMMON SHARE DURING THE PERIOD AND ASSUMES REINVESTMENT OF
DISTRIBUTIONS AT NET ASSET VALUE.
++ ADJUSTED TO AN ANNUAL BASIS.
</TABLE>

19
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

(7) FINANCIAL
HIGHLIGHTS
(CONTINUED)
Per-share data for a share of common stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST II

<TABLE>
<CAPTION>
Six Months Year Ended December 31, Period from
Ended 6/30/95 ------------------------------------- 9/26/91* to
(Unaudited) 1994 1993 1992 12/31/91
------------- ----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ............................ $ 10.27 11.66 10.26 9.71 9.45
------ ----------- ----------- ----------- -----
Operations:
Net investment income ............... 0.45 0.90 0.89 0.89 0.19
Net realized and unrealized gains
(losses) on investments ........... 0.85 (1.52) 1.25 0.44 0.36
------ ----------- ----------- ----------- -----
Total from operations ............. 1.30 (0.62) 2.14 1.33 0.55
------ ----------- ----------- ----------- -----
Distributions to shareholders from net
investment income:
Paid to common shareholders ......... (0.26) (0.62) (0.62) (0.62) (0.16)
Paid to preferred shareholders ...... (0.10) (0.15) (0.12) (0.16) (0.02)
------ ----------- ----------- ----------- -----
Total distributions to
shareholders .................... (0.36) (0.77) (0.74) (0.78) (0.18)
------ ----------- ----------- ----------- -----
Offering costs and underwriting
discounts associated with the
remarketed preferred stock .......... -- -- -- -- (0.11)
------ ----------- ----------- ----------- -----
Net asset value per share of common
stock, end of period .............. $ 11.21 10.27 11.66 10.26 9.71
------ ----------- ----------- ----------- -----
------ ----------- ----------- ----------- -----
Market value per share of common stock,
end of period ..................... $ 10.00 9.63 10.75 10.38 9.88
------ ----------- ----------- ----------- -----
------ ----------- ----------- ----------- -----
Total investment return, common stock,
market value** ...................... 7.14% (4.83%) 9.74 % 11.59 % 0.30 %
Total investment return, common stock,
net asset value+ .................... 12.38 % (6.80 %) 20.03 % 12.41 % 4.42 %
Net assets at end of period (in
millions) ......................... $ 119 113 123 112 108
Ratio of expenses to average weekly net
assets .............................. 0.61 %++ 0.60 % 0.60 % 0.64 % 0.58 %++
Ratio of net investment income to
average weekly net assets ........... 5.74 %++ 5.72 % 5.51 % 5.92 % 6.24 %++
Portfolio turnover rate (excluding
short-term securities) .............. 1 % 0 % 2 % 11 % 18 %
Remarketed preferred stock, liquidation
preference of $25,000 for each of
1,480 shares outstanding (in
millions) ......................... $ 37 37 37 37 37
Asset coverage for remarketed preferred
stock *** ........................... 323 % 304 % 332 % 304 % 293 %

<FN>

20
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Year Ended December 31,
Six Months Period from
Ended 6/30/95 ------------------------ 11/27/92* to
(Unaudited) 1994 1993 12/31/92
------------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .... $ 9.31 10.95 9.57 9.44
------ ----------- ----------- -----
Operations:
Net investment income ................... 0.41 0.83 0.81 0.04
Net realized and unrealized gains
(losses) on investments ............... 0.98 (1.75) 1.36 0.14
------ ----------- ----------- -----
Total from operations ................. 1.39 (0.92) 2.17 0.18
------ ----------- ----------- -----
Distributions to shareholders from net
investment income:
Paid to common shareholders ............. (0.24) (0.57) (0.57) (0.05)
Paid to preferred shareholders .......... (0.10) (0.15) (0.11) --
------ ----------- ----------- -----
Total distributions to shareholders ... (0.34) (0.72) (0.68) (0.05)
------ ----------- ----------- -----
Offering costs and underwriting discounts
associated with the remarketed preferred
stock ................................... -- -- (0.11) --
------ ----------- ----------- -----
Net asset value per share of common stock,
end of period ......................... $ 10.36 9.31 10.95 9.57
------ ----------- ----------- -----
------ ----------- ----------- -----
Market value per share of common stock, end
of period ............................. $ 9.13 8.50 10.13 9.88
------ ----------- ----------- -----
------ ----------- ----------- -----
Total investment return, common stock,
market value ** ......................... 10.63% (10.93%) 8.35 % (0.78 %)
Total investment return, common stock, net
asset value+ ............................ 14.54 % (10.04 %) 20.74 % 1.88 %
Net assets at end of period (in
millions) ............................. $ 82 76 85 51
Ratio of expenses to average weekly net
assets .................................. 0.67 %++ 0.64 % 0.61 % 0.60 %++
Ratio of net investment income to average
weekly net assets ....................... 5.50 %++ 5.53 % 5.34 % 4.90 %++
Portfolio turnover rate (excluding
short-term securities) .................. 4 % 3 % 1 % 0 %
Remarketed preferred stock, liquidation
preference of $25,000 for each of 1,064
shares outstanding (in millions) ...... $ 27 27 27 --
Asset coverage for remarketed preferred
stock *** ............................... 306 % 285 % 318 % --

<FN>

21
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(8) QUARTERLY DATA

AMERICAN MUNICIPAL TERM TRUST

DOLLAR AMOUNTS

<TABLE>
<CAPTION>
Net Increase
in Net
Net Realized Assets Distributions
Net and Unrealized Resulting from Net
Investment Investment Gains on from Investment
Income Income Investments Operations Income
----------- ----------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
3/31/95 $ 2,189,901 1,984,445 5,001,453 6,985,898 (1,339,258)
6/30/95 2,187,024 1,974,369 1,782,712 3,757,081 (1,813,839)
----------- ----------- -------------- ------------ ------------
$ 4,376,925 3,958,814 6,784,165 10,742,979 (3,153,097)
----------- ----------- -------------- ------------ ------------
----------- ----------- -------------- ------------ ------------
</TABLE>

PER-SHARE AMOUNTS

<TABLE>
<CAPTION>
Net Increase Distributions
Net Net Realized and in Net Assets from Net Quarter-End
Investment Unrealized Gains Resulting from Investment Net Asset
Income on Investments Operations Income Value
------------- ----------------- ----------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
3/31/95 $ 0.24 0.58 0.82 (0.16) 11.18
6/30/95 0.23 0.21 0.44 (0.21) 11.41
--- --- --- -----
$ 0.47 0.79 1.26 (0.37)
--- --- --- -----
--- --- --- -----
</TABLE>

22
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(8) QUARTERLY DATA (CONTINUED)

AMERICAN MUNICIPAL TERM TRUST II

DOLLAR AMOUNTS

<TABLE>
<CAPTION>
Net Increase
in Net
Net Realized Assets Distributions
Net and Unrealized Resulting from Net
Investment Investment Gains on from Investment
Income Income Investments Operations Income
----------- ----------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
3/31/95 $ 1,850,120 1,675,942 4,662,567 6,338,509 (1,130,528)
6/30/95 1,845,016 1,663,782 1,569,465 3,233,247 (1,521,754)
----------- ----------- -------------- ------------ ------------
$ 3,695,136 3,339,724 6,232,032 9,571,756 (2,652,282)
----------- ----------- -------------- ------------ ------------
----------- ----------- -------------- ------------ ------------
</TABLE>

PER-SHARE AMOUNTS

<TABLE>
<CAPTION>
Net Realized Net Increase Distributions
Net and Unrealized in Net Assets from Net Quarter-End
Investment Gains on Resulting from Investment Net Asset
Income Investments Operations Income Value
------------- ----------------- ----------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
3/31/95 $ 0.23 0.63 0.86 (0.15) 10.98
6/30/95 0.22 0.22 0.44 (0.21) 11.21
--- --- --- -----
$ 0.45 0.85 1.30 (0.36)
--- --- --- -----
--- --- --- -----
</TABLE>

23
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(8) QUARTERLY DATA (CONTINUED)

AMERICAN MUNICIPAL TERM TRUST III

DOLLAR AMOUNTS

<TABLE>
<CAPTION>
Net Increase
in Net
Net Realized Assets Distributions
Net and Unrealized Resulting from Net
Investment Investment Gains on from Investment
Income Income Investments Operations Income
----------- ----------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
3/31/95 $ 1,228,175 1,097,093 4,497,173 5,594,266 (762,045)
6/30/95 1,233,008 1,096,269 683,574 1,779,843 (1,021,046)
----------- ----------- -------------- ------------ ------------
$ 2,461,183 2,193,362 5,180,747 7,374,109 (1,783,091)
----------- ----------- -------------- ------------ ------------
----------- ----------- -------------- ------------ ------------
</TABLE>

PER-SHARE AMOUNTS

<TABLE>
<CAPTION>
Net Realized Net Increase Distributions
Net and Unrealized in Net Assets from Net Quarter-End
Investment Gains on Resulting from Investment Net Asset
Income Investments Operations Income Value
------------- ----------------- ----------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
3/31/95 $ 0.21 0.84 1.05 (0.14) 10.22
6/30/95 0.20 0.14 0.34 (0.20) 10.36
--- --- --- -----
$ 0.41 0.98 1.39 (0.34)
--- --- --- -----
--- --- --- -----
</TABLE>

24
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST
JUNE 30, 1995

<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)

MUNICIPAL LONG-TERM SECURITIES (97.3%):
COLORADO (1.5%):
Colorado Health Care Facility (FSA), 7.25%,
2/15/16 ............................................ $ 1,925,000 2,118,212
----------

DISTRICT OF COLUMBIA (3.3%):
General Obligation (MBIA), 6.75%, 6/1/08 .............. 4,400,000 4,630,032
----------

FLORIDA (2.4%):
Jacksonville Electric Authority (Prerefunded to
10/1/00), 7.00%, 10/1/12 ............................. 3,000,000(e) 3,376,710
----------

GEORGIA (2.3%):
Municipal Electric Authority (MBIA) (Prerefunded to
1/1/01), 7.00%, 1/1/16 ............................... 2,840,000(e) 3,198,948
----------

ILLINOIS (15.4%):
Chicago Motor Fuel Tax (AMBAC) (Prerefunded to 1/1/01),
7.10%, 1/1/11 ........................................ 1,525,000(e) 1,725,065
Development Financial Authority, 7.38%, 7/1/21 ........ 1,000,000 1,074,630
Health Facilities Authority, Evangelical Hospital
(FSA), 7.13%, 1/1/21 ................................. 2,500,000 2,702,950
Kankakee General Obligation (FGIC), 6.88%-7.00%,
5/1/11-5/1/16 ........................................ 3,000,000 3,285,520
Rochelle Water and Sewer Revenue, 7.15%, 5/1/14 ....... 1,000,000 1,053,340
State Dedicated Tax-Civic Center (AMBAC), 7.00%,
12/15/13 ............................................. 4,500,000 4,868,010
State Sales Tax Revenue (Prerefunded to 6/15/01),
6.90%, 6/15/12-6/15/13 ............................... 2,300,000(e) 2,596,401
State Sales Tax Revenue (Prerefunded to 6/15/99),
7.25%, 6/15/14 3,650,000(e) 4,076,977
----------
21,382,893
----------

INDIANA (8.9%):
Hamilton S.E. School Building Corporation (AMBAC),
7.00%, 7/1/08 ........................................ 3,445,000 3,771,310
Marion County Convention Center (AMBAC), 7.00%,
6/1/10 ............................................... 345,000 374,366
Marion County Convention Center (AMBAC) (Prerefunded to
6/1/01), 7.00%, 6/1/10 ............................... 870,000(e) 986,006
Rockport Pollution Control Revenue (FGIC), 7.60%,
3/1/16 ............................................... 3,500,000 3,924,935
St. Joe County Hospital Authority (MBIA), 7.00%,
8/15/11 .............................................. 3,000,000 3,249,600
----------
12,306,217
----------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

25
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)

<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
IOWA (0.7%):
Dubuque Hospital Revenue, 6.88%, 1/1/12 ............. $ 1,000,000 1,031,430
----------

LOUISIANA (0.1%):
Parrish of St. Martin, Cargill Inc. Project, 6.63%,
10/1/12 .............................................. 200,000(c) 207,316
----------

MAINE (2.5%):
Municipal Bond Bank (Prerefunded to 11/1/01), 7.20%,
11/1/13 .............................................. 3,000,000(e) 3,442,380
----------

MINNESOTA (0.8%):
East Grand Forks Industrial Development Revenue, 8.00%,
4/1/11 ............................................... 1,000,000 1,063,180
----------

NEBRASKA (0.8%):
Hospital Lease Investment Financing (MBIA), 7.00%,
3/1/06 ............................................... 1,000,000 1,106,160
----------

NEVADA (6.1%):
Clark County School District (MBIA) (Prerefunded to
6/1/01), 7.00%, 6/1/09 ............................... 3,000,000(e) 3,377,220
University of Nevada Revenue (AMBAC) (Prerefunded to
7/1/00), 7.13%, 7/1/16 ............................... 2,720,000(e) 3,063,890
Washoe County Limited Tax General Obligation,
Zero-Coupon (MBIA), 7.12%, 7/1/06 .................... 3,725,000(b) 1,983,599
----------
8,424,709
----------

PENNSYLVANIA (3.1%):
Higher Education-Duquesne University (MBIA), 7.00%,
4/1/10 ............................................... 1,000,000 1,088,910
Sayre Healthcare Facility (AMBAC), 7.00%, 3/1/11 ...... 3,000,000 3,275,790
----------
4,364,700
----------

SOUTH DAKOTA (3.4%):
Health and Education Facility Revenue, 7.00%,
11/1/07 .............................................. 2,500,000 2,659,000
Rapid City Area School District #51-4 (MBIA)
(Prerefunded to 1/1/02), 7.20%, 1/1/11 ............... 1,770,000(e) 2,004,879
----------
4,663,879
----------

TENNESSEE (2.6%):
Bristol Health and Education Facility (FGIC)
(Prerefunded to 3/1/01), 7.00%, 9/1/11 ............... 1,000,000(e) 1,129,120
Housing Development Authority (FSA), 7.60%, 7/1/16 .... 2,365,000 2,530,314
----------
3,659,434
----------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

26
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)

<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
TEXAS (17.9%):
Austin Utility System Revenue (MBIA) (Prerefunded to
5/15/01), 8.00%, 5/15/01 ........................... $ 500,000(e) 584,645
Corpus Christi Utility System Revenue (FGIC), 7.00%,
7/15/10 .............................................. 1,500,000 1,649,925
Harris County Health Facilities (FSA), 6.85%,
10/1/06 .............................................. 2,000,000 2,190,660
Harris County Toll Road, 6.75%, 8/1/14 ................ 1,500,000 1,587,870
Houston Hotel Occupancy (FGIC), 7.00%, 7/1/15 ......... 4,700,000 5,262,308
Houston Water and Sewer, Zero-Coupon (AMBAC), 7.14%,
8/15/06 .............................................. 4,285,000(b) 2,280,606
Lower Colorado River Authority (AMBAC), 7.00%,
1/1/11 ............................................... 415,000 455,977
Lower Colorado River Authority (AMBAC) (Prerefunded to
1/1/01), 7.00%, 1/1/11 ............................... 585,000(e) 658,938
Lower Colorado River Authority, Zero-Coupon (AMBAC),
7.17%, 1/1/06 ........................................ 765,000(b) 421,775
Municipal Power Agency, Zero-Coupon (AMBAC), 7.11%,
9/1/06 3,000,000(b) 1,592,670
San Antonio Electric and Gas, Zero-Coupon (FGIC),
7.11%, 2/1/06 ........................................ 3,000,000(b) 1,646,220
Trinity River Authority (AMBAC) (Prerefunded to
8/1/00), 7.10%, 8/1/16 ............................... 2,250,000(e) 2,499,683
Weatherford Utility System, Water Revenue (MBIA),
7.00%, 9/1/11 ........................................ 3,750,000 4,097,849
----------
24,929,126
----------

WASHINGTON (18.7%):
Chelan County Public Utility District, 7.60%,
7/1/25 ............................................... 3,375,000 3,705,244
King and Snohomish County School District (FGIC)
(Prerefunded to 12/1/00), 7.00%, 12/1/09 ............. 1,450,000(e) 1,613,343
Port Longview Industrial Development Revenue, 7.45%,
2/1/13 ............................................... 5,400,000 5,775,084
Public Power Supply System (Prerefunded to 1/1/00),
7.25%, 7/1/15 ........................................ 1,435,000(e) 1,608,965
Public Power Supply System (Prerefunded to 1/1/01),
7.63%, 7/1/10 ........................................ 5,000,000(e) 5,802,300
Public Power Supply System (Prerefunded to 7/1/00),
7.38%, 7/1/12 ........................................ 1,550,000(e) 1,764,954
Public Power Supply System, Zero-Coupon (FGIC), 7.17%,
7/1/06 ............................................... 5,000,000(b) 2,645,500
Public Power Supply System, Zero-Coupon (MBIA), 7.15%,
7/1/06 ............................................... 1,500,000(b) 793,650
Seattle Water Revenue (Prerefunded to 5/1/00), 7.25%,
5/1/17 ............................................... 2,000,000(e) 2,257,059
----------
25,966,099
----------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

27
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)

<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
WEST VIRGINIA (3.7%):
School Building Authority (MBIA) (Prerefunded to
7/1/00), 7.25%, 7/1/15 ............................. $ 4,000,000(e) 4,527,800
State Water Development Authority (CGIC), 7.00%,
11/1/11 .............................................. 500,000 549,815
----------
5,077,615
----------

WISCONSIN (3.1%):
Health and Education Facility (MBIA) (Prerefunded to
6/1/00), 7.00%, 6/1/20 ............................... 1,600,000(e) 1,790,960
Heath and Education Facility (AMBAC), 7.25%,
8/15/19 .............................................. 1,675,000 1,830,373
Neenah Industrial Development Revenue, 6.75%,
6/1/12 ............................................... 650,000 685,523
----------
4,306,856
----------

Total Municipal Long-Term Securities
(cost: $122,065,116) ................................ 135,255,896
----------

MUNICIPAL SHORT-TERM SECURITIES (0.8%):
INDIANA (0.8%):
Hospital Equipment Financing Authority, 2.20%,
12/1/15 .............................................. 1,150,000(d) 1,150,000
----------

Total Municipal Short-Term Securities
(cost: $1,150,000) .................................. 1,150,000
----------

Total Investments in Securities
(cost: $123,215,116) (f) .......................... $ 136,405,896
----------
----------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

28
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

NOTES TO INVESTMENTS IN SECURITIES:

(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) FOR ZERO-COUPON INVESTMENTS, THE INTEREST RATE SHOWN IS THE EFFECTIVE YIELD
ON THE DATE OF PURCHASE.
(C) SECURITIES PURCHASED WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM AND MAY
BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR OTHER ACCREDITED INVESTORS.
(D) VARIABLE RATE NOTE. INTEREST RATE VARIES TO REFLECT CURRENT MARKET
CONDITIONS; RATE SHOWN IS THE EFFECTIVE RATE ON JUNE 30, 1995.
(E) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
ARE CALLED AND MATURE AT THE CALL DATE INDICATED.
(F) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION .... $ 13,196,357
GROSS UNREALIZED DEPRECIATION ...... (5,577)
----------
NET UNREALIZED APPRECIATION .... $ 13,190,780
----------
----------
</TABLE>

29
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST II
JUNE 30, 1995

MUNICIPAL LONG-TERM SECURITIES (97.1%):
COLORADO (1.9%):
Boulder County, 6.90%-7.00%, 12/1/07-12/1/13 ........ $ 2,080,000 2,245,331
----------

FLORIDA (6.6%):
Manatee County, Zero-Coupon (MBIA), 6.91%, 10/1/07 .... 2,995,000(b) 1,516,848
Sumter County School District (CGIC), 7.15%,
11/1/15 .............................................. 2,045,000 2,385,472
University Community Hospital (FSA) (Prerefunded to
9/1/00), 7.50%, 9/1/11 ............................... 3,500,000(e) 4,038,090
----------
7,940,410
----------

ILLINOIS (24.0%):
Belleville General Obligation (FGIC), 7.13%,
12/1/08 .............................................. 1,000,000 1,093,040
Carbondale General Obligation (FGIC) (Prerefunded to
5/1/01), 6.90%, 5/1/12 ............................... 3,200,000(e) 3,557,152
Central Lake County, Zero-Coupon (MBIA), 6.98%,
5/1/07 ............................................... 2,370,000(b) 1,188,105
Chicago Motor Fuel Tax (AMBAC) (Prerefunded to 1/1/01),
7.10%, 1/1/11 ........................................ 1,500,000(e) 1,696,785
Chicago Waste Water Revenue (FGIC) (Prerefunded to
11/15/00), 6.75%, 11/15/20 ........................... 2,000,000(e) 2,231,360
Commonwealth Edison Pollution Control (MBIA), 7.25%,
6/1/11 . 3,000,000 3,323,190
Cook County General Obligation (AMBAC) (Prerefunded to
11/1/01), 6.75%, 11/1/18 ............................. 5,000,000(e) 5,633,050
Decatur, Zero-Coupon (AMBAC), 6.98%, 10/1/07 .......... 1,250,000(b) 611,588
Health Facilities Authority, Evangelical Hospital,
6.75%, 4/15/12-4/15/17 ............................... 3,000,000 3,117,710
Kane County Public Building Authority (MBIA), 6.88%,
12/1/10 .............................................. 1,000,000 1,062,890
Kendall, Kane, and Will Counties, Zero-Coupon (FGIC),
6.96%, 3/1/07 ........................................ 975,000(b) 493,545
Lake County Water and Sewer System (AMBAC) (Prerefunded
to 12/1/01), 6.75%, 12/1/08-12/1/08 .................. 4,215,000(e) 4,691,294
----------
28,699,709
----------

INDIANA (12.4%):
Boonville School Building Corporation, 6.90%,
7/1/09 ............................................... 2,000,000 2,163,960
Indiana University, Zero-Coupon (AMBAC), 7.07%,
8/1/07 ............................................... 3,180,000(b) 1,571,079
Lake Central Multi-District School Building Corporation
(Prerefunded to 7/15/01), 7.00%, 1/15/14-1/15/18 ..... 2,500,000(e) 2,830,000
Noblesville/Hamilton County (Prerefunded to 2/1/01),
7.00%, 2/1/13 ........................................ 1,000,000(e) 1,126,690
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

30
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)

<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
Port Commission, Cargill Inc. Project, 6.88%,
5/1/12 ............................................. $ 450,000(c) 481,743
Purdue University (AMBAC) (Prerefunded to 7/1/01),
7.00%, 7/1/14 ........................................ 3,000,000(e) 3,404,340
St. Joseph County Hospital Authority (MBIA), 7.00%,
12/1/12 .............................................. 3,000,000 3,235,380
----------
14,813,192
----------

IOWA (2.9%):
Mason City Hospital Facilities (FSA), 6.88%,
8/15/09 .............................................. 1,265,000 1,364,897
Polk County Health Facilities (MBIA), 7.10%,
11/1/09 .............................................. 1,895,000 2,081,923
----------
3,446,820
----------

KENTUCKY (0.8%):
Owensboro Electric Light and Power, Zero-Coupon
(AMBAC), 6.91%, 1/1/07 ............................... 1,775,000(b) 913,397
----------

LOUISIANA (2.3%):
New Orleans General Obligation, Zero-Coupon (AMBAC),
7.01%, 9/1/07 ........................................ 5,000,000(b) 2,475,750
Parrish of St. Martin, Cargill Inc. Project, 6.63%,
10/1/12 .............................................. 300,000(c) 310,974
----------
2,786,724
----------

MICHIGAN (0.9%):
State Housing Development Authority (FSA), 6.85%,
10/15/18 ............................................. 1,000,000 1,048,010
----------

MONTANA (2.7%):
State Board of Investment (MBIA), 6.88%, 6/1/20 ....... 3,000,000 3,227,250
----------

NEW HAMPSHIRE (0.8%):
New Hampshire Single Family Housing Authority, 5.85%,
7/1/10 . 1,000,000 986,260
----------

NEW JERSEY (1.8%):
State Educational Facilities Authority, 6.88%,
7/1/10 ............................................... 2,000,000 2,091,840
----------

NORTH DAKOTA (4.8%):
Bismark Hospital Revenue (AMBAC), 6.90%, 5/1/06 ....... 4,300,000 4,695,385
Grand Forks Health Care Authority (MBIA), 6.63%,
12/1/10 .............................................. 1,000,000 1,066,270
----------
5,761,655
----------

SOUTH CAROLINA (3.2%):
Lexington County Health Services (FSA), 6.75%,
10/1/18 .............................................. 3,600,000 3,823,776
----------
TEXAS (10.9%):
Harris County Health Facilities (FSA), 7.00%,
10/1/14 .............................................. 2,225,000 2,417,440
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

31
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)

<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
Houston Hotel Occupancy (FGIC), 7.00%, 7/1/15 ....... $ 5,095,000 5,704,566
Houston Water and Sewer, Zero-Coupon (AMBAC), 6.91%,
12/1/07 .............................................. 3,000,000(b) 1,464,150
Sabine River Authority, 8.25%, 10/1/20 ................ 3,200,000 3,498,624
----------
13,084,780
----------
WASHINGTON (16.0%):
Chelan County Public Utility District, 7.60%,
7/1/25 ............................................... 3,000,000 3,293,550
Clark County Public Utility District (FGIC), 6.50%,
1/1/11 ............................................... 2,000,000 2,095,320
King & Snohomish Counties Washington School District No
417 Northshore (FGIC), 6.63%, 12/1/12 ................ 900,000 951,966
Public Power Supply System (Prerefunded to 7/1/00),
7.38%, 7/1/12 ........................................ 4,525,000(e) 5,152,527
Public Power Supply System, Project #1, Series A,
7.00%, 7/1/11 ........................................ 700,000 744,968
Public Power Supply System, Project #3, Series A,
6.75%, 7/1/11 ........................................ 1,350,000 1,406,633
Public Power Supply System, Project #3, Series B
(Prerefunded to 1/1/00), 7.25%, 7/1/15 ............... 3,875,000(e) 4,344,766
Snohomish County Solid Waste Revenue (MBIA), 7.00%,
12/1/10 1,000,000 1,098,830
----------
19,088,560
----------
WEST VIRGINIA (4.1%):
School Building Authority (MBIA), 6.75%, 7/1/17 ....... 2,500,000 2,653,975
State Water Development Authority, 7.30%, 11/1/11 ..... 1,000,000 1,054,020
State Water Development Authority (Prerefunded to
11/1/01), 7.40%, 11/1/19 ............................. 1,000,000(e) 1,155,310
----------
4,863,305
----------
WISCONSIN (1.0%):
Neenah Industrial Development Revenue, 6.75%,
6/1/12 ............................................... 1,150,000 1,212,848
----------

Total Municipal Long-Term Securities
(cost: $105,974,357) ................................ 116,033,867
----------

MUNICIPAL SHORT-TERM SECURITIES (1.3%):
INDIANA (1.3%):
Hospital Equipment Financing Authority, 2.20%,
12/1/15 .............................................. 1,500,000(d) 1,500,000
----------

Total Municipal Short-Term Securities
(cost: $1,500,000) .................................. 1,500,000
----------

Total Investments in Securities
(cost: $107,474,357) (f) .......................... $ 117,533,867
----------
----------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

32
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

NOTES TO INVESTMENTS IN SECURITIES:

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION .... $ 10,059,510
GROSS UNREALIZED DEPRECIATION ...... 0
----------
NET UNREALIZED APPRECIATION .... $ 10,059,510
----------
----------
</TABLE>

33
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST III
JUNE 30, 1995

MUNICIPAL LONG-TERM SECURITIES (97.4%):
ALABAMA (0.6%):
Agricultural and Mechanical University Revenue (MBIA),
6.45%, 11/1/17 ..................................... $ 500,000 520,765
----------

COLORADO (1.3%):
Snomass Village Multi-Family Housing (FSA), 6.25%,
12/15/16 ............................................. 1,000,000 1,022,150
----------

DISTRICT OF COLUMBIA (1.2%):
Catholic University of America (Connie Lee), 6.30%,
10/1/13 .............................................. 1,000,000 1,017,240
----------

FLORIDA (0.6%):
Broward County School District, Zero-Coupon (MBIA),
6.55%, 2/15/08 ....................................... 1,000,000(b) 489,450
----------

ILLINOIS (20.7%):
Chicago Wastewater Revenue (FGIC), 6.35%, 1/1/22 ...... 1,000,000 1,016,020
Health Facility-Alexian Brothers Medical Center (MBIA),
6.38%, 1/1/15 ........................................ 1,125,000 1,143,416
Health Facility-Elmhurst Memorial Hospital (FGIC),
6.50%, 1/1/12 1,190,000 1,233,173
Health Facility-Lutheran General Health Systems (FSA),
6.13%, 4/1/12 ........................................ 1,000,000 1,009,010
Health Facility-Wyndemere Retirement Home (MBIA),
5.75%, 11/1/22 ....................................... 1,000,000 946,020
Henry Hospital District (AMBAC), 6.60%, 12/1/17 ....... 2,000,000 2,078,140
Lake County Housing Finance Corporation (FHA), 6.70%,
11/1/14 2,000,000 2,062,740
Rochelle Water and Sewer Revenue, 7.15%, 5/1/14 ....... 2,000,000 2,106,680
State General Obligation (CGIC), 6.25%, 10/1/12 ....... 3,370,000 3,438,344
State Sales Tax Revenue, 5.50%, 6/15/20 ............... 2,000,000 1,851,920
----------
16,885,463
----------

INDIANA (20.0%):
Crawfordsville School Building Corporation, 6.25%,
7/1/11 ............................................... 1,500,000 1,575,600
Freemont Middle School Building (AMBAC) (Prerefunded to
3/15/02), 6.75%, 3/15/13 ............................. 3,000,000(d) 3,353,670
Health Facilities-Community Hospital Project (MBIA),
6.40%, 5/1/12 ........................................ 5,000,000 5,135,100
Health Facilities-Methodist Hospital (AMBAC), 5.75%,
9/1/15 ............................................... 1,750,000 1,671,495
Indianapolis Public Improvement Bonds, 6.75%,
2/1/20 ............................................... 2,250,000 2,349,833
Lake County, Indiana Redevelopment Authority, 6.45%,
2/1/11 ............................................... 1,600,000 1,672,992
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

34
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)

<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
Patoka Lake Regional Water & Sewer District Series A
(AMBAC), 6.45%, 1/1/15 ............................. $ 500,000 516,845
----------
16,275,535
----------

IOWA (1.5%):
Cedar Rapids Hospital Facilities (FGIC), 6.13%,
8/15/13 .............................................. 1,200,000 1,209,336
----------

KANSAS (1.5%):
Kansas City Utility System Zero-coupon (AMBAC), 6.40%,
3/1/08 ............................................... 1,515,000(b) 739,653
Kansas City, Utility System Zero-coupon (AMBAC), 6.40%,
3/1/08 ............................................... 1,060,000(b) 506,797
----------
1,246,450
----------

MAINE (2.6%):
Water and Sewer Revenue, 6.60%, 11/1/15 ............... 2,000,000 2,117,260
----------

MICHIGAN (1.8%):
State Building Authority, 6.25%, 10/1/12 .............. 400,000 407,544
Municipal Bond Authority Revenue, 6.50%, 5/1/16 ....... 1,000,000 1,045,410
----------
1,452,954
----------

NEW MEXICO (1.3%):
La Cruces Health Facility-Evangelical Lutheran Project
(CGIC), 6.45%, 12/1/17 ............................... 1,000,000 1,030,500
----------

NORTH DAKOTA (3.3%):
Mercer County Pollution Control Revenue (AMBAC), 7.20%,
6/30/13 .............................................. 2,300,000 2,656,799
----------

RHODE ISLAND (1.5%):
State Health and Education Building Corporation (Connie
Lee), 6.38%, 4/1/12 .................................. 1,200,000 1,247,088
----------

SOUTH CAROLINA (2.0%):
Piedmont Municipal Power Agency (MBIA), 6.30%,
1/1/14 ............................................... 1,600,000 1,635,536
----------

SOUTH DAKOTA (7.5%):
Heartland Consumers Power District (FSA), 6.00%,
1/1/12-1/1/17 . 2,085,000 2,115,714
State Building Authority (AMBAC) (Prerefunded to
9/1/12), 6.63%, 9/1/12 ............................... 3,600,000(d) 3,982,176
----------
6,097,890
----------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

35
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)

WASHINGTON (7.5%):
Public Power Supply System, 6.25%-6.50%,
7/1/12-7/1/18 ........................................ 6,070,000 6,111,490
----------

WEST VIRGINIA (3.2%):
Clarksburg Water Revenue (Asset Guaranty), 6.25%,
9/1/14 ............................................... 2,620,000 2,605,249
----------

Total Municipal Long-Term Securities
(cost: $75,431,811) ................................. 79,376,378
----------

MUNICIPAL SHORT-TERM SECURITIES (1.0%):
INDIANA (1.0%):
Hospital Equipment Financing Authority, 2.20%,
12/1/15 .............................................. 850,000(c) 850,000
----------

Total Municipal Short-Term Securities
(cost: $850,000) .................................... 850,000
----------

Total Investments in Securities
(cost: $76,281,811) (e) ........................... $ 80,226,378
----------
----------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

36
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES (UNAUDITED)

NOTES TO INVESTMENTS IN SECURITIES:

(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) FOR ZERO-COUPON INVESTMENTS, THE INTEREST RATE SHOWN IS THE EFFECTIVE YIELD
ON THE DATE OF PURCHASE.
(C) VARIABLE RATE NOTE. INTEREST RATE VARIES TO REFLECT CURRENT MARKET
CONDITIONS; RATE SHOWN IS THE EFFECTIVE RATE ON JUNE 30, 1995.
(D) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
ARE CALLED AND MATURE AT THE CALL DATE INDICATED.
(E) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION .... $ 3,947,434
GROSS UNREALIZED DEPRECIATION ...... (2,867)
----------
NET UNREALIZED APPRECIATION .... $ 3,944,567
----------
----------
</TABLE>

37
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER UPDATE

ANNUAL MEETING RESULTS
An annual meeting of the funds' shareholders was held on August 17, 1995. Each
matter voted upon at the meeting, as well as the number of votes cast for,
against or withheld, and the number of abstentions with respect to such matter,
are set forth below.

1. The funds' preferred shareholders elected the following two directors:
American Municipal Term Trust Inc. (AXT)

<TABLE>
<CAPTION>
Shares Shares Withholding
Voted "For" Authority to Vote
------------ ------------------
<S> <C> <C>
David T. Bennett............................. 775 243
William H. Ellis............................. 775 243
</TABLE>

American Municipal Term Trust Inc. II (BXT)

<TABLE>
<CAPTION>
Shares Shares Withholding
Voted "For" Authority to Vote
------------ ------------------
<S> <C> <C>
David T. Bennett............................. 873 0
William H. Ellis............................. 873 0
</TABLE>

American Municipal Term Trust Inc. III (CXT)

<TABLE>
<CAPTION>
Shares Shares Withholding
Voted "For" Authority to Vote
------------ ------------------
<S> <C> <C>
David T. Bennett............................. 564 11
William H. Ellis............................. 564 11
</TABLE>

2. The funds' preferred and common shareholders, voting as a class, elected the
following six directors:

American Municipal Term Trust Inc. (AXT)

<TABLE>
<CAPTION>
Shares Shares Withholding
Voted "For" Authority to Vote
------------ ------------------
<S> <C> <C>
Jaye F. Dyer............................... 7,666,774 119,912
Karol D. Emmerich.......................... 7,666,784 119,902
Luella G. Goldberg......................... 7,666,784 119,902
George Latimer............................. 7,666,784 119,902
</TABLE>

38
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER UPDATE

American Municipal Term Trust Inc. II (BXT)

<TABLE>
<CAPTION>
Shares Shares Withholding
Voted "For" Authority to Vote
------------ ------------------
<S> <C> <C>
Jaye F. Dyer............................... 6,637,174 127,447
Karol D. Emmerich.......................... 6,638,306 126,315
Luella G. Goldberg......................... 6,638,306 126,315
George Latimer............................. 6,637,619 127,002
</TABLE>

American Municipal Term Trust Inc. III (CXT)

<TABLE>
<CAPTION>
Shares Shares Withholding
Voted "For" Authority to Vote
------------ ------------------
<S> <C> <C>
Jaye F. Dyer............................... 4,889,273 106,843
Karol D. Emmerich.......................... 4,889,273 106,843
Luella G. Goldberg......................... 4,889,273 106,843
George Latimer............................. 4,889,273 106,843
</TABLE>

3. The funds' preferred and common shareholders, voting as a class, ratified
the selection by a majority of the independent members of the funds' Board
of Directors of KPMG Peat Marwick LLP as the independent public accountants
for the fund for the fiscal year ending December 31, 1995. The following
votes were cast regarding this matter:

<TABLE>
<CAPTION>
Shares Shares
Voted "For" Voted "Against" Abstentions
------------ ---------------- -----------
<S> <C> <C> <C>
AXT................................. 7,648,127 31,525 108,034
BXT................................. 6,637,330 23,916 103,375
CXT................................. 4,867,911 33,110 95,095
</TABLE>

SHARE REPURCHASE PROGRAM
Your fund's board of directors has reapproved the share repurchase program,
which enables the 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 total shares outstanding.

WHAT EFFECT WILL THIS PROGRAM HAVE ON SHAREHOLDERS?
- - We do not expect any adverse impact on the adviser's ability to manage the
fund.
- - Because repurchases will be at a price below net asset value, remaining shares
outstanding may experience a slight increase in net asset value.

39
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER UPDATE

- - Although the effect of share repurchases on market price is less certain, the
board of directors believes the program may have a favorable effect on the
market price of fund shares.
- - We do not anticipate any material increase in the fund's expense ratio.

WHEN WILL SHARES BE REPURCHASED?
Share repurchases may be made from time to time and may be discontinued at any
time. Share repurchases are not mandatory when fund shares are trading at a
discount from net asset value; all repurchases will be at the discretion of the
fund's investment adviser. The board of directors will consider whether to
continue the share repurchase program on at least a semiannual basis and will
notify shareholders of its determination in the next semiannual or annual
report.

HOW WILL SHARES BE REPURCHASED?
We expect to finance the repurchase of shares by liquidating portfolio
securities or using current cash balances. We do not anticipate borrowing in
order to finance share repurchases.

EFFECTIVE DURATION
Effective duration estimates the interest rate risk of a security, in other
words how much the value of the security is expected to change with a given
change in interest rates. The longer a security's effective duration, the more
sensitive its price is to changes in interest rates. For example, if interest
rates were to increase by 1%, the market value of a bond with an effective
duration of five years would decrease by about 5%, with all other factors being
constant.

It is important to understand that, while a valuable measure, effective duration
is based upon certain assumptions and has several limitations. It is most
effective as a measure of interest rate risk when interest rate changes are
small, rapid and occur equally across all the different points of the yield
curve. In addition, effective duration is difficult to calculate precisely
especially in the case of a bond that is callable prior to maturity.

40
<PAGE>
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS

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, 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.
George Latimer, DIRECTOR, SPECIAL ACTIONS
OFFICE, OFFICE OF THE SECRETARY,
DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT

OFFICERS William H. Ellis, CHAIRMAN OF THE BOARD
Ronald R. Reuss, PRESIDENT
Douglas J. White, EXECUTIVE/SENIOR VICE
PRESIDENT
Robert H. Nelson, VICE PRESIDENT
Molly J. Destro, VICE PRESIDENT
David E. Rosedahl, SECRETARY
Charles N. Hayssen, TREASURER

INVESTMENT ADVISER Piper Capital Management Incorporated
222 SOUTH NINTH STREET
MINNEAPOLIS, MN 55402

CUSTODIAN AND Investors Fiduciary Trust Company
TRANSFER AGENT 127 WEST TENTH STREET, KANSAS CITY, MO
64105-1716

LEGAL COUNSEL Dorsey & Whitney P.L.L.P.
220 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402

<PAGE>

[logo]

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.

266-95 XXT-02

- ---------------
Bulk Rate
U.S. Postage
PAID
Permit No. 3008
Mpls., MN
- ---------------