<PAGE>
1999
ANNUAL REPORT
AMERICAN MUNICIPAL
TERM TRUSTS
AXT
BXT
CXT
[LOGO]First American-Registered Trademark-
Asset Management
<PAGE>
[LOGO]First American-Registered Trademark-
Asset Management
- -------------------------------------------------------------------------------
Contents
2 Fund Overview
7 Financial Statements and Notes
Investments in Securities
21 AXT
27 BXT
32 CXT
37 Independent Auditors' Report
38 Federal Income Tax Information
40 Shareholder Update
AMERICAN MUNICIPAL TERM TRUSTS
PRIMARY INVESTMENTS
High-quality municipal obligations including municipal zero-coupon securities.
FUND OBJECTIVE
American Municipal Term Trust (AXT), American Municipal Term Trust II (BXT), and
American Municipal Term Trust III (CXT) are diversified, closed-end management
investment companies. The investment 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.
Each fund's income may be subject to state or local tax and the federal
alternative minimum tax. Investors should consult their tax advisors. As with
other investment companies, there can be no assurance that any fund will achieve
its objective.
- -----------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- -----------------------------------------------------
<PAGE>
AVERAGE ANNUALIZED TOTAL RETURNS
- -------------------------------------------------------------------------------
Based on net asset value for the periods ended December 31, 1999
[GRAPH]
<TABLE>
<CAPTION>
One Year Five Year Since Inception
<S> <C> <C> <C>
AMERICAN MUNICIPAL TERM TRUST
(AXT, inception 3/27/1991) 0.76% 6.75% 7.86%
AMERICAN MUNICIPAL TERM TRUST II
(BXT, inception 9/26/1991) -0.13% 7.09% 7.74%
AMERICAN MUNICIPAL TERM TRUST III
(CXT, inception 11/27/1992) -1.23% 8.62% 7.49%
</TABLE>
All total returns are through December 31, 1999, and reflect the reinvestment of
distributions but not sales charges. Net asset value (NAV)-based performance is
used to measure investment management results. As noted in earlier shareholder
reports, we no longer compare the funds' NAV performance to a market benchmark.
This is because our primary goal is to meet the funds' investment objectives of
providing high current income exempt from regular federal income tax and
returning $10 per share to investors at the funds' termination dates.
Average annualized total returns based on the change in market price for the
one-year, five-year, and since-inception periods ended December 31, 1999, were
- -5.17%, 7.12%, and 6.72% for AXT, -6.49%, 7.40%, and 6.34% for BXT, and -6.81%,
9.24%, and 5.71% for CXT. These returns assume reinvestment of all distributions
and reflect sales charges on those distributions described in the funds'
dividend reinvestment plan, but not on initial purchases.
PLEASE REMEMBER, YOU COULD LOSE MONEY WITH THESE INVESTMENTS. NEITHER SAFETY OF
PRINCIPAL NOR STABILITY OF INCOME IS GUARANTEED. 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. Closed-end funds, such as these funds, often
trade at discounts to net asset value. Therefore, you may be unable to realize
the full net asset value of your shares when you sell.
1 1999 ANNUAL REPORT AMERICAN MUNICIPAL TERM TRUSTS
<PAGE>
FUND OVERVIEW
- -------------------------------------------------------------------------------
FUND MANAGEMENT
TEAM LEADER
DOUG WHITE, CFA,
is responsible for the management of the American Municipal Term Trusts. He has
17 years of financial experience.
FEBRUARY 15, 2000
WE ARE PLEASED THAT THE AMERICAN MUNICIPAL TERM TRUSTS (AXT, BXT, AND CXT)
REMAIN ON TARGET TO MEET THEIR INVESTMENT OBJECTIVES OF PROVIDING HIGH
TAX-EXEMPT INCOME AND RETURNING $10 PER SHARE TO INVESTORS ON OR SHORTLY BEFORE
THEIR TERMINATION DATES. For the year ended December 31, 1999, the funds
generally earned more than their monthly common and preferred stock dividends
and added to their dividend reserves. Since the funds' inceptions, AXT, BXT, and
CXT have maintained monthly common stock distributions of 5.42, 5.17, and 4.75
cents per share, respectively. In addition, the funds' net asset values remain
above the $10 per share objective. The net asset values for AXT, BXT, and CXT as
of December 31, 1999, were $10.72, $10.82, and $10.75, respectively.
AXT'S AND BXT'S DIVIDEND RESERVES REACHED A LEVEL WHERE THE FUNDS COULD NOT
CONTINUE TO ACCUMULATE ADDITIONAL AMOUNTS. As a result, AXT and BXT paid out
special dividends in 1999.
1999 WAS ONE OF THE WORST YEARS ON RECORD FOR THE FIXED-INCOME MARKETS. Interest
rates rose sharply throughout the year, producing negative total returns in the
broad market indexes for the first time since 1994. The decline was triggered
largely by fear of accelerating inflation. The fact that broad measures of
inflation remain benign has done little to assuage the market.
AS A RESULT OF HIGHER INTEREST RATES, ISSUANCE OF MUNICIPAL REFUNDING BONDS
SLOWED SIGNIFICANTLY FROM 1998. This contributed to overall issuance being down
from 1998. The funds performed relatively well given
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
BONDS MATURING LESS THAN A YEAR BEYOND THE FUNDS' TERMINATION DATES
- -------------------------------------------------------------------------------
AXT BXT CXT
Inception Inception Inception
3/27/1991 9/26/1991 11/27/1992
<S> <C> <C> <C>
At the Fund's Inception 0% 0% 0%
- -------------------------------------------------------------------------------
As of December 31, 1999 76% 77% 45%
- -------------------------------------------------------------------------------
</TABLE>
2 1999 ANNUAL REPORT AMERICAN MUNICIPAL TERM TRUSTS
<PAGE>
FUND OVERVIEW CONTINUED
- -------------------------------------------------------------------------------
their comparatively short durations, as evidenced by their net asset values
remaining above $10.
OUR STRATEGY REMAINS IN PLACE OF SELLING LONGER MATURITY BONDS IN FAVOR OF THOSE
CLOSER TO THE FUNDS' TERMINATION DATES. As shown in the table on page 2, the
percentage of bonds with maturity or refund dates less than a year beyond the
funds' termination dates continues to increase.
WE EXPECT THAT THE FUNDS' NET ASSET VALUES WILL CONTINUE TO DECLINE AS THE FUNDS
NEAR THEIR TERMINATION DATES. Several factors contribute to this decline. A
number of bonds currently have market values in excess of their maturity or
redemption values. As the maturity and/or refunding dates of these bonds
approach, their market prices will converge toward prices that are at or near
their maturity or refunding prices. This is especially true of AXT, which
terminates in April 2001.
IN ADDITION, AS THE FUNDS APPROACH TERMINATION AND AS OPPORTUNITIES ARISE, WE
MAY CONTINUE TO SELL LONGER MATURITY BONDS IN FAVOR OF BONDS WITH SHORTER
MATURITIES, AND LOWER COUPONS, THAT COME DUE CLOSER TO THE FUNDS' TERMINATION
DATES. Any gains realized as a result of these sales will be distributed to
shareholders, reducing net asset value. If the shorter-maturity bonds pay
insufficient income to maintain the
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
DISTRIBUTION HISTORY SINCE INCEPTION
- -------------------------------------------------------------------------------------------------
AXT BXT CXT
Inception Inception Inception
3/27/1991 9/26/1991 11/27/1992
<S> <C> <C> <C>
Total Monthly Income Distributions Through 12/31/1999
- -------------------------------------------------------------------------------------------------
Common Shareholders $5.77 $5.22 $4.04
- -------------------------------------------------------------------------------------------------
Preferred Shareholders (On a Common Share Basis) $1.43 $1.34 $1.12
- -------------------------------------------------------------------------------------------------
Total Capital Gains Distributions to Common
Shareholders Through 12/31/1999 $0.19 $0.13 $0.13
- -------------------------------------------------------------------------------------------------
</TABLE>
3 1999 ANNUAL REPORT AMERICAN MUNICIPAL TERM TRUSTS
<PAGE>
FUND OVERVIEW CONTINUED
- -------------------------------------------------------------------------------
funds' current dividends, the funds' dividend reserves may be used to supplement
common and/or preferred dividends. See the net asset value summary chart for
each fund's current accumulated realized gains, unrealized appreciation and
current dividend reserve.
As AXT nears its termination date, we are considering other risk reduction
strategies to help achieve its objective of returning $10 per share. One such
strategy for AXT may be to reduce the amount of preferred stock outstanding as
AXT nears its termination date. Such a strategy would reduce AXT's total net
assets and may reduce income to common shareholders.
SHAREHOLDERS ALSO SHOULD REMEMBER THAT THE FUNDS ARE ALWAYS SUBJECT TO INTEREST
RATE RISK AND CREDIT RISK, WHICH CAN HAVE AN IMPACT ON NET ASSET VALUE. However,
we are optimistic about achieving the funds' objectives and do not anticipate
events that would cause us to change the funds' investment strategies as they
move toward termination.
THANK YOU FOR YOUR INVESTMENT IN THE AMERICAN MUNICIPAL TERM TRUSTS.
We remain committed to providing you with quality service and look forward to
helping you achieve your investment goals.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE SUMMARY OF COMMON SHARES
- ----------------------------------------------------------------------------------------------
AXT BXT CXT
Inception Inception Inception
3/27/1991 9/26/1991 11/27/1992
<S> <C> <C> <C>
Initial Offering Price $10.00 $10.00 $10.00
- ----------------------------------------------------------------------------------------------
Initial Offering and Underwriting Expenses
(Common and Preferred Stock) - $0.67 - $0.66 - $0.67
- ----------------------------------------------------------------------------------------------
Accumulated Realized Gains or Losses at 12/31/1999 $0.00 $0.00 $0.00
- ----------------------------------------------------------------------------------------------
SUBTOTAL $9.33 $9.34 $9.33
- ----------------------------------------------------------------------------------------------
Dividend Reserve
(Undistributed Net Investment Income) at 12/31/1999 + $0.79 + $0.79 + $0.64
- ----------------------------------------------------------------------------------------------
Unrealized Appreciation on Investments at 12/31/1999 + $0.60 + $0.69 + $0.78
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ON 12/31/1999 $10.72 $10.82 $10.75
- ----------------------------------------------------------------------------------------------
</TABLE>
4 1999 ANNUAL REPORT AMERICAN MUNICIPAL TERM TRUSTS
<PAGE>
FUND OVERVIEW CONTINUED
- -------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
As a percentage of total assets on December 31, 1999
[CHART]
<TABLE>
AMERICAN MUNICIPAL TERM TRUST
<S> <C>
Utility Revenue 27%
Transportation Revenue 1%
Education Revenue 6%
General Obligations 23%
Municipal Bond Bank 2%
IDR Pollution Control Revenue 10%
Health Care Revenue 21%
Other Assets 2%
Tax Revenue 8%
[CHART]
AMERICAN MUNICIPAL TERM TRUST II
Education Revenue 13%
Industrial Development Revenue 1%
Health Care Revenue 23%
Utility Revenue 30%
Housing Revenue 2%
Miscellaneous Revenue 3%
Tax Revenue 6%
General Obligations 19%
Transportation Revenue 1%
Other assets 2%
[CHART]
AMERICAN MUNICIPAL TERM TRUST III
Health Care Revenue 24%
Other Assets 2%
Housing Revenue 5%
Utility Revenue 34%
Building Revenue 3%
Municipal Bond Bank 3%
Education Revenue 4%
General Obligations 19%
Economic Development Revenue 2%
IDR Pollution Control 4%
</TABLE>
5 1999 ANNUAL REPORT AMERICAN MUNICIPAL TERM TRUSTS
<PAGE>
FUND OVERVIEW CONTINUED
- -------------------------------------------------------------------------------
PREFERRED STOCK
- -------------------------------------------------------------------------------
The preferred stock issued by AXT, BXT, and CXT pays dividends at a specified
rate and has preference over common stock in the payments of dividends and the
liquidation of assets. Rates paid on preferred stock 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 long-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 in the leveraging of
common stock, which increases the volatility of both the net asset value of the
fund and the market value of shares of common stock.
TRIBUTE TO DAVID T. BENNETT
As friends and colleagues, the Board of Directors of the First American Funds
wishes to recognize David T. Bennett for the significant and lasting
contributions he made as a Director of the First American Funds. His services
were cut short by his recent and untimely death following a 13 year battle with
cancer.
David was an attorney with the law firm of Gray, Plant, Mooty, Mooty & Bennett
since graduating from law school in 1967. David was also a successful
entrepreneur, owning controlling interests in Highland Manufacturing, Kiefer
Built, and USL Products. He also devoted countless hours to numerous civic and
charitable groups, including the Minneapolis Institute of Arts, the Guthrie
Theater, the Nature Conservancy, and Dunwoody Institute.
His association with the funds began in 1987, when he joined the Board of
Directors of the Piper Jaffray Funds. The First American Funds have been the
beneficiary of David's experience, wisdom, and insight during challenging
periods of change and growth. His knowledge of the industry and mutual fund
board experience were invaluable during the critical transition period
integrating the Piper and First American Fund Families. David's abilities were
particularly appreciated by the Audit, Pricing, and Board Development Committees
on which he served.
The Directors with whom he served value greatly their time spent together.
We gratefully and sincerely recognize David's contributions and extend our
sincere condolences to David's family and friends.
6 1999 ANNUAL REPORT AMERICAN MUNICIPAL TERM TRUSTS
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES December 31, 1999
................................................................................
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
TERM TRUST TERM TRUST II TERM TRUST III
------------- ------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments in securities at market value* (note 2) ....... $131,057,687 $117,121,882 $82,592,692
Cash in bank on demand deposit ............................ 303 878 98,177
Accrued interest receivable ............................... 2,608,526 2,065,005 1,186,867
------------ ------------ -----------
Total assets ............................................ 133,666,516 119,187,765 83,877,736
------------ ------------ -----------
LIABILITIES:
Common stock dividends payable (note 2) ................... 458,261 380,296 251,750
Preferred stock dividends payable (note 3) ................ 13,740 23,315 10,931
Payable for investment securities purchased on a when-issued
basis (note 2) .......................................... -- 2,094,602 --
Accrued investment management fee ......................... 28,366 24,865 17,828
Accrued administrative fee ................................ 17,020 14,919 10,697
Other accrued expenses .................................... 42,466 24,372 18,806
------------ ------------ -----------
Total liabilities ....................................... 559,853 2,562,369 310,012
------------ ------------ -----------
Net assets applicable to outstanding capital stock ...... $133,106,663 $116,625,396 $83,567,724
============ ============ ===========
COMPOSITION OF NET ASSETS:
Capital stock and additional paid-in capital (common and
preferred stock) ........................................ $121,433,111 $105,777,741 $76,083,608
Undistributed net investment income ....................... 6,701,323 5,738,849 3,375,363
Unrealized appreciation of investments .................... 4,972,229 5,108,806 4,108,753
------------ ------------ -----------
Total - representing net assets applicable to outstanding
capital stock .......................................... $133,106,663 $116,625,396 $83,567,724
============ ============ ===========
* Investments in securities at identified cost ............. $126,085,458 $112,013,076 $78,483,939
============ ============ ===========
NET ASSET VALUE AND MARKET PRICE OF COMMON STOCK:
Net assets applicable to common stock ...................... $ 90,606,663 $ 79,625,396 $56,967,724
Shares of common stock outstanding (authorized 200 million
shares for each fund of $0.01 par value) ................. 8,455,000 7,355,820 5,300,000
Net asset value ............................................ $ 10.72 $ 10.82 $ 10.75
Market price ............................................... $ 10.25 $ 10.13 $ 9.94
LIQUIDATION PREFERENCE OF PREFERRED STOCK:
Net assets applicable to preferred stock (note 3) .......... $ 42,500,000 $ 37,000,000 $26,600,000
Shares of preferred stock outstanding (authorized 1 million
shares for each fund) .................................... 1,700 1,480 1,064
Liquidation preference per share ........................... $ 25,000 $ 25,000 $ 25,000
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
1999 Annual Report 7 American Municipal Term Trusts
<PAGE>
FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS For the Year Ended December 31, 1999
................................................................................
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
TERM TRUST TERM TRUST II TERM TRUST III
------------ ------------- --------------
<S> <C> <C> <C>
INCOME:
Interest ................................................... $ 8,488,244 $ 7,300,086 $ 4,978,889
----------- ----------- -----------
EXPENSES (NOTE 5):
Investment management fee .................................. 340,791 299,169 214,492
Administrative fee ......................................... 204,475 179,502 128,695
Remarketing agent fee ...................................... 106,252 92,498 66,499
Custodian and accounting fees .............................. 89,970 76,858 60,862
Transfer agent fees ........................................ 3,800 3,201 2,402
Reports to shareholders .................................... 26,905 26,905 25,905
Directors' fees ............................................ 3,000 3,000 3,000
Audit and legal fees ....................................... 56,943 56,943 56,943
Other expenses ............................................. 62,713 60,151 49,982
----------- ----------- -----------
Total expenses ........................................... 894,849 798,227 608,780
Less expenses paid indirectly .......................... (6,164) (6,487) (5,286)
----------- ----------- -----------
Total net expenses ....................................... 888,685 791,740 603,494
----------- ----------- -----------
Net investment income .................................... 7,599,559 6,508,346 4,375,395
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain on investments (note 4) .................. 26,322 4,500 21,203
Unrealized depreciation of investments ..................... (5,538,169) (5,324,104) (4,285,205)
----------- ----------- -----------
Net (loss) on investments ................................ (5,511,847) (5,319,604) (4,264,002)
----------- ----------- -----------
Net increase in net assets resulting
from operations ...................................... $ 2,087,712 $ 1,188,742 $ 111,393
=========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
1999 Annual Report 8 American Municipal Term Trusts
<PAGE>
FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
................................................................................
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL TERM
TRUST
--------------------------
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 7,599,559 $ 7,588,515
Net realized gain on investments ........................... 26,322 889,510
Unrealized depreciation of investments ..................... (5,538,169) (1,829,143)
------------ ------------
Net increase in net assets resulting from operations ..... 2,087,712 6,648,882
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................... (6,200,897) (5,499,132)
Preferred stock dividends ................................ (1,424,980) (1,385,872)
From net realized gains:
Common stock dividends ................................... (21,983) (697,538)
Preferred stock dividends ................................ (4,930) (195,761)
------------ ------------
Total distributions ...................................... (7,652,790) (7,778,303)
------------ ------------
Total decrease in net assets ............................. (5,565,078) (1,129,421)
Net assets at beginning of year ............................ 138,671,741 139,801,162
------------ ------------
Net assets at end of year .................................. $133,106,663 $138,671,741
============ ============
Undistributed net investment income ........................ $ 6,701,323 $ 6,731,423
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
1999 Annual Report 9 American Municipal Term Trusts
<PAGE>
FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
................................................................................
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL TERM
TRUST II
--------------------------
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 6,508,346 $ 6,513,399
Net realized gain on investments ........................... 4,500 353,801
Unrealized depreciation of investments ..................... (5,324,104) (1,013,370)
------------ ------------
Net increase in net assets resulting from operations ..... 1,188,742 5,853,830
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................... (5,277,801) (4,563,551)
Preferred stock dividends ................................ (1,272,842) (1,291,977)
From net realized gains:
Common stock dividends ................................... (3,678) (279,521)
Preferred stock dividends ................................ (870) (82,152)
------------ ------------
Total distributions ...................................... (6,555,191) (6,217,201)
------------ ------------
Total decrease in net assets ............................. (5,366,449) (363,371)
Net assets at beginning of year ............................ 121,991,845 122,355,216
------------ ------------
Net assets at end of year .................................. $116,625,396 $121,991,845
============ ============
Undistributed net investment income ........................ $ 5,738,849 $ 5,784,744
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
1999 Annual Report 10 American Municipal Term Trusts
<PAGE>
FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
................................................................................
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL TERM
TRUST III
--------------------------
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 4,375,395 $ 4,317,377
Net realized gain on investments ........................... 21,203 414,745
Unrealized depreciation of investments ..................... (4,285,205) (42,338)
----------- -----------
Net increase in net assets resulting from operations ..... 111,393 4,689,784
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................... (3,021,000) (3,021,000)
Preferred stock dividends ................................ (833,052) (875,748)
From net realized gains:
Common stock dividends ................................... (17,490) (323,300)
Preferred stock dividends ................................ (5,850) (102,809)
----------- -----------
Total distributions ...................................... (3,877,392) (4,322,857)
----------- -----------
Total increase (decrease) in net assets .................. (3,765,999) 366,927
Net assets at beginning of year ............................ 87,333,723 86,966,796
----------- -----------
Net assets at end of year .................................. $83,567,724 $87,333,723
=========== ===========
Undistributed net investment income ........................ $ 3,375,363 $ 2,855,345
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
1999 Annual Report 11 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(1) ORGANIZATION
............................
American Municipal Term Trust Inc. (AXT), American Municipal
Term Trust Inc. II (BXT) and American Municipal Term Trust Inc.
III (CXT) (the funds) are registered under the Investment
Company Act of 1940 (as amended) as diversified, closed-end
management investment companies. AXT, BXT and CXT 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. The funds invest
primarily in investment grade municipal obligations including
municipal zero-coupon securities. Fund shares are listed on the
New York Stock Exchange under the symbols AXT, BXT and CXT,
respectively.
(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
............................
INVESTMENTS IN SECURITIES
Portfolio securities for which market quotations are readily
available are valued at current market value. If market
quotations or valuations are not readily available, or if such
quotations or valuations are believed to be inaccurate,
unreliable or not reflective of market value, portfolio
securities are valued according to procedures adopted by the
funds' board of directors in good faith at "fair value", that
is, a price that the fund might reasonably expect to receive for
the security or other asset upon its current sale.
The current market value of certain fixed income securities is
provided by an independent pricing service. Fixed income
securities for which prices are not available from an
independent pricing service but where an active market exists
are valued using market quotations obtained from one or more
dealers that make markets in the securities or from a
widely-used quotation system. 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 securities
are purchased or sold. Realized gains and losses are calculated
- --------------------------------------------------------------------------------
1999 Annual Report 12 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
on the identified-cost basis. Interest income, including
amortization of bond discount and premium, is recorded on an
accrual basis.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities that have been purchased by
the funds on a when-issued or forward-commitment 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 fluctuation and may increase or decrease in value prior
to their delivery. The funds segregate, 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' net asset values if the funds make such purchases while
remaining substantially fully invested. As of December 31, 1999,
American Municipal Term Trust Inc. II had entered into
outstanding when-issued or forward-commitments of $2,094,602.
FEDERAL TAXES
Each fund intends 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. The funds also intend to
distribute 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 and losses may
differ for financial statement and tax purposes primarily
because of market discount amortization. The character of
distributions made during the year from net investment income or
net realized gains may differ from its 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 or losses were recorded by the funds.
- --------------------------------------------------------------------------------
1999 Annual Report 13 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
On the statements of assets and liabilities, as a result of
permanent book-to-tax differences, reclassification adjustments
have been made as follows:
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
TERM TRUST TERM TRUST II TERM TRUST III
---------- ------------- --------------
<S> <C> <C> <C>
Decrease undistributed net
investment income .................... $3,782 $3,598 $1,325
Decrease accumulated net realized loss
on investments ....................... $ 591 $ 48 $2,137
Increase (Decrease) additional paid-
in-capital ........................... $3,191 $3,550 $ (812)
</TABLE>
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income are made monthly for
common shareholders and weekly for preferred shareholders.
Common stock distributions are recorded as of the close of
business on the ex-dividend date and preferred stock dividends
are accrued daily. Per share common stock distributions of
$0.0542, $0.0518 and $0.0475, for American Municipal Term Trust
Inc., American Municipal Term Trust Inc. II and American
Municipal Term Trust III, respectively, were declared in
December and are payable in January. Net realized gains
distributions, if any, will be made at least annually.
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.
REPURCHASE AGREEMENTS
For repurchase agreements entered into with certain broker-
dealers, the funds along with other affiliated registered
investment companies, may transfer uninvested cash balances to a
joint trading account, the daily aggregate of which is invested
in repurchase agreements secured by U.S. government or agency
obligations. Securities pledged as collateral for all individual
and joint repurchase agreements are held by the fund's custodian
bank until maturity of the repurchase agreement. Provisions for
all
- --------------------------------------------------------------------------------
1999 Annual Report 14 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
agreements ensure that the daily market value of the collateral
is in excess of the repurchase amount, including accrued
interest, to protect the funds in the event of a default.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
in the financial statements. Actual results could differ from
these estimates.
(3) REMARKETED
PREFERRED
STOCK
............................
American Municipal Term Trust Inc., American Municipal Term
Trust Inc. II, and American Municipal Term Trust Inc. III have
issued and as of December 31, 1999, have outstanding 1,700
shares, 1,480 shares, and 1,064 shares, respectively, of
remarketed preferred stock (RP) with a liquidation preference of
$25,000 per share for each fund. The dividend rate on the RP is
adjusted every seven days as determined by the remarketing
agent. On December 31, 1999, the dividend rates were 5.90%,
5.75% and 3.00% for American Municipal Term Trust Inc., American
Municipal Term Trust Inc. II, and American Municipal Term Trust
Inc. III, respectively.
RP is a registered trademark of Merrill Lynch & Company (Merrill
Lynch).
(4) INVESTMENT
SECURITY
TRANSACTIONS
............................
Cost of purchases and proceeds from sales of securities, other
than temporary investments in short-term securities, for the
year ended December 31, 1999, were as follows:
- --------------------------------------------------------------------------------
1999 Annual Report 15 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
TERM TRUST TERM TRUST II TERM TRUST III
---------- ------------- --------------
<S> <C> <C> <C>
Purchases .............................. $4,807,003 $3,967,987 $1,062,426
Proceeds from sales .................... $9,297,962 $2,457,995 $1,111,055
</TABLE>
(5) EXPENSES
............................
INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES
The funds entered into the following agreements with U.S. Bank
National Association (U.S. Bank) acting through its division,
First American Asset Management (the advisor and administrator):
The investment advisory agreement provides the advisor with a
monthly investment management fee in an amount equal to an
annualized rate of 0.25% 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 advisor provides investment advice and, in general,
conducts 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 regulatory reporting and record-keeping services
for the funds.
REMARKETING AGENT FEE
The funds have entered into a remarketing agreement with Merrill
Lynch (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 funds' average
amount of RP outstanding. For its fee, the remarketing agent
will remarket shares of RP tendered to it, on behalf of
shareholders thereof, and will determine the applicable dividend
rate for each seven-day dividend period.
- --------------------------------------------------------------------------------
1999 Annual Report 16 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
OTHER FEES AND EXPENSES
In addition to investment management, administrative and
remarketing agent fees, 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; taxes and
other miscellaneous expenses. During the year ended
December 31, 1999, American Municipal Term Trust Inc., American
Municipal Term Trust Inc. II and American Municipal Term Trust
Inc. III, paid $5,068, $4,443 and $3,183 respectively for
custody services to U.S. Bank.
Expenses paid indirectly represent a reduction of custodian fees
for earnings on miscellaneous cash balances maintained by the
funds.
- --------------------------------------------------------------------------------
1999 Annual Report 17 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
............................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1999 1998 (g) 1997 1996 1995
------ -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, common stock, beginning
of period ................................... $11.37 $11.51 $11.52 $11.83 $10.52
------ ------ ------ ------ ------
Operations:
Net investment income ....................... 0.90 0.90 0.91 0.93 0.94
Net realized and unrealized gains (losses)
on investments ............................ (0.65) (0.12) (0.02) (0.35) 1.22
------ ------ ------ ------ ------
Total from operations ..................... 0.25 0.78 0.89 0.58 2.16
------ ------ ------ ------ ------
Distributions to shareholders:
Paid to common shareholders ................. (0.73) (0.65) (0.65) (0.65) (0.65)
Paid to preferred shareholders .............. (0.17) (0.16) (0.17) (0.17) (0.20)
From net realized gains
Paid to common shareholders ................. -- (0.08) (0.06) (0.05) --
Paid to preferred shareholders .............. -- (0.03) (0.02) (0.02) --
------ ------ ------ ------ ------
Total distributions to shareholders ....... (0.90) (0.92) (0.90) (0.89) (0.85)
------ ------ ------ ------ ------
Net asset value, common stock, end
of period ................................... $10.72 $11.37 $11.51 $11.52 $11.83
====== ====== ====== ====== ======
Market value, common stock, end of period ..... $10.25 $11.56 $11.50 $11.25 $11.00
====== ====== ====== ====== ======
SELECTED INFORMATION
Total return, common stock, net asset
value (a) ................................... 0.76% 5.37% 6.22% 3.47% 18.93%
Total return, common stock, market
value (b) ................................... (5.17)% 7.11% 8.89% 9.06% 16.91%
Net assets at end of period (in millions) ..... $ 133 $ 139 $ 140 $ 140 $ 143
Ratio of expenses to average weekly net assets
applicable to common stock (c) .............. 0.95% 0.90% 0.90% 0.91% 0.88%
Ratio of net investment income to average
weekly net assets applicable to common
stock (d)(e) ................................ 6.58% 6.40% 6.39% 6.57% 6.53%
Portfolio turnover rate (excluding
short-term securities) ...................... 4% 8% 4% 9% 1%
Remarketed preferred stock outstanding end of
period (in millions) ........................ $ 43 $ 43 $ 43 $ 43 $ 43
Asset coverage per share (in
thousands) (f) .............................. $ 78 $ 82 $ 82 $ 82 $ 83
Liquidation preference and market value per
share (in thousands) ........................ $ 25 $ 25 $ 25 $ 25 $ 25
</TABLE>
<TABLE>
<S> <C>
(a) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE AND
DOES NOT REFLECT A SALES CHARGE.
(b) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT ACTUAL PRICES
PURSUANT TO THE FUND'S DIVIDEND REINVESTMENT PLAN.
(c) RATIO OF EXPENSES TO TOTAL AVERAGE WEEKLY NET ASSETS IS
0.66%, 0.63%, 0.63%, 0.64% AND 0.61% FOR FISCAL YEARS 1999,
1998, 1997, 1996 AND 1995, RESPECTIVELY. DIVIDEND PAYMENTS
TO PREFERRED SHAREHOLDERS ARE NOT CONSIDERED AN EXPENSE.
(d) RATIO REFLECTS TOTAL NET INVESTMENT INCOME LESS DIVIDENDS
PAID TO PREFERRED SHAREHOLDERS FROM NET INVESTMENT INCOME
DIVIDED BY NET ASSETS APPLICABLE TO COMMON STOCK.
(e) RATIO OF NET INVESTMENT INCOME TO TOTAL AVERAGE WEEKLY NET
ASSETS IS 5.57%, 5.43%, 5.49%, 5.59% AND 5.72% FOR FISCAL
YEARS 1999, 1998, 1997, 1996 AND 1995, RESPECTIVELY.
(f) REPRESENTS TOTAL NET ASSETS DIVIDED BY PREFERRED STOCK
OUTSTANDING.
(g) EFFECTIVE AUGUST 10, 1998, THE ADVISOR WAS CHANGED FROM
PIPER CAPITAL MANAGEMENT INCORPORATED TO U.S. BANK.
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 18 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
............................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST II
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1999 1998 (g) 1997 1996 1995
------ -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, common stock, beginning
of period ................................... $11.55 $11.60 $11.43 $11.71 $10.27
------ ------ ------ ------ ------
Operations:
Net investment income ....................... 0.88 0.89 0.89 0.90 0.90
Net realized and unrealized gains (losses)
on investments ............................ (0.72) (0.09) 0.14 (0.35) 1.37
------ ------ ------ ------ ------
Total from operations ..................... 0.16 0.80 1.03 0.55 2.27
------ ------ ------ ------ ------
Distributions to shareholders:
Paid to common shareholders ................. (0.72) (0.62) (0.62) (0.62) (0.62)
Paid to preferred shareholders .............. (0.17) (0.18) (0.17) (0.17) (0.20)
From net realized gains
Paid to common shareholders ................. -- (0.04) (0.05) (0.03) (0.01)
Paid to preferred shareholders .............. -- (0.01) (0.02) (0.01) --
------ ------ ------ ------ ------
Total distributions to shareholders ....... (0.89) (0.85) (0.86) (0.83) (0.83)
------ ------ ------ ------ ------
Net asset value, common stock, end
of period ................................... $10.82 $11.55 $11.60 $11.43 $11.71
====== ====== ====== ====== ======
Market value, common stock, end of period ..... $10.13 $11.56 $11.38 $10.75 $10.63
====== ====== ====== ====== ======
SELECTED INFORMATION
Total return, common stock, net asset
value (a) ................................... (0.13)% 5.36% 7.57% 3.33% 20.48%
Total return, common stock, market
value (b) ................................... (6.49)% 7.65% 12.46% 7.66% 17.28%
Net assets at end of period (in millions) ..... $ 117 $ 122 $ 122 $ 121 $ 123
Ratio of expenses to average weekly net assets
applicable to common stock (c) .............. 0.97% 0.89% 0.91% 0.92% 0.90%
Ratio of net investment income to average
weekly net assets applicable to common
stock (d)(e) ................................ 6.33% 6.12% 6.21% 6.41% 6.35%
Portfolio turnover rate (excluding
short-term securities) ...................... 2% 2% 6% 6% 3%
Remarketed preferred stock outstanding end of
period (in millions) ........................ $ 37 $ 37 $ 37 $ 37 $ 37
Asset coverage per share (in
thousands) (f) .............................. $ 79 $ 82 $ 83 $ 82 $ 83
Liquidation preference and market value per
share (in thousands) ........................ $ 25 $ 25 $ 25 $ 25 $ 25
</TABLE>
<TABLE>
<S> <C>
(a) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE AND
DOES NOT REFLECT A SALES CHARGE.
(b) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT ACTUAL PRICES
PURSUANT TO THE FUND'S DIVIDEND REINVESTMENT PLAN.
(c) RATIO OF EXPENSES TO TOTAL AVERAGE WEEKLY NET ASSETS IS
0.67%, 0.62%, 0.64%, 0.64% AND 0.62% FOR FISCAL YEARS 1999,
1998, 1997, 1996 AND 1995, RESPECTIVELY. DIVIDEND PAYMENTS
TO PREFERRED SHAREHOLDERS ARE NOT CONSIDERED AN EXPENSE.
(d) RATIO REFLECTS TOTAL NET INVESTMENT INCOME LESS DIVIDENDS
PAID TO PREFERRED SHAREHOLDERS FROM NET INVESTMENT INCOME
DIVIDED BY NET ASSETS APPLICABLE TO COMMON STOCK.
(e) RATIO OF NET INVESTMENT INCOME TO TOTAL AVERAGE WEEKLY NET
ASSETS IS 5.44%, 5.32%, 5.36%, 5.48% AND 5.58% FOR FISCAL
YEARS 1999, 1998, 1997, 1996 AND 1995, RESPECTIVELY.
(f) REPRESENTS TOTAL NET ASSETS DIVIDED BY OUTSTANDING PREFERRED
STOCK.
(g) EFFECTIVE AUGUST 10, 1998, THE ADVISOR WAS CHANGED FROM
PIPER CAPITAL MANAGEMENT INCORPORATED TO U.S. BANK.
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 19 American Municipal Term Trusts
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
............................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST III
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1999 1998 (g) 1997 1996 1995
------ -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, common stock, beginning
of period ................................... $11.46 $11.39 $10.92 $11.11 $ 9.31
------ ------ ------ ------ ------
Operations:
Net investment income ....................... 0.83 0.81 0.82 0.83 0.83
Net realized and unrealized gains (losses)
on investments ............................ (0.81) 0.08 0.47 (0.27) 1.73
------ ------ ------ ------ ------
Total from operations ..................... 0.02 0.89 1.29 0.56 2.56
------ ------ ------ ------ ------
Distributions to shareholders:
Paid to common shareholders ................. (0.57) (0.57) (0.57) (0.57) (0.57)
Paid to preferred shareholders .............. (0.16) (0.17) (0.16) (0.18) (0.19)
From net realized gains
Paid to common shareholders ................. -- (0.06) (0.07) -- --
Paid to preferred shareholders .............. -- (0.02) (0.02) -- --
------ ------ ------ ------ ------
Total distributions to shareholders ....... (0.73) (0.82) (0.82) (0.75) (0.76)
------ ------ ------ ------ ------
Net asset value, common stock, end
of period ................................... $10.75 $11.46 $11.39 $10.92 $11.11
====== ====== ====== ====== ======
Market value, common stock, end of period ..... $ 9.94 $11.25 $10.94 $10.38 $10.13
====== ====== ====== ====== ======
SELECTED INFORMATION
Total return, common stock, net asset
value (a) ................................... (1.23)% 6.28% 10.42% 3.65% 25.93%
Total return, common stock, market
value (b) ................................... (6.81)% 8.86% 11.93% 8.38% 26.32%
Net assets at end of period (in millions) ..... $ 84 $ 87 $ 87 $ 84 $ 85
Ratio of expenses to average weekly net assets
applicable to common stock (c) .............. 1.03% 0.95% 0.99% 1.01% 0.98%
Ratio of net investment income to average
weekly net assets applicable to common
stock (d)(e) ................................ 5.98% 5.67% 5.91% 6.08% 6.05%
Portfolio turnover rate (excluding
short-term securities) ...................... 1% 5% 7% 3% 5%
Remarketed preferred stock outstanding end of
period (in millions) ........................ $ 27 $ 27 $ 27 $ 27 $ 27
Asset coverage per share (in thousands)(f) .... $ 78 $ 82 $ 82 $ 79 $ 80
Liquidation preference and market value per
share (in thousands) ........................ $ 25 $ 25 $ 25 $ 25 $ 25
</TABLE>
<TABLE>
<S> <C>
(a) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE AND
DOES NOT REFLECT A SALES CHARGE.
(b) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT ACTUAL PRICES
PURSUANT TO THE FUND'S DIVIDEND REINVESTMENT PLAN.
(c) RATIO OF EXPENSES TO TOTAL AVERAGE WEEKLY NET ASSETS IS
0.71%, 0.66%, 0.68%, 0.69% AND 0.66% FOR FISCAL YEARS 1999,
1998, 1997, 1996 AND 1995, RESPECTIVELY. DIVIDEND PAYMENTS
TO PREFERRED SHAREHOLDERS ARE NOT CONSIDERED AN EXPENSE.
(d) RATIO REFLECTS TOTAL NET INVESTMENT INCOME LESS DIVIDENDS
PAID TO PREFERRED SHAREHOLDERS FROM NET INVESTMENT INCOME
DIVIDED BY NET ASSETS APPLICABLE TO COMMON STOCK.
(e) RATIO OF NET INVESTMENT INCOME TO TOTAL AVERAGE WEEKLY NET
ASSETS IS 5.10%, 4.94%, 5.09%, 5.26% AND 5.38% FOR FISCAL
YEARS 1999, 1998, 1997, 1996 AND 1995, RESPECTIVELY.
(f) REPRESENTS TOTAL NET ASSETS DIVIDED BY PREFERRED STOCK
OUTSTANDING.
(g) EFFECTIVE AUGUST 10, 1998, THE ADVISOR WAS CHANGED FROM
PIPER CAPITAL MANAGEMENT INCORPORATED TO U.S. BANK
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 20 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES
- --------------------------------------------------------------------------------
<TABLE>
AMERICAN MUNICIPAL TERM TRUST December 31, 1999
.....................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
MUNICIPAL LONG-TERM SECURITIES (97%):
CALIFORNIA (2.3%):
Southern California Public Power Authority Power
Project Revenue, 5.00%, 7/1/01 .................... $3,000,000 $ 3,031,050
------------
COLORADO (2.0%):
Health Care Facility (FSA) (Prerefunded to 2/15/01 at
102), 7.25%, 2/15/16 .............................. 1,925,000(d) 2,022,597
Health Facilities Authority Revenue,
4.45%, 1/1/01 ..................................... 540,000 537,176
------------
2,559,773
------------
DISTRICT OF COLUMBIA (4.9%):
District Columbia (FSA), 5.50%, 6/1/03 .............. 2,000,000 2,042,480
General Obligation (MBIA) (Callable 6/1/00 at 102),
6.75%, 6/1/08 ..................................... 40,000 41,182
General Obligation (MBIA)(Prerefunded to 6/1/00 at
102), 6.75%, 6/1/08 ............................... 4,360,000(d) 4,493,939
------------
6,577,601
------------
FLORIDA (2.3%):
Jacksonville Electric Authority (Prerefunded to
10/1/00 at 101.50), 7.00%, 10/1/12 ................ 3,000,000(d) 3,109,170
------------
GEORGIA (2.2%):
Municipal Electric Authority (MBIA) (Prerefunded to
1/1/01 at 102), 7.00%, 1/1/16 ..................... 2,840,000(d) 2,972,997
------------
HAWAII (0.5%):
State Department Budget and Finance,
4.45%, 7/1/01 ..................................... 720,000 712,591
------------
ILLINOIS (5.8%):
Chicago Motor Fuel Tax (AMBAC) (Prerefunded to 1/1/01
at 102), 7.10%, 1/1/11 ............................ 1,525,000(d) 1,597,682
Health Facility-Evangelical Hospital (FSA)
(Prerefunded to 1/1/01 at 102), 7.13%, 1/1/21 ..... 2,500,000(d) 2,618,975
Higher Education Facility-Augustana College (Connie
Lee), 4.80%, 10/1/01 .............................. 500,000 501,585
State Dedicated Tax - Civic Center (Prerefunded to
12/15/00 at 102), 7.00%, 12/15/13 ................. 555,000(d) 580,974
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 21 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
State Sales Tax Revenue (Prerefunded to 6/15/01 at
102), 6.90%, 6/15/12-6/15/13 ...................... $2,300,000(d) $ 2,419,991
------------
7,719,207
------------
INDIANA (5.0%):
Hamilton S.E. School Building Corporation (AMBAC)
(Callable 1/1/01 at 102), 7.00%, 7/1/08 ........... 3,445,000 3,597,648
Indiana Bond Bank, 5.00%, 2/1/01 .................... 650,000 652,626
Marion County Convention Center (AMBAC) (Callable
6/1/01 at 102), 7.00%, 6/1/10 ..................... 345,000 361,853
Marion County Convention Center (AMBAC) (Prerefunded
to 6/1/01 at 102), 7.00%, 6/1/10 .................. 870,000(d) 915,945
St. Joseph County Hospital Authority (MBIA)
(Prerefunded to 8/15/01 at 102),
7.00%, 8/15/11 .................................... 1,000,000(d) 1,056,420
------------
6,584,492
------------
IOWA (0.8%):
Dubuque Hospital Revenue (Callable 1/1/02 at 102),
6.88%, 1/1/12 . 1,000,000 1,059,480
------------
MAINE (2.4%):
Municipal Bond Bank (Prerefunded to 11/1/01 at 102),
7.20%, 11/1/13 .................................... 3,000,000(d) 3,193,410
------------
MINNESOTA (1.2%):
Cuyuna Range Hospital District Health Facilities,
4.00%, 6/1/00 ..................................... 380,000 378,408
East Grand Forks Industrial Development Revenue
(Callable 4/1/01 at 102), 8.00%, 4/1/11 ........... 1,000,000 1,041,250
Moorhead Gross Revenue, 4.75%, 12/1/00 .............. 115,000 114,786
------------
1,534,444
------------
NEBRASKA (0.8%):
Hospital Lease Investment Financing (MBIA)
(Prerefunded to 3/1/01 at 102), 7.00%, 3/1/06 ..... 1,000,000(d) 1,049,150
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 22 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
NEVADA (6.5%):
Clark County School District (MBIA) (Prerefunded to
6/1/01 at 101), 7.00%, 6/1/09 ..................... $3,000,000(d) $ 3,130,680
University of Nevada Revenue (AMBAC) (Prerefunded to
7/1/00 at 102), 7.13%, 7/1/16 ..................... 2,720,000(d) 2,814,792
Washoe County Limited Tax General Obligation,
Zero-Coupon (MBIA), 7.12%, 7/1/06 ................. 3,725,000(b) 2,651,306
------------
8,596,778
------------
NEW YORK (3.0%):
New York City General Obligation, 5.00%, 8/1/01 ..... 4,000,000 4,020,840
------------
OHIO (0.5%):
Franklin County Ohio Health Care Facility Revenue,
4.40%-4.50%, 8/15/00-8/15/01 ...................... 620,000 615,306
------------
OKLAHOMA (1.3%):
Tulsa County Independent School District No. 5,
6.00%, 7/1/00-7/1/01 .............................. 1,670,000 1,694,214
------------
PENNSYLVANIA (3.1%):
Higher Education-Duquesne University (MBIA)
(Prerefunded to 4/1/01 at 100), 7.00%, 4/1/10 ..... 1,000,000(d) 1,030,950
Sayre Healthcare Facility (AMBAC) (Callable 3/1/01 at
102), 7.00%, 3/1/11 ............................... 3,000,000 3,130,950
------------
4,161,900
------------
SOUTH DAKOTA (3.6%):
Health and Education Facility Revenue (Callable
5/1/01 at 102), 7.00%, 11/1/07 .................... 2,500,000 2,615,925
Rapid City Area School District (MBIA) (Prerefunded
to 1/1/02 at 100), 7.20%, 1/1/11 .................. 1,770,000(d) 1,857,668
Sioux Falls Health Facilities Revenue (AMBAC)
(Callable 12/01/99 at 100), 4.45%, 6/1/01 ......... 370,000 368,764
------------
4,842,357
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 23 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
TENNESSEE (1.5%):
Bristol Health and Education Facility (FGIC)
(Prerefunded to 3/1/01 at 102), 7.00%, 9/1/11 ..... $1,000,000(d) $ 1,048,800
Housing Development Authority (FSA) (Callable 7/1/00
at 103), 7.70%, 7/1/16 ............................ 5,000 5,119
Memphis-Shelby County Airport Authority (MBIA), AMT,
5.25%, 2/15/01 .................................... 1,000,000(e) 1,008,340
------------
2,062,259
------------
TEXAS (19.0%):
Abliene Texas Health Care Facility Development,
4.50%-4.70%, 11/15/00-11/15/01 .................... 1,065,000 1,049,661
Austin Utility System Revenue (BIG) (Prerefunded to
5/15/01 at 100), 8.00%, 11/15/16 .................. 500,000(d) 523,105
Corpus Christi Utility System Revenue (FGIC)
(Callable 7/15/00 at 102), 7.00%, 7/15/10 ......... 1,500,000 1,550,535
Harris County Health Facilities (FSA) (Prerefunded to
10/1/01 at 102), 6.85%, 10/1/06 ................... 2,000,000(d) 2,113,880
Houston Hotel Occupancy (FGIC) (Prerefunded to 7/1/01
at 100), 7.00%, 7/1/15 ............................ 4,800,000(d) 4,971,504
Houston Independent School District, Zero-Coupon
(AMBAC), 7.14%, 8/15/06 ........................... 4,285,000(b) 3,024,610
Lower Colorado River Authority (AMBAC) (Prerefunded
to 1/1/01 at 102), 7.00%, 1/1/11 .................. 115,000(d) 120,385
Lower Colorado River Authority (AMBAC) (Prerefunded
to 1/1/01 at 102), 7.00%, 1/1/11 .................. 885,000(d) 926,445
Lower Colorado River Authority, Zero-Coupon (AMBAC),
7.17%, 1/1/06 ..................................... 765,000(b) 560,232
Municipal Power Agency, Zero-Coupon (AMBAC),
7.11%, 9/1/06 ..................................... 3,000,000(b) 2,116,740
San Antonio Electric and Gas, Zero-Coupon (FGIC),
7.11%, 2/1/06 ..................................... 3,000,000(b) 2,187,510
Trinity River Authority (AMBAC) (Prerefunded to
8/1/00 at 102), 7.10%, 8/1/16 ..................... 2,250,000(d) 2,289,510
Weatherford Utility System, Water Revenue (MBIA)
(Prerefunded to 9/1/01 at 100), 7.00%, 9/1/11 ..... 3,750,000(d) 3,897,975
------------
25,332,092
------------
UTAH (2.9%):
Intermountain Power Agency (FSA), 5.25%, 7/1/01 ..... 3,810,000 3,851,567
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 24 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
WASHINGTON (15.7%):
Chelan County Public Utilities District (MBIA), AMT,
5.20%-5.35%, 7/1/00-7/1/01 ........................ $ 885,000(e) $ 890,349
King and Snohomish Counties School District (FGIC)
(Prerefunded to 12/1/00 at 100),
7.00%, 12/1/09 .................................... 1,450,000(d) 1,488,208
Public Power Supply System (Prerefunded to 1/1/00),
7.25%, 7/1/15 ..................................... 1,435,000(d) 1,463,700
Public Power Supply System (Prerefunded to 1/1/01 at
102), 7.63%, 7/1/10 ............................... 5,000,000(d) 5,260,900
Public Power Supply System (Prerefunded to 7/1/00 at
102), 7.38%, 7/1/12 ............................... 1,550,000(d) 1,605,568
Public Power Supply System, Zero-Coupon (BIG),
7.15%, 7/1/06 ..................................... 1,500,000(b) 1,065,615
Public Power Supply System, Zero-Coupon (FGIC),
7.17%, 7/1/06 ..................................... 5,000,000(b) 3,552,050
Public Power Supply Systems,
5.00%-5.25%, 7/1/00-7/1/01 ........................ 3,500,000 3,519,600
Seattle Water Revenue (Prerefunded to 5/1/00 at 100),
7.25%, 5/1/17 ..................................... 2,000,000(d) 2,060,260
------------
20,906,250
------------
WEST VIRGINIA (3.5%):
School Building Authority (MBIA) (Prerefunded to
7/1/00 at 102), 7.25%, 7/1/15 ..................... 4,000,000(d) 4,141,760
State Water Development Authority (FSA) (Callable
11/1/01 at 102), 7.00%, 11/1/11 ................... 500,000 528,390
------------
4,670,150
------------
WISCONSIN (6.2%):
Amery Apple River Hospital Project Revenue,
4.50%-4.65%, 6/1/00-6/1/01 ........................ 780,000 775,989
Health and Education Facilities-Gundersen Clinic
(FSA), 5.50%, 12/1/01 ............................. 2,400,000 2,438,736
Health and Education Facilities-Waukesha Hospital
(AMBAC) (Callable 8/15/00 at 102),
7.25%, 8/15/19 .................................... 105,000 108,602
Health and Education Facilities-Waukesha Hospital
(AMBAC) (Prerefunded to 8/15/00 at 102),
7.25%, 8/15/19 .................................... 1,570,000(d) 1,631,167
Health and Education Facility (MBIA) (Prerefunded to
6/1/00 at 102), 7.00%, 6/1/20 ..................... 1,600,000(d) 1,650,784
Neenah Industrial Development Revenue (Callable
6/1/00 at 101), AMT, 6.75%, 6/1/12 ................ 650,000(e) 659,283
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 25 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
Shares/
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
Oshkosh Area School Dist (FSA), 4.80%, 3/1/02 ....... $1,000,000 $ 1,003,410
------------
8,267,971
------------
Total Municipal Long-Term Securities
(cost: $124,152,820) ............................ 129,125,049
------------
MUNICIPAL SHORT-TERM SECURITIES (1.4%):
NEW YORK (1.4%):
New York City, Municipal Water Authority,
4.50%, 6/15/25 .................................... 690,000(c) 690,000
New York City, Series B, 4.50%, 10/1/20 ............. 600,000(c) 600,000
New York City, Series C, 4.50%, 10/1/23 ............. 600,000(c) 600,000
------------
Total Municipal Short-Term Securities
(cost: $1,890,000) ............................. 1,890,000
------------
RELATED PARTY MONEY MARKET FUND (0.0%):
First American Tax Free Obligations Fund
(cost: $42,638) ................................... 42,638(f) 42,638
------------
Total Investments in Securities
(cost: $126,085,458)(g) ......................... $131,057,687
============
</TABLE>
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) FLOATING OR VARIABLE RATE OBLIGATION MATURING IN MORE THAN ONE YEAR. THE
INTEREST RATE, WHICH IS BASED ON SPECIFIC, OR AN INDEX OF, MARKET INTEREST
RATES, IS SUBJECT TO CHANGE PERIODICALLY AND IS THE EFFECTIVE RATE ON
DECEMBER 31, 1999. THIS INSTRUMENT MAY ALSO HAVE A DEMAND FEATURE WHICH
ALLOWS THE RECOVERY OF PRINCIPAL AT ANY TIME, OR AT SPECIFIED INTERVALS NOT
EXCEEDING ONE YEAR, ON UP TO 30 DAYS' NOTICE. MATURITY DATE SHOWN
REPRESENTS FINAL MATURITY.
(d) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
MATURE AT THE DATE AND PRICE INDICATED.
(e) PORTFOLIO ABBREVIATIONS AND DEFINITIONS:
AMT - ALTERNATIVE MINIMUM TAX. AS OF DECEMBER 31, 1999, THE AGGREGATE
MARKET VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS
$2,557,972, WHICH REPRESENTS 1.9% OF NET ASSETS.
(f) THIS MONEY MARKET FUND IS ADVISED BY U.S. BANK WHO ALSO SERVES AS ADVISOR
FOR THIS FUND. SEE NOTE 2 IN THE NOTES TO FINANCIAL STATEMENTS.
(g) ON DECEMBER 31, 1999, THE COST OF INVESTMENTS IN SECURITIES FOR FEDERAL
INCOME TAX PURPOSES WAS 125,756,671. THE AGGREGATE GROSS UNREALIZED
APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS
COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $5,370,050
GROSS UNREALIZED DEPRECIATION ...... (69,034)
----------
NET UNREALIZED APPRECIATION ...... $5,301,016
==========
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 26 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES
- --------------------------------------------------------------------------------
<TABLE>
AMERICAN MUNICIPAL TERM TRUST II December 31, 1999
.....................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
MUNICIPAL LONG-TERM SECURITIES (99.3%):
FLORIDA (4.8%):
Manatee County, Zero-Coupon (MBIA),
6.91%, 10/1/07 .................................... $2,995,000(b) $ 2,003,595
University Community Hospital (FSA) (Prerefunded to
9/1/00 at 102), 7.50%, 9/1/11 ..................... 3,500,000(e) 3,646,895
------------
5,650,490
------------
ILLINOIS (21.4%):
Belleville General Obligation (FGIC) (Prerefunded to
12/1/01 at 100), 7.13%, 12/1/08 ................... 1,000,000(e) 1,047,170
Carbondale General Obligation (FGIC) (Prerefunded to
5/1/01 at 100), 6.90%, 5/1/12 ..................... 3,200,000(e) 3,301,568
Central Lake County, Zero-Coupon (MBIA),
6.98%, 5/1/07 ..................................... 2,370,000(b) 1,602,286
Chicago Motor Fuel Tax (AMBAC) (Prerefunded to 1/1/01
at 102), 7.10%, 1/1/11 ............................ 1,500,000(e) 1,571,490
Chicago Wastewater Revenue (FGIC) (Prerefunded to
11/15/00 at 102), 6.75%, 11/15/20 ................. 2,000,000(e) 2,084,540
Cook County General Obligation (AMBAC) (Prerefunded
to 11/1/01 at 102), 6.75%, 11/1/18 ................ 5,000,000(e) 5,286,700
Decatur, Zero-Coupon (AMBAC), 6.98%, 10/1/07 ........ 1,250,000(b) 826,500
Health Facility-Evangelical Hospital (escrowed to
maturity) (Callable 4/15/02 at 102),
6.75%, 4/15/12 .................................... 990,000 1,087,099
Health Facility-Evangelical Hospital (Prerefunded to
4/15/02 at 102), 6.75%, 4/15/12-4/15/17 ........... 1,190,000(e) 1,263,566
Health Facility-Highland Park Hospital (FGIC),
5.30%, 10/1/02 .................................... 1,265,000 1,284,266
Higher Education Facility-Augustana College (Connie
Lee), 4.90%, 10/1/02 .............................. 500,000 502,005
Kendall, Kane, and Will Counties, Zero-Coupon (FGIC),
6.96%, 3/1/07 975,000(b) 665,057
Lake County Water and Sewer System (AMBAC)
(Prerefunded to 12/1/01 at 100),
6.75%, 12/4/08-12/1/09 ............................ 4,215,000(e) 4,386,298
------------
24,908,545
------------
INDIANA (13.4%):
Boonville School Building Corporation (Callable
7/1/02 at 102), 6.90%, 7/1/09 ..................... 2,000,000 2,119,740
Indiana Bond Bank, 5.15%, 2/1/02 .................... 900,000 903,888
Indiana University, Zero-Coupon (AMBAC),
7.07%, 8/1/07 ..................................... 3,180,000(b) 2,121,410
Lake Central Multi-District School Building
Corporation (Prerefunded to 7/15/01 at 102),
7.00%, 1/15/14-1/15/18 ............................ 2,500,000(e) 2,635,475
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 27 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
Noblesville/Hamilton County School Building
Corporation (Prerefunded to 2/1/01 at 102),
7.00%, 2/1/13 ..................................... $1,000,000(e) $ 1,047,520
Port Commission, Cargill Inc. Project (Callable
5/1/02 at 102), 6.88%, 5/1/12 ..................... 450,000(c) 471,865
Purdue University (AMBAC) (Prerefunded to 7/1/01 at
102), 7.00%, 7/1/14 ............................... 3,000,000(e) 3,162,840
St. Joseph County Hospital Authority (MBIA)
(Prerefunded to 12/1/01 at 102),
7.00%, 12/1/12 .................................... 3,000,000(e) 3,188,340
------------
15,651,078
------------
IOWA (2.9%):
Mason City Hospital Facilities (FSA) (Prerefunded to
8/15/01 at 102), 6.88%, 8/15/09 ................... 1,265,000(e) 1,334,841
Polk County Health Facilities (MBIA) (Prerefunded to
11/1/01 at 101), 7.10%, 11/1/09 ................... 1,895,000(e) 1,997,595
------------
3,332,436
------------
KENTUCKY (1.1%):
Owensboro Electric Light and Power, Zero-Coupon
(AMBAC), 6.91%, 1/1/07 ............................ 1,775,000(b) 1,229,081
------------
LOUISIANA (3.1%):
New Orleans General Obligation, Zero-Coupon (AMBAC),
7.01%, 9/1/07 ..................................... 5,000,000(b) 3,338,100
Parrish of St. Martin, Cargill Inc. Project (Callable
10/1/02 at 102), 6.63%, 10/1/12 ................... 300,000(c) 308,148
------------
3,646,248
------------
MICHIGAN (2.7%):
Detroit General Obligation, 6.50%, 4/1/02 ........... 2,000,000 2,063,320
State Housing Development Authority (FSA) (Callable
10/15/02 at 103), 6.85%, 10/15/18 ................. 1,000,000 1,044,410
------------
3,107,730
------------
MINNESOTA (0.9%):
Burnsville Gross Revenue,
3.80%-4.50%, 5/1/00-5/1/05 ........................ 1,120,000 1,085,797
------------
MONTANA (1.8%):
State Board of Investment (MBIA) (escrowed to
maturity) (Callable 6/1/01 at 102),
6.88%, 6/1/20 ..................................... 2,000,000 2,088,980
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 28 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
NEVADA (1.8%):
Clark County School District (FGIC),
5.75%, 6/15/02 .................................... $2,000,000 $ 2,051,000
------------
NEW HAMPSHIRE (0.8%):
Single Family Housing Authority (Callable 7/1/03 at
102), 5.85%, 7/1/10 ............................... 905,000 900,801
------------
NEW JERSEY (1.8%):
State Educational Facilities Authority (Prerefunded
to 7/1/01 at 102), 6.88%, 7/1/10 .................. 2,000,000(e) 2,102,740
------------
NEW YORK (0.9%):
New York City General Obligation, 5.10%, 8/1/02 ..... 1,000,000 1,006,920
------------
NORTH DAKOTA (4.8%):
Bismark Hospital Revenue (AMBAC) (Prerefunded to
5/1/01 at 102), 6.90%, 5/1/06 ..................... 4,300,000(e) 4,514,183
Grand Forks Health Care Authority (MBIA) (Callable
12/1/01 at 102), 6.63%, 12/1/10 ................... 1,000,000 1,050,500
------------
5,564,683
------------
OKLAHOMA (0.7%):
Tulsa County Oklahoma Independent School
District No. 5, 5.00%, 7/1/02 ..................... 850,000 854,955
------------
SOUTH CAROLINA (1.4%):
Lexington County Health Services (FSA) (Prerefunded
to 10/1/01 at 102), 6.75%, 10/1/18 ................ 1,600,000(e) 1,690,224
------------
SOUTH DAKOTA (0.4%):
Health & Education Facility Revenue (AMBAC),
4.50%, 8/1/02 ..................................... 430,000 428,018
------------
TENNESSEE (1.1%):
Memphis-Shelby County Airport Authority (MBIA), AMT,
5.25%, 2/15/02 .................................... 1,235,000(f) 1,247,128
------------
TEXAS (8.6%):
Abilene Health Facility Development,
4.80%, 11/15/02 ................................... 605,000 586,463
Harris County Health Facilities (FSA) (Prerefunded to
10/1/01 at 102), 7.00%, 10/1/14 ................... 2,225,000(e) 2,357,009
Houston Hotel Occupancy (FGIC) (Prerefunded to 7/1/01
at 100), 7.00%, 7/1/15 ............................ 4,995,000(e) 5,173,471
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 29 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
Houston Water and Sewer, Zero-Coupon (AMBAC),
6.91%, 12/1/07 .................................... $3,000,000(b) $ 1,970,580
------------
10,087,523
------------
WASHINGTON (17.0%):
Chelan County Public Utilities District (Callable
7/1/03 at 100), AMT, 7.60%, 7/1/25 ................ 3,000,000(f) 3,218,790
Chelan County Public Utilities District (MBIA), AMT,
5.45%, 7/1/02 ..................................... 385,000(f) 390,648
Clark County Public Utility District (FGIC)
(Prerefunded to 1/1/01 at 102), 6.50%, 1/1/11 ..... 2,000,000(e) 2,083,560
King and Snohomish Counties School District (FGIC)
(Prerefunded to 12/1/02 at 100),
6.63%, 12/1/12 .................................... 300,000(e) 315,888
Public Power Supply System, 5.25%, 7/1/01 ........... 2,000,000 2,018,920
Public Power Supply System (Prerefunded to 1/1/00 at
102), 7.25%, 1/1/15 ............................... 3,875,000(e) 3,952,500
Public Power Supply System (Prerefunded to 7/1/00 at
102), 7.00%-7.38%, 7/1/11-7/1/12 .................. 5,225,000(e) 5,411,063
Public Power Supply System (Prerefunded to 7/1/01 at
102), 6.75%, 7/1/11 ............................... 1,350,000(e) 1,417,028
Snohomish County Solid Waste Revenue (MBIA)
(Prerefunded to 12/1/01 at 102),
7.00%, 12/1/10 .................................... 1,000,000(e) 1,062,970
------------
19,871,367
------------
WEST VIRGINIA (4.0%):
School Building Authority (MBIA) (Prerefunded to
7/1/00 at 102), 6.75%, 7/1/17 ..................... 2,500,000(e) 2,582,725
State Water Development Authority (Prerefunded to
11/1/01 at 102), 7.30%-7.40%, 11/1/11-11/1/19 ..... 2,000,000(e) 2,134,090
------------
4,716,815
------------
WISCONSIN (3.9%):
Amery Revenue, 4.80%, 6/1/02 ........................ 420,000 413,897
Health and Education Facilities-Gundersen Clinic
(FSA), 5.10%, 12/1/02 ............................. 3,000,000 3,025,980
Neenah Industrial Development Revenue (Callable
6/1/00 at 101), AMT, 6.75%, 6/1/12 ................ 1,150,000(f) 1,166,422
------------
4,606,299
------------
Total Municipal Long-Term Securities
(cost: $110,720,052) ............................ 115,828,858
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 30 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
Shares/
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
MUNICIPAL SHORT-TERM SECURITIES (1.0%):
NEW YORK (1.0%):
New York City, Municipal Water Authority,
4.50%, 6/15/25 .................................... $ 400,000(d) $ 400,000
New York General Obligation, 4.50%, 8/15/18 ......... 800,000(d) 800,000
------------
Total Municipal Short-Term Securities
(cost: $1,200,000) ............................. 1,200,000
------------
RELATED PARTY MONEY MARKET FUND (0.1%):
First American Tax Free Obligations Fund
(cost: $93,024) ................................... 93,024(g) 93,024
------------
Total Investments in Securities
(cost: $112,013,076)(h) ......................... $117,121,882
============
</TABLE>
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 AS PART OF A PRIVATE PLACEMENT WHICH HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT OF 1933 AND ARE CONSIDERED TO BE ILLIQUID. ON DECEMBER 31, 1999, THE
TOTAL MARKET VALUE OF THESE INVESTMENTS WAS $780,013 OR .67% OF TOTAL NET
ASSETS.
(d) FLOATING OR VARIABLE RATE OBLIGATION MATURING IN MORE THAN ONE YEAR. THE
INTEREST RATE, WHICH IS BASED ON SPECIFIC, OR AN INDEX OF, MARKET INTEREST
RATES, IS SUBJECT TO CHANGE PERIODICALLY AND IS THE EFFECTIVE RATE ON
DECEMBER 31, 1999. THIS INSTRUMENT MAY ALSO HAVE A DEMAND FEATURE WHICH
ALLOWS THE RECOVERY OF PRINCIPAL AT ANY TIME, OR AT SPECIFIED INTERVALS NOT
EXCEEDING ONE YEAR, ON UP TO 30 DAYS' NOTICE. MATURITY DATE SHOWN
REPRESENTS FINAL MATURITY.
(e) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
ARE MATURE AT THE DATE AND PRICE INDICATED.
(f) AMT - ALTERNATIVE MINIMUM TAX. AS OF DECEMBER 31, 1999, THE AGGREGATE
MARKET VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS
$6,022,988, WHICH REPRESENTS 5.16% OF NET ASSETS.
(g) THIS MONEY MARKET FUND IS ADVISED BY U.S. BANK WHO ALSO SERVES AS ADVISOR
FOR THIS FUND. SEE NOTE 2 IN THE NOTES TO FINANCIAL STATEMENTS.
(h) ON DECEMBER 31, 1999, THE COST OF INVESTMENTS IN SECURITIES FOR FEDERAL
INCOME TAX PURPOSES WAS $111,734,337. THE AGGREGATE GROSS UNREALIZED
APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS
COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $5,445,954
GROSS UNREALIZED DEPRECIATION ...... (58,409)
----------
NET UNREALIZED APPRECIATION ...... $5,387,545
==========
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 31 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES
- --------------------------------------------------------------------------------
<TABLE>
AMERICAN MUNICIPAL TERM TRUST III December 31, 1999
....................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
MUNICIPAL LONG-TERM SECURITIES (98.1%):
ALABAMA (0.6%):
Agricultural and Mechanical University Revenue (MBIA)
(Prerefunded to 11/1/02 at 102),
6.45%, 11/1/17 .................................... $ 500,000(d) $ 532,510
-----------
CALIFORNIA (1.1%):
State Housing Finance Revenue (FHA),
4.80%, 8/1/03 ..................................... 895,000 897,005
-----------
COLORADO (2.5%):
Health Facilities Authority Revenue,
4.65%, 1/1/03 ..................................... 1,055,000 1,032,982
Snowmass Village Multifamily Housing (FSA) (Callable
12/15/02 at 102), 6.25%, 12/15/16 ................. 1,000,000 1,013,960
-----------
2,046,942
-----------
DISTRICT OF COLUMBIA (3.0%):
Catholic University of America (Connie Lee)
(Prerefunded to 10/1/03 at 102),
6.30%, 10/1/13 .................................... 1,000,000(d) 1,069,000
General Obligation (MBIA), 4.75%, 6/1/03 ............ 1,460,000 1,457,128
-----------
2,526,128
-----------
FLORIDA (0.8%):
Broward County School District, Zero-Coupon (MBIA),
6.55%, 2/15/08 1,000,000(b) 653,750
-----------
HAWAII (1.5%):
State General Obligation (FGIC), 4.80%, 3/1/03 ...... 1,250,000 1,253,450
-----------
ILLINOIS (18.8%):
Chicago Wastewater Revenue (FGIC) (Prerefunded to
1/1/03 at 102), 6.35%, 1/1/22 ..................... 1,000,000(d) 1,063,650
Greenville Educational Facility Revenue,
4.65%, 6/1/03 ..................................... 320,000 311,142
Health Facility-Alexian Brothers Medical Center
(MBIA) (Prerefunded to 1/1/02 at 102),
6.38%, 1/1/15 ..................................... 1,125,000(d) 1,182,184
Health Facility-Elmhurst Memorial Hospital (FGIC)
(Callable 1/1/02 at 102), 6.50%, 1/1/12 ........... 1,190,000 1,244,204
Health Facility-Highland Park Hospital (FGIC),
5.40%, 10/1/03 .................................... 1,000,000 1,019,090
Health Facility-Lutheran General Systems (FSA)
(escrowed to maturity) (Callable 4/1/03 at 102),
6.13%, 4/1/12 ..................................... 1,000,000 1,055,270
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 32 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
Henry Hospital District (AMBAC) (Prerefunded to
12/1/02 at 100), 6.60%, 12/1/17 ................... $2,000,000(d) $ 2,107,360
Higher Education Facility-Augustana College (Connie
Lee), 5.00%, 10/1/03 .............................. 330,000 331,373
Lake County Housing and Finance Corporation (FHA)
(Callable 11/1/02 at 100), 6.70%, 11/1/14 ......... 2,000,000 2,040,460
Rochelle Water and Sewer Revenue (Prerefunded to
5/1/02 at 102), 7.15%, 5/1/14 ..................... 2,000,000(d) 2,139,260
State General Obligation (FSA) (Callable 10/1/02 at
102), 6.25%, 10/1/12 .............................. 3,100,000 3,244,894
-----------
15,738,887
-----------
INDIANA (15.1%):
Crawfordsville School Building Corporation (Callable
1/1/03 at 102), 6.25%, 7/1/11 ..................... 500,000 522,185
Freemont Middle School Building (AMBAC) (Prerefunded
to 3/15/02 at 101), 6.75%, 3/15/13 ................ 3,000,000(d) 3,159,000
Health Facilities-Community Hospital Project (MBIA)
(Callable 5/1/02 at 102), 6.40%, 5/1/12 ........... 5,000,000 5,230,900
Health Facilities-Methodist Hospital (AMBAC)
(escrowed to maturity) (Callable 9/1/02 at 102),
5.75%, 9/1/15 ..................................... 1,000,000 999,910
Indiana Health Facility, 5.00%, 5/15/03 ............. 495,000 486,832
Lake County Redevelopment Authority (MBIA) (Callable
2/1/05 at 102), 6.45%, 2/1/11 ..................... 1,600,000 1,684,256
Patoka Lake Regional Water and Sewer District (AMBAC)
(Prerefunded to 1/1/04 at 101), 6.45%, 1/1/15 ..... 500,000(d) 534,215
-----------
12,617,298
-----------
IOWA (1.5%):
Cedar Rapids Hospital Facilities (FGIC) (Prerefunded
to 8/15/03 at 102), 6.13%, 8/15/13 ................ 1,200,000(d) 1,273,656
-----------
KANSAS (2.0%):
Kansas City Utility Systems, Zero-Coupon (AMBAC),
6.40%, 3/1/08 ..................................... 1,060,000(b) 686,000
Kansas City Utility Systems, Zero-Coupon (AMBAC)
(escrowed to maturity), 6.40%, 3/1/08 ............. 1,515,000(b) 981,235
-----------
1,667,235
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 33 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)
<TABLE>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
MAINE (2.5%):
Water and Sewer Revenue (Callable 11/1/02 at 102),
6.60%, 11/1/15 .................................... $2,000,000 $ 2,110,540
-----------
NEVADA (1.2%):
Clark County School District (FGIC),
5.75%, 6/15/03 .................................... 1,000,000 1,032,530
-----------
NEW MEXICO (1.2%):
Las Cruces Health Facility-Evangelical Lutheran
Project (FSA) (Callable 12/1/02 at 102),
6.45%, 12/1/17 .................................... 1,000,000 1,013,550
-----------
NEW YORK (2.1%):
State General Obligation, 5.20%, 8/1/03 ............. 1,735,000 1,749,973
-----------
NORTH DAKOTA (3.7%):
Mercer County Pollution Control Revenue (AMBAC),
7.20%, 6/30/13 .................................... 2,700,000 3,097,332
-----------
OKLAHOMA (1.0%):
Tulsa County Oklahoma Independent School
District No. 5, 5.00%, 7/1/03 ..................... 850,000 853,519
-----------
RHODE ISLAND (1.5%):
State Health and Education Building Corporation
(Connie Lee) (Callable 4/1/03 at 102),
6.38%, 4/1/12 ..................................... 1,200,000 1,258,692
-----------
SOUTH CAROLINA (1.6%):
Piedmont Municipal Power Agency (MBIA) (Prerefunded
to 1/1/03 at 102), 6.30%, 1/1/14 .................. 1,285,000(d) 1,366,495
-----------
SOUTH DAKOTA (3.0%):
State Building Authority (AMBAC) (Prerefunded to
9/01/02 at 102), 6.63%, 9/1/12 .................... 115,000(d) 122,690
State Building Authority (AMBAC) (Prerefunded to
9/01/04 at 100), 6.63%, 9/1/12 .................... 2,235,000(d) 2,381,549
-----------
2,504,239
-----------
TEXAS (21.9%):
Abilene Health Facility Development,
4.90%, 11/15/03 ................................... 665,000 637,662
Austin Utility System Revenue, Zero-Coupon (MBIA),
6.53%, 11/15/08 ................................... 5,000,000(b) 3,103,000
Houston Water and Sewer Revenue (FSA) (Callable
12/1/02 at 102), 6.38%, 12/1/14 ................... 1,900,000 1,955,024
Montgomery County Hospital District (FSA)
(Prerefunded to 4/1/02 at 102), 6.63%, 4/1/17 ..... 3,300,000(d) 3,496,185
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
1999 Annual Report 34 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)
<TABLE>
Shares/
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
Pflugerville Independent School District (Prerefunded
to 8/15/04 at 100), 5.75%, 8/15/15 ................ $ 975,000(d) $ 1,013,747
San Antonio Electric and Gas, Zero-Coupon (FGIC),
6.40%, 2/1/08 ..................................... 4,500,000(b) 2,920,590
San Antonio Texas Water Revenue (MBIA) (Callable
5/15/02 at 102)), 6.50%, 5/15/10 .................. 1,685,000 1,771,693
San Antonio Texas Water Revenue (MBIA) (Prerefunded
to 5/15/02 at 102), 6.50%, 5/15/10 ................ 440,000(d) 480,427
San Antonio Texas Water Revenue (MBIA) (Prerefunded
to 5/15/02 at 102), 6.50%, 5/15/10 ................ 875,000(d) 927,001
State Capital Appreciation, Zero-Coupon (FGIC),
6.43%, 4/1/08 ..................................... 3,100,000(b) 2,010,195
-----------
18,315,524
-----------
WASHINGTON (7.8%):
Chelan County Public Utilities District (MBIA), AMT,
5.55%, 7/1/03 ..................................... 305,000(e) 311,012
Public Power Supply (Callable 7/1/02 at 102),
6.25%, 7/1/12 ..................................... 770,000 800,823
Public Power Supply (Prerefunded to 7/1/02 at 102),
6.25%, 7/1/12 ..................................... 2,600,000(d) 2,740,322
Public Power Supply System (Prerefunded to 7/1/01 at
102), 6.50%, 7/1/12 ............................... 2,515,000(d) 2,631,973
-----------
6,484,130
-----------
WEST VIRGINIA (3.3%):
Clarksburg Water Revenue (Asset Guaranty) (Callable
9/1/02 at 102), 6.25%, 9/1/14 ..................... 2,620,000 2,722,573
-----------
WISCONSIN (0.4%):
Amery Revenue, 4.90%, 6/1/03 ........................ 300,000 293,865
-----------
Total Municipal Long-Term Securities
(cost: $77,901,070) ............................. 82,009,823
-----------
MUNICIPAL SHORT-TERM SECURITIES (0.5%):
NEW YORK (0.5%):
New York City, Series C, 4.50%, 10/1/23
(cost: $400,000) .................................. 400,000(c) 400,000
-----------
RELATED PARTY MONEY MARKET FUND (0.2%):
First American Tax Free Obligations Fund ............ 182,869(f) 182,869
-----------
(cost: $182,869) 182,869
-----------
Total Investments in Securities
(cost: $78,483,939)(g) .......................... $82,592,692
===========
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 35 American Municipal Term Trusts
<PAGE>
INVESTMENTS IN SECURITIES (continued)
- --------------------------------------------------------------------------------
NOTES TO INVESTEMENTS 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) FLOATING OR VARIABLE RATE OBLIGATION MATURING IN MORE THAN ONE YEAR. THE
INTEREST RATE, WHICH IS BASED ON SPECIFIC, OR AN INDEX OF, MARKET INTEREST
RATES, IS SUBJECT TO CHANGE PERIODICALLY AND IS THE EFFECTIVE RATE ON
DECEMBER 31, 1999. THIS INSTRUMENT MAY ALSO HAVE A DEMAND FEATURE WHICH
ALLOWS THE RECOVERY OF PRINCIPAL AT ANY TIME, OR AT SPECIFIED INTERVALS NOT
EXCEEDING ONE YEAR, ON UP TO 30 DAYS' NOTICE. MATURITY DATE SHOWN
REPRESENTS FINAL MATURITY.
(d) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
MATURE AT THE DATE AT THE DATE AND PRICE INDICATED.
(e) PORTFOLIO ABBREVIATIONS AND DEFINITIONS:
AMT - ALTERNATIVE MINIMUM TAX. AS OF DECEMBER 31, 1999, THE AGGREGATE
MARKET VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS
$311,012, WHICH REPRESENTS 0.37% OF NET ASSETS.
(f) THIS MONEY MARKET FUND IS ADVISED BY U.S. BANK WHO ALSO SERVES AS ADVISOR
FOR THIS FUND. SEE NOTE 2 IN THE NOTES TO FINANCIAL STATEMENTS.
(g) ON DECEMBER 31, 1999, THE COST OF INVESTMENTS IN SECURITIES FOR FEDERAL
INCOME TAX PURPOSES WAS $78,412,294. THE AGGREGATE GROSS UNREALIZED
APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS
COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $4,248,419
GROSS UNREALIZED DEPRECIATION ...... (68,021)
----------
NET UNREALIZED APPRECIATION ...... $4,180,398
==========
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 36 American Municipal Term Trusts
<PAGE>
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS
AMERICAN MUNICIPAL TERM TRUST INC.,
AMERICAN MUNICIPAL TERM TRUST INC. II AND
AMERICAN MUNICIPAL TERM TRUST INC. III
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments in securities, of American Municipal Term Trust
Inc., American Municipal Term Trust Inc. II and American Municipal Term Trust
Inc. III as of December 31, 1999, and the related statements of operations,
changes in net assets and the financial highlights for the year then ended.
These financial statements and financial highlights are the responsibility of
the funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
statements of changes in net assets for the year ended December 31, 1998 and the
financial highlights for each of the four years in the period ended
December 31, 1998, were audited by other auditors whose report dated
February 12, 1999, expressed an unqualified opinion.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and the
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the custodian and broker. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the 1999 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
American Municipal Term Trust Inc., American Municipal Term Trust Inc. II and
American Municipal Term Trust Inc. III at December 31, 1999, and the results of
their operations, changes in their net assets and financial highlights for the
year then ended, in conformity with accounting principles generally accepted in
the United States.
/s/ ERNST & YOUNG LLP
Minneapolis, Minnesota
February 9, 2000
- --------------------------------------------------------------------------------
1999 Annual Report 37 American Municipal Term Trusts
<PAGE>
FEDERAL INCOME TAX INFORMATION
- --------------------------------------------------------------------------------
The following per-share information describes the federal tax
treatment of distributions made during the fiscal year. Exempt-
interest dividends are exempt from federal income tax and should
not be included in your gross income, but need to be reported on
your income tax return for informational purposes. Please
consult a tax advisor on how to report these distributions at
the state and local levels.
COMMON STOCK INCOME DISTRIBUTIONS
(INCOME FROM TAX-EXEMPT SECURITIES, 100%, 100% AND 99.99%
QUALIFYING AS EXEMPT-INTEREST DIVIDENDS, RESPECTIVELY)
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III
- ------------ ---------- ------------- --------------
<S> <C> <C> <C>
January 13, 1999 ....................... $0.0542 $0.0517 $0.0475
February 24, 1999 ...................... 0.0542 0.0517 0.0475
March 24, 1999 ......................... 0.0542 0.0517 0.0475
April 28, 1999 ......................... 0.0542 0.0517 0.0475
May 26, 1999 ........................... 0.1242 0.1387 0.0475
June 23, 1999 .......................... 0.0542 0.0517 0.0475
July 28, 1999 .......................... 0.0542 0.0517 0.0475
August 25, 1999 ........................ 0.0542 0.0517 0.0475
September 22, 1999 ..................... 0.0542 0.0517 0.0475
October 27, 1999 ....................... 0.0672 0.0617 0.0475
November 23, 1999 ...................... 0.0542 0.0517 0.0475
December 15, 1999 ...................... 0.0542 0.0518 0.0475
------- ------- -------
Total .................................. $0.7334 $0.7174 $0.5700
======= ======= =======
</TABLE>
COMMON STOCK LONG-TERM GAINS
(TAXABLE AS CAPITAL GAINS DISTRIBUTIONS)
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III
- ------------ ---------- ------------- --------------
<S> <C> <C> <C>
December 15, 1999 ...................... $0.0026 $0.0005 $0.0033
======= ======= =======
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 38 American Municipal Term Trusts
<PAGE>
FEDERAL INCOME TAX INFORMATION (continued)
- --------------------------------------------------------------------------------
PREFERRED STOCK INCOME DISTRIBUTIONS
(INCOME FROM TAX-EXEMPT SECURITIES, 100%, 100% AND 99.99%
QUALIFYING AS EXEMPT-INTEREST DIVIDENDS, RESPECTIVELY)
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III
- ------------ ---------- ------------- --------------
<S> <C> <C> <C>
Total ................................ $833.0410 $858.2900 $792.5517
========= ========= =========
</TABLE>
PREFERRED STOCK LONG-TERM GAINS
(TAXABLE AS CAPITAL GAINS DISTRIBUTIONS)
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III
- ------------ ---------- ------------- --------------
<S> <C> <C> <C>
December 13, 1999 ...................... $ -- $0.5880 $ --
December 15, 1999 ...................... 2.9000 -- --
December 19, 1999 ...................... -- -- 4.7440
------- ------- -------
Total ................................ $2.9000 $0.5880 $4.7440
======= ======= =======
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 39 American Municipal Term Trusts
<PAGE>
SHAREHOLDER UPDATE
- --------------------------------------------------------------------------------
ANNUAL MEETING RESULTS
An annual meeting of the funds' shareholders was held on August
16, 1999. Each matter voted upon at that meeting, as well as the
number of votes cast for, against or withheld, the number of
abstentions, and the number of broker non-votes with respect to
such matters, are set forth below.
(1) The funds' preferred shareholders elected the following
directors:
<TABLE>
<CAPTION>
SHARES SHARES WITHHOLDING
VOTED "FOR" AUTHORITY TO VOTE
------------- ------------------
<S> <C> <C>
AMERICAN MUNICIPAL TERM TRUST
David T. Bennett ....................... 1,614 0
Leonard W. Kedrowski ................... 1,614 0
AMERICAN MUNICIPAL TERM TRUST II
David T. Bennett ....................... 1,271 0
Leonard W. Kedrowski ................... 1,271 0
AMERICAN MUNICIPAL TERM TRUST III
David T. Bennett ....................... 1,014 1
Leonard W. Kedrowski ................... 1,014 1
</TABLE>
David Bennett passed away in September, 1999. The funds'
preferred shareholders may be asked to elect a replacement
director at the next annual meeting.
- --------------------------------------------------------------------------------
1999 Annual Report 40 American Municipal Term Trusts
<PAGE>
SHAREHOLDER UPDATE (continued)
- --------------------------------------------------------------------------------
(2) The funds' preferred and common shareholders, voting as a
class, elected the following directors:
<TABLE>
<CAPTION>
SHARES SHARES WITHHOLDING
VOTED "FOR" AUTHORITY TO VOTE
------------- ------------------
<S> <C> <C>
AMERICAN MUNICIPAL TERM TRUST
Robert J. Dayton ....................... 6,675,864 8,389
Roger A. Gibson ........................ 6,675,864 8,389
Andrew M. Hunter III ................... 6,675,864 8,389
John M. Murphy, Jr. .................... 6,675,864 8,389
Robert L. Spies ........................ 6,675,864 8,389
Joseph D. Strauss ...................... 6,675,864 8,389
Virginia L. Stringer ................... 6,675,864 8,389
AMERICAN MUNICIPAL TERM TRUST II
Robert J. Dayton ....................... 5,986,628 23,159
Roger A. Gibson ........................ 5,986,628 23,159
Andrew M. Hunter III ................... 5,986,628 23,159
John M. Murphy, Jr. .................... 5,986,628 23,159
Robert L. Spies ........................ 5,986,628 23,159
Joseph D. Strauss ...................... 5,986,628 23,159
Virginia L. Stringer ................... 5,986,628 23,159
AMERICAN MUNICIPAL TERM TRUST III
Robert J. Dayton ....................... 4,327,329 21,548
Roger A. Gibson ........................ 4,327,329 21,548
Andrew M. Hunter III ................... 4,327,329 21,548
John M. Murphy, Jr. .................... 4,327,329 21,548
Robert L. Spies ........................ 4,327,329 21,548
Joseph D. Strauss ...................... 4,327,329 21,548
Virginia L. Stringer ................... 4,327,329 21,548
</TABLE>
- --------------------------------------------------------------------------------
1999 Annual Report 41 American Municipal Term Trusts
<PAGE>
SHAREHOLDER UPDATE (continued)
- --------------------------------------------------------------------------------
(3) The funds' preferred and common shareholders, voting as a
class, ratified the selection the funds' Board of Directors
of Ernst & Young LLP as the independent public accountants
for the funds for the fiscal year ending December 31, 2000.
The following votes were cast regarding this matter:
<TABLE>
<CAPTION>
SHARES VOTED SHARES VOTED BROKER
"FOR" "AGAINST" ABSTENTIONS NON-VOTES
------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
AXT .................................... 6,673,143 5,400 5,709 --
BXT .................................... 5,991,265 7,496 11,026 --
CXT .................................... 4,315,404 25,675 7,797 --
</TABLE>
TERMS AND CONDITIONS OF THE DIVIDEND REINVESTMENT PLAN
As a shareholder, you may choose to participate in the Dividend
Reinvestment Plan. It's a convenient and economical way to buy
additional shares of the fund by automatically reinvesting
dividends and capital gains. The plan is administered by
EquiServe, the plan agent.
ELIGIBILITY/PARTICIPATION
You may join the plan at any time. Reinvestment of distributions
will begin with the next distribution paid, provided your
request is received at least 10 days before the record date for
that distribution.
If your shares are in certificate form, you may join the plan
directly and have your distributions reinvested in additional
shares of the fund. To enroll in this plan, call EquiServe at
1-800-543-1627. If your shares are registered in your brokerage
firm's name or another name, ask the holder of your shares how
you may participate.
Banks, brokers or nominees, on behalf of their beneficial owners
who wish to reinvest dividend and capital gains distributions,
may participate in the plan by informing EquiServe at least 10
days before the next dividend and/or capital gains distribution.
- --------------------------------------------------------------------------------
1999 Annual Report 42 American Municipal Term Trusts
<PAGE>
SHAREHOLDER UPDATE (continued)
- --------------------------------------------------------------------------------
PLAN ADMINISTRATION
Beginning no more than five business days before the dividend
payment date, EquiServe will buy shares of the fund on the New
York Stock Exchange (NYSE) or elsewhere on the open market.
The fund will not issue any new shares in connection with the
plan. All reinvestments will be at a market price plus a pro
rata share of any brokerage commissions, which may be more or
less than the fund's net asset value per share. The number of
shares allocated to you is determined by dividing the amount of
the dividend or distribution by the applicable price per share.
There is no direct charge for reinvestment of dividends and
capital gains, since EquiServe fees are paid for by the fund.
However, each participant pays a pro rata portion of the
brokerage commissions. Brokerage charges are expected to be
lower than those for individual transactions because shares are
purchased for all participants in blocks. As long as you
continue to participate in the plan, distributions paid on the
shares in your account will be reinvested.
EquiServe maintains accounts for plan participants holding
shares in certificate form and will furnish written confirmation
of all transactions, including information you need for tax
records. Reinvested shares in your account will be held by
EquiServe in noncertificated form in your name.
TAX INFORMATION
Distributions invested in additional shares of the fund are
subject to income tax to the same extent they would be if
received in cash. Shareholders, as required by the Internal
Revenue Service, will receive Form 1099 regarding the federal
tax status of the prior year's distributions.
PLAN WITHDRAWAL
If you hold your shares in certificate form, you may terminate
your participation in the plan at any time by giving written
- --------------------------------------------------------------------------------
1999 Annual Report 43 American Municipal Term Trusts
<PAGE>
SHAREHOLDER UPDATE (continued)
- --------------------------------------------------------------------------------
notice to EquiServe. If your shares are registered in your
brokerage firm's name, you may terminate your participation via
verbal or written instructions to your investment professional.
Written instructions should include your name and address as
they appear on the certificate or account.
If notice is received at least 10 days before the record date,
all future distributions will be paid directly to the
shareholder of record.
If your shares are issued in certificate form and you
discontinue your participation in the plan, you (or your
nominee) will receive an additional certificate for all full
shares and a check for any fractional shares in your account.
PLAN AMENDMENT/TERMINATION
The fund reserves the right to amend or terminate the plan.
Should the plan be amended or terminated, participants will be
notified in writing at least 90 days before the record date for
such dividend or distribution. The plan may also be amended or
terminated by EquiServe with at least 90 days written notice to
participants in the plan.
Any question about the plan should be directed to your
investment professional or to EquiServe LP, P.O. Box 8218,
Boston, Massachusetts 02266, 1-800-543-1627.
- --------------------------------------------------------------------------------
1999 Annual Report 44 American Municipal Term Trusts
<PAGE>
[LOGO]First American-Registered Trademark-
Asset Management
AMERICAN MUNICIPAL TERM TRUSTS
1999 ANNUAL REPORT
2/2000 3007-00
