-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TIrsnBxS9yztPPZf9B+Oq/GVRgK4pwWq7CA/ZVZ1HbykIEfTpl3kSyU7EfJbqAPS GOFT9xSU8r/6AAyJwlA8+A== 0000912057-01-006989.txt : 20010307 0000912057-01-006989.hdr.sgml : 20010307 ACCESSION NUMBER: 0000912057-01-006989 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MUNICIPAL TERM TRUST INC CENTRAL INDEX KEY: 0000872086 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411687895 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06274 FILM NUMBER: 1558369 BUSINESS ADDRESS: STREET 1: 222 SOUTH NINTH ST STREET 2: PIPER JAFFRAY TOWER CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123426231 MAIL ADDRESS: STREET 2: 222 S 9TH STREET CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MUNICIPAL TERM TRUST INC II CENTRAL INDEX KEY: 0000877346 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411700789 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06356 FILM NUMBER: 1558370 BUSINESS ADDRESS: STREET 1: 222 SOUTH NINTH ST STREET 2: PIPER JAFFRAY TOWER CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123426231 MAIL ADDRESS: STREET 2: 222 S 9TH STREET CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MUNICIPAL TERM TRUST INC III CENTRAL INDEX KEY: 0000882418 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411710663 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06516 FILM NUMBER: 1558371 BUSINESS ADDRESS: STREET 1: 222 SOUTH NINTH ST STREET 2: PIPER JAFFRAY TOWER CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123421116 MAIL ADDRESS: STREET 2: 222 S 9TH STREET CITY: MINNEAPOLIS STATE: MN ZIP: 55402 N-30D 1 a2036137zn-30d.txt N-30D AMERICAN MUNICIPAL TERM TRUSTS AXT BXT CXT ANNUAL REPORT DECEMBER 31, 2000 [Logo] FIRST AMERICAN-Registered Trademark- ASSET MANAGEMENT [Logo] FIRST AMERICAN-Registered Trademark- ASSET MANAGEMENT AMERICAN MUNICIPAL TERM TRUSTS [SIDE NOTE] TABLE OF CONTENTS 2 Fund Overview 7 Financial Statements and Notes Investments in Securities 22 AXT 26 BXT 32 CXT 37 Independent Auditor's Report 38 Federal Income Tax Information 40 Shareholder Update 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 AVERAGE ANNUALIZED TOTAL RETURNS Based on net asset value for the periods ended December 31, 2000
AMERICAN MUNICIPAL TERM TRUST AMERICAN MUNICIPAL TERM TRUST II AMERICAN MUNICIPAL TERM TRUST III (AXT, inception 3/27/1991) (BXT, inception 9/26/1991 (CXT, inception 11/27/1992 One Year 4.16% 6.16% 7.73% Five Year 3.96% 4.42% 5.29% Since Inception 7.47% 7.57% 7.52%
All total returns are through December 31, 2000, 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, 2000, were 7.35%, 5.30%, and 6.78% for AXT, 9.86%, 6.00%, and 6.71% for BXT, and 11.19%, 6.47%, and 6.37% 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 NAV. Therefore, you may be unable to realize the full net asset value of your shares when you sell. AMERICAN MUNICIPAL TERM TRUSTS ANNUAL REPORT 2000 1) FUND OVERVIEW [SIDE NOTE] FUND MANAGEMENT DOUG WHITE, CFA, is primarily responsible for the management of the American Municipal Term Trusts. He has 18 years of financial experience. CATHERINE STIENSTRA assists with the management of the American Municipal Term Trusts. She has 13 years of financial experience. February 15, 2001 WE ARE PLEASED TO ANNOUNCE THAT THE AMERICAN MUNICIPAL TERM TRUST (AXT)-- THE FIRST MUNICIPAL TERM TRUST EVER ISSUED--WILL TERMINATE IN APRIL 2001 AND RETURN MORE THAN ITS OBJECTIVE OF $10 PER SHARE. As of December 31, 2000, the net asset value of AXT was $10.40 per share. The fund also continues to pay high tax-free income and actually raised its monthly common stock distribution beginning in October from $0.0542 to $0.0632 per share. The new distribution level will remain in effect until fund termination. The other two American Municipal Term Trusts (BXT and CXT) also remain on track to return $10 per share at their respective termination dates in 2002 and 2003 and provide high tax-exempt income. The net asset values of BXT and CXT were $10.80 and $10.97, respectively, as of December 31, 2000, and they continue to maintain the monthly common stock distributions of $0.0517 and $0.0475 per share, respectively, that they have paid since inception. MUNICIPAL BOND RATES--AS REPRESENTED BY THE BOND BUYER 20 INDEX--TRENDED DOWNWARD DURING THE YEAR, BEGINNING AT 6.00% AND ENDING AT 5.14%. This benefited the net asset values of BXT and CXT as the prices of intermediate- and long-term bonds increased. AXT's net asset value was not significantly impacted because the portfolio is positioned in all short-term securities as it nears its termination. The municipal bond marketplace continued to experience decreasing supply, as municipalities were not issuing as many new bonds. The - -------------------------------------------------------------------------------- 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 At the Fund's Inception 0% 0% 0% - -------------------------------------------------------------------------------- As of December 31, 2000 100% 64% 48% - --------------------------------------------------------------------------------
(2 AMERICAN MUNICIPAL TERM TRUSTS ANNUAL REPORT 2000 overall national supply of municipal bonds was down approximately 12% compared to a year ago. However, the reduced supply has had little impact on these portfolios as turnover in the trusts remains very low. This is because the bonds we currently own in the portfolios generally pay out more attractive tax-free income than we can find in the marketplace today. FOR MOST OF THE YEAR, BXT AND CXT ADDED TO THEIR DIVIDEND RESERVES; HOWEVER, BOTH FUNDS HAD TO PAY OUT SPECIAL DIVIDENDS IN OCTOBER TO AVOID PAYING EXTRA TAXES ON UNDISTRIBUTED INCOME. BXT paid a special dividend of $0.032 per share in October and a long-term capital gain distribution of $0.0148 per share in December and CXT paid a special dividend of $0.019 per share in October. On the other hand, AXT began drawing down its dividend reserve to maintain its monthly common stock distribution amount. Shareholders of BXT and CXT should also expect to see this trend as those portfolios get closer to their termination dates. DURING THE PERIOD WE CONTINUED OUR STRATEGY OF REDUCING THE INTEREST-RATE RISK IN THE PORTFOLIOS AS THEY APPROACH THEIR TERMINATIONS. We executed this strategy in two ways. In all three term trusts, we have been selectively selling off longer-maturity bonds as opportunities arise and replacing them with bonds that mature closer to the termination dates of the - -------------------------------------------------------------------------------- DISTRIBUTION HISTORY SINCE INCEPTION
AXT BXT CXT Inception Inception Inception 3/27/1991 9/26/1991 11/27/1992 Total Monthly Income Distributions Through 12/31/2000 - -------------------------------------------------------------------------------- Common Shareholders $6.46 $5.87 $4.63 - -------------------------------------------------------------------------------- Preferred Shareholders (On a Common Share Basis) $1.57 $1.54 $1.32 - -------------------------------------------------------------------------------- Total Capital Gains Distributions to Common Shareholders Through 12/31/2000 $0.26 $0.14 $0.13 - --------------------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUSTS ANNUAL REPORT 2000 3) FUND OVERVIEW CONTINUED trusts. This process is complete in AXT with 100% of its holdings maturing before the termination in April 2001. In BXT and CXT, 64% and 48%, respectively, of their holdings mature within a year of the funds' terminations. ALTHOUGH ALL THREE FUNDS' NET ASSET VALUES ARE SUBSTANTIALLY ABOVE THE $10 GOAL, WE ANTICIPATE THEY WILL TREND DOWNWARD AS THE PORTFOLIOS NEAR TERMINATION. Three factors cause this decline in NAV. First, because of the strategy of selling longer-term bonds as the funds near termination, the funds may realize gains that will be distributed to shareholders. Second, the shorter-term securities may not generate enough income to maintain the funds' distribution levels, which would cause the funds to dip into their dividend reserves. Because both the capital gains and the dividend reserves are part of the net asset value of the funds, the net asset values will decrease as these are paid out. Third, some of the bonds in the portfolios currently have market values greater than their maturity or redemption values. Over time their market prices will converge toward prices that are at or near their maturity or refunding prices. AXT provides a good example of how these - -------------------------------------------------------------------------------- NET ASSET VALUE SUMMARY OF COMMON SHARES AXT BXT CXT Inception Inception Inception 3/27/1991 9/26/1991 11/27/1992 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 on 12/31/2000 +$0.33 +$0.01 +$0.00 - ------------------------------------------------------------------------------------------- SUBTOTAL $9.66 $9.35 $9.33 - ------------------------------------------------------------------------------------------- Dividend Reserve (Undistributed Net Investment Income) on 12/31/2000 +$0.69 +$0.77 +$0.65 - ------------------------------------------------------------------------------------------- Unrealized Appreciation on Investments on 12/31/2000 +$0.05 +$0.68 +$0.99 - ------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE ON 12/31/2000 $10.40 $10.80 $10.97 - -------------------------------------------------------------------------------------------
(4 AMERICAN MUNICIPAL TERM TRUSTS ANNUAL REPORT 2000 factors will occur near fund termination as its net asset value was $10.66 six months ago and has trended downward to $10.40 as of December 31. AS ALWAYS, WE THANK YOU FOR YOUR INVESTMENT IN THE AMERICAN MUNICIPAL TERM TRUSTS AND THE CONFIDENCE THAT YOU HAVE PLACED IN US AS FUND MANAGERS. If you are a shareholder of AXT, please watch for more information in the mail about the process for terminating your shares in April. To those shareholders, this will be the last shareholder report you receive from us regarding that fund. We are pleased that we will be able to exceed the objective of the fund and hope we have helped you achieve some of your financial goals. To the shareholders of BXT and CXT, we will continue to execute our strategy and closely monitor the net asset values and income streams of the funds. We currently see no events on the horizon that would cause us to fall short of those trusts' objectives. - -------------------------------------------------------------------------------- LIQUIDATION OF AXT At a shareholder meeting held on August 3, 2000, shareholders approved the AXT plan of liquidation, which will occur on or about April 15, 2000. At such time, portfolio securities and other assets of the fund will be sold, creditors will be paid or reserves for such payments will be made, and the net proceeds of such sales will be distributed to common shareholders in cash. PREFERRED STOCK The preferred stock issued by 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 NAV of the fund and the market value of shares of common stock. AMERICAN MUNICIPAL TERM TRUSTS ANNUAL REPORT 2000 5) FUND OVERVIEW CONTINUED PORTFOLIO COMPOSITION As a percentage of total assets on December 31, 2000 AMERICAN MUNICIPAL TERM TRUST [Pie Chart] Utility Revenue 10% Transportation Revenue 1% Education Revenue 1% Tax Revenue 2% General Obligations 10% Tax-Exempt Commercial Paper 28% IDR Pollution Control Revenue 5% Health Care Revenue 7% Other Assets 1% Short-Term 29% Housing Revenue 2% Preferred Stock 4%
AMERICAN MUNICIPAL TERM TRUST II [Pie Chart] Education Revenue 12% Health Care Revenue 22% Industrial Development Revenue 5% Housing Revenue 6% Short Term 1% Miscellaneous Revenue 2% Tax Revenue 6% General Obligations 19% Transportation Revenue 3% Other Assets 2% Utility Revenue 16% IDR Pollution Control Revenue 4% Financial Authority 2%
AMERICAN MUNICIPAL TERM TRUST III [Pie Chart] Housing Revenue 5% Building Revenue 3% Short Term 1% Utility Revenue 32% Health Care Revenue 22% IDR Pollution Control Revenue 9% General Obligations 19% Other Assets 2% Education Revenue 7%
(6 AMERICAN MUNICIPAL TERM TRUSTS ANNUAL REPORT 2000 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES December 31, 2000 ................................................................................
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL TERM TRUST TERM TRUST II TERM TRUST III ------------ ------------- -------------- ASSETS: Investments in securities at market value* (note 2) ....... $87,313,582 $115,183,885 $ 83,830,495 Cash in bank on demand deposit ............................ 5,312 -- 92,100 Accrued interest receivable ............................... 1,133,857 1,765,162 1,150,099 Other assets .............................................. 8,447 4,588 7,122 ----------- ------------ ------------ Total assets ............................................ 88,461,198 116,953,635 85,079,816 ----------- ------------ ------------ LIABILITIES: Common stock dividends payable (note 2) ................... 534,356 380,296 251,750 Preferred stock dividends payable (note 3) ................ -- 30,715 22,082 Accrued investment management fee ......................... 14,806 24,634 17,905 Accrued administrative fee ................................ 13,734 11,318 9,006 Bank overdraft ............................................ -- 9,592 -- Other accrued expenses .................................... 8,519 25,248 18,160 ----------- ------------ ------------ Total liabilities ....................................... 571,415 481,803 318,903 ----------- ------------ ------------ Net assets applicable to outstanding capital stock ...... $87,889,783 $116,471,832 $ 84,760,913 =========== ============ ============ COMPOSITION OF NET ASSETS: Capital stock and additional paid-in capital (common and preferred stock) ........................................ $78,933,111 $105,777,741 $ 76,083,608 Undistributed net investment income ....................... 5,801,447 5,696,727 3,469,885 Accumulated net realized gain (loss) on investments ....... 2,759,321 65,315 (5,736) Net unrealized appreciation of investments ................ 395,904 4,932,049 5,213,156 ----------- ------------ ------------ Total - representing net assets applicable to outstanding capital stock ......................................... $87,889,783 $116,471,832 $ 84,760,913 =========== ============ ============ * Investments in securities at identified cost ............ $86,917,678 $110,251,836 $ 78,617,339 =========== ============ ============ NET ASSET VALUE AND MARKET PRICE OF COMMON STOCK: Net assets applicable to common stock ..................... $87,889,783 $ 79,471,832 $ 58,160,913 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 ........................................... $ 10.40 $ 10.80 $ 10.97 Market price .............................................. $ 10.25 $ 10.44 $ 10.44 LIQUIDATION PREFERENCE OF PREFERRED STOCK: Net assets applicable to preferred stock (note 3) ......... -- $ 37,000,000 $ 26,600,000 Shares of preferred stock outstanding (authorized 1 million shares for each fund) ................................... -- 1,480 1,064 Liquidation preference per share .......................... -- $ 25,000 $ 25,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 2000 Annual Report 7 American Municipal Term Trusts FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS For the Year Ended December 31, 2000 ................................................................................
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL TERM TRUST TERM TRUST II TERM TRUST III ------------ ------------- -------------- INCOME: Interest .................................................. $ 6,855,472 $ 7,018,452 $4,849,322 ----------- ----------- ---------- EXPENSES (NOTE 5): Investment management fee ................................. 293,278 290,908 209,527 Administrative fee ........................................ 234,622 232,727 167,623 Remarketing agent fee ..................................... 57,423 92,752 66,682 Custodian and accounting fees ............................. 18,164 17,865 13,090 Transfer agent fees ....................................... 26,436 25,717 26,115 Reports to shareholders ................................... 40,617 28,969 23,117 Directors' fees ........................................... 2,134 2,009 2,009 Audit and legal fees ...................................... 33,505 33,305 33,305 Other expenses ............................................ 54,999 54,192 46,264 ----------- ----------- ---------- Total expenses .......................................... 761,178 778,444 587,732 ----------- ----------- ---------- Net investment income ................................... 6,094,294 6,240,008 4,261,590 ----------- ----------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gain (loss) on investments (note 4) .......... 3,302,123 211,392 (5,736) Unrealized appreciation (depreciation) of investments ..... (4,576,325) (176,757) 1,104,403 ----------- ----------- ---------- Net gain (loss) on investments .......................... (1,274,202) 34,635 1,098,667 ----------- ----------- ---------- Net increase in net assets resulting from operations .......................................... $ 4,820,092 $ 6,274,643 $5,360,257 =========== =========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 2000 Annual Report 8 American Municipal Term Trusts FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS ................................................................................
AMERICAN MUNICIPAL TERM TRUST -------------------------- Year Ended Year Ended 12/31/00 12/31/99 ------------ ------------ OPERATIONS: Net investment income ..................................... $ 6,094,294 $ 7,599,559 Net realized gain on investments .......................... 3,302,123 26,322 Unrealized depreciation of investments .................... (4,576,325) (5,538,169) ------------ ------------ Net increase in net assets resulting from operations .... 4,820,092 2,087,712 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: From net investment income: Common stock dividends ................................ (5,806,049) (6,200,897) Preferred stock dividends ............................. (1,160,210) (1,424,980) From net realized gains: Common stock dividends ................................ (570,713) (21,983) Preferred stock dividends ............................. -- (4,930) ------------ ------------ Total distributions ..................................... (7,536,972) (7,652,790) ------------ ------------ CAPITAL SHARE TRANSACTIONS: (NOTE 6): Decrease in net assets from capital share transactions .... (42,500,000) -- ------------ ------------ Total decrease in net assets ............................ (45,216,880) (5,565,078) Net assets at beginning of year ........................... 133,106,663 138,671,741 ------------ ------------ Net assets at end of year ................................. $ 87,889,783 $133,106,663 ============ ============ Undistributed net investment income ....................... $ 5,801,447 $ 6,701,323 ============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 2000 Annual Report 9 American Municipal Term Trusts FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS ................................................................................
AMERICAN MUNICIPAL TERM TRUST II -------------------------- Year Ended Year Ended 12/31/00 12/31/99 ------------ ------------ OPERATIONS: Net investment income ..................................... $ 6,240,008 $ 6,508,346 Net realized gain on investments .......................... 211,392 4,500 Unrealized depreciation of investments .................... (176,757) (5,324,104) ------------ ------------ Net increase in net assets resulting from operations .... 6,274,643 1,188,742 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: From net investment income: Common stock dividends ................................ (4,798,937) (5,277,801) Preferred stock dividends ............................. (1,480,904) (1,272,842) From net realized gains: Common stock dividends ................................ (108,866) (3,678) Preferred stock dividends ............................. (39,500) (870) ------------ ------------ Total distributions ..................................... (6,428,207) (6,555,191) ------------ ------------ Total decrease in net assets ............................ (153,564) (5,366,449) Net assets at beginning of year ........................... 116,625,396 121,991,845 ------------ ------------ Net assets at end of year ................................. $116,471,832 $116,625,396 ============ ============ Undistributed net investment income ....................... $ 5,696,727 $ 5,738,849 ============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 2000 Annual Report 10 American Municipal Term Trusts FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS ................................................................................
AMERICAN MUNICIPAL TERM TRUST III -------------------------- Year Ended Year Ended 12/31/00 12/31/99 ------------ ------------ OPERATIONS: Net investment income ..................................... $ 4,261,590 $ 4,375,395 Net realized gain (loss) on investments ................... (5,736) 21,203 Unrealized appreciation (depreciation) of investments ..... 1,104,403 (4,285,205) ----------- ----------- Net increase in net assets resulting from operations .... 5,360,257 111,393 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income: Common stock dividends ................................ (3,121,700) (3,021,000) Preferred stock dividends ............................. (1,045,368) (833,052) From net realized gains: Common stock dividends ................................ -- (17,490) Preferred stock dividends ............................. -- (5,850) ----------- ----------- Total distributions ..................................... (4,167,068) (3,877,392) ----------- ----------- Total increase (decrease) in net assets ................. 1,193,189 (3,765,999) Net assets at beginning of year ........................... 83,567,724 87,333,723 ----------- ----------- Net assets at end of year ................................. $84,760,913 $83,567,724 =========== =========== Undistributed net investment income ....................... $ 3,469,385 $ 3,375,363 =========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 2000 Annual Report 11 American Municipal Term Trusts 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, 2007, and April 15, 2008, for BXT and CXT, 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. The pricing service may employ methodologies that utilize actual market transactions, broker-dealer supplied valuations, or other electronic data processing techniques. These techniques generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings and general market conditions. 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 - -------------------------------------------------------------------------------- 2000 Annual Report 12 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- 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 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, 2000, the funds had no outstanding when-issued or forward- commitments. FEDERAL TAXES Each fund is treated separately for federal income tax purposes. 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 - -------------------------------------------------------------------------------- 2000 Annual Report 13 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- of market discount amortization and losses deferred due to "wash sale" transactions. 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. On the statements of assets and liabilities, as a result of permanent book-to-tax differences, reclassification adjustments have been made as follows:
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL TERM TRUST TERM TRUST II TERM TRUST III ---------- ------------- -------------- Decrease undistributed net investment income .................... $27,911 $2,289 $ -- Increase accumulated net realized gain on investments ....................... 27,911 2,289 $ --
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 $0.0632, $0.0517 and $0.0475, for American Municipal Term Trust Inc., American Municipal Term Trust Inc. II and American Municipal Term Trust Inc. 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. - -------------------------------------------------------------------------------- 2000 Annual Report 14 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS AND OTHER SHORT-TERM SECURITIES For repurchase agreements entered into with certain broker- dealers, the funds, along with other affiliated registered investment companies, may transfer uninvested cash balances into a joint trading account, the daily aggregate balance 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 funds' custodian bank until maturity of the repurchase agreement. Provisions for all 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. In addition to repurchase agreements, the funds may invest in money market funds advised by the funds' advisor. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. II and American Municipal Term Trust Inc. III have issued and, as of December 31, 2000, have outstanding 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, 2000, the dividend rates were 5.05% for both American Municipal Term Trust Inc. II and American Municipal Term Trust Inc. III. RP is a registered trademark of Merrill Lynch & Company (Merrill Lynch). - -------------------------------------------------------------------------------- 2000 Annual Report 15 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- (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, 2000, were as follows:
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL TERM TRUST TERM TRUST II TERM TRUST III ------------ ------------- -------------- Purchases .............................. $ 21,427,448 $16,992,024 $545,073 Proceeds from sales .................... 112,438,804 19,092,948 478,962
(5) EXPENSES ............................ INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES The funds have 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): Each fund's investment advisory agreement provides the advisor with a monthly investment management fee in an amount equal to an annualized percentage of 0.25% of the fund's average weekly net assets (computed by subtracting liabilities, which exclude preferred stock, from the value of the total assets of the fund). For its fee, the advisor provides investment advice and, in general, conducts the management and investment activity of the fund. Each fund's administration agreement provides the administrator with a monthly fee in an amount equal to an annualized percentage of 0.20% of the fund's average weekly net assets (computed by subtracting liabilities, which exclude preferred stock, from the value of the total assets of the fund). For its fee, the administrator provides regulatory reporting and record- keeping services for the fund. In addition, each fund pays the administrator a fee for transfer agency and dividend disbursement services. REMARKETING AGENT FEE Each fund has entered into a remarketing agreement with Merrill Lynch (the remarketing agent). Each remarketing - -------------------------------------------------------------------------------- 2000 Annual Report 16 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- agreement provides the remarketing agent with a monthly fee in an amount equal to an annualized rate of 0.25% of the fund's average amount of RP 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. OTHER FEES AND EXPENSES In addition to the investment management, administrative and the remarketing agent fees, the funds are responsible for paying most other operating expenses including: outside directors' fees and expenses; custodian and accounting fees; registration fees; printing and shareholder reports; legal and auditing services; insurance; interest; taxes and other miscellaneous expenses. During the year ended December 31, 2000, American Municipal Term Trust Inc., American Municipal Term Trust Inc. II and American Municipal Term Trust Inc. III paid $18,177, $17,468 and $12,567, respectively, to U.S. Bank for custody services. (6) CAPITAL SHARE TRANSACTIONS ............................ In preparation for the termination and liquidation of American Municipal Term Trust Inc. on or about April 15, 2001, the fund redeemed all outstanding shares of its preferred stock at a redemption price of $25,000 per share plus accumulated, but unpaid, dividends through the redemption date. The fund redeemed the following shares of preferred stock:
DATE SHARES COST -------- ------ ----------- 7/13/00 800 $20,000,000 8/24/00 200 5,000,000 10/12/00 700 17,500,000 ----- ----------- 1,700 $42,500,000 ===== ===========
(7) CAPITAL LOSS CARRYOVER ............................ For federal income tax purposes, American Municipal Term Trust Inc. III had capital loss carryovers at December 31, 2000, of $5,736 which, if not offset by subsequent capital gains, will expire on December 31, 2008. It is unlikely the board of - -------------------------------------------------------------------------------- 2000 Annual Report 17 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- directors will authorize a distribution of any net realized capital gains until the available capital loss carryovers have been offset or expire. (8) PENDING ACQUISITION ............................ On October 4, 2000, U.S. Bancorp, the parent company of the funds' investment advisor, announced that it had entered into an agreement to be acquired by Firstar Corporation. It is anticipated that this acquisition will be completed in the first quarter of 2001, subject to regulatory approval, the approval of U.S. Bancorp shareholders, and the satisfaction of customary closing conditions. - -------------------------------------------------------------------------------- 2000 Annual Report 18 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- (9) 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
Year Ended December 31, -------------------------------------------- 2000 1999 1998(g) 1997 1996 ------ ------ ---------- ------- ------- PER-SHARE DATA Net asset value, common stock, beginning of period ......... $10.72 $11.37 $11.51 $11.52 $11.83 ------ ------ ------ ------ ------ Operations: Net investment income .................................... 0.72 0.90 0.90 0.91 0.93 Net realized and unrealized gains (losses) on investments ......................................... (0.14) (0.65) (0.12) (0.02) (0.35) ------ ------ ------ ------ ------ Total from operations .................................. 0.58 0.25 0.78 0.89 0.58 ------ ------ ------ ------ ------ Distributions to shareholders: From net investment income Paid to common shareholders ............................ (0.69) (0.73) (0.65) (0.65) (0.65) Paid to preferred shareholders ......................... (0.14) (0.17) (0.16) (0.17) (0.17) From net realized gains Paid to common shareholders ............................ (0.07) -- (0.08) (0.06) (0.05) Paid to preferred shareholders ......................... -- -- (0.03) (0.02) (0.02) ------ ------ ------ ------ ------ Total distributions to shareholders ...................... (0.90) (0.90) (0.92) (0.90) (0.89) ------ ------ ------ ------ ------ Net asset value, common stock, end of period ............... $10.40 $10.72 $11.37 $11.51 $11.52 ====== ====== ====== ====== ====== Market value, common stock, end of period .................. $10.25 $10.25 $11.56 $11.50 $11.25 ====== ====== ====== ====== ====== SELECTED INFORMATION Total return, common stock, net asset value (a) ............ 4.16% 0.76% 5.37% 6.22% 3.47% Total return, common stock, market value (b) ............... 7.35% (5.17)% 7.11% 8.89% 9.06% Net assets at end of period (in millions) .................. $ 88 $ 133 $ 139 $ 140 $ 140 Ratio of expenses to average weekly net assets applicable to common stock (c) ......................................... 0.65% 0.95% 0.90% 0.90% 0.91% Ratio of net investment income to average weekly net assets applicable to common stock (d)(e) ........................ 4.20% 6.58% 6.40% 6.39% 6.57% Portfolio turnover rate (excluding short-term securities) ................................... 20% 4% 8% 4% 9% Remarketed preferred stock outstanding end of period (in millions) ............................................ $ -- $ 43 $ 43 $ 43 $ 43 Asset coverage per share (in thousands) (f) ................ -- 78 82 82 82 Liquidation preference and market value per share (in thousands) ........................................... -- 25 25 25 25
(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 0.65%, 0.66%, 0.63%, 0.63% AND 0.64% FOR THE FISCAL YEARS 2000, 1999, 1998, 1997 AND 1996, 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 5.19%, 5.57%, 5.43%, 5.49% AND 5.59% FOR FISCAL YEARS 2000, 1999, 1998, 1997 AND 1996, 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. - -------------------------------------------------------------------------------- 2000 Annual Report 19 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- (9) 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
Year Ended December 31, -------------------------------------------- 2000 1999 1998(g) 1997 1996 ------ ------ ---------- ------- ------- PER-SHARE DATA Net asset value, common stock, beginning of period ......... $10.82 $11.55 $11.60 $11.43 $11.71 ------ ------ ------ ------ ------ Operations: Net investment income .................................... 0.84 0.88 0.89 0.89 0.90 Net realized and unrealized gains (losses) on investments ......................................... 0.01 (0.72) (0.09) 0.14 (0.35) ------ ------ ------ ------ ------ Total from operations .................................. 0.85 0.16 0.80 1.03 0.55 ------ ------ ------ ------ ------ Distributions to shareholders: From net investment income Paid to common shareholders ............................ (0.65) (0.72) (0.62) (0.62) (0.62) Paid to preferred shareholders ......................... (0.20) (0.17) (0.18) (0.17) (0.17) From net realized gains Paid to common shareholders ............................ (0.01) -- (0.04) (0.05) (0.03) Paid to preferred shareholders ......................... (0.01) -- (0.01) (0.02) (0.01) ------ ------ ------ ------ ------ Total distributions to shareholders ...................... (0.87) (0.89) (0.85) (0.86) (0.83) ------ ------ ------ ------ ------ Net asset value, common stock, end of period ............... $10.80 $10.82 $11.55 $11.60 $11.43 ====== ====== ====== ====== ====== Market value, common stock, end of period .................. $10.44 $10.13 $11.56 $11.38 $10.75 ====== ====== ====== ====== ====== SELECTED INFORMATION Total return, common stock, net asset value (a) ............ 6.16% (0.13)% 5.36% 7.57% 3.33% Total return, common stock, market value (b) ............... 9.86% (6.49)% 7.65% 12.46% 7.66% Net assets at end of period (in millions) .................. $ 116 $ 117 $ 122 $ 122 $ 121 Ratio of expenses to average weekly net assets applicable to common stock (c) ......................................... 0.98% 0.97% 0.89% 0.91% 0.92% Ratio of net investment income to average weekly net assets applicable to common stock (d)(e) ........................ 6.00% 6.33% 6.12% 6.21% 6.41% Portfolio turnover rate (excluding short-term securities) ................................... 15% 2% 2% 6% 6% Remarketed preferred stock outstanding end of period (in millions) ............................................ $ 37 $ 37 $ 37 $ 37 $ 37 Asset coverage per share (in thousands) (f) ................ 79 79 82 83 82 Liquidation preference and market value per share (in thousands) ........................................... 25 25 25 25 25
(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%, 0.67%, 0.62%, 0.64% AND 0.64% FOR FISCAL YEARS 2000, 1999, 1998, 1997 AND 1996, 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 5.36%, 5.44%, 5.32%, 5.36% AND 5.48% FOR FISCAL YEARS 2000, 1999, 1998, 1997 AND 1996, 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. - -------------------------------------------------------------------------------- 2000 Annual Report 20 American Municipal Term Trusts NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- (9) 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
Year Ended December 31, -------------------------------------------- 2000 1999 1998(g) 1997 1996 ------ ------ ---------- ------- ------- PER-SHARE DATA Net asset value, common stock, beginning of period ......... $10.75 $11.46 $11.39 $10.92 $11.11 ------ ------ ------ ------ ------ Operations: Net investment income .................................... 0.81 0.83 0.81 0.82 0.83 Net realized and unrealized gains (losses) on investments ......................................... 0.20 (0.81) 0.08 0.47 (0.27) ------ ------ ------ ------ ------ Total from operations .................................... 1.01 0.02 0.89 1.29 0.56 ------ ------ ------ ------ ------ Distributions to shareholders: From net investment income Paid to common shareholders ............................ (0.59) (0.57) (0.57) (0.57) (0.57) Paid to preferred shareholders ......................... (0.20) (0.16) (0.17) (0.16) (0.18) From net realized gains Paid to common shareholders ............................ -- -- (0.06) (0.07) -- Paid to preferred shareholders ......................... -- -- (0.02) (0.02) -- ------ ------ ------ ------ ------ Total distributions to shareholders ...................... (0.79) (0.73) (0.82) (0.82) (0.75) ------ ------ ------ ------ ------ Net asset value, common stock, end of period ............... $10.97 $10.75 $11.46 $11.39 $10.92 ====== ====== ====== ====== ====== Market value, common stock, end of period .................. $10.44 $ 9.94 $11.25 $10.94 $10.38 ====== ====== ====== ====== ====== SELECTED INFORMATION Total return, common stock, net asset value (a) ............ 7.73% (1.23)% 6.28% 10.42% 3.65% Total return, common stock, market value (b) ............... 11.19% (6.81)% 8.86% 11.93% 8.38% Net assets at end of period (in millions) .................. $ 85 $ 84 $ 87 $ 87 $ 84 Ratio of expenses to average weekly net assets applicable to common stock (c) ......................................... 1.03% 1.03% 0.95% 0.99% 1.01% Ratio of net investment income to average weekly net assets applicable to common stock (d)(e) ........................ 5.62% 5.98% 5.67% 5.91% 6.08% Portfolio turnover rate (excluding short-term securities) ................................... 1% 1% 5% 7% 3% Remarketed preferred stock outstanding end of period (in millions) ............................................ $ 27 $ 27 $ 27 $ 27 $ 27 Asset coverage per share (in thousands) (f) ................ 80 78 82 82 79 Liquidation preference and market value per share (in thousands) ........................................... 25 25 25 25 25
(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 0.70%, 0.71%, 0.66%, 0.68% AND 0.69% FOR FISCAL YEARS 2000, 1999, 1998, 1997 AND 1996, 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 5.08%, 5.10%, 4.94%, 5.09% AND 5.26% FOR FISCAL YEARS 2000, 1999, 1998, 1997 AND 1996, 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 - -------------------------------------------------------------------------------- 2000 Annual Report 21 American Municipal Term Trusts INVESTMENTS IN SECURITIES - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST December 31, 2000 ..................................................................................... Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ----------- ----------- (PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS) MUNICIPAL LONG-TERM SECURITIES (37.8%): COLORADO (2.2%): Health Care Facility (FSA) (Prerefunded to 2/15/01 at 102), 7.25%, 2/15/16 .............................. $1,925,000(d) $ 1,971,027 ----------- GEORGIA (3.3%): Municipal Electric Authority (MBIA) (Prerefunded to 1/1/01 at 102), 7.00%, 1/1/16 ..................... 2,840,000(d) 2,897,254 ----------- ILLINOIS (4.7%): Chicago Motor Fuel Tax (AMBAC) (Prerefunded to 1/1/01 at 102), 7.10%, 1/1/11 ............................ 1,525,000(d) 1,555,744 Health Facility-Evangelical Hospital (FSA) (Prerefunded to 1/1/01 at 102), 7.13%, 1/1/21 ..... 2,500,000(d) 2,550,400 ----------- 4,106,144 ----------- INDIANA (4.0%): Hamilton S.E. School Building Corporation (AMBAC) (Prerefunded to 1/1/01 at 102), 7.00%, 7/1/08 ..... 3,445,000(d) 3,514,451 ----------- MASSACHUSETTS (2.0%): Peabody Anticipation Notes, 4.50%, 2/15/01 .......... 1,725,000 1,725,966 ----------- MINNESOTA (6.9%): Public Facilities Authority, 4.50%, 3/1/01 .......... 4,100,000 4,103,362 St. Louis Park Independent School District No. 283 (Callable 8/1/01 at 100), 5.90%, 2/1/04 ........... 1,000,000 1,001,590 Washington County Housing and Redevelopment Authority, 6.50%, 2/1/01 .......................... 1,000,000 1,002,170 ----------- 6,107,122 ----------- NEBRASKA (1.2%): Hospital Lease Investment Financing (MBIA) (Prerefunded to 3/1/01 at 102), 7.00%, 3/1/06 ..... 1,000,000(d) 1,024,930 ----------- PENNSYLVANIA (1.1%): Higher Education-Duquesne University (MBIA) (Prerefunded to 4/1/01 at 100), 7.00%, 4/1/10 ..... 1,000,000(d) 1,007,550 -----------
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 22 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST (CONTINUED) Principal Market Description of Security Amount/Shares Value (a) - --------------------------------------------------------- ----------- ----------- RHODE ISLAND (1.7%): Rhode Island Housing and Mortgage Finance, AMT, 3.65%, 3/30/01 $1,500,000(b) $ 1,496,475 ----------- SOUTH CAROLINA (0.7%): South Carolina State, 5.80%, 3/1/01 ................. 600,000 601,830 ----------- TENNESSEE (2.3%): Bristol Health and Education Facility (FGIC) (Prerefunded to 3/1/01 at 102), 7.00%, 9/1/11 ..... 1,000,000(d) 1,024,860 Memphis-Shelby County Airport Authority (MBIA), AMT, 5.25%, 2/15/01 .................................... 1,000,000(b) 1,001,200 ----------- 2,026,060 ----------- TEXAS (1.9%): Dallas County (Callable 2/15/01 at 100), 6.40%, 8/15/03 .................................... 750,000 752,302 Lower Colorado River Authority (AMBAC) (Prerefunded to 1/1/01 at 102), 7.00%, 1/1/11 .................. 885,000(d) 902,842 ----------- 1,655,144 ----------- WASHINGTON (5.8%): Public Power Supply System (Prerefunded to 1/1/01 at 102), 7.63%, 7/1/10 ............................... 5,000,000(d) 5,100,950 ----------- Total Municipal Long-Term Securities (cost: $32,843,587) ............................. 33,234,903 ----------- PREFERRED STOCK (4.1%): Muniholdings Insurance Fund ......................... 16 400,000 Nuveen DVD Advantage Muni ........................... 40 1,000,000 Nuveen PA Inv Qlty Muni ............................. 88 2,200,000 ----------- Total Preferred Stock (cost: $3,600,000) .............................. 3,600,000 -----------
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 23 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST (CONTINUED) Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ----------- ----------- MUNICIPAL SHORT-TERM SECURITIES (57.3%): COLORADO (14.1%): Colorado Springs-YMCA of Pikes Peak, 4.20%, 11/1/20 .................................... $2,400,000(c) $ 2,400,000 Inter Mountain Power Tax-Exempt Commercial Paper, 4.10%, 4/10/01 .................................... 10,000,000 10,000,000 ----------- 12,400,000 ----------- DISTRICT OF COLUMBIA (4.5%): National Academy of Sciences Tax-Exempt Commerical Paper, 4.10%, 4/9/01 .............................. 4,000,000 4,000,000 ----------- IOWA (5.0%): Webster County Iowa Education Facilities, 4.85%, 7/1/20 ..................................... 4,400,000(c) 4,400,000 ----------- LOUISIANA (5.0%): Louisiana PFA Tax-Exempt Commercial Paper, 4.10%, 4/9/01 ..................................... 4,400,000 4,401,188 ----------- MINNESOTA (7.0%): Hennepin County Minnesota General Obligation, 4.70%, 12/1/10 .................................... 500,000(c) 500,000 Mankota, Minnesota Revenue, 4.55%, 11/1/15 .......... 4,250,000(c) 4,250,000 Minneapolis Judgement, 4.05%, 12/1/10 ............... 1,400,000(c) 1,400,000 ----------- 6,150,000 ----------- NEW YORK (7.6%): New York City, NY, Subseries B-2, 4.85%, 8/15/19 .... 2,400,000(c) 2,400,000 New York State Energy & Development Authority, 5.20%, 7/1/27 ..................................... 4,250,000(c) 4,250,000 ----------- 6,650,000 ----------- TENNESSEE (1.1%): Shelby County Health Baptist Tax-Exempt Commerical Paper, 4.20%, 4/9/01 .............................. 1,000,000 1,000,000 ----------- TEXAS (10.7%): Harris County, 5.25%, 10/1/17 ....................... 4,400,000(c) 4,400,000 Texas PFA Tax-Exempt Commercial Paper, 4.25%, 4/9/01 ..................................... 5,000,000 5,003,400 ----------- 9,403,400 -----------
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 24 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST (CONTINUED) Principal Market Description of Security Amount/Shares Value (a) - --------------------------------------------------------- ----------- ----------- WASHINGTON (2.3%): Washington State Health Care Facilities Authority, 5.25%, 1/1/18-1/1/29 .............................. $2,030,000(c) $ 2,030,000 ----------- 2,030,000 ----------- Total Municipal Short-Term Securities (cost: $50,430,000) ............................. 50,434,588 ----------- RELATED PARTY MONEY MARKET FUND (0.1%): First American Tax Free Obligations Fund (cost: $44,091) ................................... 44,091(e) 44,091 ----------- 44,091 ----------- Total Investments in Securities (cost: $86,917,678)(f) .......................... $87,313,582 ===========
NOTES TO INVESTMENTS IN SECURITIES: (a) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 IN THE NOTES TO FINANCIAL STATEMENTS. (b) AMT-ALTERNATIVE MINIMUM TAX. AS OF DECEMBER 31, 2000, THE AGGREGATE MARKET VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS $2,497,675, WHICH REPRESENTS 2.8% OF NET ASSETS. (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, 2000. 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) 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. (f) ON DECEMBER 31, 2000, THE COST OF INVESTMENTS IN SECURITIES FOR FEDERAL INCOME TAX PURPOSES WAS $86,894,887. THE AGGREGATE GROSS UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS COST WERE AS FOLLOWS: GROSS UNREALIZED APPRECIATION ...... $ 418,695 GROSS UNREALIZED DEPRECIATION ...... -- ---------- NET UNREALIZED APPRECIATION ...... $ 418,695 ==========
- -------------------------------------------------------------------------------- 2000 Annual Report 25 American Municipal Term Trusts INVESTMENTS IN SECURITIES - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST II December 31, 2000 ...................................................................................... Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ------------ (PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS) MUNICIPAL LONG-TERM SECURITIES (97.7%): FLORIDA (1.9%): Manatee County, Zero-Coupon (MBIA), 6.91%, 10/1/07 .................................... $2,995,000(b) $ 2,224,686 ------------ ILLINOIS (21.3%): Belleville General Obligation (FGIC) (Prerefunded to 12/1/01 at 100), 7.13%, 12/1/08 ................... 1,000,000(e) 1,028,250 Carbondale General Obligation (FGIC) (Prerefunded to 5/1/01 at 100), 6.90%, 5/1/12 ..................... 3,200,000(e) 3,231,488 Central Lake County, Zero-Coupon (MBIA), 6.98%, 5/1/07 ..................................... 2,370,000(b) 1,778,638 Chicago Motor Fuel Tax (AMBAC) (Prerefunded to 1/1/01 at 102), 7.10%, 1/1/11 ............................ 1,500,000(e) 1,530,240 Chicago, Illinois O'Hare Airport, 5.20%, 4/1/11 ..... 2,000,000 1,816,560 Cook County General Obligation (AMBAC) (Prerefunded to 11/1/01 at 102), 6.75%, 11/1/18 ................ 5,000,000(e) 5,209,100 Decatur, Zero-Coupon (AMBAC), 6.98%, 10/1/07 ........ 1,250,000(b) 920,562 Health Facility-Evangelical Hospital (escrowed to maturity) (Callable 4/15/02 at 102), 6.75%, 4/15/12 .................................... 990,000 1,143,876 Health Facility-Evangelical Hospital (Prerefunded to 4/15/02 at 102, 6.75%, 4/15/12 .................... 510,000(e) 536,173 Health Facility-Evangelical Hospital (Prerefunded to 4/15/02 at 102), 6.75%, 4/15/17 ................... 680,000(e) 714,898 Health Facility-Highland Park Hospital (FGIC), 5.30%, 10/1/02 .................................... 1,265,000 1,288,871 Higher Education Facility-Augustana College (Connie Lee), 4.90%, 10/1/02 .............................. 500,000 506,000 Kendall, Kane, and Will Counties, Zero-Coupon (FGIC), 6.96%, 3/1/07 ..................................... 975,000(b) 737,256 Lake County Water and Sewer System (AMBAC) (Prerefunded to 12/1/01 at 100), 6.75%, 12/1/08-12/1/09 ............................ 4,215,000(e) 4,320,291 ------------ 24,762,203 ------------ INDIANA (13.5%): Boonville School Building Corporation (Callable 7/1/02 at 102), 6.90%, 7/1/09 ..................... 2,000,000 2,105,320 Indiana Bond Bank, 5.15%, 2/1/02 .................... 900,000 907,749 Indiana University, Zero-Coupon (AMBAC), 7.07%, 8/1/07 ..................................... 3,180,000(b) 2,355,108
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 26 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST II (CONTINUED) Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ------------ 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) $ 2,588,725 Noblesville/Hamilton County School Building Corporation (Prerefunded to 2/1/01 at 102), 7.00%, 2/1/13 ..................................... 1,000,000(e) 1,022,490 Port Commission, Cargill Inc. Project (Callable 5/1/02 at 102), 6.88%, 5/1/12 ..................... 450,000 471,519 Purdue University (AMBAC) (Prerefunded to 7/1/01 at 102), 7.00%, 7/1/14 ............................... 3,000,000(e) 3,104,160 St. Joseph County Hospital Authority (MBIA) (Prerefunded to 12/1/01 at 102), 7.00%, 12/1/12 .................................... 3,000,000(e) 3,138,120 ------------ 15,693,191 ------------ IOWA (2.8%): Mason City Hospital Facilities (FSA) (Prerefunded to 8/15/01 at 102), 6.88%, 8/15/09 ................... 1,265,000(e) 1,312,362 Polk County Health Facilities (MBIA) (Prerefunded to 11/1/01 at 101), 7.10%, 11/1/09 ................... 1,895,000(e) 1,961,173 ------------ 3,273,535 ------------ KENTUCKY (1.2%): Owensboro Electric Light and Power, Zero-Coupon (AMBAC), 6.91%, 1/1/07 ............................ 1,775,000(b) 1,354,733 ------------ LOUISIANA (3.4%): New Orleans General Obligation, Zero-Coupon (AMBAC), 7.01%, 9/1/07 ..................................... 5,000,000(b) 3,703,400 Parrish of St. Martin, Cargill Inc. Project (Callable 10/1/02 at 102), 6.63%, 10/1/12 ................... 300,000(c) 313,413 ------------ 4,016,813 ------------ MICHIGAN (2.7%): Detroit General Obligation, 6.50%, 4/1/02 ........... 2,000,000 2,048,860 State Housing Development Authority (FSA) (Callable 10/15/02 at 103), 6.85%, 10/15/18 ................. 1,000,000 1,048,470 ------------ 3,097,330 ------------
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 27 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST II (CONTINUED) Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ------------ MINNESOTA (1.6%): Burnsville Gross Revenue, 4.20%-4.50%, 5/1/02-5/1/05 ........................ $ 870,000 $ 858,297 East Grand Forks Industrial Development Revenue (Callable 4/1/01 at 102), 8.00%, 4/1/11 ........... 1,000,000 1,024,520 ------------ 1,882,817 ------------ 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 2,117,180 ------------ NEVADA (1.8%): Clark County School District (FGIC), 5.75%, 6/15/02 .................................... 2,000,000 2,045,280 ------------ NEW HAMPSHIRE (0.8%): Single Family Housing Authority (Callable 7/1/03 at 102), 5.85%, 7/1/10 ............................... 905,000 915,326 ------------ NEW JERSEY (1.8%): State Educational Facilities Authority (Prerefunded to 7/1/01 at 102), 6.88%, 7/1/10 .................. 2,000,000(e) 2,067,140 ------------ NEW YORK (0.8%): New York City General Obligation, 5.10%, 8/1/02 ..... 1,000,000 1,015,350 ------------ NORTH DAKOTA (4.7%): Bismark Hospital Revenue (AMBAC) (Prerefunded to 5/1/01 at 102), 6.90%, 5/1/06 ..................... 4,300,000(e) 4,426,119 Grand Forks Health Care Authority (MBIA) (Callable 12/1/01 at 102), 6.63%, 12/1/10 ................... 1,000,000 1,040,340 ------------ 5,466,459 ------------ OKLAHOMA (0.7%): Tulsa County Oklahoma Independent School District No. 5, 5.00%, 7/1/02 ..................... 850,000 859,818 ------------ PENNSYLVANIA (1.3%): Dauphin County (AMBAC) (Callable 6/2/08 at 100), 4.50%, 6/1/26 1,490,000 1,486,230 ------------
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 28 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST II (CONTINUED) Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ------------ SOUTH CAROLINA (2.3%): Lexington County Health Services (FSA) (Prerefunded to 10/1/01 at 102), 6.75%, 10/1/18 ................ $1,600,000(e) $ 1,664,080 South Carolina Ports Authority, 4.10%, 7/1/02 ....... 1,010,000 1,006,586 ------------ 2,670,666 ------------ SOUTH DAKOTA (2.4%): Health & Education Facility Revenue (AMBAC), 4.50%, 8/1/02 ..................................... 295,000 296,472 Health and Education Facility Revenue (Callable 5/1/01 at 102), 7.00%, 11/1/07 .................... 2,500,000 2,567,700 ------------ 2,864,172 ------------ TENNESSEE (1.1%): Memphis-Shelby County Airport Authority (MBIA), AMT, 5.25%, 2/15/02 .................................... 1,235,000(f) 1,248,400 ------------ TEXAS (11.0%): Abilene Texas Health Facility Development, 4.80%, 11/15/02 ................................... 605,000 591,744 Dallas-Fort Worth International Airport, AMT (Callable 11/1/03 at 100), 5.95%, 5/1/29 .......... 2,000,000 2,025,280 Harris County Health Facilities (FSA) (Prerefunded to 10/1/01 at 102), 7.00%, 10/1/14 ................... 2,225,000(e) 2,317,360 Houston Hotel Occupancy (FGIC) (Prerefunded to 7/1/01), 7.00%, 7/1/15 ............................ 4,995,000(e) 5,069,475 Houston Water and Sewer, Zero-Coupon (AMBAC), 6.91%, 12/1/07 .................................... 3,000,000(b) 2,194,230 Nueces County Housing Finance Authority, 6.25%, 7/1/10 ..................................... 575,000 587,805 ------------ 12,785,894 ------------ VIRGINIA (3.5%): State HDA Commonwealth Meeting, 5.13%-5.30%, 1/1/07-1/1/10 3,985,000 4,089,198 ------------ WASHINGTON (10.5%): Chelan County Public Utilities District (Callable 7/1/03 at 100), AMT, 7.60%, 7/1/25 ................ 3,000,000(f) 3,173,820 Chelan County Public Utilities District (MBIA), AMT, 5.45%, 7/1/02 385,000(f) 390,994 Clark County Industrial Revenue, AMT (Callable 8/1/02 at 100), 4.65%, 8/1/07 ............................ 1,895,000(f) 1,894,640
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 29 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST II (CONTINUED) Principal Market Description of Security Amount/Shares Value (a) - --------------------------------------------------------- ---------- ------------ Clark County Public Utility District (FGIC) (Prerefunded to 1/1/01 at 102), 6.50%, 1/1/11 ..... $2,000,000(e) $ 2,040,260 King and Snohomish Counties School District (FGIC) (Prerefunded to 12/1/02 at 100), 6.63%, 12/1/12 .................................... 300,000(e) 313,965 Public Power Supply System, 5.25%, 7/1/01 ........... 2,000,000 2,011,480 Public Power Supply System (Prerefunded to 7/1/01 at 102), 6.75%, 7/1/11 ............................... 1,350,000(e) 1,394,861 Snohomish County Solid Waste Revenue (MBIA) (Prerefunded to 12/1/01 at 102), 7.00%, 12/1/10 .................................... 1,000,000(e) 1,046,420 ------------ 12,266,440 ------------ WEST VIRGINIA (1.8%): 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) 2,093,440 ------------ WISCONSIN (3.0%): Amery Wisconsin Revenue, 4.80%, 6/1/02 .............. 420,000 418,118 Health and Education Facilities-Gundersen Clinic (FSA), 5.10%, 12/1/02 ............................. 3,000,000 3,048,150 ------------ 3,466,268 ------------ Total Municipal Long-Term Securities (cost: $108,830,520) ............................ 113,762,569 ------------ MUNICIPAL SHORT-TERM SECURITIES (1.2%): TEXAS (0.6%): Harris County, 5.25%, 10/1/17 ....................... 700,000(d) 700,000 ------------ WASHINGTON (0.6%): Washington State Health Care Facilities Authority, 5.25%, 1/1/18-1/1/29 .............................. 700,000(d) 700,000 ------------ Total Municipal Short-Term Securities (cost: $1,400,000) .............................. 1,400,000 ------------ RELATED PARTY MONEY MARKET FUND (0.0%): First American Tax Free Obligations Fund (cost: $21,316) ................................... 21,316(g) 21,316 ------------ 21,316 ------------ Total Investments in Securities (cost: $110,251,836) (h) ....................... $115,183,885 ============
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 30 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- NOTES TO INVESTMENTS IN SECURITIES: (a) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 IN THE NOTES TO 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, 2000, THE TOTAL MARKET VALUE OF THESE INVESTMENTS WAS $313,413 OR 0.3% 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, 2000. 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 MATURE AT THE DATE AND PRICE INDICATED. (f) AMT-ALTERNATIVE MINIMUM TAX. AS OF DECEMBER 31, 2000, THE AGGREGATE MARKET VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS $6,707,854, WHICH REPRESENTS 5.8% 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, 2000, THE COST OF INVESTMENTS IN SECURITIES FOR FEDERAL INCOME TAX PURPOSES WAS $110,225,099. THE AGGREGATE GROSS UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS COST WERE AS FOLLOWS: GROSS UNREALIZED APPRECIATION ...... $4,984,009 GROSS UNREALIZED DEPRECIATION ...... (25,223) ---------- NET UNREALIZED APPRECIATION ...... $4,958,786 ==========
- -------------------------------------------------------------------------------- 2000 Annual Report 31 American Municipal Term Trusts INVESTMENTS IN SECURITIES - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST III December 31, 2000 ..................................................................................... Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ----------- (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) $ 530,040 ----------- CALIFORNIA (1.0%): State Housing Finance Revenue (FHA), 4.80%, 8/1/03 ..................................... 845,000 861,190 ----------- COLORADO (2.4%): Health Facilities Authority Revenue, 4.65%, 1/1/03 ..................................... 1,055,000 1,040,895 Snowmass Village Multifamily Housing (FSA) (Callable 12/15/02 at 102), 6.25%, 12/15/16 ................. 1,000,000 1,023,840 ----------- 2,064,735 ----------- 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) 1,072,950 General Obligation (escrowed to maturity) (MBIA), 4.75%, 6/1/03 ..................................... 1,460,000 1,478,416 ----------- 2,551,366 ----------- FLORIDA (0.9%): Broward County School District, Zero-Coupon (MBIA), 6.55%, 2/15/08 1,000,000(b) 728,190 ----------- HAWAII (1.5%): State General Obligation (FGIC), 4.80%, 3/1/03 ...... 1,250,000 1,266,200 ----------- ILLINOIS (18.2%): Chicago Wastewater Revenue (FGIC) (Prerefunded to 1/1/03 at 102), 6.35%, 1/1/22 ..................... 1,000,000(d) 1,060,530 Health Facility-Alexian Brothers Medical Center (MBIA) (Prerefunded to 1/1/02 at 102), 6.38%, 1/1/15 ..................................... 1,125,000(d) 1,171,901 Health Facility-Elmhurst Memorial Hospital (FGIC) (Callable 1/1/02 at 102), 6.50%, 1/1/12 ........... 1,190,000 1,235,184 Health Facility-Highland Park Hospital (FGIC), 5.40%, 10/1/03 .................................... 1,000,000 1,029,280 Health Facility-Lutheran General Systems (FSA) (escrowed to maturity) (Callable 4/1/03 at 102), 6.13%, 4/1/12 ..................................... 1,000,000 1,102,640 Henry Hospital District (AMBAC) (Prerefunded to 12/1/02 at 100), 6.60%, 12/1/17 ................... 2,000,000(d) 2,093,320
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 32 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST III (CONTINUED) Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ----------- Higher Education Facility-Augustana College (Connie Lee), 5.00%, 10/1/03 .............................. $ 330,000 $ 336,178 Lake County Housing and Finance Corporation (FHA) (Callable 11/1/02 at 100), 6.70%, 11/1/14 ......... 2,000,000 2,039,140 Rochelle Water and Sewer Revenue (Prerefunded to 5/1/02 at 102), 7.15%, 5/1/14 ..................... 2,000,000(d) 2,113,440 State General Obligation (Callable 10/1/02 at 102), 6.25%, 10/1/12 410,000 429,102 State General Obligation (Prerefunded to 10/1/02 at 102), 6.25%, 10/1/12 .............................. 2,690,000(d) 2,837,358 ----------- 15,448,073 ----------- INDIANA (14.9%): Crawfordsville School Building Corporation (Callable 1/1/03 at 102), 6.25%, 7/1/11 ..................... 500,000 525,945 Freemont Middle School Building (AMBAC) (Prerefunded to 3/15/02 at 101), 6.75%, 3/15/13 ................ 3,000,000(d) 3,122,580 Health Facilities-Community Hospital Project (MBIA) (Callable 5/1/02 at 102), 6.40%, 5/1/12 ........... 5,000,000 5,200,650 Health Facilities-Methodist Hospital (AMBAC) (escrowed to maturity) (Callable 9/1/02 at 102), 5.75%, 9/1/15 ..................................... 1,000,000 1,093,630 Indiana Health Facility, 5.00%, 5/15/03 ............. 380,000 373,988 Lake County Redevelopment Authority (MBIA) (Callable 2/1/05 at 102), 6.45%, 2/1/11 ..................... 1,600,000 1,739,936 Patoka Lake Regional Water and Sewer District (AMBAC) (Prerefunded to 1/1/04 at 101), 6.45%, 1/1/15 ..... 500,000(d) 536,745 ----------- 12,593,474 ----------- IOWA (1.5%): Cedar Rapids Hospital Facilities (FGIC) (Prerefunded to 8/15/03 at 102), 6.13%, 8/15/13 ................ 1,200,000(d) 1,278,972 ----------- KANSAS (2.2%): Kansas City Utility Systems, Zero-Coupon (AMBAC), 6.40%, 3/1/08 . 1,060,000(b) 764,970 Kansas City Utility Systems, Zero-Coupon (AMBAC) (escrowed to maturity), 6.40%, 3/1/08 ............. 1,515,000(b) 1,096,406 ----------- 1,861,376 -----------
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 33 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST III (CONTINUED) Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ----------- MAINE (2.5%): Water and Sewer Revenue (Callable 11/1/02 at 102), 6.60%, 11/1/15 .................................... $2,000,000 $ 2,104,220 ----------- NEVADA (1.2%): Clark County School District (FGIC), 5.75%, 6/15/03 .................................... 1,000,000 1,035,630 ----------- 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 1,045,750 ----------- NEW YORK (2.1%): State General Obligation, 5.20%, 8/1/03 ............. 1,735,000 1,779,642 ----------- NORTH DAKOTA (3.9%): Mercer County Pollution Control Revenue (AMBAC), 7.20%, 6/30/13 2,700,000 3,274,371 ----------- OKLAHOMA (1.0%): Tulsa County Independent School District No. 5, 5.00%, 7/1/03 ..................................... 850,000 864,187 ----------- 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 1,276,104 ----------- 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) 1,362,074 ----------- SOUTH DAKOTA (2.9%): State Building Authority (AMBAC) (Prerefunded to 9/01/02 at 102), 6.63%, 9/1/12 .................... 115,000(d) 121,768 State Building Authority (AMBAC) (Prerefunded to 9/01/04 at 100), 6.63%, 9/1/12 .................... 2,235,000(d) 2,360,942 ----------- 2,482,710 ----------- TEXAS (22.8%): Abilene Texas Health Facility Development, 4.90%, 11/15/03 ................................... 665,000 641,286 Austin Utility System Revenue, Zero-Coupon (MBIA), 6.53%, 11/15/08 5,000,000(b) 3,489,050 Houston Water and Sewer Revenue (FSA) (Prerefunded to 12/1/02 at 102), 6.38%, 12/1/14 ................... 1,900,000(d) 1,991,618
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 34 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST III (CONTINUED) Principal Market Description of Security Amount Value (a) - --------------------------------------------------------- ---------- ----------- Montgomery County Hospital District (FSA) (Prerefunded to 4/1/02 at 102), 6.63%, 4/1/17 ..... $3,300,000(d) $ 3,462,987 Pflugerville Independent School District (Prerefunded to 8/15/04 at 100), 5.75%, 8/15/15 ................ 975,000(d) 1,027,319 San Antonio Electric and Gas, Zero-Coupon (FGIC), 6.40%, 2/1/08 ..................................... 4,500,000(b) 3,264,390 San Antonio Water Revenue (MBIA) (Callable 5/15/02 at 102), 6.50%, 5/15/10 .............................. 1,585,000 1,660,969 San Antonio Water Revenue (MBIA) (escrowed to maturity), 6.50%, 5/15/10 ......................... 440,000 497,138 San Antonio Water Revenue (MBIA) (Prerefunded to 5/15/02 at 102), 6.50%, 5/15/10 ................... 875,000(d) 919,231 San Antonio Water Revenue (MBIA) (Prerefunded to 5/15/04 at 100), 6.50%, 5/15/10 ................... 100,000(d) 107,265 State Capital Appreciation, Zero-Coupon (FGIC), 6.43%, 4/1/08 ..................................... 3,100,000(b) 2,231,876 ----------- 19,293,129 ----------- WASHINGTON (7.6%): Chelan County Public Utilities District (MBIA), AMT, 5.55%, 7/1/03 ..................................... 305,000(e) 312,872 Public Power Supply System (Callable 7/1/02 at 102), 6.25%, 7/1/12 770,000 802,540 Public Power Supply System (Prerefunded to 7/1/01 at 102), 6.50%, 7/1/18 ............................... 2,515,000(d) 2,595,706 Public Power Supply System (Prerefunded to 7/1/02 at 102), 6.25%, 7/1/12 ............................... 2,600,000(d) 2,729,324 ----------- 6,440,442 ----------- WEST VIRGINIA (3.2%): Clarksburg Water Revenue (Asset Guaranty) (Callable 9/1/02 at 102), 6.25%, 9/1/14 ..................... 2,620,000 2,734,573 ----------- WISCONSIN (0.4%): Amery Wisconsin Revenue, 4.90%, 6/1/03 .............. 300,000 298,152 ----------- Total Municipal Long-Term Securities (cost: $77,961,445) ............................. 83,174,600 ----------- MUNICIPAL SHORT-TERM SECURITIES (0.7%): NEW YORK (0.1%): New York City, Series B, 5.50%, 10/1/20 ............. 100,000(c) 100,000 -----------
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES. - -------------------------------------------------------------------------------- 2000 Annual Report 35 American Municipal Term Trusts INVESTMENTS IN SECURITIES (continued) - -------------------------------------------------------------------------------- AMERICAN MUNICIPAL TERM TRUST III (CONTINUED) Principal Market Description of Security Amount/Shares Value (a) - --------------------------------------------------------- ---------- ----------- TEXAS (0.2%): Harris County, 5.25%, 10/1/17 ....................... $ 150,000(c) $ 150,000 ----------- WASHINGTON (0.4%): Washington State Health Care Facilities Authority, 5.25%, 1/1/18-1/1/29 .............................. 350,000(c) 350,000 ----------- Total Municipal Short-Term Securities (cost: $600,000) ................................ 600,000 ----------- RELATED PARTY MONEY MARKET FUND (0.1%): First American Tax Free Obligations Fund (cost: $55,895) ................................... 55,895(f) 55,895 ----------- 55,895 ----------- Total Investments in Securities (cost: $78,617,339) (g) ........................ $83,830,495 ===========
Notes to Investements in Securities: (a) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 IN THE NOTES TO 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, 2000. 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) AMT-ALTERNATIVE MINIMUM TAX. AS OF DECEMBER 31, 2000, THE AGGREGATE MARKET VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS $312,872, WHICH REPRESENTS 0.4% 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, 2000, THE COST OF INVESTMENTS IN SECURITIES FOR FEDERAL INCOME TAX PURPOSES WAS $78,593,473. THE AGGREGATE GROSS UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS COST WERE AS FOLLOWS: GROSS UNREALIZED APPRECIATION ...... $5,279,220 GROSS UNREALIZED DEPRECIATION ...... (42,198) ---------- NET UNREALIZED APPRECIATION ...... $5,237,022 ==========
- -------------------------------------------------------------------------------- 2000 Annual Report 36 American Municipal Term Trusts 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 of American Municipal Term Trust Inc., American Municipal Term Trust Inc. II and American Municipal Term Trust Inc. III, including the schedules of investments in securities, as of December 31, 2000, and the related statements of operations for the year then ended, and the statements of changes in net assets and the financial highlights for each of the two years in the period 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 financial highlights for each of the three 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, 2000, with the custodians. 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 2000 and 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, 2000, the results of their operations for the year then ended, and changes in their net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Minneapolis, Minnesota January 31, 2001 - -------------------------------------------------------------------------------- 2000 Annual Report 37 American Municipal Term Trusts 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, 99.96%, 100% AND 99.98% QUALIFYING AS EXEMPT-INTEREST DIVIDENDS, RESPECTIVELY)
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III - ------------ ---------- ------------- -------------- January 12, 2000 ....................... $0.0542 $0.0517 $0.0475 February 23, 2000 ...................... 0.0542 0.0517 0.0475 March 29, 2000 ......................... 0.0542 0.0517 0.0475 April 26, 2000 ......................... 0.0542 0.0517 0.0475 May 24, 2000 ........................... 0.0542 0.0517 0.0475 June 28, 2000 .......................... 0.0542 0.0517 0.0475 July 26, 2000 .......................... 0.0542 0.0517 0.0475 August 23, 2000 ........................ 0.0542 0.0517 0.0475 September 27, 2000 ..................... 0.0542 0.0517 0.0475 October 25, 2000 ....................... 0.0632 0.0837 0.0665 November 21, 2000 ...................... 0.0632 0.0517 0.0475 December 15, 2000 ...................... 0.0635 0.0517 0.0475 ------- ------- ------- Total .............................. $0.6777 $0.6524 $0.5890 ======= ======= =======
COMMON STOCK LONG-TERM GAINS (TAXABLE AS CAPITAL GAINS DISTRIBUTIONS)
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III - ------------ ---------- ------------- -------------- December 15, 2000 .................. $0.0675 $0.0148 $ -- ======= ======= =======
- -------------------------------------------------------------------------------- 2000 Annual Report 38 American Municipal Term Trusts FEDERAL INCOME TAX INFORMATION (continued) - -------------------------------------------------------------------------------- PREFERRED STOCK INCOME DISTRIBUTIONS (INCOME FROM TAX-EXEMPT SECURITIES, 99.96%, 100% AND 99.98% QUALIFYING AS EXEMPT-INTEREST DIVIDENDS, RESPECTIVELY)
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III - ------------ ---------- ------------- -------------- Total .............................. $828.8700 $995.6100 $972.0100 ========= ========= =========
PREFERRED STOCK LONG-TERM GAINS (TAXABLE AS CAPITAL GAINS DISTRIBUTIONS)
AMERICAN AMERICAN AMERICAN MUNICIPAL MUNICIPAL MUNICIPAL PAYABLE DATE TERM TRUST TERM TRUST II TERM TRUST III - ------------ ---------- ------------- -------------- December 18, 2000 .................. $ -- $26.6900 $ -- ======== ======== ========
- -------------------------------------------------------------------------------- 2000 Annual Report 39 American Municipal Term Trusts SHAREHOLDER UPDATE - -------------------------------------------------------------------------------- ANNUAL MEETING RESULTS An annual meeting of the funds' shareholders was held on August 3, 2000. 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) Each fund's preferred and common shareholders, voting as a single class, elected to decrease the size of the Board of Directors to eight directors. The following votes were cast regarding this matter:
SHARES SHARES BROKER VOTED "FOR" VOTED "AGAINST" ABSTENTIONS NON-VOTES ------------- ----------------- ----------- --------- American Municipal Term Trust .......... 7,660,533 70,859 173,709 -- American Municipal Term Trust II ....... 6,729,437 29,028 54,402 -- American Municipal Term Trust III ...... 4,811,620 32,887 24,143 --
(2) The funds' preferred shareholders elected the following directors:
SHARES SHARES WITHHOLDING VOTED "FOR" AUTHORITY TO VOTE ------------- ------------------ AMERICAN MUNICIPAL TERM TRUST Roger A. Gibson ........................ 1,358 -- Leonard W. Kedrowski ................... 1,358 -- AMERICAN MUNICIPAL TERM TRUST II Roger A. Gibson ........................ 1,458 -- Leonard W. Kedrowski ................... 1,458 -- AMERICAN MUNICIPAL TERM TRUST III Roger A. Gibson ........................ 1,064 -- Leonard W. Kedrowski ................... 1,064 --
- -------------------------------------------------------------------------------- 2000 Annual Report 40 American Municipal Term Trusts SHAREHOLDER UPDATE (continued) - -------------------------------------------------------------------------------- (3) Each fund's preferred and common shareholders, voting as a single class, elected the following directors:
SHARES SHARES WITHHOLDING VOTED "FOR" AUTHORITY TO VOTE ------------- ------------------ AMERICAN MUNICIPAL TERM TRUST Robert J. Dayton ....................... 7,777,772 127,330 Andrew M. Hunter III ................... 7,780,986 124,116 John M. Murphy, Jr. .................... 7,780,986 124,116 Robert L. Spies ........................ 7,774,886 130,216 Joseph D. Strauss ...................... 7,780,986 124,116 Virginia L. Stringer ................... 7,778,786 126,316 AMERICAN MUNICIPAL TERM TRUST II Robert J. Dayton ....................... 6,747,877 67,990 Andrew M. Hunter III ................... 6,747,877 67,990 John M. Murphy, Jr. .................... 6,747,876 67,991 Robert L. Spies ........................ 6,665,899 146,968 Joseph D. Strauss ...................... 6,747,877 67,990 Virginia L. Stringer ................... 6,744,032 68,835 AMERICAN MUNICIPAL TERM TRUST III Robert J. Dayton ....................... 4,826,706 41,945 Andrew M. Hunter III ................... 4,826,706 41,945 John M. Murphy, Jr. .................... 4,826,706 41,945 Robert L. Spies ........................ 4,826,706 41,945 Joseph D. Strauss ...................... 4,826,706 41,945 Virginia L. Stringer ................... 4,826,706 41,945
(4) Each fund's preferred and common shareholders, voting as a single class, ratified the selection by a majority of the independent members of the funds' Board of Directors of Ernst and 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:
SHARES SHARES BROKER VOTED "FOR" VOTED "AGAINST" ABSTENTIONS NON-VOTES ------------- ----------------- ----------- --------- American Municipal Term Trust .......... 7,754,191 23,860 127,051 -- American Municipal Term Trust II ....... 6,766,665 9,122 37,080 -- American Municipal Term Trust III ...... 4,817,128 18,773 32,749 --
- -------------------------------------------------------------------------------- 2000 Annual Report 41 American Municipal Term Trusts SHAREHOLDER UPDATE (continued) - -------------------------------------------------------------------------------- (5) The preferred and common shareholders of American Municipal Term Trust, voting as a single class, approved a plan of liquidation and dissolution for the fund, providing for the sale of all of the assets of the fund and the distribution of the proceeds to fund shareholders on or shortly before April 15, 2001. The following votes were cast regarding this matter:
SHARES SHARES BROKER VOTED "FOR" VOTED "AGAINST" ABSTENTIONS NON-VOTES -------------- ------------------ --------------- ------------- 4,610,323 84,474 218,909 --
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. - -------------------------------------------------------------------------------- 2000 Annual Report 42 American Municipal Term Trusts 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, just as 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 - -------------------------------------------------------------------------------- 2000 Annual Report 43 American Municipal Term Trusts 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 questions 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. - -------------------------------------------------------------------------------- 2000 Annual Report 44 American Municipal Term Trusts [Logo] FIRST AMERICAN-Registered Trademark- ASSET MANAGEMENT AMERICAN MUNICIPAL TERM TRUSTS 2000 ANNUAL REPORT [Recycled Logo] This document is printed on paper containing 30% post-consumer waste. 2/2001 2009-01 -----END PRIVACY-ENHANCED MESSAGE-----