================================================================================
INVESTMENT ADVISER
Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891
DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891
CUSTODIAN BANK
State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Co.
c/o NFDS
P.O. Box 419729
Kansas City, MO 64141-6729
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036-2798
LEGAL COUNSEL
Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
TRUSTEES
Jean Bernhard Buttner
John W. Chandler
Leo R. Futia
David H. Porter
Paul Craig Roberts
Nancy-Beth Sheerr
OFFICERS
Jean Bernhard Buttner
Chairman and President
Charles Heebner
Vice President
Raymond S. Cowen
Vice President
David T. Henigson
Vice President and Secretary/Treasurer
Jack M. Houston
Assistant Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
This report is issued for information of shareholders. It is not authorized for
distrubution to prospective investors unless preceded or accompanied by a
currently effective prospectus of the Trust (obtainable from the Distributor).
505997
-------------------------------
ANNUAL REPORT
-------------------------------
February 28, 1999
-------------------------------
Value Line
New York
Tax Exempt
Trust
[GRAPHIC]
----------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line New York Tax Exempt Trust
To Our Value Line
================================================================================
To Our Shareholders:
The primary objective of the Value Line New York Tax Exempt Trust (the "Trust")
is to provide investors with the maximum income exempt from New York State, New
York City and Federal income taxes, while avoiding undue risk to principal. For
the year ended February 28, 1999, the Trust's total return was 5.56%. Since its
inception in July, 1987, the total return for the Trust, assuming the
reinvestment of all dividends over that period, was 129.39%. This is equivalent
to an average annual total return of 7.38%. The Trust's SEC yield as of February
28, 1999 was 3.35%, slightly below the average SEC yield of 3.74% for all New
York State municipal debt funds ranked by Lipper Analytical Services.
Your Trust's total return for the year ended February 28, 1999 was 5.56% and was
comparable to the 6.15% total return for the Lehman Brothers Municipal Bond
Index during the same time period since the Index does not reflect expenses
which are deducted from the Trust's returns.
During the past year ended February 28, 1999, prices of fixed-income securities
increased as interest rates declined. Long-term, tax-exempt interest rates, as
measured by the Bond Buyer's 40-Bond Index, declined from 5.24% on February 28,
1998 to 5.17% on February 28, 1999. During this same period, long-term taxable
rates, as measured by the 30-year Treasury bond, declined from 5.92% to 5.58%.
Low inflation in spite of continued economic growth is the major factor
contributing to this decline in interest rates. Expectations of slower economic
growth, continued low inflation, and a weak worldwide economy are keeping rates
low. In 1998, the Federal Reserve reduced interest rates, in quick succession, a
total of 0.75 percentage points from 5.50% on September 29, 1998 to 4.75% on
November 17, 1998 in response to the Russian financial crisis, a hedge fund
crisis, and fears of an economic slowdown in this country. Subsequently, the
Federal Reserve has held rates constant. While interest rates declined in 1998,
there was significant volatility between the high yield of 6.08% on April 29,
1998 and the low yield of 4.72% on October 5, 1998 as measured by the 30-year
Treasury bond. Currently, the 30-year Treasury bond yields about 5.50% as the
market is anticipating less of an economic slowdown and a lower probability that
the Federal Reserve will reduce rates further.
During the past year, the return before taxes of taxable bonds have outperformed
those of tax-exempt bonds. For the twelve months ended February 28, 1999, the
Lehman Brothers Aggregate Bond Index increased to 6.27% compared to 6.15% for
the Lehman Brothers Municipal Bond Index. The large demand for U.S. government
and corporate bonds, the near record issuance of tax-exempt bonds in 1998, and
the strong demand for stocks have contributed to the underperformance of
tax-exempts. Currently, the ratio of tax-exempt yields to Treasury yields is at
the high end of its historic range. A 30-year triple A rated municipal bond
yields 5.0% which is 88.7% of the 5.64% yield of the 30-year Treasury bond. A
5.0% tax-exempt yield is equivalent to an 8.28% taxable yield for individuals in
the 39.6% tax bracket. At these levels, municipal bonds are very attractive
compared to taxable securities.
Management continues to avoid securities rated below investment grade (defined
as Baa or higher by Moody's Investors Service and as BBB or higher by Standard &
Poor's Corporation). As of February 28, 1999, the market value of the Trust's
portfolio consisted of 57% AAA, 30% AA, 6% A, and 7% Baa or BBB rated bonds. The
yield differential between high-grade and low-grade bonds is small. As a result,
your Trust's management has increased its holdings of AAA rated bonds and
reduced its holdings of Baa or BBB rated bonds during the past year. The
- --------------------------------------------------------------------------------
2
<PAGE>
Value Line New York Tax Exempt Trust
New York Tax Exempt Trust Shareholders
================================================================================
portfolio's highest concentrations of investments are in the insured,
hospital-revenue, housing-revenue, and general obligation sectors respectively.
The municipal bond market is one of the most fragmented and complex sectors of
the American capital markets. We believe that most investors seeking tax-free
income are best served by a mutual fund, whose advantages include professional
management, diversification, liquidity, low transaction costs, accurate
record-keeping, automatic reinvestment of dividends, and availability in
small-dollar amounts. In addition to these features, the Value Line New York Tax
Exempt Trust has the additional advantage of carrying no sales or redemption
fees; it is a true no-load fund.
We thank you for your continued confidence in Value Line, and we look forward to
serving your investment needs in the future.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
March 28, 1999
Economic Observations
Sustained growth and low inflation remain the dominant themes in the U.S.
economy at this time. This enviable showing is underscored by reports indicating
further strength in personal income and consumer spending along with modest
gains in manufacturing. Such trends suggest that the economy will grow by a
solid 2.5%-3% in the second quarter of this year. At the same time, inflation
remains low, with producer and consumer price increases averaging 2%, or less,
overall, and with certain industrial sectors finding it difficult to implement
price increases. In selected instances, prices are actually falling.
We believe this altogether favorable economic and inflation pattern will
continue in the second half, with growth averaging 2.0%-2.5% for much of this
time. Our sense, as well, is that the economic crisis now afflicting parts of
Asia and Latin America will recede gradually over the next year. The Federal
Reserve, encouraged by this benign state of affairs, will probably maintain its
current monetary stance over the next few months, at least. Any subsequent
adjustment in interest rates will probably be modest, given the continuing
absence of excesses in growth or inflation.
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3
<PAGE>
Value Line New York Tax Exempt Trust
================================================================================
The following graph compares the performance of the Value Line New York Tax
Exempt Trust to that of the Lehman Brothers Municipal Bond Index. The Value Line
New York Tax Exempt Trust is a professionally managed mutual fund, while the
Index is not available for investment and is unmanaged. The comparison is shown
for illustrative purposes only.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN VALUE LINE NEW YORK TAX EXEMPT TRUST AND THE
LEHMAN BROTHERS MUNICIPAL BOND INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIALS.]
Value Line New York Lehman Brothers Municipal
Tax Exempt Trust Bond Index
------------------- -------------------------
02/89 10,000 10,000
05/89 10,303 10,425
08/89 10,476 10,606
11/89 10,630 10,891
02/90 10,689 11,026
05/90 10,831 11,188
08/90 10,927 11,286
11/90 11,134 11,729
02/91 11,331 12,042
05/91 11,646 12,315
08/91 12,093 12,617
11/91 12,385 12,933
02/92 12,597 13,245
05/92 13,072 13,524
08/92 13,661 14,026
11/92 13,778 14,229
02/93 14,811 15,068
05/93 14,887 15,143
08/93 15,566 15,737
11/93 15,526 15,807
02/94 15,696 15,902
05/94 15,143 15,517
08/94 15,330 15,759
11/94 14,310 14,976
02/95 15,605 16,202
05/95 16,257 16,931
08/95 16,326 17,156
11/95 17,034 17,807
02/96 17,166 17,991
05/96 16,665 17,704
08/96 16,996 18,055
11/96 17,759 18,854
02/97 17,807 18,982
05/97 18,008 19,170
08/97 18,530 19,724
11/97 18,933 20,205
02/98 19,464 20,717
05/98 19,642 20,969
08/98 20,094 21,430
11/98 20,374 21,773
02/99 20,546 21,991
(Period covered is from 3/1/89 to 2/28/99)
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4
<PAGE>
Value Line New York Tax Exempt Trust
================================================================================
Performance Data:
Average Annual
Total Returns
12/31/98 2/28/99
------- ------
1 year ended................................. 6.12% 5.56%
5 years ended................................ 5.15% 5.53%
10 years ended................................ 7.53% 7.47%
The performance data quoted represent past performance and are no guarantee of
future performance. The average annual total return and growth of an assumed
investment of $10,000 includes dividends reinvested and capital gains
distributions accepted in shares. The investment return and principal value of
an investment will fluctuate so that an investment, when redeemed, may be worth
more or less than its original cost.
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5
<PAGE>
Value Line New York Tax Exempt Trust
Schedule of Investments
================================================================================
<TABLE>
<CAPTION>
Principal Rating
Amount (Unaudited) Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (94.5%)
NEW YORK STATE (74.2%)
$1,000,000 Albany County, General Obligations, 5.75%, 6/1/11.................. Aaa $ 1,096,490
Dormitory Authority, Revenue:
500,000 Bishop Henry B. Hucles Nursing Home, 5.625%, 7/1/18.............. Aa1 524,975
500,000 Champlain Valley Hospitals, 6.00%, 7/1/10........................ AAA* 572,270
1,000,000 Eger Health Center, 4.90%, 2/1/13................................ AAA* 988,630
500,000 Hospital for Special Surgery, 4.90%, 2/1/11...................... Aaa 511,290
555,000 Long Island University, Asset Guaranty, 5.50%, 9/1/10............ AA* 598,012
750,000 Lutheran Nursing Home, 5.125%, 2/1/18............................ AAA* 752,873
500,000 Rochester Institute of Technology, 5.30%, 7/1/17................. Aaa 516,785
200,000 St. Barnabas Hospital, 5.35%, 8/1/17............................. Aaa 205,326
1,000,000 St. Clares Hospital, Ser. B, 5.25%, 2/15/15...................... Baa1 1,017,510
1,000,000 State University Educational Facilities, 5.00%, 5/15/12.......... A3 1,023,240
500,000 Terence Cardinal Cooke Health Care Center, 4.50%, 7/1/10......... Aa3 496,465
500,000 W.K. Nursing Home Corp., 5.75%, 2/1/10........................... AAA* 546,270
700,000 East Rochester, Housing Authority, Mortgage Revenue,
St. Johns Meadows, Ser. A, 5.05%, 8/1/07......................... AAA* 737,786
Energy Research & Development Authority,
Pollution Control Revenue, Refunding:
300,000 Central Hudson Gas, Ser. A, 4.20%, 12/1/28..................... Aaa 299,214
250,000 Niagara Mohawk Project, Ser. A, 5.15%, 11/1/25................. Aaa 251,290
1,000,000 Environmental Facilities Corp., Pollution Control Revenue,
Water, Revolving Fund, Ser. E, 4.90%, 6/15/10.................... Aaa 1,038,700
Local Government Assistance Corp., Refunding, Ser. B:
1,730,000 4.80%, 4/1/11.................................................... Aaa 1,775,793
1,000,000 4.875%, 4/1/20................................................... Aaa 976,130
300,000 Long Island Power Authority, Electric System Revenue,
Subser. 8F, 5.00%, 4/1/11....................................... Aaa 313,089
Medical Care Facilities Finance Agency, Revenue, Refunding,
Presbyterian Hospital, Ser. A:
150,000 5.10%, 8/15/10................................................. Aa2 154,607
1,100,000 5.25%, 8/15/14................................................. Aa2 1,138,885
700,000 Saint Mary's Hospital, Ser. A, 6.00%, 11/1/09.................... Aaa 771,435
Mortgage Agency, Revenue Refunding, Homeowner Mortgage:
510,000 Ser. 77-A, 4.60%, 4/1/10......................................... Aa2 506,042
525,000 Ser. 61, 5.60%, 10/1/11.......................................... Aa2 546,320
1,000,000 Ser. 55, 5.95%, 10/1/17.......................................... Aa2 1,059,700
1,000,000 Niagara Falls, Water Treatment Plant, 7.25%, 11/1/11............... Aaa 1,259,560
890,000 Onondaga County, General Obligations, Ser. A, 5.85%, 5/1/10........ Aa2 971,800
1,000,000 Power Authority, Revenue & General Purpose, Ser. A, 4.90%, 2/15/12. Aa3 1,023,350
</TABLE>
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6
<PAGE>
Value Line New York Tax Exempt Trust
February 28, 1999
================================================================================
<TABLE>
<CAPTION>
Principal Rating
Amount (Unaudited) Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,000,000 Syracuse, Housing Authority, Mortgage Revenue,
Loretto Rest Home, Ser. A, 5.60%, 8/1/17......................... AAA* $ 1,048,980
520,000 Thruway Authority, Highway & Bridge Trust Fund,
Ser. B, 5.00%, 4/1/10............................................ Aaa 544,331
1,000,000 Triborough Bridge & Tunnel Authority, Revenue,
General Purpose, Ser. A, 4.75%, 1/1/16........................... Aa3 985,120
500,000 Urban Development Corp., Refunding, Corporate Purpose,
Senior Lien, 5.125%, 1/1/09...................................... Aaa 531,445
----------
TOTAL NEW YORK STATE .............................................. 24,783,713
----------
NEW YORK CITY (18.6%)
General Obligation:
1,000,000 Ser. G, Refunding, 5.00%, 8/1/10................................. Aaa 1,045,380
1,000,000 Ser. D, Refunding, 5.00%, 8/1/11................................. A3 1,033,420
1,500,000 Housing Development Corp., Multi Family Housing Revenue,
Ser. A, 5.625%, 5/1/12........................................... Aa2 1,594,335
Industrial Development Agency:
Civic Facilities Revenue:
500,000 College of Aeronautics Project, 5.45%, 5/1/18.................. BBB* 511,735
500,000 USTA National Tennis Center Project, 6.40%, 11/15/08........... Aaa 569,295
250,000 Industrial Development Revenue, Brooklyn Navy Yard,
Cogen Partners, 6.20%, 10/1/22................................... Baa3 279,358
1,125,000 Transitional Finance Authority, Revenue, Future Tax Secured,
Ser. B, 5.125%, 11/1/11+......................................... Aa3 1,187,201
----------
TOTAL NEW YORK CITY ............................................... 6,220,724
----------
PUERTO RICO (1.7%)
500,000 Electric Power Authority, Power Revenue, Ser. T, 6.125%, 7/1/09.... Baa1 551,360
----------
TOTAL LONG-TERM MUNICIPAL SECURITIES
(Cost $30,081,832) .............................................. 31,555,797
----------
</TABLE>
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7
<PAGE>
Value Line New York Tax Exempt Trust
Schedule of Investments February 28, 1999
================================================================================
<TABLE>
<CAPTION>
Principal Rating
Amount (Unaudited) Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES (4.5%)
NEW YORK STATE (1.8%)
$ 600,000 Energy Research & Development Authority, Pollution Control Revenue,
Niagara Mohawk Power, Ser. A, 3.60%, 12/1/23..................... A-1+*(1) $ 600,000
----------
NEW YORK CITY (2.7%)
500,000 General Obligations, Subser. B-3, 3.15%, 8/15/04 .................. VMIG-1(1) 500,000
400,000 Water Finance Authority, Water & Sewer System Revenue,
Ser. C, 3.15%, 6/15/22........................................... VMIG-1(1) 400,000
----------
900,000
----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES
(Cost $1,500,000) .............................................. 1,500,000
----------
TOTAL MUNICIPAL SECURITIES (99.0%)
(Cost $31,581,832) .............................................. 33,055,797
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES (1.0%) .............................................. 347,338
----------
NET ASSETS (100.0%) ............................................... $33,403,135
==========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE,
PER OUTSTANDING SHARE ........................................... $ 10.33
==========
</TABLE>
Rated by Moody's Investors Service except for those marked by an asterisk (*)
which are rated by Standard & Poor's.
Variable rate demand notes are considered short-term obligations. Interest rates
change every (1) day. These securities are payable on demand on interest rate
refix dates and are secured by either letters of credit or other credit support
agreements from banks. The rates listed are as of February 28, 1999.
+ When issued security.
See Notes to Financial Statements.
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8
<PAGE>
Value Line New York Tax Exempt Trust
Statement of Assets
and Liabilities at February 28, 1999
================================================================================
Dollars
(in thousands
except per share
amount)
-------------
Assets:
Investment securities, at value
(Cost $31,582)..................... $ 33,056
Cash ................................ 174
Receivable for securities sold ...... 1,062
Interest receivable ................. 356
Receivable for Trust shares sold .... 68
--------
Total Assets .................. 34,716
--------
Liabilities:
Payable for securities purchased..... 1,194
Dividends payable to shareholders.... 34
Payable for Trust shares repurchased 4
Accrued expenses:
Advisory fee ...................... 15
Other ............................. 66
--------
Total Liabilities ............. 1,313
--------
Net Assets .......................... $ 33,403
========
Net Assets:
Capital stock, at $.01 par value
(authorized unlimited,
outstanding 3,233,501
shares of beneficial interest)..... $ 32
Additional paid-in capital .......... 31,450
Undistributed net investment income.. 7
Accumulated net realized gain
on investments..................... 440
Net unrealized appreciation of
investments ....................... 1,474
--------
Net Assets .................... $ 33,403
========
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share .......... $ 10.33
========
Statement of Operations
for the Year Ended February 28, 1999
================================================================================
Dollars
(in thousands)
------------
Investment Income:
Interest ............................ $ 1,709
-------
Expenses:
Advisory fee ........................ 204
Auditing and legal fees ............. 54
Printing and stationery ............. 17
Trustees' fees and expenses.......... 15
Custodian fees ...................... 14
Transfer agent fees ................. 12
Other................................ 16
-------
Total expenses before
custody credits ............. 332
Less: custody credits ......... (3)
-------
Net Expenses .................. 329
-------
Net Investment Income ............... 1,380
-------
Net Realized and Unrealized Gain on
Investments:
Net Realized Gain ............... 442
Change in Unrealized
Appreciation .................. 9
-------
Net Realized Gain and Change in
Unrealized Appreciation on
Investments ....................... 451
-------
Net Increase in Net Assets from
Operations ........................ $ 1,831
=======
See Notes to Financial Statements.
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9
<PAGE>
Value Line New York Tax Exempt Trust
Statement of Changes in Net Assets
for the Years Ended February 28, 1999 and 1998
================================================================================
<TABLE>
<CAPTION>
1999 1998
----------------------
(Dollars in thousands)
<S> <C> <C>
Operations:
Net investment income ............................................. $ 1,380 $ 1,456
Net realized gain on investments .................................. 442 1,147
Change in unrealized appreciation ................................. 9 380
----------------------
Net increase in net assets from operations ........................ 1,831 2,983
----------------------
Distributions to Shareholders:
Net investment income ............................................. (1,372) (1,451)
Net realized gains ................................................ (1,042) --
----------------------
Net decrease in net assets from distributions ..................... (2,414) (1,451)
----------------------
Trust Share Transactions:
Net proceeds from sale of shares .................................. 3,160 3,531
Net proceeds from reinvestment of distributions to shareholders ... 1,737 986
Cost of shares repurchased ........................................ (5,508) (4,197)
----------------------
Net (decrease) increase in net assets from Trust share transactions (611) 320
----------------------
Total (Decrease) Increase in Net Assets ............................. (1,194) 1,852
Net Assets:
Beginning of year ................................................. 34,597 32,745
----------------------
End of year ....................................................... $ 33,403 $ 34,597
======================
Undistributed Net Investment Income at end of year .................. $ 8 $ --
======================
</TABLE>
See Notes to Financial Statements.
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10
<PAGE>
Value Line New York Tax Exempt Trust
Notes to Financial Statements February 28, 1999
================================================================================
1. Significant Accounting Policies
Value Line New York Tax Exempt Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The investment objective of the Trust is to
provide New York taxpayers with the maximum income exempt from New York State,
New York City, and federal income taxes, while avoiding undue risk to principal.
The Trust will invest primarily in New York State municipal and public authority
debt obligations. The ability of the issuers of the securities held by the Trust
to meet their obligations may be affected by economic or political developments
in New York State and New York City. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Trust in
the preparation of its financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements. Actual results
may differ from those estimates.
(A) Security Valuation: The Trust's investments are valued each business day by
an independent pricing service (the "Service") approved by the Trustees.
Investments for which quoted bid prices in the judgment of the Service are
readily available and are representative of the bid side of the market are
valued at quotations obtained by the Service from dealers in such securities.
Other investments (which constitute a majority of the portfolio securities) are
valued by the Service, based on methods that include consideration of yields or
prices of municipal securities of comparable quality, coupon, maturity, and
type; indications as to values from dealers; and general market conditions.
Short-term instruments maturing within 60 days are valued at amortized cost,
which approximates value. Other assets and securities for which no quotations
are readily available are valued in good faith at their fair value using methods
determined by the Trustees.
(B) Distributions: It is the policy of the Trust to distribute all of its
investment income to shareholders. Dividends from net investment income are
declared daily and paid monthly. Net realized capital gains, if any, are
distributed to shareholders annually. Income dividends and capital-gains
distributions are automatically reinvested in additional shares of the Trust
unless the shareholder has requested otherwise. Income earned by the Trust on
weekends, holidays, and other days on which the Trust is closed for business is
declared as a dividend on the next day on which the Trust is open for business.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature, such amounts are reclassified within the capital accounts based on their
federal tax-basis treatment. Temporary differences do not require
reclassification.
(C) Federal Income Taxes: It is the policy of the Trust to qualify as a
regulated investment company, which can distribute tax-exempt dividends, by
complying with the provisions available to certain investment companies, as
defined in applicable sections of the Internal Revenue Code, and to distribute
all of its investment income and capital gains to its shareholders. Therefore,
no federal income tax or excise tax provision is required.
(D) Investments: Securities transactions are recorded on a trade-date basis.
Realized gains and losses from securities transactions are recorded on the
identified-cost basis. Interest income, adjusted for amortization of premium and
accretion of original-issue discounts on investments, in accordance with federal
income-tax regulations, is earned from settlement date and recognized on the
accrual basis. Additionally, the Trust recognizes market discount when the
securities are disposed.
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11
<PAGE>
Value Line New York Tax Exempt Trust
Notes to Financial Statements February 28, 1999
================================================================================
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
2. Trust Share Transactions
Transactions in shares of beneficial interest were as follows:
1999 1998
--------------
(in thousands)
Shares sold ..................... 300 345
Shares issued to shareholders in
reinvestment of distributions.. 167 96
--------------
467 441
Shares repurchased .............. (525) (410)
--------------
Net (decrease) increase.......... (58) 31
==============
3. Purchases and Sales of Securities
Purchases and sales of municipal securities were as follows:
1999
--------------
(in thousands)
PURCHASES:
Long-term obligations ............. $ 18,060
Short-term obligations............. 8,503
--------
$ 26,563
========
MATURITIES OR SALES:
Long-term obligations ............. $ 19,527
Short-term obligations............. 8,602
--------
$ 28,129
========
At February 28, 1999, the aggregate cost of investments for federal income tax
purposes was $31,581,832. The aggregate appreciation and depreciation of
investments at February 28, 1999, based on a comparison of investment values and
their costs for federal income tax purposes, was $1,523,719 and $49,754,
respectively, resulting in a net appreciation of $1,473,965.
4. Investment Advisory Contract and Transactions With Affiliates
An advisory fee of $204,231 was paid or payable to Value Line, Inc. (the
"Adviser") for the year ended February 28, 1999. This was computed at the rate
of .60 of 1% per year of the Trust's average daily net assets for the period.
The Adviser provides research, investment programs, and supervision of the
investment portfolio and pays costs of administrative services, office space,
and compensation of administrative, bookkeeping, and clerical personnel
necessary for managing the affairs of the Trust. The Adviser also provides
persons, satisfactory to the Trustees, to act as officers of the Trust and pays
their salaries and wages. The Trust bears all other costs and expenses in its
operation.
Certain officers and directors of the Adviser and its subsidiary, Value Line
Securities, Inc. (the Trust's distributor and a registered broker/dealer), are
also officers and a Trustee of the Trust.
At February 28, 1999, the Adviser owned 117,885 shares of beneficial interest in
the Trust, representing 3.7% of the outstanding shares.
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12
<PAGE>
Value Line New York Tax Exempt Trust
Financial Highlights
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
year:
<TABLE>
<CAPTION>
Years Ended on Last Day of February,
--------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ........ $ 10.51 $ 10.04 $ 10.28 $ 9.81 $ 10.49
--------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................. .43 .44 .48 .49 .52
Net gains or losses on securities
(both realized and unrealized) ...... .14 .47 (.11) .47 (.61)
--------------------------------------------------------
Total from investment operations .... .57 .91 .37 .96 (.09)
--------------------------------------------------------
Less distributions:
Dividends from net investment income .. (.42) (.44) (.48) (.49) (.52)
Distributions from capital gains ...... (.33) -- (.13) -- (.07)
--------------------------------------------------------
Total distributions ................. (.75) (.44) (.61) (.49) (.59)
--------------------------------------------------------
Net asset value, end of year .............. $ 10.33 $ 10.51 $ 10.04 $ 10.28 $ 9.81
========================================================
Total return .............................. 5.56% 9.31% 3.73% 10.00% (.58)%
========================================================
Ratios/Supplemental Data:
Net assets, end of year (in thousands) .... $ 33,403 $ 34,597 $ 32,745 $ 40,169 $ 39,139
Ratio of expenses to average net assets ... .98%(2) .92%(1) .92%(1) .92% .86%
Ratio of net investment income
to average net assets ................... 4.05% 4.35% 4.79% 4.87% 5.36%
Portfolio turnover rate ................... 56% 116% 86% 119% 105%
</TABLE>
(1) Before offset of custody credits.
(2) Ratio reflects expenses grossed up for custody credit arrangement. The
ratio of expenses net of custody credits would have been .97%.
See Notes to Financial Statements.
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13
<PAGE>
Value Line New York Tax Exempt Trust
Report of Independent Accountants
================================================================================
To the Shareholders and Board of Trustees of
Value Line New York Tax Exempt Trust
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Value Line New York Tax Exempt
Trust (the "Trust") at February 28, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
February 28, 1999 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
April 23, 1999
Other Information (unaudited)
================================================================================
Year 2000. Like other mutual funds, the Trust could be adversely affected if the
computer systems used by the Adviser and other service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Problem." The Adviser is
taking steps that it believes are reasonably designed to address the Year 2000
Problem with respect to the computer systems that it uses and to obtain
satisfactory assurances that comparable steps are being taken by the Trust's
other major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact to the Trust.
The Year 2000 Problem is expected to impact corporations, which may include
issuers of portfolio securities held by the Trust, to varying degrees based upon
various factors, including, but not limited to, the corporation's industry
sector and degree of technological sophistication. The Trust is unable to
predict what impact, if any, the Year 2000 Problem will have on issuers of the
portfolio securities held by the Trust.
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FEDERAL TAX NOTICE (unaudited)
During the year ended February 28, 1999, the Trust paid to shareholders $0.423
per share from net investment income. Substantially all of the Trust's dividends
from net investment income were exempt-interest dividends, excludable from gross
income for regular Federal income-tax purposes. During the year ended February
28, 1999, the Trust paid to shareholders $0.232 per share of Long Term Capital
Gains and $0.096 of Short Term Capital Gains.
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14
<PAGE>
Value Line New York Tax Exempt Trust
================================================================================
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15
<PAGE>
Value Line New York Tax Exempt Trust
The Value Line Family of Funds
================================================================================
1950--The Value Line Fund seeks long-term growth of capital. Current income is a
secondary objective.
1952--The Value Line Income Fund's primary investment objective is income, as
high and dependable as is consistent with reasonable risk. Capital growth to
increase total return is a secondary objective.
1956--The Value Line Special Situations Fund seeks long-term growth of capital.
No consideration is given to current income in the choice of investments.
1972--Value Line Leveraged Growth Investors' sole investment objective is to
realize capital growth.
1979--The Value Line Cash Fund, a money market fund, seeks to secure as high a
level of current income as is consistent with maintaining liquidity and
preserving capital.
1981--Value Line U.S. Government Securities Fund seeks maximum income without
undue risk to capital. Under normal conditions, at least 80% of the value of its
net assets will be invested in securities issued or guaranteed by the U.S.
Government and its agencies and instrumentalities.
1983--Value Line Centurion Fund* seeks long-term growth of capital.
1984--The Value Line Tax Exempt Fund seeks to provide investors with the maximum
income exempt from federal income taxes while avoiding undue risk to principal.
The Fund offers investors a choice of two portfolios: The Money Market Portfolio
and The High-Yield Portfolio.
1985--Value Line Convertible Fund seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by the Value Line Convertible Ranking System.
1986--Value Line Aggressive Income Trust seeks to maximize current income.
Capital appreciation is a secondary objective.
1987--Value Line New York Tax Exempt Trust seeks to provide New York taxpayers
with the maximum income exempt from New York State, New York City and federal
income taxes while avoiding undue risk to principal.
1987--Value Line Strategic Asset Management Trust* seeks to achive a high total
investment return consistent with reasonable risk.
1993--Value Line Small-Cap Growth Fund invests primarily in common stocks or
securities convertible into common stock, with its primary objective being
long-term growth of capital.
1993--Value Line Asset Allocation Fund seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the correct
asset mix.
1995--Value Line U.S. Multinational Company Fund's investment objective is
maximum total return. It invests primarily in securities of U.S. companies that
have significant sales from international operations.
* Only available through the purchase of Guardian Investor, a tax deferred
variable annuity, or ValuePlus, a variable life insurance policy.
For more complete information about any of the Value Line Funds, including
charges and expenses, send for a prospectus from Value Line Securities, Inc.,
220 East 42nd Street, New York, New York 10017-5891 or call 1-800-223-0818, 24
hours a day, 7 days a week, or visit us at www.valueline.com. Read the
prospectus carefully before you invest or send money.
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