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ANNUAL REPORT
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February 29, 2000
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Value Line
New York
Tax Exempt
Trust
[LOGO]
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VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line New York Tax Exempt Trust
To Our Value Line
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To Our Shareholders:
The primary objective of the Value Line New York Tax Exempt Trust is to provide
investors with maximum income exempt from New York State, New York City and
Federal income taxes, while avoiding undue risk to principal. During the year
ended February 29, 2000, the Trust's total return was a negative 3.97%. Since
its inception in July, 1987, the total return for the Trust, assuming the
reinvestment of all dividends over that period, has been 120.29%. This is
equivalent to an average annual total return of 6.43%.(1)
Your Trust's total return for the year underperformed the Lehman Brothers
Municipal Bond Index, which was down 2.08% during the same time period. The
Index does not reflect expenses that are deducted from the Trust's returns. The
Trust had a higher concentration in insured and hospital-revenue bonds than the
Index. While these two sectors performed worse than the Index, the Trust had 20%
in the housing-revenue sector which was one of the best performing sectors of
the Index.
During the year that ended February 29, 2000, prices of fixed-income securities
declined as interest rates increased. Long-term, tax-exempt interest rates, as
measured by the Bond Buyer's 40-Bond Index, rose from 5.17% on February 28, 1999
to 6.17% on February 29, 2000. During this same period, long-term taxable rates,
as measured by the 30-year Treasury bond, increased from 5.58% to 6.14%. The
rise in interest rates was the result of strong economic growth, tighter
monetary policy by the Federal Reserve, low unemployment, and increasing fears
of inflation. Since May 1999, the Federal Reserve has raised the Federal Funds
rate four times from 4.75% to 5.75%. This was a reversal of the reduction in
this rate by 0.75% in 1998 following the Russian financial crisis, a hedge fund
crisis, and fears of an economic slowdown. During this transition from a
declining rate to a rising rate environment, the yield curve in the taxable bond
market has inverted with short maturity bonds providing higher yields than the
30-year Treasury bond. For example, as of February 29, 2000, the 5-year Treasury
bond had a yield of 6.60% compared to 6.17% on the 30-year bond. This inverted
yield curve is primarily the result of the Federal Reserve raising short-term
interest rates and the U.S. Treasury issuing fewer long-term bonds, as well as
planning to buy back outstanding Treasury bonds.
During the past year, taxable bonds have outperformed tax-exempt bonds. For the
twelve months ended February 29, 2000, the Lehman Brothers Aggregate Bond Index
was up 1.11% compared to -2.08% for the Lehman Brothers Municipal Bond Index.
The declining demand for tax-exempt bonds, coupled with a heavy supply in 1999,
the strong demand for Treasuries coupled with a declining supply, and the great
demand for stocks have contributed to the underperformance of tax-exempt bonds.
Currently, the ratio of tax-exempt yields to Treasury yields is at the high end
of its historical range. A 30-year triple A rated municipal bond yields 5.87%,
which is 95.2% of the 6.16% yield of the 30-year Treasury bond. A 5.87%
tax-exempt yield is equivalent to an 9.72% taxable yield for individuals in the
39.6% tax bracket. At these levels, municipal bonds are very attractive as
income vehicles for investors.
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 29, 2000, the market value of the Trust's
portfolio consisted of 57% AAA, 30% AA, 5% A, and 8% Baa or BBB rated bonds. The
portfolio's highest concentrations of investments are in the insured,
housing-revenue, and hospital-revenue sectors respectively.
The municipal bond market is one of the most fragmented and complex sectors of
the American capital markets. We
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2
<PAGE>
Value Line New York Tax Exempt Trust
New York Tax Exempt Trust Shareholders
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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 20, 2000
(1) Total return includes reinvestment of dividends and any capital gains paid.
Income may be subject to state and local taxes, and some income may be
subject to the Federal Alternative Minimum Tax (AMT) for certain investors.
Capital gains, if any, are fully taxable.
Economic Observations
The American economy continues to perform well as we proceed through the first
quarter of 2000. Evidence of this healthy level of business activity can be
found in the strong pace of manufacturing, the continued healthy gains in
personal income, and the comparatively high levels of consumer spending.
Overall, we estimate that Gross Domestic Product growth will exceed 4% in the
opening quarter and average 3.5%-4.0% for the year as a whole. That would make
2000 the tenth year in a row of sustained economic growth in this country.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, in spite of a further recent surge in oil and gasoline prices, with strong
increases in productivity and ongoing technological innovations being at least
partially responsible for this comparative pricing stability. Nevertheless, an
increase in cost pressures does seem likely over the next several quarters. The
Federal Reserve, taking note of this somewhat higher expense structure, is
likely to chart a more restrictive monetary course in the months ahead. As such,
we now expect the lead bank to vote one additional, albeit modest, interest rate
increase before midyear.
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3
<PAGE>
Value Line New York Tax Exempt Trust
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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 IS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL]
[GRAPH]
(Period covered is from 3/1/90 to 2/29/00)
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4
<PAGE>
Value Line New York Tax Exempt Trust
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Performance Data:
Average Annual
Total Returns
12/31/99 2/29/00
-------- -------
1 year ended .............................. -4.21% -3.97%
5 years ended ............................. 5.94% 4.80%
10 years ended ............................. 6.22% 6.32%
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
<TABLE>
<CAPTION>
Schedule of Investments (unaudited)
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Principal Rating
Amount (Unaudited) Value
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<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (95.6%)
NEW YORK STATE (74.0%)
$1,000,000 Albany County, General Obligations, 5.75%, 6/1/11.................. Aaa $1,019,340
Dormitory Authority, Revenue:
500,000 Bishop Henry B. Hucles Nursing Home, 5.625%, 7/1/18.............. Aa1 464,070
475,000 Champlain Valley Hospitals, 6.00%, 7/1/10 ....................... AAA* 496,546
750,000 City University System, 5.50%, 7/1/19 ........................... Aaa 707,355
1,020,000 Maimonides Medical Center, Ser. A, 5.75%, 8/1/24 ................ Aaa 1,014,023
Mental Health Services Facilities:
500,000 4.75%, 8/15/18................................................. Aaa 422,390
1,000,000 4.75%, 8/15/19................................................. Aaa 835,390
1,020,000 Montefiore Medical Center, 5.25%, 8/1/19 ........................ Aaa 986,564
1,950,000 St. Vincent DePaul Residence, 5.30%, 7/1/18 ..................... Aa3 1,769,469
975,000 Sisters of Charity Health Care, 4.80%, 8/1/19.................... Aaa 942,045
525,000 State University Educational Facilities, 5.50%, 5/15/13 ......... A3 518,647
660,000 East Rochester, Housing Authority, Mortgage Revenue,
St. Johns Meadows, Ser. A, 5.05%, 8/1/07 ....................... AAA* 657,961
500,000 Environmental Facilities Corp., Clean Water & Drinking Water Revenue,
Revolving Fund, Ser. F, 5.25%, 6/15/13 ......................... Aa1 482,795
750,000 Kenmore Housing Authority Student Housing State University
Buffalo Student Apt, 5.40%, 8/1/12 .............................. AA* 728,310
Medical Care Facilities Finance Agency, Revenue, Refunding:
1,000,000 Hospital & Nursing Home Mortgage, Ser. B, 6.125%, 8/15/24........ AAA* 1,001,020
700,000 Long-Term Health Care, Ser. C, 6.40%, 11/1/14 ................... Aaa 732,305
Mortgage Agency, Revenue Refunding, Homeowner Mortgage:
1,000,000 Ser. 73-B, 5.45%, 10/1/24 ....................................... Aa1 979,000
510,000 Ser. 77-A, 4.60%, 4/1/10 ........................................ Aa1 466,278
1,000,000 Ser. 55, 5.95%, 10/1/17 ......................................... Aa1 987,070
1,435,000 Ser. 79, 4.75%, 4/1/23 .......................................... Aa1 1,384,789
1,000,000 Nassau County, General Improvement, Ser. C, 5.125%, 1/1/14......... Aaa 934,490
1,000,000 Niagara Falls, Water Treatment Plant, 7.25%, 11/1/11............... Aaa 1,148,700
1,000,000 Syracuse, Housing Authority, Mortgage Revenue, Loretto Rest Home,
Ser. A, 5.60%, 8/1/17 .......................................... AAA* 956,250
400,000 Urban Development Corp., Refunding, Corporate Purpose,
Senior Lien, 5.125%, 1/1/09...................................... Aaa 394,804
1,000,000 Yonkers, Ser. C, General Obligations, 5.25%, 6/1/12................ Aaa 977,830
----------
TOTAL NEW YORK STATE .............................................. 21,007,441
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</TABLE>
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6
<PAGE>
Value Line New York Exempt Trust
<TABLE>
<CAPTION>
February 29, 2000
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Principal Rating
Amount (Unaudited) Value
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<S> <C> <C> <C>
NEW YORK CITY (10.0%)
$ 820,000 General Obligations, Refunding, Ser. G, 5.25%, 8/1/16 ............. A3 $ 754,671
990,000 Housing Development Corp., Multi Family Housing Revenue,
Ser. A, 5.625%, 5/1/12 ......................................... Aa2 972,814
Industrial Development Agency:
500,000 Civic Facilities Revenue, College of Aeronautics Project,
5.45%, 5/1/18 ................................................ BBB* 440,080
250,000 Industrial Development Revenue, Brooklyn Navy Yard,
Cogen Partners, 6.20%, 10/1/22 ............................... Baa3 238,747
525,000 Transitional Finance Authority, Revenue, Future Tax Secured,
Ser. B, 4.75%, 11/1/23........................................... Aa3 429,429
----------
TOTAL NEW YORK CITY................................................ 2,835,741
----------
GUAM (1.4%)
500,000 Power Authority Revenue, Ser. A, 5.125%, 10/1/29................... Baa3 407,345
PUERTO RICO (6.7%)
2,000,000 Electric Power Authority, Power Revenue, Ser. DD, 5.25%, 7/1/16.... Aaa 1,915,220
VIRGIN ISLANDS (3.5%)
1,000,000 Public Finance Authority, Revenue, Gross Receipts Taxes,
Ser. A, 6.375%, 10/1/19 ........................................ BBB-* 980,770
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TOTAL LONG-TERM MUNICIPAL SECURITIES
(Cost $27,906,667) .............................................. 27,146,517
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</TABLE>
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7
<PAGE>
Value Line New York Tax Exempt Trust
<TABLE>
<CAPTION>
Schedule of Investments
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Principal Rating
Amount (Unaudited) Value
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<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES (3.5%)
$ 1,000,000 New York City, General Obligations, Subser. B-4, 3.80%, 8/15/23... VMIG-1(I) $ 1,000,000
-----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES
(Cost $1,000,000) ............................................... 1,000,000
-----------
TOTAL MUNICIPAL SECURITIES (99.1%)
(Cost $28,906,667) .............................................. 28,146,517
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES (.9%) ............................................... 262,628
-----------
NET ASSETS (100.0%) ............................................... $28,409,145
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE,
PER OUTSTANDING SHARE ........................................... $ 9.37
===========
</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 29, 2000.
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 29, 2000
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(In thousands
except per share
amount)
----------------
Assets:
Investment securities, at value
(Cost $28,907) .............................................. $ 28,147
Cash .......................................................... 22
Interest receivable ........................................... 369
Receivable for Trust shares sold .............................. 2
--------
Total Assets ............................................ 28,540
--------
Liabilities:
Dividends payable to shareholders ............................. 38
Payable for Trust shares repurchased .......................... 3
Accrued expenses:
Advisory fee ................................................ 13
Other ....................................................... 77
--------
Total Liabilities ....................................... 131
--------
Net Assets .................................................... $ 28,409
========
Net Assets:
Shares of beneficial interest at $.01 par value
(authorized unlimited,
outstanding 3,031,978 shares) ............................... $ 30
Additional paid-in capital .................................... 29,542
Accumulated net realized loss
on investments .............................................. (403)
Net unrealized depreciation of
investments ................................................. (760)
--------
Net Assets .............................................. $ 28,409
========
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share ..................................... $ 9.37
========
Statement of Operations
for the Year Ended February 29, 2000
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(In thousands)
--------------
Investment Income:
Interest ................................................... $ 1,639
-------
Expenses:
Advisory fee ............................................... 187
Auditing and legal fees .................................... 50
Printing and stationery .................................... 30
Trustees' fees and expenses ................................ 13
Custodian fees ............................................. 13
Transfer agent fees ........................................ 13
Other ...................................................... 24
-------
Total expenses before
custody credits .................................... 330
Less: custody credits ................................ (4)
-------
Net Expenses ......................................... 326
-------
Net Investment Income ...................................... 1,313
-------
Net Realized and Unrealized
Loss on Investments:
Net Realized Loss ...................................... (403)
Change in Unrealized
Appreciation (Depreciation) .......................... (2,234)
-------
Net Realized Loss and Change in
Unrealized Appreciation
(Depreciation) on Investments .......................... (2,637)
-------
Net Decrease in Net Assets from
Operations ............................................... $(1,324)
=======
See Notes to Financial Statements
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9
<PAGE>
Value Line New York Tax Exempt Trust
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
for the Years Ended February 29, 2000 and February 28, 1999
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2000 1999
--------------------
(In thousands)
<S> <C> <C>
Operations:
Net investment income ........................................ $ 1,313 $ 1,380
Net realized (loss) gain on investments ...................... (403) 442
Change in unrealized appreciation (depreciation) ............. (2,234) 9
--------------------
Net (decrease) increase in net assets from operations ........ (1,324) 1,831
--------------------
Distributions to Shareholders:
Net investment income ........................................ (1,321) (1,372)
Net realized gains ........................................... (440) (1,042)
--------------------
Net decrease in net assets from distributions ................ (1,761) (2,414)
--------------------
Trust Share Transactions:
Net proceeds from sale of shares ............................. 3,062 3,160
Net proceeds from reinvestment of distributions to shareholders 1,217 1,737
Cost of shares repurchased ................................... (6,188) (5,508)
--------------------
Net decrease in net assets from Trust share transactions ..... (1,909) (611)
--------------------
Total Decrease in Net Assets ................................... (4,994) (1,194)
Net Assets:
Beginning of year ............................................ 33,403 34,597
--------------------
End of year .................................................. $ 28,409 $ 33,403
====================
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 29, 2000
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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 market 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. Permanent differences 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 29, 2000
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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:
2000 1999
------------------
(in thousands)
Shares sold ........................................ 314 300
Shares issued to shareholders in
reinvestment of distributions .................... 126 167
------------------
440 467
Shares repurchased ................................. (642) (525)
------------------
Net decrease ....................................... (202) (58)
==================
3. Purchases and Sales of Securities
Purchases and sales of municipal securities were as follows:
2000
-------------
(in thousands)
Purchases:
Long-term obligations ............................ $29,676
Short-term obligations ........................... 8,100
---------
$37,776
=========
maturities or Sales:
Long-term obligations ............................ $31,445
Short-term obligations ........................... 8,600
---------
$40,045
=========
At February 29, 2000, the aggregate cost of investments for federal income tax
purposes was $28,907,570. The aggregate appreciation and depreciation of
investments at February 29, 2000, based on a comparison of investment values and
their costs for federal income tax purposes, was $154,220 and $915,273,
respectively, resulting in a net depreciation of $761,053.
For Federal income tax purposes, the Trust had a capital loss carryover at
February 29, 2000 of approximately $401,764 which will expire in 2008. To the
extent future capital gains are offset by such capital losses, the Trust does
not anticipate distributing any such gains to the shareholders.
4. Investment Advisory Contract and Transactions With Affiliates
An advisory fee of $187,252 was paid or payable to Value Line, Inc. (the
"Adviser") for the year ended February 29, 2000. This was computed at an annual
rate of .60% of the Trust's average daily net assets. 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.
For the year ended February 29, 2000, the Trust's expenses were reduced by
$3,598 under a custody credit arrangement with the custodian.
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 29, 2000, the Adviser owned 124,804 shares of beneficial interest in
the Trust, representing 4.1% of the outstanding shares.
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12
<PAGE>
Value Line New York Tax Exempt Trust
Financial Highlights
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Selected data for a share of beneficial interest outstanding throughout each
year:
<TABLE>
<CAPTION>
Years Ended on Last Day of February,
----------------------------------------------------------------------------------
2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .......... $ 10.33 $ 10.51 $ 10.04 $ 10.28 $ 9.81
----------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................... .42 .43 .44 .48 .49
Net gains or losses on securities
(both realized and unrealized) ........ (.82) .14 .47 (.11) .47
----------------------------------------------------------------------------------
Total from investment operations ...... (.40) .57 .91 .37 .96
----------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income .... (.42) (.42) (.44) (.48) (.49)
Distributions from capital gains ........ (.14) (.33) -- (.13) --
----------------------------------------------------------------------------------
Total distributions ................... (.56) (.75) (.44) (.61) (.49)
----------------------------------------------------------------------------------
Net asset value, end of year ................ $ 9.37 $ 10.33 $ 10.51 $ 10.04 $ 10.28
==================================================================================
Total return ................................ -3.97% 5.56% 9.31% 3.73% 10.00%
==================================================================================
Ratios/Supplemental Data:
Net assets, end of year (in thousands) ...... $ 28,409 $ 33,403 $ 34,597 $ 32,745 $ 40,169
Ratio of expenses to average net assets ..... 1.05%(2) .98%(2) .92%(1) .92%(1) .92%
Ratio of net investment income
to average net assets ..................... 4.21% 4.05% 4.35% 4.79% 4.87%
Portfolio turnover rate ..................... 100% 56% 116% 86% 119%
</TABLE>
(1) Before offset of custody credits.
(2) Ratio reflects expenses grossed up for custody credit arrangement. The
ratio of expenses to average net assets net of custody credits would have
been .97% and 1.04% for the year ended February 28, 1999 and February 29,
2000, respectively.
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 29, 2000, 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 accounting principles generally accepted
in the United States. 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 auditing standards generally accepted in
the United States 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 29, 2000 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
New York, New York
April 17, 2000
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- --------------------------------------------------------------------------------
FEDERAL TAX NOTICE (unaudited)
During the year ended February 29, 2000, the Trust paid to shareholders $0.415
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
29, 2000, the Trust paid to shareholders $0.101 per share of Long Term Capital
Gains and $0.038 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--Value Line Income and Growth 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 National Bond 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.
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 Emerging Opportunities 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 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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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 State Street Bank and Trust Co.
SERVICING AGENT c/o NFDS
P.O. Box 419729
Kansas City, MO 64141-6729
INDEPENDENT PricewaterhouseCoopers LLP
ACCOUNTANTS 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
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 distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Trust (obtainable from
the Distributor).
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