<PAGE>
Templeton American Trust
[PHOTO OF GARY P. MOTYL APPEARS HERE]
Gary P. Motyl
President
Templeton
American Trust
Your Fund's Objective
The Templeton American Trust seeks long-term total return through a flexible
policy of investing primarily in stocks and debt obligations of U.S. companies.
The Fund may, however, invest up to 35% of its assets in securities in any
foreign country, developed or underdeveloped.
February 15, 1995
Dear Shareholder:
We are pleased to bring you the annual report of the Templeton American Trust
for the period ended December 31, 1994. This was a challenging year for the
financial markets and for your Fund. In response to rapid economic growth in
1993, the Federal Reserve Board began raising the federal funds rate in February
in a preemptive attack against inflation. Over the course of the year, the Board
raised this rate six times, from 3% to 5.5%, causing volatility and some price
declines in markets around the world. Within this environment, your Fund
achieved a total return of +1.63% versus a return of +1.36% for the Standard &
Poor's 500 Stock Index/(R)/ as shown in the Performance Summary on page 5.
Since we maintained our long-term approach to value-oriented investing, there
was not a high turnover of stocks in the portfolio. We did, however, make
initial purchases in some companies with exciting potential. Two of
1
<PAGE>
them, American International Group and Westvaco, have made significant gains for
us already. American International Group is viewed as a well-managed globally
diversified insurance company with excellent long-term prospects in Asia.
Westvaco is a leading U.S. forest products company that we consider undervalued
based on its assets and earnings potential. Other new positions that should
enhance the Fund's return in future years were taken in Goodyear Tire, a strong
cyclical recovery candidate, and YPF, an Argentinian company that we consider
one of the most undervalued energy stocks in the world.
During the year, we sold our positions in Martin Marietta, an aerospace company
whose share price achieved our target, and Barnett Bank, a Southeastern regional
bank that performed well for us, but whose long-term earnings prospects were
recently downgraded. We also took profits when we sold our shares in Telebras,
the Brazilian telecommunications company, after its stock had a big run-up in
anticipation of a favorable outcome in that country's recent presidential
election. As these examples show, although we focus on U.S. companies, we
believe in exercising our option to invest up to 35% of assets in foreign
securities. On December 31, 1994, these securities represented 15.3% of total
net assets. Unlike U.S. investments, however, foreign investments involve
political uncertainty and currency risks, which are discussed in your
prospectus.
- --------------------------------------------------------------------------------
TEMPLETON AMERICAN TRUST
Geographic Distribution on 12/31/94
Based on Total Net Assets
[PIE CHART APPEARS HERE SHOWING GEOGRAPHIC DISTRIBUTION OF THE FUND]
<TABLE>
<CAPTION>
Description Amount
------------------------- ------------
<S> <C>
Latin America 1.0%
Asia 1.3
Australia & New Zealand 3.8
Europe 9.2
U.S. 60.2
Short-Term Obligations &
Other Net Assets 24.5
</TABLE>
Like all investors, we suffered declines in some holdings due to the year's
challenging circumstances. These stocks
2
<PAGE>
included Kmart, the American retailing giant, Presidential Life, an American
insurance company, Alcatel Alsthom, a French electrical equipment maker and
Dairy Farm International, a Hong Kong retail company. The Fund continues to
hold these shares because we believe they should increase in value over the
long term.
Looking forward, although the recovery remains intact in the U.S., we think
it is likely that the rate of increase will decline over the next several
months as higher interest rates restrict consumption. The inflation rate
should remain relatively low as the economy slows, providing a good backdrop
for stocks. We believe the economic outlook for the rest of the developed
world remains positive, with European countries and Japan still in the early
stages of an economic rebound. The situation in the emerging markets is more
varied. Although the widely publicized problems in Mexico are likely to
constrain the economy there for at least the next year, most of the
developing Asian economies continue to make strong progress.
As is normally the case, political developments are the most difficult to
foresee. In the U.S., we will closely monitor the Republican agenda in
Washington for its impact on investors. Overseas, the United Kingdom and
Italy face the potential for a change in leadership, while
Templeton American Trust
Top 10 Holdings on 12/31/94
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry Net Assets
<S> <C>
Georgia-Pacific Corp.,
Forest & Paper Products 2.4%
Westvaco Corp., Forest & Paper Products 2.1%
American President Companies, Ltd.,
Transportation 1.8%
Ford Motor Co., Automobiles 1.7%
Intel Corp., Electronic Components &
Instruments 1.7%
American International Group, Inc.,
Insurance 1.7%
Great Lakes Chemical Corp., Chemicals 1.7%
Fruit of the Loom, Inc., Textiles &
Apparel 1.6%
Boeing Co., Aerospace & Military
Technology 1.6%
Plains Petroleum Co., Energy Sources 1.5%
</TABLE>
For a complete list of portfolio holdings, see page 7 of this report.
Templeton American Trust
Top 10 Industries on 12/31/94
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Industry Net Assets
<S> <C>
Energy Sources 10.0%
Forest Products & Paper 6.4%
Insurance 5.7%
Transportation 5.5%
Merchandising 4.6%
Utilities - Electrical & Gas 3.7%
Banking 3.6%
Building Materials & Components 3.2%
Industrial Components 2.9%
Data Processing & Reproduction 2.8%
</TABLE>
3
<PAGE>
Russia and China continue their difficult attempts at integration into the world
economic and political community. Although 1994 was hardly satisfactory for most
investors, we think the expanding global marketplace offers virtually unlimited
opportunities to take advantage of well-managed companies whose share prices are
temporarily depressed. We shall maintain the long-term approach that we have
practiced for many years and urge our investors to view lackluster, seemingly
trendless stock market action as an opportunity to purchase undervalued shares
for the long term.
We would like to thank you for your continued support in 1994, and wish you a
happy and prosperous 1995.
Sincerely,
/s/ Gary P. Motyl
Gary P. Motyl
President
Templeton American Trust, Inc.
4
<PAGE>
Performance Summary
The Templeton American Trust, Inc. reported a total return of +1.63% for the
one-year period ended December 31, 1994. Total return measures the change in
value of an investment, assuming reinvestment of dividends and capital gains
distributions, and does not include the maximum contingent deferred sales
charge. Of course, we have always maintained a long-term perspective when
managing the Fund, and we encourage shareholders to view their investments in
a similar manner. As you can see from the chart to the right, the Fund has
delivered a cumulative total return of more than 44% since its inception on
February 27, 1991./2/
The Fund's share price, as measured by net asset value, decreased 90 cents
($0.90), from $13.39 on December 31, 1993 to $12.49 on December 31, 1994.
During the period, shareholders received distributions of 5 cents ($0.05) per
share in income dividends; 97.5 cents ($0.975) per share in long-term capital
gains and 8.5 cents ($0.085) in short-term capital gains. Distributions will
vary, depending on the income earned by the Fund and any profits realized
from the sales of securities in the portfolio. Of course, past performance is
not predictive of future results.
The graph to the right shows how an investment in the Templeton American
Trust, since its inception on February 27, 1991, has kept your purchasing
power ahead of inflation, as measured by the Consumer Price Index (CPI). It
also shows how the Fund has outperformed the unmanaged Standard and Poor's
500 Stock Index/(R)/ during most of that period. Please remember that the
Fund's performance differs from that of the index because the index does not
contain cash (the Fund generally carries a certain percentage of cash at any
given time) and includes no sales charges or management expenses. Of course,
one cannot invest directly in an index, and past performance is not
predictive of future results.
The Fund's performance will fluctuate with market conditions, currencies, and
the economic and political climates of the countries where investments are
made. These special risks and other considerations are discussed in the
Fund's prospectus.
TEMPLETON AMERICAN TRUST
Total Return Index Comparison
$10,000 Investment (2/27/91 - 12/31/94)
[GRAPH APPEARS HERE SHOWING COMPARISON BETWEEN TEMPLETON AMERICAN TRUST FUND*,
S&P 500 AND THE CPI**]
<TABLE>
<CAPTION>
2/91 12/94
------ ------
<S> <C> <C>
Templeton American Trust Fund* 10,000 14,216
S&P 500 10,000 14,007
CPI** 10,000 11,105
</TABLE>
* Includes all sales charges and represents the change in value of an
investment over the indicated period, assuming reinvestment of dividends and
capital gains. Past performance is not indicative of future results.
** Source: U.S. Bureau of Labor Statistics
Templeton American Trust
Periods Ended 12/31/94
<TABLE>
<CAPTION>
Since
Inception
One-Year Three-Year (2/27/91)
<S> <C> <C> <C>
Average Annual
Total Return/1/ -3.37% 7.58% 9.59%
Cumulative
Total Return/2/ 1.63% 27.51% 44.16%
</TABLE>
1. Average annual total return represents the average annual change in value of
an investment. It includes the deduction of the maximum 5% contingent deferred
sales charge, assuming all shares were redeemed at the end of this reporting
period. Please refer to the prospectus for more information regarding all sales
charges.
2. Cumulative total return represents the change in value of an investment over
the specified periods and does not include the deduction of the maximum 5%
contingent deferred sales charge.
Note: Past expense limitations increased the Fund's total returns.
All total return calculations assume reinvestment of dividends and capital gains
distributions when paid. Your investment return and principal value will
fluctuate with market conditions, and you may have a gain or loss when you sell
your shares. Past performance is not indicative of future results.
5
<PAGE>
Templeton American Trust, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE (for a share outstanding throughout the period)
<TABLE>
<CAPTION>
FEBRUARY 7, 1991
YEAR ENDED DECEMBER 31 (COMMENCEMENT OF
------------------------- OPERATIONS) TO
1994 1993 1992 DECEMBER 31, 1991
------- ------- ------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of pe-
riod $ 13.39 $ 11.77 $ 11.20 $ 10.00
------- ------- ------- -------
Income from investment operations:
Net investment income .04 .04 .10 .08
Net realized and unrealized gain .17 1.82 .83 1.22
------- ------- ------- -------
Total from investment operations .21 1.86 .93 1.30
------- ------- ------- -------
Distributions:
Dividends from net investment in-
come (.05) (.03) (.11) (.08)
Distributions from net realized
gains (1.06) (.21) (.09) (.02)
Distributions in excess of real-
ized gains -- -- (.16) --
------- ------- ------- -------
Total distributions (1.11) (.24) (.36) (.10)
------- ------- ------- -------
Change in net asset value (.90) 1.62 .57 1.20
------- ------- ------- -------
Net asset value, end of year $ 12.49 $ 13.39 $ 11.77 $ 11.20
======= ======= ======= =======
TOTAL RETURN * 1.63% 15.82% 8.33% 13.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $37,959 $34,418 $27,485 $13,019
Ratio of expenses to average net
assets 2.47% 2.53% 3.17% 3.94%**
Ratio of expenses, net of reim-
bursement to average net assets 2.47% 2.53% 2.25% 2.25%**
Ratio of net investment income to
average net assets 0.34% 0.31% 1.13% 1.64%**
Portfolio turnover rate 31.92% 14.10% 27.91% 9.86%
</TABLE>
*NOT ANNUALIZED IN PERIODS OF LESS THAN ONE YEAR.
**ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS: 75.0%
- -------------------------------------------------------------------------------
Aerospace & Military Technical Systems: 1.6%
Boeing Co. U.S. 13,000 $ 607,750
- -------------------------------------------------------------------------------
Automobiles:
2.7%
Ford Motor Co. U.S. 23,000 644,000
General Motors Corp. U.S. 9,000 380,250
-----------
1,024,250
- -------------------------------------------------------------------------------
Banking: 3.6%
Australia & New Zealand
Banking Group Ltd. Aus. 102,910 339,068
Bancorp Hawaii Inc. U.S. 6,000 152,250
BankAmerica Corp. U.S. 10,000 395,000
Chemical Banking Corp. U.S. 6,000 215,250
NationsBank Corp. U.S. 5,500 248,188
-----------
1,349,756
- -------------------------------------------------------------------------------
Building Materials & Components: 3.2%
*Owens Corning Fiberglas Corp. U.S. 15,500 496,000
Pioneer International Ltd. Aus. 175,000 434,139
*Uralita SA Sp. 31,250 305,081
-----------
1,235,220
- -------------------------------------------------------------------------------
Business & Public Services: 0.7%
Esselte AB, B Swe. 22,000 279,791
- -------------------------------------------------------------------------------
Chemicals: 2.7%
Great Lakes Chemical Corp. U.S. 11,000 627,000
Solvay SA Bel. 800 379,755
-----------
1,006,755
- -------------------------------------------------------------------------------
Construction & Housing: 2.1%
Kaufman & Broad Home Corp. U.S. 20,000 257,500
*National Gypsum Co. U.S. 13,000 529,750
-----------
787,250
- -------------------------------------------------------------------------------
Data Processing & Reproduction: 2.8%
*Inacom Corp. U.S. 14,000 98,000
*Progress Software Corp. U.S. 14,000 528,500
*Quantum Corp. U.S. 28,000 423,500
-----------
1,050,000
- -------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31, 1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -------------------------------------------------------------------------------
Electrical & Electronics: 2.6%
BBC Brown Boveri AG, br. Swtz. 525 $ 451,885
Motorola Inc. U.S. 9,000 520,875
-----------
972,760
- -------------------------------------------------------------------------------
Electronic Components & Instruments: 1.7%
Intel Corp. U.S. 10,000 638,750
- -------------------------------------------------------------------------------
Energy Sources: 10.0%
Amerada Hess Corp. U.S. 4,000 182,500
Norsk Hydro AS, ADR Nor. 8,800 344,300
Plains Petroleum Co. U.S. 25,000 587,500
Saga Petroleum AS, B Nor. 20,000 207,024
Societe Nationale Elf Aquitane Fr. 4,000 281,520
Tosco Corp. U.S. 13,500 393,188
Total SA, B Fr. 7,000 406,553
USX-Marathon Group Inc. U.S. 33,000 540,375
Valero Energy Corp. U.S. 27,000 455,625
YPF Sociedad Anonima, ADR Arg. 18,000 384,750
-----------
3,783,335
- -------------------------------------------------------------------------------
Financial Services: 1.8%
Dean Witter Discover & Co. U.S. 3,122 105,758
Federal National Mortgage
Assn. U.S. 8,000 583,000
-----------
688,758
- -------------------------------------------------------------------------------
Food & Household Products: 0.7%
Chiquita Brands International
Inc. U.S. 13,000 177,125
Dairy Farm International
Holdings Ltd. H.K. 100,000 107,270
-----------
284,395
- -------------------------------------------------------------------------------
Forest Products & Paper: 6.4%
Georgia-Pacific Corp. U.S. 13,000 929,500
International Paper Co. U.S. 4,900 369,338
James River Corp. U.S. 17,100 346,275
Westvaco Corp. U.S. 20,000 785,000
-----------
2,430,113
- -------------------------------------------------------------------------------
Health & Personal Care: 2.3%
Astra AB, A Swe. 15,000 387,589
Windmere Corp. U.S. 62,000 488,250
-----------
875,839
- -------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31, 1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -----------------------------------------------------------------------------
Industrial Components: 2.9%
BW/IP Inc. U.S. 30,000 $ 513,750
Goodyear Tire & Rubber Co. U.S. 17,400 585,075
-----------
1,098,825
- -----------------------------------------------------------------------------
Insurance: 5.7%
Aetna Life & Casualty Co. U.S. 8,500 400,562
American International Group
Inc. U.S. 6,500 637,000
Kemper Corp. U.S. 13,000 492,375
Presidential Life Corp. U.S. 47,100 247,275
Progressive Corp. Ohio U.S. 2,700 94,500
Providian Corp. U.S. 3,000 92,625
Travellers Inc. U.S. 6,433 209,073
-----------
2,173,410
- -----------------------------------------------------------------------------
Merchandising: 4.6%
American Stores Co. U.S. 20,000 537,500
Dayton-Hudson Corp. U.S. 4,000 283,000
K Mart Corp. U.S. 25,000 325,000
Limited Inc. U.S. 23,000 416,875
Strawbridge & Clothier U.S. 8,487 194,140
-----------
1,756,515
- -----------------------------------------------------------------------------
Metals & Mining: 2.0%
Oregon Steel Mills Inc. U.S. 14,000 218,750
Reynolds Metals Co. U.S. 11,000 539,000
-----------
757,750
- -----------------------------------------------------------------------------
Multi-Industry: 1.1%
Hutchison Whampoa Ltd. H.K. 100,000 404,523
- -----------------------------------------------------------------------------
Real Estate: 0.8%
American Health Properties
Inc. U.S. 15,300 302,175
- -----------------------------------------------------------------------------
Telecommunications: 0.3%
Alcatel Alsthom SA Fr. 1,600 136,604
- -----------------------------------------------------------------------------
Textiles & Apparel: 2.8%
*Fruit of the Loom Inc., A U.S. 23,000 621,000
Shaw Industries Inc. U.S. 30,400 452,200
-----------
1,073,200
- -----------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31,1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------
Transportation: 5.5%
American President Cos.
Ltd. U.S. 27,000 $ 681,750
*AMR Corp. U.S. 8,000 426,000
Brambles Industries Ltd. Aus. 40,000 382,042
OMI Corp. U.S. 40,000 265,000
Stolt Nielsen SA U.S. 17,000 350,625
-----------
2,105,417
- --------------------------------------------------------------------------------
Utilities-Electrical & Gas: 3.7%
Iberdrola SA Sp. 50,000 308,452
Iowa Illinois Gas &
Electric U.S. 27,500 546,563
Pinnacle West Capital
Corp. U.S. 27,500 543,125
-----------
1,398,140
- --------------------------------------------------------------------------------
Wholesale & International Trade: 0.7%
Brierley Investments
Ltd. N.Z. 370,000 267,647
-----------
TOTAL COMMON STOCKS (cost $25,550,900) 28,488,928
- --------------------------------------------------------------------------------
PREFERRED STOCK: 0.1% (cost $7,648)
- --------------------------------------------------------------------------------
*Telebras-
Telecomunicacoes
Brasileiras SA, ADR Braz. 136 6,103
- --------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY**
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
BONDS: 0.4%
- --------------------------------------------------------------------------------
American Stores Co.,
7.25%, conv., 9/15/01 U.S. 100,000 119,000
Brierley Investments
Ltd., 9.00%, conv.,
6/30/98 N.Z. 46,250 30,363
-----------
TOTAL BONDS: (cost $120,997) 149,363
- --------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 23.7% (cost $8,994,970)
- --------------------------------------------------------------------------------
U.S. Treasury Bills,
4.75% to 5.42% with
maturities to 2/23/95 U.S. 9,034,000 9,001,400
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.2% (cost $34,674,415) 37,645,794
OTHER ASSETS, LESS LIABILITIES: 0.8% 313,572
-----------
TOTAL NET ASSETS: 100.0% $37,959,366
===========
</TABLE>
*NON INCOME PRODUCING.
**PRINCIPAL AMOUNT IN CURRENCY OF COUNTRY INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Templeton American Trust, Inc.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<TABLE>
<S> <C>
Assets:
Investment in securities, at value (identified cost $34,674,415) $37,645,794
Cash 4,386
Receivables:
Capital shares sold 492,101
Dividends and interest 68,769
-----------
Total assets 38,211,050
-----------
Liabilities:
Payables:
Investment securities purchased 46,653
Capital shares redeemed 10,517
Accrued expenses 194,514
-----------
Total liabilities 251,684
-----------
Net assets, at value $37,959,366
===========
Net assets consist of:
Undistributed net investment income $ 5,267
Unrealized appreciation on investments 2,971,379
Accumulated net realized gain 69,360
Net capital paid in on shares of capital stock 34,913,360
-----------
Net assets, at value $37,959,366
===========
Shares outstanding 3,038,787
===========
Net asset value per share
($37,959,366 / 3,038,787) $ 12.49
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
for the year ended December 31, 1994
<TABLE>
<S> <C> <C>
Investment Income:
(net of $17,121
foreign taxes withheld)
Dividends $ 663,714
Interest 364,423
-----------
Total Income $1,028,137
Expenses:
Management fees (Note 3) 255,905
Administrative fees (Note 3) 54,836
Distribution fees (Note 3) 365,579
Transfer agent fees (Note 3) 43,800
Custodian fees 19,200
Reports to shareholders 50,000
Audit fees 21,200
Legal fees 19,100
Registration and filing fees 36,000
Directors' fees and expenses 30,600
Other 6,993
-----------
Total Expenses 903,213
----------
Net investment income 124,924
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments 2,850,372
Foreign currency transactions (557)
-----------
2,849,815
Net unrealized depreciation on investments (2,458,034)
-----------
Net realized and unrealized gain 391,781
----------
Net increase in net assets resulting from operations $ 516,705
==========
</TABLE>
11
<PAGE>
Templeton American Trust, Inc.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 124,924 $ 99,522
Net realized gain from security and foreign cur-
rency transactions 2,849,815 1,061,425
Net unrealized appreciation (depreciation) (2,458,034) 3,436,298
----------- -----------
Net increase in net assets resulting from opera-
tions 516,705 4,597,245
Distributions to shareholders:
From net investment income (137,730) (75,729)
From net realized capital gain (2,952,688) (530,046)
Capital share transactions (Note 2) 6,114,650 2,941,586
----------- -----------
Net increase in net assets 3,540,937 6,933,056
Net assets:
Beginning of year 34,418,429 27,485,373
----------- -----------
End of year $37,959,366 $34,418,429
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Templeton American Trust, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton American Trust, Inc. (the Fund) is an open-end, diversified manage-
ment investment company registered under the Investment Company Act of 1940.
The following summarizes the Fund's significant accounting policies.
a. Securities Valuations:
Securities listed or traded on a recognized national or foreign stock exchange
or NASDAQ are valued at the last reported sales prices on the principal ex-
change on which the securities are traded. Over-the-counter securities and
listed securities for which no sale is reported are valued at the mean between
the last current bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
and approved in good faith by the Board of Directors.
b. Foreign Currency Translations:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign curren-
cies are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customar-
ily enters into foreign exchange contracts to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of for-
eign currencies, currency gains or losses realized between the trade and set-
tlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at the end
of the fiscal period, resulting from changes in the exchange rates.
c. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all its
taxable income to its shareholders. Therefore, no provision has been made for
federal income taxes.
d. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on ex-dividend date. Certain dividend income from foreign securi-
ties is recorded as soon as information is available to the Fund. Interest in-
come and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
At December 31, 1994, there were 100 million shares of capital stock authorized
($0.01 par value). Transactions in the Fund's shares for the years ended Decem-
ber 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1994 1993
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold 492,348 $ 6,699,834 532,314 $ 6,742,384
Shares issued in reinvest-
ment of distributions 212,560 2,647,339 38,778 513,981
Shares redeemed (236,481) (3,232,523) (336,396) (4,314,779)
-------- ----------- -------- -----------
Net increase 468,427 $ 6,114,650 234,696 $ 2,941,586
======== =========== ======== ===========
</TABLE>
13
<PAGE>
Templeton American Trust, Inc.
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Counsel, Inc. (TICI), Templeton Global Investors, Inc. (TGII), Frank-
lin Templeton Distributors, Inc. (FTD) and Franklin Templeton Investors Servic-
es, Inc. (FTIS), the Fund's investment manager, administrative manager, princi-
pal underwriter, and transfer agent, respectively. The Fund pays monthly an in-
vestment management fee to TICI equal, on an annual basis, to 0.70% of the av-
erage daily net assets of the Fund. The fee is subject to reduction in any year
to the extent that expenses (exclusive of certain expenses) of the Fund exceed
2 1/2% of the first $30 million of net assets, 2% of the next $70 million of
net assets and 1 1/2% of the remainder. During the year ended December 31,
1994, no reduction in fee was required as a result of this limitation. The Fund
pays TGII an administrative fee of 0.15% per annum on the first $200 million of
the Fund's aggregate average daily net assets, 0.135% of the next $500 million,
0.10% of the next $500 million, and 0.075% per annum of such average net assets
in excess of $1.2 billion. For the year ended December 31, 1994, FTD did not
receive any commissions from the sale of the Fund's shares and FTIS received
fees of $43,800.
Pursuant to a Distribution Plan, the Fund reimburses FTD monthly 1% per annum
of the Fund's average daily net assets for FTD's costs and expenses in connec-
tion with any activity including commissions advanced to selling dealers, which
is primarily intended to result in a sale of Fund shares. Fund shares which are
redeemed within five years of purchase may be subject to a contingent deferred
sales charge at rates ranging from 5% to 0%, charged as a percentage of the
dollar amount subject thereto. Contingent deferred sales charges of $59,594
were paid to FTD during the year ended December 31, 1994.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1994 aggregated $10,654,807 and $9,252,080, respective-
ly. The cost of securities for federal income tax purposes is the same as that
shown in the investment portfolio. Realized gains and losses are reported on an
identified cost basis.
At December 31, 1994, the aggregate gross unrealized appreciation and deprecia-
tion of portfolio securities, based on cost for federal income tax purposes,
was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 4,187,788
Unrealized depreciation (1,216,409)
-----------
Net unrealized appreciation $ 2,971,379
===========
</TABLE>
14
<PAGE>
Templeton American Trust, Inc.
Independent Auditor's Report
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The Board of Directors and Shareholders
Templeton American Trust, Inc.
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of Templeton American Trust, Inc. as of December 31,
1994, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the three years in the period
then ended and for the period from February 7, 1991 (commencement of opera-
tions) to December 31, 1991. These financial statements and financial high-
lights are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of De-
cember 31, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by man-
agement, 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 financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Tem-
pleton American Trust, Inc. as of December 31, 1994, the results of its opera-
tions, the changes in its net assets and the financial highlights for the peri-
ods indicated, in conformity with generally accepted accounting principles.
[SIGNATURE OF MCGLADREY & PULLEN, LLP APPEARS HERE]
New York, New York
February 3, 1995
15
<PAGE>
TEMPLETON AMERICAN TRUST, INC.
Auditors
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Account Services
1-800-354-9191
Sales Information
1-800-292-9293
This report must be preceded or accompanied
by the prospectus of Templeton American
Trust, Inc.
Like any investment in securities, the value
of the Fund's portfolio will be subject to the
risk of loss from market, currency,
economic, political and other factors, as well
as investment decisions by the investment
manager which will not always be profitable
or wise. The Fund and its investors are not
protected from such losses by the
investment manager. Therefore, investors
who cannot accept this risk should not invest
in shares of the Fund.
To ensure the highest quality of service,
telephone calls to or from our service
departments may be monitored, recorded and
accessed. These calls can be determined by
the presence of a regular beeping tone.
TL00 A94 12/94
[LOGO OF RECYCLED PAPER APPEARS HERE]
TEMPLETON
AMERICAN
TRUST, INC.
Annual Report
December 31, 1994
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
