<PAGE>
Templeton American
Trust
[PHOTO 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, 1996
Dear Shareholder:
We are pleased to bring you the annual report of the Templeton American Trust,
which covers the twelve months ended December 31, 1995.
During the fiscal year, falling interest rates, strong corporate earnings
growth, and massive cash inflows into mutual funds buoyed U.S. equities. The
U.S. stock market, as measured by both the Standard & Poor's 500 Stock Index
(S&P 500)/(R)/ and the Dow Jones Industrial Average/(R)/, turned in a
spectacular performance, breaking records with ease and making the most bullish
market prognosticators appear timid. Even a dramatic weakening in the important
technology sector late in 1995 could not restrain investor enthusiasm for
stocks.
Within this environment, the Fund's Class II shares produced a one-year total
return of 17.55%, as discussed in the Performance Summary on page 6. It did not,
however, perform as well as the broader market indices, such as the unmanaged
S&P 500, which rose 37.45% during the same period.
1
<PAGE>
One of the most important reasons for this underperformance was the Fund's low
exposure to technology and blue-chip stocks, whose high price/earnings and
price-to-book value ratios were favored by investors during the year. The Fund's
performance was also hurt by its relatively high cash position (27.8% of total
net assets) and its exposure to foreign equities (14.7% of total net assets).
While many overseas stocks posted positive gains in 1995, the underlying tone of
most foreign markets was not as favorable as that of the U.S. market. Of course,
investing in foreign securities involves special risks related to market,
currency, economic, political and other factors. These risks are discussed in
the Fund's prospectus.
Maintaining a long-term approach to value-oriented investing, we made few
changes to the portfolio during the reporting period. We did, however, add to
our position in Wheelabrator Technologies, a manufacturer of waste and energy-
related equipment, which we feel has excellent long-term prospects. And taking
advantage of rising share prices, we sold all of our stock in Bancorp Hawaii and
reduced our holdings of Intel Corp., the leading U.S. microprocessor maker.
This discussion reflects the strategies we employed for the Fund during the past
fiscal year, and includes our
- --------------------------------------------------------------------------------
Templeton American Trust
Geographic Distribution on 12/31/95
Based on Total Net Assets
[PIE CHART APPEARS HERE]
United States Stocks 57.5%
European Stocks 8.4%
Austrailian & New Zealand Stocks 3.8%
Asian Stocks 1.6%
Latin American Stocks 0.9%
Short-Term Obligations &
Other Net Assets 27.8%
opinions as of the close of the period. Since economic and market conditions are
constantly changing, our strategies, and our evaluations, conclusions and
decisions regarding portfolio holdings, may change in light of new circumstances
as they arise. Although past performance of a specific investment or sector
cannot guarantee future performance, such information can be useful in analyzing
securities we purchase or sell for the Fund.
While the potential outlook for U.S. equities appears bright due to low
inflation, declining interest rates, and strong corporate profits, it has become
increasingly difficult to find undervalued U.S. securities to purchase for the
Fund.
2
<PAGE>
- --------------------------------------------------------------------------------
Templeton American Trust
Top 10 Holdings on 12/31/95
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Boeing Co., Aerospace & Military
Technology 2.3%
- --------------------------------------------------------------------------------
Federal National Mortgage Association,
Financial Services 2.2%
- --------------------------------------------------------------------------------
Barrett Resources Corp.,
Energy Sources 2.1%
- --------------------------------------------------------------------------------
American International Group, Inc.,
Insurance 2.0%
- --------------------------------------------------------------------------------
Georgia-Pacific Corp., Forest Products &
Paper 2.0%
- --------------------------------------------------------------------------------
Goodyear Tire & Rubber Co.,
Industrial Components 1.8%
- --------------------------------------------------------------------------------
Great Lakes Chemical Corp.,
Chemicals 1.8%
- --------------------------------------------------------------------------------
Pinnacle West Capital Corp.,
Utilities - Electrical & Gas 1.8%
- --------------------------------------------------------------------------------
Owens Corning Fiberglas Corp.,
Building Materials & Components 1.5%
- --------------------------------------------------------------------------------
Intel Corp., Electronic Components &
Instruments 1.5%
- --------------------------------------------------------------------------------
</TABLE>
For a complete list of portfolio holdings, please see page 10 of this report.
It should be noted that the 1995 price/earnings ratios of the U.S. stock market
were relatively high, and at year end the dividend yields reached 20-year lows.*
Also, remembering what happened to some now-defunct computer companies during
the personal computer boom of the
*Sources: Baseline. The price/earnings ratios for the Dow Jones Industrial
Average and the S&P 500 for 1995 were 15.5 and 16.9, respectively.
Factset Data Systems, Inc. The dividend yields for the Dow Jones
Industrial Average and the S&P 500 as of December 31, 1995, were 2.28%
and 2.32%, respectively.
- --------------------------------------------------------------------------------
Templeton American Trust
Top 10 Industries on 12/31/95
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Industry Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Energy Sources 10.6%
- --------------------------------------------------------------------------------
Insurance 7.2%
- --------------------------------------------------------------------------------
Transportation 5.5%
- --------------------------------------------------------------------------------
Forest Products & Paper 5.2%
- --------------------------------------------------------------------------------
Merchandising 4.4%
- --------------------------------------------------------------------------------
Utilities - Electrical & Gas 4.3%
- --------------------------------------------------------------------------------
Banking 4.1%
- --------------------------------------------------------------------------------
Building Materials & Components 3.2%
- --------------------------------------------------------------------------------
Industrial Components 2.9%
- --------------------------------------------------------------------------------
Electrical & Electronics 2.8%
- --------------------------------------------------------------------------------
</TABLE>
mid-1980s, we are concerned about the speculative fervor surrounding some of the
"new era" initial public offerings.
Looking forward, we shall continue to implement, in a disciplined fashion, the
investment strategies which have served our shareholders over the long term. We
thank you for your participation in the Templeton American Trust and welcome any
comments or suggestions you may have.
Sincerely,
/s/ Gary P. Motyl
Gary P. Motyl, CFA
President
Templeton American Trust, Inc.
3
<PAGE>
Performance Summary
Class I Shares
The Templeton American Trust Class I shares reported a cumulative total return
of 9.94% since inception on May 1, 1995. Cumulative total return shows the
change in value of an investment and does not include the current maximum 5.75%
initial sales charge.
We always maintain a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner.
During the reporting period, Class I shareholders received distributions of 19.5
cents ($0.195) per share in income dividends, 9 cents ($0.09) in short-term
capital gains, and 17.5 cents ($0.175) in long-term capital gains.
The price of the Fund's Class I shares, as measured by net asset value,
increased from $13.37 on May 1, 1995 to $14.23 on December 31, 1995. Of course,
past performance is not indicative of future results, and distributions will
vary depending on income earned by the Fund, as well as any profits realized
from the sale of securities in the portfolio.
The graph on page 5 shows how an investment in the Templeton American Trust
Class I shares, since inception on May 1, 1995, has kept your purchasing power
ahead of inflation, as measured by the Consumer Price Index (CPI). 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.
4
<PAGE>
- --------------------------------------------------------------------------------
TEMPLETON AMERICAN TRUST-CLASS I
Total Return Index Comparison
$10,000 Investment (5/1/95-12/31/95)
[GRAPH APPEARS HERE SHOWING COMPARISON BETWEEN TEMPLETON AMERICAN TRUST-CLASS
I*, S&P 500 INDEX, AND THE CPI**]
<TABLE>
<CAPTION>
5/95 12/95
--------- ---------
<S> <C> <C>
Templeton American Trust-Class I $ 10,000 $ 10,362
S&P 500 Index 10,000 12,179
Consumer Price Index 10,000 10,105
</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 December 31, 1995
Class I shares
Since
Inception
(05/01/95)
Aggregate Total Return/1/
Class I Shares 3.62%
Cumulative Total Return/2/
Class I Shares 9.94%
1. Aggregate total return represents the change in value of an investment over
the indicated period. The figure reflects the maximum 5.75% initial sales
charge. Since Class I shares have existed for less than one year, average annual
total returns are not provided.
2. Cumulative total return represents the change in value of an investment over
the period indicated. This calculation does not include the current maximum
5.75% initial sales charge.
Total return calculations assume reinvestment of dividends and capital gains.
Investment return and principal value will fluctuate with market conditions,
currencies and the economic and political climates of the countries where
investments are made. Thus, your shares, when redeemed, may be worth more or
less than their original cost. Past performance is not predictive of future
results.
- --------------------------------------------------------------------------------
5
<PAGE>
Performance Summary
Class II Shares
The Templeton American Trust Class II shares reported a total return of 17.55%
for the one-year period ended December 31, 1995. Total return measures the
change in value of an investment, assuming reinvestment of dividends and capital
gains distributions, and does not include sales charges.
We always maintain 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 on page 7, the Fund's Class II shares delivered a cumulative
total return of more than 69% since inception on February 27, 1991.
During the reporting period, Class II shareholders received distributions of
13.63 cents ($0.1363) per share in income dividends, 9 cents ($0.09) in short-
term capital gains, and 19.5 cents ($0.195) in long-term capital gains.
The price of the Fund's Class II shares, as measured by net asset value,
increased from $12.49 on December 31, 1994 to $14.25 on December 31, 1995. Of
course, past performance is not indicative of future results, and distributions
will vary depending on income earned by the Fund, as well as any profits
realized from the sale of securities in the portfolio.
The graph on page 7 shows how an investment in the Templeton American Trust
Class II shares, since 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 S&P 500 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 initial sales
charges or management expenses. Of course, one cannot invest directly in an
index, and past performance is not predictive of future results.
6
<PAGE>
- --------------------------------------------------------------------------------
TEMPLETON AMERICAN TRUST-CLASS II
Total Return Index Comparison
$10,000 Investment (2/27/91-12/31/95)
[COMPARISON GRAPH SHOWING TEMPLETON AMERICA TRUST-CLASS II*,
S&P 500 INDEX, AND CONSUMER PRICE INDEX** APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C> <C>
Templeton American Markets Trust-Class II
S&P 500 Index
Consumer Price Index
</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 December 31, 1995
Class II shares
Since
Inception
One-Year Three-Year (2/27/91)
Average Annual
Total Return/1/
Class II Shares 15.25% 11.07% 11.28%
Cumulative
Total Return/2/
Class II Shares 17.55% 38.37% 69.46%
1. Average annual total returns represent the average annual change in value of
an investment over the periods indicated. They include the deduction of the
1.00% initial sales charge and the 1.00% contingent deferred sales charge
(CDSC), applicable to shares redeemed within the first 18 months of investment.
See note below.
2. Cumulative total return represents the change in value of an investment over
the periods indicated. These calculations do not include the deduction of the
1.00% initial sales charge nor the 1.00% CDSC. See note below.
Note: Prior to May 1, 1995, Class II shares were offered with no initial sales
charge and a higher but declining contingent deferred sales charge. Thus, actual
total returns would have been somewhat different than noted above. All total
return figures assume reinvestment of dividends and capital gains. Past expense
reductions by the Fund's manager increased the Fund's total returns.
Investment return and principal value will fluctuate with market conditions,
currencies and the economic and political climates of the countries where
investments are made. Thus, your shares, when redeemed, may be worth more or
less than their original cost. Past performance is not predictive of future
results.
- --------------------------------------------------------------------------------
7
<PAGE>
Templeton American Trust, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
CLASS I
-----------------
FOR THE PERIOD
MAY 1, 1995+
THROUGH
DECEMBER 31, 1995
-----------------
<S> <C>
Net asset value, beginning of period $13.37
------
Income from investment operations:
Net investment income .11
Net realized and unrealized gain 1.21
------
Total from investment operations 1.32
------
Distributions:
Dividends from net investment income (.20)
Distributions from net realized gains (.26)
------
Total distributions (.46)
------
Change in net asset value .86
------
Net asset value, end of year $14.23
======
TOTAL RETURN* 9.94%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000) $ 881
Ratio of expenses to average net assets 1.81%**
Ratio of net investment income to average net assets 1.31%**
Portfolio turnover rate 4.44%
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR PERIODS
OF LESS THAN ONE YEAR.
**ANNUALIZED.
+COMMENCEMENT OF SALES.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Templeton American Trust, Inc.
Financial Highlights (cont.)
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
CLASS II
-----------------------------------------------------
FEBRUARY 7, 1991
YEAR ENDED DECEMBER 31 (COMMENCEMENT OF
---------------------------------- OPERATIONS) TO
1995 1994 1993 1992 DECEMBER 31, 1991
------- ------- ------- ------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 12.49 $ 13.39 $ 11.77 $ 11.20 $ 10.00
------- ------- ------- ------- -------
Income from investment
operations:
Net investment income .14 .04 .04 .10 .08
Net realized and
unrealized gain 2.04 .17 1.82 .83 1.22
------- ------- ------- ------- -------
Total from investment
operations 2.18 .21 1.86 .93 1.30
------- ------- ------- ------- -------
Distributions:
Dividends from net
investment income (.14) (.05) (.03) (.11) (.08)
Distributions from net
realized gains (.28) (1.06) (.21) (.09) (.02)
Distributions in excess
of realized gains -- -- -- (.16) --
------- ------- ------- ------- -------
Total distributions (.42) (1.11) (.24) (.36) (.10)
------- ------- ------- ------- -------
Change in net asset
value 1.76 (.90) 1.62 .57 1.20
------- ------- ------- ------- -------
Net asset value, end of
year $ 14.25 $ 12.49 $ 13.39 $ 11.77 $ 11.20
======= ======= ======= ======= =======
TOTAL RETURN* 17.55% 1.63% 15.82% 8.33% 13.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(000) $44,183 $37,959 $34,418 $27,485 $13,019
Ratio of expenses to
average net assets 2.40% 2.47% 2.53% 3.17% 3.94%**
Ratio of expenses, net
of reimbursement to
average net assets 2.40% 2.47% 2.53% 2.25% 2.25%
Ratio of net investment
income to average net
assets .95% .34% .31% 1.13% 1.64%**
Portfolio turnover rate 4.44% 31.92% 14.10% 27.91% 9.86%
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT DEFERRED
SALES CHARGE. NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
**ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS: 72.0%
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Aerospace & Military Technical Systems: 2.3%
Boeing Co. U.S. 13,000 $ 1,018,875
- --------------------------------------------------------------------------------
Automobiles: 1.5%
Ford Motor Co. U.S. 23,000 667,000
- --------------------------------------------------------------------------------
Banking: 4.1%
Australia & New Zealand
Banking Group Ltd. Aus. 102,910 482,639
BankAmerica Corp. U.S. 10,000 647,500
Chemical Banking Corp. U.S. 6,000 352,500
NationsBank Corp. U.S. 5,500 382,938
-----------
1,865,577
- --------------------------------------------------------------------------------
Building Materials & Components: 3.2%
*Owens Corning Fiberglas
Corp. U.S. 15,500 695,563
Pioneer International
Ltd. Aus. 175,000 451,339
Uralita Sp. 31,250 283,388
-----------
1,430,290
- --------------------------------------------------------------------------------
Business & Public Services: 1.5%
Esselte AB, B Swe. 22,000 329,547
Wheelabrator
Technologies Inc. U.S. 22,000 368,500
-----------
698,047
- --------------------------------------------------------------------------------
Chemicals: 1.8%
Great Lakes Chemical
Corp. U.S. 11,000 792,000
- --------------------------------------------------------------------------------
Data Processing & Reproduction: 1.0%
*Quantum Corp. U.S. 28,000 451,500
- --------------------------------------------------------------------------------
Electrical & Electronics: 2.8%
Alcatel Alsthom SA Fr. 1,600 137,946
BBC Brown Boveri Ltd.,
br. Swtz. 525 609,883
Motorola Inc. U.S. 9,000 513,000
-----------
1,260,829
- --------------------------------------------------------------------------------
Electronic Components & Instruments: 1.5%
Intel Corp. U.S. 12,000 681,000
- --------------------------------------------------------------------------------
Energy Equipment & Services: 0.7%
Sun Co. Inc. U.S. 12,000 328,500
- --------------------------------------------------------------------------------
Energy Sources: 10.6%
Amerada Hess Corp. U.S. 4,000 212,000
*Barrett Resources Corp. U.S. 32,500 954,688
Norsk Hydro AS, ADR Nor. 8,800 368,500
</TABLE>
10
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Energy Sources (cont.)
Saga Petroleum AS, B Nor. 20,000 $ 249,443
Societe Elf Aquitane SA Fr. 4,000 294,711
Tosco Corp. U.S. 13,500 514,688
Total SA, B Fr. 7,000 472,432
USX-Marathon Group Inc. U.S. 33,000 643,500
Valero Energy Corp. U.S. 27,000 661,500
YPF Sociedad Anonima,
ADR Arg. 18,000 389,250
-----------
4,760,712
- -------------------------------------------------------------------------------
Financial Services: 2.5%
Dean Witter Discover &
Co. U.S. 3,122 146,734
Federal National
Mortgage Assn. U.S. 8,000 993,000
-----------
1,139,734
- -------------------------------------------------------------------------------
Forest Products & Paper: 5.2%
*Crown Vantage Inc. U.S. 1,710 24,368
Georgia-Pacific Corp. U.S. 13,000 892,125
International Paper Co. U.S. 9,800 371,175
James River Corp. U.S. 17,100 412,538
Westvaco Corp. U.S. 24,000 666,000
-----------
2,366,206
- -------------------------------------------------------------------------------
Health & Personal Care: 2.4%
Astra AB, A Swe. 15,000 598,424
Windmere Corp. U.S. 70,000 498,750
-----------
1,097,174
- -------------------------------------------------------------------------------
Industrial Components: 2.9%
BW/IP Inc. U.S. 30,000 495,000
Goodyear Tire & Rubber
Co. U.S. 18,000 816,750
-----------
1,311,750
- -------------------------------------------------------------------------------
Insurance: 7.2%
Aetna Life & Casualty
Co. U.S. 8,500 588,625
American International
Group Inc. U.S. 9,750 901,875
Kemper Corp. U.S. 13,000 645,125
Presidential Life Corp. U.S. 47,100 465,113
Progressive Corp. Ohio U.S. 2,700 131,963
Providian Corp. U.S. 3,000 122,250
*Transport Holdings
Inc., A U.S. 32 1,304
Travelers Inc. U.S. 6,433 404,475
-----------
3,260,730
- -------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Merchandising: 4.4%
American Stores Co. U.S. 24,444 $ 653,877
Dairy Farm International
Holdings Ltd. H.K. 100,000 92,000
Dayton-Hudson Corp. U.S. 6,000 450,000
K Mart Corp. U.S. 25,000 181,250
Limited Inc. U.S. 23,000 399,625
Strawbridge & Clothier,
A U.S. 8,487 203,688
-----------
1,980,440
- --------------------------------------------------------------------------------
Metals & Mining: 1.8%
Oregon Steel Mills Inc. U.S. 14,000 196,000
Reynolds Metals Co. U.S. 11,000 622,875
-----------
818,875
- --------------------------------------------------------------------------------
Multi-Industry: 1.4%
Hutchison Whampoa Ltd. H.K. 100,000 609,117
- --------------------------------------------------------------------------------
Telecommunications: 0.1%
Telecomunicacoes
Brasileiras SA, ADR,
144A Braz. 136 6,452
- --------------------------------------------------------------------------------
Textiles & Apparel: 2.7%
*Fruit of the Loom Inc.,
A U.S. 23,000 560,625
Shaw Industries Inc. U.S. 45,000 663,750
-----------
1,224,375
- --------------------------------------------------------------------------------
Transportation: 5.5%
American President Cos.
Ltd. U.S. 27,000 621,000
*AMR Corp. U.S. 8,000 594,000
Brambles Industries Ltd. Aus. 40,000 445,951
*OMI Corp. U.S. 50,000 325,000
Stolt Nielsen SA U.S. 17,000 490,875
-----------
2,476,826
- --------------------------------------------------------------------------------
Utilities Electrical & Gas: 4.3%
Iberdrola SA Sp. 50,000 457,543
Midamerican Energy U.S. 40,425 677,119
Pinnacle West Capital
Corp. U.S. 27,500 790,625
-----------
1,925,287
- --------------------------------------------------------------------------------
Wholesale & International Trade: 0.6%
Brierley Investments
Ltd. N.Z. 370,000 292,683
-----------
TOTAL COMMON STOCKS (cost $23,770,485) 32,463,979
- --------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Templeton American Trust, Inc.
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------
PREFERRED STOCK: 0.1% (cost $6,795)
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
*Everen Capital Corp.,
pfd. A U.S. 430 $ 10,544
- ----------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY**
- ----------------------------------------------------------------------------------------
BOND: 0.1% (cost $21,414)
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Brierley Investments
Ltd., 9.00%, conv.,
6/30/98 N.Z. 46,250 34,393
- ----------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 27.9% (cost $12,564,017)
- ----------------------------------------------------------------------------------------
U.S. Treasury Bills,
4.83% to 5.40% with
maturities to 3/14/96 U.S. 12,605,000 12,573,276
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 100.1% (cost $36,362,711) 45,082,192
OTHER ASSETS, LESS LIABILITIES: (0.1)% (18,460)
-----------
TOTAL NET ASSETS: 100.0% $45,063,732
===========
</TABLE>
*NON-INCOME PRODUCING.
**CURRENCY OF COUNTRIES INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Templeton American Trust, Inc.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost $36,362,711) $45,082,192
Cash 5,675
Receivables:
Capital shares sold 112,369
Dividends and interest 76,442
-----------
Total assets 45,276,678
-----------
Liabilities:
Payables:
Investment securities purchased 9,896
Capital shares redeemed 24,641
Accrued expenses 178,409
-----------
Total liabilities 212,946
-----------
Net assets, at value $45,063,732
===========
Net assets consist of:
Net unrealized appreciation $ 8,719,481
Accumulated net realized loss (1,773)
Net capital paid in on shares of capital stock 36,346,024
-----------
Net assets, at value $45,063,732
===========
Class I
Net asset value per share ($880,688 / 61,870 shares outstanding) $ 14.23
===========
Maximum offering price ($14.23 / 94.25%) $ 15.10
===========
Class II
Net asset value per share ($44,183,044 / 3,101,475 shares
outstanding) $ 14.25
===========
Maximum offering price ($14.25 / 99.0%) $ 14.39
===========
</TABLE>
STATEMENT OF OPERATIONS
for the year ended December 31, 1995
<TABLE>
<S> <C> <C>
Investment income:
(net of $24,921 foreign taxes withheld)
Dividends $ 747,182
Interest 707,452
----------
Total income $1,454,634
Expenses:
Management fees (Note 3) 304,286
Administrative fees (Note 3) 65,203
Distribution fees (Note 3)
Class I 1,602
Class II 429,294
Transfer agent fees (Note 3) 57,000
Custodian fees 5,300
Reports to shareholders 78,000
Audit fees 16,000
Legal fees (Note 3) 33,500
Registration and filing fees 48,000
Other 2,872
----------
Total expenses 1,041,057
----------
Net investment income 413,577
Realized and unrealized gain:
Net realized gain on:
Investments 800,064
Foreign currency transactions 4,625
----------
804,689
Net unrealized appreciation on investments 5,748,102
----------
Net realized and unrealized gain 6,552,791
----------
Net increase in net assets resulting from operations $6,966,368
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Templeton American Trust, Inc.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 413,577 $ 124,924
Net realized gain on investment and foreign cur-
rency transactions 804,689 2,849,815
Net unrealized appreciation (depreciation) 5,748,102 (2,458,034)
----------- -----------
Net increase in net assets resulting from opera-
tions 6,966,368 516,705
Distributions to shareholders:
From net investment income
Class I (11,296) --
Class II (402,975) (137,730)
From net realized gain
Class I (15,561) --
Class II (864,834) (2,952,688)
Capital share transactions (Note 2)
Class I 867,236 --
Class II 565,428 6,114,650
----------- -----------
Net increase in net assets 7,104,366 3,540,937
Net assets:
Beginning of year 37,959,366 34,418,429
----------- -----------
End of year $45,063,732 $37,959,366
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<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 exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange
on which the securities are traded. Over-the-counter 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 Transactions:
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 a foreign exchange contract 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
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 the ex-dividend date. Certain dividend income on 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
Effective May 1, 1995, the Fund offered two classes of shares: Class I shares
and Class II shares. Shares of each class are identical except for their ini-
tial sales load, a contingent deferred sales charge on Class II shares, distri-
bution fees, and voting rights on matters affecting a single class. All Fund
shares outstanding before May 1, 1995 were designated as Class II shares. At
December 31, 1995, there were, for each class, 100 million shares of capital
stock authorized ($0.01 par value). Transactions in the Fund's shares were as
follows:
16
<PAGE>
Templeton American Trust, Inc.
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS I
--------------------
FOR THE PERIOD
MAY 1, 1995 THROUGH
DECEMBER 31, 1995
--------------------
SHARES AMOUNT
-------- ----------
<S> <C> <C>
Shares sold 103,187 $1,462,727
Shares issued on reinvestment
of distributions 1,736 24,258
Shares redeemed (43,053) (619,749)
-------- ----------
Net increase 61,870 $ 867,236
======== ==========
<CAPTION>
CLASS II
------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Shares sold 484,989 $6,429,431 492,348 $6,699,834
Shares issued on reinvestment
of distributions 79,384 1,103,844 212,560 2,647,339
Shares redeemed (501,685) (6,967,847) (236,481) (3,232,523)
-------- ---------- -------- ----------
Net increase 62,688 $ 565,428 468,427 $6,114,650
======== ========== ======== ==========
</TABLE>
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 Investor Servic-
es, Inc. (FTIS), the Fund's investment manager, administrative manager, princi-
pal underwriter, and transfer agent, respectively.
The Fund pays monthly an investment management fee to TICI equal, on an annual
basis, to 0.70% of the average daily net assets of the Fund. The Fund pays TGII
monthly 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, 1995, FTD did not
receive any commissions from the sale of the Fund's shares and FTIS received
fees of $57,000.
Under the distribution plans for Class I and Class II shares, the Fund reim-
burses FTD quarterly for FTD's costs and expenses in connection with any activ-
ity that is primarily intended to result in a sale of Fund shares, subject to a
maximum of 0.35% and 1.00% per annum of the average daily net assets of Class I
and Class II shares, respectively. Under the Class I distribution plan, costs
and expenses exceeding the maximum may be reimbursed in subsequent periods. At
December 31, 1995, there were no unreimbursed expenses. Class II shares re-
deemed within 18 months are subject to a contingent deferred sales charge. Con-
tingent deferred sales charges of $48,847 were paid to FTD for the year ended
December 31, 1995.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel
for the Fund, which firm received fees of $33,500 for the year ended December
31, 1995.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1995 aggregated $1,354,017 and $3,935,342, 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.
17
<PAGE>
Templeton American Trust, Inc.
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
At December 31, 1995, 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 $9,462,622
Unrealized depreciation (743,141)
----------
Net unrealized appreciation $8,719,481
==========
</TABLE>
18
<PAGE>
Templeton American Trust, Inc.
Independent Auditor's Report
- --------------------------------------------------------------------------------
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,
1995, 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 the periods indicated in the accompany-
ing financial statements. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to ex-
press 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, 1995, 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, 1995, 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.
/s/ McGladrey + Pullen, LLP
New York, New York January 31, 1996
19
<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 current
prospectus of the
Templeton American
Trust, Inc., which
contains more complete
information including
charges and expenses.
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.
- --------------------------
TL100 A95 02/96
LOGO
TEMPLETON
AMERICAN
TRUST, INC.
Annual Report
December 31, 1995
LOGO
