<PAGE> 1
TEMPLETON AMERICAN
TRUST, INC.
Annual Report
DECEMBER 31, 1997
[LOGO] FRANKLIN TEMPLETON
<PAGE> 2
TECHNOLOGY UPDATE:
FRANKLIN TEMPLETON
COMBATS THE YEAR 2000 PROBLEM
By Charles B. Johnson,
President of Franklin Resources, Inc.
As we near the 21st century, Franklin Templeton is taking important steps to
tackle the computer glitch dubbed the Year 2000 Problem, Y2K, or the Millennium
Bug. The problem originated from the software designers' attempt to save memory
by recording years in a two-digit format -- "98" instead of "1998", for example
- -- but didn't take into account that the year 2000 or "00", could also be
interpreted as 1900. Uncorrected, this problem could prevent computers from
accurately processing date-sensitive data after 1999.
Franklin Templeton's Information Services & Technology division established a
Year 2000 Project Team that has already begun making the necessary software
changes to help ensure that our computer systems, which service the funds and
their shareholders, will be Year-2000 Compliant. As changes reach completion, we
will conduct comprehensive tests to verify their effectiveness. We will also
require all of our major software or data-services suppliers to be Year-2000
Compliant.
In addition, with an estimated 80% of businesses facing the Year 2000 Problem,
mutual fund portfolio managers must be aware of the impact it could have on
companies in their portfolios. That's why Franklin Templeton portfolio managers
consistently keep this issue in mind while selecting investments and managing
their portfolios.
[PHOTO]
PETER A. NORI
Portfolio Manager
Templeton American Trust, Inc.
<PAGE> 3
SHAREHOLDER LETTER
- -------------------------------------------------------------------------
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 developing.
- -------------------------------------------------------------------------
Dear Shareholder:
We are pleased to bring you the annual report of Templeton American Trust for
the period ended December 31, 1997. Despite Alan Greenspan's December 1996
warning about "irrational exuberance," and the increase in the federal funds
rate from 5.25% to 5.50% in March 1997, low interest rates, strong corporate
profit growth, and benign inflation enabled the U.S. stock market to continue
setting records during the year. Although share prices of some companies doing
business in Asia declined substantially in 1997's fourth quarter, currency
crises there helped redirect portfolio flows to the U.S. market, which was
perceived by many investors to be safer. Within this environment, the Fund's
Class II shares provided a one-year total return of 21.83%, as discussed in the
Performance Summary on page 8. The Standard & Poor's 500 Stock Index (S&P
500(R)) posted a 31.63% return for the same period.(1)
1. Index is unmanaged and includes reinvested dividends. One cannot invest
directly in an index.
You may find a complete listing of the Fund's portfolio holdings, including the
number of shares and dollar value, beginning on page 13 of this report.
CONTENTS
Shareholder Letter ............ 1
Performance Summary
Class I ...................... 5
Class II ..................... 8
Financial Highlights &
Statement of Investments ......11
Financial Statements ..........16
Notes to Financial Statements .19
Independent Auditor's Report ..23
Tax Designation ...............24
[Pyramid Graph]
<PAGE> 4
The Fund's underperformance compared to the S&P 500 was due to its lack of
exposure to many of the large-cap growth companies with high price-to-earnings
ratios that dominate the index. The Fund also was hurt by price declines of
several foreign stocks, which generally underperformed the strong U.S. market.
However, many Fund holdings did perform well during the year. Prospects for
higher earnings benefited appliance maker Windmere-Durable Holdings Inc. and
telecommunication providers AT&T Corp. and US West Communications Group. And the
value of our holdings in APL Limited, Caliber Systems and Mapco Inc. increased
when they were the subject of takeover discussions. In addition, our shares in
American International Group Inc., Morgan Stanley Dean Witter Discover & Co.,
and the Federal National Mortgage Association (Fannie Mae) rose due to strong
capital markets and low interest rates.
We found excellent buying opportunities after the sharp market correction
between mid-March and mid-April, and added new positions to the portfolio from
several industries. These included technology companies such as Intuit Inc.,
3Com Corp., and Digital Equipment Corp., and transportation stocks Caliber
Systems and Landstar System Inc.
During the year, we also purchased shares of LTC Properties Inc., and National
Health Investors Inc., two Real Estate Investment Trusts (REITs). And because we
believed that some out-of-favor cyclical companies offered long-term value not
recognized by the marketplace, we initiated positions in Birmingham Steel Corp.,
Exide Corp., Occidental Petroleum Corp. and Sun Co. Inc.
2
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
12/31/97
<TABLE>
<CAPTION>
<S> <C>
United States 72.5%
Europe 4.1%
Canada 1.6%
Latin America 1.5%
Australia &
New Zealand 1.4%
Asia 1.1%
Short-Term Obligations
& Other Net Assets 17.8%
</TABLE>
<PAGE> 5
On the sell side, we liquidated our holdings of several U.S. stocks which had
appreciated beyond our definition of fair value, including NationsBank Corp.,
Chase Manhattan Corp., Dayton-Hudson Corp. and Limited Inc. We also took profits
in three large foreign companies: the Australian bank ANZ Group, Swedish
pharmaceutical manufacturer Astra AB, and French telecommunications equipment
provider Alcatel Alsthom.
Although the Fund focuses on U.S. companies, we exercised our option to invest
in foreign securities. At the end of the reporting period, overseas investments
comprised 9.7% of total net assets. As you know, investing in foreign securities
involves special risks related to market and currency volatility and economic,
political, social and other factors in the countries where the Fund is invested.
Emerging markets involve similar but heightened risks, in addition to those
associated with their relatively small size and lesser liquidity. These special
risks and other considerations are discussed in the Fund's prospectus.
Looking forward, we remain positive about the U.S. market over the long-term,
although short-term valuations give us some concern. Because both the Dow
Jones(R) Industrial Average and the S&P 500 Index have been trading well-above
their 20-year average levels for price-to-dividends, price-to-sales, and
price-to-book value, we expect that our underweighting of these stocks will
continue. However, we are optimistic that our philosophy of buying temporarily
out-of-favor securities trading at depressed levels relative to long-term
expected earnings should produce attractive returns.
Please remember, this discussion reflects our views and opinions as of December
31, 1997, the end of the reporting period. However, market and economic
conditions are changing constantly, which may affect
TOP 10 HOLDINGS
12/31/97
COMPANY, % OF TOTAL
INDUSTRY NET ASSETS
--------------------------------------------
Intuit Inc.
Data Processing & Reproduction 3.2%
American International
Group Inc.
Insurance 2.8%
AT&T Corp.
Telecommunications 2.3%
Morgan Stanley
Dean Witter Discover & Co.
Financial Services 2.2%
Pinnacle West
Capital Corp.
Utilities Electrical & Gas 2.0%
Goodyear Tire &
Rubber Co.
Industrial Components 2.0%
Intel Corp.
Electronic Components &
Instruments 2.0%
Ford Motor Co.
Automobiles 2.0%
Landstar System Inc.
Transportation 2.0%
Exide Corp.
Industrial Components 1.9%
<PAGE> 6
our strategies and portfolio holdings. Although historic performance is no
guarantee of future results, these insights may help you understand our
investment and management philosophy.
As always, we thank you for your participation in the Templeton American Trust
and look forward to serving your investment needs in the years to come.
Sincerely,
/s/ Peter A. Nori
Peter A. Nori
Portfolio Manager
Templeton American Trust, Inc.
TOP 10 INDUSTRIES
12/31/97
% OF TOTAL
INDUSTRY NET ASSETS
--------------------------------------------
Data Processing &
Reproduction 10.2%
Insurance 7.9%
Industrial Components 5.9%
Energy Sources 5.7%
Merchandising 4.4%
Transportation 4.3%
Metals & Mining 4.1%
Telecommunications 3.9%
Health & Personal Care 3.9%
Electrical & Electronics 3.9%
<PAGE> 7
PERFORMANCE SUMMARY
CLASS I
Templeton American Trust - Class I produced a 22.66% cumulative total return for
the one-year period ended December 31, 1997. Cumulative total return measures
the change in value of an investment, assuming reinvestment of dividends and
capital gains, if any, and does not include the 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. As you can see from the table on
page 7, the Fund's Class I shares delivered a cumulative total return of more
than 61% since inception on May 1, 1995.
The Fund's share price, as measured by net asset value, increased $1.15, from
$16.02 on December 31, 1996, to $17.17 on December 31, 1997. During the
reporting period, shareholders received per share distributions of 15 cents
($0.15) in income dividends, 14.5 cents ($0.145) in short-term capital gains,
and $2.105 in long-term capital gains. Distributions will vary depending on
income earned by the Fund and any profits realized from the sale of securities
in the portfolio, as well as the level of the Fund's operating expenses.
The graph on page 6 compares the performance of Templeton American Trust - Class
I since inception on May 1, 1995, with that of the unmanaged Standard and Poor's
500 (S&P 500) Stock Index.
The past performance is not predictive of future results.
5
<PAGE> 8
index is a domestic, broad market index consisting of 500 large-capitalization
U.S. stocks. The graph also shows the Fund's performance versus the Consumer
Price Index (CPI), a commonly used measure of inflation. Please remember that
the Fund's performance differs from that of an index because an index is not
managed according to any investment strategy, 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, nor is an index representative of the Fund's portfolio.
CLASS 1
Total Return Index Comparison
$10,000 Investment (5/1/95 - 12/31/97)
<TABLE>
<CAPTION>
Templeton
American Trust(1)- Consumer S&P 500
Class I Price Index(3) Index(2)
-------------------------------------------------
<S> <C> <C> <C>
5/1/95 $9,423 $10,000 $10,000
5/95 $9,704 $10,020 $10,385
6/95 $9,887 $10,040 $10,627
7/95 $10,190 $10,040 $10,997
8/95 $10,134 $10,067 $11,019
9/95 $10,275 $10,086 $11,483
10/95 $9,972 $10,119 $11,448
11/95 $10,218 $10,112 $11,941
12/95 $10,351 $10,105 $12,171
1/96 $10,467 $10,164 $12,594
2/96 $10,548 $10,197 $12,703
3/96 $10,780 $10,250 $12,826
4/96 $11,071 $10,289 $13,020
5/96 $11,239 $10,309 $13,341
6/96 $11,253 $10,316 $13,393
7/96 $10,940 $10,335 $12,758
8/96 $11,246 $10,355 $13,079
9/96 $11,493 $10,388 $13,812
10/96 $11,755 $10,421 $14,204
11/96 $12,322 $10,441 $15,271
12/96 $12,411 $10,441 $14,969
1/97 $13,000 $10,473 $15,912
2/97 $12,864 $10,505 $16,029
3/97 $12,651 $10,531 $15,369
4/97 $12,880 $10,544 $16,289
5/97 $13,842 $10,537 $17,268
6/97 $14,158 $10,550 $18,043
7/97 $15,302 $10,563 $19,478
8/97 $15,136 $10,583 $18,383
9/97 $16,011 $10,609 $19,397
10/97 $15,065 $10,636 $18,761
11/97 $15,033 $10,629 $19,622
12/97 $15,223 $10,617 $19,960
</TABLE>
THE HISTORICAL PERFORMANCE DATA SHOWN PERTAIN ONLY TO THE FUND'S CLASS I SHARES.
THE FUND OFFERS ANOTHER SHARE CLASS SUBJECT TO DIFFERENT FEES AND EXPENSES,
WHICH AFFECT PERFORMANCE. PLEASE SEE THE PROSPECTUS FOR MORE DETAILS.
1. Includes the sales charge and represents the change in value of an investment
over the period shown. Total return assumes reinvestment of dividends and
capital gains.
2. Index is unmanaged and includes reinvested dividends. One cannot invest
directly in an index.
3. Source: U.S. Bureau of Labor Statistics.
Past performance is not predictive of future results.
6
<PAGE> 9
CLASS I
Periods ended 12/31/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR (5/1/95)
----------------------------------------------------------------------
<S> <C> <C>
Cumulative Total Return(1) 22.66% 61.58%
Average Annual Total Return(2) 15.61% 17.05%
Value of $10,000 Investment(3) $11,561 $15,229
</TABLE>
<TABLE>
<CAPTION>
12/31/96 12/31/97
----------------------------------------------------------------------
<S> <C> <C>
One-Year Total Return(4) 19.90% 22.66%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum 5.75% initial
sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include the maximum 5.75% initial sales
charge.
4. One-year total return represents the change in value of an investment over
the indicated periods ended on the specified dates and does not include the
sales charge.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Investment return and principal value will fluctuate with market
conditions, currency volatility and the social, economic and political climates
of countries where investments are made. Emerging markets involve heightened
risks related to the same factors, in addition to those associated with their
relatively small size and lesser liquidity. You may have a gain or loss when you
sell your shares.
Past performance is not predictive of future results.
7
<PAGE> 10
CLASS II
Templeton American Trust - Class II produced a 21.83% cumulative total return
for the one-year period ended December 31, 1997. Cumulative total return
measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, if any, 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 table on page 10, the Fund's Class II shares delivered a cumulative total
return of more than 145% since inception on February 27, 1991.
The Fund's share price, as measured by net asset value, increased $1.17, from
$16.04 on December 31, 1996, to $17.21 on December 31, 1997. During the
reporting period, shareholders received per share distributions of 0.32 cents
($0.0032) in dividend income, 14.5 cents ($0.145) in short-term capital gains,
and $2.105 in long-term capital gains. Distributions will vary depending on
income earned by the Fund and any profits realized from the sale of securities
in the portfolio, as well as the level of the Fund's operating expenses.
The graph on page 9 compares the performance of Templeton American Trust - Class
II since inception on February 27, 1991, with that of the unmanaged Standard and
Poor's 500 (S&P 500) Stock Index. The index is a domestic, broad market index
consisting of 500 large-capitalization U.S. stocks. The graph also shows the
Fund's
Past performance is not predictive of future results.
8
<PAGE> 11
performance versus the Consumer Price Index (CPI), a commonly used measure of
inflation. Please remember that the Fund's performance differs from that of an
index because an index is not managed according to any investment strategy, 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, nor is an index representative of the
Fund's portfolio.
CLASS II
Total Return Index Comparison
$10,000 Investment (2/27/91 - 12/31/97)
<TABLE>
<CAPTION>
Templeton
American Trust(1)- Consumer S&P 500
Class II Price Index(3) Index(2)
-------------------------------------------------------------
<S> <C> <C> <C>
2/27/91 $9,901 $10,000 $10,000
2/91 $9,911 $9,999 $10,000
3/91 $10,119 $10,013 $10,246
4/91 $10,327 $10,028 $10,280
5/91 $10,673 $10,057 $10,708
6/91 $10,376 $10,088 $10,223
7/91 $10,515 $10,102 $10,712
8/91 $10,663 $10,132 $10,953
9/91 $10,584 $10,177 $10,770
10/91 $10,653 $10,191 $10,930
11/91 $10,208 $10,221 $10,476
12/91 $11,193 $10,229 $11,676
1/92 $11,543 $10,243 $11,470
2/92 $11,893 $10,281 $11,605
3/92 $11,513 $10,332 $11,381
4/92 $11,763 $10,347 $11,723
5/92 $11,783 $10,362 $11,760
6/92 $11,513 $10,399 $11,585
7/92 $11,873 $10,422 $12,083
8/92 $11,233 $10,451 $11,823
9/92 $11,443 $10,480 $11,961
10/92 $11,483 $10,517 $12,018
11/92 $11,923 $10,532 $12,411
12/92 $12,126 $10,525 $12,568
1/93 $12,486 $10,577 $12,679
2/93 $12,589 $10,614 $12,839
3/93 $12,898 $10,652 $13,111
4/93 $12,919 $10,681 $12,805
5/93 $13,125 $10,696 $13,124
6/93 $13,073 $10,711 $13,164
7/93 $13,218 $10,710 $13,134
8/93 $13,588 $10,740 $13,620
9/93 $13,527 $10,762 $13,516
10/93 $13,733 $10,807 $13,807
11/93 $13,630 $10,815 $13,660
12/93 $14,044 $10,814 $13,831
1/94 $14,778 $10,844 $14,308
2/94 $14,569 $10,882 $13,905
3/94 $14,021 $10,919 $13,301
4/94 $14,210 $10,934 $13,484
5/94 $14,358 $10,940 $13,683
6/94 $14,021 $10,978 $13,348
7/94 $14,621 $11,007 $13,809
8/94 $15,106 $11,052 $14,366
9/94 $14,716 $11,081 $14,013
10/94 $14,674 $11,089 $14,336
11/94 $14,252 $11,104 $13,804
12/94 $14,273 $11,104 $14,007
1/95 $14,227 $11,148 $14,381
2/95 $14,656 $11,192 $14,930
3/95 $14,942 $11,229 $15,376
4/95 $15,308 $11,266 $15,829
5/95 $15,789 $11,289 $16,437
6/95 $16,064 $11,311 $16,821
7/95 $16,556 $11,311 $17,406
8/95 $16,453 $11,341 $17,441
9/95 $16,682 $11,363 $18,176
10/95 $16,178 $11,400 $18,120
11/95 $16,568 $11,392 $18,901
12/95 $16,778 $11,384 $19,265
1/96 $16,955 $11,451 $19,934
2/96 $17,061 $11,488 $20,107
3/96 $17,414 $11,548 $20,302
4/96 $17,873 $11,592 $20,608
5/96 $18,144 $11,614 $21,118
6/96 $18,156 $11,622 $21,200
7/96 $17,637 $11,644 $20,194
8/96 $18,120 $11,666 $20,703
9/96 $18,509 $11,703 $21,863
10/96 $18,933 $11,740 $22,483
11/96 $19,839 $11,762 $24,173
12/96 $19,951 $11,762 $23,694
1/97 $20,896 $11,799 $25,186
2/97 $20,667 $11,835 $25,371
3/97 $20,312 $11,864 $24,326
4/97 $20,667 $11,878 $25,784
5/97 $22,200 $11,871 $27,333
6/97 $22,681 $11,886 $28,559
7/97 $24,506 $11,900 $30,832
8/97 $24,240 $11,922 $29,098
9/97 $25,634 $11,952 $30,702
10/97 $24,100 $11,982 $29,696
11/97 $24,037 $11,975 $31,060
12/97 $24,305 $11,961 $31,594
</TABLE>
THE HISTORICAL PERFORMANCE DATA SHOWN PERTAINS ONLY TO THE FUND'S CLASS II
SHARES. THE FUND OFFERS ANOTHER SHARE CLASS SUBJECT TO DIFFERENT FEES AND
EXPENSES, WHICH AFFECT PERFORMANCE. PLEASE SEE THE PROSPECTUS FOR MORE DETAILS.
1. Includes all sales charges and represents the change in value of an
investment over the period shown. Total return assumes reinvestment of dividends
and capital gains.
2. Index is unmanaged and includes reinvested dividends. One cannot invest
directly in an index.
3. Source: U.S. Bureau of Labor Statistics.
Past performance is not predictive of future results.
9
<PAGE> 12
CLASS II
Periods ended 12/31/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (2/7/91)
------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) 21.83% 100.45% 145.49%
Average Annual Total Return(2) 19.63% 14.69% 13.86%
Value of $10,000 Investment(3) $11,963 $19,843 $24,305
</TABLE>
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One-Year Total Return(4) 15.82% 1.63% 17.55% 18.91% 21.83%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods and does not include sales charges. See Note below.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods and includes the current 1.0% initial
sales charge and the 1.0% contingent deferred sales charge applicable to shares
redeemed within 18 months of purchase. See Note below.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods and include sales charges.
4. One-year total return represents the change in value of an investment over
the indicated periods ended on the specified dates and does not include sales
charges.
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 for investors who paid this higher charge would differ. Past
expense waivers by the Fund's Manager increased the Fund's total returns.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Investment return and principal value will fluctuate with market
conditions, currency volatility and the social, economic and political climates
of countries where investments are made. Emerging markets involve heightened
risks related to the same factors, in addition to those associated with their
relatively small size and lesser liquidity. You may have a gain or loss when you
sell your shares.
Past performance is not predictive of future results.
10
<PAGE> 13
TEMPLETON AMERICAN TRUST, INC.
Financial Highlights
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1997 1996 1995+
------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS I
(For a share outstanding throughout the year)
Net asset value, beginning of year................................... $16.02 $14.23 $13.37
------------------------------------------
Income from investment operations:
Net investment income............................................... .13 .20 .11
Net realized and unrealized gain.................................... 3.42 2.60 1.21
------------------------------------------
Total from investment operations..................................... 3.55 2.80 1.32
------------------------------------------
Less distributions from:
Net investment income............................................... (.15) (.26) (.20)
Net realized gains.................................................. (2.25) (.75) (.26)
------------------------------------------
Total distributions.................................................. (2.40) (1.01) (.46)
------------------------------------------
Net asset value, end of year......................................... $17.17 $16.02 $14.23
==========================================
Total Return*........................................................ 22.66% 19.90% 9.94%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of year (000's)...................................... $5,028 $2,053 $881
Ratios to average net assets:
Expenses............................................................ 1.41% 1.57% 1.81%**
Net investment income............................................... 0.58% 1.53% 1.31%**
Portfolio turnover rate.............................................. 41.06% 15.93% 4.44%
Average commission rate paid***...................................... $.0515 $.0410 --
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities. Prior to fiscal year
1996 disclosure of average commission rate was not required.
+For the period May 1, 1995 (commencement of operations) to December 31, 1995.
11
<PAGE> 14
TEMPLETON AMERICAN TRUST, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1997 1996 1995 1994 1993
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS II
(For a share outstanding throughout the year)
Net asset value, beginning of year.............................. $16.04 $14.25 $12.49 $13.39 $11.77
--------------------------------------------------
Income from investment operations:
Net investment income (loss)................................... (.03) .14 .14 .04 .04
Net realized and unrealized gain............................... 3.45 2.54 2.04 .17 1.82
--------------------------------------------------
Total from investment operations................................ 3.42 2.68 2.18 .21 1.86
--------------------------------------------------
Less distributions from:
Net investment income.......................................... -- (.14) (.14) (.05) (.03)
Net realized gains............................................. (2.25) (.75) (.28) (1.06) (.21)
--------------------------------------------------
Total distributions............................................. (2.25) (.89) (.42) (1.11) (.24)
--------------------------------------------------
Net asset value, end of year.................................... $17.21 $16.04 $14.25 $12.49 $13.39
==================================================
Total Return*................................................... 21.83% 18.91% 17.55% 1.63% 15.82%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of year (000's)................................. $52,063 $44,648 $44,183 $37,959 $34,418
Ratios to average net assets:
Expenses....................................................... 2.17% 2.26% 2.40% 2.47% 2.53%
Net investment income (loss)................................... (0.16%) 0.85% 0.95% 0.34% 0.31%
Portfolio turnover rate......................................... 41.06% 15.93% 4.44% 31.92% 14.10%
Average commission rate paid**.................................. $.0515 $.0410 -- -- --
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge.
**Relates to purchases and sales of equity securities. Prior to fiscal year 1996
disclosure of average commission rate was not required.
See Notes to Financial Statements.
12
<PAGE> 15
TEMPLETON AMERICAN TRUST, INC.
STATEMENT OF INVESTMENTS, DECEMBER 31, 1997
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 82.1%
AUTOMOBILES 2.0%
Ford Motor Co. ........................................................ United States 23,000 $ 1,119,812
-----------
BANKING 0.5%
Credicorp Ltd. ........................................................ Peru 14,400 259,200
-----------
BROADCASTING & PUBLISHING 0.4%
*Scholastic Corp. ..................................................... United States 5,600 210,000
-----------
BUILDING MATERIALS & COMPONENTS 0.8%
Pioneer International Ltd. ............................................ Australia 175,000 477,896
-----------
BUSINESS & PUBLIC SERVICES 2.6%
Columbia HCA Healthcare Corp. ......................................... United States 26,000 770,250
Wheelabrator Technologies Inc. ........................................ United States 44,000 706,750
-----------
1,477,000
-----------
CHEMICALS 0.9%
Great Lakes Chemical Corp. ............................................ United States 11,000 493,625
-----------
DATA PROCESSING & REPRODUCTION 10.2%
*3com Corp. ........................................................... United States 31,000 1,083,062
*Bay Networks Inc. .................................................... United States 35,000 894,687
*Digital Equipment Corp. .............................................. United States 24,200 895,400
*Intuit Inc. .......................................................... United States 44,200 1,823,250
*NCR Corp. ............................................................ United States 18,021 501,209
*Quantum Corp. ........................................................ United States 32,300 648,019
-----------
5,845,627
-----------
ELECTRICAL & ELECTRONICS 3.9%
Ametek Inc. ........................................................... United States 31,100 839,700
*DSC Communications Corp. ............................................. United States 36,100 866,400
Motorola Inc. ......................................................... United States 9,000 513,563
-----------
2,219,663
-----------
ELECTRONIC COMPONENTS & INSTRUMENTS 2.0%
Intel Corp. ........................................................... United States 16,000 1,124,000
-----------
ENERGY EQUIPMENT & SERVICES 1.7%
Sun Co. Inc. .......................................................... United States 23,300 980,056
-----------
ENERGY SOURCES 5.7%
Norsk Hydro AS, ADR.................................................... Norway 8,800 448,800
Occidental Petroleum Corp. ............................................ United States 32,150 942,397
Societe Elf Aquitane SA................................................ France 4,000 465,232
Total SA, B............................................................ France 7,000 761,818
YPF Sociedad Anonima, ADR.............................................. Argentina 18,000 615,375
-----------
3,233,622
-----------
FINANCIAL SERVICES 3.8%
Federal National Mortgage Association.................................. United States 16,000 913,000
Morgan Stanley, Dean Witter Discover & Co. ............................ United States 21,644 1,279,702
-----------
2,192,702
-----------
</TABLE>
13
<PAGE> 16
TEMPLETON AMERICAN TRUST, INC.
STATEMENT OF INVESTMENTS, DECEMBER 31, 1997 (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
FOOD & HOUSEHOLD PRODUCTS 1.1%
IBP Inc. .............................................................. United States 30,000 $ 628,125
-----------
FOREST PRODUCTS & PAPER 2.2%
Boise Cascade Corp. ................................................... United States 20,300 614,075
Fort James Corporation................................................. United States 17,100 654,075
-----------
1,268,150
-----------
HEALTH & PERSONAL CARE 3.9%
Aetna Inc. ............................................................ United States 8,500 599,781
Pharmacia & Upjohn..................................................... United States 20,000 732,500
Windmere-Durable Holdings Inc. ........................................ United States 40,000 902,500
-----------
2,234,781
-----------
INDUSTRIAL COMPONENTS 5.9%
Exide Corp. ........................................................... United States 43,000 1,112,625
Flowserve Corp. ....................................................... United States 20,904 584,005
Goodyear Tire & Rubber Co. ............................................ United States 18,000 1,145,250
Walbro Corp. .......................................................... United States 37,800 507,938
-----------
3,349,818
-----------
INSURANCE 7.9%
American General Corp. ................................................ United States 17,000 919,062
American International Group Inc. ..................................... United States 14,625 1,590,469
Presidential Life Corp. ............................................... United States 47,100 953,775
Travelers Inc. ........................................................ United States 19,298 1,039,653
-----------
4,502,959
-----------
MERCHANDISING 4.4%
American Stores Co. ................................................... United States 48,888 1,005,259
*Circuit City Stores Inc., Carmax Group................................ United States 43,200 388,800
*Gymboree Inc. ........................................................ United States 40,600 1,111,425
-----------
2,505,484
-----------
METALS & MINING 4.1%
Birmingham Steel Corp. ................................................ United States 56,800 894,600
Oregon Steel Mills Inc. ............................................... United States 36,600 780,038
Reynolds Metals Co. ................................................... United States 11,000 660,000
-----------
2,334,638
-----------
MISC MATERIALS & COMMODITIES 1.6%
Agrium Inc. ........................................................... Canada 75,000 914,062
-----------
MULTI-INDUSTRY 1.1%
Hutchison Whampoa Ltd. ................................................ Hong Kong 100,000 627,178
-----------
REAL ESTATE 1.6%
LTC Properties Inc. ................................................... United States 41,720 865,690
National Health Investors Inc. ........................................ United States 1,800 75,375
-----------
941,065
-----------
</TABLE>
14
<PAGE> 17
TEMPLETON AMERICAN TRUST, INC.
STATEMENT OF INVESTMENTS, DECEMBER 31, 1997 (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TELECOMMUNICATIONS 3.9%
AT&T Corp. ............................................................ United States 21,150 $ 1,295,437
U.S. West Communications Group......................................... United States 21,200 956,650
-----------
2,252,087
-----------
TEXTILES & APPAREL 1.9%
*Fruit of the Loom Inc., A............................................. United States 23,000 589,375
Shaw Industries Inc. .................................................. United States 45,000 523,125
-----------
1,112,500
-----------
TRANSPORTATION 4.3%
A.S.A. Holdings Inc. .................................................. United States 9,200 261,625
*Fritz Companies Inc. ................................................. United States 79,000 1,101,063
*Landstar System Inc. ................................................. United States 42,400 1,118,300
-----------
2,480,988
-----------
UTILITIES ELECTRICAL & GAS 3.2%
Iberdrola SA .......................................................... Spain 50,000 658,024
Pinnacle West Capital Corp. ........................................... United States 27,500 1,165,313
-----------
1,823,337
-----------
WHOLESALE & INTERNATIONAL TRADE 0.5%
Brierley Investments Ltd. ............................................. New Zealand 370,000 264,253
-----------
46,872,628
TOTAL COMMON STOCKS (COST $32,424,048)........................... -----------
PRINCIPAL
AMOUNT**
--------
BONDS (COST $21,406) 0.1%
Brierley Investments Ltd., 9.00%, conv., 6/30/98....................... New Zealand 46,250 NZD 30,072
-----------
SHORT TERM INVESTMENTS 3.7%
Federal Farm Credit Banks, 5.62%, 4/01/98.............................. United States 610,000 609,874
Federal National Mortgage Assn., 5.47%, 2/18/98........................ United States 900,000 893,479
United States Treasury Bill, 4.81%, 1/02/98............................ United States 610,000 610,000
-----------
2,113,353
TOTAL SHORT TERM INVESTMENTS (COST $2,113,136)................... -----------
TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENTS (COST 49,016,053
$34,558,590)................................................... -----------
(a)REPURCHASE AGREEMENT 15.5%
Deutsche Bank AG, 6.80%, 1/02/98 (Maturity Value $8,855,344)
(Cost $8,852,000) Collateralized by U.S. Treasury Notes............... United States 8,852,000 8,852,000
-----------
57,868,053
TOTAL INVESTMENTS (COST $43,410,590) 101.4%..................... (777,019)
OTHER ASSETS, LESS LIABILITIES (1.4%)........................... -----------
$57,091,034
TOTAL NET ASSETS 100.0%......................................... ===========
</TABLE>
*Non-income producing.
**Securities traded in U.S. dollars unless otherwise indicated.
(a)See note 1e regarding repurchase agreement.
CURRENCY ABBREVIATION:
NZD -- New Zealand Dollar
See Notes to Financial Statements.
15
<PAGE> 18
TEMPLETON AMERICAN TRUST, INC.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $43,410,590)............................... $57,868,053
Receivables:
Capital shares sold................................................................. 35,169
Dividends and interest.............................................................. 54,264
-----------
Total assets..................................................................... 57,957,486
-----------
Liabilities:
Payables:
Investment securities purchased..................................................... 655,048
Capital shares redeemed............................................................. 1,827
To affiliates....................................................................... 129,936
Distributions to shareholders........................................................ 2,583
Funds advanced by custodian.......................................................... 4,796
Other liabilities.................................................................... 72,262
-----------
Total liabilities................................................................ 866,452
-----------
Net assets, at value.................................................................. $57,091,034
===========
Net assets consist of:
Net unrealized appreciation.......................................................... $14,457,463
Accumulated net realized gain........................................................ 2,946,785
Capital shares....................................................................... 39,686,786
-----------
Net assets, at value.................................................................. $57,091,034
===========
CLASS I
Net asset value per share ($5,027,557 / 292,728 shares outstanding)....................... $17.17
======
Maximum offering price per share ($17.17 / 94.25%)........................................ $18.22
======
CLASS II
Net asset value per share ($52,063,477 / 3,025,879 shares outstanding)*................... $17.21
======
Maximum offering price per share ($17.21 / 99.00%)........................................ $17.38
======
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
16
<PAGE> 19
TEMPLETON AMERICAN TRUST, INC.
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $13,819)
Dividends.............................................................. $ 751,806
Interest............................................................... 300,173
----------
Total investment income............................................ $ 1,051,979
-----------
Expenses:
Management fees (Note 3)............................................... 365,732
Administrative fees (Note 3)........................................... 78,371
Distribution fees (Note 3)
Class I........................................................... 7,803
Class II.......................................................... 492,261
Transfer agent fees (Note 3)........................................... 60,500
Custodian fees......................................................... 4,943
Reports to shareholders................................................ 26,569
Registration and filing fees........................................... 34,700
Professional fees (Note 3)............................................. 31,467
Trustees' fees and expenses............................................ 4,600
Other.................................................................. 4,773
----------
Total expenses..................................................... 1,111,719
-----------
Net investment loss.............................................. (59,740)
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments........................................................... 8,779,056
Foreign currency transactions......................................... (6,336)
----------
Net realized gain.................................................. 8,772,720
Net unrealized appreciation on investments......................... 1,234,510
-----------
Net realized and unrealized gain........................................ 10,007,230
-----------
Net increase in net assets resulting from operations.................... $ 9,947,490
===========
</TABLE>
See Notes to Financial Statements.
17
<PAGE> 20
TEMPLETON AMERICAN TRUST, INC.
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
-----------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (loss)......................................... $ (59,740) $ 388,090
Net realized gain from investments and foreign currency
transactions....................................................... 8,772,720 2,956,343
Net unrealized appreciation on investments........................... 1,234,510 4,503,472
-----------------------------
Net increase in net assets resulting from operations............... 9,947,490 7,847,905
Distributions to shareholders from:
Net investment income:
Class I.............................................................. (34,067) (31,751)
Class II............................................................. (8,714) (360,732)
Net realized gains:
Class I.............................................................. (482,773) (89,244)
Class II............................................................. (6,135,485) (1,967,862)
Capital share transactions (Note 2):
Class I.............................................................. 2,906,521 997,883
Class II............................................................. 4,196,590 (4,758,459)
-----------------------------
Net increase in net assets......................................... 10,389,562 1,637,740
Net assets:
Beginning of year..................................................... 46,701,472 45,063,732
-----------------------------
End of year........................................................... $57,091,034 $46,701,472
=============================
Undistributed net investment income included in net assets:
End of year........................................................... $ -- $ --
=============================
</TABLE>
See Notes to Financial Statements.
18
<PAGE> 21
TEMPLETON AMERICAN TRUST, INC.
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton American Trust, Inc. (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company. The Fund
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. The following summarizes the Fund's significant accounting
policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Directors.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
19
<PAGE> 22
TEMPLETON AMERICAN TRUST, INC.
Notes to Financial Statements (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
(CONTINUED)
Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.
e. REPURCHASE AGREEMENTS:
The Fund may enter into repurchase agreements, which are accounted for as a loan
by the Fund to the seller, collateralized by securities which are delivered to
the Fund's custodian. The market value, including accrued interest, of the
initial collateralization is required to be at least 102% of the dollar amount
invested by the Funds, with the value of the underlying securities marked to
market daily to maintain coverage of at least 100%. At December 31, 1997, all
outstanding repurchase agreements held by the Fund had been entered into on that
date.
f. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. CAPITAL STOCK
The Fund offers two classes of shares: Class I and Class II. The shares differ
by their initial sales load, distribution fees, voting rights on matters
affecting a single class and the exchange privilege of each class.
At December 31, 1997, there were an unlimited number of shares authorized ($0.01
par value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1997 1996
----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------
<S> <C> <C> <C> <C>
CLASS I:
Shares sold....................................................... 205,470 $ 3,717,827 96,004 $1,454,259
Shares issued on reinvestment of distributions.................... 27,495 464,649 6,973 108,639
Shares redeemed................................................... (68,378) (1,275,955) (36,706) (565,015)
----------------------------------------------------
Net increase...................................................... 164,587 $ 2,906,521 66,271 $ 997,883
====================================================
</TABLE>
20
<PAGE> 23
TEMPLETON AMERICAN TRUST, INC.
Notes to Financial Statements (continued)
2. CAPITAL STOCK (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1997 1996
-------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS II:
Shares sold..................................................... 336,921 $ 6,061,966 207,954 $ 3,182,096
Shares issued on reinvestment of distributions.................. 322,381 5,449,383 130,716 2,042,358
Shares redeemed................................................. (416,422) (7,314,759) (657,146) (9,982,913)
-------------------------------------------------------
Net increase (decrease)......................................... 242,880 $ 4,196,590 (318,476) $(4,758,459)
=======================================================
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also directors or officers of Templeton
Investment Counsel, Inc. (TICI), Franklin Templeton Services, Inc. (FT
Services), Franklin/Templeton Distributors, Inc. (Distributors) and
Franklin/Templeton Investor Services, Inc. (Investor Services), the Fund's
investment manager, administrative manager, principal underwriter, and transfer
agent, respectively.
The Fund pays an investment management fee to TICI of 0.70% per year of the
average daily net assets of the Fund.
The Fund pays an administrative fee to FT Services based on the Fund's average
daily net assets as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -------------------------------------------------------------------
<S> <C>
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion
</TABLE>
The Fund reimburses Distributors up to 0.35% and 1.00% per year of the average
daily net assets of Class I and Class II, respectively, for costs incurred in
marketing the Fund's shares. Under the Class I distribution plan, costs
exceeding the maximum may be reimbursed in subsequent periods. At December 31
1997, there were no unreimbursed costs. Distributors received net commissions
from sales of fund shares and received contingent deferred sales charges for the
year of $8,432 and $2,996, respectively.
Included in professional fees are legal fees of $5,968 that were paid to a law
firm in which a partner is an officer of the Fund.
21
<PAGE> 24
TEMPLETON AMERICAN TRUST, INC.
Notes to Financial Statements (continued)
4. INCOME TAXES
The cost of securities for income tax purposes is the same as that shown in the
statement of investments. At December 31, 1997, the net unrealized appreciation
based on cost of investments for income tax purposes was as follows:
<TABLE>
<S> <C>
Unrealized appreciation...................................... $15,628,721
Unrealized depreciation...................................... (1,171,258)
-----------
Net unrealized appreciation.................................. $14,457,463
===========
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the year
ended December 31, 1997 aggregated $19,623,879 and $18,986,541, respectively.
22
<PAGE> 25
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 statement of investments, of Templeton American Trust, Inc. as of December
31, 1997, 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 accompanying
financial statements. These financial statements and financial highlights 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
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Templeton American Trust, Inc. as of December 31, 1997, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
McGladrey & Pullen, LLP
New York, New York
January 30, 1998
23
<PAGE> 26
TEMPLETON AMERICAN TRUST, INC.
Tax Designation
Under Section 854(b)(2) of the Internal Revenue Code, the Fund hereby designates
100% of the ordinary income dividends as income qualifying for the dividends
received deduction for the fiscal year ended December 31, 1997.
24
<PAGE> 27
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Fund Information, toll free, at
1-800/DIAL BEN (1-800/342-5236). Please read the prospectus carefully before you
invest or send money. 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.
FRANKLIN TEMPLETON GROUP
GLOBAL GROWTH
Franklin Global Health Care Fund
Franklin Templeton Japan Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller
Companies Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global
Real Estate Fund
Templeton Global
Smaller Companies Fund
Templeton Greater European Fund
Templeton Growth Fund
Templeton Latin America Fund
Templeton Pacific Growth Fund
Templeton World Fund
GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Franklin Templeton German
Government Bond Fund
Franklin Templeton Global
Currency Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and
Income Fund
GLOBAL INCOME
Franklin Global Government
Income Fund
Franklin Templeton Hard
Currency Fund
Franklin Templeton High Income
Currency Fund
Templeton Americas Government
Securities Fund
GROWTH
Franklin Biotechnology
Discovery Fund
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap
Growth Fund
Mutual Discovery Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet
Investment Fund*
Franklin Convertible
Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund*
Franklin Natural Resources Fund
Franklin Real Estate
Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund
Templeton American Trust, Inc.
Fund Allocator Series
Franklin Templeton Conservative
Target Fund
Franklin Templeton Moderate
Target Fund
Franklin Templeton Growth
Target Fund
INCOME
Franklin Adjustable Rate
Securities Fund
Franklin Adjustable U.S.
Government Securities Fund
Franklin's AGE High Income Fund
Franklin Investment Grade
Income Fund
Franklin Short-Intermediate
U.S. Government Securities Fund
Franklin U.S. Government
Securities Fund
Franklin Money Fund
Franklin Federal Money Fund
For Corporations
Franklin Corporate Qualified
Dividend Fund
FRANKLIN FUNDS SEEKING
TAX-FREE INCOME
Federal Intermediate-Term
Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free
Income Fund
Tax-Exempt Money Fund
FRANKLIN STATE-SPECIFIC
FUNDS SEEKING
TAX-FREE INCOME
Alabama
Arizona**
Arkansas***
California**
Colorado
Connecticut
Florida**
Georgia
Hawaii***
Indiana
Kentucky
Louisiana
Maryland
Massachusetts+
Michigan**
Minnesota+
Missouri
New Jersey
New York**
North Carolina
Ohio+
Oregon
Pennsylvania
Tennessee***
Texas
Virginia
Washington***
VARIABLE ANNUITIES++
Franklin Valuemark(R)
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
*These funds are now closed to new accounts, with the exception of retirement
accounts.
**Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
***The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
+ Portfolio of insured municipal securities.
++ Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC.
10/97.1
<PAGE> 28
TEMPLETON AMERICAN
TRUST, INC.
AUDITORS
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, N.Y. 10017-2416
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404-1585
SHAREHOLDER SERVICES
1-800-632-2301
FUND INFORMATION
1-800-342-5236
This report must be preceded or accompanied by a 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.
100 A97 02/98 [LOGO] Printed on recycled paper
