ANNUAL REPORT December 31, 1998
TEMPLETON AMERICAN TRUST, INC.
[FRANKLIN TEMPLETON LOGO]
PAGE
[FRANKLIN TEMPLETON 50 YEAR SEAL]
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently he devotes all of his time and efforts to the John
Templeton Foundation. A major portion of his assets remain invested in the
Templeton funds which are managed by many of the investment professionals he
selected and trained.
[PHOTO OF PETER A. NORI]
PETER A. NORI
Portfolio Manager
Templeton American Trust, Inc.
PAGE
SHAREHOLDER LETTER
Your Fund's Goal: Templeton American Trust seeks long-term total return (a
combination of capital growth and income) by investing at least 65% of its total
assets in the equity and debt securities of U.S. companies and the U.S.
Government, its agencies and instrumentalities.
Dear Shareholder:
This annual report of the Templeton American Trust covers the fiscal year ended
December 31, 1998. During the first part of this reporting period, the U.S.
stock market rose significantly, as many investors concerned about Asia's
economic turmoil sought a safe haven in domestic securities. However in August,
Russia's economic meltdown and Asia's recession sent many U.S. share prices
plummeting. In response, the Federal Reserve Board cut the Federal Funds rate in
September, October and November. The U.S. stock market, as measured by most
broad-based indices, reacted favorably
You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 11 of
this report.
CONTENTS
Shareholder Letter ........................................................ 1
Performance Summary
Class I ................................................................ 6
Class II ............................................................... 6
Financial Highlights &
Statement of Investments .................................................. 9
Financial Statements ...................................................... 14
Notes to
Financial Statements ...................................................... 17
Independent Auditor's Report .............................................. 20
Tax Designation ........................................................... 21
FUND CATEGORY
[PYRAMID GRAPHIC]
PAGE
GEOGRAPHIC DISTRIBUTION
BASED ON TOTAL NET ASSETS
12/31/98
[This chart shows in bar format the geographic distribution of Templeton
American Trust based on total net assets as of 12/31/98.]
North America .................... 94.6%
Short-Term Investments &
Other Net Assets ............... 2.5%
Latin America .................... 1.4%
Australia ........................ 0.8%
Europe ........................... 0.7%
to the rate cuts and finished the year with an appreciable gain. Generally
leading the way were large capitalization growth stocks and popular internet
stocks. Within this environment, Templeton American Trust - Class I shares
delivered a 12-month cumulative total return of 9.96%, as discussed in the
Performance Summary on page 6. The Standard & Poor's(R) 500 (S&P 500(R)) Stock
Index, the Fund's benchmark, provided a 28.58% cumulative total return for the
same period.(1)
While we do hold some companies in the S&P 500(R), the Fund was adversely
affected by its relatively small exposure to the large-cap companies with high
price-to-earnings ratios that dominate the S&P 500(R). Since we are "value"
investors, we continued to employ the Templeton investment philosophy of a
"bottom-up," value-oriented, long-term approach to this Fund's investment
portfolio. Like most value investors, we fared relatively poorly in 1998
compared to the broad-based market indices, such as the S&P 500(R), but some of
our holdings, including a number of companies subject to merger activity,
performed well. For example, merging companies whose shares were held in the
portfolio in 1998 included Digital Equipment Corporation which was acquired by
Compaq Computer, Bay Networks which was bought out by Northern Telecom, and
(1). Source: Standard & Poor's(R) Micropal. Index is unmanaged and includes
reinvested dividends. One cannot invest directly in an index.
2
PAGE
AMP Inc. which was purchased by Tyco International. Spurred by low interest
rates and a strong stock market, a number of our financial holdings also rose
considerably in value, and we sold our shares of CitiGroup at a profit.
With the U.S. stock market near or at all-time highs, finding new shares for the
Fund's portfolio presented some challenges. However, as indicated by the Fund's
equity position on December 31, 1998, we did locate a number of stocks meeting
our qualifications. For example, we purchased additional shares of Scholastic
Corp., and initiated a position in Sears, Roebuck and Co. We also added to our
existing positions in 3Com Corporation and Aetna Inc., companies facing what we
believe to be short-term difficulties, but offering long-term growth-potential.
While we remain optimistic about the U.S. stock market's long-term potential, we
are concerned with certain short-term valuations. For much of the reporting
period, the Dow Jones(R) Industrial Average and the S&P 500(R) traded well-above
their 20-year average price-to-book, price-to-sales, price-to-dividends and
price-to-cash flow levels.(2) By purchasing out-of-favor securities trading at
depressed valuations, we are attempting to position the Fund for a possible
market correction while seeking attractive, long-term performance.
TOP 10 HOLDINGS
12/31/98
[This chart lists the top 10 holdings, including industry, of Templeton American
Trust based on total net assets as of December 31, 1998.]
COMPANY, % OF TOTAL
INDUSTRY NET ASSETS
- -------- ----------
ADC Telecommunications Inc.
Electronic Components &
Instruments 4.3%
Intel Corp.
Electronic Components &
Instruments 4.2%
Scholastic Corp.
Broadcasting & Publishing 4.1%
3Com Corp.
Data Processing &
Reproduction 4.0%
Landstar System Inc.
Transportation 3.8%
American Stores Co.
Merchandising 3.5%
Morgan Stanley
Dean Witter & Co.
Financial Services 3.4%
AMP Inc.
Electrical & Electronics 3.2%
American International
Group Inc.
Insurance 3.2%
U.S. West Inc.
Telecommunications 3.1%
For a complete list of portfolio holdings, please see page 11 of this report.
(2.) Source: FactSet.
3
PAGE
TOP 10 INDUSTRIES
12/31/98
[This chart lists the top 10 industries of Templeton American Trust, based on
total net assets as of December 31, 1998.]
% OF TOTAL
INDUSTRY NET ASSETS
- -------- ----------
Data Processing &
Reproduction 11.9%
Electronic Components &
Instruments 10.3%
Insurance 9.6%
Merchandising 6.6%
Financial Services 6.1%
Electrical & Electronics 6.0%
Transportation 5.7%
Telecommunications 5.4%
Broadcasting & Publishing 4.1%
Automobiles 3.8%
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of December 31, 1998, the end of the reporting period. However,
market and economic conditions are changing constantly, which can be expected to
affect our strategies and the Fund's portfolio composition. Although historical
performance is no guarantee of future results, these insights may help you
better understand our investment and management philosophy.
While the Fund invests primarily in securities of U.S. companies and the U.S.
government, its agencies and instrumentalities, it may also invest up to 35% of
its total assets in securities of issuers in any foreign market, developed or
developing. There are, of course, special risks involved with global investing
related to market, currency, economic, social, political and other factors.
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. Investing
in any emerging market means accepting a certain amount of volatility and, in
some cases, severe market corrections. While short-term volatility can be
disconcerting, declines in excess of 50% are not
4
PAGE
unusual in emerging markets. In fact, the Hong Kong equity market has increased
1049% in the last 15 years, but has suffered five declines of more than 20%
during that time.(3)
We thank you for your participation in Templeton American Trust and look forward
to serving you in the future.
Sincerely,
/s/ Peter A. Nori
Peter A. Nori, CFA
Portfolio Manager
Templeton American Trust, Inc.
The Fund's Board of Directors approved a proposal to merge the Fund into
Franklin Equity Fund, subject to shareholder approval. A proxy and proxy
statement on the proposed merger are being mailed to shareholders requesting
their vote.
(3.) Source: Bloomberg. Based on quarterly percentage change over 15 years ended
December 31, 1998. Market returns are measured in Hong Kong dollars.
5
PAGE
TEMPLETON AMERICAN TRUST, INC.
CLASS I:
Subject to the maximum 5.75% initial sales charge.
CLASS II:
Subject to the current, maximum 1% initial sales charge and 1% contingent
deferred sales charge (CDSC) for shares redeemed within 18 months of investment.
These shares have higher annual fees and expenses than Class I shares. Prior to
May 1, 1995, Class II shares were offered without an initial sales charge and
with a higher, but declining, CDSC; thus, actual returns would have been lower.
Past expense waivers by the Fund's manager increased the Fund's Class II total
returns to shareholders. Without these waivers, the Fund's total returns as
shown on the next page for Class II shares would have been lower.
PERFORMANCE SUMMARY AS OF 12/31/98
Distributions will vary based on earnings of the Fund's portfolio and any
profits realized from the sale of the portfolio's securities. Past distributions
are not indicative of future trends. All total returns include reinvested
distributions at net asset value.
PRICE AND DISTRIBUTION INFORMATION (1/1/98 - 12/31/98)
<TABLE>
<CAPTION>
CLASS I CHANGE 12/31/98 12/31/97
- ------- ------ -------- --------
<S> <C> <C> <C>
Net Asset Value - $1.58 $15.59 $17.17
DISTRIBUTIONS
-------------
Dividend Income $0.150
Long-Term Capital Gain $2.515
Short-Term Capital Gain $0.510
TOTAL $3.175
</TABLE>
<TABLE>
<CAPTION>
CLASS II CHANGE 12/31/98 12/31/97
- -------- ------ -------- --------
<S> <C> <C> <C>
Net Asset Value - $1.57 $15.64 $17.21
DISTRIBUTIONS
-------------
Dividend Income $0.002
Long-Term Capital Gain $2.515
Short-Term Capital Gain $0.510
TOTAL $3.027
</TABLE>
Past performance is not predictive of future results.
6
PAGE
PERFORMANCE
<TABLE>
<CAPTION>
SINCE
INCEPTION
CLASS I 1-YEAR 3-YEAR (5/1/95)
- ------- ------ ------ --------
<S> <C> <C> <C>
Cumulative Total Return(1) 9.96% 61.72% 77.67%
Average Annual Total Return(2) 3.62% 15.05% 15.06%
Value of $10,000 Investment(3) $10,362 $15,231 $16,729
12/31/96 12/31/97 12/31/98
-------- -------- --------
One-Year
Total Return(4) 19.90% 22.66% 9.96%
</TABLE>
<TABLE>
<CAPTION>
SINCE
INCEPTION
CLASS II 1-YEAR 3-YEAR (2/7/91)
- -------- ------ ------ --------
<S> <C> <C> <C>
Cumulative Total Return(1) 9.05% 57.98% 167.71%
Average Annual Total Return(2) 7.00% 16.06% 13.13%
Value of $10,000 Investment(3) $10,700 $15,640 $26,503
</TABLE>
<TABLE>
<CAPTION>
12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- --------
<S> <C> <C> <C> <C>
One-Year
Total Return(4) 17.55% 18.91% 21.83% 9.05%
</TABLE>
(1.) Cumulative total return represents the change in value of an investment
over the periods indicated and does not include sales charges.
(2.) Average annual total return represents the average annual change in value
of an investment over the periods indicated and includes the current,
applicable, maximum sales charge(s) for that class.
(3.) These figures represent the value of a hypothetical $10,000 investment in
the Fund over the periods indicated and include the current applicable, maximum
sales charge(s) for that class.
(4.) One-year total return represents the change in value of an investment over
the one-year periods ended on the specified dates and does not include sales
charges.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility, and the economic,
social and political climates of countries where the Fund invests. 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
TEMPLETON AMERICAN TRUST, INC.
AVERAGE ANNUAL TOTAL RETURN
12/31/98
<TABLE>
<CAPTION>
CLASS I
<S> <C>
1-Year 3.62%
3-Year 15.05%
Since Inception (5/1/95) 15.06%
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
12/31/98
<TABLE>
<CAPTION>
CLASS II
<S> <C>
1-Year 7.00%
3-Year 16.06%
Since Inception (2/7/91) 13.13%
</TABLE>
TOTAL RETURN INDEX COMPARISON FOR HYPOTHETICAL $10,000 INVESTMENT
The unmanaged index differs from the fund in composition, does not pay
management fees or expenses and includes reinvested dividends. One cannot invest
directly in an index. Total return represents the change in value of an
investment over the periods shown. It includes the current, applicable, maximum
sales charge(s), fund expenses, account fees, and reinvested distributions.
Performance of the fund's shares exceeded the rate of inflation as measured by
the Consumer Price Index (CPI).
CLASS I (5/1/95 - 12/31/98)
Average Annual Total Return
12/31/98
[The following line graph compares the performance of Templeton American Trust
Fund's Class I shares to that of the Standard & Poor's 500 Stock Index and to
the Consumer Price Index, based on a $10,000 investment from 5/1/98 to
12/31/98.]
[LINE GRAPH]
<TABLE>
<CAPTION>
TEMPLETON AMERICAN TRUST S&P 500 COMPOSITE CONSUMER PRICE
- CLASS I INDEX INDEX
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/1/95 $9,423 $10,000 $10,000
May-95 $9,704 $10,372 $10,020
Jun-95 $9,887 $10,614 $10,040
Jul-95 $10,190 $10,983 $10,040
Aug-95 $10,134 $11,005 $10,067
Sep-95 $10,275 $11,469 $10,086
Oct-95 $9,972 $11,433 $10,119
Nov-95 $10,218 $11,926 $10,112
Dec-95 $10,351 $12,156 $10,105
Jan-96 $10,467 $12,578 $10,164
Feb-96 $10,548 $12,687 $10,197
Mar-96 $10,780 $12,811 $10,250
Apr-96 $11,071 $13,004 $10,289
May-96 $11,239 $13,325 $10,309
Jun-96 $11,253 $13,377 $10,316
Jul-96 $10,940 $12,742 $10,335
Aug-96 $11,246 $13,063 $10,355
Sep-96 $11,493 $13,795 $10,388
Oct-96 $11,755 $14,186 $10,421
Nov-96 $12,322 $15,252 $10,441
Dec-96 $12,411 $14,950 $10,441
Jan-97 $13,000 $15,892 $10,473
Feb-97 $12,864 $16,009 $10,505
Mar-97 $12,651 $15,350 $10,531
Apr-97 $12,880 $16,269 $10,544
May-97 $13,842 $17,247 $10,537
Jun-97 $14,158 $18,021 $10,550
Jul-97 $15,302 $19,454 $10,563
Aug-97 $15,136 $18,360 $10,583
Sep-97 $16,011 $19,373 $10,609
Oct-97 $15,065 $18,737 $10,636
Nov-97 $15,033 $19,598 $10,629
Dec-97 $15,223 $19,935 $10,617
Jan-98 $15,161 $20,164 $10,636
Feb-98 $16,260 $21,607 $10,657
Mar-98 $16,635 $22,714 $10,678
Apr-98 $16,728 $22,942 $10,697
May-98 $16,262 $22,534 $10,717
Jun-98 $16,709 $23,450 $10,730
Jul-98 $15,936 $23,216 $10,742
Aug-98 $13,587 $19,856 $10,755
Sep-98 $13,960 $21,123 $10,768
Oct-98 $15,106 $22,854 $10,794
Nov-98 $16,141 $24,234 $10,794
Dec-98 $16,729 $25,631 $10,783
</TABLE>
CLASS II (2/7/91 - 12/31/98)
Average Annual Total Return
12/31/98
[The following line graph compares the performance of Templeton American Trust
Fund's Class II shares to that of the Standard and Poor's 500 Stock Index and to
the Consumer Price Index, based on a $10,000 investment from 2/27/91 to
12/31/98.]
[LINE GRAPH]
<TABLE>
<CAPTION>
TEMPLETON AMERICAN S&P 500 COMPOSITE CONSUMER
TRUST - CLASS II INDEX PRICE INDEX
--------------------------------------------------------------------
<S> <C> <C> <C>
2/27/91 $9,901 $10,000 $10,000
Feb-91 $9,911 $10,023 $10,000
Mar-91 $10,119 $10,270 $10,015
Apr-91 $10,327 $10,304 $10,029
May-91 $10,673 $10,733 $10,059
Jun-91 $10,376 $10,247 $10,089
Jul-91 $10,515 $10,737 $10,104
Aug-91 $10,663 $10,978 $10,133
Sep-91 $10,584 $10,795 $10,178
Oct-91 $10,653 $10,955 $10,193
Nov-91 $10,208 $10,501 $10,222
Dec-91 $11,193 $11,704 $10,230
Jan-92 $11,543 $11,497 $10,245
Feb-92 $11,893 $11,633 $10,282
Mar-92 $11,513 $11,408 $10,334
Apr-92 $11,763 $11,750 $10,348
May-92 $11,783 $11,788 $10,363
Jun-92 $11,513 $11,612 $10,400
Jul-92 $11,873 $12,111 $10,423
Aug-92 $11,233 $11,851 $10,452
Sep-92 $11,443 $11,989 $10,481
Oct-92 $11,483 $12,046 $10,519
Nov-92 $11,923 $12,440 $10,533
Dec-92 $12,126 $12,597 $10,527
Jan-93 $12,486 $12,709 $10,579
Feb-93 $12,589 $12,869 $10,616
Mar-93 $12,898 $13,141 $10,653
Apr-93 $12,919 $12,835 $10,682
May-93 $13,125 $13,154 $10,697
Jun-93 $13,073 $13,195 $10,712
Jul-93 $13,218 $13,165 $10,712
Aug-93 $13,588 $13,652 $10,742
Sep-93 $13,527 $13,548 $10,763
Oct-93 $13,733 $13,839 $10,809
Nov-93 $13,630 $13,692 $10,816
Dec-93 $14,044 $13,863 $10,815
Jan-94 $14,778 $14,341 $10,846
Feb-94 $14,569 $13,938 $10,883
Mar-94 $14,021 $13,332 $10,920
Apr-94 $14,210 $13,516 $10,935
May-94 $14,358 $13,715 $10,942
Jun-94 $14,021 $13,379 $10,979
Jul-94 $14,621 $13,841 $11,008
Aug-94 $15,106 $14,400 $11,054
Sep-94 $14,716 $14,046 $11,083
Oct-94 $14,674 $14,369 $11,091
Nov-94 $14,252 $13,836 $11,105
Dec-94 $14,273 $14,040 $11,105
Jan-95 $14,227 $14,414 $11,149
Feb-95 $14,656 $14,965 $11,194
Mar-95 $14,942 $15,412 $11,231
Apr-95 $15,308 $15,866 $11,268
May-95 $15,789 $16,476 $11,290
Jun-95 $16,064 $16,860 $11,312
Jul-95 $16,556 $17,447 $11,312
Aug-95 $16,453 $17,482 $11,343
Sep-95 $16,682 $18,219 $11,364
Oct-95 $16,178 $18,162 $11,401
Nov-95 $16,568 $18,945 $11,393
Dec-95 $16,778 $19,309 $11,386
Jan-96 $16,955 $19,980 $11,453
Feb-96 $17,061 $20,154 $11,490
Mar-96 $17,414 $20,350 $11,549
Apr-96 $17,873 $20,657 $11,594
May-96 $18,144 $21,167 $11,616
Jun-96 $18,156 $21,249 $11,623
Jul-96 $17,637 $20,242 $11,645
Aug-96 $18,120 $20,751 $11,668
Sep-96 $18,509 $21,914 $11,705
Oct-96 $18,933 $22,535 $11,742
Nov-96 $19,839 $24,229 $11,764
Dec-96 $19,951 $23,749 $11,764
Jan-97 $20,896 $25,245 $11,801
Feb-97 $20,667 $25,430 $11,836
Mar-97 $20,312 $24,383 $11,866
Apr-97 $20,667 $25,844 $11,880
May-97 $22,200 $27,397 $11,873
Jun-97 $22,681 $28,626 $11,887
Jul-97 $24,506 $30,904 $11,901
Aug-97 $24,240 $29,166 $11,924
Sep-97 $25,634 $30,774 $11,954
Oct-97 $24,100 $29,765 $11,984
Nov-97 $24,037 $31,132 $11,976
Dec-97 $24,306 $31,668 $11,962
Jan-98 $24,193 $32,032 $11,984
Feb-98 $25,930 $34,323 $12,008
Mar-98 $26,527 $36,083 $12,032
Apr-98 $26,646 $36,444 $12,053
May-98 $25,918 $35,796 $12,075
Jun-98 $26,601 $37,251 $12,090
Jul-98 $25,353 $36,878 $12,104
Aug-98 $21,610 $31,542 $12,119
Sep-98 $22,160 $33,555 $12,133
Oct-98 $23,972 $36,304 $12,162
Nov-98 $25,606 $38,496 $12,162
Dec-98 $26,506 $40,716 $12,150
</TABLE>
*Source: Standard & Poor's(R) Micropal
Past performance is not predictive of future results.
8
PAGE
TEMPLETON AMERICAN TRUST, INC.
Financial Highlights
<TABLE>
<CAPTION>
CLASS I
---------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------
1998 1997 1996 1995+
-------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net asset value, beginning of year.......................... $17.17 $16.02 $14.23 $13.37
---------------------------------------------
Income from investment operations:
Net investment income...................................... .06 .13 .20 .11
Net realized and unrealized gains.......................... 1.54 3.42 2.60 1.21
---------------------------------------------
Total from investment operations............................ 1.60 3.55 2.80 1.32
---------------------------------------------
Less distributions from:
Net investment income...................................... (.15) (.15) (.26) (.20)
Net realized gains......................................... (3.03) (2.25) (.75) (.26)
---------------------------------------------
Total distributions......................................... (3.18) (2.40) (1.01) (.46)
---------------------------------------------
Net asset value, end of year................................ $15.59 $17.17 $16.02 $14.23
---------------------------------------------
Total Return*............................................... 9.96% 22.66% 19.90% 9.94%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)............................. $5,441 $5,028 $2,053 $881
Ratios to average net assets:
Expenses................................................... 1.61% 1.41% 1.57% 1.81%**
Net investment income...................................... .28% .58% 1.53% 1.31%**
Portfolio turnover rate..................................... 27.93% 41.06% 15.93% 4.44%
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+For the period May 1, 1995 (effective date) to December 31, 1995.
9
PAGE
TEMPLETON AMERICAN TRUST, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS II
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1998 1997 1996 1995 1994
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net asset value, beginning of year.................. $17.21 $16.04 $14.25 $12.49 $13.39
---------------------------------------------------------------
Income from investment operations:
Net investment income (loss)....................... (.06) (.03) .14 .14 .04
Net realized and unrealized gains.................. 1.52 3.45 2.54 2.04 .17
---------------------------------------------------------------
Total from investment operations.................... 1.46 3.42 2.68 2.18 .21
---------------------------------------------------------------
Less distributions from:
Net investment income.............................. -- -- (.14) (.14) (.05)
Net realized gains................................. (3.03) (2.25) (.75) (.28) (1.06)
---------------------------------------------------------------
Total distributions................................. (3.03) (2.25) (.89) (.42) (1.11)
---------------------------------------------------------------
Net asset value, end of year........................ $15.64 $17.21 $16.04 $14.25 $12.49
---------------------------------------------------------------
Total Return*....................................... 9.05% 21.83% 18.91% 17.55% 1.63%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of year (000's)..................... $39,458 $52,063 $44,648 $44,183 $37,959
Ratios to average net assets:
Expenses........................................... 2.26% 2.17% 2.26% 2.40% 2.47%
Net investment income (loss)....................... (.34)% (.16)% .85% .95% .34%
Portfolio turnover rate............................. 27.93% 41.06% 15.93% 4.44% 31.92%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge.
See Notes to Financial Statements.
10
PAGE
TEMPLETON AMERICAN TRUST, INC.
STATEMENT OF INVESTMENTS, DECEMBER 31, 1998
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
<S> <C> <C> <C>
COMMON STOCKS 97.5%
AEROSPACE & MILITARY TECHNOLOGY 1.8%
Kaman Corp., A.............................................. United States 50,200 $ 806,338
-----------
AUTOMOBILES 3.8%
*Circuit City Stores Inc., Carmax Group..................... United States 63,200 343,650
Ford Motor Co. ............................................. United States 23,000 1,349,812
-----------
1,693,462
-----------
BANKING .3%
Credicorp Ltd. ............................................. Peru 15,840 142,560
-----------
BROADCASTING & PUBLISHING 4.1%
*Scholastic Corp. .......................................... United States 34,600 1,855,425
-----------
BUILDING MATERIALS & COMPONENTS 2.9%
Owens Corning............................................... United States 26,015 921,907
Pioneer International Ltd. ................................. Australia 175,000 370,310
-----------
1,292,217
-----------
BUSINESS & PUBLIC SERVICES 1.4%
Columbia HCA Healthcare Corp. .............................. United States 26,000 643,500
-----------
CHEMICALS 1.0%
Great Lakes Chemical Corp. ................................. United States 11,000 440,000
-----------
DATA PROCESSING & REPRODUCTION 11.9%
*3Com Corp. ................................................ United States 40,300 1,805,944
Compaq Computer Corp. ...................................... United States 22,869 959,069
*Midway Games Inc. ......................................... United States 56,250 618,750
*Newbridge Networks Corp. .................................. Canada 41,845 1,271,042
*Quantum Corp. ............................................. United States 32,300 686,375
-----------
5,341,180
-----------
ELECTRICAL & ELECTRONICS 6.0%
Ametek Inc. ................................................ United States 31,100 693,919
AMP Inc. ................................................... United States 27,910 1,453,064
Motorola Inc. .............................................. United States 9,000 549,563
-----------
2,696,546
-----------
ELECTRONIC COMPONENTS & INSTRUMENTS 10.3%
*ADC Telecommunications Inc. ............................... United States 56,200 1,952,950
Harman International Industries Inc. ....................... United States 20,500 781,562
Intel Corp. ................................................ United States 16,000 1,897,000
-----------
4,631,512
-----------
ENERGY EQUIPMENT & SERVICES 1.9%
Sunoco Inc. ................................................ United States 23,300 840,256
-----------
ENERGY SOURCES 3.0%
Norsk Hydro AS, ADR......................................... Norway 8,800 300,850
Occidental Petroleum Corp. ................................. United States 32,150 542,531
YPF Sociedad Anonima, ADR................................... Argentina 18,000 502,875
-----------
1,346,256
-----------
</TABLE>
11
PAGE
TEMPLETON AMERICAN TRUST, INC.
STATEMENT OF INVESTMENTS, DECEMBER 31, 1998 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
FINANCIAL SERVICES 6.1%
Fannie Mae.................................................. United States 16,000 $ 1,184,000
Morgan Stanley Dean Witter & Co. ........................... United States 21,644 1,536,724
-----------
2,720,724
-----------
FOOD & HOUSEHOLD PRODUCTS .8%
IBP Inc. ................................................... United States 12,000 349,500
-----------
FOREST PRODUCTS & PAPER 1.4%
Boise Cascade Corp. ........................................ United States 20,300 629,300
-----------
HEALTH & PERSONAL CARE 2.5%
Aetna Inc. ................................................. United States 12,275 965,122
*LTC Healthcare Inc. ....................................... United States 4,172 10,951
*Windmere-Durable Holdings Inc. ............................ United States 21,400 165,850
-----------
1,141,923
-----------
INDUSTRIAL COMPONENTS 2.6%
Goodyear Tire & Rubber Co. ................................. United States 18,000 907,875
*Walbro Corp. .............................................. United States 37,800 240,975
-----------
1,148,850
-----------
INSURANCE 9.6%
American General Corp. ..................................... United States 17,000 1,326,000
American International Group Inc. .......................... United States 15,037 1,452,950
Presidential Life Corp. .................................... United States 47,100 936,113
W R Berkeley Corp. ......................................... United States 17,100 582,469
-----------
4,297,532
-----------
MERCHANDISING 6.6%
American Stores Co. ........................................ United States 42,888 1,584,175
*Gymboree Inc. ............................................. United States 73,800 470,475
*S & C Liquidating Trust.................................... United States 8,487 0
Sears Roebuck & Co. ........................................ United States 21,400 909,500
-----------
2,964,150
-----------
METALS & MINING 1.5%
Birmingham Steel Corp. ..................................... United States 56,800 237,850
Oregon Steel Mills Inc. .................................... United States 36,600 434,625
-----------
672,475
-----------
MISC MATERIALS & COMMODITIES 1.4%
Agrium Inc. ................................................ Canada 75,000 651,562
-----------
REAL ESTATE 1.6%
LTC Properties Inc. ........................................ United States 41,720 693,595
National Health Investors Inc. ............................. United States 1,800 44,438
-----------
738,033
-----------
</TABLE>
12
PAGE
TEMPLETON AMERICAN TRUST, INC.
STATEMENT OF INVESTMENTS, DECEMBER 31, 1998 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TELECOMMUNICATIONS 5.4%
Northern Telecom, Ltd. ..................................... Canada 21,000 $ 1,052,625
U.S. West Inc. ............................................. United States 21,200 1,370,050
-----------
2,422,675
-----------
TEXTILES & APPAREL 1.8%
*Fruit of the Loom Inc., A.................................. United States 58,700 810,794
-----------
TRANSPORTATION 5.7%
*Fritz Companies Inc. ...................................... United States 79,000 854,187
*Landstar System Inc. ...................................... United States 42,400 1,727,800
-----------
2,581,987
-----------
UTILITIES ELECTRICAL & GAS 2.1%
Potomac Electric Power Co. ................................. United States 35,208 926,411
-----------
TOTAL COMMON STOCKS (COST $33,552,672)...................... 43,785,168
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT**
----------
<S> <C> <C> <C>
(a)REPURCHASE AGREEMENT (COST $1,192,000) 2.7%
Barclays Bank Plc., 4.75%, 1/04/99 (Maturity Value
$1,192,629) Collateralized by U.S. Treasury Notes &
Bonds..................................................... United States $1,192,000 1,192,000
-----------
TOTAL INVESTMENTS (COST $34,744,672) 100.2%................. 44,977,168
OTHER ASSETS, LESS LIABILITIES (.2%)........................ (78,171)
-----------
TOTAL NET ASSETS 100.0%..................................... $44,898,997
-----------
</TABLE>
*Non-income producing.
**Securities traded in U.S. dollars.
(a)At December 31, 1998, all repurchase agreements held by the Fund had been
entered into on that date.
See Notes to Financial Statements.
13
PAGE
TEMPLETON AMERICAN TRUST, INC.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $33,552,672)..... $43,785,168
Repurchase agreement, at value and cost.................... 1,192,000
Cash....................................................... 1,923
Receivables:
Investment securities sold................................ 139,902
Capital shares sold....................................... 40,322
Dividends and interest.................................... 50,170
-----------
Total assets.......................................... 45,209,485
-----------
Liabilities:
Payables:
Capital shares redeemed................................... 115,645
To affiliates............................................. 123,287
Distributions to shareholders.............................. 2,048
Accrued expenses and other................................. 69,508
-----------
Total liabilities..................................... 310,488
-----------
Net assets, at value........................................ $44,898,997
-----------
Net assets consist of:
Net unrealized appreciation................................ $10,232,496
Accumulated net realized gain.............................. 2,496,378
Capital shares............................................. 32,170,123
-----------
Net assets, at value........................................ $44,898,997
-----------
CLASS I:
Net asset value per share ($5,440,858 / 349,029 shares
outstanding)............................................. $15.59
-----------
Maximum offering price per share ($15.59 / 94.25%)......... $16.54
-----------
CLASS II:
Net asset value per share ($39,458,139 / 2,522,200 shares
outstanding)*............................................ $15.64
-----------
Maximum offering price per share ($15.64 / 99.00%)......... $15.80
-----------
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
14
PAGE
TEMPLETON AMERICAN TRUST, INC.
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $15,234)
Dividends.................................................. $ 702,547
Interest................................................... 323,834
----------
Total investment income............................... $ 1,026,381
Expenses:
Management fees (Note 3)................................... 374,730
Administrative fees (Note 3)............................... 80,299
Distribution fees (Note 3)
Class I................................................... 20,484
Class II.................................................. 477,056
Transfer agent fees (Note 3)............................... 65,500
Custodian fees............................................. 20,900
Reports to shareholders.................................... 49,900
Registration and filing fees............................... 32,000
Professional fees.......................................... 40,000
Directors' fees and expenses............................... 9,700
Other...................................................... 1,420
----------
Total expenses........................................ 1,171,989
-----------
Net investment loss............................. (145,608)
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 8,238,409
Foreign currency transactions............................. (30,481)
----------
Net realized gain..................................... 8,207,928
Net unrealized depreciation on investments............ (4,224,967)
-----------
Net realized and unrealized gain............................ 3,982,961
-----------
Net increase in net assets resulting from operations........ $ 3,837,353
-----------
</TABLE>
See Notes to Financial Statements.
15
PAGE
TEMPLETON AMERICAN TRUST, INC.
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
-----------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment loss....................................... $ (145,608) $ (59,740)
Net realized gain from investments and foreign currency
transactions............................................. 8,207,928 8,772,720
Net unrealized appreciation (depreciation) on
investments.............................................. (4,224,967) 1,234,510
-----------------------------
Net increase in net assets resulting from operations.... 3,837,353 9,947,490
Distributions to shareholders from:
Net investment income:
Class I.................................................. (48,675) (34,067)
Class II................................................. (4,523) (8,714)
Net realized gains:
Class I.................................................. (981,978) (482,773)
Class II................................................. (7,477,551) (6,135,485)
Capital share transactions (Note 2):
Class I.................................................. 953,526 2,906,521
Class II................................................. (8,470,189) 4,196,590
-----------------------------
Net increase (decrease) in net assets................... (12,192,037) 10,389,562
Net assets:
Beginning of year.......................................... 57,091,034 46,701,472
-----------------------------
End of year................................................ $44,898,997 $57,091,034
-----------------------------
Undistributed net investment income included in net assets:
End of year................................................ $ -- $ --
-----------------------------
</TABLE>
See Notes to Financial Statements.
16
PAGE
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 (a combination of capital growth and income) by
investing at least 65% of its total assets in the equity and debt securities of
U.S. companies and the U.S. government, its agencies, and instrumentalities. 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 Trustees.
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.
17
PAGE
TEMPLETON AMERICAN TRUST, INC.
Notes to Financial Statements (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS (CONT.)
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. 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, 1998, 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,
----------------------------------------------------------
1998 1997
----------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS I SHARES:
Shares sold................................................. 226,238 $ 3,888,073 205,470 $ 3,717,827
Shares issued on reinvestment of distributions.............. 56,184 879,674 27,495 464,649
Shares redeemed............................................. (226,121) (3,814,221) (68,378) (1,275,955)
----------------------------------------------------------
Net increase................................................ 56,301 $ 953,526 164,587 $ 2,906,521
----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1998 1997
----------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS II SHARES:
Shares sold................................................. 450,756 $ 7,768,137 336,921 $ 6,061,966
Shares issued on reinvestment of distributions.............. 415,393 6,584,503 322,381 5,449,383
Shares redeemed............................................. (1,369,828) (22,822,829) (416,422) (7,314,759)
----------------------------------------------------------
Net increase (decrease)..................................... (503,679) $ (8,470,189) 242,880 $ 4,196,590
----------------------------------------------------------
</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
18
PAGE
TEMPLETON AMERICAN TRUST, INC.
Notes to Financial Statements (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
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 shares, respectively, for costs
incurred in marketing the Fund's Class I and Class II shares. Under the Class I
distribution plan, costs exceeding the maximum may be reimbursed in subsequent
periods. At December 31, 1998, there were no unreimbursed costs. Distributors
received net commissions from sales of fund shares and received contingent
deferred sales charges for the period of $25,249 and $9,589, respectively.
Legal fees of $27,991 were paid to a law firm in which a partner is an officer
of the Fund.
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, 1998, the net unrealized appreciation
based on the cost of investments for income tax purposes was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $15,009,207
Unrealized depreciation..................................... (4,776,711)
-----------
Net unrealized appreciation................................. $10,232,496
===========
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended December 31, 1998 aggregated $13,239,589 and $20,369,319
respectively.
6. SUBSEQUENT EVENT
The Fund's Board of Directors approved a proposal to merge the Fund into
Franklin Equity Fund, subject to shareholder approval. Franklin Equity Fund is
affiliated with Franklin Resources, Inc., the parent company of the Fund's
investment manager. It is anticipated that in early 1999, shareholders will
receive a proxy and proxy statement requesting their vote on the proposal.
19
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 Statement of Investments, of Templeton American Trust, Inc. as of December
31, 1998, 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, 1998, 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, 1998, 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 28, 1999
20
PAGE
TEMPLETON AMERICAN TRUST, INC.
Tax Designation
Under Section 852(b)(3)(C) of the Internal Revenue Code, the Templeton American
Trust, Inc. hereby designates $7,568,718 as a capital gain dividend for the
fiscal year ended December 31, 1998.
Under Section 854(b)(2) of the Internal Revenue Code, the Templeton American
Trust, Inc. hereby designates 35.30% of the ordinary income dividends as income
qualifying for the dividends received deduction for the fiscal year ended
December 31, 1998.
21
PAGE
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PAGE
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Templeton Fund Information at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending 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
Mutual Discovery 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
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and
Income Fund
GLOBAL INCOME
Franklin Global Government
Income Fund
Franklin Templeton Global
Currency Fund
Franklin Templeton Hard
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
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 Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund
FUND ALLOCATOR SERIES
Franklin Templeton Conservative
Target Fund
Franklin Templeton Moderate
Target Fund
Franklin Templeton Growth
Target Fund
INCOME
Franklin Adjustable U.S.
Government Securities Fund
Franklin's AGE High Income Fund
Franklin Bond Fund
Franklin Floating Rate Trust
Franklin Investment Grade
Income Fund
Franklin Short-Intermediate
U.S. Government Securities Fund
Franklin Strategic Income Fund
Franklin U.S. Government
Securities Fund
Franklin Federal Money Fund
Franklin Money 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**
California**
Colorado
Connecticut
Florida**
Georgia
Kentucky
Louisiana
Maryland
Massachusetts+
Michigan+
Minnesota+
Missouri
New Jersey
New York**
North Carolina
Ohio+
Oregon
Pennsylvania
Tennessee***
Texas
Virginia
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
plan 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. The Franklin Valuemark Funds are managed by Franklin
Advisers, Inc. and its Templeton and Franklin affiliates.
PAGE
TEMPLETON AMERICAN
TRUST, INC.
ANNUAL REPORT
AUDITORS
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, NY 10017-2416
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404-1585
1-800/DIAL BEN(R)
www.franklin-templeton.com
SHAREHOLDER SERVICES
1-800/632-2301
FUND INFORMATION
1-800/342-5236
This report must be preceded or accompanied by the current Templeton American
Trust, Inc. prospectus, which contains more complete information including risk
factors, charges and expenses. Like any investment in securities, 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 the risk of such losses 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 A98 02/99 [RECYCLE LOGO] Printed on recycled paper
