================================================================================
------------------
SEMI-ANNUAL REPORT
------------------
September 30, 2000
------------------
Value Line
U.S.
Multinational
Company
Fund, Inc.
[LOGO]
--------------
VALUE LINE
No Load
Mutual
Funds
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
To Our Value Line
--------------------------------------------------------------------------------
To Our Shareholders:
Due to difficult market conditions the first half of the Value Line U.S.
Multinational Fund's fiscal year is off to a rocky start. For the period from
April 1st to September 30, 2000, the Fund posted a loss of 6.25%, versus a loss
of 3.59% for the benchmark Standard & Poor's 500 Index. Both measures assume the
reinvestment of any dividends. Despite this negative short-term performance
differential, we once again advocate the prudence of investing in large, global
U.S. companies. Over the longer time period of the past 12 months, the Fund has
done very well against the benchmark scoring a 17.93% one-year return vs. 13.28%
for the S&P 500.
There have been several violent swings in investor sentiment over the past six
months, and as of this writing the market is once again trending downward. In
the balance of this letter, we will review some of the reasons for the current
weakness in the stock market--including rising oil prices, the weak euro, and
uncertainty over corporate earnings--and lay out our case that this environment
is temporary.
From our discussions with petroleum analysts, it seems apparent that the recent
rise in oil prices, to about $37 a barrel, was largely fueled by speculative
fever. One can justify that view by observing that the President's recent
release of 30 million barrels from the Strategic Reserve--less than two days of
national supply--was sufficient to drive down crude prices by nearly five
dollars a barrel. It is true that oil supplies are tight throughout the world,
but we think pricing will return to a more rational $25-$30 a barrel over the
next several months.
The Euro has been eroding against the dollar since its introduction a year and a
half ago, and the recent weakness just continues that trend. Several recent
central bank easings around the world should help stimulate Euroland economies,
and a group of major nations has recently acted to support the currency.
While there have been some high-profile profit warnings around the end of the
third quarter, the vast majority of companies should report results consistent
with the economy growing at a rate of 3% or better. We believe that this pace of
GDP growth should continue well into 2001 (see our Economic Observations
nearby). Meanwhile, inflation remains entirely benign, and the Federal Reserve's
tight monetary policy seems to have accomplished its purpose. With the Fed
likely to be on hold, lower interest rates and expanding P/E multiples should
develop.
Globally, the economic backdrop seems to be in pretty good shape. While western
Europe is slowing and Japan remains an economic quagmire, the high-growth
economies of the Asia-Pacific region and Latin America, all of which were
battered in the currency crises of 1997 and 1998, are back up and running at
full throttle. This scenario should benefit U.S. companies operating abroad,
which are the focus of this portfolio.
We offer you our best regards for the balance of 2000, and wish you the best for
investment success in 2001.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
October 26, 2000
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2
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Value Line U.S. Multinational Company Fund Shareholders
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Economic Observations
The U.S. economy is now clearly proceeding along a slower growth track as we
move through the final months of the year. Evidence of this deceleration in
business activity can be found in the most recent figures on manufacturing,
retail spending, and employment. Overall, we estimate that GDP growth will
average 3%, or so, over the balance of the year. Thereafter, we would expect the
pace of economic activity to hold at these comparatively restrained levels
through 2001, as the succession of interest-rate hikes voted for by the Federal
Reserve Board over the past year and a half continues to have the hoped-for
effect of stabilizing the economy at comfortably lower growth levels.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, with sustained increases in productivity and ongoing technological
innovations being at least partially responsible for this comparative pricing
stability. Nevertheless, a moderate increase in cost pressures could still
evolve over the next few quarters, particularly if energy prices continue their
uncontrolled ascent for several months and the aforementioned moderation in
economic growth fails to continue into 2001, two events that we do not currently
expect to take place.
Meanwhile, the Federal Reserve, taking note of the current slower pace of
business activity and the comparatively muted inflation figures, is likely to
maintain a relatively stable monetary stance over the next several quarters.
Indeed, should oil prices reverse course and move back down to the
$25-$30-a-barrel level, as seems logical given the expected moderation in
underlying demand, or the economy slows more then we now expect, it is
conceivable that the central bank's next move could be to lower interest rates
sometime next year.
Performance Data:*
Average
Annual
Total
Return
--------
1 year ended September 30, 2000 ....................... 17.93%
3 years ended September 30, 2000 ...................... 16.39%
From November 17, 1995+ to
September 30, 2000 .................................. 21.53%
+ Commencement of operations.
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total return include dividends
reinvested and capital gains distributions accepted in shares. The investment
return and principal value of an investment will fluctuate so that an
investment, when redeemed, may be worth more or less than its original cost.
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3
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments (unaudited)
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Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS (91.6%)
ADVERTISING (1.6%)
9,200 Omnicom Group, Inc. ................... $ 671,025
BANK (3.9%)
6,450 Chase Manhattan Corp. ................. 297,909
9,900 State Street Corporation............... 1,287,000
----------
1,584,909
COMPUTER &
PERIPHERALS (13.1%)
28,000 Cisco Systems, Inc.*................... 1,547,000
30,000 Dell Computer Corp.*................... 924,375
20,000 EMC Corp.*............................. 1,982,500
8,000 International Business
Machines Corp. ..................... 900,000
----------
5,353,875
COMPUTER SOFTWARE
& SERVICES (6.6%)
5,000 Adobe Systems, Inc. ................... 776,250
15,000 Fiserv, Inc.*.......................... 898,125
12,000 Microsoft Corp.*....................... 723,750
4,100 Oracle Corp.*.......................... 322,875
----------
2,721,000
DIVERSIFIED
COMPANIES (1.3%)
10,000 Tyco International Ltd. ............... 518,750
DRUG (8.4%)
16,000 Amgen Inc.*............................ 1,117,250
6,800 Biogen, Inc.*.......................... 414,800
6,000 Merck & Co., Inc. ..................... 446,625
18,000 Pfizer, Inc. .......................... 808,875
14,000 Schering-Plough Corp. ................. 651,000
----------
3,438,550
ELECTRIC UTILITY--
CENTRAL (3.0%)
18,000 AES Corp.* (The)....................... 1,233,000
ELECTRICAL
EQUIPMENT (4.1%)
2,400 Corning Inc. .......................... 712,800
16,500 General Electric Co. .................. 951,844
----------
1,664,644
ENTERTAINMENT (2.3%)
6,000 Time Warner, Inc. ..................... 469,500
8,200 Viacom, Inc. Class "A"*................ 479,700
----------
949,200
FINANCIAL SERVICES--
DIVERSIFIED (6.7%)
18,000 American Express Co. .................. 1,093,500
10,125 American International
Group, Inc. ........................ 968,836
12,500 Citigroup, Inc. ....................... 675,781
----------
2,738,117
INTERNET (3.0%)
20,000 America Online, Inc.*.................. 1,075,000
1,800 Yahoo! Inc.*........................... 163,800
----------
1,238,800
MEDICAL SUPPLIES (8.6%)
18,000 Guidant Corp.*......................... 1,272,375
12,792 Johnson & Johnson...................... 1,201,649
20,000 Medtronic, Inc. ....................... 1,036,250
----------
3,510,274
METALS & MINING--
DIVERSIFIED (0.9%)
15,000 Alcoa, Inc. ........................... 379,687
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4
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
September 30, 2000
Shares Value
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PETROLEUM--
PRODUCING (1.5%)
10,500 Apache Corp. .......................... $ 620,812
PRECISION
INSTRUMENTS (0.5%)
5,200 KLA-Tencor Corp.*...................... 214,175
RECREATION (1.5%)
13,000 Harley-Davidson, Inc. ................. 622,375
RETAIL--
SPECIAL LINES (4.3%)
10,800 Gap, Inc. (The)........................ 217,350
40,000 Tiffany & Co. ......................... 1,542,500
----------
1,759,850
RETAIL STORE (2.5%)
9,000 Costco Wholesale Corp.*................ 314,438
14,800 Wal-Mart Stores, Inc. ................. 712,250
----------
1,026,688
SEMICONDUCTOR (7.2%)
30,000 Intel Corp. ........................... 1,246,875
8,000 PMC-Sierra, Inc.*...................... 1,722,000
----------
2,968,875
SEMICONDUCTOR
CAPITAL EQUIPMENT
(2.4%)
10,000 Altera Corp.*.......................... 477,500
8,600 Applied Materials Inc.*................ 510,087
----------
987,587
TELECOMMUNICATIONS
EQUIPMENT (6.6%)
40,000 ADC
Telecommunications, Inc.*........... $ 1,075,625
7,400 Lucent Technologies Inc. .............. 226,163
11,200 QUALCOMM Inc.*......................... 798,000
12,800 Tellabs, Inc.*......................... 611,200
----------
2,710,988
TELECOMMUNICATION
SERVICES (1.6%)
21,600 WorldCom, Inc.*........................ 656,100
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TOTAL COMMON STOCKS
& TOTAL INVESTMENT
SECURITIES (91.6%)
(Cost $15,848,182) .................. 37,569,281
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5
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments (unaudited) September 30, 2000
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Principal
Amount Value
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REPURCHASE AGREEMENT (8.3%)
(including accrued interest)
$3,400,000 Collateralized by $3,250,000
U.S. Treasury Bonds 8.375%,
due 8/15/08, with a value
of $3,470,159 (with Morgan
Stanley Dean Witter & Co.,
6.35%, dated 9/29/00,
due 10/2/00, delivery
value $3,401,799)................... $ 3,401,200
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CASH AND OTHER ASSETS IN
EXCESS OF LIABLITIES (0.1%) ...................... 48,260
----------
NET ASSETS (100%) .................................. $41,018,741
----------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE,
PER OUTSTANDING SHARE
($41,018,741 / 1,730,480) ........................ $ 23.70
----------
*Non-income producing
See Notes to Financial Statements.
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6
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Assets and Liabilities
at September 30, 2000 (unaudited)
Assets:
Investment securities, at value
(Cost--$15,848,182) .................................... $ 37,569,281
Repurchase agreement
(Cost--$3,401,200) ..................................... 3,401,200
Cash ..................................................... 98,723
Receivable for capital shares sold ....................... 325,562
Dividends receivable ..................................... 10,566
Deferred organization costs (note 2) ..................... 1,322
------------
Total Assets ......................................... $ 41,406,654
------------
Liabilities:
Payable for capital shares repurchased ................... 315,701
Accrued expenses:
Advisory fee payable ................................... 26,794
Service and distribution plan
fees payable ......................................... 8,936
Other .................................................. 36,482
------------
Total Liabilities .................................... 387,913
------------
Net Assets ............................................... $ 41,018,741
------------
Net Assets consist of:
Capital stock, at $.01 par value
(authorized 50,000,000,
outstanding 1,730,480 shares) .......................... $ 17,305
Additional paid-in capital ............................... 18,715,089
Accumulated net investment loss .......................... (172,464)
Undistributed net realized gain
on investments ......................................... 737,712
Net unrealized appreciation
of investments ......................................... 21,721,099
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Net Assets ............................................... $ 41,018,741
------------
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($41,018,741 / 1,730,480
shares outstanding) .................................... $ 23.70
============
Statement of Operations
for the six months ended September 30, 2000 (unaudited)
Investment Income:
Interest ................................................ $ 72,393
Dividend ................................................ 64,195
-----------
Total Income ........................................ 136,588
-----------
Expenses:
Advisory fee ............................................ 161,815
Service and distribution plan fee ....................... 53,938
Auditing and legal fees ................................. 20,816
Accounting and bookkeeping fees ......................... 16,200
Custodian fees .......................................... 14,439
Registration and filing fees ............................ 13,382
Directors' fees and expenses ............................ 12,413
Insurance, dues and other ............................... 5,359
Amortization of deferred
organization costs (note 2) ........................... 5,214
Printing ................................................ 4,025
Transfer agent .......................................... 2,710
-----------
Total Expenses before
custody credits ................................... 310,311
Less: custody credits ............................... (1,259)
-----------
Net Expenses ...................................... 309,052
-----------
Net Investment Loss ..................................... (172,464)
-----------
Net Realized and Unrealized
Gain (Loss) on Investments:
Net Realized Gain ................................... 293,463
Change in Net Unrealized
Appreciation ...................................... (2,957,311)
-----------
Net Realized Gain and Change in
Net Unrealized Appreciation
on Investments ........................................ (2,663,848)
-----------
Net Decrease in Net Assets
from Operations ....................................... $(2,836,312)
===========
See Notes to Financial Statements.
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7
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Changes in Net Assets
for the six months ended September 30, 2000 (unaudited) and for the year ended
March 31, 2000
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<TABLE>
<CAPTION>
Six Months Ended
September 30, 2000 Year Ended
(unaudited) March 31,2000
----------------------------------------
<S> <C> <C>
Operations:
Net investment loss ....................................... $ (172,464) $ (261,154)
Net realized gain on investments .......................... 293,463 446,945
Change in net unrealized appreciation ..................... (2,957,311) 10,285,136
----------------------------------
Net (decrease) increase in net assets from operations ..... (2,836,312) 10,470,927
----------------------------------
Distributions to Shareholders:
Net realized gain from investment transactions ............ -- (749,854)
----------------------------------
Capital Share Transactions:
Proceeds from sale of shares .............................. 7,346,424 7,846,551
Proceeds from reinvestment of distributions to shareholders -- 748,821
Cost of shares repurchased ................................ (8,861,743) (7,049,157)
----------------------------------
Net (decrease) increase from capital share transactions ... (1,515,319) 1,546,215
----------------------------------
Total (Decrease) Increase in Net Assets ..................... (4,351,631) 11,267,288
Net Assets:
Beginning of period ....................................... 45,370,372 34,103,084
----------------------------------
End of period ............................................. $ 41,018,741 $ 45,370,372
----------------------------------
Accumulated Net Investment Loss, at end of period ........... $ (172,464) $ --
==================================
</TABLE>
See Notes to Financial Statements.
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8
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements (unaudited) September 30, 2000
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1. Significant Accounting Policies
Value Line U.S. Multinational Company Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company whose primary investment objective is maximum
total return. The Fund invests primarily in common stock or securities
convertible into common stock of U.S. companies that have significant sales from
international operations.
The following significant accounting policies are in conformity with generally
accepted accounting principles for investment companies. Such policies are
consistently followed by the Fund in the preparation of its financial
statements. Generally accepted accounting principles may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
(A) Security Valuation. Securities listed on a securities exchange and
over-the-counter securities traded on the NASDAQ national market are valued at
the closing sales prices on the date as of which the net asset value is being
determined. In the absence of closing sales prices for such securities and for
securities traded in the over-the-counter market, the security is valued at the
midpoint between the latest available and representative asked and bid prices.
Securities for which market quotations are not readily available or which are
not readily marketable and all other assets of the Fund are valued at fair value
as the Board of Directors may determine in good faith. Short-term instruments
with maturities of 60 days or less at the date of purchase are valued at
amortized cost, which approximates market value.
(B) Repurchase Agreements. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
(C) Federal Income Taxes. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, including the distribution requirements of the Tax Reform Act of
1986, and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax or excise tax provision is required.
(D) Security Transactions and Distributions. Security transactions are accounted
for on the date the securities are purchased or sold. Interest income is accrued
as earned. Realized gains and losses on sales of securities are calculated for
financial accounting and federal income tax purposes on the identified cost
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
2. Organization Costs
Costs of $52,030 incurred in connection with the Fund's organization and initial
registration have been deferred and are being amortized on a straight-line basis
over 60 months, beginning at the commencement of operations of the Fund. In the
event any of the initial shares of the Fund are redeemed by the holder thereof
during the five-year amortization period, the redemption proceeds will be
reduced by a pro rata portion of any unamortized deferred organizational
expenses in the same proportion as the number of initial shares being redeemed
bears to the number of initial shares outstanding at the time of redemption.
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9
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements (unaudited) September 30, 2000
--------------------------------------------------------------------------------
3. Capital Share Transactions
Transactions in capital stock were as follows:
Six Months
Ended
September 30, Year Ended
2000 March 31,
(unaudited) 2000
-------------------------
Shares sold ................................. 306,017 337,841
Shares issued in reinvestment
of distributions .......................... -- 33,192
-------------------------
306,017 371,033
Shares repurchased .......................... 370,404 302,612
-------------------------
Net (decrease) increase ..................... (64,387) 68,421
=========================
4 Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Six Months Ended
September 30, 2000
(unaudited)
-------------------
PURCHASES:
Investment Securities ................................ $1,954,266
----------
SALES:
Investment Securities ................................ $4,262,929
----------
At September 30, 2000, the aggregate cost of investment securities and
short-term investments for federal income tax purposes was $19,249,382. The
aggregate appreciation and depreciation of investments based on a comparison of
investment values and their costs for federal income tax purposes was
$22,299,276 and $578,177 respectively, resulting in a net appreciation of
$21,721,099.
5. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates:
An advisory fee of $161,815 was paid or payable to Value Line, Inc. the Fund's
investment adviser (the "Adviser") for the six months ended September 30, 2000.
The fee is computed at the annual rate of .75 of 1% of the daily net assets
during the period and paid monthly. The Adviser provides research, investment
programs and supervision of the investment portfolio and pays costs of certain
administrative services and office space. The Adviser also provides persons,
satisfactory to the Fund's Board of Directors, to act as officers of the Fund
and pays their salaries and wages. The Fund bears all other costs and expenses.
The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended, for the payment
of certain expenses incurred by Value Line Securities, Inc. (the "Distributor")
a wholly-owned subsidiary of the Adviser, in advertising, marketing and
distributing the Fund's shares and for servicing the Fund's shareholders, at an
annual rate of 0.25% of the Fund's average daily net assets. Fees amounting to
$53,938 were paid or payable to the Distributor under this Plan for the six
months ended September 30, 2000.
For the six months ended September 30, 2000, the Fund's expenses were reduced by
$1,259 under a custody credit arrangement with the Custodian.
Certain officers and directors of the Adviser and the Distributor, are also
officers and a director of the Fund. During the six months ended September 30,
2000, the Fund paid brokerage commissions totaling $2,767 to the Distributor,
which clears its transactions through unaffiliated brokers.
At September 30, 2000, the Adviser, and/or affiliated companies, and the Value
Line, Inc. Profit Sharing and Savings Plan, owned 1,412,544 shares of the Fund's
capital stock, representing 81.6% of the outstanding shares. In addition,
certain officers and directors of the Fund owned 119,565 shares of capital
stock, representing 6.9% of the outstanding shares.
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10
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
November 17, 1995
September Years Ended March 31, (Commencement of
30, 2000 ------------------------------------------------------- Operations) to
(unaudited) 2000 1999 1998 1997 March 31, 1996
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ............. $25.28 $19.75 $16.27 $12.34 $10.55 $10.00
-----------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment (loss) income .... (.10) (.15) (.13) (.08) .12(1) .07(1)
Net gains or losses on securities
(both realized and unrealized) (1.48) 6.11 3.61 4.80 1.82 .52
-----------------------------------------------------------------------------------------------
Total from investment operations (1.58) 5.96 3.48 4.72 1.94 .59
-----------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income ........................ -- -- -- -- (.14) (.04)
Distributions from realized gains -- (.43) -- (.79) (.01) --
-----------------------------------------------------------------------------------------------
Total distributions ............. -- (.43) -- (.79) (.15) (.04)
-----------------------------------------------------------------------------------------------
Net asset value, end of period .... $23.70 $25.28 $19.75 $16.27 $12.34 $10.55
-----------------------------------------------------------------------------------------------
Total return ...................... -6.25%+ 30.44% 21.39% 39.17% 18.36% 5.93%+
===============================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) .................. $41,019 $45,370 $34,103 $29,675 $18,081 $12,448
Ratio of operating expenses to
average net assets .............. 1.43%*(5) 1.49%(5) 1.58%(4) 1.69%(4) 1.97%(2)(3) 2.45%*(2)(3)
Ratio of net investment (loss)
income to average net assets .... (0.80)%* (0.69)% (0.76)% (0.60)% (0.64)%(2)(3) (0.32)%*(2)(3)
Portfolio turnover rate ........... 5%+ 37% 36% 49% 56% 17%+
</TABLE>
(1) Net of custody fee credits, expense reimbursement and fees waived by the
Adviser. Had these expenses been fully paid by the Fund for the periods
ended March 31, 1997 and 1996, net investment loss per share would have
been $(.07) and $(.001), respectively.
(2) Due to the reimbursement of expenses and waiver of fees by the Adviser,
data are not indicative of future periods.
(3) Before custody fee credits, expense reimbursement and fees waived by the
Adviser. After expense reimbursement and fees waived for the periods ended
March 31, 1997 and 1996, ratio of expenses to average net assets was 0.40%
and 0%* respectively; and ratio of net investment income to average net
assets was 0.93% and 2.13%* respectively.
(4) Before offset of custody credits.
(5) Ratio reflects expenses grossed up for custody credit arrangement. The
ratio of expenses net of custody credits would have been 1.48% for the year
ended March 31, 2000 and unchanged for the six month period ended September
30, 2000 (unaudited).
* Annualized
+ Not annualized
See Notes to Financial Statements.
--------------------------------------------------------------------------------
11
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
The Value Line Family of Funds
1950--The Value Line Fund seeks long-term growth of capital. Current income is a
secondary objective.
1952--Value Line Income and Growth Fund's primary investment objective is
income, as high and dependable as is consistent with reasonable risk. Capital
growth to increase total return is a secondary objective.
1956--Value Line Special Situations Fund seeks long-term growth of capital. No
consideration is given to current income in the choice of investments.
1972--Value Line Leveraged Growth Investors' sole investment objective is to
realize capital growth.
1979--The Value Line Cash Fund, a money market fund, seeks to secure as high a
level of current income as is consistent with maintaining liquidity and
preserving capital. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
1981--Value Line U.S. Government Securities Fund seeks maximum income without
undue risk to capital. Under normal conditions, at least 80% of the value of its
net assets will be invested in securities issued or guaranteed by U.S.
Government and its agencies and instrumentalities.
1983--Value Line Centurion Fund* seeks long-term growth of capital.
1984--The Value Line Tax Exempt Fund seeks to provide investors with the maximum
income exempt from federal income taxes while avoiding undue risk to principal.
The Fund offers investors a choice of two portfolios: The Money Market Portfolio
and the National Bond Portfolio. The fund may be subject to state and local
taxes and the Alternative Minimum Tax (if applicable).
1985--Value Line Convertible Fund seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by the Value Line Convertible Ranking System.
1986--Value Line Aggressive Income Trust seeks to maximize current income.
1987--Value Line New York Tax Exempt Trust seeks to provide New York taxpayers
with maximum income exempt from New York State, New York City and federal income
taxes while avoiding undue risk to principal. The Trust may be subject to state
and local taxes and the Alternative Minimum Tax (if applicable).
1987--Value Line Strategic Asset Management Trust* seeks to achieve a high total
investment return consistent with reasonable risk.
1993--Value Line Emerging Opportunities Fund invests primarily in common stocks
or securities convertible into common stock, with its primary objective being
long-term growth of capital.
1993--Value Line Asset Allocation Fund seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the asset mix.
1995--Value Line U.S. Multinational Company Fund's investment objective is
maximum total return. It invests primarily in securities of U.S. companies that
have significant sales from international operations.
* Only available through the purchase of Guardian Investor, a tax deferred
variable annuity, or ValuePlus, a variable life insurance policy.
For more complete information about any of the Value Line Funds, including
charges and expenses, send for a prospectus from Value Line Securities, Inc.,
220 East 42nd Street, New York, New York 10017-5891 or call 1-800-223-0818, 24
hours a day, 7 days a week, or visit us at www.valueline.com. Read the
prospectus carefully before you invest or send money.
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INVESTMENT ADVISER Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891
DISTRIBUTOR Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891
CUSTODIAN BANK State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o NFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT PricewaterhouseCoopers LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Sound View Drive, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
John W. Chandler
Frances T. Newton
Francis C. Oakley
David H. Porter
Paul Craig Roberts
Marion N. Ruth
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Alan N. Hoffman
Vice President
Philip J. Orlando
Vice President
David T. Henigson
Vice President and
Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
International investments entail special risk considerations including currency,
liquidity, economic and political risks.
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants, and, accordingly, they
do not express an opinion thereon.
This unaudited report is issued for information of shareholders. It is not
authorized for distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Fund (obtainable from the
Distributor). #514999
