- -------------------------------------------------------------------------------
ANNUAL REPORT
- -------------------------------------------------------------------------------
March 31, 2000
- -------------------------------------------------------------------------------
Value Line
U.S.
Multinational
Company
Fund, Inc.
- --------------------------------------------------------------------------------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
To Our Value Line
================================================================================
To Our Shareholders:
We are pleased to present positive results for the U.S. Multinational Company
Fund's fiscal year, which ended on March 31, 2000. For the full fiscal year, we
posted a return of over 30%, beating the benchmark unmanaged Standard & Poor's
500 Index by more than twelve percentage points. A good portion of that
outperformance was realized in the second half of the fiscal year, when the U.S.
Multinational Company Fund beat its benchmark by over eight percentage points.
The actual returns are as follows:
U.S. S&P
Multinational 500
----------- ------
Six months ended 3/31/2000............... 25.79% 17.51%
Year ended 3/31/2000..................... 30.44 17.94
This positive performance reflects stronger economic growth across the world, as
well as a constructive backdrop for the large-cap domestic equity market, which
defines most of the holdings in the U.S. Multinational Company Fund.
The global economic backdrop deserves some commentary. After a few years of
turmoil, economies around the world--including the Pacific rim, Latin America,
and Europe--all are doing well. So well, in fact, that some observers are
concerned that economic growth abroad could be driving business conditions in
the U.S. to a level that is unsustainably high-pitched. The recent run-up in the
price of crude oil, for example, is as much a function of growing demand in
third-world jurisdictions as a result of OPEC production restraint. And part of
the growth in U.S. Gross Domestic Product over the past few quarters has been
fueled by higher export volume.
Still, the trends identified above are short-run imbalances, and global growth
over the longer term will undoubtedly be anchored in the developing world. For
that reason, we think that solid investments in U.S. companies able to leverage
that foreign growth through multinational operations--the focus of the Value
Line U.S. Multinational Company Fund's holdings--should provide a dynamic
vehicle for capital appreciation in many investors' portfolios.
We thank you for your continued confidence in the Value Line mutual fund family,
and we wish you the best for investment success in the future.
Sincerely,
/s/Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
April 15, 2000
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2
<PAGE>
Value Line U.S. Multnational Company Fund, Inc
U.S. MULTINATIONAL COMPANY FUND SHAREHOLDERS
================================================================================
Economic Observations
The American economy continues to perform well as we proceed through the second
quarter of 2000. Evidence of this healthy level of business activity can be
found in the strong pace of manufacturing, continued healthy gains in personal
income, and high levels of employment. Overall, we estimate that GDP growth will
approach 4% in the second quarter and average that level, or slightly better,
for the year as a whole. That would make 2000 the tenth year in a row of
sustained economic growth in this country.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, with strong increases in productivity and ongoing technological
innovations being at least partially responsible for this comparative pricing
stability. Nevertheless, an increase in cost pressures could still evolve over
the next several quarters, particularly if the expected late-2000 moderation in
GDP growth does not evolve. The Federal Reserve, taking note of this potential
for higher prices, is likely to chart a fairly restrictive monetary course in
the months ahead. As such, we now expect the lead bank to vote two additional
modest interest rate increases over the course of the current year.
COMPARISON OF THE CHANGE IN VALUE OF A $10,000
INVESTMENT IN THE VALUE LINE U.S. MULTINATIONAL COMPANY
FUND, INC. AND THE S&P 500 INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Value Line U.S.
Multnational Company Fund, Inc. S & P 500
------------------------------ ------------
11/95 10,000 10,000
12/95 9,890.29 10,323.46
3/96 10,593.15 10,876.9
6/96 11,436.59 11,363.88
9/96 12,500.92 11,712.44
12/96 13,106.49 12,687.53
3/97 12,537.53 13,029.92
6/97 14,711.78 15,299.73
9/97 16,428.83 16,444
12/97 15,592.87 16,914.44
3/98 17,448.14 19,268.86
6/98 17,877.11 19,903.21
9/98 15,464.18 17,927.17
12/98 19,592.97 21,738.56
3/99 21,180.14 22,819.98
6/99 21866 24287
9/99 21963 22773
12/99 26622 26157
3/00 27627 26752
From November 17, 1995+ to March 31, 2000
The Standard & Poor's 500 Index is an unmanaged index that is representative of
the larger capitalization stocks traded in the United States.
Performance Data:*
Average
Annual
Total
Return
-----
1 year ended March 31, 2000......................... 30.44%
3 years ended March 31, 2000........................ 30.13%
From November 17, 1995+ to
March 31, 2000.................................... 26.11%
+ Commencement of operations.
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total return and growth of an
assumed investment of $10,000 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.
- --------------------------------------------------------------------------------
3
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (93.8%)
ADVERTISING (1.9%)
9,200 Omnicom Group, Inc..................... $ 859,625
ALUMINUM (1.2%)
7,500 Alcoa, Inc............................. 526,875
BANK (2.9%)
4,300 Chase Manhattan Corp................... 374,906
9,900 State Street Corporation............... 959,063
----------
1,333,969
COMPUTER &
PERIPHERALS (14.6%)
28,000 Cisco Systems, Inc.*................... 2,164,750
30,000 Dell Computer Corp.*................... 1,618,125
15,000 EMC Corp.*............................. 1,875,000
8,000 International Business
Machines Corp....................... 944,000
----------
6,601,875
COMPUTER SOFTWARE
& SERVICES (7.3%)
5,000 Adobe Systems, Inc..................... 556,562
15,750 Computer Associates
International, Inc.................. 932,203
15,000 Fiserv, Inc.*.......................... 557,813
12,000 Microsoft Corp.*....................... 1,275,000
----------
3,321,578
DIVERSIFIED
COMPANIES (2.5%)
12,200 Honeywell International, Inc........... 642,787
10,000 Tyco International Ltd................. 498,750
----------
1,141,537
DRUG (6.6%)
16,000 Amgen Inc.*............................ $ 982,000
6,800 Biogen, Inc.*.......................... 475,150
6,000 Merck & Co., Inc....................... 372,750
18,000 Pfizer, Inc............................ 658,125
14,000 Schering-Plough Corp................... 514,500
----------
3,002,525
ELECTRIC UTILITY--
CENTRAL (1.6%)
9,000 AES Corp.*............................. 708,750
ELECTRICAL
EQUIPMENT (1.9%)
5,500 General Electric Co.................... 853,531
ENTERTAINMENT (3.2%)
6,000 Clear Channel
Communications, Inc.*............... 414,375
6,000 Time Warner, Inc....................... 600,000
8,200 Viacom, Inc. Class "A"*................ 438,187
----------
1,452,562
FINANCIAL SERVICES--
DIVERSIFIED (4.8%)
6,000 American Express Co.................... 893,625
6,750 American International
Group, Inc.......................... 739,125
9,375 Citigroup Inc.......................... 556,055
----------
2,188,805
INTERNET (3.0%)
20,000 America Online, Inc.*.................. 1,345,000
MEDICAL SUPPLIES (6.6%)
18,000 Guidant Corp.*......................... 1,058,625
12,792 Johnson & Johnson...................... 896,240
20,000 Medtronic, Inc......................... 1,028,750
----------
2,983,615
- -------------------------------------------------------------------------------
4
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT &
SUPPLIES (0.7%)
17,000 Staples, Inc.*......................... $ 340,000
PAPER & FOREST
PRODUCTS (0.8%)
8,700 International Paper Co................. 371,925
PETROLEUM--
PRODUCING (1.2%)
10,500 Apache Corp............................ 522,375
RECREATION (2.6%)
9,500 Electronic Arts Inc.*.................. 676,281
6,500 Harley-Davidson, Inc................... 515,938
----------
1,192,219
RETAIL--SPECIAL
LINES (4.9%)
10,800 Gap, Inc. (The)........................ 537,975
20,000 Tiffany & Co........................... 1,672,500
----------
2,210,475
RETAIL STORE (2.9%)
9,000 Costco Wholesale Corp.*................ 473,062
14,800 Wal-Mart Stores, Inc................... 821,400
----------
1,294,462
SEMICONDUCTOR (8.0%)
15,000 Intel Corp............................. 1,979,063
8,000 PMC-Sierra, Inc.*...................... 1,629,500
----------
3,608,563
SEMICONDUCTOR
CAPITAL
EQUIPMENT (2.8%)
5,000 Altera Corp.*.......................... 446,250
8,600 Applied Materials Inc.*................ 810,550
----------
1,256,800
STEEL (0.4%)
4,000 Nucor Corp............................. 200,000
Shares or
Principal
Amount Value
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS
EQUIPMENT (9.3%)
20,000 ADC Telecommunications,
Inc.*............................... $ 1,077,500
23,600 Loral Space &
Communications Ltd.*................ 240,425
7,400 Lucent Technologies Inc................ 449,550
11,200 QUALCOMM Inc.*......................... 1,672,300
12,800 Tellabs, Inc.*......................... 806,200
-----------
4,245,975
TELECOMMUNICATION
SERVICES (2.1%)
21,600 MCI WorldCom, Inc.*.................... 978,750
-----------
TOTAL COMMON STOCKS
& TOTAL INVESTMENT
SECURITIES (93.8%)
(Cost $17,863,381) .................. 42,541,791
-----------
REPURCHASE AGREEMENT (5.9%)
(including accrued interest)
$2,700,000 Collateralized by $2,060,000
U.S. Treasury Bonds 9%,
due 11/15/18, with a value
of $2,753,573 (with
Warburg Dillon Read LLC
6.25%, dated 3/31/00,
due 4/3/00, delivery
value $2,701,406) .............. 2,700,469
CASH AND OTHER ASSETS IN
EXCESS OF LIABLITIES (0.3%) .................... 128,112
-----------
NET ASSETS (100%) .................................. $45,370,372
-----------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE,
PER OUTSTANDING SHARE
($45,370,372 / 1,794,867) ...................... $ 25.28
===========
* Non-income producing
See Notes to Financial Statements.
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5
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Assets and Liabilities
at March 31, 2000
================================================================================
Assets:
Investment securities, at value
(Cost--$17,863,381) ........................... $42,541,791
Repurchase agreement
(Cost--$2,700,469) ............................ 2,700,469
Cash ........................................... 96,943
Receivable for capital shares sold ............. 325,114
Dividends receivable ........................... 10,862
Deferred organization costs (note 2) ........... 6,536
-----------
Total Assets ............................... 45,681,715
-----------
Liabilities:
Payable for securities purchased ............... 227,788
Payable for capital shares
repurchased .................................. 10,000
Accrued expenses:
Advisory fee payable ......................... 27,951
Service and distribution plan
fees payable ............................... 9,322
Other ........................................ 36,282
-----------
Total Liabilities .......................... 311,343
----------
Net Assets ..................................... $45,370,372
===========
Net Assets consist of:
Capital stock, at $.01 par value
(authorized 50,000,000,
outstanding 1,794,867 shares) ................ $ 17,949
Additional paid-in capital ..................... 20,229,764
Undistributed net realized gain
on investments ............................... 444,249
Net unrealized appreciation
of investments ............................... 24,678,410
-----------
Net Assets ..................................... $45,370,372
===========
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($45,370,372 / 1,794.867
shares outstanding) .......................... $ 25.28
===========
Statement of Operations
for the year ended March 31, 2000
================================================================================
Investment Income:
Interest ....................................... $ 162,890
Dividend ....................................... 136,877
-----------
Total Income ............................... 299,767
-----------
Expenses:
Advisory fee ................................... 284,542
Service and distribution plan fee .............. 94,847
Auditing and legal fees ........................ 40,128
Accounting and bookkeeping fees ................ 32,400
Custodian fees ................................. 29,450
Directors' fees and expenses ................... 22,992
Registration and filing fees ................... 22,649
Printing ....................................... 11,590
Amortization of deferred organization
costs (note 2) ............................... 10,428
Insurance, dues and other ...................... 8,367
Transfer agent ................................. 5,913
-----------
Total Expenses before
custody credits .......................... 563,306
Less: custody credits ...................... (2,385)
-----------
Net Expenses ............................... 560,921
-----------
Net Investment Loss ............................ (261,154)
-----------
Net Realized and Unrealized Gain
on Investments:
Net Realized Gain .......................... 446,945
Change in Net Unrealized
Appreciation ............................. 10,285,136
-----------
Net Realized Gain and Change in
Net Unrealized Appreciation
on Investments ............................... 10,732,081
-----------
Net Increase in Net Assets from
Operations ................................... $10,470,927
===========
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
6
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Changes in Net Assets
for the years ended March 31, 2000 and 1999
===============================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, March 31,
2000 1999
-----------------------------------
<S> <C> <C>
Operations:
Net investment loss ............................................ $ (261,154) $ (222,745)
Net realized gain on investments ............................... 446,945 747,158
Change in net unrealized appreciation .......................... 10,285,136 5,358,747
-----------------------------------
Net increase in net assets from operations...................... 10,470,927 5,883,160
-----------------------------------
Distributions to Shareholders:
Net realized gain from investment transactions ................. (749,854) --
-----------------------------------
Capital Share Transactions:
Proceeds from sale of shares ................................... 7,846,551 1,820,458
Proceeds from reinvestment of distributions to shareholders .... 748,821 --
Cost of shares repurchased ..................................... (7,049,157) (3,275,754)
-----------------------------------
Net increase (decrease) from capital share transactions ........ 1,546,215 (1,455,296)
-----------------------------------
Total Increase in Net Assets ..................................... 11,267,288 4,427,864
Net Assets:
Beginning of year .............................................. 34,103,084 29,675,220
-----------------------------------
End of year .................................................... $45,370,372 $34,103,084
===================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
7
<PAGE>
Value Line U.S. Multinational Company, Inc.
Notes to Financial Statements
================================================================================
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 price 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 price.
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.
Permanent book-tax differences relating to shareholder distributions have been
reclassified. Net investment loss, net realized gain, and net assets are not
affected. In the current year the net investment loss of $261,154 was
reclassified within the composition of net assets to additional paid-in capital.
- --------------------------------------------------------------------------------
8
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
March 31, 2000
===============================================================================
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.
3. Capital Share Transactions
Transactions in capital stock were as follows:
Year Ended Year Ended
March 31, March 31,
2000 1999
------------------------
Shares sold ............................ 337,841 106,930
Shares issued in reinvestment of
dividends and distributions .......... 33,192 --
------------------------
371,033 106,930
Shares repurchased ..................... 302,612 204,594
------------------------
Net increase (decrease) ................ 68,421 (97,664)
========================
4. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Year Ended
March 31, 2000
--------------
PURCHASES:
Investment Securities .......................... $14,033,942
===========
SALES:
Investment Securities .......................... $12,709,200
===========
At March 31, 2000, the aggregate cost of investment securities and short-term
investments for federal income tax purposes was $20,717,143. The aggregate
appreciation and depreciation of investments based on a comparison of investment
values and their costs for federal income tax purposes was $24,843,501 and
$318,384 respectively, resulting in a net appreciation of $24,525,117.
5. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates:
An advisory fee of $284,542 was paid or payable to Value Line, Inc. the Fund's
investment adviser (the "Adviser") for the year ended March 31, 2000. The fee is
computed at the annual rate of .75 of 1% of the daily net assets during the year
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
$94,847 were paid or payable to the Distributor under this Plan for the year
ended March 31, 2000.
For the year ended March 31, 2000, the Fund's expenses were reduced by $2,385
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 year ended March 31, 2000, the
Fund paid brokerage commissions totaling $14,425 to the Distributor, which
clears its transactions through unaffiliated brokers.
At March 31, 2000, the Adviser, and/or affiliated companies, and the Value Line,
Inc. Profit Sharing and Savings Plan, owned 1,458,311 shares of the Fund's
capital stock, representing 81.2% of the outstanding shares. In addition,
certain officers and directors of the Fund owned 121,422 shares of capital
stock, representing 6.8% of the outstanding shares.
- -------------------------------------------------------------------------------
9
<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
Years Ended March 31, (Commencement of
------------------------------------------------ Operations) to
2000 1999 1998 1997 March 31, 1996
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .... $ 19.75 $ 16.27 $ 12.34 $ 10.55 $ 10.00
---------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment (loss) income .......... (.15) (.13) (.08) .12(1) .07(1)
Net gains or losses on securities (both
realized and unrealized) ............ 6.11 3.61 4.80 1.82 .52
---------------------------------------------------------------------------
Total from investment operations ...... 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 .......... $ 25.28 $ 19.75 $ 16.27 $ 12.34 $ 10.55
===========================================================================
Total return ............................ 30.44% 21.39% 39.17% 18.36% 5.93%+
===========================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $ 45,370 $ 34,103 $ 29,675 $ 18,081 $ 12,448
Ratio of operating expenses to average
net assets ............................ 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 .................... (0.69)% (0.76)% (0.60)% (0.64)%(2)(3) (0.32)%*(2)(3)
Portfolio turnover rate ................. 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%.
* Annualized
+ Not annualized.
See Notes to Financial Statements.
- -------------------------------------------------------------------------------
10
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Report of Independent Accountants
===============================================================================
To the Shareholders and Board of Directors
of Value Line U.S. Multinational Company Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Value Line U.S. Multinational
Company Fund, Inc. (the "Fund") at March 31, 2000, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the four years
in the period then ended and for the period November 17, 1995 (commencement of
operations) through March 31, 1996, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at March 31,
2000 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
May 1, 2000
------------------------------------------------------------------------------
Federal Tax Notice (unaudited)
The amount of long term capital gain paid by the Fund for the fiscal year
ended March 31, 2000 was $749,85 4.
-----------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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 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.
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: a Money Market Portfolio
and the National Bond Portfolio.
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.
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 Greenwich Plaza, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
Francis C. Oakley
Marion N. Ruth
Frances T. Newton
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
Jack M. Houston
Assistant Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
International investments entail special risk considerations including currency,
liquidity, economic and political risks.
This 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).
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