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[front cover] October 31, 1999 AMERICAN CENTURY(reg.sm) Annual Report [graphic of runners] [graphic of person looking at computer screen] Ultra Vista [american century logo(reg.sm)] American Century [inside front cover] Y2K Testing Efforts Pay Dividends in Preparedness -------------------------------------------------------------------------------- Y2K, short for the year 2000, refers more specifically to the date change from December 31, 1999, to January 1, 2000. This date change is significant for computers because many were originally programmed to process dates with two-character years -- 99 instead of 1999. When the calendar rolls to 2000, this can create problems for computers programmed this way because they will read the date as "00," and may interpret it as 1900. Most companies have been working to reprogram their computer systems with four-digit years. Reprogramming is very labor-intensive and requires testing to ensure that there are no errors and that all lines of code were successfully changed. Recognizing the possible impact of the Y2K issue, our senior-level Steering Committee, programmers, business partners and Y2K team have been working diligently to make January 1, 2000, a non-event for American Century investors. Currently, all of our computer systems have been modified, tested and returned to production. We have an ongoing commitment to testing our systems with our vendors and business partners and within the industry throughout the rest of the year. In March and April of this year, we participated in the Security Industry Association's (SIA) industry-wide test and successfully processed transactions for dates up to and beyond 2000. American Century transactions with our partner firms were processed free of Y2K bugs. We also participated in the Market Data Test conducted by the SIA and Financial Information Forum in May. Again, the computer scripts were executed successfully with no Y2K-related errors. In addition to our testing schedule, our Y2K team has developed contingency plans. These plans are designed to minimize the impact on our investors and help us maintain operations in the event of any Y2K-related incidents. We will conduct practice drills of contingency scenarios during the rest of 1999 and refine those plans to respond quickly and effectively so that the date change is as seamless as possible for investors. We expect the year 2000 to be business as usual at American Century. Year 2000 Readiness Disclosure [left margin] ULTRA (TWCUX) ----------------------------------------- VISTA (TWCVX) ----------------------------------------- TURN TO THE INSIDE BACK COVER OF THIS REPORT TO SEE A LIST OF AMERICAN CENTURY FUNDS CLASSIFIED BY OBJECTIVE AND RISK. Tackling the Rollover Challenge -------------------------------------------------------------------------------- Changing jobs or retiring? The American Century Personalized Rollover Service(SM) provides individualized service that makes rolling over your employer-sponsored retirement plan easy and stress free. Our Rollover Expert Team will: * Give personal guidance on which options best meet your retirement needs by explaining the types of investments available through both our mutual funds and American Century Brokerage. * Assist you with the paperwork, helping to ensure it's completed right the first time. * Monitor retirement plan money as it rolls over from your employer-sponsored plan to the American Century Rollover IRA account. Call the Rollover Expert Team weekdays 7 a.m. to 7 p.m. (CT) at 1-888-345-2431, ext. 4232, or visit our Web site at www.americancentury.com. Our Message to You -------------------------------------------------------------------------------- [photo of James E. Stowers III and James E. Stowers, Jr.] James E. Stowers III, seated, with James E. Stowers, Jr. Growth-oriented investors--including those in Ultra and Vista--were well-rewarded during the 12 months ended October 31, 1999. It was no cakewalk, however--the period will be remembered as one of heightened stock market volatility, particularly during the last six months when the Federal Reserve twice raised interest rates. Nonetheless, several sectors of the economy, especially those connected to the Internet, displayed strong earnings growth, of which our funds took advantage. On the corporate front, we are constantly looking for ways to enhance our ability to generate investment returns and reduce costs associated with the management of our funds. One priority, for example, has been reducing the costs of buying and selling securities for our funds. Thus, we have been investing in companies that provide technology for electronic communications networks (ECNs). Today, more than one-third of our equity trades are executed over these "alternative" networks. Savings in this area directly affect the performance of your funds. We're also pleased to report that American Century's investor account statement is the first fund company statement to win the Communications Seal from DALBAR Inc., an independent financial services research firm. DALBAR commends us for meeting investors' needs with an attractive document that's easy to read and understand. Finally, in the spirit of our ongoing Year 2000 readiness disclosure, we've provided a complete update on our preparations for Y2K on the inside front cover of this report. As always, we appreciate your continued confidence in American Century. Sincerely, /s/James E. Stowers, Jr. James E. Stowers, Jr. Chairman of the Board and Founder /s/James E. Stowers III James E. Stowers III Vice Chairman of the Board and Chief Executive Officer [right margin] Table of Contents Report Highlights ....................................................... 2 Market Perspective ...................................................... 3 ULTRA Performance Information ................................................. 4 Management Q&A ...................................................... 5 Portfolio at a Glance ................................................... 5 Top Ten Holdings ........................................................ 6 Top Five Industries ..................................................... 6 Types of Investments .................................................... 7 Schedule of Investments ................................................. 8 VISTA Performance Information .................................................10 Management Q&A ...................................................... 11 Portfolio at a Glance ...................................................11 Top Ten Holdings ........................................................12 Top Five Industries .....................................................12 Types of Investments ....................................................13 Schedule of Investments .................................................14 FINANCIAL STATEMENTS Statements of Assets and Liabilities ..........................................................16 Statements of Operations ................................................17 Statements of Changes in Net Assets ........................................................18 Notes to Financial Statements ...........................................................19 Financial Highlights ....................................................22 Independent Auditors' Report ...............................................................28 OTHER INFORMATION Share Class and Retirement Account Information 29 Background Information Investment Philosophy and Policies 30 Comparative Indices 30 Portfolio Managers 30 Glossary 31 [end right margin] www.americancentury.com 1 Report Highlights -------------------------------------------------------------------------------- MARKET PERSPECTIVE * Even though the past year was marked by heightened stock market volatility, the period was rewarding for growth investors. The Dow Industrials reached a record high during the year. * Technology stocks were the big winners, particularly companies involved either directly or indirectly with what has become an economy within an economy, the Internet. The NASDAQ Composite, home to many high-tech firms, had spectacular results for the 12 months ended October 31, 1999. Ultimately, the period showed that market volatility is a two-way street, and doesn't always lead to negative returns. ULTRA * With growth stocks in favor, Ultra significantly outperformed the Standard & Poor's 500 Index. Technology stocks paced the market, and more than a third of Ultra's portfolio was devoted to technology-oriented firms in various fields. * Ultra was drawn to cable and media stocks during the period, particularly cable providers with high-capacity digital networks that can carry a large number of services in and out of the home. The fund also looked for results from investments in companies involved in various facets of wireless communications. * Ultra's investments in pharmaceutical stocks, accounting for almost 10% of the fund, were slowed by uncertainty surrounding Medicare's coverage for prescription drugs and increased earnings power in other sectors of the economy. VISTA * Vista's performance for the year far outdistanced that of its benchmark, the Russell 2500 Growth Index, thanks to the fund's significant investments in technology-oriented companies. In addition, Vista's 10 largest positions accounted for more than 40% of its assets, and a number of these holdings turned in strong results. * The fund's double-digit weighting in many types of semiconductor stocks received a boost as recovering global economies once again began buying computer chips. The strong results turned in by electrical equipment was paced by strong demand for wireless phones. Another strong performing industry, media, benefited from strong cable TV growth in Europe and other countries. * Vista also benefited from moving out of interest rate-sensitive banks, financial services companies, and electric utilities. These stocks declined as interest rates climbed in the first three quarters of 1999. [left margin] ULTRA(1) (TWCUX) TOTAL RETURNS: AS OF 10/31/99 6 Months 6.30%(2) 1 Year 37.94% INCEPTION DATE: 11/2/81 NET ASSETS: $36.2 billion(3) VISTA(1) (TWCVX) TOTAL RETURNS: AS OF 10/31/99 6 Months 34.94%(2) 1 Year 66.24% INCEPTION DATE: 11/25/83 NET ASSETS: $1.2 billion(3) (1) Investor Class. (2) Not annualized. (3) Includes Investor, Advisor, and Institutional classes. Investment terms are defined in the Glossary on pages 31-32. 2 1-800-345-2021 Market Perspective from James E. Stowers III -------------------------------------------------------------------------------- [photo of James E. Stowers III] James E. Stowers III, Chief Executive Officer of American Century THE YEAR IN BRIEF This has been a year of sharp contrasts. Consider the climate in which stocks began our fiscal year, and the atmosphere in which they ended it. In October 1998, we were coming off a substantial downturn, which saw the S&P 500 drop 18% in just over 80 days. The Asian financial crises were with us, and the financial markets had been shaken by the collapse of a major U.S. hedge fund. Credit the Federal Reserve with quickly stepping in the fall of 1998 and lowering interest rates. Stocks began to recover--to the point where the Dow Jones Industrials went beyond the 10,000 level for the first time ever and closed above 11,000 a month later. For the first half of our fiscal year, a handful of large growth stocks led the market. In April, long-neglected value stocks and those of smaller companies suddenly rallied amid signs of economic recovery in Asia. Unfortunately, their performance run ended only a few weeks later. When the Federal Reserve reversed course and raised rates in July and August, the market retreated. But inflation remained dormant--despite the lowest unemployment rate in 30 years--corporate earnings strengthened, and stock prices rallied again in late October. A GREAT YEAR FOR GROWTH The period was rewarding for growth investors, particularly for those focused on technology, like many of our portfolios. The Internet economy--as measured by equipment and software spending--grew by almost 70% over the last 12 months. "Technology" once stood for microchips and computers. Today it refers to a broad spectrum of companies involved in endeavors as diverse as electronics, telecommunications, cable TV and media, software, and medical products. The growth enjoyed by many high-tech companies was reflected in the performance of the NASDAQ Composite, where many such firms are represented. NASDAQ gained a spectacular 67.46% during the 12 months ended October 31, 1999. Unfortunately, value investors had a relatively difficult time. The S&P 500/ BARRA Growth Index was up 31.29% for the 12 months, versus a 19.01% gain for the S&P 500/BARRA Value Index. A FINAL THOUGHT The last 12 months saw heightened stock market volatility as earnings- conscious investors quickly rewarded companies that exceeded expectations and swiftly punished those that fell short. Volatility can be unnerving, but it doesn't always lead to negative returns, as our results this year demonstrate. Ultimately, fiscal 1999 illustrates why we try to remain fully invested. Market upturns tend to be sudden and powerful. We want investors in position to take full advantage of "good" volatility. [right margin] "ULTIMATELY, FISCAL 1999 ILLUSTRATES WHY WE TRY TO REMAIN FULLY INVESTED. MARKET UPTURNS TEND TO BE SUDDEN AND POWERFUL. WE WANT INVESTORS IN POSITION TO TAKE FULL ADVANTAGE OF 'GOOD' VOLATILITY." MARKET RETURNS FOR THE YEAR ENDED OCTOBER 31, 1999 S&P 500 25.67% S&P MIDCAP 400 21.07% RUSSELL 2000 14.87% Source: Lipper Inc. These indices represent the performance of large-, medium-, and small-capitalization stocks. MARKET PERFORMANCE (GROWTH OF $1.00) FOR THE YEAR ENDED OCTOBER 31, 1999 [data shown in line chart] Date S&P 500 S&P Mid-Cap 400 Russell 2000 10/31/1998 $1.00 $1.00 $1.00 11/30/1998 $1.06 $1.05 $1.05 12/31/1998 $1.12 $1.18 $1.12 1/31/1999 $1.17 $1.13 $1.13 2/28/1999 $1.13 $1.07 $1.04 3/31/1999 $1.18 $1.10 $1.06 4/30/1999 $1.22 $1.19 $1.15 5/31/1999 $1.19 $1.19 $1.17 6/30/1999 $1.26 $1.26 $1.22 7/31/1999 $1.22 $1.23 $1.19 8/31/1999 $1.22 $1.19 $1.14 9/30/1999 $1.18 $1.15 $1.14 10/31/1999 $1.26 $1.21 $1.15 Value on 10/31/99 S&P 500 $1.26 S&P MidCap 400 $1.21 Russell 2000 $1.15 [end right margin] www.americancentury.com 3 Ultra--Performance -------------------------------------------------------------------------------- TOTAL RETURNS AS OF OCTOBER 31, 1999 INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS (INCEPTION 11/2/81) (INCEPTION 10/2/96) (INCEPTION 11/14/96) ULTRA S&P 500 ULTRA S&P 500 ULTRA S&P 500 6 MONTHS(1) 6.30% 2.74% 6.19% 2.74% 6.39% 2.74% 1 YEAR 37.94% 25.67% 37.63% 25.67% 38.21% 25.67% ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 24.89% 26.52% 24.59% 26.52% -- -- 5 YEARS 24.19% 26.02% -- -- -- -- 10 YEARS 22.12% 17.82% -- -- -- -- LIFE OF FUND 18.86% 18.11% 23.84% 26.87%(2) 23.75% 25.07% (1) Returns for periods less than one year are not annualized. (2) Since 9/30/96, the date nearest the class's inception for which data are available. See pages 29-31 for information about share classes, the S&P 500 Index, and returns. GROWTH OF $10,000 OVER 10 YEARS Value on 10/31/99 Ultra $73,714 S&P 500 $51,530 $10,000 investment made 10/31/89 [data shown in mountain chart] Ultra S&P 500 Date Value Value 10/31/1989 $10,000 $10,000 10/31/1990 $9,098 $9,252 10/31/1991 $18,334 $12,351 10/31/1992 $18,252 $13,582 10/31/1993 $25,512 $15,611 10/31/1994 $24,982 $16,215 10/31/1995 $34,197 $20,502 10/31/1996 $37,887 $25,443 10/31/1997 $45,446 $33,613 10/31/1998 $53,449 $41,004 10/31/1999 $73,714 $51,530 The graph at left shows the growth of a $10,000 investment in the fund over 10 years, while the graph below shows the fund's year-by-year performance. The S&P 500 Index is provided for comparison in each graph. Ultra's total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the S&P 500 Index do not. The graphs are based on Investor Class shares only; performance for other classes will vary due to differences in fee structures (see the Total Returns table above). Past performance does not guarantee future results. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. ONE-YEAR RETURNS OVER 10 YEARS (PERIODS ENDING OCTOBER 31) [data shown in bar chart] Ultra S&P 500 Date Return Return 10/31/1990 -9.02% -7.52% 10/31/1991 101.51% 33.50% 10/31/1992 -0.45% 9.93% 10/31/1993 39.78% 14.89% 10/31/1994 -2.08% 3.87% 10/31/1995 36.89% 26.36% 10/31/1996 10.79% 24.03% 10/31/1997 19.95% 32.10% 10/31/1998 17.61% 21.96% 10/31/1999 37.94% 25.67% 4 1-800-345-2021 Ultra--Q&A -------------------------------------------------------------------------------- [photo of John Sykora, Jim Stowers III, and Bruce Wimberly] An interview with John Sykora, Jim Stowers III, and Bruce Wimberly, portfolio managers on the Ultra investment team. HOW DID ULTRA PERFORM FOR THE 12 MONTHS ENDED OCTOBER 31, 1999? Ultra had a good year. The fund gained 37.94%, well above the 25.67% increase posted by its benchmark, the Standard & Poor's 500 Index.* We're pleased with this short-term experience, but our overarching goal is to provide you with strong performance over longer periods of time. Those investors who have been in Ultra for the last five years have received an average annual return on their investment of 24.19%. WHAT HELPED YOU ACHIEVE THESE RETURNS? To begin with, Ultra's investment approach centers on owning successful companies--firms experiencing strong growth in their earnings and revenues. As part of our strategy, we concentrate the portfolio in those companies we believe have the best chances to sustain their growth going forward. When we closed our October books, Ultra's 10 largest holdings accounted for 40% of the fund. Growth stocks led the stock market, and within that realm, technology stocks were the strongest performers--particularly companies involved in the Internet. The average technology stock in the S&P 500 was up 66% for the year. Ultra carried a large weighting of technology firms into the period, a broad group of companies accounting for about a third of the fund. Put simply, we were in a lot of the right stocks at the right time. WHICH COMPANIES OR SECTORS CONTRIBUTED THE MOST TO PERFORMANCE? Several technology themes worked well, starting with the Internet. We believe that as bandwidth inevitably increases, the movement of economic activity to the "Net" will accelerate. Finding those companies that can successfully transition their products profitably to the virtual economy will be one of many challenges for investors in the future. As with many new industries, some of today's newly minted "dot coms" will go bust or be consolidated. The key to future investment success will be identifying those companies with sustainable business models. We are not interested in today's fad but rather tomorrow's winner. In this light we believe America Online (AOL) has positioned itself well. AOL has been a major investment in Ultra for several years and accounts for slightly more than 5% of the fund. We think AOL is the nation's best online service, and that it's run by a talented, insightful management team. Moreover, it is profitable today, with a business model that makes sense. EMC Corporation, another Internet-related company that provides hardware and software for data storage, might not be as familiar to you as AOL. Yet, it certainly has benefited from the explosion of data traveling the Internet. We believe that electronic commerce will place enormous demands on electronic storage. * All fund returns referenced in this interview are for Investor Class shares. [right margin] "THOSE INVESTORS WHO HAVE BEEN IN ULTRA FOR THE LAST FIVE YEARS HAVE RECEIVED AN AVERAGE ANNUAL RETURN ON THEIR INVESTMENT OF 24.19%." PORTFOLIO AT A GLANCE 10/31/99 10/31/98 NO. OF COMPANIES 68 177 MEDIAN P/E RATIO 43.7 32.0 MEDIAN MARKET $65.2 $17.4 CAPITALIZATION BILLION BILLION PORTFOLIO TURNOVER 42% 128% EXPENSE RATIO (FOR INVESTOR CLASS) 1.00% 1.00% Investment terms are defined in the Glossary on pages 31-32. [end right margin] www.americancentury.com 5 Ultra--Q&A -------------------------------------------------------------------------------- (Continued) WHAT OTHER TECHNOLOGY THEMES FARED WELL FOR YOU? We continue to like the growth rates in wireless communications and the investment potential in this part of the telecommunications market. The demand is strong and should continue for the next few years. We believe the growing trend for hand-held devices in whatever form they come in, be it cell phones or palm computers, will continue to accelerate at a rapid pace. Ultra's portfolio is positioned to benefit from those trends. WHAT ARE SOME OF YOUR HOLDINGS IN THE WIRELESS ARENA? We own one of the emerging leaders in wireless technology, QUALCOMM. QUALCOMM owns the rights and patents to CDMA technology which it develops itself and licenses out to other providers. CDMA enables wireless networks to carry more data. In terms of manufacturers, we believe Nokia is well-positioned to maintain its leadership in both handsets and infrastructure. Nokia has been one of the best companies at staying ahead of the wireless technology curve, putting out increasingly smarter portable phones. HOW ABOUT WIRELESS SERVICE PROVIDERS? As for wireless service providers, we have benefited from Vodafone's worldwide "footprint." If the name isn't familiar to you, Vodafone is the leading wireless company in Britain, with a large wireless presence in Europe and parts of Asia. It now has a nationwide wireless service in the United States, thanks to its purchase of Airtouch Communications earlier this year. Another company that deserves mention in this space is MCI WorldCom. As the nation's second-largest phone company, WorldCom provides voice, data, Internet, and international communications. It's in the process of acquiring Sprint, which has built the only all-digital wireless network in the United States. CABLE AND MEDIA STOCKS ALSO OCCUPY A SIGNIFICANT PORTION OF YOUR PORTFOLIO, ALMOST 10%. WHAT DREW YOU TO THAT AREA? Cable firms have been big contributors to Ultra's results over the past few years--this is an exciting area of the economy that's experiencing solid earnings growth. Not only is the cable industry booming--subscriptions are climbing and there is strong demand for value-added services--but the leading cable firms are preparing their wideband networks to compete in the telecommunications marketplace, carrying voice, data, and video to and from the home. In addition to the media conglomerate Time Warner, one of our larger media investments is Liberty Media, a spin-out from the merger last year between AT&T and the cable giant Tele-Communications, Inc. (TCI). Liberty is actually a collection of media-oriented assets that were under the TCI umbrella, including cable channels such as BET Black Entertainment, the Discovery Channel, Court TV, and Animal Planet. Liberty also owns stakes in USA Network, TV Guide, and Time Warner. In a sense, this single investment is giving us exposure to a variety of areas we like in the cable industry. [left margin] TOP TEN HOLDINGS % OF FUND INVESTMENTS AS OF AS OF 10/31/99 4/30/99 MICROSOFT CORP. 6.1% 5.3% MCI WORLDCOM, INC. 5.7% 5.1% AMERICA ONLINE INC. 5.2% 4.9% AMERICAN INTERNATIONAL GROUP, INC. 5.1% 4.7% GENERAL ELECTRIC CO. (U.S.) 4.7% 3.4% TIME WARNER INC. 3.8% 4.3% EMC CORP. (MASS.) 3.5% 2.5% QUALCOMM INC. 3.3% 0.2% AT&T CORP. - LIBERTY MEDIA GROUP CL A 2.9% 2.5% PFIZER, INC. 2.6% 2.6% TOP FIVE INDUSTRIES % OF FUND INVESTMENTS AS OF AS OF 10/31/99 4/30/99 MEDIA 9.8% 10.7% DRUGS 9.6% 10.1% COMPUTER SOFTWARE 9.5% 7.8% FINANCIAL SERVICES 8.6% 7.7% WIRELESS TELECOMMUNICATIONS 6.8% 2.1% [end left margin] 6 1-800-345-2021 Ultra--Q&A -------------------------------------------------------------------------------- (Continued) SIX MONTHS AGO, YOU DISCUSSED THE SLUGGISH PERFORMANCE OF YOUR DOUBLE-DIGIT WEIGHTING IN PHARMACEUTICALS. ULTRA STILL HAS A LARGE COMPLEMENT OF DRUG STOCKS. HAVE THINGS IMPROVED FOR THIS SECTOR? We've stayed with these stocks because their fundamentals remain solid. What has changed is the way investors are viewing them. Investor sentiment has turned against drug stocks due to uncertainty surrounding Medicare coverage for prescription drugs and increased earnings power in other sectors of the economy. Overall, Ultra's pharmaceutical holdings continue to produce strong revenue and earnings growth. These companies have made significant investments in research and development over the last few years, which should improve future earnings. HOW ABOUT YOUR FINANCIAL SERVICES COMPANIES? WEREN'T THEY UNDERPERFORMERS DURING THE YEAR AS WELL? Rising interest rates over the summer caused problems for financial services companies in general, and banks in particular. Investors were concerned that rising rates would create credit quality problems and diminish overall loan demand. One of our favorite names in financial services remains American International Group, which is among the premier international insurers in the world. The company is expected to benefit from the economic recovery now underway in Asia. We're being very selective when it comes to financial services companies, especially banks. The Internet is rapidly changing the face of this industry. Trading, brokerage, and banking services are available online--at reduced prices. The passage of the banking reform bill will clearly lead to increased industry consolidation. We think selectivity will be extremely important in this new environment. THE NUMBER OF COMPANIES IN ULTRA DROPPED OVER THE PERIOD. WHAT LED TO THE DECREASE? In general, we moved more money into holdings that we felt had the best chance to sustain their accelerating growth moving forward. For the most part, these stocks represent the fund's 15 largest positions, which account for more than half of Ultra's investments. In addition, we closed out a number of smaller positions that we felt were no longer appropriate for the fund. WHAT'S YOUR STRATEGY AND OUTLOOK FOR ULTRA MOVING FORWARD? The mantra here is that "money follows earnings," meaning that over time, investors tend to reward successful companies. We try to put the odds further in our favor by owning firms whose top and bottom lines are not just growing, but growing at an accelerating pace, faster this quarter than the previous one. Whenever we can, we look to invest money in successful companies that are also "pure plays." Instead of trying to be everything to everyone, these firms concentrate on doing a few things very well. Such companies tend to be leaders in their respective fields, with focused management and growing market share. We're confident that this strategy will continue to reward investors over longer periods of time. [right margin] "WE TRY TO PUT THE ODDS FURTHER IN OUR FAVOR BY OWNING FIRMS WHOSE TOP AND BOTTOM LINES ARE NOT JUST GROWING, BUT GROWING AT AN ACCELERATING PACE, FASTER THIS QUARTER THAN THE PREVIOUS ONE." TYPES OF INVESTMENTS IN THE PORTFOLIO AS OF OCTOBER 31, 1999 [data shown in pie chart] Temporary Cash Investments 0.6% Foreign Stocks 3.3% U.S. Stocks 96.1% AS OF APRIL 30, 1999 [data shown in pie chart] Temporary Cash Investments 1.3% Foreign Stocks 0.4% Foreign & U.S. Preferred 0.5% U.S. Stocks 97.8% www.americancentury.com 7 Ultra--Schedule of Investments -------------------------------------------------------------------------------- This schedule lists all investments owned by the fund, as well as each security's market value, as of the last day of the reporting period. The securities are grouped by asset class (such as common stocks, corporate bonds, temporary cash investments, as applicable), and some asset classes are further broken down by industry or country. NOTE: For securities denominated in foreign currencies, the market value is translated into U.S. dollars based on exchange rates as of the last day of the reporting period. OCTOBER 31, 1999 Shares ($ in Thousands) Value -------------------------------------------------------------------------------- COMMON STOCKS -- 99.4% BANKS -- 2.9% 9,590,000 Bank of New York Co., Inc. (The) $ 401,581 1,925,000 Chase Manhattan Corp. 168,197 9,127,500 Citigroup Inc. 494,026 --------------- 1,063,804 --------------- CLOTHING STORES(1) 170,000 Gap, Inc. (The) 6,311 --------------- COMPUTER HARDWARE & BUSINESS MACHINES -- 6.1% 18,653,400 Dell Computer Corp.(2) 747,885 17,500,000 EMC Corp. (Mass.)(2) 1,277,500 1,540,000 Sun Microsystems, Inc.(2) 162,903 230,000 Taiwan Semiconductor Manufacturing Co. Ltd. ADR(2) 7,964 --------------- 2,196,252 --------------- COMPUTER SOFTWARE -- 9.5% 1,235,000 BMC Software, Inc.(2) 79,233 9,483,200 Compuware Corp.(2) 263,455 5,201,200 International Business Machines Corp. 511,668 23,831,300 Microsoft Corp.(2) 2,205,885 8,141,300 Oracle Corp.(2) 387,475 --------------- 3,447,716 --------------- CONSUMER DURABLES -- 0.1% 225,000 Sony Corp. ORD 35,119 --------------- DEPARTMENT STORES -- 3.2% 2,214,000 Costco Companies, Inc.(2) 177,743 2,444,500 Dayton Hudson Corp. 157,976 14,860,600 Wal-Mart Stores, Inc. 842,410 --------------- 1,178,129 --------------- DRUGS -- 9.6% 30,000 Amgen Inc.(2) 2,392 9,245,900 Bristol-Myers Squibb Co. 710,201 3,452,000 Lilly (Eli) & Co. 237,756 7,560,800 Merck & Co., Inc. 601,556 23,826,300 Pfizer, Inc. 941,139 413,500 Pharmacia & Upjohn Inc. 22,303 7,408,400 Schering-Plough Corp. 366,716 7,234,900 Warner-Lambert Co. 577,435 --------------- 3,459,498 --------------- Shares ($ in Thousands) Value ------------------------------------------------------------------------------- - ELECTRICAL EQUIPMENT -- 4.5% 10,317,800 Cisco Systems Inc.(2) $ 763,840 15,000 General Instrument Corp.(2) 807 908,300 JDS Uniphase Corp.(2) 151,544 4,004,500 Lucent Technologies Inc. 257,289 720,000 Motorola, Inc. 70,155 2,228,000 Nokia Corp. Cl A ADR 257,473 1,065,000 Nortel Networks Corp. 65,963 636,000 Solectron Corp.(2) 47,859 --------------- 1,614,930 --------------- ENTERTAINMENT -- 1.4% 196,000 Viacom, Inc. Cl A(2) 8,930 11,048,000 Viacom, Inc. Cl B(2) 494,398 --------------- 503,328 --------------- FINANCIAL SERVICES -- 8.6% 1,999,200 American Express Co. 307,877 9,336,400 Fannie Mae 660,550 7,950,500 Federal Home Loan Mortgage Corporation 429,824 12,577,500 General Electric Co. (U.S.) 1,705,037 --------------- 3,103,288 --------------- FOOD & BEVERAGE -- 2.0% 9,251,700 Coca-Cola Company (The) 545,850 7,045,000 Coca-Cola Enterprises, Inc. 180,088 --------------- 725,938 --------------- GAS & WATER UTILITIES -- 1.2% 10,686,000 Enron Corp. 426,772 --------------- HOME PRODUCTS -- 1.8% 2,488,000 Colgate-Palmolive Co. 150,524 4,843,200 Procter & Gamble Co. (The) 507,931 --------------- 658,455 --------------- INDUSTRIAL PARTS -- 2.6% 23,409,120 Tyco International Ltd. 934,902 --------------- INFORMATION SERVICES -- 0.8% 3,525,000 Gemstar International Group Ltd.(2) 305,794 --------------- INTERNET -- 5.4% 14,412,600 America Online Inc.(2) 1,869,134 582,900 Yahoo! Inc.(2) 104,412 --------------- 1,973,546 --------------- MEDIA -- 9.8% 26,704,400 AT&T Corp. -- Liberty Media Group Cl A(2) 1,059,831 8 1-800-345-2021 See Notes to Financial Statements Ultra--Schedule of Investments -------------------------------------------------------------------------------- (Continued) OCTOBER 31, 1999 Shares ($ in Thousands) Value -------------------------------------------------------------------------------- MEDIA (continued) 5,378,160 Clear Channel Communications, Inc.(2) $ 432,270 16,100,000 Comcast Corp. Cl A 677,709 19,722,200 Time Warner Inc. 1,374,391 ---------------- 3,544,201 ---------------- MEDICAL PRODUCTS & SUPPLIES -- 4.0% 5,771,100 Guidant Corp. 284,948 5,350,100 Johnson & Johnson 560,423 17,273,400 Medtronic, Inc. 598,091 ---------------- 1,443,462 ---------------- PROPERTY AND CASUALTY INSURANCE -- 6.2% 18,044,781 American International Group, Inc. 1,857,485 5,816 Berkshire Hathaway Inc. Cl A(2) 371,642 ---------------- 2,229,127 ---------------- SEMICONDUCTOR -- 5.7% 4,294,700 Applied Materials, Inc.(2) 385,852 8,877,000 Intel Corp. 687,135 1,998,600 Linear Technology Corp. 139,715 1,985,000 Maxim Integrated Products, Inc.(2) 156,629 2,553,600 Micron Technology, Inc.(2) 182,104 5,045,400 Texas Instruments Inc. 452,825 805,000 Xilinx, Inc.(2) 63,268 ---------------- 2,067,528 ---------------- SPECIALTY STORES -- 1.3% 6,266,000 Home Depot, Inc. 473,083 ---------------- TELEPHONE -- 5.9% 2,340,000 Global Crossing Holdings Ltd.(2) 81,096 23,863,374 MCI WorldCom, Inc.(2) 2,047,030 ---------------- 2,128,126 ---------------- WIRELESS TELECOMMUNICATIONS -- 6.8% 5,370,300 QUALCOMM Inc.(2) 1,196,066 4,304,300 Sprint PCS(2) 356,988 17,177,500 Vodafone Group plc ADR 823,446 17,679,060 Vodafone Group plc ORD 82,247 ---------------- 2,458,747 ---------------- TOTAL COMMON STOCKS 35,978,056 (Cost $21,229,624) ---------------- Principal Amount ($ in Thousands) Value ------------------------------------------------------------------------------- - TEMPORARY CASH INVESTMENTS -- 0.6% $11,767 FNMA Discount Notes, 5.46%, 1/18/00(3) $ 11,628 Repurchase Agreement, Goldman Sachs & Co., Inc., (U.S. Treasury obligations), in a joint trading account at 5.13%, dated 10/29/99, due 11/1/99 (Delivery value $201,386) 201,300 Repurchase Agreement, Morgan Stanley Group, Inc., (U.S. Treasury obligations), in a joint trading account at 5.16%, dated 10/29/99, due 11/1/99 (Delivery value $15,507) 15,500 ---------------- TOTAL TEMPORARY CASH INVESTMENTS 228,428 (Cost $228,428) ---------------- TOTAL INVESTMENT SECURITIES -- 100.0% $36,206,484 ================ (Cost $21,458,052) FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS ($ in Thousands) Contracts Settlement Unrealized to Sell Date Value Loss ----------------------------------------------------------------------------- 108,162,361 EURO 11/30/99 $114,265 $(100) ======================================= (Value on Settlement Date $114,165) Forward foreign currency exchange contracts are used by the portfolio management team in an effort to protect the fund's foreign investments against declines in foreign currencies (also known as hedging). The contracts are called "forward" because they allow the fund to exchange a foreign currency for U.S. dollars on a specific date in the future--and at a prearranged exchange rate. NOTES TO SCHEDULE OF INVESTMENTS ADR = American Depositary Receipt ORD = Foreign Ordinary Share FNMA = Federal National Mortgage Association (1) Industry is less than 0.05% of total investment securities. (2) Non-income producing. (3) Rate disclosed is the yield to maturity at purchase. See Notes to Financial Statements www.americancentury.com 9 Vista--Performance -------------------------------------------------------------------------------- TOTAL RETURNS AS OF OCTOBER 31, 1999 INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS (INCEPTION 11/25/83) (INCEPTION 10/2/96) (INCEPTION 11/14/96) RUSSELL 2500 RUSSELL 2500 RUSSELL 2500 VISTA GROWTH INDEX VISTA GROWTH INDEX VISTA GROWTH INDEX 6 MONTHS(1) 34.94% 9.51% 34.89% 9.51% 34.87% 9.51% 1 YEAR 66.24% 37.39% 65.87% 37.39% 66.42% 37.39% ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.31% 12.98% 4.12% 12.98% -- -- 5 YEARS 11.86% 15.71% -- -- -- -- 10 YEARS 11.35% 13.24% -- -- -- -- LIFE OF FUND 12.08% N/A(2) 1.54% 11.46%(3) 4.48% 11.98%(4) (1) Returns for periods less than one year are not annualized. (2) Benchmark began 1/1/86. (3) Since 9/30/96, the date nearest the class's inception for which data are available. (4) Since 11/30/96, the date nearest the class's inception for which data are available. See pages 29-31 for information about share classes, the Russell 2500 Growth Index, and returns. GROWTH OF $10,000 OVER 10 YEARS Value as of 10/31/99 Russell 2500 Growth $34,671 Vista $29,277 $10,000 investment made 10/31/89 [data shown in mountain chart] Vista Russell 2500 Growth Date Value Value 10/31/1989 $10,000 $10,000 10/31/1990 $7,782 $7,735 10/31/1991 $13,049 $12,944 10/31/1992 $13,644 $13,234 10/31/1993 $16,062 $16,407 10/31/1994 $16,730 $16,712 10/31/1995 $24,124 $20,633 10/31/1996 $25,803 $24,040 10/31/1997 $25,878 $29,292 10/31/1998 $17,613 $25,235 10/31/1999 $29,277 $34,671 The graph at left shows the growth of a $10,000 investment in the fund over 10 years, while the graph below shows the fund's year-by-year performance. The Russell 2500 Growth Index is provided for comparison in each graph. Vista's total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the Russell 2500 Growth Index do not. The graphs are based on Investor Class shares only; performance for other classes will vary due to differences in fee structures (see the Total Returns table above). Past performance does not guarantee future results. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. ONE-YEAR RETURNS OVER 10 YEARS (PERIODS ENDING OCTOBER 31) [data shown in bar chart] Russell 2500 Vista Growth Index Date Return Return 10/31/1990 -22.17% -22.65% 10/31/1991 67.67% 67.34% 10/31/1992 4.55% 2.24% 10/31/1993 17.72% 23.98% 10/31/1994 4.16% 1.86% 10/31/1995 44.20% 23.46% 10/31/1996 6.96% 16.51% 10/31/1997 0.29% 21.85% 10/31/1998 -31.94% -13.85% 10/31/1999 66.24% 37.39% 10 1-800-345-2021 Vista--Q&A -------------------------------------------------------------------------------- [photo of Arnie Douville and Glenn Fogle] An interview with Arnie Douville and Glenn Fogle, portfolio managers on the Vista investment team. HOW DID VISTA PERFORM DURING THE FISCAL YEAR ENDED OCTOBER 31? Vista's outstanding 66.24% return was almost two times greater than that of its benchmark, the Russell 2500 Growth Index, which gained 37.39%.* That performance placed Vista in the 27th percentile of its peer group (62 out of 230 mid-cap growth funds) for the one-year period, according to Lipper Inc.** Vista's strong gain this year was especially satisfying, given its underperformance during the previous two years. In April 1998, we outlined the steps we were taking to improve the fund's results. Chief among them were strengthening the portfolio team, developing improved investment tools, and more effectively implementing our earnings-based investment approach. Vista's returns relative to its benchmark began to improve shortly after these changes were fully implemented, and have continued up through the writing of this report. We realize our shareholders endured a trying period, and we are grateful for your patience. WHAT FACTORS HELPED VISTA POST SUCH A LARGE GAIN? Vista was rewarded by having concentrated investments in several areas within the technology sector. This part of the economy performed the best over the period and was led by companies that are either directly or indirectly involved with the Internet, particularly companies that provide products for it. Medium-sized, technology-oriented firms targeted by Vista experienced a sharp turnaround in 1999, after being punished in the past two years by the economic turmoil in Asia and other overseas markets. Finally, we profited from having some of Vista's largest holdings turn in good results. Maintaining large positions in successful companies is a cornerstone of our earnings-based investment approach. As of October 31, Vista's 10 largest holdings represented nearly 43% of assets and five of its best-performing stocks were among them. ELECTRICAL EQUIPMENT AND RELATED COMPANIES COMPRISE ALMOST 40% OF THE PORTFOLIO. CAN YOU TELL US MORE ABOUT THE INDUSTRY AND WHY IT IS ATTRACTIVE? Companies that make semiconductors--computer chips--saw their profits climb sharply as recovering global economies accelerated demand for electronic devices. Semiconductors are used primarily to enable many functions in computers and consumer electronics. However, telecommunications is one of the fastest-growing uses for these chips. This is how our largest holding, JDS Uniphase, which * All fund returns referenced in this interview are for Investor Class shares. ** Vista ranked 73 out of 84 for the five-year period, and 32 out of 34 for the 10-year period according to Lipper. Lipper rankings are based on average annual total returns. [right margin] "MEDIUM-SIZED, TECHNOLOGY-ORIENTED FIRMS TARGETED BY VISTA EXPERIENCED A SHARP TURNAROUND IN 1999, AFTER BEING PUNISHED IN THE PAST TWO YEARS BY THE ECONOMIC TURMOIL IN ASIA AND OTHER OVERSEAS MARKETS." PORTFOLIO AT A GLANCE 10/31/99 10/31/98 NO. OF COMPANIES 63 81 MEDIAN P/E RATIO 24.9 28.4 MEDIAN MARKET $3.93 $3.24 CAPITALIZATION BILLION BILLION PORTFOLIO TURNOVER 187% 229% EXPENSE RATIO (FOR INVESTOR CLASS) 1.00% 1.00% Investment terms are defined in the Glossary on pages 31-32. [end right margin] www.americancentury.com 11 Vista--Q&A -------------------------------------------------------------------------------- (Continued) represents almost 10% of the fund, is making an impact. JDS Uniphase is the leading independent producer of components that enable communications across optical networks. For example, communication companies use their components to increase fiber-optic cable lines' capacity to handle the immense traffic on the Internet. As Internet and wireless phone use grows exponentially, service providers must add lines and upgrade existing ones. In fact, demand for JDS Uniphase's patented technologies from large telecommunications companies like Lucent Technologies is so great that JDS Uniphase is expanding its production capacity three-fold. We've owned this company since 1997; its shares gained 575% this year. With a nearly 20% weighting in semiconductors, we're invested in a wide range of chipmakers that sell their products to a diverse set of industries. For example, Conexant Systems' chips are used in modems, network access, and wireless applications, while Micron Technology sells semiconductor memory components (or DRAMs) for PCs and data storage devices. After spot memory chip prices temporarily fell last spring, we significantly added to our position in Boise, Idaho-based Micron, the world's second-largest DRAM builder. Micron estimates that next year the worldwide demand for memory chips may grow by more than 80%. That approaching demand imbalance is already boosting memory chip prices. Another related group of companies in our portfolio sells equipment used in manufacturing semiconductors. As chipmakers race to meet growing demand for their current offerings and also develop new, faster, and cheaper semiconductors, they must upgrade or replace equipment that etches millions of electronic circuits on silicon and other materials. That's why the fund got a boost from Lam Research Corp. and ASM Lithography, whose machines enable chipmakers to make smaller chips with more circuits at a lower cost per unit. While Vista may appear to have a large exposure to a single industry, the reality is that the fortunes of semiconductor companies are no longer tied almost exclusively to computers, as they once were. They now serve end markets as diverse as communications, health care, transportation, and entertainment. WHICH OTHER STOCKS CONTRIBUTED TO PERFORMANCE? Our third-largest industry weighting was in wireless telecommunications, accounting for another 12.8% of the fund. Within this group, we are excited about QUALCOMM, a San Diego-based builder of mobile phones and inventor of the technology that eventually may be used in every wireless phone worldwide. The company's crown jewels are the patents it holds on code-division-multiple-access (CDMA) technology, which enables a greater number of cell phone conversations and video images to travel on the same frequencies by compressing data transmissions. The technology is truly battle-tested; it was originally developed by the government for top-secret communications because it's impervious to jamming. Just as Microsoft receives licensing revenue for every PC equipped with its software operating system, QUALCOMM earns a royalty on the sale of every cell phone using its technology. With such dominance in one of the fastest-growing industries, it's possible to understand [left margin] TOP TEN HOLDINGS % OF FUND INVESTMENTS AS OF AS OF 10/31/99 4/30/99 JDS UNIPHASE CORP. 9.7% 5.1%(1) QUALCOMM INC. 6.9% 4.3% UNITEDGLOBALCOM CL A 4.3% 2.5% MICRON TECHNOLOGY, INC. 3.7% 0.9% CONEXANT SYSTEMS, INC. 3.3% - LAM RESEARCH CORP. 3.3% - ECHOSTAR COMMUNICATIONS CORP. CL A 3.1% 2.6% CYPRESS SEMICONDUCTOR CORP. 3.0% - VOICESTREAM WIRELESS CORP. 2.8% - TERADYNE, INC. 2.7% 1.8% TOP FIVE INDUSTRIES % OF FUND INVESTMENTS AS OF AS OF 10/31/99 4/30/99 SEMICONDUCTOR 19.4% 5.7% ELECTRICAL EQUIPMENT 19.4% 16.1% WIRELESS TELECOMMUNICATIONS 12.8% 6.8% MEDIA 8.4% 6.2% DRUGS 6.0% 3.4% (1) Uniphase Corp. acquired JDS Fitel Inc. on 7/6/99. Surviving name is JDS Uniphase Corp. Percentage represents Uniphase Corp. shares owned by the fund. [end left margin] 12 1-800-345-2021 Vista--Q&A -------------------------------------------------------------------------------- (Continued) why the stock went up 702% during the year and grew to account for 7% of the fund's investments. In media, another fast-growing industry, we purchased UnitedGlobalCom, a Denver-based cable-TV operator that has 4.8 million subscribers in 20 European, Asian, and Latin American countries. The company is focusing its efforts overseas because cable TV is still in its infancy in many countries, and as a consequence, there are greater growth opportunities abroad. In Europe, for example, UnitedGlobalCom is offering phone service and Internet access over its network. The bundled service is extremely desirable to Europeans who want to surf the Internet because they can avoid the per-minute fees charged by local phone companies. WHICH SECTORS OR STOCKS DAMPENED PERFORMANCE? Our largest disappointment was Quintiles Transnational, a provider of drug testing and related services to the pharmaceutical industry. The company had been a solid performer since its 1994 IPO, but the stock declined sharply after Quintiles lost a large drug-development contract. Although the company has other contracts in the pipeline, the market recognized that its revenue stream would slow at least temporarily. We were reducing our position in the stock when the revenue shortfall was announced, and eliminated it entirely when we heard the bad news. WHAT CHANGES DID YOU MAKE TO THE PORTFOLIO IN THE LAST SIX MONTHS? As interest rates reached bottom in late 1998, we reallocated more than 20% of the portfolio from interest rate-sensitive electric utilities, banking, and financial industries to faster-growing technology companies. The decision was timely because while technology surged, interest rate-sensitive sectors suffered as rates climbed in 1999. Another significant change was reducing our health care sector weighting by half. We primarily cut stocks of medical device builders such as Steris--the world's largest provider of infection-prevention systems--and pharmaceutical companies such as Mylan Laboratories as their growth slowed. We did add a select few biotech firms, an area that is growing at a much faster rate than the traditional drug companies. One of Vista's best performers was MedImmune, which specializes in products to prevent and treat infectious diseases. Its stellar performance was driven by the successful introduction of Synagis, a drug that treats a type of respiratory infection in premature infants. The drug enjoyed $250 million in sales in its first year, which helped MedImmune's shares gain more than 200% over the last 12 months. WHAT'S YOUR OUTLOOK FOR VISTA HEADING INTO 2000? We are pleased that investment dollars are beginning to flow back into mid-cap stocks. Investors are finally seeing opportunity outside the largest growth stocks. Whether technology stocks will continue to drive the market in 2000 remains to be seen. Remember that just before this period began, technology-oriented companies weren't high on investors' lists. That's why we look for successful, growing firms, no matter what field they're in, instead of trying to anticipate the next "hot" sector of the economy. [right margin] "WE ARE PLEASED THAT INVESTMENT DOLLARS ARE BEGINNING TO FLOW BACK INTO MID-CAP STOCKS. INVESTORS ARE FINALLY SEEING OPPORTUNITY OUTSIDE THE LARGEST GROWTH STOCKS." TYPES OF INVESTMENTS IN THE PORTFOLIO AS OF OCTOBER 31, 1999 [data shown in pie chart] Temporary Cash Investments 5.2% U.S. Stocks 94.8% AS OF APRIL 30, 1999 [data shown in pie chart] Temporary Cash Investments 2.9% Foreign Stocks 1.0% U.S. Stocks 96.1% www.americancentury.com 13 Vista--Schedule of Investments -------------------------------------------------------------------------------- This schedule lists all investments owned by the fund, as well as each security's market value, as of the last day of the reporting period. The securities are grouped by asset class (such as common stocks, corporate bonds, temporary cash investments, as applicable), and some asset classes are further broken down by industry or country. NOTE: For securities denominated in foreign currencies, the market value is translated into U.S. dollars based on exchange rates as of the last day of the reporting period. OCTOBER 31, 1999 Shares ($ in Thousands) Value -------------------------------------------------------------------------------- COMMON STOCKS -- 94.8% APPAREL & TEXTILES -- 0.5% 185,000 Jones Apparel Group, Inc.(1) $ 5,851 ---------------- BANKS -- 0.5% 130,000 UnionBanCal Corp. 5,647 ---------------- CLOTHING STORES -- 1.8% 125,000 American Eagle Outfitters, Inc.(1) 5,356 355,000 Talbots, Inc. 16,707 ---------------- 22,063 ---------------- COMPUTER HARDWARE & BUSINESS MACHINES -- 1.0% 150,000 Electronics for Imaging, Inc.(1) 6,042 200,000 Seagate Technology, Inc.(1) 5,888 ---------------- 11,930 ---------------- COMPUTER SOFTWARE -- 0.6% 70,000 Veritas Software Corp.(1) 7,549 ---------------- CONSTRUCTION & REAL PROPERTY -- 0.7% 300,000 Quanta Services, Inc.(1) 8,362 ---------------- DEPARTMENT STORES -- 3.1% 740,000 Ames Department Stores, Inc.(1) 23,472 570,000 ShopKo Stores, Inc.(1) 14,286 ---------------- 37,758 ---------------- DRUGS -- 6.0% 400,000 Chiron Corp.(1) 11,412 90,000 Gilead Sciences, Inc.(1) 5,690 150,000 MedImmune, Inc.(1) 16,786 680,000 Protein Design Labs, Inc.(1) 27,242 700,000 U.S. Bioscience, Inc.(1) 11,288 ---------------- 72,418 ---------------- ELECTRICAL EQUIPMENT -- 19.4% 600,000 CIENA Corp.(1) 21,131 80,000 Foundry Networks, Inc.(1) 15,150 35,641 Indigo N.V. Warrants(1) 20 700,000 JDS Uniphase Corp.(1) 116,791 145,000 KLA-Tencor Corporation(1) 11,487 140,000 Sanmina Corp.(1) 12,604 545,000 Sawtek Inc.(1) 22,481 850,000 Teradyne, Inc.(1) 32,725 ---------------- 232,389 ---------------- Shares ($ in Thousands) Value ------------------------------------------------------------------------------- ELECTRICAL UTILITIES -- 0.9% 200,000 AES Corp. (The)(1) $ 11,288 ---------------- ENERGY RESERVES & PRODUCTION -- 2.1% 500,000 EOG Resources Inc. 10,406 165,000 Noble Affiliates, Inc. 4,177 300,000 Pogo Producing Co. 6,019 390,000 Vintage Petroleum, Inc. 4,241 ---------------- 24,843 ---------------- FOREST PRODUCTS & PAPER -- 0.5% 275,000 Smurfit-Stone Container Corp.(1) 5,938 ---------------- HEAVY MACHINERY -- 1.0% 220,000 Case Corp. 11,660 ---------------- HOTELS -- 4.0% 655,000 Harrah's Entertainment, Inc.(1) 18,954 110,000 MGM Grand, Inc.(1) 5,610 1,750,000 Park Place Entertainment Corp.(1) 22,969 ---------------- 47,533 ---------------- INDUSTRIAL PARTS -- 1.1% 350,000 Cymer, Inc.(1) 12,928 ---------------- INTERNET -- 2.2% 8,200 Akamai Technologies, Inc.(1) 1,191 500,000 At Home Corp. Series A(1) 18,672 55,000 RealNetworks, Inc.(1) 6,035 ---------------- 25,898 ---------------- LEISURE -- 0.5% 250,000 Station Casinos, Inc.(1) 6,047 ---------------- MEDIA -- 8.4% 600,000 EchoStar Communications Corp. Cl A(1) 37,350 229,000 RCN Corp.(1) 10,956 600,000 UnitedGlobalCom Cl A(1) 52,125 ---------------- 100,431 ---------------- OIL SERVICES -- 1.6% 400,000 R&B Falcon Corp.(1) 4,975 300,000 Global Marine Inc.(1) 4,556 355,000 Pride International Inc.(1) 4,881 340,000 Rowan Companies, Inc.(1) 5,291 ---------------- 19,703 ---------------- PUBLISHING -- 1.3% 120,000 Central Newspapers, Inc. Cl A 5,152 125,000 New York Times Co. (The) Cl A 5,031 14 1-800-345-2021 See Notes to Financial Statements Vista--Schedule of Investments -------------------------------------------------------------------------------- (Continued) OCTOBER 31, 1999 Shares ($ in Thousands) Value -------------------------------------------------------------------------------- PUBLISHING (continued) 80,000 Times Mirror Co. (New) Cl A $ 5,770 ---------------- 15,953 ---------------- RESTAURANTS -- 1.6% 800,000 Jack in the Box Inc.(1) 19,250 ---------------- SEMICONDUCTOR -- 19.4% 350,000 ASM Lithography Holding N.V. New York Shares(1) 25,397 425,000 Conexant Systems, Inc.(1) 39,684 1,400,000 Cypress Semiconductor Corp.(1) 35,788 225,000 DSP Group, Inc.(1) 10,645 465,000 Lam Research Corp.(1) 39,176 625,000 Micron Technology, Inc.(1) 44,570 180,000 PMC-Sierra, Inc.(1) 16,959 195,000 Qlogic Corp.(1) 20,310 ---------------- 232,529 ---------------- TELEPHONE -- 3.8% 625,050 Global Crossing Holdings Ltd.(1) 21,662 312,500 NTL Inc.(1) 23,564 ---------------- 45,226 ---------------- WIRELESS TELECOMMUNICATIONS -- 12.8% 300,000 Nextel Communications, Inc.(1) 25,866 371,800 QUALCOMM Inc.(1) 82,807 335,000 VoiceStream Wireless Corp.(1) 33,092 225,000 Western Wireless Corp. Cl A(1) 11,890 ---------------- 153,655 ---------------- TOTAL COMMON STOCKS 1,136,849 (Cost $710,758) ---------------- ($ in Thousands) Value ------------------------------------------------------------------------------- - TEMPORARY CASH INVESTMENTS -- 5.2% Repurchase Agreement, BA Security Services, (U.S. Treasury obligations), in a joint trading account at 5.20%, dated 10/29/99, due 11/1/99 (Delivery value $56,625) $ 56,600 Repurchase Agreement, Merrill Lynch & Co., Inc., (U.S. Treasury obligations), in a joint trading account at 5.19%, dated 10/29/99, due 11/1/99 (Delivery value $5,903) 5,900 ---------------- TOTAL TEMPORARY CASH INVESTMENTS 62,500 (Cost $62,500) ---------------- TOTAL INVESTMENT SECURITIES -- 100.0% $1,199,349 (Cost $773,258) ================ NOTES TO SCHEDULE OF INVESTMENTS (1) Non-income producing. See Notes to Financial Statements www.americancentury.com 15 Statements of Assets and Liabilities -------------------------------------------------------------------------------- This statement breaks down the fund's ASSETS (such as securities, cash, and other receivables) and LIABILITIES (money owed for securities purchased, management fees, and other liabilities) as of the last day of the reporting period. Subtracting the liabilities from the assets results in the fund's NET ASSETS. For each class of shares, the net assets divided by shares outstanding is the share price, or NET ASSET VALUE PER SHARE. This statement also breaks down the fund's net assets into capital (shareholder investments) and performance (investment income and gains/losses). OCTOBER 31, 1999 ULTRA VISTA ASSETS (In Thousands Except Per-Share Amounts) Investment securities, at value (identified cost of $21,458,052 and $773,258, respectively) (Note 3) .................................. $36,206,484 $1,199,349 Cash ................................................................ 1,888 200 Receivable for investments sold ..................................... 92,931 486 Dividends and interest receivable ................................... 18,118 27 -------------------- ------------------ 36,319,421 1,200,062 -------------------- ------------------ LIABILITIES Payable for forward foreign currency exchange contracts ............. 100 -- Payable for investments purchased ................................... 50,286 18,553 Payable for capital shares redeemed ................................. 54,061 26,628 Accrued management fees (Note 2) .................................... 28,913 921 Distribution fees payable (Note 2) .................................. 49 1 Service fees payable (Note 2) ....................................... 49 1 Payable for directors' fees and expenses ............................ 23 1 Accrued expenses and other liabilities .............................. 28 3 -------------------- ------------------ 133,509 46,108 -------------------- ------------------ NET ASSETS .......................................................... $36,185,912 $1,153,954 ==================== ================== NET ASSETS CONSIST OF: Capital (par value and paid in surplus) ............................. $20,241,677 $ 656,415 Undistributed net investment income ................................. -- -- Accumulated undistributed net realized gain on investment and foreign currency transactions ................................. 1,196,168 71,448 Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies (Note 3) .......... 14,748,067 426,091 -------------------- ------------------ $36,185,912 $1,153,954 ==================== ================== INVESTOR CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL) Net assets .......................................................... $35,752,073,270 $1,146,076,838 Shares outstanding .................................................. 917,465,531 74,371,156 Net asset value per share ........................................... $38.97 $15.41 ADVISOR CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL) Net assets .......................................................... $247,813,636 $7,755,294 Shares outstanding .................................................. 6,387,011 506,591 Net asset value per share ........................................... $38.80 $15.31 INSTITUTIONAL CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL) Net assets .......................................................... $186,024,822 $122,043 Shares outstanding .................................................. 4,753,434 7,868 Net asset value per share ........................................... $39.13 $15.51 16 1-800-345-2021 See Notes to Financial Statements Statements of Operations -------------------------------------------------------------------------------- This statement shows how the fund's net assets changed during the reporting period as a result of the fund's operations. In other words, it shows how much money the fund made or lost as a result of dividend and interest income, fees and expenses, and investment gains or losses. YEAR ENDED OCTOBER 31, 1999 ULTRA VISTA INVESTMENT LOSS (In Thousands) INCOME: Dividends (net of foreign taxes withheld of $267 and $16, respectively) .................................. $ 189,604 $ 4,065 Interest ............................................................. 10,796 1,705 -------------------- ------------------ 200,400 5,770 -------------------- ------------------ EXPENSES (Note 2): Management fees ...................................................... 324,788 9,565 Distribution fees -- Advisor Class ................................... 450 14 Service fees -- Advisor Class ........................................ 450 14 Directors' fees and expenses ......................................... 286 9 -------------------- ------------------ 325,974 9,602 -------------------- ------------------ NET INVESTMENT LOSS .................................................. (125,574) (3,832) -------------------- ------------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY (NOTE 3) NET REALIZED GAIN ON: Investments .......................................................... 1,307,562 107,173 Foreign currency transactions ........................................ 22,492 -- -------------------- ------------------ 1,330,054 107,173 -------------------- ------------------ CHANGE IN NET UNREALIZED APPRECIATION ON: Investments .......................................................... 8,569,088 394,280 Translation of assets and liabilities in foreign currencies .......... (350) -- -------------------- ------------------ 8,568,738 394,280 -------------------- ------------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ...................... 9,898,792 501,453 -------------------- ------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $9,773,218 $497,621 ==================== ================== See Notes to Financial Statements www.americancentury.com 17 Statements of Changes in Net Assets -------------------------------------------------------------------------------- This statement shows how the fund's net assets changed over the past two reporting periods. It details how much a fund grew or shrank as a result of operations (as detailed on the previous page for the most recent period), income and capital gain distributions, and shareholder investments and redemptions. YEARS ENDED OCTOBER 31, 1999 AND OCTOBER 31, 1998 ULTRA VISTA Increase (Decrease) in Net Assets 1999 1998 1999 1998 OPERATIONS (In Thousands) Net investment loss ..................................$ (125,574) $ (19,332) $ (3,832) $ (5,907) Net realized gain (loss) on investments and foreign currency transactions ...................... 1,330,054 2,504,658 107,173 (27,871) Change in net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies .... 8,568,738 1,250,224 394,280 (416,761) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations .................................... 9,773,218 3,735,550 497,621 (450,539) ------------ ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class ..................................... -- (8,654) -- -- Institutional Class ................................ -- (1) -- -- From net realized gains on investment transactions: Investor Class ..................................... (2,558,619) (4,593,562) -- (98,425) Advisor Class ...................................... (10,096) (6,944) -- (378) Institutional Class ................................ (1,995) (73) -- (750) ------------ ------------ ------------ ------------ Decrease in net assets from distributions ............ (2,570,710) (4,609,234) -- (99,553) ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS (NOTE 4) Net increase (decrease) in net assets from capital share transactions .................... 3,452,155 4,679,017 (242,960) (398,837) ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS ................ 10,654,663 3,805,333 254,661 (948,929) NET ASSETS Beginning of period .................................. 25,531,249 21,725,916 899,293 1,848,222 ------------ ------------ ------------ ------------ End of period ........................................$ 36,185,912 $ 25,531,249 $ 1,153,954 $ 899,293 ============ ============ ============ ============ 18 1-800-345-2021 See Notes to Financial Statements Notes to Financial Statements -------------------------------------------------------------------------------- OCTOBER 31, 1999 -------------------------------------------------------------------------------- 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION -- American Century Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 as an open-end management investment company. Ultra Fund (Ultra) and Vista Fund (Vista) (the funds) are two of the thirteen series of funds issued by the corporation. The funds are diversified under the 1940 Act. The funds' investment objective is to seek capital growth by investing primarily in equity securities. Ultra generally invests in companies with medium to large size market capitalization while Vista invests in companies with small to medium market capitalization. The following significant accounting policies are in accordance with generally accepted accounting principles; these policies may require the use of estimates by fund management. MULTIPLE CLASS -- The funds are authorized to issue three classes of shares: the Investor Class, the Advisor Class, and the Institutional Class. The three classes of shares differ principally in their respective shareholder servicing and distribution expenses and arrangements. All shares of each fund represent an equal pro rata interest in the assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. SECURITY VALUATIONS -- Portfolio securities traded primarily on a principal securities exchange are valued at the last reported sales price, or at the mean of the latest bid and asked prices where no last sales price is available. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices or, in the case of certain foreign securities, at the last reported sales price, depending on local convention or regulation. Discount notes are valued through a commercial pricing service. When valuations are not readily available, securities are valued at fair value as determined in accordance with procedures adopted by the Board of Directors. SECURITY TRANSACTIONS -- Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. INVESTMENT INCOME -- Dividend income less foreign taxes withheld (if any) is recorded as of the ex-dividend date. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. For assets and liabilities, other than investments in securities, net realized and unrealized gains and losses from foreign currency translations arise from changes in currency exchange rates. Net realized and unrealized foreign currency exchange gains or losses occurring during the holding period of investment securities are a component of realized gain (loss) on investments and unrealized appreciation (depreciation) on investments, respectively. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The funds may enter into forward foreign currency exchange contracts to facilitate transactions of securities denominated in a foreign currency or to hedge the fund's exposure to foreign currency exchange rate fluctuations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the funds and the resulting unrealized appreciation or depreciation are determined daily using prevailing exchange rates. The funds bear the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses may arise if the counterparties do not perform under the contract terms. REPURCHASE AGREEMENTS -- The funds may enter into repurchase agreements with institutions that the funds' investment manager, American Century Investment Management, Inc. (ACIM), has determined are creditworthy pursuant to criteria adopted by the Board of Directors. Each repurchase agreement is recorded at cost. Each fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable each fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to each fund under each repurchase agreement. JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, each fund, along with other registered investment companies having management agreements with ACIM, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations. INCOME TAX STATUS -- It is the funds' policy to distribute all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for federal or state income taxes. DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income and net realized gains are declared and paid annually. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes and may result in reclassification among certain capital accounts. ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the corporation's distributor. Certain officers of FDI are also officers of the corporation. www.americancentury.com 19 Notes to Financial Statements -------------------------------------------------------------------------------- (Continued) OCTOBER 31, 1999 -------------------------------------------------------------------------------- 2. TRANSACTIONS WITH RELATED PARTIES The corporation has entered into a Management Agreement with ACIM, under which ACIM provides the funds with investment advisory and management services in exchange for a single, unified management fee per class. The Agreement provides that all expenses of the funds, except brokerage commissions, taxes, interest, expenses of those directors who are not considered "interested persons" as defined in the Investment Company Act of 1940 (including counsel fees) and extraordinary expenses, will be paid by ACIM. The fee is computed daily and paid monthly based on each fund's class average daily closing net assets during the previous month. The annual management fee is 1.00%, 0.75% and 0.80% for the Investor, Advisor, and Institutional Classes, respectively. The Board of Directors has adopted the Advisor Class Master Distribution and Shareholder Services Plan (the plan), pursuant to Rule 12b-1 of the Investment Company Act of 1940. The plan provides that the funds will pay ACIM an annual distribution fee equal to 0.25% and service fee equal to 0.25%. The fees are computed daily and paid monthly based on the Advisor Class's average daily closing net assets during the previous month. The distribution fee provides compensation for distribution expenses incurred in connection with distributing shares of the Advisor Class including, but not limited to, payments to brokers, dealers, and financial institutions that have entered into sales agreements with respect to shares of the funds. The service fee provides compensation for shareholder and administrative services rendered by ACIM, its affiliates or independent third party providers. Fees incurred by the funds under the plan during the year ended October 31, 1999, were $900,443 for Ultra and $27,537 for Vista. Certain officers and directors of the corporation are also officers and/or directors, and, as a group, controlling stockholders of American Century Companies, Inc., the parent of the corporation's investment manager, ACIM and the corporation's transfer agent, American Century Services Corporation. -------------------------------------------------------------------------------- 3. INVESTMENT TRANSACTIONS Purchases of investment securities, excluding short-term investments, for the year ended October 31, 1999, for Ultra and Vista were $14,590,217,654 and $1,729,586,028, respectively. Sales of investment securities, excluding short-term investments, for the year ended October 31, 1999, were $13,431,145,025 and $1,916,691,219, respectively. At October 31, 1999, accumulated net unrealized appreciation for Ultra and Vista was $14,662,178,028 and $424,889,426, respectively, based on the aggregate cost of investments for federal income tax purposes of $21,544,305,666 and $774,459,771, respectively. Accumulated net unrealized appreciation consisted of unrealized appreciation of $14,773,476,108 and $447,517,785 for Ultra and Vista, respectively, and unrealized depreciation of $111,298,080 and $22,628,359, respectively. -------------------------------------------------------------------------------- 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the funds were as follows: ULTRA VISTA SHARES AMOUNT SHARES AMOUNT INVESTOR CLASS (IN THOUSANDS) Shares Authorized .......................... 3,500,000 710,000 ============== ============= YEAR ENDED OCTOBER 31, 1999 Sold ....................................... 224,914 $ 8,003,665 57,121 $ 670,261 Issued in reinvestment of distributions .... 80,171 2,515,534 -- -- Redeemed ................................... (205,318) (7,309,515) (79,279) (913,989) -------------- -------------- ------------- ------------- Net increase (decrease) .................... 99,767 $ 3,209,684 (22,158) $(243,728) ============== ============== ============= ============= YEAR ENDED OCTOBER 31, 1998 Sold ....................................... 224,437 $ 7,006,778 98,587 $ 1,196,006 Issued in reinvestment of distributions .... 170,508 4,526,262 7,926 95,322 Redeemed ................................... (225,564) (6,959,796) (135,809) (1,678,583) -------------- -------------- ------------- ------------- Net increase (decrease) .................... 169,381 $ 4,573,244 (29,296) $ (387,255) ============== ============== ============= ============= 20 1-800-345-2021 Notes to Financial Statements -------------------------------------------------------------------------------- (Continued) OCTOBER 31, 1999 -------------------------------------------------------------------------------- 4. CAPITAL SHARE TRANSACTIONS (CONTINUED) ULTRA VISTA SHARES AMOUNT SHARES AMOUNT ADVISOR CLASS (IN THOUSANDS) SHARES AUTHORIZED ......................... 300,000 210,000 ============== ============= YEAR ENDED OCTOBER 31, 1999 Sold ...................................... 6,738 $ 241,379 346 $ 4,163 Issued in reinvestment of distributions ... 318 9,982 -- -- Redeemed .................................. (3,862) (139,274) (278) (3,338) -------------- -------------- ------------- ------------- Net increase .............................. 3,194 $ 112,087 68 $ 825 ============== ============== ============= ============= YEAR ENDED OCTOBER 31, 1998 Sold ...................................... 2,873 $ 87,888 211 $ 2,555 Issued in reinvestment of distributions ... 262 6,944 32 378 Redeemed .................................. (866) (26,625) (256) (3,132) -------------- -------------- ------------- ------------- Net increase (decrease) ................... 2,269 $ 68,207 (13) $ (199) ============== ============== ============= ============= INSTITUTIONAL CLASS (IN THOUSANDS) -------------------------------------------------------------------------------------------------------------- SHARES AUTHORIZED ......................... 200,000 80,000 ============== ============= YEAR ENDED OCTOBER 31, 1999 Sold ...................................... 5,148 $184,926 295 $ 3,219 Issued in reinvestment of distributions ... 63 1,985 -- -- Redeemed .................................. (1,616) (56,527) (294) (3,276) -------------- -------------- ------------- ------------- Net increase (decrease) ................... 3,595 $130,384 1 $ (57) ============== ============== ============= ============= YEAR ENDED OCTOBER 31, 1998 Sold ...................................... 3,132 $ 98,660 998 $ 12,315 Issued in reinvestment of distributions ... 2 49 62 750 Redeemed .................................. (1,985) (61,143) (1,986) (24,448) -------------- -------------- ------------- ------------- Net increase (decrease) ................... 1,149 $ 37,566 (926) $(11,383) ============== ============== ============= ============= -------------------------------------------------------------------------------- 5. BANK LOANS Effective December 18, 1998, the funds, along with certain other funds managed by ACIM, entered into an unsecured $570,000,000 bank line of credit agreement with Chase Manhattan Bank. Borrowings under the agreement bear interest at the Federal Funds rate plus 0.40%. The funds may borrow money for temporary or emergency purposes to fund shareholder redemptions. The funds did not borrow from the line during the period December 18, 1998 through October 31, 1999. www.americancentury.com 21 Ultra--Financial Highlights -------------------------------------------------------------------------------- This table itemizes investment results and distributions on a per-share basis to illustrate share price changes for each of the last five fiscal years (or less, if the share class is not five years old). It also includes several key statistics for each reporting period, including TOTAL RETURN, INCOME RATIO (net income as a percentage of average net assets), EXPENSE RATIO (operating expenses as a percentage of average net assets), and PORTFOLIO TURNOVER (a gauge of the fund's trading activity). FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 Investor Class 1999 1998 1997 1996 1995 --------------------------------------------------------------------------------------------------------------- PER-SHARE DATA Net Asset Value, Beginning of Period .....$ 31.06 $ 33.46 $ 29.52 $ 28.03 $ 21.16 ---------- ---------- ---------- ---------- ---------- Income From Investment Operations Net Investment Income (Loss)(1) ........ (0.14) (0.02) 0.01 (0.05) (0.07) Net Realized and Unrealized Gain on Investment Transactions ................ 11.17 4.70 5.62 2.84 7.58 ---------- ---------- ---------- ---------- ---------- Total From Investment Operations ....... 11.03 4.68 5.63 2.79 7.51 ---------- ---------- ---------- ---------- ---------- Distributions From Net Investment Income ............. -- (0.01) -- -- -- From Net Realized Gains on Investment Transactions ............. (3.12) (7.07) (1.69) (1.19) (0.64) In Excess of Net Realized Gains ........ -- -- -- (0.11) -- ---------- ---------- ---------- ---------- ---------- Total Distributions .................... (3.12) (7.08) (1.69) (1.30) (0.64) ---------- ---------- ---------- ---------- ---------- Net Asset Value, End of Period ...........$ 38.97 $ 31.06 $ 33.46 $ 29.52 $ 28.03 ========== ========== ========== ========== ========== TOTAL RETURN(2) ........................ 37.94% 17.61% 19.95% 10.79% 36.89% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets ....................... 1.00% 1.00% 1.00% 1.00% 1.00% Ratio of Net Investment Income (Loss) to Average Net Assets .................... (0.39)% (0.08)% 0.03% (0.20)% (0.30)% Portfolio Turnover Rate .................. 42% 128% 107% 87% 87% Net Assets, End of Period (in millions) ..$ 35,752 $ 25,396 $ 21,695 $ 18,266 $ 14,376 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of dividends and capital gains distributions, if any. 22 1-800-345-2021 See Notes to Financial Statements Ultra--Financial Highlights -------------------------------------------------------------------------------- FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED) Advisor Class 1999 1998 1997 1996(1) ------------------------------------------------------------------------------------------------------------ PER-SHARE DATA Net Asset Value, Beginning of Period ........ $ 31.00 $ 33.36 $ 29.52 $ 29.55 ----------- ----------- ----------- ----------- Income From Investment Operations Net Investment Loss(2) .................... (0.23) (0.11) (0.07) (0.02) Net Realized and Unrealized Gain (Loss) on Investment Transactions ................ 11.15 4.73 5.60 (0.01) ----------- ----------- ----------- ----------- Total From Investment Operations .......... 10.92 4.62 5.53 (0.03) ----------- ----------- ----------- ----------- Distributions From Net Realized Gains on Investment Transactions ................... (3.12) (6.98) (1.69) -- ----------- ----------- ----------- ----------- Net Asset Value, End of Period .............. $ 38.80 $ 31.00 $ 33.36 $ 29.52 =========== =========== =========== =========== TOTAL RETURN(3) ........................... 37.63% 17.36% 19.59% (0.10)% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets ....................... 1.25% 1.25% 1.25% 1.25%(4) Ratio of Net Investment Loss to Average Net Assets ....................... (0.64)% (0.33)% (0.22)% (0.80)%(4) Portfolio Turnover Rate ..................... 42% 128% 107% 87% Net Assets, End of Period (in thousands) .... $ 247,814 $ 98,965 $ 30,827 $ 13,051 (1) October 2, 1996 (commencement of sale) through October 31, 1996. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of dividends and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (4) Annualized. See Notes to Financial Statements www.americancentury.com 23 Ultra--Financial Highlights -------------------------------------------------------------------------------- FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED) Institutional Class 1999 1998 1997(1) -------------------------------------------------------------------------------------- PER-SHARE DATA Net Asset Value, Beginning of Period ......$ 31.12 $ 33.53 $ 30.78 ----------- ----------- ----------- Income From Investment Operations Net Investment Income (Loss)(2) ......... (0.09) 0.03 0.06 Net Realized and Unrealized Gain on Investment Transactions .............. 11.22 4.72 4.38 ----------- ----------- ----------- Total From Investment Operations ........ 11.13 4.75 4.44 ----------- ----------- ----------- Distributions From Net Investment Income .............. -- (0.09) -- From Net Realized Gains on Investment Transactions .............. (3.12) (7.07) (1.69) ----------- ----------- ----------- Total Distributions ..................... (3.12) (7.16) (1.69) ----------- ----------- ----------- Net Asset Value, End of Period ............$ 39.13 $ 31.12 $ 33.53 =========== =========== =========== Total Return(3) ......................... 38.21% 17.85% 15.28% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets ..................... 0.80% 0.80% 0.80%(4) Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (0.19)% 0.12% 0.23%(4) Portfolio Turnover Rate ................... 42% 128% 107% Net Assets, End of Period (in thousands) ..$ 186,025 $ 36,065 $ 334 (1) November 14, 1996 (commencement of sale) through October 31, 1997. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of dividends and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (4) Annualized. 24 1-800-345-2021 See Notes to Financial Statements Vista--Financial Highlights -------------------------------------------------------------------------------- This table itemizes investment results and distributions on a per-share basis to illustrate share price changes for each of the last five fiscal years (or less, if the share class is not five years old). It also includes several key statistics for each reporting period, including TOTAL RETURN, INCOME RATIO (net income as a percentage of average net assets), EXPENSE RATIO (operating expenses as a percentage of average net assets), and PORTFOLIO TURNOVER (a gauge of the fund's trading activity). FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 Investor Class 1999 1998 1997 1996 1995 ---------------------------------------------------------------------------------------------------------- PER-SHARE DATA Net Asset Value, Beginning of Period ......$ 9.27 $ 14.53 $ 15.68 $ 15.73 $ 10.94 --------- --------- --------- --------- --------- Income From Investment Operations Net Investment Loss(1) .................. (0.05) (0.05) (0.10) (0.11) (0.08) Net Realized and Unrealized Gain(Loss) on Investment Transactions .............. 6.19 (4.41) 0.13 1.09 4.90 --------- --------- --------- --------- --------- Total From Investment Operations ........ 6.14 (4.46) 0.03 0.98 4.82 --------- --------- --------- --------- --------- Distributions From Net Realized Gains on Investment Transactions .............. -- (0.80) (1.18) (1.02) (0.03) In Excess of Net Realized Gains ......... -- -- -- (0.01) -- --------- --------- --------- --------- --------- Total Distributions ..................... -- (0.80) (1.18) (1.03) (0.03) --------- --------- --------- --------- --------- Net Asset Value, End of Period ............$ 15.41 $ 9.27 $ 14.53 $ 15.68 $ 15.73 ========= ========= ========= ========= ========= TOTAL RETURN(2) ......................... 66.24% (31.94)% 0.29% 6.96% 44.20% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets ..................... 1.00% 1.00% 1.00% 0.99% 0.98% Ratio of Net Investment Loss to Average Net Assets ..................... (0.40)% (0.42)% (0.73)% (0.70)% (0.60)% Portfolio Turnover Rate ................... 187% 229% 96% 91% 89% Net Assets, End of Period (in millions) ...$ 1,146 $ 895 $ 1,828 $ 2,276 $ 1,676 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of dividends and capital gains distributions, if any. See Notes to Financial Statements www.americancentury.com 25 Vista--Financial Highlights -------------------------------------------------------------------------------- FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED) Advisor Class 1999 1998 1997 1996(1) -------------------------------------------------------------------------------------------------- PER-SHARE DATA Net Asset Value, Beginning of Period .......$ 9.23 $ 14.50 $ 15.67 $ 16.87 --------- --------- --------- --------- Income From Investment Operations Net Investment Loss(2) ................... (0.08) (0.08) (0.14) (0.02) Net Realized and Unrealized Gain (Loss) on Investment Transactions ............... 6.16 (4.39) 0.15 (1.18) --------- --------- --------- --------- Total From Investment Operations ......... 6.08 (4.47) 0.01 (1.20) --------- --------- --------- --------- Distributions From Net Realized Gains on Investment Transactions ............... -- (0.80) (1.18) -- --------- --------- --------- --------- Net Asset Value, End of Period .............$ 15.31 $ 9.23 $ 14.50 $ 15.67 ========= ========= ========= ========= Total Return(3) .......................... 65.87% (32.08)% 0.15% (7.11)% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets ...................... 1.25% 1.25% 1.25% 1.25%(4) Ratio of Net Investment Loss to Average Net Assets ................. (0.65)% (0.67)% (0.98)% (1.20)%(4) Portfolio Turnover Rate .................... 187% 229% 96% 91% Net Assets, End of Period (in thousands) ...$ 7,755 $ 4,052 $ 6,553 $ 5,646 (1) October 2, 1996 (commencement of sale) through October 31, 1996. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of dividends and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (4) Annualized. 26 1-800-345-2021 See Notes to Financial Statements Vista--Financial Highlights -------------------------------------------------------------------------------- FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED OCTOBER 31 (EXCEPT AS NOTED) Institutional Class 1999 1998 1997(1) -------------------------------------------------------------------------------- PER-SHARE DATA Net Asset Value, Beginning of Period .......$ 9.32 $ 14.56 $ 15.73 ---------- ---------- ---------- Income From Investment Operations Net Investment Loss(2) ................... (0.04) (0.01) (0.07) Net Realized and Unrealized Gain (Loss) on Investment Transactions ............... 6.23 (4.43) 0.08 ---------- ---------- ---------- Total From Investment Operations ......... 6.19 (4.44) 0.01 ---------- ---------- ---------- Distributions From Net Realized Gains on Investment Transactions ............... -- (0.80) (1.18) ---------- ---------- ---------- Net Asset Value, End of Period .............$ 15.51 $ 9.32 $ 14.56 ========== ========== ========== TOTAL RETURN(3) .......................... 66.42% (31.72)% 0.17% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets ...................... 0.80% 0.80% 0.80%(4) Ratio of Net Investment Loss to Average Net Assets ...................... (0.20)% (0.22)%(0.53)%(4) Portfolio Turnover Rate .................... 187% 229% 96% Net Assets, End of Period (in thousands) ...$ 122 $ 60 $ 13,581 (1) November 14, 1996 (commencement of sale) through October 31, 1997. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of dividends and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (4) Annualized. See Notes to Financial Statements www.americancentury.com 27 Independent Auditors' Report -------------------------------------------------------------------------------- The Board of Directors and Shareholders, American Century Mutual Funds, Inc: We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Ultra Fund and Vista Fund, (collectively the "Funds"), two of the funds comprising American Century Mutual Funds, Inc., as of October 31, 1999, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and the financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and the 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 the 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 at October 31, 1999 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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 positions of Ultra Fund and Vista Fund as of October 31, 1999, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with generally accepted accounting principles. Deloitte & Touche LLP Kansas City, Missouri December 7, 1999 28 1-800-345-2021 Share Class and Retirement Account Information -------------------------------------------------------------------------------- SHARE CLASSES Three classes of shares are authorized for sale by the fund: Investor Class, Advisor Class, and Institutional Class. INVESTOR CLASS shareholders do not pay any commissions or other fees for purchase of fund shares directly from American Century. Investors who buy Investor Class shares through a broker-dealer may be required to pay the broker-dealer a transaction fee. ADVISOR CLASS shares are sold through banks, broker-dealers, insurance companies, and financial advisors. Advisor Class shares are subject to a 0.50% Rule 12b-1 service and distribution fee. Half of that fee is available to pay for recordkeeping and administrative services, and half is available to pay for distribution services provided by the financial intermediary through which the Advisor Class shares are purchased. The total expense ratio of the Advisor Class shares is 0.25% higher than the total expense ratio of the Investor Class shares. INSTITUTIONAL CLASS shares are available to endowments, foundations, defined benefit pension plans, or financial intermediaries serving these investors. This class recognizes the relatively lower cost of serving institutional customers and others who invest at least $5 million in an American Century fund or at least $10 million in multiple funds. In recognition of the larger investments and account balances and comparatively lower transaction costs, the total expense ratio of the Institutional Class shares is 0.20% less than the total expense ratio of the Investor Class shares. All classes of shares represent a pro rata interest in the funds and generally have the same rights and preferences. RETIREMENT ACCOUNT INFORMATION As required by law, any distributions you receive from an IRA and certain 403(b) distributions [not eligible for rollover to an IRA or to another 403(b) account] are subject to federal income tax withholding at the rate of 10% of the total amount withdrawn, unless you elect not to have withholding apply. If you don't want us to withhold on this amount, you may send us a written notice not to have the federal income tax withheld. Your written notice is valid from the date of receipt at American Century. Even if you plan to roll over the amount you withdraw to another tax-deferred account, the withholding rate still applies to the withdrawn amount unless we have received a written notice not to withhold federal income prior to the withdrawal. When you plan to withdraw, you may make your election by completing our Exchange/Redemption form or an IRS Form W-4P. Call American Century for either form. Your written election is valid from the date of receipt at American Century. You may revoke your election at any time by sending a written notice to us. Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don't have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. www.americancentury.com 29 Background Information -------------------------------------------------------------------------------- INVESTMENT PHILOSOPHY AND POLICIES American Century offers 13 growth funds including domestic equity, specialty, international, and global. The philosophy behind these growth funds focuses on three important principles. First, the funds seek to own successful companies, which we define as those with growing earnings and revenues. Second, we attempt to keep the funds fully invested, regardless of short-term market activity. Experience has shown that market gains can occur in unpredictable spurts and that missing those opportunities can significantly limit the potential for gain. Third, the funds are managed by teams, rather than by one "star." We believe this allows us to make better, more consistent management decisions. In addition to these principles, each fund has its own investment policies: AMERICAN CENTURY ULTRA generally invests in the securities of mid-sized and larger companies that exhibit growth. It typically will have significant price fluctuations. AMERICAN CENTURY VISTA invests mainly in the securities of smaller and medium-sized firms that exhibit growth. The fund is subject to significant price volatility but offers high long-term growth potential. Historically, small- and mid-cap stocks have been more volatile than the stocks of larger, more established companies. COMPARATIVE INDICES The following indices are used in the report to serve as fund performance comparisons. They are not investment products available for purchase. The DOW JONES INDUSTRIAL AVERAGE (DJIA) is a price-weighted average of 30 actively traded Blue Chip stocks, primarily industrials but including service-oriented firms. Prepared and published by Dow Jones & Co., it is the oldest and most widely quoted of all the market indicators. The S&P 500 INDEX is a capitalization-weighted index of the stocks of 500 publicly traded U.S. companies that are considered to be leading firms in dominant industries. Created by Standard & Poor's Corporation, it is considered to be a broad measure of U.S. stock market performance. The S&P 500/BARRA INDEX is a capitalization-weighted index consisting of S&P 500 stocks. S&P 500/BARRA VALUE consists of stocks with lower price-to-book ratios, and S&P 500/BARRA GROWTH consists of stocks with higher price-to-book ratios. In general, both share other characteristics with value- or growth-style stocks. The S&P MIDCAP 400 is a capitalization-weighted index of the stocks of the 400 largest leading U.S. companies not included in the S&P 500. Created by Standard & Poor's Corporation, it is considered to represent the performance of mid-cap stocks generally. The RUSSELL 2000 INDEX was created by the Frank Russell Company. It measures the performance of the 2,000 smallest of the 3,000 largest publicly traded U.S. companies based on total market capitalization. The Russell 2000 represents approximately 10% of the total market capitalization of the top 3,000 companies. The average market capitalization of the index is approximately $420 million. The RUSSELL 2500 INDEX was created by the Frank Russell Company. It measures the performance of the 2,500 smallest of the 3,000 largest publicly traded U.S. companies based on total market capitalization. The Russell 2500 represents approximately 23% of the total market capitalization of the top 3,000 companies. The average market capitalization of the index is approximately $650 million. The RUSSELL 2500 GROWTH INDEX measures the performance of those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth rates. [left margin] PORTFOLIO MANAGERS ------------------------------------ Ultra JIM STOWERS III BRUCE WIMBERLY JOHN SYKORA, CFA ------------------------------------ Vista GLENN FOGLE, CFA ARNIE DOUVILLE [end left margin] 30 1-800-345-2021 Glossary -------------------------------------------------------------------------------- RETURNS * TOTAL RETURN figures show the overall percentage change in the value of a hypothetical investment in the fund and assume that all of the fund's distributions are reinvested. * AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would have produced the fund's cumulative total returns if the fund's performance had been constant over the entire period. Average annual returns smooth out variations in a fund's return; they are not the same as fiscal year-by-year results. For fiscal year-by-year total returns, please refer to the "Financial Highlights" on pages 22-27. INVESTMENT TERMS * EXPENSE RATIO-- the operating expenses of the fund, expressed as a percentage of average net assets. Shareholders pay an annual fee to the investment manager for investment advisory and management services. The expenses and fees are deducted from fund income, not from each shareholder account. (See Note 2 in the Notes to Financial Statements.) * MEDIAN MARKET CAPITALIZATION-- Market capitalization (market cap) is the total value of a company's stock and is calculated by multiplying the number of outstanding common shares by the current share price. The company whose market cap is in the middle of the portfolio is the median market cap. Half the companies in the portfolio have values greater than the median, and half have values that are less. If there is an even number of companies, then the median is the average of the two companies in the middle. * NUMBER OF COMPANIES-- the number of different companies held by a fund on a given date. * PORTFOLIO TURNOVER-- the percentage of a fund's investment portfolio that is replaced during a given time period, usually a year. Actively managed portfolios tend to have higher turnover than passively managed portfolios such as index funds. * PRICE/BOOK RATIO-- a stock value measurement calculated by dividing a company's stock price by its book value per share, with the result expressed as a multiple instead of as a percentage. (Book value per share is calculated by subtracting a company's liabilities from its assets, then dividing that value by the number of outstanding shares.) * PRICE/EARNINGS (P/E) RATIO-- a stock value measurement calculated by dividing a company's stock price by its earnings per share, with the result expressed as a multiple instead of as a percentage. (Earnings per share is calculated by dividing the after-tax earnings of a corporation by its outstanding shares.) TYPES OF STOCKS * BLUE CHIP STOCKS-- stocks of the most established companies in American industry. They are generally large, fairly stable companies that have demonstrated consistent earnings and usually have long-term growth potential. Examples include General Electric and Coca-Cola. * CYCLICAL STOCKS-- generally considered to be stocks whose price and earnings fluctuations tend to follow the ups and downs of the business cycle. Examples include the stocks of automobile manufacturers, steel producers, and textile operators. * GROWTH STOCKS-- stocks of companies that have experienced above-average earnings growth and are expected to continue such growth. These stocks often sell at high P/E ratios. Examples can include the stocks of high-tech, health care, and consumer staple companies. * LARGE-CAPITALIZATION ("LARGE-CAP") STOCKS-- these are stocks generally considered to be companies with a market capitalization (the total value of a company's outstanding stock) of more than $8.2 billion. Though dynamic given its sensitivity to market fluctuation, this is the market capitalization breakpoint on October 31, 1999, as determined by Lipper, Inc. The Dow Jones Industrial Average and the S&P 500 Index generally consist of stocks in this range. * MEDIUM-CAPITALIZATION ("MID-CAP") STOCKS-- these are stocks generally considered to be companies with a market capitalization (the total value of a company's outstanding stock) of between $1.9 billion and $8.2 billion. Though dynamic given its sensitivity to market fluctuation, this is the market capitalization range on October 31, 1999, as determined by Lipper, Inc. The S&P 400 Index and Russell 2500 Index generally consist of stocks in this range. www.americancentury.com 31 Glossary -------------------------------------------------------------------------------- (Continued) * SMALL-CAPITALIZATION ("SMALL-CAP") STOCKS-- These are stocks generally considered to be companies with a market capitalization (the total value of a company's outstanding stock) of less than $1.9 billion. Though dynamic given itssensitivity to market fluctuation, this is the market capitalization breakpoint on October 31, 1999, as determined by Lipper, Inc. The S&P 600 Index and the Russell 2000 Index generally consist of stocks in this range. * VALUE STOCKS-- generally considered to be stocks that are purchased because they are relatively inexpensive. These stocks are typically characterized by low P/E ratios. FUND CLASSIFICATIONS INVESTMENT OBJECTIVE The investment objective may be based on the fund's objective as stated in its prospectus or fund profile, or the fund's categorization by independent rating organizations based on its management style. * CAPITAL PRESERVATION -- offers taxable and tax-free money market funds for relative stability of principal and liquidity. * INCOME -- offers funds that can provide current income and competitive yields, as well as a strong and stable foundation and generally lower volatilitylevels than stock funds. * GROWTH & INCOME -- offers funds that emphasize both growth and income provided by either dividend-paying equities or a combination of equity and fixed-income securities. * GROWTH -- offers funds with a focus on capital appreciation and long-term growth, generally providing high return potential with corresponding high price fluctuation risk. RISK The classification of funds by risk category is based on quantitative historical measures as well as qualitative prospective measures. It is not intended to be a precise indicator of future risk or return levels. The degree of risk within each category can vary significantly, and some fund returns have historically been higher than more aggressive funds or lower than more conservative funds. Please be aware that a fund's category may change over time. Therefore, it is important that you read a fund's prospectus or fund profile carefully before investing to ensure its objectives, policies, and risk potential are consistent with your needs. * CONSERVATIVE -- these funds generally provide lower return potential with either low or minimal price fluctuation risk. * MODERATE -- these funds generally provide moderate return potential with moderate price fluctuation risk. * AGGRESSIVE -- these funds generally provide high return potential with corresponding high price fluctuation risk. 32 1-800-345-2021 [inside back cover] =============================================================================== INVESTMENT OBJECTIVE - CAPITAL PRESERVATION =============================================================================== RISK LEVEL - CONSERVATIVE TAXABLE MONEY MARKETS TAX-FREE MONEY MARKETS Premium Capital Reserve FL Municipal Money Market Prime Money Market CA Municipal Money Market Premium Government Reserve CA Tax-Free Money Market Government Agency Tax-Free Money Market Money Market Capital Preservation =============================================================================== INVESTMENT OBJECTIVE - INCOME =============================================================================== RISK LEVEL - AGGRESSIVE TAXABLE BONDS TAX-FREE BONDS Target 2025* CA High-Yield Municipal Target 2020* High-Yield Municipal Target 2015* Target 2010* High-Yield International Bond RISK LEVEL - MODERATE TAXABLE BONDS TAX-FREE BONDS Long-Term Treasury CA Long-Term Tax-Free Target 2005* Long-Term Tax-Free Bond CA Insured Tax-Free Premium Bond RISK LEVEL - CONSERVATIVE TAXABLE BONDS TAX-FREE BONDS Intermediate-Term Bond CA Intermediate-Term Tax-Free Intermediate-Term Treasury AZ Intermediate-Term Municipal GNMA FL Intermediate-Term Municipal Inflation-Adjusted Treasury Intermediate-Term Tax-Free Limited-Term Bond CA Limited-Term Tax-Free Target 2000* Limited-Term Tax-Free Short-Term Government Short-Term Treasury =============================================================================== INVESTMENT OBJECTIVE - GROWTH AND INCOME =============================================================================== RISK LEVEL - AGGRESSIVE DOMESTIC EQUITY Small Cap Quantitative Small Cap Value RISK LEVEL - MODERATE ASSET ALLOCATION/BALANCED DOMESTIC EQUITY SPECIALTY Strategic Allocation: Equity Growth Utilities Aggressive Equity Index Real Estate Balanced Tax-Managed Value Strategic Allocation: Income & Growth Moderate Value Strategic Allocation: Large Cap Value Conservative Equity Income =============================================================================== INVESTMENT OBJECTIVE - GROWTH =============================================================================== RISK LEVEL - AGGRESSIVE DOMESTIC EQUITY SPECIALTY INTERNATIONAL New Opportunities Global Gold Emerging Markets Giftrust(reg.tm) International Discovery Vista International Growth Heritage Global Growth Growth Ultra(reg.tm) Select RISK LEVEL - MODERATE SPECIALTY Global Natural Resources The investment objective may be based on the fund's objective as stated in its prospectus or fund profile, or the fund's categorization by independent rating organizations based on its management style. The classification of funds by risk category is based on quantitative historical measures as well as qualitative prospective measures. It is not intended to be a precise indicator of future risk or return levels. The degree of risk within each category can vary significantly, and some fund returns have historically been higher than more aggressive funds or lower than more conservative funds. Please be aware that a fund's category may change over time. Therefore, it is important that you read a fund's prospectus or fund profile carefully before investing to ensure its objectives, policies and risk potential are consistent with your needs. For a definition of fund categories, see the Glossary. *While listed within the Income investment objective, the Target funds do not pay current dividend income. Income dividends are distributed once a year in December. The Target funds are listed in all three risk categories due to the dramatic price volatility investors may experience during certain market conditions. If held to their target dates, however, they can offer a conservative, dependable way to invest for a specific time horizon. Please call 1-800-345-2021 for a prospectus or profile on any American Century fund. These documents contain important information including charges and expenses, and you should read them carefully before you invest or send money. [back cover] [graphic of runners] Who we are American Century offers investors more than 70 mutual funds that span the investment spectrum. We currently manage $100 billion for roughly 2 million individuals, institutions and corporations, with a range of services designed to make investing easy and convenient. For four decades, American Century has been a leader in performance, service and innovation. From pioneering the use of computer technology in investing to allowing investors to conduct transactions and receive financial advice over the Internet, we have remained committed to building long-term relationships and to helping investors achieve their dreams. In a very real sense, investors put their future in our hands. With so much at stake, our work continues to be guided by one central belief, shared by every person at American Century: WE SUCCEED ONLY IF OUR INVESTORS SUCCEED. [left margin] [american century logo(reg.sm)] American Century P.O. BOX 419200 KANSAS CITY, MISSOURI 64141-6200 WWW.AMERICANCENTURY.COM INVESTOR RELATIONS 1-800-345-2021 OR 816-531-5575 AUTOMATED INFORMATION LINE 1-800-345-8765 FAX: 816-340-7962 TELECOMMUNICATIONS DEVICE FOR THE DEAF 1-800-634-4113 OR 816-444-3485 BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS 1-800-345-3533 BANKS AND TRUST COMPANIES, BROKER-DEALERS, FINANCIAL ADVISORS, INSURANCE COMPANIES 1-800-345-6488 AMERICAN CENTURY MUTUAL FUNDS, INC. INVESTMENT MANAGER AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. KANSAS CITY, MISSOURI THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. -------------------------------------------------------------------------------- American Century Investments BULK RATE P.O. Box 419200 U.S. POSTAGE PAID Kansas City, MO 64141-6200 AMERICAN CENTURY www.americancentury.com COMPANIES 9912 Funds Distributor, Inc. is the distributor for SH-ANN-18859 American Century funds (c)1999 American Century Services Corporation
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