<PAGE>
Semiannual Report
NEW ERA
FUND
-------------
JUNE 30, 2000
-------------
[LOGO OF T. ROWE PRICE]
<PAGE>
REPORT HIGHLIGHTS
--------------------------------------------------------------------------------
New Era Fund
. Stocks finished moderately lower in a volatile environment.
. The fund's respectable six-month gain outperformed the S&P 500, but lagged the
Lipper average.
. Energy service and exploration and production stocks performed well, but
returns were hurt by weakness in railroad and specialty chemical stocks.
. The greatest risk ahead is a reacceleration of economic growth, which could
cause the Fed to raise interest rates too high.
. The summer doldrums have created opportunities to buy shares at attractive
prices.
UPDATES AVAILABLE
For updates on T. Rowe Price funds following the end of each calendar quarter,
please see our Web site at www.troweprice.com.
<PAGE>
FELLOW SHAREHOLDERS
U.S. markets finished modestly lower as they struggled to overcome higher
interest rates, inflation concerns, and earnings disappointments during the
first half of the year. New Economy stocks led a sharp downturn beginning in
March, but the markets rebounded late in the period. Old Economy stocks fared
moderately better during the slide, because valuations--and therefore
expectations--were more reasonable than for the technology and
telecommunications sectors. Your fund performed well in this volatile
environment.
The fund gained 5.50% for the six months ended June 30, 2000, and 6.16% for the
12-month period, surpassing the S&P 500 during the last six months, largely
because of its exposure to real estate and the energy industry. Energy service
and exploration and production company stocks performed particularly well due to
the strength of natural gas prices. For the 12-month period these were the only
resource sectors that outperformed the market. The larger, more diversified
integrated oil companies lagged as investors remained skeptical that the current
oil price strength is anything more than transitory.
----------------------
PERFORMANCE COMPARISON
--------------------------------------------------------------------------------
Periods Ended 6/30/00 6 Months 12 Months
--------------------------------------------------------------------------------
New Era Fund 5.50% 6.16%
S&P 500 -0.43 7.24
Lipper Natural Resources
Funds Average 13.34 15.27
New Era trailed its peers as represented by the Lipper Natural Resources Funds
Average, which is dominated by energy funds, primarily because of the funds
broader diversification. While this diversification serves us well over time
because it reduces risk, the fund may lag its competition in years when a narrow
sector of the resource spectrum shines. For the six-month period, shares of the
metals and paper and forest products industries gave back a considerable amount
of the superior performance they achieved in the prior year. Weakness in our
railroad and specialty chemical holdings also hampered performance over the last
12 months.
1
<PAGE>
ECONOMIC REVIEW
The Federal Reserve continued to tap the monetary brakes in an effort to slow
the domestic economy from its torrid pace. The Fed has raised the benchmark
federal funds rate 175 basis points since June 1999, the most recent a 50-basis-
point hike in May (100 basis points equal 1%). It is now likely to step back and
evaluate its efforts, holding off on any further action until after the
election. The Fed has not acted alone: There have been more than a hundred rate
hikes by central banks around the world over the last 13 months.
...THE REAL CONSTRAINT TO RISING PRICES HAS BEEN DECLINING COSTS...
Retail sales began to moderate in the second quarter along with consumer
confidence, and the unemployment rate no longer appears to be declining. Just as
the rising stock market boosted the overall level of wealth and increased
consumer confidence--the so-called wealth effect the recent weakness,
particularly in the Nasdaq, has slowed spending. Over the next few months it
will become apparent whether the economy has merely entered a normal summer
slowdown or if, in fact, a more moderate pace has been established. Although
controlling inflation is a laudable goal, a much slower domestic economy could
affect the more fragile emerging economies that depend on exports to the U.S.
and capital availability from the West. This is a significant risk to the
industries your fund invests in. Elsewhere, the recovery of the euro, Europes
fledgling currency, has reduced pressure on the integrity of the European Union
and should improve U.S. exports.
Resource prices peaked early in the year and have since retreated as
expectations for economic strength and rising inflation have abated. The market
appears to believe strongly that the Fed has managed to prevent a general rise
in prices of most products and commodities (with the exception of oil). However,
the real constraint to rising prices has been declining costs, as companies have
concentrated on cost cutting to boost earnings and using technology to manage
inventories and input costs. These lower costs have either been passed on to
consumers through competition or at least mitigated the need to raise prices to
improve corporate profits. For the most part, capacity has not kept up with
growing demand in the resource sector, but once these productivity enhancements
are absorbed, tight capacity utilization should have a more pronounced impact on
prices.
The current situation with natural gas, where the domestic price has doubled in
the last six months, offers a classic illustration of what can
2
<PAGE>
happen when reinvestment remains low while demand grows even modestly.
Furthermore, recent polls on the broader economy suggest that more companies
plan to increase prices in the year ahead. A slowing economy may offer a
temporary reprieve from rising prices, but continued growth, even at a slower
pace, will ultimately lead to moderate inflation.
PORTFOLIO MANAGEMENT
The extraordinary strength in domestic natural gas prices was the principal
driver behind the strong performance of the energy service and exploration and
production stocks. The market for natural gas became extremely tight because of
the lack of reinvestment in new productive capacity and surging demand growth
for electrical generation. This price strength has resulted in improved
reinvestment economics for producers, in turn prompting an increase in the
demand for energy services. Likewise, the price of oil recovered dramatically
during the last 12 months as global oil inventories declined, largely due to
OPECs imposed production restraints. However, the significant improvement in
cash flow and profits for major oil companies went largely unnoticed in the
marketplace.
Merger activity continued its rapid pace in several natural resource sectors.
This has generally led to the shedding of excess and antiquated plants and to
the more widespread practice of temporarily idling production capacity. This
demonstrates that managements now recognize that simply spending excess cash at
cycle peaks to build new productive capacity is not acceptable to investors.
Rather, capital spending must generate good returns over the cycle at reasonable
commodity prices. New investment must also be focused on low-operating-cost
facilities and projects that are at the low end of the industry's cost curve.
Managements are also taking a cue from industry leaders to find ways to increase
shareholder value. For example, companies are considering share repurchases as
an alternative investment option, and looking to align internal incentives with
the interests of shareholders. Stock options are becoming a significant part of
compensation and are now based on such financial measures as return on capital
and economic value added.
Consolidation and merger activity was concentrated in the paper and forest
products and exploration and production industries during the last six months.
International Paper acquired Champion
3
<PAGE>
------------------------
INDUSTRY DIVERSIFICATION
--------------------------------------------------------------------------------
[GRAPH]
Diversified Resources 6%
Forest Products 7%
Precious Metals 5%
Metals and Mining 6%
Building and Real Estate 5%
Reserves and Other 10%
Non-resources 4%
Energy 57%
Based on net assets as of 6/30/00.
International, topping a bid by UPM-Kymmene. (We sold our Champion shares prior
to International's bid.) Finnish paper company Stora Enso will acquire
Consolidated Papers, another fund holding. Anadarko Petroleum acquired Union
Pacific Resources. Santa Fe Snyder was bought by one of the most successful
acquisition-oriented independent oil companies, Devon Energy. The market
regarded the acquisitions by Anadarko and Devon--both holdings of your fund--
positively, rewarding the shareholders of both the acquirers and acquirees.
Finally, a major integrated oil company, BP Amoco, will acquire Vastar
Resources, another significant position in the portfolio.
Fund purchases and sales included several paper and forest product companies, as
we replaced those being acquired with new positions and sought to take advantage
of low valuations for the sector. We sold International Paper before the market
reacted negatively to its acquisition of Champion, then reestablished our
position in this global player. We also added Packaging Corp. of America, a
leader in the containerboard and box industry. In addition, we reestablished a
position in Kerr-McGee after a successful trade in that stock. We had sold this
major independent producer before oil price concerns temporarily caused a
downdraft in the stock.
We established a new position in Tidewater, a significant provider of supply
boat services to offshore platforms and drilling rigs. The fund also invested in
USX-U.S. Steel Group with the expectation that changes in the ownership
structure of the parent holding company and other restructuring actions will
reward its shareholders. We purchased Arch Coal, a major domestic coal producer,
because we expect industry fundamentals to gradually improve given the rise in
the price of competitive fuels. Finally, we revisited Dow Chemical, a global
commodity and specialty chemical producer, because we think that fundamental
conditions in commodity chemicals are bottoming and that synergies from the
recent acquisition of Union Carbide should provide greater operating leverage in
the upturn.
4
<PAGE>
OUTLOOK
While the economy seems to be slowing down, some question remains as to whether
the Fed's medicine will actually keep inflation in check. Resource and commodity
markets are fairly tight, and there is minimal new capacity planned for the next
couple of years for most industries. Consequently, even the slower demand growth
from moderating global economic activity is likely to exceed capacity growth and
put upward pressure on prices. The primary risk is the potential for reac-
celeration of domestic economic growth later this year, which may lead the Fed
to apply further tightening in the credit markets. If the Fed goes too far, this
could lead to recession, as monetary conditions tend to have a delayed effect.
Your fund's holdings remain attractive by traditional valuation measures. The
market continues to be skeptical of the recovery in oil prices, and this
cynicism is reflected in the modest valuations of energy stocks. The price of
oil has risen 27% since the beginning of the year, yet the S&P Energy Composite
Index has only risen about 3.5%; for the 12-month period the price of oil is up
68% while the Composite has only risen 2%. Additionally, the fund is taking
advantage of the summer doldrums, which have created good values in the shares
of metals and forest product and paper companies. Despite our near-term caution
regarding the effects of further interest rate hikes, we believe the fund's
attractively priced holdings offer shareholders good long-term prospects.
Respectfully submitted,
/s/ Charles M. Ober
Charles M. Ober
President and Chairman of the Investment Advisory Committee
July 21, 2000
5
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
--------------------
PORTFOLIO HIGHLIGHTS
--------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/00
------------------------------------------------------------------
Exxon Mobil 4.6%
Wal-Mart 4.5
Schlumberger 3.7
Royal Dutch Petroleum 3.5
BP Amoco 2.7
------------------------------------------------------------------
USX-Marathon 2.6
TotalFinaElf 2.4
Fort James 2.2
Halliburton 2.0
Newmont Mining 2.0
------------------------------------------------------------------
Coflexip 1.8
Amerada Hess 1.7
Baker Hughes 1.7
Chevron 1.6
Ocean Energy 1.6
------------------------------------------------------------------
Anadarko Petroleum 1.5
Cooper Cameron 1.5
Kimberly-Clark 1.4
Murphy Oil 1.4
Burlington Resources 1.3
------------------------------------------------------------------
Union Pacific Resources 1.3
Vastar Resources 1.3
Key Energy Services 1.3
Rouse 1.3
Mitchell Energy & Development 1.3
------------------------------------------------------------------
Total 52.2%
Note: Table excludes reserves.
6
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
--------------------
PORTFOLIO HIGHLIGHTS
--------------------------------------------------------------------------------
MAJOR PORTFOLIO CHANGES
Listed in descending order of size
6 Months Ended 6/30/00
Ten Largest Purchases Ten Largest Sales
----------------------------------------------------------------
USX-U.S. Steel Group * Champion International **
Tidewater * BJ Services
FMC * Newmont Mining
Arch Coal * Nucor **
Dow Chemical * Burlington Northern Santa Fe
Packaging Corp. of America * Valero Energy **
Texaco Wal-Mart
Hercules International Paper
Kerr-McGee McDermott International **
Phelps Dodge Texaco
* Position added
** Position eliminated
7
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
----------------------
PERFORMANCE COMPARISON
--------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with benchmarks, which may include a broad-
based market index and a peer group average or index. Market indexes do not
include expenses, which are deducted from fund returns as well as mutual fund
averages and indexes.
NEW ERA FUND
--------------------------------------------------------------------------------
[GRAPH]
[PLOT POINTS TO COME]
------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
--------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Periods Ended 6/30/00 1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------------------------
New Era Fund 6.16% 5.15% 11.36% 9.78%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
8
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Unaudited
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
6/30/00 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 21.80 $ 19.78 $ 25.95 $ 26.06 $ 22.65 $ 20.15
Investment activities
Net investment
income (loss) 0.15 0.30 0.37 0.40 0.38 0.47
Net realized and
unrealized gain (loss) 1.05 3.84 (2.97) 2.40 5.12 3.71
Total from
investment activities 1.20 4.14 (2.60) 2.80 5.50 4.18
Distributions
Net investment income - (0.30) (0.40) (0.37) (0.38) (0.48)
Net realized gain - (1.82) (3.17) (2.54) (1.71) (1.20)
Total distributions - (2.12) (3.57) (2.91) (2.09) (1.68)
NET ASSET VALUE
End of period $ 23.00 $ 21.80 $ 19.78 $ 25.95 $ 26.06 $ 22.65
---------------------------------------------------------------------------
Ratios/Supplemental Data
Total return* 5.50% 21.22% (9.88)% 10.96% 24.25% 20.76%
Ratio of total expenses to
average net assets 0.73%+ 0.74% 0.75% 0.74% 0.76% 0.79%
Ratio of net investment
income (loss) to average
net assets 1.32%+ 1.29% 1.27% 1.33% 1.53% 2.00%
Portfolio turnover rate 29.4%+ 32.5% 23.1% 27.5% 28.6% 22.7%
Net assets, end of period
(in millions) $ 1,094 $ 1,082 $ 999 $ 1,493 $ 1,468 $ 1,090
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Unaudited June 30, 2000
-----------------------
STATEMENT OF NET ASSETS Shares/Par Value
--------------------------------------------------------------------------------
In thousands
COMMON STOCKS 96.3%
NATURAL RESOURCE-RELATED 91.1%
Building and Real Estate 4.8%
Archstone Communities Trust, REIT 259,000 $ 5,455
Boston Properties, REIT 50,000 1,931
Camden Property Trust, REIT 178,100 5,232
Catellus Development * 395,000 5,925
Equity Office Properties, REIT 88,441 2,437
Federal Realty Investment Trust, REIT 200,000 4,000
Reckson Associates Realty, REIT 340,000 8,075
Rouse 560,000 13,860
Simon Property Group, REIT 271,400 6,022
----------
52,937
----------
Forest Products 6.8%
Consolidated Papers 126,700 4,632
Fort James 1,024,120 23,683
Georgia Pacific Timber 231,500 5,006
International Paper 100,000 2,981
Kimberly-Clark 260,000 14,918
Packaging Corp. of America * 706,100 7,149
Potlatch 118,000 3,909
Smurfit-Stone Container * 551,700 7,086
Weyerhaeuser 116,000 4,988
----------
74,352
----------
Integrated Petroleum - Domestic 9.5%
Amerada Hess 300,000 18,525
Conoco (Class B) 368,525 9,052
Kerr-McGee 139,000 8,192
Murphy Oil 250,000 14,859
Occidental Petroleum 600,000 12,638
Unocal 350,000 11,594
USX-Marathon 1,150,000 28,822
----------
103,682
----------
Integrated Petroleum - International 16.2%
BP Amoco ADR 524,800 29,684
Chevron 210,000 17,811
10
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Exxon Mobil 636,280 $ 49,948
Norsk Hydro 200,000 8,413
Royal Dutch Petroleum ADR 618,400 38,070
Texaco 120,000 6,390
TotalFinaElf ADR 346,148 26,588
----------
176,904
----------
Petroleum Exploration and Production 13.2%
Anadarko Petroleum 340,000 16,766
Anderson Exploration (CAD) * 50,000 909
Barrett Resources * 190,000 5,783
Burlington Resources 380,000 14,535
Canadian Natural Resources (CAD) * 90,000 2,615
Canadian Occidental Petroleum Limited 130,000 3,534
Devon Energy 154,550 8,684
EEX * 300,000 1,744
EOG Resources 300,000 10,050
Forest Oil * 180,000 2,869
Mitchell Energy & Development (Class A) 430,000 13,814
Noble Affiliates 150,000 5,587
Ocean Energy * 1,247,800 17,703
Pogo Producing 200,000 4,425
Santa Fe Snyder * 600,000 6,825
Union Pacific Resources 654,186 14,392
Vastar Resources 175,000 14,372
----------
144,607
----------
Miscellaneous Energy 0.6%
Niagara Mohawk * 490,000 6,829
----------
6,829
----------
Energy Services 16.0%
Baker Hughes 566,000 18,112
BJ Services * 200,000 12,500
Coflexip ADR 330,000 19,924
Cooper Cameron * 241,800 15,959
Diamond Offshore Drilling 230,000 8,079
Halliburton 470,000 22,178
Helmerich & Payne 100,000 3,738
Key Energy * 1,450,000 13,956
Schlumberger 540,000 40,297
11
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Smith International * 120,000 $ 8,737
Tidewater 320,000 11,520
---------
175,000
---------
Precious Metals 4.6%
Barrick Gold 270,640 4,922
Battle Mountain Gold * 1,630,000 3,566
Homestake Mining 1,402,630 9,643
Lihir Gold * 4,628,000 1,827
Newmont Mining 990,359 21,416
Placer Dome 956,950 9,151
---------
50,525
---------
Non-ferrous Metals 2.3%
Bougainville Copper (EUR) * 2,030,829 188
Inco * 740,000 11,378
Phelps Dodge 230,000 8,553
WMC Limited (EUR) 1,100,000 4,916
---------
25,035
---------
Diversified Metals 3.7%
Alcoa 381,600 11,066
Allegheny Technologies 492,000 8,856
Rio Tinto (GBP) 800,000 13,158
USX-U.S. Steel 400,000 7,425
---------
40,505
---------
Chemicals 5.5%
Dow Chemical 240,000 7,245
DuPont 245,076 10,722
FMC * 105,000 6,090
Great Lakes Chemical 200,000 6,300
Hercules 690,000 9,703
Olin 281,900 4,652
Pall 300,000 5,550
W. R. Grace * 800,000 9,700
---------
59,962
---------
Diversified Resources 5.9%
Arch Coal 1,100,000 8,456
Burlington Northern Santa Fe 370,000 8,487
Cleveland-Cliffs 230,000 5,937
IMC Global 700,000 9,100
12
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Martin Marietta Materials 100,000 $ 4,044
Norfolk Southern 460,000 6,843
Overseas Shipholding Group 95,000 2,339
Penn Virginia 346,800 8,540
Southdown 100,000 5,775
Waste Management 250,000 4,750
----------
64,271
----------
Gas and Gas Transmission 1.5%
El Paso Energy 250,000 12,735
Kinder Morgan 100,000 3,456
----------
16,191
----------
Miscellaneous 0.5%
Tyco International 130,000 6,159
6,159
----------
Total Natural Resource-Related 996,959
----------
CONSUMER AND SERVICE 4.5%
Merchandising 4.5%
Wal-Mart 850,000 48,981
Total Consumer and Service 48,981
Total Miscellaneous Common Stock 0.7% 7,850
----------
Total Common Stocks (Cost $ 740,690) 1,053,790
----------
CONVERTIBLE PREFERRED STOCKS 0.0%
Western Water (Series C) * 2,259 64
----------
Total Convertible Preferred Stocks (Cost $ 2,000) 64
----------
CONVERTIBLE BONDS 0.2%
Inco, Deb. Notes, 5.75%, 7/1/04 $2,000,000 1,795
----------
Total Convertible Bonds (Cost $ 1,835) 1,795
----------
13
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
SHORT-TERM INVESTMENTS 3.0%
Money Market Funds 3.0%
Reserve Investment Fund, 6.68% # 33,291,252 $ 33,291
-----------
Total Short-Term Investments (Cost $ 33,291) 33,291
-----------
Total Investments in Securities
99.5% of Net Assets (Cost $777,816) $ 1,088,940
Other Assets Less Liabilities 5,017
-----------
NET ASSETS $ 1,093,957
-----------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 7,267
Accumulated net realized gain/loss - net of distributions 43,583
Net unrealized gain (loss) 311,124
Paid-in-capital applicable to 47,559,784 shares of $1.00 par
value capital stock outstanding; 200,000,000 shares authorized 731,983
-----------
NET ASSETS $ 1,093,957
-----------
NET ASSET VALUE PER SHARE $ 23.00
-----------
</TABLE>
# Seven-day yield
* Non-income producing
ADR American Depository Receipt
REIT Real Estate Investment Trust
CAD Canadian dollar
EUR Euro
GBP British sterling
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Unaudited
---------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/00
Investment Income (Loss)
Income
Dividend $ 9,729
Interest 1,182
-------
Total income 10,911
-------
Expenses
Investment management 3,022
Shareholder servicing 741
Custody and accounting 64
Prospectus and shareholder reports 33
Registration 15
Legal and audit 6
Directors 5
Miscellaneous 5
-------
Total expenses 3,891
-------
Net investment income (loss) 7,020
-------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 26,694
Foreign currency transactions 13
-------
Net realized gain (loss) 26,707
Change in net unrealized gain or loss on securities 22,478
-------
Net realized and unrealized gain (loss) 49,185
-------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $56,205
-------
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Unaudited
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/00 12/31/99
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 7,020 $ 13,903
Net realized gain (loss) 26,707 74,496
Change in net unrealized gain or loss 22,478 110,197
--------------------------
Increase (decrease) in net assets from operations 56,205 198,596
--------------------------
Distributions to shareholders
Net investment income - (13,817)
Net realized gain - (83,827)
--------------------------
Decrease in net assets from distributions - (97,644)
--------------------------
Capital share transactions *
Shares sold 119,619 177,085
Distributions reinvested 86,942
Shares redeemed (164,122) (281,288)
--------------------------
Increase (decrease) in net assets from capital
share transactions (44,503) (17,261)
--------------------------
Net Assets
Increase (decrease) during period 11,702 83,691
Beginning of period 1,082,255 998,564
--------------------------
End of period $ 1,093,957 $ 1,082,255
--------------------------
*Share information
Shares sold 5,325 7,815
Distributions reinvested 4,097
Shares redeemed (7,421) (12,748)
--------------------------
Increase (decrease) in shares outstanding (2,096) (836)
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
Unaudited June 30, 2000
-----------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price New Era Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company and commenced operations on January 20, 1969. The fund
seeks long-term capital growth by investing primarily in the common stocks
of companies that own or develop natural resources and other basic
commodities, and also in the stocks of selected nonresource growth
companies.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company
industry; these principles may require the use of estimates by fund
management.
Valuation Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price on the day the
valuations are made. A security which is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Listed securities not traded on a
particular day and securities regularly traded in the over-the-counter
market are valued at the mean of the latest bid and asked prices. Other
equity securities are valued at a price within the limits of the latest bid
and asked prices deemed by the Board of Directors or by persons delegated
by the Board, best to reflect fair value.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of
such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by or under the supervision of the
officers of the fund, as authorized by the Board of Directors.
Currency Translation Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated
into U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes
17
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
in foreign exchange rates on realized and unrealized security gains and
losses is reflected as a component of such gains and losses.
Premiums and Discounts Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis. Dividend income and
distributions to shareholders are recorded by the fund on the ex-dividend
date. Income and capital gain distributions are determined in accordance
with federal income tax regulations and may differ from those determined in
accordance with generally accepted accounting principles. Credits earned on
daily uninvested cash balances at the custodian are used to reduce the
funds custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term,
aggregated $151,896,000 and $194,831,000, respectively, for the six months
ended June 30, 2000.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
At June 30, 2000, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$777,816,000. Net unrealized gain aggregated $311,124,000 at period-end, of
which $390,029,000 related to appreciated investments and $78,905,000 to
depreciated investments.
NOTE 4- RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management
fee, of which $527,000 was payable at June 30, 2000. The fee is computed
daily and paid monthly, and consists of an individual fund fee equal to
0.25%
18
<PAGE>
T. ROWE PRICE NEW ERA FUND
--------------------------------------------------------------------------------
of average daily net assets and a group fee. The group fee is based on the
combined assets of certain mutual funds sponsored by the manager or Rowe
Price-Fleming International, Inc. (the group). The group fee rate ranges
from 0.48% for the first $1 billion of assets to 0.295% for assets in
excess of $120 billion. At June 30, 2000, and for the six months then
ended, the effective annual group fee rate was 0.32%. The fund pays a
pro-rata share of the group fee based on the ratio of its net assets to
those of the group.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund
receives certain other services. The manager computes the daily share price
and maintains the financial records of the fund. T. Rowe Price Services,
Inc. is the funds transfer and dividend disbursing agent and provides
shareholder and administrative services to the fund. T. Rowe Price
Retirement Plan Services, Inc. provides subaccounting and recordkeeping
services for certain retirement accounts invested in the fund. The fund
incurred expenses pursuant to these related party agreements totaling
approximately $565,000 for the six months ended June 30, 2000, of which
$116,000 was payable at period-end.
Additionally, the fund is one of several T. Rowe Price-sponsored mutual
funds (underlying funds) in which the T. Rowe Price Spectrum Funds
(Spectrum) may invest. Spectrum does not invest in the underlying funds for
the purpose of exercising management or control. Expenses associated with
the operation of Spectrum are borne by each underlying fund to the extent
of estimated savings to it and in proportion to the average daily value of
its shares owned by Spectrum, pursuant to special servicing agreements
between and among Spectrum, the underlying funds, T. Rowe Price, and, in
the case of T. Rowe Price Spectrum International, Rowe Price-Fleming
International. Spectrum Growth Fund held approximately 6.7% of the
outstanding shares of the fund at June 30, 2000. For the six months then
ended, the fund was allocated $87,000 of Spectrum expenses, $17,000 of
which was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available
to the public. The Reserve Funds pay no investment management fees.
Distributions from the Reserve Funds to the fund for the six months ended
June 30, 2000, totaled $1,106,000 and are reflected as interest income in
the accompanying Statement of Operations.
19
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
--------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10
p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed-income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe Price
Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES(*)
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over full-service commission rates. (**)
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a July 2000 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of
order.
20
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
--------------------------------------------------------------------------------
STOCK FUNDS
..............................
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery*
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
..............................
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
..............................
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
..............................
Balanced
Personal Strategy Balanced
Personal Strategy Growth Personal Strategy Income Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
..............................
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by
investing in the funds.
Please call for a prospectus, which contains complete information, including
fees and expenses. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
21
<PAGE>
For fund and account information
or to conduct transactions,
24 hours, 7 days a week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132
To open a brokerage account
or obtain information, call:
1-800-638-5660
Internet address:
www.troweprice.com
Plan Account Lines for retirement
plan participants:
The appropriate 800 number appears
on your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus appropriate
to the fund or funds covered in this
report.
Walk-In Investor Centers:
For directions, call 1-800-225-5132
or visit our Web site.
Baltimore Area
Downtown
101 East Lombard Street
Owings Mills
Three Financial Center
4515 Painters Mill Road
Boston Area
386 Washington Street
Wellesley
Colorado Springs
4410 ArrowsWest Drive
Los Angeles Area
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
Tampa
4200 West Cypress Street
10th Floor
Washington, D.C.
900 17th Street N.W.
Farragut Square
Invest With Confidence(R)
[LOGO]
T. Rowe Price Investment Services, Inc., Distributor. F41-051 6/30/00
