<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Semiannual Report
Prime Reserve Fund
- --------------------------------------------------------------------------------
November 30, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
PRIME RESERVE FUND
- ------------------
* A series of three interest rate hikes during the six months ended
November 30 helped boost money market yields.
* The Prime Reserve Fund achieved solid performance as its return
exceeded that of its Lipper peer group average.
* The PLUS Shares also exceeded the Lipper average by a slim margin,
despite the higher expenses associated with the shares' added
services.
* We reduced the fund's weighted average maturity as interest rates
rose.
* We are focusing on providing attractive yields.
================================================================================
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.
================================================================================
FELLOW SHAREHOLDERS
- -------------------
The U.S. economy continued its remarkable run of strong, steady growth
during the six and 12 months ended November 30, 1999, and signs of inflation
were modest. Nonetheless, the Federal Reserve raised the federal funds target
rate three times, and interest rates overall rose significantly. Money market
funds largely benefited, a trend reflected in the performance of the Prime
Reserve Fund and the PLUS Shares.
MARKET ENVIRONMENT
- ------------------
<PAGE>
There was little doubt during the past six months that the U.S. economy was
on solid footing. Annual GDP data have painted an attractive picture, with
growth rates fluctuating between 3.5% and 4.5% for nearly four years now.
Moreover, the consumer and producer price indices (CPI and PPI), the most
commonly reported inflation figures, have generally appeared subdued. During the
past spring and summer, however, economic data hinted at an increase in
inflationary pressure. Although economic growth did not overheat, the engines of
that growth -- including strong consumer spending fueled by rising stock markets
and home prices, improved productivity, and faster information flow due to the
Internet -- remained in high gear.
[Chart showing interest rates for one-year Treasury bills, 90-day Treasury
bills, and the Federal Funds Target Rate 11/30/98 through 11/30/99.]
Prior to summer, the Fed had largely been staying on the sidelines,
concerned that a U.S. rate hike would put untenable pressure on fragile foreign
economies in the wake of the 1998 global currency and liquidity crisis. However,
an improving outlook overseas prompted a change in direction. The Fed raised the
federal funds target rate in June, August, and November by a total of 75 basis
points (100 basis points equal one percent). The target rate has returned to its
level of August 1998, just before the Fed cut rates three-quarters of a percent
to alleviate the global financial crisis.
The market largely anticipated these moves, pushing rates sharply higher
throughout the year. For example, one-year Treasury bill yields climbed 106
basis points to 5.65% on November 30, and other short-term rates followed suit.
A considerable portion of those increases occurred in the last few months of the
period -- for example, the one-year rate rose more than 40 basis points in
October and November alone. Yields on money market securities benefited from
these changes.
PERFORMANCE AND STRATEGY REVIEW
- -------------------------------
PERFORMANCE COMPARISON
----------------------
Periods Ended 11/30/99 6 Months 12 Months
---------------------- -------- ---------
Prime Reserve Fund 2.36% 4.66%
Prime Reserve PLUS Shares 2.27 4.46
Lipper Money Market
Funds Average 2.26 4.43
================================================================================
The Prime Reserve Fund posted good 6- and 12-month returns of 2.36% and
4.66%, respectively, surpassing the 2.26% and 4.43% gains for the Lipper Money
Market Funds Average by a notable margin. Performance was aided by rising
interest rates, which helped rebuild yields in our market. For the first time in
many quarters, six-month dividends per share increased by a penny over the last
period, contributing to a considerably improved seven-day compound dividend
yield.
<PAGE>
The six-month return on the PLUS shares of the Prime Reserve Fund was
2.27%, and its 12-month advance was 4.46%. These results also outpaced the
benchmark averages by slim margins. We are pleased with this result as the PLUS
shares carry a higher expense ratio, reflecting additional services available to
its investors.
Rising interest rates during the period prompted a modest shift in our
investment strategy. Earlier in the fiscal year, rates had been relatively low
and the fund's dividend yield had slipped as a result. As we noted in the last
shareholder report, our strategy at the time was to capture the higher yields at
the longer end of the money market universe by maintaining an average maturity
10 to 15 days longer than our average peer. With rates rising, however, we chose
to reduce the portfolio's weighted average maturity from 68 days on May 31,
1999, to a more neutral 59 days on November 30, 1999. We largely used a
"barbell" portfolio structure to achieve the desired maturity -- that is,
dividing significant assets between securities with one-month and one-year
maturities. As long as the possibility of rising interest rates remains high, we
will preserve an average maturity that is generally the same as or shorter than
the average money market fund.
We made only minor changes to the portfolio's sector positioning, modestly
increasing our stake in asset-backed securities -- extremely high-quality,
liquid securities collateralized by receivables or other assets. These
securities contribute to the fund's very high-quality profile and also add to
the fund's diversification.
We increased fund exposure to floating rate notes from 18% of assets at the
end of May to 31% at the end of November. Issuance of these securities increased
dramatically during the middle of the year as they became a popular form of Year
2000 financing. The increased supply forced issuers to price offerings somewhat
more attractively than in the last couple of years in order to attract buyers.
Floating rate issues are designed with adjustable coupons that track rate
changes relatively quickly -- a benefit to shareholders when rates are rising.
OUTLOOK
- -------
Interest rates could move higher in coming months because of persistent
strength in the domestic economy and economic recovery overseas. However, the
Fed's continued vigilance on inflation is good news for fixed income investors
in the long term. Indeed, the market appears to us to offer attractive real
rates of returns at these levels, and 2000 could bring better results. At
present, we are focusing on the higher yields available in the marketplace and
on maintaining liquidity and flexibility in the portfolio.
Respectfully submitted,
/s/
Edward A. Wiese
President
November 19, 1999
<PAGE>
================================================================================
T. Rowe Price Prime Reserve Fund
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
--------------------
KEY STATISTICS
--------------
5/31/99 11/30/99
------- --------
PRIME RESERVE SHARES
- ----------------------
Price Per Share $ 1.00 $ 1.00
- -------------------------------------------------------------------
Dividends Per Share
- -------------------------------------------------------------------
For 6 months 0.022 0.023
- -------------------------------------------------------------------
For 12 months 0.047 0.046
- -------------------------------------------------------------------
Dividend Yield (7-Day Compound) * 4.35% 5.21%
- -------------------------------------------------------------------
Weighted Average Maturity (days) 68 59
- -------------------------------------------------------------------
Weighted Average Quality ** First Tier First Tier
- -------------------------------------------------------------------
PRIME RESERVE PLUS SHARES
- ---------------------------
Price Per Share $ 1.00 $ 1.00
- -------------------------------------------------------------------
Dividends Per Share
- -------------------------------------------------------------------
For 6 months 0.022 0.023
- -------------------------------------------------------------------
For 12 months NA 0.044
- -------------------------------------------------------------------
Dividend Yield (7-Day Compound) * 4.27 4.98
- -------------------------------------------------------------------
Weighted Average Maturity (days) 68 59
- -------------------------------------------------------------------
Weighted Average Quality ** First Tier First Tier
- -------------------------------------------------------------------
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the fund's net asset value per share at the end of the
period.
** All securities purchased in the money fund are rated in the two highest
categories (tiers) as established by national rating agencies or, if
unrated, are deemed of comparable quality by T. Rowe Price.
To request a prospectus for any T. Rowe Price fund, please call
1-800-638-5660. Read the prospectus carefully before investing.
<PAGE>
================================================================================
T. Rowe Price Prime Reserve Fund
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
SECTOR DIVERSIFICATION
- ----------------------
Percent of Percent of
Net Assets Net Assets
5/31/99 11/30/99
- ------------------------------------------------------------------------------
U.S. Negotiable Bank Notes 5% 7%
- ------------------------------------------------------------------------------
Certificates of Deposit 26 26
- ------------------------------------------------------------------------------
Domestic Negotiable CDs 5 5
- ------------------------------------------------------------------------------
Eurodollar Negotiable CDs 9 6
- ------------------------------------------------------------------------------
U.S. Dollar Denominated Foreign Negotiable CDs 12 15
- ------------------------------------------------------------------------------
Commercial Paper and Medium-Term Notes 63 65
- ------------------------------------------------------------------------------
Asset-Backed 20 22
- ------------------------------------------------------------------------------
Banking 9 15
- ------------------------------------------------------------------------------
Automobiles and Related 3 4
- ------------------------------------------------------------------------------
Insurance 3 3
- ------------------------------------------------------------------------------
Finance and Credit 5 3
- ------------------------------------------------------------------------------
All Other 23 18
- ------------------------------------------------------------------------------
Canadian Government and Municipalities 1 1
- ------------------------------------------------------------------------------
Foreign Government and Municipalities 2 1
- ------------------------------------------------------------------------------
Funding Agreements 4 3
- ------------------------------------------------------------------------------
Other Assets Less Liabilities -1 -3
- ------------------------------------------------------------------------------
Total 100% 100%
Fixed Rate Obligations 82 69
- ------------------------------------------------------------------------------
Floating Rate Instruments 18 31
================================================================================
<PAGE>
T. Rowe Price Prime Reserve 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.
[SEC chart for Prime Reserve Shares shown here.]
[SEC chart for Prime Reserve PLUS Shares shown here.]
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- ------------------------------------
This table shows how each share class would have performed each year if its
actual (or cumulative) returns for the periods shown had been earned at a
constant rate.
Since Inception
Periods Ended 11/30/99 1 Year 5 Years 10 Years Inception Date
- ---------------------- ------ ------- -------- --------- ---------
Prime Reserve Shares 4.66% 5.06% 4.85% 7.36% 1/26/76
Prime Reserve PLUS Shares 4.46 - - 4.46 11/1/98
Investment return represents past performance and will vary. An investment
in the fund is not insured or guaranteed by the FDICor any other government
agency. Although the fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the fund.
================================================================================
<PAGE>
T. Rowe Price Prime Reserve Fund
- --------------------------------------------------------------------------------
Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
PRIME RESERVE SHARES
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
6 Months Year
Ended Ended
11/30/99 5/31/99 5/31/98 5/31/97 5/31/96 5/31/95
-------- ------- ------- ------- ------- -------
NET ASSET VALUE
Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment activities
Net investment income 0.023 0.047 0.050 0.048 0.051 0.047
Distributions
Net investment income (0.023) (0.047) (0.050) (0.048) (0.051) (0.047)
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
RATIOS/SUPPLEMENTAL DATA
- ------------------------
TOTAL RETURN* 2.36% 4.82% 5.16% 4.92% 5.25% 4.85%
- ------------------------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.64%+ 0.66% 0.63% 0.64% 0.66% 0.67%
- ------------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 4.66%+ 4.70% 5.06% 4.83% 5.07% 4.76%
- ------------------------------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 5,322 $ 5,169 $ 4,889 $ 4,561 $ 4,011 $ 3,841
- ------------------------------------------------------------------------------------------------
<FN>
* 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
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Prime Reserve Fund
- --------------------------------------------------------------------------------
Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
PRIME RESERVE PLUS SHARES
- -------------------------
6 Months 11/1/98
Ended Through
11/30/99 5/31/99
-------- -------
NET ASSET VALUE
Beginning of period $ 1.000 $ 1.000
- -------------------------------------------------------------------------------
Investment activities
Net investment income 0.023 0.025
Distributions
Net investment income (0.023) (0.025)
- -------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 1.000 $ 1.000
RATIOS/SUPPLEMENTAL DATA
- ------------------------
TOTAL RETURN* 2.27% 2.50%
- -----------------------------------------------------------------------------
Ratio of total expenses to average net assets 0.81%+ 0.82%+
- -----------------------------------------------------------------------------
Ratio of net investment income to
average net assets 4.53%+ 4.22%+
- -----------------------------------------------------------------------------
Net assets, end of period (in millions) $ 34 $ 20
- -----------------------------------------------------------------------------
* Total return reflects the rate that an investor would have earned on an
investment in the fund during the period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE PRIME RESERVE FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1999
STATEMENT OF NET ASSETS
- -----------------------
Par Value
In thousands
BANK NOTES 7.0%
- ----------------
Coamerica Bank, VR
5.43%, 12/1/99 $ 12,000 $ 11,996
- -----------------------------------------------------------------------------
5.378%, 12/13/99 25,000 24,992
- -----------------------------------------------------------------------------
Fifth Third Bank Cincinnati Ohio
5.39%, 12/22 - 12/28/99 100,000 100,001
- -----------------------------------------------------------------------------
First Tennessee Bank, VR, 5.419%, 12/17/99 36,800 36,791
- -----------------------------------------------------------------------------
First USA Bank Delaware, 6.08%, 10/10/00 21,000 20,991
- -----------------------------------------------------------------------------
Huntington National Bank, 6.26%, 10/27/00 14,900 14,895
- -----------------------------------------------------------------------------
Key Bank N.A., VR, 6.061%, 2/28/00 25,700 25,692
- -----------------------------------------------------------------------------
National City Bank, VR, 5.621%, 12/29/99 57,700 57,662
- -----------------------------------------------------------------------------
Southtrust Bank, VR, 5.439%, 12/6/99 34,700 34,680
- -----------------------------------------------------------------------------
U.S. Bank N.A. Minnesota, VR, 5.409%, 12/15/99 35,000 34,988
- -----------------------------------------------------------------------------
Westpac Banking Corp., VR, 5.444%, 12/6/99 13,000 12,993
- -----------------------------------------------------------------------------
Total Bank Notes (Cost $375,681) 375,681
- -----------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 25.6%
- ------------------------------
Abbey National Treasury Services PLC
(London)
5.30%, 12/21/99 30,000 30,000
- -----------------------------------------------------------------------------
5.44%, 12/31/99 30,000 30,001
- -----------------------------------------------------------------------------
Allfirst Bank Maryland
5.58%, 12/20/99 25,000 24,990
- -----------------------------------------------------------------------------
VR, 6.123%, 2/7/00 10,000 9,998
- -----------------------------------------------------------------------------
Banco Bilbao Vizcaya New York, 5.89%, 3/7/00 4,000 3,999
- -----------------------------------------------------------------------------
Bank Austria, 6.185%, 12/1/00 50,000 49,969
- -----------------------------------------------------------------------------
<PAGE>
Bank of Nova Scotia, 6.22%, 12/4/00 45,000 44,965
- -----------------------------------------------------------------------------
Bank of Scotland, 5.50%, 12/8/99 24,750 24,724
- -----------------------------------------------------------------------------
Barclays Bank PLC, (London)
5.01%, 12/30/99 40,000 40,000
- -----------------------------------------------------------------------------
5.26%, 12/20/99 25,000 25,000
- -----------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, (London),
5.35%, 12/29/99 20,000 20,000
- -----------------------------------------------------------------------------
Chase Manhattan Bank, 5.00%, 12/21/99 59,500 59,500
- -----------------------------------------------------------------------------
Commerzbank, 5.90%, 8/9/00 43,900 43,865
- -----------------------------------------------------------------------------
Credit Agricole Indosuez
VR
5.395%, 12/8/99 29,700 29,683
- -----------------------------------------------------------------------------
5.40%, 12/1/99 49,700 49,656
- -----------------------------------------------------------------------------
Credit Commercial de France, 6.00%, 2/29/00 $ 40,000 $ 40,000
- -----------------------------------------------------------------------------
Credit Communal De Belgique, VR, 6.106%, 2/29/00 50,000 49,982
- -----------------------------------------------------------------------------
Deutsche Bank AG New York, 6.19%, 12/1/00 30,000 29,980
- -----------------------------------------------------------------------------
Dresdner Bank, VR, 5.559%, 12/23/99 49,900 49,887
- -----------------------------------------------------------------------------
First Union National Bank, VR, 6.14%, 2/16/00 10,000 10,000
- -----------------------------------------------------------------------------
Fleet National Bank, VR, 5.405%, 12/6/99 22,000 22,000
- -----------------------------------------------------------------------------
Generale Bank, 4.92%, 12/14/99 50,000 50,000
- -----------------------------------------------------------------------------
Halifax, 5.40%, 12/30/99 20,000 19,998
- -----------------------------------------------------------------------------
Harris Trust & Savings Bank, 5.53%, 12/17/99 38,000 38,000
- -----------------------------------------------------------------------------
Lloyds Bank
5.37%, 12/29/99 10,000 10,000
- -----------------------------------------------------------------------------
5.42%, 12/29/99 30,000 30,001
- -----------------------------------------------------------------------------
Merita Bank PLC
6.09%, 10/10/00 39,250 39,234
- -----------------------------------------------------------------------------
(London), 6.16%, 1/28/00 25,000 25,000
- -----------------------------------------------------------------------------
Natexis Banque, 5.285%, 3/10/00 29,000 28,997
- -----------------------------------------------------------------------------
National Bank of Canada, VR, 5.49%, 6/5/00 14,850 14,848
- -----------------------------------------------------------------------------
<PAGE>
National Westminster Bank PLC, 5.29%, 12/27/99 10,000 10,000
- -----------------------------------------------------------------------------
Norddeutsche Landesbank, (London)
5.29%, 12/29/99 25,000 25,000
- -----------------------------------------------------------------------------
6.12%, 2/1/00 50,000 50,001
- -----------------------------------------------------------------------------
Skandinaviska Enskilda Banken, VR, 5.569%, 12/24/99 25,000 24,995
- -----------------------------------------------------------------------------
Societe Generale, VR, 5.399%, 12/16/99 42,800 42,788
- -----------------------------------------------------------------------------
Svenska Handelsbanken
5.30%, 12/30/99 24,000 24,000
- -----------------------------------------------------------------------------
6.06%, 1/14/00 32,000 32,001
- -----------------------------------------------------------------------------
UBS AG
5.51%, 6/5/00 24,900 24,895
- -----------------------------------------------------------------------------
6.01%, 8/14/00 64,700 64,678
- -----------------------------------------------------------------------------
Unibank A/S, 5.92%, 8/7/00 9,800 9,797
- -----------------------------------------------------------------------------
Union Bank of California, 5.05%, 12/13/99 25,000 25,000
- -----------------------------------------------------------------------------
Wachovia Bank of North Carolina, 5.53%, 12/20/99 30,000 30,000
- -----------------------------------------------------------------------------
Westpac Banking Corp., 5.00%, 12/10/99 49,500 49,500
- -----------------------------------------------------------------------------
Wilmington Trust, 6.23%, 10/23/00 15,000 14,991
- -----------------------------------------------------------------------------
Total Certificates of Deposit (Cost $1,371,923) 1,371,923
- -----------------------------------------------------------------------------
COMMERCIAL PAPER 49.5%
- -----------------------
Albertson's, 4(2), VR, 5.424%, 12/14/99 $ 25,000 $ 24,994
- -----------------------------------------------------------------------------
Alliance & Leicester, 4(2), 5.31%, 12/7 - 12/8/99 51,700 51,651
- -----------------------------------------------------------------------------
Alpine Securitization Corp.
6.00%, 1/13 - 2/10/00 16,089 15,904
- -----------------------------------------------------------------------------
6.02%, 1/19/00 9,000 8,926
- -----------------------------------------------------------------------------
6.03%, 1/18/00 5,000 4,960
- -----------------------------------------------------------------------------
6.05%, 1/25/00 28,200 27,939
- -----------------------------------------------------------------------------
6.10%, 1/28/00 10,200 10,100
- -----------------------------------------------------------------------------
6.12%, 1/28/00 3,983 3,944
- -----------------------------------------------------------------------------
<PAGE>
American Home Products
4(2)
5.78%, 3/6/00 2,892 2,848
- -----------------------------------------------------------------------------
VR, 5.667%, 12/20/99 50,000 49,995
- -----------------------------------------------------------------------------
Asset Securitization Cooperative Corp.
4(2), VR
5.30%, 12/1/99 20,000 20,000
- -----------------------------------------------------------------------------
5.543%, 12/20/99 39,750 39,750
- -----------------------------------------------------------------------------
5.98%, 1/27/00 35,000 34,668
- -----------------------------------------------------------------------------
6.00%, 1/27/00 53,500 52,992
- -----------------------------------------------------------------------------
Associates Financial Services Co. of Puerto Rico,
5.98%, 1/31/00 3,192 3,160
- -----------------------------------------------------------------------------
AT&T, 4(2), VR, 6.136%, 1/13/00 50,000 49,988
- -----------------------------------------------------------------------------
Bell South Capital Funding, 4(2), 5.42%, 2/2/00 1,000 991
- -----------------------------------------------------------------------------
BMW US Capital, 5.70%, 12/1/99 28,105 28,105
- -----------------------------------------------------------------------------
Caisse des Depots et Consignations, 4(2),
5.30%, 12/10/99 35,000 34,954
- -----------------------------------------------------------------------------
CBA (Delaware) Finance, 5.75%, 5/22/00 35,000 34,033
- -----------------------------------------------------------------------------
Chase Manhattan Corp., 5.50%, 12/21/99 29,000 28,911
- -----------------------------------------------------------------------------
Citicorp, 5.52%, 12/22/99 20,000 19,936
- -----------------------------------------------------------------------------
Citigroup, 5.52%, 12/22/99 5,000 4,984
- -----------------------------------------------------------------------------
Coca Cola Company, 4(2), 5.53%, 12/21/99 50,000 49,846
- -----------------------------------------------------------------------------
Corporate Asset Funding
4(2)
5.33%, 12/2/99 34,500 34,495
- -----------------------------------------------------------------------------
5.43%, 12/6/99 49,750 49,750
- -----------------------------------------------------------------------------
5.95%, 1/24/00 36,000 35,679
- -----------------------------------------------------------------------------
Corporate Receivables Corp.
5.35%, 12/7/99 $ 50,000 $ 49,955
- -----------------------------------------------------------------------------
VR, 5.448%, 12/15/99 48,750 48,750
- -----------------------------------------------------------------------------
<PAGE>
Credit Suisse First Boston, Inc.
5.89%, 2/17/00 25,000 24,681
- -----------------------------------------------------------------------------
4(2), VR, 5.593%, 12/21/99 10,000 10,000
- -----------------------------------------------------------------------------
Delaware Funding
4(2)
5.32%, 12/3/99 20,000 19,994
- -----------------------------------------------------------------------------
5.82%, 2/22/00 50,000 49,329
- -----------------------------------------------------------------------------
6.00%, 1/24/00 20,000 19,820
- -----------------------------------------------------------------------------
6.10%, 1/20/00 50,000 49,577
- -----------------------------------------------------------------------------
Den Danske Corp.
5.12%, 12/23/99 24,700 24,623
- -----------------------------------------------------------------------------
5.30%, 12/23/99 49,000 48,841
- -----------------------------------------------------------------------------
Dexia CLF Finance
4(2)
5.33%, 12/8/99 11,044 11,033
- -----------------------------------------------------------------------------
5.35%, 12/15/99 10,000 9,979
- -----------------------------------------------------------------------------
Dover Corp., 4(2), 5.55%, 12/2 - 12/7/99 6,000 5,995
- -----------------------------------------------------------------------------
Enterprise Funding
4(2)
5.33%, 12/3/99 5,000 4,998
- -----------------------------------------------------------------------------
5.38%, 12/3/99 2,500 2,499
- -----------------------------------------------------------------------------
5.50%, 12/16/99 4,000 3,991
- -----------------------------------------------------------------------------
5.52%, 12/15/99 12,800 12,773
- -----------------------------------------------------------------------------
5.53%, 12/16/99 24,497 24,441
- -----------------------------------------------------------------------------
Falcon Asset Securitization
4(2)
5.35%, 12/2/99 35,000 34,995
- -----------------------------------------------------------------------------
6.02%, 1/10/00 37,860 37,607
- -----------------------------------------------------------------------------
6.10%, 1/18/00 20,000 19,837
- -----------------------------------------------------------------------------
FCAR Owner Trust, 5.40%, 12/21/99 2,500 2,492
- -----------------------------------------------------------------------------
Finova Capital, VR, 6.12%, 2/14/00 24,900 24,900
- -----------------------------------------------------------------------------
France Telecom, 4(2), 5.75%, 12/9/99 38,155 38,106
- -----------------------------------------------------------------------------
<PAGE>
Gap, 4(2), 5.30%, 12/22/99 1,000 997
- -----------------------------------------------------------------------------
General Electric Capital, 5.90%, 3/10/00 $ 17,000 $ 16,721
- -----------------------------------------------------------------------------
Generale Funding LLC, 4(2), 5.145%, 12/27/99 40,000 39,851
- -----------------------------------------------------------------------------
Golden Funding
4(2)
5.83%, 3/3/00 26,082 25,689
- -----------------------------------------------------------------------------
6.14%, 1/27/00 7,200 7,130
- -----------------------------------------------------------------------------
Greenwich Funding, 4(2), 6.00%, 1/24/00 13,200 13,081
- -----------------------------------------------------------------------------
Halifax, 5.50%, 12/16/99 40,765 40,672
- -----------------------------------------------------------------------------
Heller Financial Services, 5.57%, 12/17/99 12,000 11,970
- -----------------------------------------------------------------------------
Island Finance of Puerto Rico
5.29%, 12/8/99 9,500 9,490
- -----------------------------------------------------------------------------
5.95%, 2/15/00 20,000 19,749
- -----------------------------------------------------------------------------
Jefferson Pilot
4(2)
5.92%, 2/1/00 10,000 9,898
- -----------------------------------------------------------------------------
5.95%, 2/1/00 2,500 2,474
- -----------------------------------------------------------------------------
Kitty Hawk Funding
4(2)
5.77%, 3/20/00 25,000 24,559
- -----------------------------------------------------------------------------
5.80%, 3/20/00 6,682 6,564
- -----------------------------------------------------------------------------
6.11%, 1/18/00 25,000 24,796
- -----------------------------------------------------------------------------
Knight-Ridder, 4(2), 6.08%, 2/4/00 6,000 5,934
- -----------------------------------------------------------------------------
Leland Stanford Junior Univ. of California
5.55%, 12/13/99 9,000 8,983
- -----------------------------------------------------------------------------
5.60%, 12/21/99 6,589 6,569
- -----------------------------------------------------------------------------
Lloyds Bank PLC
5.32%, 12/29/99 25,000 24,897
- -----------------------------------------------------------------------------
5.33%, 12/29/99 4,500 4,481
- -----------------------------------------------------------------------------
5.37%, 12/20/99 25,000 24,929
- -----------------------------------------------------------------------------
Market Street Funding, 4(2), 5.55%, 12/14/99 49,000 48,902
- -----------------------------------------------------------------------------
<PAGE>
Marsh USA
4(2)
5.53%, 2/1/00 36,700 36,351
- -----------------------------------------------------------------------------
5.75%, 3/20/00 40,000 39,297
- -----------------------------------------------------------------------------
Merck & Company, 5.37%, 2/1/00 1,000 991
- -----------------------------------------------------------------------------
Merrill Lynch
5.30%, 12/17/99 25,000 24,941
- -----------------------------------------------------------------------------
5.50%, 12/2/99 19,500 19,497
- -----------------------------------------------------------------------------
Morgan Stanley Dean Witter, 5.93%, 2/3/00 $ 36,000 $ 35,620
- -----------------------------------------------------------------------------
Natexis US Finance, 5.34%, 12/20/99 20,000 19,944
- -----------------------------------------------------------------------------
Northern Illinois Gas, 5.27%, 12/3/99 4,158 4,157
- -----------------------------------------------------------------------------
Park Avenue Receivables Corp.
4(2)
5.34%, 12/8 - 12/17/99 17,100 17,073
- -----------------------------------------------------------------------------
6.15%, 1/18/00 2,020 2,003
- -----------------------------------------------------------------------------
VR, 5.478%, 12/13/99 49,750 49,750
- -----------------------------------------------------------------------------
VR, 5.743%, 12/22/99 25,000 25,000
- -----------------------------------------------------------------------------
Power Auth., State of New York, 5.30%, 12/8/99 10,240 10,229
- -----------------------------------------------------------------------------
Preferred Receivables Funding
4(2)
5.34%, 12/9/99 18,000 17,979
- -----------------------------------------------------------------------------
5.35%, 12/13/99 48,500 48,414
- -----------------------------------------------------------------------------
5.50%, 12/10/99 11,400 11,384
- -----------------------------------------------------------------------------
5.85%, 2/7/00 14,000 13,845
- -----------------------------------------------------------------------------
5.88%, 1/24/00 11,070 10,972
- -----------------------------------------------------------------------------
5.95%, 2/11/00 4,000 3,952
- -----------------------------------------------------------------------------
6.02%, 1/31/00 16,000 15,837
- -----------------------------------------------------------------------------
6.10%, 1/20/00 32,500 32,225
- -----------------------------------------------------------------------------
Province of Quebec, 4.77%, 12/17/99 38,400 38,319
- -----------------------------------------------------------------------------
Reed Elsevier, 4(2), 5.65%, 12/1/99 1,098 1,098
- -----------------------------------------------------------------------------
<PAGE>
Repeat Offering Securitization Entity
4(2)
6.05%, 1/21/00 2,000 1,983
- -----------------------------------------------------------------------------
6.14%, 1/24/00 2,788 2,762
- -----------------------------------------------------------------------------
6.16%, 1/28/00 24,250 24,009
- -----------------------------------------------------------------------------
Sand Dollar Funding LLC
4(2)
5.90%, 2/9 - 2/11/00 102,922 101,732
- -----------------------------------------------------------------------------
6.05%, 1/28/00 24,500 24,261
- -----------------------------------------------------------------------------
6.10%, 1/21/00 28,560 28,313
- -----------------------------------------------------------------------------
Schering Corp., 5.45%, 12/7/99 9,125 9,117
- -----------------------------------------------------------------------------
Tasmanian Public Finance, 4(2), 5.35%, 12/10/99 9,450 9,437
- -----------------------------------------------------------------------------
Telstra, 5.35%, 12/17/99 13,500 13,468
- -----------------------------------------------------------------------------
Toronto-Dominion Holdings (USA), 5.35%, 12/13/99 65,000 64,884
- -----------------------------------------------------------------------------
Toyota Motor Credit
5.30%, 12/14/99 $ 38,450 $ 38,376
- -----------------------------------------------------------------------------
5.50%, 12/17/99 20,942 20,891
- -----------------------------------------------------------------------------
Variable Funding Capital, 4(2), 6.25%, 1/21/00 9,500 9,416
- -----------------------------------------------------------------------------
Westpac Capital, 5.12%, 12/22/99 25,000 24,925
- -----------------------------------------------------------------------------
Yale Univ.
5.52%, 12/2/99 11,000 10,998
- -----------------------------------------------------------------------------
6.12%, 1/26/00 25,850 25,604
- -----------------------------------------------------------------------------
ZCM Matched Funding
5.70%, 12/1/99 25,000 25,000
- -----------------------------------------------------------------------------
5.71%, 12/1/99 25,000 25,000
- -----------------------------------------------------------------------------
4(2), 5.64%, 12/6/99 30,000 29,976
- -----------------------------------------------------------------------------
Total Commercial Paper (Cost $2,650,085) ,650,085
- -----------------------------------------------------------------------------
<PAGE>
MEDIUM-TERM NOTES 17.9%
- ------------------------
A T & T Capital, VR, 6.83%, 12/1/00 21,250 21,388
- -----------------------------------------------------------------------------
Abbey National Treasury Services PLC, 5.92%, 8/7/00 50,000 49,987
- -----------------------------------------------------------------------------
American General Finance
7.10%, 12/23/99 4,250 4,255
- -----------------------------------------------------------------------------
Sr. Notes, 7.125%, 12/1/99 1,500 1,500
- -----------------------------------------------------------------------------
Associates Manufacturing Housing Pass-Through Trust
(144a), VR, 5.658%, 12/15/99 34,069 34,069
- -----------------------------------------------------------------------------
Associates Corp. of North America, Sr. Notes,
8.25%, 12/1/99 1,000 1,000
- -----------------------------------------------------------------------------
Bear Stearns, VR, 5.51%, 12/10/99 24,800 24,806
- -----------------------------------------------------------------------------
Beta Finance, Inc., VR, 5.428%, 12/15/99 50,000 49,989
- -----------------------------------------------------------------------------
Caterpillar Financial Services
6.95%, 11/1/00 1,400 1,409
- -----------------------------------------------------------------------------
VR
5.664%, 12/27/99 15,000 14,998
- -----------------------------------------------------------------------------
6.104%, 7/10/00 15,900 15,900
- -----------------------------------------------------------------------------
Chrysler Financial
5.25%, 10/19/00 3,500 3,476
- -----------------------------------------------------------------------------
Sr. Notes, 9.50%, 12/15/99 13,000 13,021
- -----------------------------------------------------------------------------
Ciesco L.P.
(144a), VR
5.424%, 12/16/99 50,000 49,987
- -----------------------------------------------------------------------------
5.479%, 12/17/99 24,750 24,745
- -----------------------------------------------------------------------------
CIT Group, 5.875%, 12/9/99 $ 12,000 $ 12,002
- -----------------------------------------------------------------------------
Citicorp
VR
5.439%, 12/2/99 25,000 25,000
- -----------------------------------------------------------------------------
6.131%, 2/10/00 10,000 9,998
- -----------------------------------------------------------------------------
Colgate Palmolive, VR, 6.033%, 2/7/00 24,800 24,783
- -----------------------------------------------------------------------------
Corestates Capital, VR, 5.509%, 12/1/99 5,000 5,000
- -----------------------------------------------------------------------------
<PAGE>
Countrywide Home Loans
6.43%, 10/23/00 4,000 4,003
- -----------------------------------------------------------------------------
VR, 5.559%, 12/30/99 23,000 23,000
- -----------------------------------------------------------------------------
DaimlerChrysler North America, VR, 5.538%, 12/30/99 49,800 49,780
- -----------------------------------------------------------------------------
Diageo PLC, 6.24%, 12/4/00 48,900 48,872
- -----------------------------------------------------------------------------
Ford Motor Credit
6.375%, 10/6/00 5,000 5,011
- -----------------------------------------------------------------------------
7.02%, 10/10/00 3,000 3,023
- -----------------------------------------------------------------------------
VR
5.499%, 10/2/00 20,000 19,984
- -----------------------------------------------------------------------------
6.038%, 2/18/00 25,000 24,982
- -----------------------------------------------------------------------------
General Electric Capital, VR, 5.503%, 12/1/99 20,000 19,994
- -----------------------------------------------------------------------------
General Motors Acceptance Corp.
6.125%, 11/21/00 5,000 4,990
- -----------------------------------------------------------------------------
6.21%, 9/19/00 13,000 13,011
- -----------------------------------------------------------------------------
Goldman Sachs Group
VR
5.40%, 12/13/99 25,000 25,000
- -----------------------------------------------------------------------------
5.404%, 12/6/99 15,000 15,000
- -----------------------------------------------------------------------------
GTE, VR, 5.546%, 12/13/99 24,900 24,891
- -----------------------------------------------------------------------------
Heller Financial Services, 5.875%, 11/1/00 1,500 1,495
- -----------------------------------------------------------------------------
Household Finance, VR, 5.569%, 12/10/99 10,000 10,000
- -----------------------------------------------------------------------------
IBM, VR, 6.104%, 1/28/00 12,800 12,792
- -----------------------------------------------------------------------------
International Lease Finance, 6.25%, 10/15/00 6,000 6,007
- -----------------------------------------------------------------------------
John Deere Owner Trust, VR, 4.999%, 6/19/00 8,943 8,943
- -----------------------------------------------------------------------------
KFW International Finance, 9.50%, 12/15/00 3,915 4,041
- -----------------------------------------------------------------------------
LINCS Series 1999-2, (144a), VR, 5.448%, 12/20/99 72,900 72,900
- -----------------------------------------------------------------------------
National Rural Utilities Cooperative Finance Corp.
VR, 5.409%, 12/2/99 54,900 54,900
- -----------------------------------------------------------------------------
Norwest Corp., 6.125%, 10/15/00 1,500 1,500
- -----------------------------------------------------------------------------
Norwest Financial, Sr. Notes, 6.875%, 12/15/99 $ 1,000 $ 1,001
- -----------------------------------------------------------------------------
<PAGE>
Rabobank Optional Redemption Trust, VR,
5.459%, 12/17/99 14,363 14,363
- -----------------------------------------------------------------------------
Royal Bank of Canada, VR, 6.204%, 1/28/00 10,000 9,998
- -----------------------------------------------------------------------------
Salomon Smith Barney, (144a), 6.98%, 12/30/99 2,000 2,003
- -----------------------------------------------------------------------------
Strategic Money Market Trust (1999-B), VR,
5.57%, 12/15/99 50,000 50,000
- -----------------------------------------------------------------------------
Wachovia Bank Corp., Sub. Notes, 7.00%, 12/15/99 1,475 1,476
- -----------------------------------------------------------------------------
Wells Fargo & Company, 5.225%, 4/10/00 40,000 39,995
- -----------------------------------------------------------------------------
Total Medium-Term Notes (Cost $960,268) 960,268
- -----------------------------------------------------------------------------
FUNDING AGREEMENTS 2.7%
- ------------------------
Allstate Life Insurance, VR, 5.558%, 12/1/99 + 25,000 25,000
- -----------------------------------------------------------------------------
Peoples Benefit Life Insurance
VR
5.55%, 12/1/99 + 40,000 40,000
- -----------------------------------------------------------------------------
5.56%, 12/1/99 + 25,000 25,000
- -----------------------------------------------------------------------------
Protective Life Insurance, VR, 5.703%, 12/1/99 + 30,000 30,000
- -----------------------------------------------------------------------------
Security Life of Denver, 6.301%, 2/23/00 + 25,000 25,000
- -----------------------------------------------------------------------------
Total Funding Agreements (Cost $145,000) 145,000
<PAGE>
TOTAL INVESTMENTS IN SECURITIES
102.7% of Net Assets (Cost $5,502,957) $ 5,502,957
Other Assets Less Liabilities (146,941)
NET ASSETS $ 5,356,016
NET ASSETS CONSIST OF:
Accumulated net investment income - net of distributions $ 735
Accumulated net realized gain/loss - net of distributions 735
Paid-in-capital applicable to $0.01 par value capital stock
outstanding; 15,000,000,000 shares authorized 5,354,546
NET ASSETS $ 5,356,016
NET ASSET VALUE PER SHARE
PRIME RESERVE SHARES
($5,321,900,357/5,321,928,324 SHARES OUTSTANDING) $ 1.00
PRIME RESERVE PLUS SHARES
($34,115,443/34,115,782 SHARES OUTSTANDING) $ 1.00
================================================================================
+ Private Placement
VR Variable Rate
4(2) Commercial Paper sold within terms of a private placement memorandum,
exempt from registration under section 4.2 of the Securities Act of
1933, as amended, and may be sold only to dealers in that program or
other "accredited investors".
144a Security was purchased pursuant to Rule 144a under the Securities Act
of 1933 and may not be resold subject to that rule except to qualified
institutional buyers -- total of such securities at period-end amounts
to 3.4% of net assets.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE PRIME RESERVE FUND
- --------------------------------
Unaudited
STATEMENT OF OPERATIONS
- -----------------------
In thousands
6 Months
Ended
11/30/99
--------
INVESTMENT INCOME
- -----------------
Interest income $ 140,592
---------
Expenses
Investment management 9,786
Shareholder servicing
Prime Reserve shares 6,522
Prime Reserve PLUS shares 111
Prospectus and shareholder reports 381
Custody and accounting 150
Registration 31
Legal and audit 19
Directors 12
Miscellaneous 20
---------
Total expenses 17,032
Expenses paid indirectly (5)
Net expenses 17,027
---------
Net investment income 123,565
---------
REALIZED GAIN (LOSS)
- --------------------
Net realized gain (loss) on securities (45)
---------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 123,520
---------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE PRIME RESERVE FUND
- --------------------------------
Unaudited
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
In thousands
6 Months Year
Ended Ended
11/30/99 5/31/99
-------- -------
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------
Operations
Net investment income $ 123,565 $ 238,106
Net realized gain (loss) (45) 695
-------------------------
Increase (decrease) in net assets
from operations 123,520 238,801
-------------------------
Distributions to shareholders
Net investment income
Prime Reserve shares (122,943) (238,015)
Prime Reserve PLUS shares (622) (170)
-------------------------
Decrease in net assets from distributions (123,565) (238,185)
-------------------------
Capital share transactions *
Shares sold
Prime Reserve shares 4,675,776 10,346,430
Prime Reserve PLUS shares 47,242 36,500
-------------------------
Increase in net assets from shares sold 4,723,018 10,382,930
-------------------------
Distributions reinvested
Prime Reserve shares 118,648 230,066
Prime Reserve PLUS shares 611 165
-------------------------
Increase in net assets from
distributions reinvested 119,259 230,231
-------------------------
Shares redeemed
Prime Reserve shares (4,641,515) (10,297,344)
Prime Reserve PLUS shares (33,712) (16,691)
-------------------------
Decrease in net assets from shares redeemed (4,675,227) (10,314,035)
-------------------------
Increase (decrease) in net assets from
capital share transactions 167,050 299,126
-------------------------
NET ASSETS
- ----------
Increase (decrease) during period 167,005 299,742
Beginning of period 5,189,011 4,889,269
-------------------------
End of period $5,356,016 $ 5,189,011
-------------------------
-------------------------
* Capital share transactions at net asses value of $1.00 per share.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE PRIME RESERVE FUND
- --------------------------------
Unaudited November 30, 1999
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
T. Rowe Price Prime Reserve 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 March 3, 1976. Its goals are preservation of
capital, liquidity, and, consistent with these, the highest possible current
income. The fund offers two classes of shares, Prime Reserve and Prime Reserve
PLUS. Prime Reserve PLUS commenced operations on November 1, 1998, and offers
expanded shareholder services, the cost of which is borne by its shareholders.
Each class has exclusive voting rights on matters related solely to that class,
separate voting rights on matters which relate to both classes, and, in all
other respects, the same rights and obligations as the other class.
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 Securities are valued at amortized cost. Assets and liabilities
for which such valuation procedures 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 autho rized by the Board of Directors.
PREMIUMS AND DISCOUNTS Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
CLASS ACCOUNTING Shareholder servicing expenses are charged directly to the
class to which they relate. Expenses common to both classes, investment income,
and realized gains and losses are allocated to the classes based upon the
relative daily net assets of each class. Income distributions are declared by
the fund on a daily basis, and paid monthly. Capital gain distributions, if any,
are declared by the fund on an annual basis.
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. 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. Expenses paid indirectly reflect credits earned on daily
uninvested cash balances at the custodian, which are used to reduce the fund's
custody charges.
<PAGE>
NOTE 2 - 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 November 30, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$5,502,957,000.
NOTE 3- 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 $1,618,000 was payable at November 30, 1999. The fee is computed daily
and paid monthly, and consists of an individual fund fee equal to 0.05% 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
November 30, 1999, 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.
The manager has agreed to bear any expenses through April 30, 2000, which
would cause Prime Reserve PLUS' ratio of total expenses to average net assets to
exceed 1.00%. Thereafter, through April 30, 2002, Prime Reserve PLUS is required
to reimburse the manager for these expenses, provided that its average net
assets have grown or expenses have declined sufficiently to allow reimbursement
with causing its ratio of total expenses to average net assets to exceed 1.00%.
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 fund's
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 $4,965,000 for the six months
ended November 30, 1999, of which $1,007,000 was payable at period-end.
================================================================================
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- ----------------------------------
INVESTMENT SERVICES AND INFORMATION
-----------------------------------
KNOWLEDGEABLE SERVICE REPRESENTATIVES
BY PHONE Shareholder service representatives are available from 8 a.m.
to 10 p.m. ET Monday through Friday and from 8:30 a.m. to 5 p.m. ET on
weekends. Call 1-800-225-5132 to speak directly with a representative
who will be able to assist you with your accounts.
IN PERSON Visit one of our investor center locations to meet with a
representative who will be able to assist you with your accounts. You
can also drop off applications or obtain prospectuses and other
literature at these centers.
AUTOMATED 24-HOUR SERVICES
TELE*ACCESS (Registration Mark) Call 1-800-638-2587 to obtain
information such as account balance, date and amount of your last
transaction, latest dividend payment, fund prices, and yields.
Additionally, you have the ability to request prospectuses,
statements, and account and tax forms; to reorder checks; and to
initiate purchase, redemption, and exchange orders for identically
registered accounts.
INTERNET. T. ROWE PRICE WEB SITE: WWW.TROWEPRICE.COM All the
information and services available on Tele*Access are available on our
Web site, including transactions in your fund and brokerage accounts
(with preauthorized access).
ACCOUNT SERVICES
CHECKING Write checks for $500 or more on any money market and most
bond fund accounts (except the High Yield and Emerging Markets Bond
Funds).
AUTOMATIC INVESTING Build your account over time by investing directly
from your bank account or paycheck with Automatic Asset Builder.
Additionally, Automatic Exchange enables you to set up systematic
investments from one fund account into another, such as from a money
fund into a stock fund. A $50 minimum makes it easy to get started.
AUTOMATIC WITHDRAWAL If you need money from your fund account on a
regular basis, you can establish scheduled, automatic redemptions.
DIVIDEND AND CAPITAL GAINS PAYMENT OPTIONS Reinvest all or some of
your distributions, or take them in cash. We give you maximum
flexibility and convenience.
<PAGE>
BROKERAGE SERVICES*
INVESTMENTS AVAILABLE You can trade stocks, bonds, options, precious
metals, and other securities at a savings over full-service commission
rates.**
TO OPEN AN ACCOUNT Call a shareholder service representative for more
information.
INVESTMENT INFORMATION
COMBINED STATEMENT A comprehensive overview of your T. Rowe Price
accounts is provided. The summary page gives you earnings by tax
category, provides total portfolio value, and lists your investments
by type. Detail pages itemize account transactions.
SHAREHOLDER REPORTS Portfolio managers review the performance of the
funds in plain language and discuss T. Rowe Price's economic outlook.
T. ROWE PRICE REPORT This is a quarterly newsletter with relevant
articles on market trends, personal financial planning, and T. Rowe
Price's economic perspective.
PERFORMANCE UPDATE This quarterly report reviews recent market
developments and provides comprehensive performance information for
every T. Rowe Price fund.
INSIGHTS These are reports on mutual fund tax issues, investment
strategies, investment fundamentals, and financial markets.
DETAILED INVESTMENT GUIDES Our Asset Mix Worksheet, College Planning
Kit, Diversifying Overseas: A Guide to International Investing,
Retirees Financial Guide, and Retirement Planning Kit (also available
on disk or CD-ROM for PC use) can help you determine and reach your
investment goals.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may vary
depending on size of order.
================================================================================
<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
<PAGE>
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
<PAGE>
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. 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.
================================================================================
T. Rowe Price Retirement Plans and Resources
- --------------------------------------------
RETIREMENT PLANS AND RESOURCES
- ------------------------------
We recognize that saving for retirement is the number one investment
goal for most Americans. We can help you meet your retirement needs,
whether you are starting an IRA or designing a retirement program for
your employees. T. Rowe Price offers an assortment of retirement plans
for individuals, the self-employed, small businesses, corporations,
and nonprofit organizations. We provide recordkeeping, communications,
and investment management services, as well as a variety of
educational materials, self-help planning guides, and software tools
to help you choose and implement a retirement plan appropriate for
you. For information or to request literature, call us at
1-800-638-5660.
<PAGE>
IRAs AND QUALIFIED PLANS
- ------------------------
Traditional IRA Money Purchase Pension
Roth IRA "Paired" Plans (Money Purchase
Rollover IRA Pension and Profit Sharing Plans)
SEP-IRA 401(k)
SIMPLE IRA 401(b)
Profit Sharing 457 Deferred Compensation
RETIREMENT RESOURCES AT T. ROWE PRICE
- -------------------------------------
PLANNING AND INFORMATIONAL GUIDES
- ---------------------------------
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
INVESTMENT KITS
- ---------------
The IRA Investing Kit
Roth IRA Conversion Kit
Rollover IRA Kit
The T. Rowe Price SIMPLE IRA Plan Kit
The T. Rowe Price SEP-IRA Plan
The Simplified Keogh Plan [Registration Mark] From T. Rowe Price
The T. Rowe Price 401(k) Century Plan [Registration Mark]
(for small businesses)
Money Purchase Pension/Profit Sharing Plan Kit
Investing for Retirement in Your 403(b) Account
The T. Rowe Price No-Load Variable Annuity Information Kit
INSIGHTS REPORTS
- ----------------
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
SOFTWARE PACKAGES
- -----------------
T. ROWE PRICE RETIREMENT PLANNING ANALYZER [TM] CD-ROM or diskette $19.95.
To order, please call 1-800-541-5760. Also available on the Internet for $9.95.
T. ROWE PRICE VARIABLE ANNUITY ANALYZER [TM] CD-ROM or diskette, free. To
order, please call 1-800-469-5304.
Many of these resources are also available for viewing or ordering on the
Internet at WWW.TROWEPRICE.COM.
================================================================================
<PAGE>
T. ROWE PRICE INSIGHTS REPORTS
THE FUNDAMENTALS OF INVESTING
Whether you are unsure how to get started or are saving for a specific
goal, such as retirement or college, the T. Rowe Price Insights series
can help you make informed investment decisions. These reports,
written in plain English about fundamental investment topics, can be
useful at every stage of your investment journey. They cover a range
of topics, from the basic, such as getting started with mutual funds,
to the more advanced, such as managing risk through diversification or
buying individual securities through a broker. To request one or more
Insights, call us at 1-800-638-5660.
INSIGHTS REPORTS
----------------
GENERAL INFORMATION
The ABCs of Giving
Back to Basics: The ABCs of Investing
The Challenge of Preparing for Retirement
Financial Planning After Retirement
Getting Started: Investing With Mutual Funds
The Roth IRA: A Review
Tax Information for Mutual Fund Investors
INVESTMENT STRATEGIES
Conservative Stock Investing
Dollar Cost Averaging
Equity Index Investing
Growth Stock Investing
Investing for Higher Yield
Managing Risk Through Diversification
The Power of Compounding
Value Investing
TYPES OF SECURITIES
The Basics of International Stock Investing
The Basics of Tax-Free Investing
The Fundamentals of Fixed Income Investing
Global Bond Investing
Investing in Common Stocks
Investing in Emerging Growth Stocks
Investing in Financial Services Stocks
Investing in Health Care Stocks
Investing in High-Yield Municipal Bonds
Investing in Money Market Securities
Investing in Mortgage-Backed Securities
Investing in Natural Resource Stocks
Investing in Science and Technology Stocks
Investing in Small-Company Stocks
Understanding Derivatives
Understanding High-Yield "Junk" Bonds
BROKERAGE INSIGHTS
Combining Individual Securities With Mutual Funds
Getting Started: An Introduction to Individual Securities
What You Should Know About Bonds
What You Should Know About Margin and Short-Selling
What You Should Know About Options
What You Should Know About Stocks
T. Rowe Price Insights are also available for reading or downloading
on the Internet at WWW.TROWEPRICE.COM.
================================================================================
<PAGE>
T. ROWE PRICE BROKERAGE
- -----------------------
BROKERAGE SERVICES
------------------
T. ROWE PRICE BROKERAGE IS A DIVISION OF T. ROWE PRICE INVESTMENT
SERVICES, INC., MEMBER NASD/SIPC.
T. Rowe Price Brokerage provides high-quality services and financial
tools you can use to manage your investments effectively and
conveniently. We also offer significant commission savings over
full-service brokerages on a wide range of individual securities and
other investments.*
INTERNET AND AUTOMATED SERVICES You can enter trades, access
quotes, and review account information 24 hours a day, seven days
a week, by telephone or computer. We offer a flat-rate commission
of $24.95 on stock trades placed through our Internet-Trader
service.**
RESEARCH SERVICES To help you make informed investment decisions,
we offer access to several sources of data. You can research your
investments using our Online Research & News Service, provided by
Thomson Investors Network, which includes company profiles,
intra-day and 12-month interactive charting, and analysts'
ratings and earnings estimates. Using our Research On Call
service, you can request reports from Standard & Poor's,
Vicker's, Lipper, and other well-known research providers to be
delivered by fax or by mail.
DIVIDEND REINVESTMENT SERVICE This service helps keep more of
your money working for you. Cash dividends (of $10 or greater)
from your eligible securities will be invested automatically in
additional shares of the same company, free of charge. Most
stocks listed on national securities exchanges or Nasdaq are
eligible for this service.
* Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may
vary depending on size of order.
** $24.95 per trade for up to 1,000 shares plus an additional
$.02 for each share over 1,000 shares. Visit our Web site
for a complete commission schedule or call for rates on
representative-assisted and other non-Internet trades.
================================================================================
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
<PAGE>
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
T. Rowe Price Investment Services, Inc., Distributor. F44-051 11/30/99
