- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
Growth & Income Fund
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
GROWTH & INCOME FUND
* After a sharp sell-off in late summer and early fall, the stock market
roared back to close with its fourth consecutive annual gain over 20%.
* The market's advance was narrowly led, with value stocks and small-cap
stocks largely left behind.
* The fund's gains of 1.22% and 9.96% for the 6- and 12-month periods
lagged the S&P 500 and its Lipper peer group average, reflecting our
dividend- and value-oriented strategy.
* We purchased a number of stocks in sectors that had been beaten down,
including energy and financial services.
* Performance disparities such as those in 1998 tend to correct
themselves as cycles change; the fund's valuation discipline should
continue to be rewarding over time.
<PAGE>
FELLOW SHAREHOLDERS
The past year was characterized by favorable economic growth, declining
interest rates, subdued corporate profits, and considerable stock market
volatilityNespecially in the second half. The general market indices suffered
declines of nearly 20% over a six-week period through the end of August and
then, powered by technology stocks, launched a startling 30% gain in the final
months of 1998.
================================================================================
Performance Comparison
----------------------
Periods Ended 12/31/98 6 Months 12 Months
---------------------- -------- ---------
Growth & Income Fund 1.22% 9.96%
S&P 500 9.22 28.57
Lipper Growth & Income
Funds Average 3.09 15.61
================================================================================
This period was a disappointing one for your fund. Although the 1998 return
of nearly 10% added nicely to the gains of recent years, it significantly lagged
the overall market as measured by the S&P 500 Stock Index. The last quarter of
the year was particularly frustrating from a comparative return perspective.
Your fund held up better than its peer group in the third quarter correction and
was ahead for the nine-month period, only to be left behind when the final
market surge largely bypassed the types of stocks we emphasize.
DISTRIBUTIONS
Your Board of Directors declared a fourth quarter income dividend of $0.14
per share, bringing the total for the year to $0.53. Additionally, on December
15, 1998, a long-term capital gain of $1.84 and a short-term gain of $0.01 were
declared to shareholders of record on that date. You should have already
received your check or statement reflecting these distributions, and also Form
1099-DIV reporting them for tax purposes.
MARKET ENVIRONMENT
In addition to the previously mentioned level of volatility, there were
several other distinct trends that made the investment environment very
challenging for us last year. Foremost of these was the extremely narrow
leadership of the market rise. Only 15 stocks accounted for over one-half of the
return generated by the S&P 500. In fact, the average stock in the index
experienced a gain of about 12% for the year, far below the index itself.
<PAGE>
================================================================================
Preparing For The Year 2000
- --------------------------------------------------------------------------------
The Year 2000 draws closer every day, and it holds special meaning beyond
the arrival of a new millennium. The issue for investors is that many computer
programs throughout the world use two digits instead of four to identify the
year and may assume the next century starts with 1900. If these programs are not
modified, they will not be able to correctly handle the century change when the
year changes from "99" to "00" on January 1, 2000, and they will no longer be
able to perform necessary functions. The Year 2000 issue affects all companies
and organizations.
T. Rowe Price has been taking steps to assure that its computer systems and
processes are capable of functioning in the Year 2000. Detailed plans for
remediation efforts have been developed and are currently being executed.
OUR PLAN OF ACTION
We began to address these issues several years ago by requiring that all
new systems process and store four-digit years. All critical systems have been
reprogrammed (including business applications required to service our customers
and processing infrastructure necessary to ensure the integrity of customer data
and investments), and they are currently being tested. Because we exchange data
electronically with customers and vendors, we are working with them to assess
the adequacy of their own compliance efforts. Our goal is to ensure the
continuation of the same level of service to all our mutual fund shareholders
and clients after December 31, 1999.
We are asking all vendors and companies we do business with for a Year 2000
compliance status, with the expectation that some organizations will not be able
to modify their interface files prior to December 31, 1999. In addition, we are
scheduling tests for critical vendors and companies that claim Year 2000
compliance to ensure that time-related data and calculations function properly
as we move into the next century.
SMOOTH TRANSITION PLANNED
We believe our programs and initiatives will provide a smooth transition
into the next millennium. We are assessing all systems providing products or
services to our retail mutual fund shareholders, retirement plan sponsors, and
participants, and we have modified them where necessary for the Year 2000.
<PAGE>
The Securities Industry Association (SIA) is coordinating Year 2000 testing
to assure that securities markets, clearing corporations, depositories, and
third party service providers can send, receive, and process files and
transactions accurately. In late July 1998, the SIA completed a beta test of
Year 2000 readiness. The test was considered successful in terms of transactions
completed and will serve as the basis for the SIA's industry-wide approach.
During October 1998, T. Rowe Price completed its beta test of Year 2000
readiness with the SIA and is ready for the industry-wide test that is scheduled
for March and April 1999.
For a more detailed discussion of our Year 2000 effort, as well as
continuing updates on our progress, please check our Web site
(WWW.TROWEPRICE.COM).
================================================================================
The other dominant trend of the past year was the superior performance of
large-cap growth stocks compared with value stocks. In part, this reflected the
uncertain corporate profit environment of the past year and the willingness of
many investors to "pay up" to own companies where the confidence level in
profitability improvement was high. This preference meant that companies exposed
to global weakness, particularly basic industry and commodities, were almost
totally left out of the rally. Not only was "growth" preferred, but only a
handful of all growth companies were favored. Nearly all of the 15 companies
driving the index return are generally considered to be blue chip growth stocks,
and most of the 15 are technology stocks.
Historically, performance disparities such as these tend to correct
themselves during different phases of the business and stock market cycles. In
fact, over longer periods, the average stock tends to out-perform the index, and
the performance of growth stocks and value stocks is quite variable. Given the
diversified, yield-oriented approach employed in the management of your fund, we
expect relative returns to improve considerably as the trends reverse in the
marketplace.
PORTFOLIO REVIEW
The fund's asset allocation changed little over the past six months, with
94% in common stocks, 1% in convertibles, and 1% in bonds and preferred stocks.
A modest reserve position of 4% allowed us some flexibility in implementing
portfolio changes; however, due to our high equity commitment, money for some
new additions was generated from the sale of existing holdings. This activity is
summarized in the table of Major Portfolio Changes following this letter.
Our major purchases in the last few months were a blend of new holdings and
enhancements of existing positions, but in character they were quite similar.
They were virtually all companies that were negatively affected by the
previously mentioned trends and had lagged the market considerably. For example,
BAKER HUGHES (oil services) and NEWMONT MINING (gold) were hurt by weakness in
commodity prices related to the global economic slowdown. MORGAN STANLEY DEAN
WITTER (investment banking and brokerage) was dragged down by the turmoil--even
panic--in the financial markets. The stock declined from over $90 at the end of
June to under $37 in early October, when we bought it. By year-end, it was back
over $70. Pointing up the often unreliable nature of investor mood swings, the
company just reported record fourth quarter earnings.
<PAGE>
All of the companies we purchased tend to have cyclical earnings patterns,
and their share prices were penalized accordingly. It is our belief that
anticipation of earnings improvement in these companies will also provide
favorable investment opportunities, albeit over a more normal, multiyear horizon
than was the case with Morgan Stanley Dean Witter.
================================================================================
FINANCIAL PROFILE
- -----------------
Growth &
As of 12/31/98 Income Fund S&P 500
- -------------- ----------- -------
Current Yield 2.3% 1.3%
Price/Book Ratio 4.0X 6.5X
Price/Earnings Ratio
(1999 estimated EPS) 19.6X 25.4X
Historical Beta
(based on monthly
returns for 5 years) 0.75 1.00
================================================================================
This recycling process--selling fully valued stocks and buying undervalued
ones--is a vital component of a value-oriented investment approach. Our focus is
to keep enhancing the yield and the relative valuation profile of your portfolio
holdings. We believe that, over time, this focus will result in attractive
returns and lower volatility. Your fund's emphasis on these characteristics is
shown in the Financial Profile table. The volatility measure ("beta") means that
the fund can be expected to have about 75% of the volatility of the S&P 500.
OUTLOOK
The current environment remains difficult for a yield- and value- oriented
approach like ours. Although this reality is frustrating in the short run, we
remain confident that sticking to our valuation discipline will prove rewarding
in the long run. Additionally, in a more adverse environment, we would expect
your fund to perform better than the general market.
Respectfully submitted,
/s/
Stephen W. Boesel
President and Chairman of the Investment Advisory Committee
January 22, 1999
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
Portfolio Highlights
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
12/31/98
- ------------------------------------------------------------------
Pfizer 2.5%
- ------------------------------------------------------------------
Corning 2.3
- ------------------------------------------------------------------
GE 2.3
- ------------------------------------------------------------------
Dayton Hudson 1.8
- ------------------------------------------------------------------
Chase Manhattan 1.7
- ------------------------------------------------------------------
Fannie Mae 1.7
- ------------------------------------------------------------------
Amoco 1.7
- ------------------------------------------------------------------
American Home Products 1.6
- ------------------------------------------------------------------
Household International 1.6
- ------------------------------------------------------------------
Amerada Hess 1.5
- ------------------------------------------------------------------
Unicom 1.5
- ------------------------------------------------------------------
FirstEnergy 1.4
- ------------------------------------------------------------------
Burlington Northern Santa Fe 1.4
- ------------------------------------------------------------------
Pall 1.4
- ------------------------------------------------------------------
H&R Block 1.4
- ------------------------------------------------------------------
American Stores 1.4
- ------------------------------------------------------------------
Norfolk Southern 1.3
- ------------------------------------------------------------------
American General 1.3
- ------------------------------------------------------------------
International Flavors & Fragrances 1.3
- ------------------------------------------------------------------
American Express 1.3
- ------------------------------------------------------------------
<PAGE>
AT&T 1.3
- ------------------------------------------------------------------
Reader's Digest 1.3
- ------------------------------------------------------------------
AlliedSignal 1.2
- ------------------------------------------------------------------
Great Lakes Chemical 1.2
- ------------------------------------------------------------------
Sara Lee 1.2
- ------------------------------------------------------------------
Total 38.6%
================================================================================
T. Rowe Price Growth & Income Fund
- -------------------------------------------------------------------------------
Portfolio Highlights
MAJOR PORTFOLIO CHANGES
Listed in descending order of size
6 Months Ended 12/31/98
Ten Largest Purchases
- ---------------------
Hercules *
Baker Hughes *
International Flavors & Fragrances
PacifiCorp *
AMP *
Morgan Stanley Dean Witter *
Union Pacific Capital Trust *
AlliedSignal
Newmont Mining
Starwood Hotels & Resorts
Ten Largest Sales
- -----------------
Willis-Corroon **
Schlumberger **
Honeywell **
UNUM **
EXEL **
Waste Management
RJR Nabisco **
First Data **
Dominion Resources **
Warner-Lambert
* Position added
** Position eliminated
================================================================================
<PAGE>
T. Rowe Price Growth & Income 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 a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
[Growth & Income Fund SEC Chart Shown Here]
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 12/31/98 1 Year 3 Years 5 Years 10 Years
- ---------------------- ------ ------- ------- --------
Growth & Income Fund 9.96% 19.50% 17.41% 15.02%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
For a share outstanding throughout each period
Financial Highlights
Year
Ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
NET ASSET VALUE
Beginning of period $ 26.36 $ 22.63 $ 19.18 $ 15.63 $ 16.57
- -------------------------------------------------------------------------------
Investment activities
Net investment income 0.55 0.55 0.52 0.58 0.50
Net realized and
unrealized gain (loss) 2.00 4.71 4.34 4.16 (0.53)
- -------------------------------------------------------------------------------
Total from
investment activities 2.55 5.26 4.86 4.74 (0.03)
- -------------------------------------------------------------------------------
Distributions
Net investment income (0.53) (0.56) (0.51) (0.59) (0.49)
Net realized gain (2.13) (0.97) (0.90) (0.60) (0.42)
- -------------------------------------------------------------------------------
Total distributions (2.66) (1.53) (1.41) (1.19) (0.91)
- -------------------------------------------------------------------------------
NET ASSET VALUE
===============================================================================
End of period $ 26.25 $ 26.36 $ 22.63 $ 19.18 $ 15.63
===============================================================================
Ratios/Supplemental=Data=======================================================
Total return* 9.96% 23.53% 25.64% 30.92% (0.15)%
- -------------------------------------------------------------------------------
Ratio of expenses to
average net assets 0.77% 0.78% 0.82% 0.84% 0.81%
- -------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 2.03% 2.22% 2.53% 3.31% 3.08%
- -------------------------------------------------------------------------------
Portfolio turnover rate 20.5% 15.7% 13.5% 26.2% 25.6%
- -------------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 3,563 $ 3,447 $ 2,489 $ 1,748 $ 1,229
- -------------------------------------------------------------------------------
* 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.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
Statement of Net Assets
- --------------------------------------------------------------------------------
Shares/Par Value
Common Stocks 93.6%
===============================================================================
FINANCIAL 14.4%
Bank and Trust 5.3%
Bank One 495,239 $ 25,288
- -------------------------------------------------------------------------------
Chase Manhattan 900,000 61,256
- -------------------------------------------------------------------------------
Citigroup 616,437 30,514
- -------------------------------------------------------------------------------
Golden Sate Bancorp * 319,300 5,308
- -------------------------------------------------------------------------------
Golden State Bancorp, Warrants, 1/1/01 * 480,800 2,179
- -------------------------------------------------------------------------------
KeyCorp 1,100,000 35,200
- -------------------------------------------------------------------------------
National City 400,000 29,000
- -------------------------------------------------------------------------------
188,745
- -------------------------------------------------------------------------------
Insurance 3.2%
American General 600,000 46,800
- -------------------------------------------------------------------------------
St. Paul Companies 1,200,000 41,700
- -------------------------------------------------------------------------------
Travelers Property Casualty (Class A) 800,000 24,800
- -------------------------------------------------------------------------------
113,300
- -------------------------------------------------------------------------------
Financial Services 5.9%
American Express 450,000 46,013
- -------------------------------------------------------------------------------
Bear Stearns 565,329 21,129
- -------------------------------------------------------------------------------
Fannie Mae 800,000 59,200
- -------------------------------------------------------------------------------
Household International 1,397,322 55,369
- -------------------------------------------------------------------------------
Morgan Stanley Dean Witter 400,000 28,400
- -------------------------------------------------------------------------------
210,111
- -------------------------------------------------------------------------------
Total Financial 512,156
- -------------------------------------------------------------------------------
<PAGE>
UTILITIES==12.6%===============================================================
Telephone 5.2%
AT&T 600,000 45,150
- -------------------------------------------------------------------------------
BellSouth 360,000 17,955
- -------------------------------------------------------------------------------
Frontier 1,200,000 40,800
- --------------------------------------------------------------------------------
GTE 400,000 26,000
- --------------------------------------------------------------------------------
SBC Communications 768,022 41,185
- --------------------------------------------------------------------------------
Telebras ADR 200,000 14,538
- --------------------------------------------------------------------------------
185,628
- --------------------------------------------------------------------------------
Electric Utilities 7.4%
DQE 600,000 26,362
- -------------------------------------------------------------------------------
Edison International 503,100 $ 14,024
- -------------------------------------------------------------------------------
Entergy 780,379 24,289
- -------------------------------------------------------------------------------
FirstEnergy 1,575,000 51,286
- -------------------------------------------------------------------------------
GPU 769,100 33,985
- -------------------------------------------------------------------------------
Niagara Mohawk * 1,000,000 16,125
- -------------------------------------------------------------------------------
PacifiCorp 1,000,000 21,063
- -------------------------------------------------------------------------------
Texas Utilities 500,000 23,344
- -------------------------------------------------------------------------------
Unicom 1,400,000 53,987
- -------------------------------------------------------------------------------
264,465
- -------------------------------------------------------------------------------
Total Utilities 450,093
- -------------------------------------------------------------------------------
<PAGE>
CONSUMER=NONDURABLES==21.0%====================================================
Cosmetics 1.3%
International Flavors & Fragrances 1,042,900 46,083
- -------------------------------------------------------------------------------
46,083
- -------------------------------------------------------------------------------
Beverages 2.2%
Anheuser-Busch 380,600 24,977
- -------------------------------------------------------------------------------
Brown-Forman (Class B) 220,000 16,651
- -------------------------------------------------------------------------------
PepsiCo 900,000 36,844
- -------------------------------------------------------------------------------
78,472
- -------------------------------------------------------------------------------
Food Processing 4.0%
General Mills 450,000 34,987
- -------------------------------------------------------------------------------
Heinz 300,000 16,988
- -------------------------------------------------------------------------------
McCormick 472,400 15,958
- -------------------------------------------------------------------------------
Ralston Purina 976,500 31,614
- -------------------------------------------------------------------------------
Sara Lee 1,550,000 43,691
- -------------------------------------------------------------------------------
143,238
- -------------------------------------------------------------------------------
Hospital Supplies/Hospital Management 1.6%
Abbott Laboratories 400,000 19,600
- -------------------------------------------------------------------------------
Baxter International 246,400 15,847
- -------------------------------------------------------------------------------
Smith & Nephew (GBP) 6,700,000 20,370
- -------------------------------------------------------------------------------
55,817
- -------------------------------------------------------------------------------
Pharmaceuticals 6.0%
American Home Products 1,000,000 56,312
- -------------------------------------------------------------------------------
Pfizer 700,000 87,806
- -------------------------------------------------------------------------------
Pharmacia & Upjohn 700,000 39,638
- -------------------------------------------------------------------------------
Warner-Lambert 400,000 30,075
- -------------------------------------------------------------------------------
213,831
- -------------------------------------------------------------------------------
<PAGE>
Miscellaneous Consumer Products 5.9%
Colgate-Palmolive 352,500 $ 32,738
- -------------------------------------------------------------------------------
Newell 600,000 24,750
- -------------------------------------------------------------------------------
Philip Morris 800,000 42,800
- -------------------------------------------------------------------------------
Procter & Gamble 400,000 36,525
- -------------------------------------------------------------------------------
Tomkins (GBP) 2,500,000 11,879
- -------------------------------------------------------------------------------
Unifi 1,000,000 19,563
- -------------------------------------------------------------------------------
UST 1,200,000 41,850
- -------------------------------------------------------------------------------
210,105
- -------------------------------------------------------------------------------
Total Consumer Nondurables 747,546
- -------------------------------------------------------------------------------
CONSUMER=SERVICES==6.1%========================================================
Restaurants 0.0%
Crestline Capital * 76,570 1,120
- -------------------------------------------------------------------------------
1,120
- -------------------------------------------------------------------------------
General Merchandisers 2.5%
Dayton Hudson 1,199,700 65,084
- -------------------------------------------------------------------------------
J.C. Penney 500,000 23,437
- -------------------------------------------------------------------------------
88,521
- -------------------------------------------------------------------------------
Specialty Merchandisers 2.0%
American Stores 1,313,800 48,529
- -------------------------------------------------------------------------------
Tupperware 1,373,900 22,583
- -------------------------------------------------------------------------------
71,112
- -------------------------------------------------------------------------------
Entertainment and Leisure 1.6%
Host Marriott 765,700 10,576
- -------------------------------------------------------------------------------
Reader's Digest (Class A) 1,032,400 26,004
- -------------------------------------------------------------------------------
Reader's Digest (Class B) 786,400 18,972
- -------------------------------------------------------------------------------
55,552
- -------------------------------------------------------------------------------
Total Consumer Services 216,305
- -------------------------------------------------------------------------------
<PAGE>
CONSUMER=CYCLICALS==7.1%=======================================================
Building and Real Estate 4.1%
CarrAmerica Realty, REIT 665,000 15,960
- -------------------------------------------------------------------------------
Federal Realty Investment Trust, REIT 775,000 18,309
- -------------------------------------------------------------------------------
Patriot American Hospitality, REIT 2,300,003 13,800
- -------------------------------------------------------------------------------
Prologis Trust, REIT 327,272 6,791
- -------------------------------------------------------------------------------
Reckson Associates Realty, REIT 750,000 16,641
- -------------------------------------------------------------------------------
Rouse, REIT 599,500 $ 16,486
- -------------------------------------------------------------------------------
Simon DeBartolo Group, REIT 841,000 23,968
- -------------------------------------------------------------------------------
Spieker Properties, REIT 200,000 6,925
- -------------------------------------------------------------------------------
Starwood Hotels & Resorts, REIT 775,000 17,583
- -------------------------------------------------------------------------------
United Dominion Realty Trust, REIT 1,057,900 10,910
- -------------------------------------------------------------------------------
147,373
- -------------------------------------------------------------------------------
Miscellaneous Consumer Durables 3.0%
Corning 1,850,000 83,250
- -------------------------------------------------------------------------------
Eastman Kodak 300,000 21,600
- -------------------------------------------------------------------------------
104,850
- -------------------------------------------------------------------------------
Total Consumer Cyclicals 252,223
- -------------------------------------------------------------------------------
TECHNOLOGY==1.9%===============================================================
Aerospace and Defense 1.3%
AlliedSignal 1,000,000 44,312
- -------------------------------------------------------------------------------
44,312
- -------------------------------------------------------------------------------
Electronic Components 0.6%
AMP 436,125 22,706
- -------------------------------------------------------------------------------
22,706
- -------------------------------------------------------------------------------
Total Technology 67,018
- -------------------------------------------------------------------------------
<PAGE>
CAPITAL=EQUIPMENT==3.6%========================================================
Electrical Equipment 3.0%
GE 800,000 81,650
- -------------------------------------------------------------------------------
Hubbell (Class B) 710,000 26,980
- -------------------------------------------------------------------------------
108,630
- -------------------------------------------------------------------------------
Machinery 0.6%
Cooper Industries 455,907 21,741
- -------------------------------------------------------------------------------
21,741
- -------------------------------------------------------------------------------
Total Capital Equipment 130,371
- -------------------------------------------------------------------------------
BUSINESS=SERVICES=AND==========================================================
===============================================================================
TRANSPORTATION 6.0%
Miscellaneous Business Services 3.3%
Browning-Ferris 1,400,000 39,812
- -------------------------------------------------------------------------------
H&R Block 1,100,000 49,500
- -------------------------------------------------------------------------------
Waste Management 588,645 27,446
- -------------------------------------------------------------------------------
116,758
- -------------------------------------------------------------------------------
Railroads 2.7%
Burlington Northern Santa Fe 1,500,000 $ 50,625
- -------------------------------------------------------------------------------
Norfolk Southern 1,500,000 47,531
- -------------------------------------------------------------------------------
98,156
- -------------------------------------------------------------------------------
Total Business Services and Transportation 214,914
- -------------------------------------------------------------------------------
<PAGE>
ENERGY==9.1%===================================================================
Energy Services 1.2%
Baker Hughes 1,400,000 24,762
- -------------------------------------------------------------------------------
Halliburton 636,000 18,842
- -------------------------------------------------------------------------------
43,604
- -------------------------------------------------------------------------------
Integrated Petroleum - Domestic 5.0%
Amerada Hess 1,100,000 54,725
- -------------------------------------------------------------------------------
Atlantic Richfield 550,000 35,887
- -------------------------------------------------------------------------------
British Petroleum ADR 400,000 38,000
- -------------------------------------------------------------------------------
Unocal 600,000 17,513
- -------------------------------------------------------------------------------
USX-Marathon 1,100,000 33,137
- -------------------------------------------------------------------------------
179,262
- -------------------------------------------------------------------------------
Integrated Petroleum - International 2.9%
Amoco 1,000,000 59,000
- -------------------------------------------------------------------------------
Texaco 800,000 42,300
- -------------------------------------------------------------------------------
101,300
- -------------------------------------------------------------------------------
Total Energy 324,166
- -------------------------------------------------------------------------------
PROCESS=INDUSTRIES==8.8%=======================================================
Diversified Chemicals 2.8%
Dow Chemical 400,000 36,375
- -------------------------------------------------------------------------------
DuPont 500,000 26,531
- -------------------------------------------------------------------------------
Hercules 1,299,200 35,566
- -------------------------------------------------------------------------------
98,472
- -------------------------------------------------------------------------------
Specialty Chemicals 3.3%
A. Schulman 940,123 21,241
- -------------------------------------------------------------------------------
Great Lakes Chemical 1,100,000 44,000
- -------------------------------------------------------------------------------
Pall 2,000,000 50,625
- -------------------------------------------------------------------------------
115,866
- -------------------------------------------------------------------------------
<PAGE>
Paper and Paper Products 2.2%
Fort James 1,050,000 42,000
- -------------------------------------------------------------------------------
Kimberly-Clark 700,000 $ 38,150
- -------------------------------------------------------------------------------
80,150
- -------------------------------------------------------------------------------
Forest Products 0.5%
Georgia-Pacific 325,000 19,033
- -------------------------------------------------------------------------------
19,033
- -------------------------------------------------------------------------------
Total Process Industries 313,521
- -------------------------------------------------------------------------------
BASIC=MATERIALS==3.0%==========================================================
Metals 2.1%
Alcoa 326,400 24,337
- -------------------------------------------------------------------------------
Inco 2,000,000 21,125
- -------------------------------------------------------------------------------
Nucor 200,000 8,650
- -------------------------------------------------------------------------------
Reynolds Metals 400,000 21,075
- -------------------------------------------------------------------------------
75,187
- -------------------------------------------------------------------------------
Mining 0.9%
Newmont Mining 1,800,000 32,513
- -------------------------------------------------------------------------------
32,513
- -------------------------------------------------------------------------------
Total Basic Materials 107,700
- -------------------------------------------------------------------------------
===============================================================================
Total Common Stocks (Cost $2,159,261) 3,336,013
===============================================================================
PREFERRED=STOCKS==0.1%=========================================================
Entergy-GSU (Series A) 2,660 267
- -------------------------------------------------------------------------------
Entergy-GSU (Series B) 13,411 674
- -------------------------------------------------------------------------------
Entergy-GSU, $8.64 3,458 351
- -------------------------------------------------------------------------------
<PAGE>
===============================================================================
Total Preferred Stocks (Cost $1,268) 1,292
===============================================================================
CONVERTIBLE=PREFERRED=STOCKS==0.5%=============================================
Union Pacific Capital Trust, 6.25% 400,000 18,587
- -------------------------------------------------------------------------------
===============================================================================
Total Convertible Preferred Stocks (Cost $18,123) 18,587
===============================================================================
CONVERTIBLE=BONDS==1.0%========================================================
Corporate Express, (144a), 4.50%, 7/1/00 15,000,000 12,718
- -------------------------------------------------------------------------------
Exide, (144a), 2.90%, 12/15/05 40,000,000 23,500
- -------------------------------------------------------------------------------
===============================================================================
Total Convertible Bonds (Cost $40,831) 36,218
===============================================================================
CORPORATE=BONDS==0.8%==========================================================
Container Corp of America, Sr. Notes, 9.75%, 4/1/03 5,000,000 $ 5,125
- -------------------------------------------------------------------------------
Scotts, Sr. Sub. Notes, 9.875%, 8/1/04 5,000,000 5,371
- -------------------------------------------------------------------------------
Starwood Hotel & Resort, Sr. Secured Notes, VR,
8.868%, 1/25/99 16,875,000 16,706
Total Corporate Bonds (Cost $26,831) 27,202
<PAGE>
SHORT-TERM=INVESTMENTS==4.1%===================================================
Money Market Funds 4.1%
Reserve Investment Fund, 5.42%, # + 147,133,937 147,134
Total Short-Term Investments (Cost $147,134) 147,134
=Total=Investments=in=Securities===============================================
100.1% of Net Assets (Cost $2,393,448) 3,566,446
================================================================================
Other Assets Less Liabilities (3,289)
NET ASSETS 3,563,157
===============================================================================
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 2,482
Accumulated net realized gain/loss - net of distributions 14,143
Net unrealized gain (loss) 1,172,998
Paid-in-capital applicable to 135,755,222 shares of $0.01 par
value capital stock outstanding; 500,000,000 shares authorized 2,373,534
NET ASSETS $ 3,563,157
NET ASSET VALUE PER SHARE $ 26.25
=============================================================================
# Seven-day yield
+ Affiliated company
* Non-income producing
ADR American Depository Receipt
REIT Real Estate Investment Trust
VR Variable rate
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 1.02% of net assets.
GBP British sterling
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
Statement of Operations
- -------------------------------------------------------------------------------
In thousands
Year
Ended
12/31/98
Investment=Income==============================================
Income
Dividend $ 80,268
Interest (including $9,733 from
affiliated companies) 18,967
- ---------------------------------------------------------------
Total income 99,235
- ---------------------------------------------------------------
Expenses
Investment management 20,258
Shareholder servicing 6,376
Custody and accounting 218
Prospectus and shareholder reports 179
Registration 103
Directors 15
Legal and audit 15
Miscellaneous 20
- ---------------------------------------------------------------
Total expenses 27,184
- ---------------------------------------------------------------
Net investment income 72,051
- ---------------------------------------------------------------
Realized=and=Unrealized=Gain=(Loss)============================
Net realized gain (loss)
Securities 248,770
Foreign currency transactions 20
- ---------------------------------------------------------------
Net realized gain (loss) 248,790
Change in net unrealized gain or loss on securities 14,493
- ---------------------------------------------------------------
Net realized and unrealized gain (loss) 263,283
- ---------------------------------------------------------------
INCREASE (DECREASE) IN NET
===============================================================
ASSETS FROM OPERATIONS $ 335,334
ASSETS FROM OPERATIONS
The accompanying notes are an integral part of these financial st
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
In thousands
Year
Ended
12/31/98 12/31/97
==Increase=(Decrease)=in=Net=Assets===============================
Operations
Net investment income $ 72,051 $ 67,215
Net realized gain (loss) 248,790 153,146
Change in net unrealized gain or loss 14,493 413,196
- ------------------------------------------------------------------
Increase (decrease) in net assets
from operations 335,334 633,557
- ------------------------------------------------------------------
Distributions to shareholders
Net investment income (69,614) (68,368)
Net realized gain (271,171) (121,448)
- ------------------------------------------------------------------
Decrease in net assets from distributions (340,785) (189,816)
Capital share transactions *
Shares sold 567,095 719,456
Distributions reinvested 333,198 185,574
Shares redeemed (778,401) (390,878)
- ------------------------------------------------------------------
Increase (decrease) in net assets
from capital share transactions 121,892 514,152
==Net=Assets======================================================
Increase (decrease) during period 116,441 957,893
Beginning of period 3,446,716 2,488,823
==================================================================
End of period $3,563,157 $3,446,716
==================================================================
*Share information
Shares sold 20,871 29,160
Distributions reinvested 12,745 7,236
Shares redeemed (28,635) (15,606)
- ------------------------------------------------------------------
Increase (decrease) in shares
outstanding 4,981 20,790
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
December 31, 1998
Notes to Financial Statements
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Growth & Income 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 December 21, 1982.
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.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
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.
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the outstanding
voting securities.
<PAGE>
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 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.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $691,774,000 and $687,816,000, respectively, for the year
ended December 31, 1998.
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 December 31, 1998, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$2,393,448,000. Net unrealized gain aggregated $1,172,998,000 at period-end, of
which $1,310,986,000 related to appreciated investments and $137,988,000 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 $1,706,000 was payable at December 31, 1998. The fee is computed daily
and paid monthly, and consists of an individual fund fee equal to 0.25% 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 0.30% for assets in excess of $80 billion. At
December 31, 1998, and for the year 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.
<PAGE>
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 $4,292,000 for the year ended
December 31, 1998, of which $395,000 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 9.1% of the outstanding shares of the Growth and Income Fund at
December 31, 1998. For the year then ended, the fund was allocated $827,000 of
Spectrum expenses, $95,000 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 year ended December 31, 1998, totaled
$9,733,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the year ended December 31, 1998, the fund, in the ordinary course
of business, placed security purchase and sale orders aggregating $6,075,000
with certain affiliates of the manager and paid commissions of $31,000 related
thereto.
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
Report of Independent Accountants
To the Board of Directors and Shareholders of
T. Rowe Price Growth & Income Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
T. Rowe Price Growth & Income Fund, Inc. (the "Fund") at December 31, 1998, and
the results of its operations, the changes in its net assets and the financial
highlights for each of the fiscal periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1998 by
correspondence with custodians, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
January 21, 1999
================================================================================
<PAGE>
T. Rowe Price Growth & Income Fund
- --------------------------------------------------------------------------------
Tax Information (Unaudited) for the Tax Year Ended 12/31/98
We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distributions to shareholders included:
* $1,267,000 from short-term capital gains,
* $269,904,000 from long-term capital gains, subject to the 20% rate
gains category.
For corporate shareholders, $66,613,000 of the fund's distributed income
and short-term capital gains qualified for the dividends-received deduction.
================================================================================
<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 [Registration Mark]
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.
================================================================================
<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
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
<PAGE>
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
<PAGE>
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
* Formerly named Equity Index.
** Closed to new investors.
*** Formerly named Florida Insured Intermediate Tax-Free.
+ Formerly named Tax-Free Insured Intermediate Bond.
++ Formerly named Global Government Bond.
+++ Neither the funds nor their share prices are insured or guaranteed by the
U.S. government.
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.
<PAGE>
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.
IRAs AND QUALIFIED PLANS
----------------------------------------------------------------------
Traditional IRA
Roth IRA
Rollover IRA
SEP-IRA
SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase Pension and Profit Sharing Plans)
401(k)
403(b)
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 PlanRegistration 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
<PAGE>
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.
================================================================================
T. Rowe Price Brokerage
- --------------------------------------------------------------------------------
Brokerage Services
T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
Our brokerage service offers significant commission savings over
full-service brokerages on a wide range of individual securities
and other investments.* It also provides high-quality services
and financial tools you can use to manage your investments
effectively and conveniently.
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. Trades executed through these
automated services provide additional commission savings.**
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, Vickers,
Lipper, and other well-known research providers.
Dividend Reinvestment Service This service helps keep more of
your money working for you. Virtually all stocks held in customer
accounts are eligible for this service, free of charge.
* Based on an April 1998 survey for
representative-assisted stock trades. Services vary by
firm, and commissions may vary by size of order.
** Discount applies to our current commission schedule.
All trades subject to a $35 minimum commission except
equity trades placed through Internet-Trader, which are
subject to a $29.95 minimum commission.
<PAGE>
FOR YIELD, PRICE, LAST TRANSACTION,
CURRENT BALANCE, OR TO CONDUCT
TRANSACTIONS, 24 HOURS, 7 DAYS
A WEEK, CALL TELE*ACCESS [REGISTRATION MARK]:
1-800-638-2587 toll free
FOR ASSISTANCE
WITH YOUR EXISTING
FUND ACCOUNT, CALL:
shareholder service center
1-800-225-5132 toll free
410-625-6500 Baltimore area
TO OPEN A BROKERAGE ACCOUNT
OR OBTAIN INFORMATION, CALL:
1-800-638-5660 toll free
INTERNET ADDRESS:
www.troweprice.com
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 of the
T. Rowe Price Growth & Income Fund [Registration Mark.]
INVESTOR CENTERS:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
T. Rowe Price Investment Services, Inc., Distributor. F54-050 12/31/98
