<PAGE>
================================================================================
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
Growth & Income Fund
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
GROWTH & INCOME FUND
- ---------------------
* Powered by the technology sector, the stock market generated an
unprecedented fifth straight year of gains over 20%.
* The market's advance was exceptionally narrow; more than half of all
stocks in the S&P 500 Stock Index declined in 1999.
* After a solid first half, the fund lost ground in the second half but
recorded a modest gain for the year.
* Stocks favored by our value-conscious approach were shunned by
investors in 1999, and our underweighting in technology hurt
performance.
* We will be focusing on companies that should be able to maintain their
earnings growth if the economy slows, which we think likely.
- --------------------------------------------------------------------------------
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 stock market closed out the final quarter of the year with a powerful
surge that allowed the Standard & Poor's 500 Index to continue its unprecedented
streak of 20% gains. The market was cheered by the surprising strength of the
economy, benign inflation, and healthy gains in corporate profits. Although
rising interest rates did not seem to inhibit the general stock market indices,
many stocks were negatively affected. In fact, more than half of the stocks in
the index actually declined for the year. Unfortunately, the type of stocks that
have been emphasized in your fund -- income-oriented and reasonably priced --
were prominent in this latter category.
================================================================================
PERFORMANCE COMPARISON
----------------------
Periods Ended 12/31/99 6 Months 12 Months
---------------------- -------- ---------
Growth & Income Fund -7.84% 3.78%
S&P500 7.71 21.04
Lipper Multi-Cap Value
Funds Average -2.64 7.78
================================================================================
<PAGE>
In our report to you at midyear, the fund had just completed a favorable
first half and was outperforming the market index and the peer group of similar
funds. The second half reversal was disappointing and somewhat surprising given
the generally favorable economic backdrop. As shown in the table, the fund did
not compare well with the overall market during 1999, reflecting our broader
diversification and underweighting in technology. We also lagged the new peer
group (Multi-Cap Value) assigned to the fund by Lipper Inc. Previously, Lipper
assigned a fund to a category based on its objective as outlined in its
prospectus. The new categories are based on the major characteristics of each
fund's actual portfolio holdings, such as market capitalization, earnings growth
rates, and price/earnings ratios and other valuation measures.
YEAR-END DISTRIBUTIONS
- ----------------------
Your Board of Directors declared a fourth quarter income dividend of $0.15
per share, bringing the 1999 total to $0.51. At the same time a $2.15 capital
gain distribution was declared, of which $0.14 represented short-term and $2.01
represented long-term capital gains. These distributions were paid on December
16, 1999, to shareholders of record on December 14. You should have received
your check or statement reflecting them as well as Form 1099-DIV summarizing
this information for 1999 tax purposes.
PORTFOLIO REVIEW
- ----------------
Nineteen ninety-nine will be remembered as a year with unusual
characteristics and crosscurrents. Although the S&P 500 ended the year at a
record high, the typical stock in the index closed down 23% from its high during
the year. This divergence occurred because a very small number of stocks that
are relatively large components of the index experienced huge price gains. The
extreme narrowness of the market's strength was further indicated by the fact
that only seven stocks accounted for half the rise in the index. Growth stocks,
in general, perform ed much better than value stocks. By sector, the whole story
was technology, especially companies connected to the Internet in any way. The
technology sector of the S&P 500 rose 75%, while the remai ning sectors of the
index eked out a gain of only 3% for the year, according to data from the
Leuthold Group.
********************************************************************************
Sector diversification pie chart
shown here; as of 12/31/99 showing:
Consumer 37%, Energy 15%, Financial
14%, Process Industries 8%,
Utilities 7%, Business Services and
Transportation 7%, Other 10%,
Reserves 2%.
********************************************************************************
The market's unprecedented narrowness was a challenge that we could not
overcome. The valuation-sensitive approach and broad industry diversificatio n
(shown in the chart) that we have typically employed in managing your fund
seldom includes any meaningful exposure to the technology sector. As discussed,
this essentially eliminated the possibility of earning a satisfactory return in
the kind of market we had last year.
<PAGE>
Reasonably valued growth stocks in the consumer area, our largest sector,
were generally out of favor in 1999. Energy, our second largest exposure, did
well for much of the year as oil prices rose, but faded in the final quarter.
Financial stocks were hurt by the perception that rising interest rates would be
a negative for the whole sector. We are hopeful that the past underperformance
of these sectors creates an enhanced opportunity for future outperformance.
Certainly, the relative valuations of many fine companies with good growth
prospects are historically attractive compared with recent market leaders.
For both the second half and the year, the fund's top-10 contributors
included CORNING (our largest holding), GE, ALCOA, and REYNOLDS METALS, which is
being acquired by Alcoa. CITIGROUP and MORGAN STANLEY DEAN WITTER swam against
the adverse financial service tide to post solid results for both periods. Among
the most negative stocks were AMERICAN HOME PRODUCTS and PFIZER. Along with
other pharmaceutical stocks, these solid blue chips were hurt by political
proposals concerning prescription benefits, which investors feared would affect
the pricing of drugs. In addition, both companies have been involved in the
merger and acquisition quest for WARNER-LAMBERT, another fund holding. J.C.
PENNEY and RITE AID (new to the portfolio) were also poor performers as they
struggled in fiercely competitive industries.
SUMMARY AND OUTLOOK
- -------------------
================================================================================
FINANCIAL PROFILE
-----------------
Growth &
As of 12/31/99 Income Fund S&P 500
-------------- ----------- -------
Current Yield 2.5% 1.1%
Price/Book Ratio 3.6X 8.1X
Price/Earnings Ratio
(2000 estimated EPS) 17.6X 29.7X
Historical Beta
(based on monthly
returns for 5 years) 0.73 1.00
================================================================================
Several conclusions are possible from a review of the traditional valuation
measures shown in the chart. First, in a historical context, the market is
richly valued by most any measure. Second, your fund has a very attractive
valuation profile compared with the market index. When the market begins to
broaden out, the fund should be in a relatively advantageous position. But if
the investment environment becomes more challenging, accompanied by increasing
volatility, the fund should be more defensive than the general market.
<PAGE>
Our intention is to ensure that as market participation broadens, as we
believe it will, our portfolio captures the developing opportunity. In the
period ahead, we will be focusing more attention on companies that are expected
to achieve good corporate earnings progress in an environment where economic
growth is expected to slow.
In closing, we would like to introduce Robert W. Sharps, who has joined the
fund's Investment Advisory Committee. Rob joined T. Rowe Price in 1997 as a
banking analyst and has been closely involved with day-to-day management of the
Financial Services Fund. We are confident that Rob's analytical and portfolio
management abilities will benefit this fund.
Respectfully submitted,
/s/
Stephen W. Boesel
President and Chairman of the Investment Advisory Committee
January 27, 2000
================================================================================
T. ROWE PRICE GROWTH & INCOME FUND
- ----------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
TWENTY-FIVE LARGEST HOLDINGS
- ----------------------------
TWENTY-FIVE LARGEST HOLDINGS
----------------------------
Percent of
Net Assets
12/31/99
- -------------------------------------------------------------------
Corning 3.7%
- -------------------------------------------------------------------
BP Amoco 3.7
- -------------------------------------------------------------------
GE 3.1
- -------------------------------------------------------------------
USX-Marathon 2.6
- -------------------------------------------------------------------
Eastman Kodak 2.1
- -------------------------------------------------------------------
St. Paul Companies 2.1
- -------------------------------------------------------------------
Chase Manhattan 2.0
- -------------------------------------------------------------------
Dayton Hudson 1.7
- -------------------------------------------------------------------
Pfizer 1.7
- -------------------------------------------------------------------
Amerada Hess 1.6
- -------------------------------------------------------------------
Reynolds Metals 1.6
- -------------------------------------------------------------------
Dow Chemical 1.6
- -------------------------------------------------------------------
Baker Hughes 1.5
- -------------------------------------------------------------------
Citigroup 1.5
- -------------------------------------------------------------------
<PAGE>
Reader's Digest 1.5
- -------------------------------------------------------------------
Fannie Mae 1.5
- -------------------------------------------------------------------
Household International 1.4
- -------------------------------------------------------------------
Atlantic Richfield 1.4
- -------------------------------------------------------------------
Pall 1.4
- -------------------------------------------------------------------
American Home Products 1.4
- -------------------------------------------------------------------
Inco 1.4
- -------------------------------------------------------------------
Alcoa 1.3
- -------------------------------------------------------------------
Colgate-Palmolive 1.3
- -------------------------------------------------------------------
AT&T 1.3
- -------------------------------------------------------------------
Kimberly-Clark 1.3
- -------------------------------------------------------------------
Total 45.7%
Note: Table excludes reserves.
================================================================================
T. ROWE PRICE GROWTH & INCOME FUND
- ----------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
MAJOR PORTFOLIO CHANGES
- -----------------------
Listed in descending order of size
6 Months Ended 12/31/99
Ten Largest Purchases
- ---------------------
Waste Management *
Rite Aid *
Xerox *
NIKE *
R.R. Donnelley *
McDermott International *
Baker Hughes
Equifax *
Rite Aid Cv. Bond *
Fort James
Ten Largest Sales
- -----------------
Browning-Ferris **
Honeywell International **
American Express **
Corning
Cooper Industries **
DuPont **
Travelers Property Casualty
DQE **
Telebras **
Amerada Hess
* 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 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.
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 12/31/99 1 Year 3 Years 5 Years 10 Years
- ---------------------- ------ ------- ------- --------
Growth & Income Fund 3.78% 12.13% 18.32% 13.43%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
T. ROWE PRICE GROWTH & INCOME FUND
- -------------------------------- For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
Year
Ended
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
NET ASSET VALUE
Beginning of period $ 26.25 $ 26.36 $ 22.63 $ 19.18 $ 15.63
- ------------------------------------------------------------------------------
Investment activities
Net investment income
(loss) 0.49 0.55 0.55 0.52 0.58
Net realized and
unrealized gain
(loss) 0.46 2.00 4.71 4.34 4.16
- ------------------------------------------------------------------------------
Total from
investment activities 0.95 2.55 5.26 4.86 4.74
- ------------------------------------------------------------------------------
Distributions
Net investment income (0.51) (0.53) (0.56) (0.51) (0.59)
Net realized gain (2.25) (2.13) (0.97) (0.90) (0.60)
- ------------------------------------------------------------------------------
Total distributions (2.76) (2.66) (1.53) (1.41) (1.19)
- ------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 24.44 $ 26.25 $ 26.36 $ 22.63 $ 19.18
==============================================================================
<PAGE>
Ratios/SupplementalData======================================================
Total return* 3.78% 9.96% 23.53% 25.64% 30.92%
- ------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.77% 0.77% 0.78% 0.82% 0.84%
- ------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 1.78% 2.03% 2.22% 2.53% 3.31%
- ------------------------------------------------------------------------------
Portfolio turnover rate 20.3% 20.5% 15.7% 13.5% 26.2%
- ------------------------------------------------------------------------------
Net assets, end of
period (in millions) $ 3,440 $ 3,563 $ 3,447 $ 2,489 $ 1,748
- ------------------------------------------------------------------------------
* 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.
================================================================================
T. ROWE PRICE GROWTH & INCOME FUND
- ---------------------------------- December 31, 1999
STATEMENT OF NET ASSETS
- -----------------------
Shares/Par Value
In thousands
COMMON STOCKS 95.9%
FINANCIAL==14.3%============================================================
Bank and Trust 3.9%
Bank of America 500,000 $ 25,094
- ----------------------------------------------------------------------------
Bank One 595,239 19,085
- ----------------------------------------------------------------------------
Chase Manhattan 900,000 69,918
- ----------------------------------------------------------------------------
National City 800,000 18,950
- ----------------------------------------------------------------------------
133,047
- ----------------------------------------------------------------------------
Insurance 4.6%
American General 600,000 45,525
- ----------------------------------------------------------------------------
St. Paul Companies 2,100,000 70,744
- ----------------------------------------------------------------------------
Travelers Property Casualty (Class A) 300,000 10,275
- ----------------------------------------------------------------------------
XL Capital (Class A) 600,000 31,125
- ----------------------------------------------------------------------------
157,669
- ----------------------------------------------------------------------------
Financial Services 5.8%
Bear Stearns 518,274 22,156
- ----------------------------------------------------------------------------
Citigroup 924,655 51,376
- ----------------------------------------------------------------------------
<PAGE>
Fannie Mae 800,000 49,950
- ----------------------------------------------------------------------------
Household International 1,297,322 48,326
- ----------------------------------------------------------------------------
Morgan Stanley Dean Witter 200,000 28,550
- ----------------------------------------------------------------------------
200,358
- ----------------------------------------------------------------------------
Total Financial 491,074
- ----------------------------------------------------------------------------
UTILITIES==7.1%=============================================================
Telephone 3.2%
AT&T 900,000 45,675
- ----------------------------------------------------------------------------
GTE 400,000 28,225
- ----------------------------------------------------------------------------
SBC Communications 768,022 37,441
- ----------------------------------------------------------------------------
111,341
- ----------------------------------------------------------------------------
Electric Utilities 3.9%
FirstEnergy 1,275,000 28,927
- ----------------------------------------------------------------------------
GPU 569,100 17,037
- ----------------------------------------------------------------------------
Niagara Mohawk * 1,000,000 13,938
- ----------------------------------------------------------------------------
Scottish Power ADR 580,000 16,240
- ----------------------------------------------------------------------------
Texas Utilities 500,000 $ 17,781
- ----------------------------------------------------------------------------
Unicom 1,200,000 40,200
- ----------------------------------------------------------------------------
134,123
- ----------------------------------------------------------------------------
Total Utilities 245,464
- ----------------------------------------------------------------------------
CONSUMER=NONDURABLES==20.9%=================================================
Cosmetics 1.3%
International Flavors & Fragrances 1,142,900 43,144
- ----------------------------------------------------------------------------
43,144
- ----------------------------------------------------------------------------
Beverages 2.1%
Anheuser-Busch 380,600 26,975
- ----------------------------------------------------------------------------
Brown-Forman (Class B) 220,000 12,595
- ----------------------------------------------------------------------------
PepsiCo 900,000 31,725
- ----------------------------------------------------------------------------
71,295
- ----------------------------------------------------------------------------
Food Processing 4.1%
Campbell 500,000 19,344
- ----------------------------------------------------------------------------
General Mills 1,000,000 35,750
- ----------------------------------------------------------------------------
Heinz 300,000 11,944
- ----------------------------------------------------------------------------
McCormick 103,000 3,064
- ----------------------------------------------------------------------------
<PAGE>
Ralston Purina 1,300,000 36,237
- ----------------------------------------------------------------------------
Sara Lee 1,550,000 34,197
- ----------------------------------------------------------------------------
140,536
- ----------------------------------------------------------------------------
Hospital Supplies/Hospital Management 1.5%
Abbott Laboratories 400,000 14,525
- ----------------------------------------------------------------------------
Baxter International 246,400 15,477
- ----------------------------------------------------------------------------
Smith & Nephew (GBP) 6,700,000 22,511
- ----------------------------------------------------------------------------
52,513
- ----------------------------------------------------------------------------
Pharmaceuticals 5.9%
American Home Products 1,200,000 47,325
- ----------------------------------------------------------------------------
Bristol-Myers Squibb 300,000 19,256
- ----------------------------------------------------------------------------
Eli Lilly 100,000 6,650
- ----------------------------------------------------------------------------
Pfizer 1,800,000 58,388
- ----------------------------------------------------------------------------
Pharmacia & Upjohn 700,000 31,500
- ----------------------------------------------------------------------------
Warner-Lambert 500,000 40,969
- ----------------------------------------------------------------------------
204,088
- ----------------------------------------------------------------------------
Miscellaneous Consumer Products 6.0%
Colgate-Palmolive 705,000 45,825
- ----------------------------------------------------------------------------
Newell Rubbermaid 600,000 17,400
- ----------------------------------------------------------------------------
NIKE (Class B) 600,000 $ 29,737
- ----------------------------------------------------------------------------
Philip Morris 800,000 18,550
- ----------------------------------------------------------------------------
Procter & Gamble 400,000 43,825
- ----------------------------------------------------------------------------
Tomkins (GBP) 2,500,000 8,077
- ----------------------------------------------------------------------------
Unifi * 995,500 12,257
- ----------------------------------------------------------------------------
UST 1,200,000 30,225
- ----------------------------------------------------------------------------
205,896
- ----------------------------------------------------------------------------
Total Consumer Nondurables 717,472
- ----------------------------------------------------------------------------
CONSUMER=SERVICES==6.4%=====================================================
General Merchandisers 2.3%
Dayton Hudson 800,000 58,750
- ----------------------------------------------------------------------------
J.C. Penney 1,000,000 19,937
- ----------------------------------------------------------------------------
78,687
- ----------------------------------------------------------------------------
<PAGE>
Specialty Merchandisers 1.9%
Albertson's 764,694 24,661
- ----------------------------------------------------------------------------
Rite Aid 1,700,000 19,019
- ----------------------------------------------------------------------------
Tupperware 1,373,900 23,271
- ----------------------------------------------------------------------------
66,951
- ----------------------------------------------------------------------------
Entertainment and Leisure 1.5%
Reader's Digest (Class A) 1,032,400 30,198
- ----------------------------------------------------------------------------
Reader's Digest (Class B) + 786,400 20,839
- ----------------------------------------------------------------------------
51,037
- ----------------------------------------------------------------------------
Media and Communications 0.7%
R.R. Donnelley 1,000,000 24,813
- ----------------------------------------------------------------------------
24,813
- ----------------------------------------------------------------------------
Total Consumer Services 221,488
- ----------------------------------------------------------------------------
CONSUMER=CYCLICALS==9.4%====================================================
Building and Real Estate 3.5%
CarrAmerica Realty, REIT 605,000 12,781
- ----------------------------------------------------------------------------
Federal Realty Investment Trust, REIT 1,275,000 23,986
- ----------------------------------------------------------------------------
Prologis Trust, REIT 327,272 6,300
- ----------------------------------------------------------------------------
Reckson Associates Realty, REIT 750,000 15,375
- ----------------------------------------------------------------------------
Rouse 599,500 12,739
- ----------------------------------------------------------------------------
Simon DeBartolo Group, REIT 841,000 19,290
- ----------------------------------------------------------------------------
Spieker Properties, REIT 200,000 7,288
- ----------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, REIT 775,000 $ 18,212
- ----------------------------------------------------------------------------
United Dominion Realty Trust, REIT 657,900 6,497
- ----------------------------------------------------------------------------
122,468
- ----------------------------------------------------------------------------
Miscellaneous Consumer Durables 5.9%
Corning 1,000,000 128,938
- ----------------------------------------------------------------------------
Eastman Kodak 1,100,000 72,875
- ----------------------------------------------------------------------------
201,813
- ----------------------------------------------------------------------------
Total Consumer Cyclicals 324,281
- ----------------------------------------------------------------------------
<PAGE>
TECHNOLOGY==0.9%============================================================
Office Automation 0.9%
Xerox 1,300,000 29,494
- ----------------------------------------------------------------------------
Total Technology 29,494
- ----------------------------------------------------------------------------
CAPITAL=EQUIPMENT==3.8%=====================================================
Electrical Equipment 3.8%
GE 700,000 108,325
- ----------------------------------------------------------------------------
Hubbell (Class B) 810,000 22,072
- ----------------------------------------------------------------------------
Total Capital Equipment 130,397
- ----------------------------------------------------------------------------
BUSINESS=SERVICES=AND=======================================================
TRANSPORTATION==5.3%========================================================
Computer Service and Software 0.6%
Galileo International 700,000 20,956
- ----------------------------------------------------------------------------
20,956
- ----------------------------------------------------------------------------
Miscellaneous Business Services 2.7%
Equifax 600,000 14,138
- ----------------------------------------------------------------------------
H&R Block 1,000,000 43,750
- ----------------------------------------------------------------------------
UPS 130,000 8,970
- ----------------------------------------------------------------------------
Waste Management 1,500,000 25,781
- ----------------------------------------------------------------------------
92,639
- ----------------------------------------------------------------------------
Railroad 2.0%
Burlington Northern Santa Fe 1,500,000 36,375
- ----------------------------------------------------------------------------
Norfolk Southern 1,500,000 30,750
- ----------------------------------------------------------------------------
67,125
- ----------------------------------------------------------------------------
Total Business Services and Transportation 180,720
- ----------------------------------------------------------------------------
ENERGY==14.6%===============================================================
Energy Services 2.5%
Baker Hughes 2,500,000 $ 52,656
- ----------------------------------------------------------------------------
Halliburton 636,000 25,599
- ----------------------------------------------------------------------------
McDermott International 1,000,000 9,063
- ----------------------------------------------------------------------------
87,318
- ----------------------------------------------------------------------------
Integrated Petroleum - Domestic 6.1%
Amerada Hess 1,000,000 56,750
- ----------------------------------------------------------------------------
Atlantic Richfield 550,000 47,575
- ----------------------------------------------------------------------------
Conoco (Class B) 614,210 15,278
- ----------------------------------------------------------------------------
<PAGE>
USX-Marathon 3,600,000 88,875
- ----------------------------------------------------------------------------
208,478
- ----------------------------------------------------------------------------
Integrated Petroleum - International 4.9%
BP Amoco ADR 2,123,332 125,940
- ----------------------------------------------------------------------------
Texaco 800,000 43,450
- ----------------------------------------------------------------------------
169,390
- ----------------------------------------------------------------------------
Exploration and Production 1.1%
Unocal 1,100,000 36,919
- ----------------------------------------------------------------------------
36,919
- ----------------------------------------------------------------------------
Total Energy 502,105
- ----------------------------------------------------------------------------
PROCESS=INDUSTRIES==7.7%====================================================
Diversified Chemicals 2.7%
Dow Chemical 400,000 53,450
- ----------------------------------------------------------------------------
Hercules 1,400,000 39,025
- ----------------------------------------------------------------------------
92,475
- ----------------------------------------------------------------------------
Specialty Chemicals 2.5%
Great Lakes Chemical 1,000,000 38,188
- ----------------------------------------------------------------------------
Pall 2,200,000 47,437
- ----------------------------------------------------------------------------
85,625
- ----------------------------------------------------------------------------
Paper and Paper Products 2.5%
Fort James 1,500,000 41,062
- ----------------------------------------------------------------------------
Kimberly-Clark 700,000 45,675
- ----------------------------------------------------------------------------
86,737
- ----------------------------------------------------------------------------
Total Process Industries 264,837
- ----------------------------------------------------------------------------
BASIC=MATERIALS==5.5%=======================================================
Metals 4.2%
Alcoa 552,800 $ 45,882
- ----------------------------------------------------------------------------
Inco * 2,000,000 47,000
- ----------------------------------------------------------------------------
Reynolds Metals 700,000 53,638
- ----------------------------------------------------------------------------
146,520
- ----------------------------------------------------------------------------
Mining 1.3%
Newmont Mining 1,800,000 44,100
- ----------------------------------------------------------------------------
44,100
- ----------------------------------------------------------------------------
Total Basic Materials 190,620
- ----------------------------------------------------------------------------
Total Common Stocks (Cost $2,338,649) 3,297,952
============================================================================
<PAGE>
PREFERRED=STOCKS==0.0%======================================================
Entergy Gulf States (Series A) 2,456 245
- ----------------------------------------------------------------------------
Entergy Gulf States (Series B) 12,063 600
- ----------------------------------------------------------------------------
Total Preferred Stocks (Cost $882) 845
============================================================================
CONVERTIBLE=PREFERRED=STOCKS==0.5%==========================================
Union Pacific Capital Trust, 6.25% 400,000 16,651
- ----------------------------------------------------------------------------
Total Convertible Preferred Stocks (Cost $18,123) 16,651
============================================================================
CONVERTIBLE=BONDS==1.5%=====================================================
Networks Associates, Zero Coupon, 2/13/18 $100,000,000 38,716
- ----------------------------------------------------------------------------
Rite Aid, 5.25%, 9/15/02 20,000,000 13,712
- ----------------------------------------------------------------------------
Total Convertible Bonds (Cost $47,145) 52,428
============================================================================
CORPORATE=BONDS==0.2%=======================================================
Container Corp of America, Sr. Notes, 9.75%,4/1/03 5,000,000 5,187
- ----------------------------------------------------------------------------
Total Corporate Bonds (Cost $5,000) 5,187
============================================================================
SHORT-TERM=INVESTMENTS==2.1%================================================
Money Market Funds 2.1%
Reserve Investment Fund, 6.16% # 71,800,775 $ 71,801
- ----------------------------------------------------------------------------
Total Short-Term Investments (Cost $71,801) 71,801
============================================================================
=Total=Investments=in=Securities============================================
100.2% of Net Assets (Cost $2,481,600) $3,444,864
Other Assets Less Liabilities (5,329)
============================================================================
NET ASSETS $3,439,535
============================================================================
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 64
Accumulated net realized gain/loss -
net of distributions 4,751
Net unrealized gain (loss) 963,264
Paid-in-capital applicable to 140,731,233
shares of $0.01 par value capital stock
outstanding; 500,000,000 shares authorized 2,471,456
- ----------------------------------------------------------------------------
NET ASSETS $3,439,535
============================================================================
NET ASSET VALUE PER SHARE $ 24.44
============================================================================
# Seven-day yield
+ Affiliated company
* Non-income producing
ADR American Depository Receipt
REIT Real Estate Investment Trust
GBP British sterling
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH & INCOME FUND
- ----------------------------------
Year
Ended
12/31/99
--------
Investment Income (Loss)
Income
Dividend $ 82,503
Interest 9,637
Securities lending 100
- --------------------------------------------------------------------------------
Total income 92,240
- --------------------------------------------------------------------------------
Expenses
Investment management 20,605
Shareholder servicing 6,491
Prospectus and shareholder reports 257
Custody and accounting 220
Registration 55
Legal and audit 16
Directors 14
Miscellaneous 22
- --------------------------------------------------------------------------------
Total expenses 27,680
Expenses paid indirectly (7)
- --------------------------------------------------------------------------------
Net expenses 27,673
- --------------------------------------------------------------------------------
Net investment income (loss) 64,567
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 282,640
Foreign currency transactions 2
- --------------------------------------------------------------------------------
Net realized gain (loss) 282,642
Change in net unrealized gain or loss on securities (209,734)
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 72,908
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 137,475
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH & INCOME FUND
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
In thousands
Year
Ended
12/31/99 12/31/98
-------- --------
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 64,567 $ 72,051
Net realized gain (loss) 282,642 248,790
Change in net unrealized gain or loss (209,734) 14,493
- --------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 137,475 335,334
- --------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (66,985) (69,614)
Net realized gain (292,034) (271,171)
- --------------------------------------------------------------------------------
Decrease in net assets from distributions (359,019) (340,785)
- --------------------------------------------------------------------------------
Capital share transactions *
Shares sold 537,422 567,095
Distributions reinvested 350,545 333,198
Shares redeemed (790,045) (778,401)
- --------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions 97,922 121,892
- --------------------------------------------------------------------------------
Net Assets
Increase (decrease) during period (123,622) 116,441
Beginning of period 3,563,157 3,446,716
- --------------------------------------------------------------------------------
End of period $3,439,535 $3,563,157
================================================================================
*Share information
Shares sold 19,809 20,871
Distributions reinvested 14,343 12,745
Shares redeemed (29,176) (28,635)
- --------------------------------------------------------------------------------
Increase (decrease) in shares outstanding 4,976 4,981
The accompanying notes are an integral part of these financial statements.
================================================================================
T. ROWE PRICE GROWTH & INCOME FUND
- ---------------------------------- December 31, 1999
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.
<PAGE>
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.
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. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian and are used to reduce the
fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
- --------------------------------
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $706,104,000 and $826,870,000, respectively, for the year
ended December 31, 1999.
<PAGE>
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, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$2,481,600,000. Net unrealized gain aggregated $963,264,000 at period- end, of
which $1,202,126,000 related to appreciated investments and $238,862,000 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 $1,651,000 was payable at December 31, 1999. 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 0.295% for assets in excess of $120 billion. At
December 31, 1999, 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.
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 $4,316,000 for the year ended
December 31, 1999, of which $405,000 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 11.6% of the outstanding shares of the fund at December 31, 1999.
For the year then ended, the fund was allocated $873,000 of Spectrum expenses,
$70,000 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, 1999, tot aled
$6,337,000 and are reflected as interest income in the accompanying Statement of
Operations.
================================================================================
<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, 1999, 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
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, ass essing 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, 1999 by correspondence with custodians, provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
January 20, 2000
================================================================================
T. ROWE PRICE GROWTH & INCOME FUND
- ----------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 12/31/99
-----------------------------------------------------------
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:
* $23,471,000 from short-term capital gains,
* $268,563,000 from long-term capital gains, subject to the 20%
rate gains category.
For corporate shareholders, $68,182,000 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 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.
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.
<PAGE>
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.
================================================================================
<PAGE>
T. ROWE PRICE ADVISORY SERVICES AND RETIREMENT RESOURCES
- --------------------------------------------------------
ADVISORY SERVICES,RETIREMENT RESOURCES
--------------------------------------
T. Rowe Price is your full-service retirement specialist.
We have developed unique advisory services that can help
you meet the most difficult retirement challenges. Our
broad array of retirement plans is suitable for
individuals, the self-employed, small businesses,
corporations, and nonprofit organizations. We also provide
recordkeeping, communications, and investment management
services, and our educational materials, self-help
planning guides, and software tools are recognized as
among the industry's best. For information or to request
literature, call us at 1-800-638-5660, or visit our Web
site at WWW.TROWEPRICE.COM.
ADVISORY SERVICES
-----------------
T. ROWE PRICE RETIREMENT INCOME MANAGER [SM] helps
retirees or those within two years of retirement determine
how much income they can take in retirement. The program
uses extensive statistical analysis and the input of
financial planning professionals to suggest an income plan
that best meets your objectives.
T. ROWE PRICE ROLLOVER INVESTMENT SERVICE offers asset
allocation advice to those planning a major change in
their qualified retirement plans, such as a 401(k)
rollover from a previous employer or an IRA transfer.
RETIREMENT RESOURCES AT T. ROWE PRICE
-------------------------------------
Traditional, Roth, and Rollover IRAs
SEP-IRA and SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase
Pension and Profit Sharing Plans)
401(k) and 403(b)
457 Deferred Compensation
PLANNING AND INFORMATIONAL GUIDES
---------------------------------
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
INSIGHTS REPORTS
----------------
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
<PAGE>
SOFTWARE PACKAGES
-----------------
T. Rowe Price Retirement Planning
AnalyzerTM 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 AnalyzerTM
CD-ROM or diskette, free. To order,
please call 1-800-469-5304.
T. ROWE PRICE IMMEDIATE VARIABLE ANNUITY (INCOME ACCOUNT)
INVESTMENT KITS
---------------
We will be happy to send you one of our easy-to-follow
investment kits when you are ready to invest in any T.
Rowe Price retirement vehicle, including IRAs, qualified
plans, small-business plans, or our no-load variable
annuities.
================================================================================
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
<PAGE>
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.
================================================================================
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.**
<PAGE>
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
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
<PAGE>
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. F54-050 12/31/99
