<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Semiannual Report
High Yield Fund
- --------------------------------------------------------------------------------
November 30, 1999
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REPORT HIGHLIGHTS
================================================================================
HIGH YIELD FUND
- ---------------
* The environment for high-yield bonds was challenging during the six
months ended November 30 due to rising interest rates, heavy supply,
and slackening demand.
* The fund's six-month return, while modestly negative, exceeded its
market benchmark and peer group average.
* Our research-intensive strategy, broad diversification, and balanced
sect or allocation were beneficial during this period.
* We continued to overweight the telecommunications area because of its
favorable prospects.
* Based on the strong economy, improving supply and demand, and
unusually attractive yields, we are reasonably optimistic for the
coming months.
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
- --------------------------------------------------------------------------------
High-yield bonds struggled during the six months ended November 30, a
period that saw the Federal Reserve raise short-term interest rates three times
to forestall higher inflation. The high-yield market was also under pressure
from a heavy supply of new issues and rising defaults. These negative influences
were partially offset by the economy's continued strength, which is generally a
plus for lower-quality, high-yield issues. While high-yield bonds were generally
weak for the six-month period, they did outperform most high-quality bonds,
which are more sensitive to rising interest rates.
MARKET ENVIRONMENT
- ------------------
As of the end of November, the high-yield market appeared headed for a
second disappointing year. Typically, the kind of robust economic growth that
has been benefiting consumers and job-seekers would also be a boon to high-yield
bonds.
<PAGE>
********************************************************************************
[Line and bar chart showing Growth of the High-Yield Market from 1/1/85
through 11/30/99, annual new issues (right scale) and total high-yield bonds
outstanding (left scale).
********************************************************************************
But other developments undercut this positive trend. Rising interest rates
were a negative, although their direct impact was greater on the upper-quality
tier of high-yield bonds (BB rated) than on lower-quality issues. Higher rates
can also pressure highly leveraged companies, which includes most in the
noninvestment-grade universe.
Another negative was a supply and demand imbalance. New issues cascaded
into the market for the third consecutive year, and demand, particularly from
mutual funds, cooled markedly in the second and third quarters of this year. The
chart on page 1 shows the explosion in supply, and while the 1999 total will not
top 1997 or 1998, it will be substantially higher than any other year in the
last 20. The combination of a significant demand/supply imbalance and Y2K
considerations contributed to declining liquidity in the marketplace, which
further depressed prices, especially of smaller issues.
Lastly, after a long period of relative stability the bond default rate
spiked in recent months, rising to about 4% of the U.S. market's outstanding
principal amount from approximately 1.5% at the beginning of 1999. Many of the
defaulting issues were among those brought to market in recent years, when more
favorable conditions enabled companies with less-than-robust balance sheets to
sell bonds.
Not all is gloom, however. Some sectors of the high-yield market bucked the
trend, particularly the dynamic telecommunications area, which now accounts for
a quarter of the high-yield bond universe. Wireless companies were especially
strong, reflecting solid fundamentals, improving cash flow, and a consolidation
trend in their industry. In addition, there were signs in November that the
high-yield market was beginning to recover as the new issue volume moderated and
buyers reappeared, attracted by the unusually wide yield advantage offered by
lower-quality bonds and the many securities trading at discounts.
PERFORMANCE AND STRATEGY REVIEW
- -------------------------------
PERFORMANCE COMPARISON
----------------------
Periods Ended 11/30/99 6 Months 12 Months
---------------------- -------- ---------
High Yield Fund -0.30% 2.51%
First Boston High Yield Index -0.71 1.81
Lipper High Yield Funds Average -0.37 2.79
- --------------------------------------------------------------------------------
<PAGE>
The difficult environment left its mark on your fund. Income of $0.38 per
share was unable to totally offset the $0.41 share price decline, resulting in a
small negative return for the six-month period. Thanks to our risk-conscious
strategy, however, the fund held up better than the average high-yield fund and
the overall market, as measured by the First Boston High Yield Index. For the
12-month period, the fund's modest gain exceeded the market index but trailed
the average competitor fund. These comparative results reflect the strong
performance in late 1998 and early 1999 of low-quality bonds (rated below B)
that our competitors tend to favor more than we do. The fund's one-year return
contrasts with its more robust performance over longer periods, shown in the
table on page 9. The fund's six-month dividend yield rose from 9.23% on May 31
to 9.85% on November 30, which is well over 6% in real (inflation-adjusted)
terms.
During the past six months we continued the strategy that has proved
beneficial to the fund during the past two-year bear market in high-yield bonds.
The foundations of this strategy are intensive credit research, wide
diversification, and balanced sector allocation. In managing the portfolio's
credit quality, we use a middle-of-the-road approach in which we focus on B
rated issues while making marginal adjustments to higher- and lower-quality
bonds in line with our current market and economic outlook. For instance, as
interest rates climbed in recent months, we trimmed our holdings rated BB or
higher, since the higher the quality of a bond, the more its price falls as
rates rise (and vice versa). At the same time, we also trimmed holdings rated
below B as market liquidity decreased particularly for lower-quality issues. As
a result, the fund's average credit quality remained unchanged at B+.
********************************************************************************
[Pie chart showing Quality Diversification (AAA, AA, A, BBB 11%; BB 11%; B
59%; CCC 8%; Nonrated (convertibles and equities 11%).]
********************************************************************************
This credit positioning means that the fund may give up some upside
potential if the high-yield market recovers sharply, because lower-quality bonds
rise the most in a rally. Conversely, this strategy helps us reduce exposure to
credit problems, and we are comfortable with the trade-off. On the whole, your
fund has fared well during the recent rising tide of defaults, although two
holdings were torpedoed in recent months -- Jitney Jungle Stores, an Alabama
supermarket chain, and Mariner Post Acute Network, a long-term health care
company. Here the second prong of our strategy was beneficial, since these two
holdings together composed only 0.9% of net assets, based on their original cost
to the fund. Thus, our default experience is far better than that of the market
as a whole. Overall, the fund holds approximately 250 issues representing about
200 different companies in 36 industries.
*****************************
wireless . . . is the
fund's largest industry
sector . . .
*****************************
<PAGE>
We continued to overweight the telecommunications area in our holdings
because of its favorable prospects. To give you a clearer picture of these
holdings, we have broken our former "telecommunications" heading in the
portfolio and Sector Diversification table into its major components, including
wireless communications, satellites, wireline communications, long distance, and
Internet service providers. Together these composed 25% of the fund's net assets
on November 30, up from 21% six months ago. Wireless, which, as mentioned,
performed very well, is the fund's largest industry sector, and Nextel
Communications, a wireless provider, is our second-largest position. In recent
weeks, we increased holdings in this sector with the addition of Voicestream
Wireless.
With the revival of some commodity prices -- especially oil -- from the
1998 deflationary cycle, we became a little more comfortable with bonds of "deep
cyclical" companies. Our major change in this area was to increase exposure to
energy from 5% to 8% of net assets, the fund's third-largest industry holding.
We also nudged holdings higher in the paper and paper products area from 3% to
4%. The other change of note was an increase in our cash position in view of the
market's recent illiquidity and for end-of-year positioning.
OUTLOOK
- -------
While high-yield bond returns were below their long-term average in the
past couple of years, their high income and shorter durations enabled them to
deliver better performance than high-quality bonds -- as you would expect in a
rising rate environment. (Duration is a more accurate measure of interest rate
sensitivity than maturity.) Having been cautious for some time, we now feel more
optimistic that high-yield bonds will strengthen in the first quarter of the new
year. The economy is expected to remain strong, Y2K anxiety will be behind us,
supply has lightened, and demand is responding to the above-average difference
between real yields on noninvestment-grade bonds and Treasuries. Insurance
companies remain a major source of demand, and foreign investors have been
increasingly attracted to the new structured high-yield bond products, such as
collateralized bond obligations (CBOs).
We will continue our commitment to research and diversification, which we
believe is prudent for a fund that operates in the riskier area of the overall
bond market. Our aim is to deliver high current income and attractive total
returns over time while seeking to cushion the volatility inherent in this
market.
Respectfully submitted,
/s/
Mark J. Vaselkiv
Chairman of the Investment Advisory Committee
December 22, 1999
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- -----------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
KEY STATISTICS
- --------------
5/31/99 11/30/99
------- --------
Price Per Share $ 8.32 $ 7.91
- -------------------------------------------------------------------
Dividends Per Share
- -------------------------------------------------------------------
For 6 months 0.37 0.38
- -------------------------------------------------------------------
For 12 months 0.75 0.76
- -------------------------------------------------------------------
Dividend Yield *
- -------------------------------------------------------------------
For 6 months 9.23% 9.85%
- -------------------------------------------------------------------
For 12 months 9.40 10.00
- -------------------------------------------------------------------
30-Day Standardized Yield 9.39 10.22
- -------------------------------------------------------------------
Weighted Average Maturity (years) 9.4 9.1
- -------------------------------------------------------------------
Weighted Average Effective Duration (years) 4.4 4.4
- -------------------------------------------------------------------
Weighted Average Quality ** B+ B+
- -------------------------------------------------------------------
* Dividends earned and reinvested for the periods indicated are
annualized and divided by the fund's net asset value per share at the
end of the period.
** Based on T. Rowe Price research.
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- -----------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
TWENTY-FIVE LARGEST HOLDINGS
- ----------------------------
Percent of
Net Assets
11/30/99
- ------------------------------------------------------------------
Cablevision Systems (CSC Holdings) 2.1%
- ------------------------------------------------------------------
Nextel Communications 1.7
- ------------------------------------------------------------------
Repap New Brunswick 1.3
- ------------------------------------------------------------------
United International Holdings 1.1
- ------------------------------------------------------------------
Dobson Communications 1.1
- ------------------------------------------------------------------
PSINet 1.1
- ------------------------------------------------------------------
NTL Communications 1.0
- ------------------------------------------------------------------
Triton Communications 1.0
- ------------------------------------------------------------------
Colt Telecom 1.0
- ------------------------------------------------------------------
Voicestream Wireless 1.0
- ------------------------------------------------------------------
Clearnet Communications 1.0
- ------------------------------------------------------------------
TravelCenters of America 0.9
- ------------------------------------------------------------------
Doane Products 0.9
- ------------------------------------------------------------------
YPFSociedad Anonima 0.9
- ------------------------------------------------------------------
Chancellor Media 0.9
- ------------------------------------------------------------------
Nextlink Communications 0.9
- ------------------------------------------------------------------
Courtyard by Marriott II 0.8
- ------------------------------------------------------------------
Frontiervision 0.8
- ------------------------------------------------------------------
Spanish Broadcasting 0.8
- ------------------------------------------------------------------
Coinmach 0.8
- ------------------------------------------------------------------
Sinclair Broadcasting 0.8
- ------------------------------------------------------------------
Horseshoe Gaming 0.8
- ------------------------------------------------------------------
ISGResources 0.8
- ------------------------------------------------------------------
American Pacific 0.8
- ------------------------------------------------------------------
Host Marriott Travel 0.8
- ------------------------------------------------------------------
Total 25.1%
Note: Table excludes reserves.
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- -----------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
SECTOR DIVERSIFICATION
- ----------------------
Percent of Percent of
Net Assets Net Assets
5/31/99 11/30/99
- ----------------------------------------------------------------
Wireless Communications 8% 10%
- ----------------------------------------------------------------
Cable Operators 7 9
- ----------------------------------------------------------------
Energy 5 8
- ----------------------------------------------------------------
Wireline Communications 7 6
- ----------------------------------------------------------------
Broadcasting 4 5
- ----------------------------------------------------------------
Service 5 5
- ----------------------------------------------------------------
Long Distance 2 5
- ----------------------------------------------------------------
Health Care Services 4 4
- ----------------------------------------------------------------
Paper and Paper Products 3 4
- ----------------------------------------------------------------
Gaming 4 4
- ----------------------------------------------------------------
Internet Service Providers 2 3
- ----------------------------------------------------------------
Food and Tobacco 2 3
- ----------------------------------------------------------------
Specialty Chemicals 4 2
- ----------------------------------------------------------------
Lodging 1 2
- ----------------------------------------------------------------
Miscellaneous Consumer Products 6 2
- ----------------------------------------------------------------
Building Products 3 2
- ----------------------------------------------------------------
Manufacturing 2 2
- ----------------------------------------------------------------
Supermarkets 2 2
- ----------------------------------------------------------------
Printing and Publishing 3 2
- ----------------------------------------------------------------
Transportation 2 2
- ----------------------------------------------------------------
Money Market Funds * 4 7
- ----------------------------------------------------------------
All Other 18 9
- ----------------------------------------------------------------
Other Assets Less Liabilities 2 2
- ----------------------------------------------------------------
Total 100% 100%
* See note in financial statements.
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- ----------------------
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
[SEC chart 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 11/30/99 1 Year 3 Years 5 Years 10 Years
- ---------------------- ------ ------- ------- --------
High Yield Fund 2.51% 7.55% 9.78% 8.95%
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 High Yield Fund
- --------------------------------------------------------------------------------
Unaudited For a share outstanding throughout each period
Financial Highlights
- --------------------
6 Months Year
Ended Ended
11/30/99 5/31/99 5/31/98 5/31/97 5/31/96 5/31/95
-------- ------- ------- ------- ------- -------
NET ASSET VALUE
Beginning of period $ 8.32 $ 8.85 $ 8.43 $ 8.13 $ 8.16 $ 8.37
Investment activities
Net investment income 0.38 0.75 0.77 0.75 0.73 0.75
Net realized and
unrealized gain (loss) (0.41) (0.53) 0.41 0.30 (0.02) (0.20)
Total from
investment activities (0.03) 0.22 1.18 1.05 0.71 0.55
Distributions
Net investment income (0.38) (0.75) (0.76) (0.75) (0.74) (0.76)
- --------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 7.91 $ 8.32 $ 8.85 $ 8.43 $ 8.13 $ 8.16
RATIOS/SUPPLEMENTAL DATA
- ------------------------
TOTAL RETURN* (0.30)% 2.73% 14.51% 13.49% 9.06% 7.09%
- --------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.82%+ 0.82% 0.81% 0.84% 0.85% 0.88%
- --------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 9.50%+ 8.93% 8.78% 9.15% 8.89% 9.27%
- --------------------------------------------------------------------------------
Portfolio turnover rate 68.6%+ 95.6% 129.6% 111.3% 100.1% 74.2%
- --------------------------------------------------------------------------------
Net assets, end of period
(in millions) $1,660 $1,776 $1,725 $1,401 $1,229 $1,208
- --------------------------------------------------------------------------------
* 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 and payment of no redemption or account fees.
+ Annualized
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1999
STATEMENT OF NET ASSETS
- -----------------------
Par/Shares Value
In thousands
CORPORATE BONDS AND NOTES 80.2%
- -------------------------------
ADVERTISING 0.3%
- -----------------
Lamar Media, Sr. Sub. Notes, 9.25%, 8/15/07 $ 5,000 $ 4,931
- --------------------------------------------------------------------------------
4,931
-----
AEROSPACE & DEFENSE 1.3%
- -------------------------
Communications & Power, Sr. Sub. Notes, 12.00%, 8/1/05 11,625 9,329
- --------------------------------------------------------------------------------
Dyncorp, Sr. Sub. Notes, 9.50%, 3/1/07 10,625 9,456
- --------------------------------------------------------------------------------
IT Group, Sr. Sub. Notes, 11.25%, 4/1/09 3,450 3,312
- --------------------------------------------------------------------------------
22,097
------
AUTOMOBILES AND RELATED 1.3%
- -----------------------------
Advance Stores, Sr. Sub. Notes, 10.25%, 4/15/08 4,100 3,526
- --------------------------------------------------------------------------------
Dura Operating, Sr. Sub. Notes, 9.00%, 5/1/09 (EUR) 8,000 7,518
- --------------------------------------------------------------------------------
Hayes Lemmerz International, Sr. Sub. Notes
8.25%, 12/15/08 4,300 3,934
- --------------------------------------------------------------------------------
MSX International, Sr. Sub. Notes, 11.375%, 1/15/08 6,550 6,157
- --------------------------------------------------------------------------------
21,135
------
BROADCASTING 2.8%
- ------------------
Chancellor Media
Sr. Notes, 8.00%, 11/1/08 6,700 6,717
- --------------------------------------------------------------------------------
Sr. Sub Notes
8.125%, 12/15/07 1,750 1,746
- --------------------------------------------------------------------------------
8.75%, 6/15/07 2,850 2,935
- --------------------------------------------------------------------------------
9.00%, 10/1/08 2,950 3,090
- --------------------------------------------------------------------------------
<PAGE>
Citadel Broadcasting, Sr. Sub. Notes, 9.25%, 11/15/08 4,650 4,673
- --------------------------------------------------------------------------------
Cumulus Media, Sr. Sub. Notes, 10.375%, 7/1/08 4,700 4,935
- --------------------------------------------------------------------------------
Paxson Communications, Sr. Sub. Notes, 11.625%, 10/1/02 3,000 3,113
- --------------------------------------------------------------------------------
Radio Unica, Sr. Notes, STEP, 0%, 8/1/06 12,000 7,830
- --------------------------------------------------------------------------------
Sinclair Broadcasting, Sr. Sub. Notes, 10.00%, 9/30/05 4,800 4,764
- --------------------------------------------------------------------------------
Spanish Broadcasting, Sr. Sub. Notes, 9.625%, 11/1/09 6,325 6,333
- --------------------------------------------------------------------------------
46,136
------
BUILDING PRODUCTS 1.8%
- -----------------------
American Builders & Contractors Supply, Sr. Sub. Notes
10.625%, 5/15/07 9,250 8,186
- --------------------------------------------------------------------------------
Associated Materials, Sr. Sub. Notes, 9.25%, 3/1/08 2,650 2,494
- --------------------------------------------------------------------------------
Building Materials, Sr. Notes, 7.75%, 7/15/05 1,550 1,418
- --------------------------------------------------------------------------------
ISG Resources, Sr. Sub. Notes, 10.00%, 4/15/08 15,500 13,098
- --------------------------------------------------------------------------------
Panolam Industries, Sr. Sub. Notes,
(144a), 11.50%, 2/15/09 4,800 4,944
- --------------------------------------------------------------------------------
30,140
------
BUILDING AND REAL ESTATE 0.3%
- ------------------------------
LNR Property, Sr. Sub. Notes, 9.375%, 3/15/08 $ 5,000 $ 4,625
- --------------------------------------------------------------------------------
4,625
-----
CABLE OPERATORS 6.9%
- ---------------------
Adelphia Communications
Sr. Notes
7.875%, 5/1/09 4,250 3,867
- --------------------------------------------------------------------------------
9.875%, 3/1/07 3,750 3,844
- --------------------------------------------------------------------------------
Century Communications, Sr. Disc. Notes
Zero Coupon, 1/15/08 10,000 4,400
- --------------------------------------------------------------------------------
Charter Communications, Sr. Disc. Notes
STEP, 0%, 4/1/11 7,775 4,684
- --------------------------------------------------------------------------------
Classic Cable, Sr. Notes, 9.875%, 8/1/08 5,000 5,006
- --------------------------------------------------------------------------------
Coaxial LLC, Sr. Notes, STEP, 0%, 8/15/08 7,700 4,928
- --------------------------------------------------------------------------------
<PAGE>
CSC Holdings, Sr. Deb., 7.625%, 7/15/18 8,000 7,384
- --------------------------------------------------------------------------------
Falcon Holding Group, Sr. Disc. Notes
STEP, 0%, 4/15/10 12,050 8,676
- --------------------------------------------------------------------------------
Frontiervision
Sr. Disc. Notes, STEP, 0%, 9/15/07 10,850 9,521
- --------------------------------------------------------------------------------
Sr. Notes, 11.00%, 10/15/06 4,200 4,462
- --------------------------------------------------------------------------------
Insight Midwest, Sr. Notes, (144a), 9.75%, 10/1/09 3,300 3,391
- --------------------------------------------------------------------------------
International Cabletel, Sr. Notes, STEP, 0%, 2/1/06 5,800 5,177
- --------------------------------------------------------------------------------
Northland Cable Television,
Sr. Sub. Notes, 10.25%, 11/15/07 7,300 7,309
- --------------------------------------------------------------------------------
NTL Communications
Sr. Notes, STEP
0%, 4/1/08 3,750 2,587
- --------------------------------------------------------------------------------
0%, 10/1/08 1,000 695
- --------------------------------------------------------------------------------
0%, 4/15/09 (GBP) 12,500 11,462
- --------------------------------------------------------------------------------
NTL Group, STEP, 0%, 4/1/08 (GBP) 2,500 2,661
- --------------------------------------------------------------------------------
United International Holdings, Sr. Disc. Notes
STEP, 0%, 2/15/08 30,000 18,825
- --------------------------------------------------------------------------------
United Pan Europe, Sr. Notes, (144a), 10.875%, 8/1/09 6,000 6,195
- --------------------------------------------------------------------------------
115,074
-------
CONTAINER 1.5%
- ---------------
Anchor Advanced, Sr. Notes, 11.75%, 4/1/04 10,500 9,450
- --------------------------------------------------------------------------------
Applied Extrusion Technology,
Sr. Notes, 11.50%, 4/1/02 5,575 5,721
- --------------------------------------------------------------------------------
BWAY, Sr. Sub. Notes, 10.25%, 4/15/07 9,375 9,270
- --------------------------------------------------------------------------------
24,441
------
ELECTRONIC COMPONENTS 0.5%
- ---------------------------
Amkor Technology, Sr. Notes, (144a), 9.25%, 5/1/06$ 8,900 $ 8,811
- --------------------------------------------------------------------------------
8,811
-----
<PAGE>
ENERGY 7.3%
- ------------
Bellwether Exploration, Sr. Sub. Notes, 10.875%, 4/1/07 7,900 7,110
- --------------------------------------------------------------------------------
Canadian Forest Oil, Sr. Sub. Notes, 8.75%, 9/15/07 7,200 7,074
- --------------------------------------------------------------------------------
Comstock Resources, Sr. Notes, 11.25%, 5/1/07 11,525 11,813
- --------------------------------------------------------------------------------
Continental Resources, Sr. Sub. Notes, 10.25%, 8/1/08 7,075 5,908
- --------------------------------------------------------------------------------
Cross Timbers Oil, Sr. Sub. Notes, 8.75%, 11/1/09 1,150 1,090
- --------------------------------------------------------------------------------
Denbury Management, Sr. Sub. Notes, 9.00%, 3/1/08 6,060 5,545
- --------------------------------------------------------------------------------
Energy Corporation of America,
Sr. Sub. Notes, 9.50%, 5/15/07 13,375 7,757
- --------------------------------------------------------------------------------
Eott Energy Partners, Sr. Notes, 11.00%, 10/1/09 3,900 4,037
- --------------------------------------------------------------------------------
Flores & Rucks, Sr. Sub. Notes, 9.75%, 10/1/06 6,850 7,441
- --------------------------------------------------------------------------------
Forest Oil, Sr. Sub. Notes, 10.50%, 1/15/06 4,800 4,998
- --------------------------------------------------------------------------------
Lomak Petroleum, Sr. Sub. Notes, 8.75%, 1/15/07 2,900 2,668
- --------------------------------------------------------------------------------
Nuevo Energy, Sr. Sub. Notes, 9.50%, 6/1/08 2,500 2,494
- --------------------------------------------------------------------------------
PDVSA Finance, 7.50%, 11/15/28 8,700 6,105
- --------------------------------------------------------------------------------
Plains Resources, Sr. Sub. Notes, 10.25%, 3/15/06 3,210 3,017
- --------------------------------------------------------------------------------
R&B Falcon
6.75%, 4/15/05 2,500 2,200
- --------------------------------------------------------------------------------
Sr. Notes, 6.95%, 4/15/08 1,000 831
- --------------------------------------------------------------------------------
RBF Finance, 11.00%, 3/15/06 4,800 5,160
- --------------------------------------------------------------------------------
Stone Energy, Sr. Sub. Notes, 8.75%, 9/15/07 4,250 4,122
- --------------------------------------------------------------------------------
Swift Energy, Sr. Sub. Notes, 10.25%, 8/1/09 6,000 6,022
- --------------------------------------------------------------------------------
Universal Compression, Sr. Disc. Notes
STEP, 0%, 2/15/08 15,615 9,681
- --------------------------------------------------------------------------------
Vintage Petroleum, Sr. Sub. Notes, 9.75%, 6/30/09 2,250 2,312
- --------------------------------------------------------------------------------
YPF Sociedad Anonima, 10.00%, 11/2/28 13,325 14,537
- --------------------------------------------------------------------------------
121,922
-------
<PAGE>
ENTERTAINMENT AND LEISURE 1.3%
- -------------------------------
AMC Entertainment, Sr. Sub. Notes, 9.50%, 2/1/11 7,675 6,984
- --------------------------------------------------------------------------------
Cinemark USA, Sr. Sub. Notes, 8.50%, 8/1/08 4,100 3,526
- --------------------------------------------------------------------------------
Premier Parks
Sr. Disc. Notes, STEP, 0%, 4/1/08 8,000 5,400
- --------------------------------------------------------------------------------
Sr. Notes, 9.75%, 6/15/07 5,000 4,975
- --------------------------------------------------------------------------------
20,885
------
FINANCIAL 0.8%
- ---------------
Bank United, 10.25%, 12/31/26 7,500 6,825
- --------------------------------------------------------------------------------
Euronet Services, 12.375%, 7/1/06 (DEM) $ 10,500 $ 2,678
- --------------------------------------------------------------------------------
First Federal Financial, 11.75%, 10/1/04 3,050 3,172
- --------------------------------------------------------------------------------
12,675
------
FOOD AND TOBACCO 2.7%
- ----------------------
Archibald Candy, Sr. Secured Notes, 10.25%, 7/1/04 4,000 3,890
- --------------------------------------------------------------------------------
B&G Foods, Sr. Sub. Notes, 9.625%, 8/1/07 12,000 10,860
- --------------------------------------------------------------------------------
Doane Pet Care, Sr. Sub. Notes, 9.75%, 5/15/07 15,353 14,758
- --------------------------------------------------------------------------------
International Home Foods, Gtd. Sr. Sub. Notes
10.375%, 11/1/06 6,500 6,752
- --------------------------------------------------------------------------------
Luigino's, Sr. Sub. Notes, 10.00%, 2/1/06 3,675 3,307
- --------------------------------------------------------------------------------
Southern Foods, Sr. Sub. Notes, 9.875%, 9/1/07 5,500 5,576
- --------------------------------------------------------------------------------
45,143
------
GAMING 4.1%
- ------------
Agrosy Gaming, Sr. Sub. Notes, 10.75%, 6/1/09 6,875 7,253
- --------------------------------------------------------------------------------
Capital Gaming International,
Sr. Sub. Notes, 12.00%, 2/1/01 * 2 0
- --------------------------------------------------------------------------------
Coral Group, Sr. Sub. Notes, 10.00%, 2/15/09 (GBP) 2,500 3,947
- --------------------------------------------------------------------------------
Eldorado Resorts, Sr. Sub. Notes, 10.50%, 8/15/06 6,000 6,135
- --------------------------------------------------------------------------------
Hollywood Casino Shreveport, 1st Mortgage Notes
(144a), 13.00%, 8/1/06 8,000 8,480
- --------------------------------------------------------------------------------
<PAGE>
Hollywood Park
Sr. Sub. Notes
9.25%, 2/15/07 7,675 7,598
- --------------------------------------------------------------------------------
9.50%, 8/1/07 2,325 2,302
- --------------------------------------------------------------------------------
Horseshoe Gaming LLC, Sr. Sub. Notes, 9.375%, 6/15/07 6,950 6,881
- --------------------------------------------------------------------------------
Horseshoe Gaming Holding,
Sr. Sub. Notes, 8.625%, 5/15/09 6,800 6,494
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Sr. Sub. Notes, 8.75%, 4/15/09 5,000 4,638
- --------------------------------------------------------------------------------
Mohegan Tribal Gaming, Sr. Notes, 8.125%, 1/1/06 7,300 7,117
- --------------------------------------------------------------------------------
Players International, Sr. Notes, 10.875%, 4/15/05 3,850 4,071
- --------------------------------------------------------------------------------
Venetian Casino, Sr. Sub. Notes, 14.25%, 11/15/05 4,800 2,520
- --------------------------------------------------------------------------------
67,436
------
HEALTH CARE SERVICES 4.5%
- --------------------------
Dade International, Sr. Sub. Notes, 11.125%, 5/1/06 12,000 12,120
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust
I, 9.00%, 12/1/06 6,500 6,273
- --------------------------------------------------------------------------------
II, 7.875%, 2/1/08 2,500 2,300
- --------------------------------------------------------------------------------
Hanger Orthopedic Group, Sr. Sub. Notes
(144a), 11.25%, 6/15/09 3,700 3,756
- --------------------------------------------------------------------------------
King Pharmaceuticals, Sr. Sub. Notes, 10.75%, 2/15/09 7,000 7,367
- --------------------------------------------------------------------------------
Lifepoint Hospitals, Sr. Sub. Notes, 10.75%, 5/15/09 10,000 10,375
- --------------------------------------------------------------------------------
Mariner Post Acute Network
Sr. Sub. Disc. Notes, Zero Coupon, 11/1/07 * $ 8,100 $ 81
- --------------------------------------------------------------------------------
Sr. Sub. Notes, 9.50%, 11/1/07 * 3,000 45
- --------------------------------------------------------------------------------
Omnicare, Sub. Notes, 5.00%, 12/1/07 6,000 4,169
- --------------------------------------------------------------------------------
Quest Diagnostics, Gtd.
Sr. Sub. Notes, 10.75%, 12/15/06 7,050 7,367
- --------------------------------------------------------------------------------
Tenet Healthcare
Sub. Exch. Notes, 6.00%, 12/1/05 5,000 4,041
- --------------------------------------------------------------------------------
Sr. Notes, 8.00%, 1/15/05 5,000 4,812
- --------------------------------------------------------------------------------
Triad Hospitals,
Sr. Sub. Notes, (144a), 11.00%, 5/15/09 10,900 11,336
- --------------------------------------------------------------------------------
74,042
------
<PAGE>
INTERNET SERVICE PROVIDERS 2.5%
- --------------------------------
Covad Communications
Sr. Disc. Notes
12.50%, 2/15/09 3,850 3,985
- --------------------------------------------------------------------------------
STEP, 0%, 3/15/08 7,850 4,867
- --------------------------------------------------------------------------------
Cybernet Internet Services,
Sr. Notes, (144a), 14.00%, 7/1/09 3,350 2,931
- --------------------------------------------------------------------------------
Exodus Communications, Sr. Notes, 11.25%, 7/1/08 3,850 3,985
- --------------------------------------------------------------------------------
PSINet
Sr. Notes, (144a), 10.00%, 2/15/05 4,200 4,148
- --------------------------------------------------------------------------------
Sr. Notes, 11.50%, 11/1/08 9,900 10,271
- --------------------------------------------------------------------------------
Verio, Sr. Notes
11.25%, 12/1/08 7,700 8,027
- --------------------------------------------------------------------------------
13.50%, 6/15/04 3,000 3,300
- --------------------------------------------------------------------------------
41,514
------
LODGING 1.7%
- -------------
Courtyard by Marriott II,
Sr. Secured Notes, 10.75%, 2/1/08 14,700 14,075
- --------------------------------------------------------------------------------
Lodgian Financing, Guaranteed Sr. Sub Notes
12.25%, 7/15/09 5,250 5,224
- --------------------------------------------------------------------------------
Red Roof Inns, Sr. Notes, 9.625%, 12/15/03 8,350 8,580
- --------------------------------------------------------------------------------
27,879
------
LONG DISTANCE 4.2%
- -------------------
Energis, Sr. Notes, (144a), 9.75%, 6/15/09 4,400 4,576
- --------------------------------------------------------------------------------
Global Telesystems Europe, (144a), 11.00%, 12/1/09 4,750 4,810
- --------------------------------------------------------------------------------
Hermes Europe Railtel, Sr. Notes, 10.375%, 1/15/09 5,750 5,664
- --------------------------------------------------------------------------------
Level 3 Communications, Sr. Notes, 9.125%, 5/1/08 4,650 4,394
- --------------------------------------------------------------------------------
Metromedia Fiber Network, Sr. Notes, 10.00%, 11/15/08 11,025 11,163
- --------------------------------------------------------------------------------
Primus Telecommunications Group, Sr. Notes
(144a), 12.75%, 10/15/09 7,750 7,789
- --------------------------------------------------------------------------------
RSL Communications, Sr. Notes, 12.00%, 11/1/08 $ 10,500 $ 10,605
- --------------------------------------------------------------------------------
<PAGE>
Viatel
Sr. Disc. Notes, STEP, 0%, 4/15/08 2,900 1,740
- --------------------------------------------------------------------------------
Sr. Notes, 11.50%, 3/15/09 6,700 6,700
- --------------------------------------------------------------------------------
Williams Communications Group,
Sr. Notes, 10.875%, 10/1/09 11,500 11,989
- --------------------------------------------------------------------------------
69,430
------
MANUFACTURING 1.8%
- -------------------
Hawk, Sr. Notes, 10.25%, 12/1/03 10,629 9,991
- --------------------------------------------------------------------------------
HCC Industries, Sr. Sub. Notes, 10.75%, 5/15/07 9,025 5,415
- --------------------------------------------------------------------------------
International Wire, Sr. Sub. Notes
11.75%, 6/1/05 12,302 12,656
- --------------------------------------------------------------------------------
Paragon Corporate Holdings, Sr. Notes, 9.625%, 4/1/08 4,250 1,488
- --------------------------------------------------------------------------------
29,550
------
METALS AND MINING 0.5%
- -----------------------
Better Minerals & Aggregates, Sr. Sub. Notes
(144a), 13.00%, 9/15/09 2,850 2,814
- --------------------------------------------------------------------------------
Golden Northwest Aluminum, 1st Mortgage Notes
12.00%, 12/15/06 4,900 5,121
- --------------------------------------------------------------------------------
7,935
-----
MISCELLANEOUS CONSUMER PRODUCTS 1.8%
- -------------------------------------
Ballys Total Fitness, Sr. Sub. Notes, 9.875%, 10/15/07 10,500 9,988
- --------------------------------------------------------------------------------
Hedstrom Holdings, Sr. Disc. Notes, STEP, 0%, 6/1/09 2,100 105
- --------------------------------------------------------------------------------
Herff Jones, Sr. Sub. Notes, 11.00%, 8/15/05 5,000 5,331
- --------------------------------------------------------------------------------
Holmes Products
Gtd. Notes, 9.875%, 11/15/07 4,175 3,340
- --------------------------------------------------------------------------------
Sr. Sub. Notes, 9.875%, 11/15/07 2,150 1,720
- --------------------------------------------------------------------------------
Mattress Discounters,
Sr. Notes, (144a), 12.625%, 7/15/07 4,000 3,820
- --------------------------------------------------------------------------------
Sleepmaster LLC,
Sr. Sub. Notes, (144a), 11.00%, 5/15/09 6,250 6,250
- --------------------------------------------------------------------------------
30,554
------
<PAGE>
PAPER AND PAPER PRODUCTS 3.9%
- ------------------------------
Doman Industries, Sr. Sub. Notes, 12.00%, 7/1/04 4,000 4,170
- --------------------------------------------------------------------------------
Kappa Beheer
STEP, 0%, 7/15/09 (EUR) 8,000 4,918
- --------------------------------------------------------------------------------
Sr. Sub. Notes, (144a), 10.625%, 7/15/09 7,000 7,210
- --------------------------------------------------------------------------------
Packaging Corporation of America, Sr. Sub. Notes
9.625%, 4/1/09 8,800 9,086
- --------------------------------------------------------------------------------
Repap New Brunswick
Sr. Secured Notes, 11.50%, 6/1/04 7,550 7,814
- --------------------------------------------------------------------------------
Repap New Brunswick
Sr. Notes, 10.625%, 4/15/05 $ 11,000 $ 10,285
- --------------------------------------------------------------------------------
Sr. Secured 1st Priority Notes, 9.00%, 6/1/04 3,325 3,275
- --------------------------------------------------------------------------------
Riverwood International
Sr. Notes
10.25%, 4/1/06 1,875 1,922
- --------------------------------------------------------------------------------
10.625%, 8/1/07 2,875 2,976
- --------------------------------------------------------------------------------
Sr. Sub. Notes, 10.875%, 4/1/08 5,700 5,700
- --------------------------------------------------------------------------------
U.S. Timberland Klamath Falls,
Sr. Notes, 9.625%, 11/15/07 7,960 7,403
- --------------------------------------------------------------------------------
64,759
------
PRINTING AND PUBLISHING 1.7%
- -----------------------------
Hollinger International Publishing,
Gtd. Notes, 9.25%, 3/15/07 9,900 9,702
- --------------------------------------------------------------------------------
Sun Media
Sr. Sub. Notes
9.50%, 2/15/07 4,275 4,243
- --------------------------------------------------------------------------------
9.50%, 5/15/07 2,925 2,903
- --------------------------------------------------------------------------------
TDL Infomedia Group,
Sr. Sub. Notes, (144a), 12.125%, 10/15/09 (GBP) 3,000 4,760
- --------------------------------------------------------------------------------
Transwestern Holdings, Sr. Disc. Notes, STEP
0%, 11/15/08 4,600 3,289
- --------------------------------------------------------------------------------
Transwestern Publishing,
Sr. Sub. Notes, 9.625%, 11/15/07 3,900 3,773
- --------------------------------------------------------------------------------
28,670
------
<PAGE>
RESTAURANTS 0.4%
- -----------------
Mrs. Fields, Gtd. Sr. Sub. Notes, 10.125%, 12/1/04 2,250 1,825
- --------------------------------------------------------------------------------
Sbarro, Sr. Notes, (144a), 11.00%, 9/15/09 5,400 5,508
- --------------------------------------------------------------------------------
7,333
-----
RETAIL 0.0%
- ------------
Safelite Glass, Sr. Sub. Notes, 9.875%, 12/15/06 6,700 335
- --------------------------------------------------------------------------------
335
---
SATELLITES 0.8%
- ----------------
Orbital Imaging, Sr. Notes, 11.625%, 3/1/05 3,400 2,380
- --------------------------------------------------------------------------------
Pegasus Communications, Sr. Notes
9.625%, 10/15/05 2,950 2,913
- --------------------------------------------------------------------------------
9.75%, 12/1/06 4,900 4,827
- --------------------------------------------------------------------------------
Satelites Mexicanos, Sr. Notes, 10.125%, 11/1/04 4,700 3,243
- --------------------------------------------------------------------------------
13,363
------
SERVICE 4.9%
- -------------
AP Holdings, Sr. Disc. Notes, STEP, 0%, 3/15/08 4,300 2,064
- --------------------------------------------------------------------------------
APCOA, Sr. Sub. Notes, 9.25%, 3/15/08 6,700 5,469
- --------------------------------------------------------------------------------
Avis Rent A Car, Sr. Sub. Notes, 11.00%, 5/1/09 6,000 6,285
- --------------------------------------------------------------------------------
Coinmach, Sr. Sub. Notes, (144a), 11.75%, 11/15/05 $ 13,275 $ 13,740
- --------------------------------------------------------------------------------
Global Imaging, Sr. Sub. Notes, 10.75%, 2/15/07 8,000 7,740
- --------------------------------------------------------------------------------
Group Maintenance America,
Sr. Sub. Notes, 9.75%, 1/15/09 8,250 8,167
- --------------------------------------------------------------------------------
<PAGE>
Host Marriott Travel, Sr. Notes, 9.50%, 5/15/05 12,300 12,827
- --------------------------------------------------------------------------------
Intertek Finance, Sr. Sub. Notes, 10.25%, 11/1/06 11,750 11,060
- --------------------------------------------------------------------------------
Mastec, Sr. Sub. Notes, 7.75%, 2/1/08 8,250 7,755
- --------------------------------------------------------------------------------
Premiere Technologies, Sub. Conv. Notes, 5.75%, 7/1/04 3,000 1,656
- --------------------------------------------------------------------------------
Protection One Alarm
Gtd. Sr. Disc. Notes, 13.625%, 6/30/05 7,750 3,332
- --------------------------------------------------------------------------------
Sr. Sub. Notes, (144a), 8.625%, 1/15/09 4,225 1,775
- --------------------------------------------------------------------------------
81,870
------
SPECIALTY CHEMICALS 2.5%
- -------------------------
American Pacific, Sr. Notes, 9.25%, 3/1/05 13,000 13,065
- --------------------------------------------------------------------------------
Koppers, Sr. Sub. Notes, 9.875%, 12/1/07 8,000 7,240
- --------------------------------------------------------------------------------
Lyondell Chemical, Sr. Sub. Notes, 10.875%, 5/1/09 4,850 5,068
- --------------------------------------------------------------------------------
Octel, Sr. Notes, 10.00%, 5/1/06 9,255 9,209
- --------------------------------------------------------------------------------
Sovereign Speciality, Sr. Sub. Notes, 9.50%, 8/1/07 6,850 6,901
- --------------------------------------------------------------------------------
41,483
------
SUPERMARKETS 1.8%
- ------------------
Jitney-Jungle Stores, Sr. Sub. Notes
10.375%, 9/15/07 * 8,000 60
- --------------------------------------------------------------------------------
12.00%, 3/1/06 * 3,100 744
- --------------------------------------------------------------------------------
Pathmark Stores, STEP, 10.75%, 11/1/03 6,100 5,643
- --------------------------------------------------------------------------------
Shoppers Food Warehouse, Sr. Notes, 9.75%, 6/15/04 11,650 12,349
- --------------------------------------------------------------------------------
The Pantry, Sr. Sub. Notes, 10.25%, 10/15/07 11,000 10,587
- --------------------------------------------------------------------------------
29,383
------
TEXTILES AND APPAREL 0.4%
- --------------------------
Delta Mills, Sr. Notes, 9.625%, 9/1/07 3,875 2,422
- --------------------------------------------------------------------------------
Dyersburg, Sr. Sub. Notes, 9.75%, 9/1/07 9,175 3,670
- --------------------------------------------------------------------------------
6,092
-----
<PAGE>
TRANSPORTATION, EXCLUDING RAIL ROAD 1.6%
- -----------------------------------------
Greyhound Lines, Sr. Notes, 11.50%, 4/15/07 6,750 7,577
- --------------------------------------------------------------------------------
Stena, Sr. Notes, 10.50%, 12/15/05 4,800 4,464
- --------------------------------------------------------------------------------
TravelCenters of America,
Sr. Sub. Notes, 10.25%, 4/1/07 15,150 14,847
- --------------------------------------------------------------------------------
26,888
------
WIRELESS COMMUNICATIONS 6.9%
- -----------------------------
Airgate PCS, Sr. Sub. Notes, STEP, 0%, 10/1/09 17,150 9,090
- --------------------------------------------------------------------------------
American Cellular, Sr. Notes, 10.50%, 5/15/08 3,680 4,085
- --------------------------------------------------------------------------------
Centennial Cellular, Sr. Sub. Notes, 10.75%, 12/15/08 $10,150 $10,759
- --------------------------------------------------------------------------------
Clearnet Communications
Sr. Disc. Notes, STEP
0%, 12/15/05 6,000 5,835
- --------------------------------------------------------------------------------
0%, 5/15/08 3,000 1,289
- --------------------------------------------------------------------------------
0%, 2/15/09 (CAD) 2,850 1,133
- --------------------------------------------------------------------------------
0%, 5/1/09 11,500 7,073
- --------------------------------------------------------------------------------
Dobson Communications, Sr. Notes, 11.75%, 4/15/07 2,287 2,516
- --------------------------------------------------------------------------------
Nextel Partners, Sr. Disc. Notes, STEP, 0%, 2/1/09 7,550 4,926
- --------------------------------------------------------------------------------
Orange, Sr. Notes
8.00%, 8/1/08 2,850 2,907
- --------------------------------------------------------------------------------
8.75%, 6/1/06 2,850 2,978
- --------------------------------------------------------------------------------
Page America Group, 15.00%, 12/31/99 +*++* 9,800 3,138
- --------------------------------------------------------------------------------
Rogers Cantel
Sr. Deb., 9.75%, 6/1/16 6,625 7,495
- --------------------------------------------------------------------------------
Sr. Secured Deb., 9.375%, 6/1/08 2,000 2,122
- --------------------------------------------------------------------------------
Telecorp PCS, Sr. Disc. Notes, (144a), STEP
0%, 4/15/09 17,800 11,436
- --------------------------------------------------------------------------------
Tritel PCS, Sr. Sub. Disc.
Notes, (144a), Zero Coupon, 5/15/09 5,000 3,213
- --------------------------------------------------------------------------------
Triton PCS, Sr. Sub. Disc. Notes, STEP, 0%, 5/1/08 24,275 17,296
- --------------------------------------------------------------------------------
Voicestream Wire, Sr. Notes, (144a), 10.375%, 11/15/09 1,850 1,929
- --------------------------------------------------------------------------------
Voicestream Wireless, Sr. Disc. Notes, (144a)
Zero Coupon, 11/15/09 25,000 15,187
- --------------------------------------------------------------------------------
114,407
-------
<PAGE>
WIRELINE COMMUNICATIONS 5.4%
- -----------------------------
21st Century Telecom,
Sr. Disc. Notes, STEP, 0%, 2/15/08 8,800 4,048
- --------------------------------------------------------------------------------
Alaska Communications, Sr. Sub. Notes, 9.375%, 5/15/09 8,630 8,350
- --------------------------------------------------------------------------------
Allegiance Telecom, Sr. Notes, Zero Coupon, 2/15/08 6,725 4,707
- --------------------------------------------------------------------------------
Colt Telecom, Sr. Disc. Notes, STEP, 0%, 12/15/06 20,000 17,225
- --------------------------------------------------------------------------------
GST Equipment Funding, Sr. Notes, 13.25%, 5/1/07 3,000 3,000
- --------------------------------------------------------------------------------
GST Network Funding, Sr. Disc. Notes, STEP
0%, 5/1/08 6,500 3,258
- --------------------------------------------------------------------------------
Hyperion Telecommunications, Sr. Disc. Notes, STEP
0%, 4/15/03 4,825 4,246
- --------------------------------------------------------------------------------
Intermedia Communications
Sr. Disc. Notes, STEP
0%, 5/15/06 1,000 865
- --------------------------------------------------------------------------------
0%, 3/1/09 4,750 2,755
- --------------------------------------------------------------------------------
KMC Telecom, Sr. Disc. Notes, STEP, 0%, 2/15/08 $ 9,650 $ 5,018
- --------------------------------------------------------------------------------
Mcleod USA
Sr. Disc. Notes, STEP, 0%, 3/1/07 1,750 1,400
- --------------------------------------------------------------------------------
Sr. Notes, 8.125%, 2/15/09 2,750 2,558
- --------------------------------------------------------------------------------
Metronet Communications
Sr. Disc. Notes, STEP
0%, 11/1/07 2,950 2,434
- --------------------------------------------------------------------------------
0%, 6/15/08 5,250 4,121
- --------------------------------------------------------------------------------
Netia Holdings II,
Sr. Notes, (144a), 13.125%, 6/15/09 3,800 3,762
- --------------------------------------------------------------------------------
Nextlink Communications
Sr. Disc. Notes, STEP, 0%, 6/1/09 6,700 4,020
- --------------------------------------------------------------------------------
Sr. Notes, 12.50%, 4/15/06 5,000 5,312
- --------------------------------------------------------------------------------
Tele1 Europe, Sr. Notes, (144a), 13.00%, 5/15/09 6,250 6,406
- --------------------------------------------------------------------------------
Teligent
Sr. Disc. Notes, STEP, 0%, 3/1/08 3,650 2,154
- --------------------------------------------------------------------------------
Sr. Notes, 11.50%, 12/1/07 4,275 4,125
- --------------------------------------------------------------------------------
89,764
------
Total Corporate Bonds and Notes (Cost $1,408,757) 1,330,702
- --------------------------------------------------------------------------------
<PAGE>
EQUITY AND CONVERTIBLE SECURITIES 10.9%
- ----------------------------------------
AUTOMOBILES AND RELATED 0.0%
- -----------------------------
Hayes Wheels International, Warrants, 7/1/03 * 18 264
- --------------------------------------------------------------------------------
264
---
BEVERAGES 0.6%
- ---------------
Dr. Pepper Bottling Holdings, Common Stock (Class A) *+* 397 9,914
- --------------------------------------------------------------------------------
9,914
-----
BROADCASTING 2.3%
- ------------------
Capstar Broadcasting, PIK, Sr. Exch. Pfd. Stock 107 12,569
- --------------------------------------------------------------------------------
Citadel Broadcasting, PIK, Pfd. Stock 52 5,906
- --------------------------------------------------------------------------------
Cumulus Media, Exch. Pfd. Stock (Series A), 13.75% 3 3,448
- --------------------------------------------------------------------------------
Sinclair Capital, Pfd. Stock (Series B), 11.625% 87 8,704
- --------------------------------------------------------------------------------
Spanish Broadcasting
Common (Class B) * 64 1,833
- --------------------------------------------------------------------------------
PIK, Sr. Exch. Pfd. Stock 5 5,680
- --------------------------------------------------------------------------------
38,140
------
CABLE OPERATORS 1.7%
- ---------------------
Classic Communications, Common Stock, (144a) * 9 $ 150
- --------------------------------------------------------------------------------
CSC Holdings
PIK, Pfd. Stock (Series H) 42 4,618
- --------------------------------------------------------------------------------
PIK, Pfd. Stock (Series M) 210 22,816
- --------------------------------------------------------------------------------
Peachtree Cable Associates, Common Stock *+* 10 170
- --------------------------------------------------------------------------------
Time Warner, Common Stock * 2 95
- --------------------------------------------------------------------------------
UIH Australia Pacific, Warrants, 5/15/06 * 5 148
- --------------------------------------------------------------------------------
Wireless One, Warrants, 10/19/00 * 19 0
- --------------------------------------------------------------------------------
27,997
------
<PAGE>
CONGLOMERATES 0.0%
- -------------------
ICF Kaiser International, Warrants, 12/31/99 * 37 0
- --------------------------------------------------------------------------------
0
----
ENERGY 0.2%
- ------------
Clark USA, PIK, Cum. Sr. Exch. Pfd. Stock 59 2,792
- --------------------------------------------------------------------------------
2,792
-----
ENTERTAINMENT AND LEISURE 0.1%
- -------------------------------
Capital Gaming International, Common Stock 1 0
- --------------------------------------------------------------------------------
Premier Parks, Common Stock * 60 1,500
- --------------------------------------------------------------------------------
1,500
-----
GAMING 0.1%
- ------------
Becker Gaming, Warrants, 11/15/00 *+* 425 106
- --------------------------------------------------------------------------------
Hollywood Casino, Common Stock (Class A) * 93 312
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Common Stock 51 661
- --------------------------------------------------------------------------------
1,079
-----
HEALTH CARE SERVICES 0.0%
- --------------------------
Wright Medical Technology, Warrants, 6/30/03 *+* 38 0
- --------------------------------------------------------------------------------
0
----
INTERNET SERVICE PROVIDERS 0.2%
- --------------------------------
Cybernet Internet Services, Warrants, 7/1/09 * 3 368
- --------------------------------------------------------------------------------
PSINet, Cv. Pfd. Stock (Series C) 64 3,224
- --------------------------------------------------------------------------------
Splitrock Services, Warrants, (144a), 7/15/08 * 2 164
- --------------------------------------------------------------------------------
3,756
-----
LODGING 0.2%
- -------------
Lodgian Capital Trust I, Exch. Pfd. Stock (144a) 125 3,187
- --------------------------------------------------------------------------------
3,187
-----
<PAGE>
LONG DISTANCE 0.4%
- -------------------
Global Crossing Holdings, Sr. Pfd. Exch. Stock, 10.50% 68 $ 6,843
- --------------------------------------------------------------------------------
RSL Communications, Warrants, (144a), 11/15/06 * 3 246
- --------------------------------------------------------------------------------
7,089
-----
METALS AND MINING 0.3%
- -----------------------
International Utility Structures
Common Stock (CAD) 25 36
- --------------------------------------------------------------------------------
PIK, Pfd. Stock * 1 1,259
- --------------------------------------------------------------------------------
PIK, Exch. Pfd. Stock 5 4,222
- --------------------------------------------------------------------------------
5,517
-----
MISCELLANEOUS CONSUMER PRODUCTS 0.0%
- -------------------------------------
Hedstrom Holdings, Common Stock * 246 2
- --------------------------------------------------------------------------------
2
----
PAPER AND PAPER PRODUCTS 0.4%
- ------------------------------
Packaging Corporation of America,
PIK, Pfd. Stock (Series B) * 22 2,364
- --------------------------------------------------------------------------------
Smurfit-Stone Container, Common Stock * 200 3,838
- --------------------------------------------------------------------------------
6,202
-----
RETAIL 0.0%
- ------------
Lamonts Apparel
Common Stock * 3 1
- --------------------------------------------------------------------------------
Warrants, 1/31/08 * 1 0
- --------------------------------------------------------------------------------
1
----
SATELLITES 0.3%
- ----------------
Globalstar, Warrants, (144a), 2/15/04 * 7 865
- --------------------------------------------------------------------------------
Pegasus Communications, PIK, Exch. Pfd. Stock 3 3,544
- --------------------------------------------------------------------------------
4,409
-----
<PAGE>
SERVICE 0.0%
- -------------
Efficient Market Securities, Common Stock * 558 0
- --------------------------------------------------------------------------------
Protection One, Common Stock * 250 437
- --------------------------------------------------------------------------------
437
---
TEXTILES AND APPAREL 0.0%
- --------------------------
Anvil Holdings, PIK, Sr. Exch. Pfd. Stock (Series B) 202 807
- --------------------------------------------------------------------------------
807
---
WIRELESS COMMUNICATIONS 3.1%
- -----------------------------
Clearnet Communications, Warrants, 9/15/05 * 66 993
- --------------------------------------------------------------------------------
Dobson Communications
PIK, Pfd. Stock 12.25% 12 11,987
- --------------------------------------------------------------------------------
Dobson Communications
PIK, Pfd. Stock 3 $ 3,151
- --------------------------------------------------------------------------------
Microcell Telecommunications, Warrants, (144a), 6/15/06 * 33 1,972
- --------------------------------------------------------------------------------
Nextel Communications
Common Stock * 12 1,205
- --------------------------------------------------------------------------------
PIK, Exch. Pfd. Stock 113 12,143
- --------------------------------------------------------------------------------
PIK, Exch. Pfd. Stock (Series E) 10 9,656
- --------------------------------------------------------------------------------
Page America Group
Common Stock *+++* 1,109 50
- --------------------------------------------------------------------------------
Conv. Pfd. Stock (Series I) *+++* 20 97
- --------------------------------------------------------------------------------
Rural Cellular, PIK, Sr. Exch. Pfd. Stock 10 10,431
- --------------------------------------------------------------------------------
Telecorp PCS, Common Stock (Class A) * 10 360
- --------------------------------------------------------------------------------
52,045
------
<PAGE>
WIRELINE COMMUNICATIONS 1.0%
- -----------------------------
Allegiance Telecom, Warrants, 2/3/08 * 8 775
- --------------------------------------------------------------------------------
AT & T Canada, Common Stock * 28 963
- --------------------------------------------------------------------------------
E. Spire Communications
PIK, Jr. Red. Pfd. Stock 71 1,203
- --------------------------------------------------------------------------------
Warrants, 11/1/05 * 12 600
- --------------------------------------------------------------------------------
Intermedia Communications
PIK, Exch. Pfd. Stock 76 7,331
- --------------------------------------------------------------------------------
Warrants, 6/1/00 * 2 204
- --------------------------------------------------------------------------------
KMC Telecom, Warrants, (144a), 1/31/08 * 5 12
- --------------------------------------------------------------------------------
Nextlink Communications, Sr. Exch. Pfd. Stock, 14.00% 97 5,069
- --------------------------------------------------------------------------------
Tele1 Europe, Warrants, 5/15/09 * 6 500
- --------------------------------------------------------------------------------
16,657
------
Total Equity and Convertible Securities (Cost $198,406) 181,795
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS 6.7%
- ------------------------
Reserve Investment Fund, 5.65% # 112,070 112,070
- --------------------------------------------------------------------------------
Total Money Market Funds (Cost $112,070) 112,070
-------
TOTAL INVESTMENT IN SECURITIES
97.8% of Net Assets (Cost $1,719,233) $ 1,624,567
Other Assets Less Liabilities 35,786
NET ASSETS $ 1,660,353
NET ASSET VALUE PER SHARE $ 7.91
<PAGE>
NET ASSETS CONSIST OF:
Accumulated net investment income - net of distributions $ 2,823
Accumulated net realized gain/loss - net of distributions (150,912)
Net unrealized gain (loss) (94,694)
Paid-in-capital applicable to 210,038,314 shares of $0.01 par
value capital stock outstanding; 1,000,000,000 shares authorized 1,903,136
- --------------------------------------------------------------------------------
NET ASSETS $ 1,660,353
NET ASSET VALUE PER SHARE $ 7.91
================================================================================
+ Private Placement
* Non-income producing
++ Securities valued by the Fund's Board of Directors
* Securities contain some restrictions as to public resale--total
of such securities at period-end amounts to 0.8% of net assets.
# Seven-day yield
CAD Canadian dollar
DEM German deutschemark
GBP British sterling
EUR Euro
PIK Payment-in-Kind
STEP Stepped coupon note for which the interest rate will adjust on
specified future date(s).
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 9.9% of net assets.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- --------------------------------------------------------------------------------
Unaudited
STATEMENT OF OPERATIONS
- -----------------------
In thousands
6 Months
Ended
11/30/99
--------
Investment Income
- -----------------
Income
Interest $ 77,289
Dividend 9,847
------
Total income 87,136
------
Expenses
Investment management 5,249
Shareholder servicing 1,407
Custody and accounting 137
Prospectus and shareholder reports 84
Registration 11
Legal and audit 8
Directors 6
Miscellaneous 6
------
Total expenses 6,908
Expenses paid indirectly (37)
------
Net expenses 6,871
------
Net investment income 80,265
------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------
Net realized gain (loss)
Securities (12,091)
Foreign currency transactions (106)
-------
Net realized gain (loss) (12,197)
-------
Change in net unrealized gain or loss
Securities (74,824)
Other assets and liabilities
denominated in foreign currencies (28)
-------
Change in net unrealized gain or loss (74,852)
-------
Net realized and unrealized gain (loss) (87,049)
-------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ (6,784)
-------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- -----------------------------
Unaudited
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
In thousands
6 Months Year
Ended Ended
11/30/99 5/31/99
-------- -------
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------
Operations
Net investment income $ 80,265 $ 152,300
Net realized gain (loss) (12,197) (42,476)
Change in net unrealized gain or loss (74,852) (64,310)
------------------------
Increase (decrease) in net assets from operations (6,784) 45,514
------------------------
Distributions to shareholders
Net investment income (80,337) (151,465)
------------------------
Capital share transactions *
Shares sold 141,056 397,369
Distributions reinvested 65,729 125,023
Shares redeemed (235,023) (365,860)
Redemption fees received 158 398
------------------------
Increase (decrease) in net assets from capital
share transactions (28,080) 156,930
------------------------
NET ASSETS
----------
Increase (decrease) during period (115,201) 50,979
Beginning of period 1,775,554 1,724,575
------------------------
END OF PERIOD $1,660,353 $ 1,775,554
------------------------
------------------------
*Share information
Shares sold 17,499 47,202
Distributions reinvested 8,197 14,826
Shares redeemed (29,077) (43,431)
-------------------------
Increase (decrease) in shares outstanding (3,381) 18,597
------------------------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE HIGH YIELD FUND
- -----------------------------
Unaudited November 30, 1999
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
T. Rowe Price High Yield 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 31, 1984.
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 Debt securities are generally traded in the over-the-counter
market. Investments in securities with original maturities of one year or more
are stated at fair value as furnished by dealers who make markets in such
securities or by an independent pricing service, which considers yield or price
of bonds of comparable quality, coupon, maturity, and type, as well as prices
quoted by dealers who make markets in such securities. Securities with original
maturities of less than one year are stated at fair value, which is determined
by using a matrix system that establishes a value for each security based on
money market yields.
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.
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.
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.
<PAGE>
PREMIUMS AND DISCOUNTS Premiums on high-yield debt securities, other than
PIK and STEP bonds, are recognized upon disposition of the security as gain or
loss for both financial reporting and tax purposes. Market discounts are
recognized upon disposition of the security as gain or loss for financial
reporting purposes and as ordinary income for tax purposes. Original issue
discounts, and all premiums and discounts on PIK and STEP bonds, 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, which are used to reduce the
fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
- --------------------------------
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
NONINVESTMENT-GRADE DEBT SECURITIES At November 30, 1999, the fund held
investments in noninvestment-grade debt securities, commonly referred to as
"high-yield" or "junk" bonds. A real or perceived economic downturn or higher
interest rates could adversely affect the liquidity or value, or both, of such
securities because such events could lessen the ability of issuers to make
principal and interest payments.
OTHER Purchases and sales of portfolio securities, other than short-term
securities, aggregated $534,864,000 and $616,788,000, respectively, for the six
months ended November 30, 1999.
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. The fund has capital loss carryforwards for federal income tax
purposes of $124,824,000, of which $6,571,000 expires in 2002, $40,450,000 in
2003, and $77,803,000 thereafter through 2007. The fund intends to retain gains
realized in future periods that may be offset by available capital loss
carryforwards.
At November 30, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$1,719,233,000. Net unrealized loss aggregated $94,666,000 at period-end, of
which $42,667,000 related to appreciated investments and $137,333,000 to
depreciated investments.
<PAGE>
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 $832,000 was payable at November 30, 1999. The fee is computed daily
and paid monthly, and consists of an individual fund fee equal to 0.30% of
average daily net assets and a group fee. The group fee is based on the combined
assets of certain mutual funds sponsored by the manager or Rowe Price-Fleming
International, Inc. (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.295% for assets in excess of $120 billion. At
November 30, 1999, and for the six months then ended, the effective annual group
fee rate was 0.32%. The fund pays a pro-rata share of the group fee based on the
ratio of its net assets to those of the group.
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 $777,000 for the six months
ended November 30, 1999, of which $173,000 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 Income Fund held
approximately 31.0% of the outstanding shares of the fund at November 30, 1999.
For the six months then ended, the fund was allocated $588,000 of Spectrum
expenses, $119,000 of which was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the six months ended November 30, 1999, totaled
$2,829,000 and are reflected as interest income in the accompanying Statement of
Operations.
================================================================================
<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*AccessRegistration 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.
** 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
- --------------------------
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
<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
* 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 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 Money Purchase Pension
Roth IRA "Paired" Plans (Money Purchase
Rollover IRA Pension and Profit Sharing Plans)
SEP-IRA 401(k)
SIMPLE IRA 401(b)
Profit Sharing 457 Deferred Compensation
RETIREMENT RESOURCES AT T. ROWE PRICE
- -------------------------------------
PLANNING AND INFORMATIONAL GUIDES
- ---------------------------------
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
INVESTMENT KITS
- ---------------
The IRA Investing Kit
Roth IRA Conversion Kit
Rollover IRA Kit
The T. Rowe Price SIMPLE IRA Plan Kit
The T. Rowe Price SEP-IRA Plan
The Simplified Keogh Plan [Registration Mark] From T. Rowe Price
The T. Rowe Price 401(k) Century Plan [Registration Mark]
(for small businesses)
Money Purchase Pension/Profit Sharing Plan Kit
Investing for Retirement in Your 403(b) Account
The T. Rowe Price No-Load Variable Annuity Information Kit
INSIGHTS REPORTS
- ----------------
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
<PAGE>
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.
================================================================================
FOR FUND AND ACCOUNT INFORMATION
OR TO CONDUCT TRANSACTIONS,
24 HOURS, 7 DAYS A WEEK
By touch-tone telephone
TELE*ACCESS 1-800-638-2587
By Account Access on the Internet
WWW.TROWEPRICE.COM/ACCESS
FOR ASSISTANCE
WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132
TO OPEN A BROKERAGE ACCOUNT
OR OBTAIN INFORMATION, CALL:
1-800-638-5660
INTERNET ADDRESS:
www.troweprice.com
PLAN ACCOUNT LINES FOR RETIREMENT
PLAN PARTICIPANTS:
The appropriate 800 number appears on
your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus appropriate
to the fund or funds covered in this
report.
WALK-IN INVESTOR CENTERS:
For directions, call 1-800-225-5132
or visit our Web site
<PAGE>
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. F57-051 11/30/99
