<PAGE>
Semiannual Report
NEW
HORIZONS
FUND
-------------
June 30, 1999
-------------
[GRAPHIC APPEARS HERE]
T. ROWE PRICE
<PAGE>
REPORT HIGHLIGHTS
- --------------------
New Horizons Fund
. The bull market continued in early 1999, with market participation
broadening.
. The New Horizons Fund bounced back from earlier weakness, but trailed its
benchmarks for the six-month period.
. Technology stocks were among the fund's top performers, but we remain wary
of speculation among Internet stocks.
. Holdings in consumer and technology sectors grew, while we sharply reduced
our health care services position.
. Valuations among small-caps remain compelling, but relative earnings
strength may be more influential in determining the duration of the small-
cap rally.
<PAGE>
FELLOW SHAREHOLDERS
The bull market in U.S. stocks continued unabated in the first half of 1999,
driven by a surprisingly strong domestic economy and healthy corporate profit
reports. Large-cap stocks continued to lead the market as the S&P 500 Stock
Index posted a strong gain of 12.38%. Secondary stocks, as represented by the
Russell 2000 Index, posted respectable gains but trailed the strong advance of
the S&P 500. While small-company stocks have now lagged for most of the last
five years, we were encouraged to see a broadening of market gains and better
relative performance by secondary stocks in the April-to-June period. We are
hopeful that this trend can be sustained.
------------------------
PERFORMANCE COMPARISON
---------------------------------------------------------------
Periods Ended 6/30/99 6 Months 12 Months
---------------------------------------------------------------
New Horizons Fund 7.46% 5.81%
Russell 2000 Growth Index 12.82 8.30
Russell 2000 Index 9.28 1.50
Lipper Small Cap Fund Index 9.43 1.92
S&P 500 12.38 22.76
Your fund rose 7.46% in the first half, trailing the returns of the Russell 2000
Growth Index, our primary benchmark, as well as the Russell 2000 Index and the
Lipper Small Cap Fund Index. For the past one-year period, the fund outperformed
the Russell 2000 Index and the Lipper Small Cap Fund Index but trailed the
Russell 2000 Growth Index. This year's underperformance comes principally from
our reluctance to speculate in Internet stocks, which have accounted for a
disproportionate part of the gains in the Russell small-stock indices. We own a
number of Internet-related issues but are underweighted relative to these
benchmarks and remain skeptical of the frenzied activity and sky-high valuation
of most Internet issues.
MARKET ENVIRONMENT
The economic backdrop for the stock market remained remarkably strong in the
first half of 1999. The domestic economy is now in its
1
<PAGE>
ninth consecutive year of growth, a record period of economic expansion. A
robust consumer sector is spearheading GDP growth, which actually accelerated in
the first half from last year's already strong level. Record high employment and
the bull market have led to a surge in consumer confidence and strong consumer
spending. Also, buoyed by consumers, the corporate sector has been healthy.
Productivity gains, led by technology advances, have helped to drive record
corporate profits. Even overseas economies, which had pockets of weakness in
areas such as Asia, Latin America, and Eastern Europe, showed signs of recovery.
Inflation remained remarkably low again in the first half, but the pickup in
economic growth, tight labor markets, and a rise in the price of oil were
potentially worrisome. The Federal Reserve took note of the strengthening
economy and raised the federal funds target rate to prevent overheating. Both
short- and long-term interest rates rose, with long-term rates back in the area
of 6% by midyear, up about one percentage point from year-end 1998 levels.
Stock prices climbed despite the backup in interest rates. Market leadership in
early 1999 remained in a narrow group of large-cap, blue chip companies, and
small-company stocks actually declined while the S&P 500 advanced. The valuation
gap between the market-leading
- ----------------------------------------
INFORMATION ON YEAR-END DISTRIBUTIONS
- -----------------------------------------------------------------------------
To help you with tax planning, we try to give you a good idea of the
per-share income and capital gain amounts our funds may distribute near
year-end. In late October, we will provide estimates of these amounts,
which will be paid on December 16, 1999, to shareholders of record on
December 14. These preliminary numbers will be included in The Price Report
mailing to shareholders in late October and will also be available on our
Web site--www.troweprice.com.
We hope that these preliminary numbers will be useful to you in
approximating the income and capital gains taxes you may pay on
distributions to taxable accounts. If your fund distributed any capital
gains earlier in 1999, you can find the amounts on your statements and
should include them in your tax planning calculations. Please keep in mind
that the numbers are not final and are likely to be revised before the
December 14 declaration and record date. As the fall progresses, you may
want to check our Web site for revisions.
If you would like information on tax matters relating to mutual funds,
please visit our Web site to download our Insights report, Tax Information
for Mutual Fund Investors, or call 1-800-225-5132 to request a copy.
2
<PAGE>
blue chips and the rest of the stock market reached record levels at the end of
the first quarter. Small stocks turned around in the second quarter, however,
posting double-digit returns and outperforming large-caps for the first time in
seven quarters.
- -------------------------
SMALL-CAP STOCK RETURNS
- --------------------------------------------------------------
Period Ended 6/30/99 6 Months 12 Months
- --------------------------------------------------------------
Russell 2000 Index 9.28% 1.50%
Russell 2000 Growth Index 12.82 8.30
Russell 2000 Value Index 5.26 -5.72
Small-cap growth stocks, led by technology and Internet issues, outpaced small-
cap value stocks in the 6- and 12-month periods, as shown in the accompanying
table. The impact of the Internet sector on these returns is worth examining
further. Internet stocks had a disproportionate effect on the recent returns of
the Russell 2000 and Russell 2000 Growth Indices. Prudential Securities reported
that, by midyear, Internet stocks composed 7% to 8% of the Russell 2000 and 13%
to 14% of the Russell 2000 Growth Index in terms of market value. These stocks
accounted for close to 40% of the Russell 2000's first half return and over 50%
of the Russell 2000 Growth's performance. As a group, Internet stocks almost
doubled in price in the first half and have risen 400% to 500% from their
October lows.
PORTFOLIO REVIEW
As was the case in the second half of 1998, technology stocks were the fund's
standout performers in the first half. Technology issues were the top-five
contributors to fund performance for the past six months and eight out of the
top-10 contributors for the past 12 months. PSINet, an Internet-service provider
to businesses, is the fund's largest Internet play. The stock doubled in price
in the first half -- it more than tripled over the last 12 months -- and was the
fund's top contributor. Adobe Systems, our largest holding, rose 75% in the
first half and was a top contributor for both the past six and 12 months. Our
large weighting in semiconductor stocks also worked well. Xilinx, Analog
Devices, Maxim Integrated Products, and Applied Micro Circuits each rose over
50% in the first half, more than doubled in the past year, and were among the
fund's best performers for both periods.
Outside of technology, top contributors included restaurant chain Outback
Steakhouse, wireless services company Omnipoint, and
3
<PAGE>
supermarket coupon dispenser Catalina Marketing. Energy stocks were strong due
to surging oil prices in the first half, and energy-service provider BJ Services
was also a top performer.
Weaker areas included health care services and many business services stocks.
Nursing home pharmacy suppliers Omnicare and NCS Healthcare fell over 50% in the
first half in response to changed Medicare reimbursement policies in nursing
homes. Total Renal Care Holdings, an operator of kidney dialysis centers, fell
close to 50% as it struggled to integrate a large 1998 acquisition and faced a
government investigation of a small lab business it operates. Among business
services holdings, supplemental staffing companies including Romac
International, SPR, and Staffmark were weak as were distribution companies MSC,
Wilmar Industries, and Henry Schein. We continue to believe that business
services is an attractive sector longer term, with significant growth
opportunities for small companies.
We made several modest portfolio shifts over the last six months as noted in the
accompanying table. Weightings in the consumer sector rose from 15% to 18%,
reflecting additions to the retailer and restaurant areas. New holdings included
O'Reilly Automotive, Tweeter Home Entertainment, and Papa John's. The technology
weighting rose from 20% to 23% mostly due to strong performance from existing
holdings, but new positions included software maker Citrix Systems and
Internet/e-commerce companies WebTrends and NetGravity. The largest decline was
in the health care sector, which fell from 17% to 12% of the portfolio. We
sharply reduced health care services holdings including the elimination of
Concentra Managed Care, Quorum Health Group, and IDX Systems.
- ----------------------
SECTOR DIVERSIFICATION
- -------------------------------------------------------------------
6/30/98 12/31/98 6/30/99
- -------------------------------------------------------------------
Financial 4% 4% 4%
Health Care 16 17 12
Consumer 16 15 18
Technology 20 20 23
Business Services 36 37 36
Energy 3 1 3
Industrial 3 2 2
Reserves 2 4 2
- --------------------------------------------------------------------
Total 100% 100% 100%
4
<PAGE>
OUTLOOK
The economic backdrop for the stock market remains positive. Domestic economic
growth is robust as we enter the second half of the year, and worldwide economic
activity is showing signs of improvement. Corporate profits are even stronger
than originally forecast. Inflation and interest rates remain relatively low
although the trends appear to be upward, which is not surprising given the
strong economic environment. Reflecting these generally positive influences,
stock market valuations are at or near record levels and investor confidence is
high. We remain worried by the lofty valuations of the small group of market-
leading blue chips and by the continued speculation in the Internet sector.
While we were disappointed by the underperformance of small-caps in the first
half and over the past several years, we were encouraged by the broadening of
the market and the improved performance of secondary stocks in the second
quarter. The relative valuations of small stocks in general and our portfolio in
particular remain compelling. The charts on the next page display first the
historical average price-to-earnings ratio of New Horizons, then the fund's P/E
relative to the average P/E of the S&P 500. The fund's current relative P/E is
0.90 -- up from the March low, but still lower than in any other year in the
fund's 39-year history. Investors still appear enamored with the market-leading
blue chips. For the shift in interest to smaller-caps to continue, small
companies need to deliver stronger relative earnings gains than has been the
case over the past several years. Small-company performance cycles tend to be
quite long, often three to seven years. They have now underperformed for over
five years. We remain optimistic that if our portfolio of emerging growth
companies can meet our earnings expectations, shareholders will see improved
relative performance in the years ahead.
Respectfully submitted,
/s/ John H. Laporte
John H. Laporte
President and Chairman of the Investment Advisory Committee
July 28, 1999
5
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------
- ---------------------------
NEW HORIZONS FUND P/E RATIO
- ------------------ ----------------- --------------- ------------------
Jun-64 20.6 Jun-74 12.5 Jun-84 13.9 Jun-94 18.2
20.1 8.7 13.5 18.9
22.0 8.7 12.4 18.2
19.9 13.7 14.5 18.9
Jun-65 17.5 Jun-75 15.3 Jun-85 15.0 Jun-95 20.4
21.1 11.7 14.0 22.8
24.6 11.5 16.1 23.6
20.4 12.4 17.3 24.1
Jun-66 21.4 Jun-76 10.7 Jun-86 17.5 Jun-96 26.2
20.7 10.1 14.6 3/31/97 21.4
23.6 10.4 14.5 6/30/97 23.1
30.9 9.0 18.3 27.2
Jun-67 32.4 Jun-77 8.7 Jun-87 17.9 23.6
36.4 8.6 18.2 3/31/98 24.7
31.9 8.8 12.5 6/30/98 24.4
29.2 8.6 13.9 20.6
Jun-68 37.1 Jun-78 9.5 Jun-88 14.7 23.5
32.8 10.7 12.8 Mar-99 20.7
33.5 8.9 12.5 Jun-99 24.4
30.1 9.6 13.0
Jun-69 31.4 Jun-79 9.0 Jun-89 13.8
28.6 9.8 14.5
28.6 10.7 14.3
25.0 9.3 13.4
Jun-70 17.7 Jun-80 10.4 Jun-90 15.0
20.4 14.2 12.0
22.2 16.5 13.6
29.7 15.7 18.3
Jun-71 28.0 Jun-81 14.9 Jun-91 17.1
27.7 11.3 17.8
28.6 11.5 19.8
33.5 10.4 19.4
Jun-72 33.5 Jun-82 10.8 Jun-92 16.8
29.7 13.1 17.0
29.2 16.8 19.8
22.6 19.4 19.0
Jun-73 17.9 Jun-83 21.5 Jun-93 19.7
21.7 19.3 20.9
16.8 17.3 21.5
15.7 14.4 20.0
- ----------------------------------------------
NEW HORIZONS FUND P/E RELATIVE TO THE S&P 500
- ------------------ ----------------- --------------- ------------------
Jun-64 1.14 Jun-74 1.19 Jun-84 1.62 Jun-94 1.26
1.09 1.13 1.52 1.29
1.18 1.04 1.35 1.37
1.20 1.25 1.42 1.32
Jun-65 1.08 Jun-75 1.29 Jun-85 1.35 Jun-95 1.34
1.22 1.16 1.27 1.44
1.47 1.17 1.30 1.49
1.27 1.14 1.26 1.48
Jun-66 1.40 Jun-76 1.03 Jun-86 1.15 Jun-96 1.58
1.50 1.04 1.05 1.23
1.56 1.07 1.02 6/30/97 1.17
1.83 0.94 1.10 1.33
Jun-67 1.91 Jun-77 1.02 Jun-87 1.13 1.16
2.01 1.05 1.14 1.09
1.91 1.11 1.01 6/30/98 1.04
1.86 1.18 1.09 0.96
Jun-68 2.14 Jun-78 1.22 Jun-88 1.20 12/31/98 0.92
1.84 1.29 1.12 Mar-99 0.78
1.86 1.17 1.14 Jun-99 0.90
1.71 1.28 1.12
Jun-69 1.86 Jun-79 1.18 Jun-89 1.12
1.64 1.20 1.08
1.57 1.32 1.01
1.43 1.37 0.99
Jun-70 1.27 Jun-80 1.28 Jun-90 1.05
1.28 1.63 0.96
1.31 1.88 1.01
1.62 1.89 1.20
Jun-71 1.63 Jun-81 1.94 Jun-91 1.17
1.63 1.66 1.15
1.80 1.53 1.19
1.99 1.53 1.23
Jun-72 2.11 Jun-82 1.54 Jun-92 1.06
1.97 1.70 1.06
1.90 1.89 1.20
1.67 2.11 1.14
Jun-73 1.46 Jun-83 2.17 Jun-93 1.20
1.67 2.05 1.25
1.47 1.86 1.34
1.39 1.6 1.32
Note: The fund's P/E ratio is an average, unweighted number based on 12-month
forward earnings per share as estimated by the Fund's investment manager at each
quarter-end.
6
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- -------------------------------------------------------------------------------
- ----------------------
PORTFOLIO HIGHLIGHTS
- ----------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/99
- --------------------------------------------------------------------------------
Adobe Systems 2.0%
Xilinx 1.7
Maxim Integrated Products 1.6
Synopsys 1.6
Analog Devices 1.6
- --------------------------------------------------------------------------------
Outback Steakhouse 1.5
Catalina Marketing 1.5
Outdoor Systems 1.4
Affiliated Computer Services 1.3
BISYSGroup 1.2
- --------------------------------------------------------------------------------
PSINet 1.1
Henry Schein 1.1
Sylvan Learning Systems 1.1
Coach USA 1.0
Altera 1.0
- --------------------------------------------------------------------------------
U.S. Foodservice 1.0
SunGard Data Systems 1.0
Radian Group 1.0
Burr Brown 0.9
BJServices 0.9
- --------------------------------------------------------------------------------
Electronics for Imaging 0.9
National Data 0.8
Orthodontic Centers of America 0.8
Sonic 0.8
Linear Technology 0.8
- --------------------------------------------------------------------------------
Total 29.6%
Note: Table excludes reserves
7
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- -------------------------------------------------------------------------------
- ---------------------
PORTFOLIO HIGHLIGHTS
- -------------------------------------------------------------------------------
CONTRIBUTIONS TO THE CHANGE IN NET ASSET VALUE PER SHARE
6 Months Ended 6/30/99
<TABLE>
<CAPTION>
Ten Best Contributors Ten Worst Contributors
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
PSINet 23(cents) Network Associates ** -23(cents)
Adobe Systems 21 Omnicare 16
Xilinx 18 Romac International 11
Analog Devices 15 Total Renal Care Holdings 11
Maxim Integrated Products 15 PathoGenesis ** 10
Outback Steakhouse 13 Boron Lepore & Associates 9
Applied Micro Circuits 10 IDXSystems ** 8
BJServices 10 SPR 8
Omnipoint 10 NCSHealthCare 8
Catalina Marketing 9 Service Corp. International ** 8
- ------------------------------------------ ------------------------------------------
Total 144(cents) Total -112(cents)
<CAPTION>
12 Months Ended 6/30/99
Ten Best Contributors Ten Worst Contributors
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Xilinx 31(cents) Omnicare -18(cents)
PSINet 27 Romac International 16
Adobe Systems * 24 Quorum Health Group ** 15
Maxim Integrated Products 23 Total Renal Care Holdings 14
Analog Devices 20 CBT 13
Altera 17 Network Associates ** 12
Biogen 16 MSC 11
Catalina Marketing 16 Paging Network ** 11
Applied Micro Circuits 14 Premisys Communications 10
Electronics for Imaging 14 NCSHealthCare 10
- ------------------------------------------ ------------------------------------------
Total 202(cents) Total -130(cents)
</TABLE>
* Position added
** Position eliminated
8
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
- ------------------------
PERFORMANCE COMPARISON
- ------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
NEW HORIZONS FUND
[LINE GRAPH APPEARS HERE]
Russell Lipper
2000 Growth Small Cap New Horizons
Date Fund Fund Index Fund
-------- ------------ ------------ --------------
6/30/89 10000 10000 10000
6/30/90 10873 11324 11681
6/30/91 10935 11764 12059
6/30/92 11859 13483 13081
6/30/93 14285 17066 17016
6/30/94 14407 17571 18079
6/30/95 18134 22126 24932
6/30/96 22938 28670 35265
6/30/97 23994 31891 36982
6/30/98 27160 37481 43306
6/30/99 29413 39092 45823
- -------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- -------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Periods Ended 6/30/99 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
New Horizons Fund 5.81% 9.12% 20.44% 16.44%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
9
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Unaudited
- ----------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 23.34 $ 23.30 $ 21.77 $ 20.50 $ 14.76 $ 16.16
-----------------------------------------------------------------
Investment activities
Net investment income (0.08) (0.15) (0.12) (0.08) (0.04) (0.07)
Net realized and
unrealized gain (loss) 1.82 1.46 2.23 3.54 8.19 0.10
-----------------------------------------------------------------
Total from
investment activities 1.74 1.31 2.11 3.46 8.15 0.03
-----------------------------------------------------------------
Distributions
Net realized gain -- (1.27) (0.58) (2.19) (2.41) (1.43)
-----------------------------------------------------------------
NET ASSET VALUE
End of period $ 25.08 $ 23.34 $ 23.30 $ 21.77 $ 20.50 $ 14.76
-----------------------------------------------------------------
Ratios/Supplemental Data
Total return* 7.46% 6.25% 9.77% 17.03% 55.44% 0.30%
-----------------------------------------------------------------
Ratio of total expenses to
average net assets 0.92%+ 0.89% 0.88% 0.90% 0.90% 0.93%
-----------------------------------------------------------------
Ratio of net investment
income to average net assets (0.70)%+ (0.65)% (0.57)% (0.41)% (0.23)% (0.50)%
-----------------------------------------------------------------
Portfolio turnover rate 47.4%+ 41.2% 45.2% 41.4% 55.9% 44.3%
-----------------------------------------------------------------
Net assets, end of period
(in millions) $ 5,065 $ 5,228 $ 5,104 $ 4,363 $ 2,855 $ 1,648
-----------------------------------------------------------------
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- ---------------------------------------------------------------------
Unaudited June 30, 1999
- --------------------------
PORTFOLIO OF INVESTMENTS Shares Value
- ---------------------------------------------------------------------
In thousands
COMMON STOCKS AND WARRANTS 97.5%
FINANCIAL 3.8%
Bank and Trust 0.2%
TeleBanc Financial * 200,000 $ 7,738
------------
7,738
------------
Insurance 1.9%
Mutual Risk Management 900,000 30,038
Presidential Life 977,200 19,086
Radian Group 1,000,000 48,812
------------
97,936
------------
Financial Services 1.7%
Affiliated Managers Group * 400,000 12,075
Financial Federal * + 850,000 18,700
Investment Technology Group 100,000 3,238
Jones Lang Lasalle * 1,000,000 29,812
Legg Mason 600,000 23,100
------------
86,925
------------
Total Financial 192,599
------------
HEALTH CARE 11.7%
Pharmaceuticals 0.8%
Alkermes * 773,200 17,784
King Pharmaceuticals * 90,000 2,331
Magainin Pharmaceuticals,
Warrants, 8/6/01 *++ 337,299 0
Noven Pharmaceuticals * 500,000 3,023
PharmaPrint * 441,900 2,196
Shire Pharmaceuticals ADR * 445,300 11,522
United Therapeutics * 300,000 3,619
------------
40,475
------------
Biotechnology 5.8%
Abegenix * 550,000 10,897
Alexion Pharmaceutical * + 825,000 7,451
Anesta * 431,900 8,786
Biogen * 600,000 38,606
Cephalon * 265,000 4,555
11
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- ------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------
In thousands
COR Therapeutics * 900,000 $ 13,219
CV Therapeutics * 250,000 1,391
Epix Medical * + 700,000 3,894
Gilead Sciences * 450,000 23,484
Guilford Pharmaceuticals * 700,000 8,794
Human Genome Sciences * 330,000 13,014
Incyte Pharmaceuticals * 500,000 13,203
Inhale Therapeutic Systems * + 855,000 20,440
Intercardia * 279,500 1,424
Invitrogen * 250,000 6,180
Ligand Pharmaceuticals * 700,000 7,722
MedImmune * 263,100 17,866
Millennium Pharmaceuticals * 370,000 13,308
Neurocrine Biosciences * + 1,015,000 5,329
North American Vaccine * 476,000 2,320
NPS Pharmaceuticals * + 1,300,000 8,612
QLT Phototherapeutics * 388,700 21,342
Serologicals * + 1,450,000 11,872
Triangle Pharmaceuticals * + 1,517,900 27,227
Zonagen * 355,300 3,309
294,245
-----------
Medical Instruments and Devices 1.6%
Cytyc * 180,000 3,504
Mentor 1,000,000 18,750
Optical Coating Laboratory 225,000 18,809
ResMed * 365,000 12,102
Sybron International * 1,000,000 27,562
VI Technologies * 330,000 1,650
82,377
----------
Health Care Services 3.4%
AmeriPath * 1,000,000 8,594
Boron Lepore & Associates * + 1,030,000 8,691
Mede America * 350,000 13,223
NCS HealthCare * 500,000 2,734
Omnicare 1,500,000 18,938
Omnicare, Warrants, 8/11/00 * 105,253 0
PhyCor * 1,395,000 10,332
ProMedCo * 762,600 2,931
12
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Renal Care Group * 1,500,000 $ 38,766
Sunrise Assisted Living * 250,000 8,703
Synetic * 112,700 7,752
Total Renal Care Holdings * 2,175,000 33,848
US Oncology * 1,250,000 15,039
169,551
------------
Pharmaceuticals and Biotechnology 0.1%
Coulter Pharmaceutical * 192,600 4,340
4,340
------------
Total Health Care 590,988
------------
CONSUMER 18.1%
Soft Goods Retailers 1.4%
Jo Ann Stores (Class B) * 470,000 6,110
Jos. A. Bank Clothiers * 200,000 1,250
Pacific Sunwear * 1,380,000 33,681
Urban Outfitters * + 1,087,100 27,109
68,150
------------
Hard Goods Retailers 4.2%
Casey's General Stores 1,500,000 22,453
Cost Plus * 200,000 9,088
CSK Auto * 1,000,000 27,000
Discount Auto Parts * + 1,000,000 24,125
Duane Reade * 750,000 22,969
General Nutrition * 381,600 8,884
O'Reilly Automotive * 520,000 26,162
Office Depot * 600,000 13,237
Restoration Hardware * 600,000 7,988
Sonic Automotive * 750,000 10,312
TSC * + 800,000 22,000
Tweeter Home Entertainment Group * 375,000 14,648
Wild Oats Markets * 150,000 4,552
213,418
------------
Consumer Nondurables 2.3%
American Italian Pasta * 500,000 15,187
Linens `n Things * 200,000 8,750
Natrol * 600,000 4,613
13
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In Thousands
Nautica Enterprises * 1,500,000 $ 25,266
Quicksilver * 1,000,000 26,062
Rayovac * 500,000 11,344
St. John Knits 300,000 8,775
Wesley Jessen VisionCare * 500,000 16,078
116,075
------------
Restaurants 3.1%
Outback Steakhouse * 2,000,000 78,437
Papa Johns * 750,000 33,492
Schlotzsky's * 230,000 2,501
Sonic * + 1,300,000 42,088
156,518
------------
Food and Beverages 0.3%
United Natural Foods * 700,000 17,369
17,369
------------
Entertainment 2.1%
American Classic Voyages * 550,000 13,097
Cinar Films (Class B) * 213,700 5,276
Dover Downs Entertainment 300,000 5,306
Imax * 1,000,000 22,625
SFX Entertainment (Class A) * 500,000 32,000
Speedway Motorsports * 500,000 19,656
Travel Services International * 295,500 3,565
Vail Resorts * 250,000 4,375
105,900
------------
Consumer Services 4.7%
Ambassadors International * + 500,000 7,406
Apollo Group (Class A) * 1,500,000 39,797
Avis Rent A Car * 1,042,500 30,363
Caliber Learning Network * 560,000 2,625
Devry * 300,000 6,713
Extended Stay America * 2,000,000 24,000
ITT Educational Service * 1,000,000 26,062
Learning Tree International * 727,200 7,976
Strayer Education + 800,000 24,525
Sunterra * 1,000,000 13,938
Sylvan Learning Systems * 2,000,000 54,375
237,780
------------
Total Consumer 915,210
------------
14
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
TECHNOLOGY 23.5%
Computer Software 8.5%
Adobe Systems 1,250,000 $ 102,695
Avant * 1,000,000 12,594
BMC Software * 500,000 26,984
Citrix Systems * 700,000 39,441
Concur Technologies * 175,000 4,944
Great Plains Software * 470,000 22,002
ISS Group * 400,000 15,075
National Instruments * 500,000 20,125
Parametric Technology * 2,000,000 27,813
Peerless Systems * 500,000 5,219
SalesLoggix * 500,000 7,469
Security Dynamics Technologies * 400,000 8,450
Summit Design * 700,000 2,111
Synopsys * 1,500,000 82,734
Visio * 1,000,000 38,031
Wind River Systems * 1,100,000 17,634
433,321
-----------
Semiconductors and Components 10.9%
Altera * 1,400,000 51,494
Analog Devices * 1,600,000 80,300
Applied Micro Circuits * 250,000 20,766
Benchmark Electronics * 300,000 10,781
Brooks Automation * 100,000 2,713
Burr Brown * 1,300,000 48,019
Cognex * 1,050,000 33,108
Galileo Technology * 400,000 18,150
Lattice Semiconductor * 350,000 21,744
Linear Technology 600,000 40,387
Maxim Integrated Products * 1,250,000 83,125
Methode Electronics (Class A) 600,000 13,725
Micrel * 250,000 18,531
Molex 97,656 3,607
SIPEX * + 1,000,000 20,437
Xilinx * 1,500,000 85,922
552,809
-----------
15
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Networking and Telecom Equipment 0.3%
Latitude Communications * 500,000 $ 6,531
Premisys Communications * 1,000,000 7,250
13,781
-----------
Computer Hardware/Peripherals 0.9%
Electronics for Imaging * 850,000 43,509
43,509
-----------
E-Commerce 2.9%
@plan.inc * + 550,000 8,181
Ask Jeeves * 25,000 350
CareInsite * 255,000 12,097
CYBERSOURCE * 300,000 4,406
High Speed Access * 225,000 5,766
Netgravity * 500,000 11,406
PSINet * 1,300,000 56,794
Sterling Commerce * 750,000 27,375
WebTrends * 450,000 20,742
147,117
-----------
Total Technology 1,190,537
-----------
BUSINESS SERVICES 35.4%
Telecom Services 2.5%
AT&T (Class B) * 400,000 25,562
Brightpoint * 1,500,000 9,141
ICG Communications * 500,000 10,641
Intermedia Communications * 350,000 10,489
Metromedia International * 1,000,000 7,500
Millicom International Cellular * 400,000 12,650
NTL * 266,666 22,992
Omnipoint * 1,000,000 28,906
127,881
-----------
Computer Services 7.0%
Acxiom * 1,300,000 32,459
Affiliated Computer Services (Class A) * 1,350,000 68,344
BISYS Group * 1,000,000 58,531
DA Consulting Group * 235,000 1,425
Informatica * 200,000 7,138
Inspire Insurance Solutions * 750,000 10,852
National Data 1,000,000 42,750
16
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
NOVA * 1,350,000 $ 33,750
Paychex 1,000,000 31,812
Saville Systems ADR * 1,000,000 14,531
SunGard Data Systems 1,478,700 51,015
352,607
-----------
Distribution 5.8%
Aviation Sales * 500,000 19,750
Barnett * 600,000 4,556
Central Garden & Pet * 500,000 5,141
Daisytek International * + 1,000,000 16,250
Henry Schein * 1,750,000 55,508
InaCom * 1,000,000 12,625
MSC * 1,750,000 17,937
Richfood Holdings 500,000 8,813
Strategic Distribution * + 1,761,000 4,237
Tech Data * 500,000 19,109
Tristar Aerospace * + 1,000,000 8,250
U.S. Foodservice * 1,200,000 51,150
United Stationers * 1,000,000 22,031
Watsco (Class A) 2,000,000 32,750
White Cap Industries * 415,000 4,941
Wilmar Industries * + 900,000 11,813
294,861
-----------
Transportation 1.7%
Coach USA * 1,250,000 52,422
Eagle USA Air Freight * 750,000 31,758
84,180
-----------
Media and Advertising 6.8%
ADVO * 1,155,000 23,966
Catalina Marketing * 835,000 76,820
Clear Channel Communications * 499,999 34,469
E4L * 1,000,000 7,187
Emmis Broadcasting (Class A) * 385,000 18,949
Entercom Communications * 150,000 6,412
Lamar Advertising * 750,000 30,680
Outdoor Systems * 1,976,062 72,126
Pegasus Communications * 750,000 29,555
Penton Media 500,000 12,125
17
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Sinclair Broadcast Group (Class A) * 1,535,000 $ 25,040
Young Broadcasting (Class A) * 207,300 8,817
346,146
-----------
Environmental 1.0%
Casella Waste Systems (Class A) * + 946,000 24,478
Catalytica * 250,000 3,492
U.S. Liquids * 350,000 7,306
Waste Connections * 417,500 12,734
48,010
-----------
Engineering and Construction 0.6%
Tetra Tech * 1,250,000 20,781
Toll Brothers * 500,000 10,719
31,500
-----------
Miscellaneous Business Services 10.0%
Billing Information Concepts * 750,000 8,367
Career Blazers * 200,000 1,075
CBT Group ADR * 500,000 8,219
Comfort Systems USA * 1,750,000 31,500
Complete Busines Solutions * 250,000 4,469
Corporate Executive Board * 300,000 10,678
EMS Technologies * 335,400 4,811
Global Imaging Systems * + 1,000,000 18,312
Hagler Bailly * + 1,250,000 12,891
Infousa (Class A) * 1,057,600 9,221
Infousa (Class B) * 347,700 2,934
IntelliQuest Information Group * + 750,000 5,437
Iron Mountain * 450,000 12,881
Lason * 650,000 32,337
MemberWorks * 250,000 7,305
META Group * + 1,125,000 17,367
Metamor Worldwide * 1,600,000 38,400
Modis Professional Services * 1,500,000 20,625
New England Business Service 200,000 6,175
NFO Worldwide * + 2,000,000 28,000
Orthodontic Centers of America * + 3,000,000 42,375
Outsource International * + 590,000 2,268
Paxar * 90,700 816
Prepaid Legal Services * 500,000 13,594
ProBusiness Services * 110,000 3,939
Professional Staff ADR * + 600,000 3,938
18
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Renaissance Worldwide * 2,306,400 $ 18,307
Romac International * 1,800,000 15,919
SITEL * 1,500,000 4,406
Snyder Communications * 702,000 22,990
SPR * + 1,450,500 7,751
StaffMark * 1,250,000 12,520
Startek * 100,000 2,475
Technology Solutions * 925,000 9,944
Tier Technologies (Class B) * 1,100,000 7,666
Trammell Crow * 1,000,000 16,437
United Road Services * 500,000 2,508
Viant * 200,000 6,962
West TeleServices * 480,300 4,503
Zebra Technologies (Class A) * 744,000 28,528
508,850
-----------
Total Business Services 1,794,035
-----------
ENERGY 2.5%
Exploration and Production 0.8%
Barrett Resources * 450,000 17,269
Devon Energy 300,387 10,739
Key Energy * 3,015,000 10,741
Noble Affiliates 200,000 5,637
44,386
-----------
Energy Services 1.7%
BJ Services * 1,500,000 44,157
Cooper Cameron * 500,000 18,531
National Oilwell * 350,000 4,900
Smith International * 400,000 17,375
84,963
-----------
Total Energy 129,349
-----------
INDUSTRIAL 2.0%
Paper and Forest Products 0.1%
Lydall * 500,000 5,750
5,750
-----------
19
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE NEW HORIZONS FUND
- ---------------------------------------------------------------------------------------
Shares Value
- ---------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Machinery 1.9%
Group Maintenance America * 1,250,000 $ 16,172
JLG Industries 1,250,000 25,469
Teleflex 600,000 26,062
United Rentals * 1,000,000 29,500
97,203
------------
Total Industrial 102,953
------------
BASIC MATERIALS 0.1%
Miscellaneous Materials 0.1%
Energy Conversion Devices * 400,000 3,950
Energy Conversion Devices, Warrants, 7/31/01 * 400,000 575
Total Basic Materials 4,525
------------
Miscellaneous Common Stocks 0.4% 18,173
------------
Total Common Stocks and Warrants (Cost $3,443,048) 4,938,369
------------
SHORT-TERM INVESTMENTS 2.8%
Money Market Funds 2.8%
Reserve Investment Fund, 5.05% # + 141,335,353 141,335
------------
Total Short-Term Investments (Cost $141,335) 141,335
Total Investments in Securities
100.3% of Net Assets (Cost $3,584,383) $ 5,079,704
Other Assets Less Liabilities (14,910)
------------
NET ASSETS $ 5,064,794
------------
</TABLE>
# Seven-day yield
+ Affiliated company
* Non-income producing
++ Securities contain some restrictions as to public resale - total of such
securities at period-end amounts to 0.0% of net assets.
ADR American Depository Receipt
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1999
- --------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value
Affiliated companies (cost $640,195) $ 632,789
Other companies (cost $2,944,188) 4,446,915
-------------
Total investments in securities 5,079,704
Other assets 48,087
-------------
Total assets 5,127,791
Liabilities
Total liabilities 62,997
-------------
NET ASSETS $ 5,064,794
-------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ (16,770)
Accumulated net realized gain/loss - net of distributions 522,796
Net unrealized gain (loss) 1,495,321
Paid-in-capital applicable to 201,983,303 shares of
$1.00 par value capital stock outstanding;
300,000,000 shares authorized 3,063,447
-------------
NET ASSETS $ 5,064,794
-------------
NET ASSET VALUE PER SHARE $ 25.08
-------------
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Unaudited
- ---------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/99
Investment Income
Income
Dividend $ 2,674
Interest (including $2,538 from affiliated company) 2,538
-------------
Total income 5,212
-------------
Expenses
Investment management 16,020
Shareholder servicing 5,508
Prospectus and shareholder reports 257
Custody and accounting 140
Registration 38
Legal and audit 12
Directors 8
Miscellaneous 19
-------------
Total expenses 22,002
Expenses paid indirectly (20)
-------------
Net expenses 21,982
-------------
Net investment income (16,770)
-------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 463,823
Foreign currency transactions 1
-------------
Net realized gain (loss) 463,824
Change in net unrealized gain or loss on securities (108,081)
-------------
Net realized and unrealized gain (loss) 355,743
-------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 338,973
-------------
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Unaudited
- ------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/99 12/31/98
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Operations
Net investment income $ (16,770) $ (32,687)
Net realized gain (loss) 463,824 214,659
Change in net unrealized gain or loss (108,081) 127,070
--------------------------
Increase (decrease) in net assets from operations 338,973 309,042
--------------------------
Distributions to shareholders
Net realized gain - (270,553)
--------------------------
Capital share transactions *
Shares sold 421,784 1,173,003
Distributions reinvested - 260,068
Shares redeemed (924,442) (1,346,820)
--------------------------
Increase (decrease) in net assets from capital
share transactions (502,658) 86,251
--------------------------
Net Assets
Increase (decrease) during period (163,685) 124,740
Beginning of period 5,228,479 5,103,739
--------------------------
End of period $5,064,794 $ 5,228,479
--------------------------
* Share information
Shares sold 18,703 50,954
Distributions reinvested - 12,419
Shares redeemed (40,766) (58,401)
--------------------------
Increase (decrease) in shares outstanding (22,063) 4,972
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1999
- -------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price New Horizons 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 June 3, 1960. 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.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
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.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and
losses are
24
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
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, used to
reduce the fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $1,134,217,000 and $1,587,919,000, respectively, for
the six months ended June 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.
At June 30, 1999, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$3,584,383,000. Net unrealized gain aggregated $1,495,321,000 at
period-end, of which $1,875,292,000 related to appreciated investments and
$379,971,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and the manager
provides for an annual investment management fee, of which $2,688,000 was
payable at June 30, 1999. The fee is computed daily and paid monthly, and
consists of an individual fund fee equal to 0.35% 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 Price Associates (the
group). The group fee rate ranges from 0.48% for the first $1 billion of
assets to 0.30% for assets in excess of $80 billion. At June 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.
25
<PAGE>
T. ROWE PRICE NEW HORIZONS FUND
- --------------------------------------------------------------------------------
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 $3,920,000 for the six months ended June 30, 1999, of which
$750,000 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 12.0% of the
outstanding shares of the fund at June 30, 1999. For the six months then
ended, the fund was allocated $710,000 of Spectrum expenses, $147,000 of
which was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available
to the public. The Reserve Funds pay no investment management fees.
Distributions from the Reserve Funds to the fund for the six months ended
June 30, 1999, totaled $2,538,000 and are reflected as interest income in
the accompanying Statement of Operations.
26
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10
p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe Price
Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a January 1999 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of
order.
27
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS BOND FUNDS
- ----------------------------- -------------------------------
Domestic Domestic Taxable
Blue Chip Growth Corporate Income
Capital Appreciation GNMA
Capital Opportunity High Yield
Diversified Small-Cap Growth New Income
Dividend Growth Short-Term Bond
Equity Income Short-Term U.S. Government
Equity Index 500 Spectrum Income
Extended Equity Market Index Summit GNMA
Financial Services Summit Limited-Term Bond
Growth & Income U.S. Treasury Intermediate
Growth Stock U.S. Treasury Long-Term
Health Sciences
Media & Telecommunications Domestic Tax-Free
Mid-Cap Growth
Mid-Cap Value California Tax-Free Bond
New America Growth Florida Intermediate Tax-Free**
New Era New Horizons* Georgia Tax-Free Bond
Real Estate Maryland Short-Term Tax-Free Bond
Science & Technology Maryland Tax-Free Bond
Small-Cap Stock New Jersey Tax-Free Bond
Small-Cap Value New York Tax-Free Bond
Spectrum Growth Summit Municipal Income
Total Equity Market Index Value Summit Municipal Intermediate
Tax-Free High Yield
International/Global Tax-Free Income
Tax-Free Intermediate Bond***
Emerging Markets Stock Tax-Free Short-Intermediate
European Stock Virginia Short-Term
Global Stock Tax-Free Bond
International Discovery Virginia Tax-Free Bond
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
- -----------------------------
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- -----------------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
- -----------------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Closed to new investors. ** Formerly named Florida Insured Intermediate
Tax-Free. *** Formerly named Tax-Free Insured Intermediate Bond.
+ 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.
28
<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 403(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(R) From T. Rowe Price
The T. Rowe Price 401(k) Century Plan(R) (for small businesses)
Money Purchase Pension/Profit Sharing Plan Kit
Investing for Retirement in Your 403(b) Account
The T. Rowe Price No-Load Variable Annuity Information Kit
Insights Reports
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
Software Packages
T.Rowe Price Retirement Planning 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.
Many of these resources are also available for viewing or ordering on the
Internet at www.troweprice.com.
29
<PAGE>
For yield, price, last transaction, current balance, or to conduct transactions,
24 hours, 7 days a week, call Tele*Access(R): 1-800-638-2587 toll free
For assistance with your existing fund account, call: Shareholder Service Center
1-800-225-5132 toll free 410-625-6500 Baltimore area
To open a brokerage account or obtain information, call:
1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus appropriate to the fund or funds
covered in this report.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
4200 West Cypress St.
10th Floor
Tampa, FL 33607
4410 ArrowsWest Drive
Colorado Springs, CO 80907
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills, CA 91367
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. F42-051 6/30/99
