<PAGE>
Annual Report
NEW
INCOME
FUND
------------
May 31, 1999
------------
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. ROWE PRICE
<PAGE>
Report Highlights
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New Income Fund
. The past 12 months were challenging for bond investors, as the market
shifted from a global credit crunch to concerns about U.S. economic
overheating.
. The fund's six-month return of -0.36% was ahead of its benchmarks, but the
12-month return of 1.02% lagged.
. Performance for the year was hurt by the decline of medium-quality
corporate bonds last summer; their rebound helped six-month returns.
. We believe the yield advantage of select corporate and mortgage securities
bonds will reward investors in the year ahead.
. The Federal Reserve is likely to tighten monetary policy at least once in
the near term, but bond prices already reflect this.
<PAGE>
FELLOW SHAREHOLDERS
The bond market was volatile over the past year, lurching from last summer's
global financial crisis to this spring's concerns about potential overheating in
the U.S. economy. As a result, it was a difficult year for most bond investors.
Your fund's six-month return, though slightly negative, compared favorably with
the benchmark returns. However, the poor showing of medium-quality corporate
bonds last summer hurt performance over the past 12 months.
MARKET ENVIRONMENT
After plunging briefly as low as 4.70% in October on flight-to-safety buying,
the yield on the 30-year Treasury bond completely retraced its steps and ended
May at 5.80% -- roughly the same level as a year ago, as shown in the chart. As
investors grew more comfortable with risk over the past six months, lower-
quality bonds recovered somewhat from depressed levels, but higher-quality bonds
fell, especially Treasuries. Stronger-than-expected economic growth in the U.S.,
combined with a stabilization of economies in Asia and Latin America, led to
this reversal of market sentiment and rising rates.
[LINE GRAPH APPEARS HERE]
[PLOT POINTS TO COME]
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INTEREST RATE LEVELS
- --------------------------------------------------------------------------------
1-Year 5-Year 30-Year
Treasury Bill Treasury Note Treasury Bond
5/31/98
8/98
11/98
2/99
5/31/99
While the Federal Reserve cut interest rates three times last fall to avert a
liquidity crisis in the credit markets and to prevent the U.S. from catching the
global contagion, by May the Fed had announced a bias toward raising interest
rates to forestall inflationary pressures. The U.S. had indeed remained an
"oasis of prosperity," in the words of Fed Chairman Alan Greenspan. (Greenspan
coined the term just weeks before the first rate cut, warning that the U.S.
might not remain
1
<PAGE>
immune to the global crisis indefinitely.) Prospects for economic growth in the
rest of the world also improved over the past six months. The chief
beneficiaries were lower- and medium-quality corporate bonds and mortgage-backed
securities, all of which significantly outperformed Treasuries in the last six
months.
Mortgage securities suffered last summer as lower interest rates spurred a high
level of homeowner refinancing, and large hedge funds sold mortgage holdings to
cover major losses. Having wagered incorrectly that Treasury prices would
decline in relation to the prices of lower-quality debt, these highly leveraged
hedge funds were forced to liquidate their most salable investments, mortgage
pass-throughs among them. They purchased Treasury bonds with the proceeds. This
buying, in turn, drove Treasury prices up and interest rates further down --
allowing more homeowners to refinance at even lower rates. Thus, the sell-off in
mortgage securities was in large part technical in nature and not related to the
fundamental attractiveness of these instruments. As interest rates began to rise
again and the liquidity crunch eased, the superior yields on mortgage bonds drew
buyers again. Mortgage securities were actually the best performers over the
full year, managing a slight margin over Treasuries and high-grade corporates
despite their poor performance in the third quarter.
The performance of corporate bonds over the past year varied widely by credit
quality, as shown in the nearby chart. High-quality corporates held up well last
summer, but more recently were hurt by rising interest rates. Lower- and medium-
quality corporate bonds are typically more sensitive to prospects for economic
growth -- and hence corporate profits -- than to interest rates. The sector was
hit hard last year amid uncertainty about the strength of the global economy but
rebounded as it became evident the U.S. remained strong. As a result, credit
spreads between Treasuries and corporate and mortgage securities narrowed
significantly
[BAR CHART APPEARS HERE]
[PLOT POINTS TO COME]
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TOTAL RETURN BY CREDIT QUALITY
- --------------------------------------------------------------------------------
Periods Ended 5/31/99 6-Month Return 12-Month Return
Treasury
Mortgage
AAA
BBB
BBB/BB
Source: Salomon Smith Barney
2
<PAGE>
after widening last summer to their highest levels since the 1990-91 recession.
(The term "credit spread" refers to the difference in yield between bonds of
different credit quality. This difference represents the premium that fixed
income investors demand at any given time for taking on more risk.) However, the
yield advantage of corporate bonds remains higher than its average level of the
past four years.
Lower-rated investment-grade bonds and Yankee bonds (foreign bonds denominated
in U.S. dollars) rebounded after their steep third quarter sell-off, but
declined in May amid the renewed concerns about a Fed rate hike. For the full
year, returns on Yankee bonds were about the same as those on high-grade U.S.
corporate bonds. Split-rated (BBB/BB) bonds delivered the best returns among
domestic bonds over the past six months.
PERFORMANCE REVIEW
Your fund held up better than its benchmarks during the difficult environment of
the six months ended May 31. The 1.02% return for the past year lagged its
Lipper peer group, however, due to last summer's dramatic sell-off in
medium-quality corporate bonds, particularly in sectors such as financials,
where we were overweighted.
Relative performance was much better for the six-month period. Though the fund's
return was fractionally negative, as shown in the table, it exceeded the
performance of its benchmarks. As is often the case, the sectors that had been
hit the hardest during the crisis posted the strongest rebound. During the past
six months, split-rated, mortgage, and Yankee bonds easily outperformed
Treasuries and high-grade corporate bonds. The fund's share price declined from
$9.09 a year ago to $8.50 on May 31, with most of the decline coming in the last
six months due to rising interest rates. This offset most of the fund's gain
from reinvested income. Dividends per share declined slightly from $0.57 per
share for the 12 months ended May 31, 1998, to $0.54 this past year.
Our strategy of investing for yield advantage over Treasuries was not rewarded
in the uncertain markets of last summer. We anticipated--correctly, as it turned
out--that a recession was not imminent in the
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PERFORMANCE COMPARISON
- ----------------------
Periods Ended 5/31/99 6 Months 12 Months
- ---------------------------------------------------
New Income Fund -0.36% 1.02%
Lehman Aggregate
Bond Index -0.76 4.35
Lipper Average of Corporate
Bond Funds A-Rated -1.52 2.52
3
<PAGE>
U.S. Therefore, we were underweighted in Treasuries compared with our benchmark
and overweighted in corporate sectors that were hard hit by the financial crisis
and attendant fears of a global economic slowdown. The strategy was beneficial
in the past six months, how-ever, and we remain confident in this approach over
the long term.
STRATEGY
OUR INVESTMENT STRATEGY FOCUSES ON FUNDAMENTAL ANALYSIS OF THE COMPANIES AND
SECTORS IN WHICH WE INVEST
The fund is managed with a consistent belief that rigorous, in-house fundamental
research on corporate and mortgage securities will produce strong returns over
the long term. Our investment strategy focuses on fundamental analysis of the
companies and sectors in which we invest. We analyze trends across a number of
U.S. and foreign markets in search of securities that offer higher yield with
stable-to-improving credit outlooks. This approach led us in recent years to
increase holdings of medium-quality corporate bonds, Yankee bonds, and
mortgages. These holdings allowed the fund to offer a yield advantage over its
peer group, but left the fund more vulnerable to bond market volatility.
In the mortgage sector, we increased the fund's liquidity opportunistically
during the crisis by selling some of the more illiquid structured and asset-
backed securities, and buying the same types of highly liquid mortgage pass-
throughs that the hedge funds were selling. (The term "liquidity" refers to the
ease with which a security can be bought or sold without a significant impact on
its price. "Structured" securities include those such as collateralized mortgage
obligations that are derived from an underlying pool of mortgages. Some of
these--the types that we favor--are designed, or structured, in such a way as to
reduce prepayment risk, or the risk that the underlying mortgages will be
refinanced at lower interest rates. These structured securities, however, tend
to be less liquid than conventional mortgage bonds.) As liquidity returned to
the market, we again increased exposure to prepayment-protected securities that
offered very attractive yields. On the corporate side, as the prices of split-
rated and Yankee bonds recovered, we gradually reduced exposure, since we
anticipate a slowing of the U.S. economy. In so doing, we upgraded the credit
quality and liquidity of the fund's corporate bond holdings. The fund's credit
quality rose from A+ a year ago to AA.
4
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[PIE CHART APPEARS HERE]
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SECURITY DIVERSIFICATION
- --------------------------------------------------------------------------------
Mortgage-Backed Securities 24%
Corporate Bonds and Asset-Backed Securities 49%
U.S. Government and Agencies 16%
Other 11%
Based on net assets as of 5/31/99.
Over the last six months, we generally reduced the risk profile of the fund.
This was accomplished by improving the credit quality and liquidity of the fund
as market conditions improved early this year. We also reduced the overall
exposure to corporate bonds, since we see some potential for the resumption of
liquidity pressures in corporate bonds as a result of technical market
conditions. Further, strong U.S. economic prospects are already priced into the
market, new supply is heavy, and there are some year 2000-related concerns. The
Federal Reserve Bank of New York has indicated that many Wall Street securities
firms might prune inventories of certain types of bonds to limit their exposure
to potential Y2K computer problems. This could reduce liquidity and pressure the
prices of some corporate bonds. Therefore, we reduced the fund's corporate bond
position to 34% of assets, a level we consider neutral.
In addition, we reduced the duration of the fund from 5.9 years 12 months ago to
its current level of 5.3 years as it has become clear that the Federal Reserve
is likely to raise interest rates in response to the economy's continued
above-trend growth. (Duration is a measure of a bond fund's sensitivity to
interest rates. For example, a fund with a duration of five years will rise
about 5% in price in response to a one-percentage-point decline in rates and
fall 5% in response to a one-percentage-point increase in rates.)
OUTLOOK
The current economic environment is one of continued U.S. economic strength
against a backdrop of global weakness. We still expect the domestic economy to
slow somewhat over the next six to 12 months, although robust demand is likely
to keep GDP growth above 3% (down from the recent pace of better than 4%).
Consumer spending
5
<PAGE>
shows some signs of slowing from the torrid pace of the last
two quarters, but there is little evidence of a slowdown in the manufacturing
sector. Despite the 0.7% jump in the April consumer price index, the CPI was
flat in May and the preponderance of evidence suggests that broad-based
inflation will remain at bay for now.
Nevertheless, as the U.S. economy and the domestic consumer have been the
drivers of world economic growth in the past year, certain imbalances have
presented themselves as potential risks. Primary among these are the record
trade deficit, a negative personal saving rate, and job creation in excess of
population growth. These factors have helped fuel concern about potential
inflation and Fed rate hikes. However, we believe the prospect of Fed tightening
is already reflected in the market. We do not expect a significant increase in
long-term interest rates from current levels.
Liquidity has been restored to international markets, the contagion of the
emerging markets crisis appears contained, and foreign economies seem to be
stabilizing. However, overall growth remains sluggish, with Europe likely to
post 1.5% growth this year. The risk of further turmoil remains, with concern
now centering on a possible devaluation in China.
In this environment, corporate and mortgage securities such as those that
dominate the fund's portfolio should continue to outperform Treasuries, as they
have for the past six months. While we do not expect credit spreads to narrow
significantly from current levels through the remainder of the year, as time
goes on the superior yield and favorable credit outlook of our holdings should
provide attractive returns to investors.
Respectfully submitted,
/s/ William T. Reynolds
William T. Reynolds
Chairman of the Investment Advisory Committee
June 18, 1999
6
<PAGE>
T. ROWE PRICE NEW INCOME FUND
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PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
KEY STATISTICS
11/30/98 5/31/99
- --------------------------------------------------------------------------------
Price Per Share $ 8.93 $ 8.50
Dividends Per Share
For 6 months 0.28 0.26
For 12 months 0.56 0.54
Dividend Yield *
For 6 months 6.39% 6.09%
For 12 months 6.42 6.34
30-Day Standardized Yield 6.61 6.06
Weighted Average Maturity (years) 11.4 10.3
Weighted Average Effective Duration (years) 5.5 5.3
Weighted Average Quality ** AA- AA
* 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.
7
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T. ROWE PRICE NEW INCOME FUND
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PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
Percent of Percent of
Net Assets Net Assets
11/30/98 5/31/99
- --------------------------------------------------------------------------------
Mortgage-Backed Securities 26% 24%
Asset-Backed Securities 9 14
Money Markets * 6 11
U.S. Treasury Obligations 7 10
U.S. Government Agency Obligations 6 6
Banking 11 5
Petroleum 5 5
Telecommunications 3 3
Electric Utilities 2 3
All Other 27 19
Other Assets Less Liabilities -2 -
- --------------------------------------------------------------------------------
Total 100% 100%
* See note at end of financial statements
8
<PAGE>
T. ROWE PRICE NEW INCOME FUND
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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 INCOME FUND
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[LINE GRAPH APPEARS HERE]
Lehman
Date New Income Fund Aggregate Bond Index
5/89 $10,000 $10,000
5/99 $20,883 $22,633
- ------------------------------------
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 5/31/99 1 Year 3 Years 5 Years 10 Years
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New Income Fund 1.02% 6.44% 6.80% 7.64%
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
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T. ROWE PRICE NEW INCOME FUND
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FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Ended
5/31/99 5/31/98 5/31/97 5/31/96 5/31/95
NET ASSET VALUE
<S> <C> <C> <C> <C> <C>
Beginning of period $ 9.09 $ 8.77 $ 8.70 $ 8.97 $ 8.65
Investment activities
Net investment income 0.54 0.57 0.58 0.60 0.58
Net realized and
unrealized gain (loss) (0.45) 0.36 0.07 (0.27) 0.34
Total from
investment activities 0.09 0.93 0.65 0.33 0.92
Distributions
Net investment income (0.54) (0.57) (0.58) (0.60) (0.58)
Net realized gain (0.14) (0.04) - - (0.02)
Total distributions (0.68) (0.61) (0.58) (0.60) (0.60)
NET ASSET VALUE
End of period $ 8.50 $ 9.09 $ 8.77 $ 8.70 $ 8.97
-------------------------------------------------------------------------
Ratios/Supplemental Data
Total return* 1.02% 10.84% 7.70% 3.70% 11.13%
Ratio of total expenses to
average net assets 0.72% 0.71% 0.74% 0.75% 0.78%
Ratio of net investment
income to average
net assets 6.16% 6.31% 6.65% 6.66% 6.95%
Portfolio turnover rate 94.3% 147.3% 87.1% 35.5% 54.1%
Net assets, end of period
(in millions) $ 1,942 $ 2,076 $ 1,711 $ 1,634 $ 1,566
</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.
The accompanying notes are an integral part of these financial statements.
10
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T. ROWE PRICE NEW INCOME FUND
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May 31, 1999
- ------------------------
PORTFOLIO OF INVESTMENTS Par/Shares Value
- --------------------------------------------------------------------------------
In thousands
CORPORATE BONDS AND NOTES 34.1%
Automobiles and Related 1.2%
Delphi Automotive Systems, 6.50%, 5/1/09 $ 10,000 $ 9,549
Hertz, 7.00%, 1/15/28 15,000 14,231
23,780
Banking 5.8%
Banco Generale, Sr. Sub. Notes, (144a), 7.70%, 8/1/02 10,000 9,350
Banco Latinoamericano, (144a), 6.69%, 12/23/99 10,000 10,039
Banco Santiago, Sub. Notes, 7.00%, 7/18/07 12,755 11,324
Bank United, 8.875%, 5/1/07 5,000 4,986
FCNCB Capital Trust I, Gtd. Cap. Securities, (144a)
8.05%, 3/1/28 12,000 11,318
Imperial Bank, Sub. Notes, 8.50%, 4/1/09 9,265 8,990
Mason Dixon Bancshares, Sr. Notes, 7.48%, 4/23/08 a 20,000 19,638
Natexis, (144a), 8.44%, 12/29/49 13,990 13,737
Riggs National, 9.65%, 6/15/09 10,000 10,750
Societe Generale, Step-Up Perpetual Sub. Notes, (144a)
7.85%, 4/29/49 13,000 12,968
113,100
Beverages 2.7%
Panamerican Beverages, Sr. Notes, (144a), 7.25%, 7/1/09 15,000 12,523
Pepsi Bottling, (144a), 5.625%, 2/17/09 16,500 15,256
Seagrams, Sr. Notes, 6.80%, 12/15/08 24,500 23,977
51,756
Broadcasting 1.0%
Hearst-Argyle Television, 7.50%, 11/15/27 20,000 19,920
19,920
Building Products 1.2%
Owens Corning, 7.70%, 5/1/08 24,000 24,040
24,040
Building and Real Estate 1.7%
BRE Properties, 7.125%, 2/15/13 10,000 9,145
Hospitality Properties Trust, Sr. Notes, 7.00%, 3/1/08 10,000 9,102
Rouse, 8.00%, 4/30/09 15,000 14,806
33,053
Container 1.0%
Owens Illinois, Sr. Notes, 7.35%, 5/15/08 20,000 19,275
19,275
11
<PAGE>
T. ROWE PRICE NEW INCOME FUND
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Par/Shares Value
- --------------------------------------------------------------------------------
In thousands
Electric Utilities 2.6%
AEP Resources, Sr. Notes, (144a), 6.50%, 12/1/03 $ 15,000 $ 14,644
Alabama Power, Sr. Notes, 5.35%, 11/15/03 10,000 9,627
DDTE Capital, (144a), Zero Coupon, 11/15/38 15,000 14,812
South Carolina Electric & Gas, 1st
Mtg.Bonds, 6.125%, 3/1/09 12,000 11,550
50,633
Entertainment and Leisure 1.0%
Royal Caribbean Cruises, Sr. Notes, 6.75%, 3/15/08 20,000 19,290
19,290
Food Processing 1.0%
Flowers Industries, 7.15%, 4/15/28 20,000 18,336
18,336
Foreign 1.7%
Bundesrepublic, 6.50%, 7/4/27 (EUR) 27,000 33,766
33,766
Health Care 0.5%
Beckman Instruments, Sr. Notes, (144a), 7.45%, 3/4/08 10,745 10,362
10,362
Insurance 1.6%
Jefferson Pilot Capital Trust, (144a), 8.14%, 1/15/46 10,000 10,127
Trenwick Capital Trust I, Cap. Securities, 8.82%, 2/1/37 10,500 9,444
Zurich Capital Trust, (144a), 8.376%, 6/1/37 10,000 10,405
29,976
Investment Dealers 1.5%
Goldman Sachs Group, (144a), 6.625%, 12/1/04 10,000 9,918
Paine Webber Group, MTN, 6.72%, 4/1/08 20,000 19,226
29,144
Paper and Paper Products 1.2%
Abitibi-Cosolidated, 7.40%, 4/1/18 16,460 15,792
Celulosa Arauco Y Constitucion, (144a), 7.20%, 9/15/09 7,500 6,595
22,387
Petroleum 5.2%
Conoco, Sr. Notes, 5.90%, 4/15/04 6,990 6,842
PDVSA Finance, 7.50%, 11/15/28 20,290 15,334
Union Texas Petroleum, 7.00%, 4/15/08 20,000 20,499
Woodside Finance Limited, (144a), 6.60%, 4/15/08 20,000 18,820
YPF Sociedad Anonima
7.25%, 3/15/03 20,000 19,418
10.00%, 11/2/28 17,925 20,206
101,119
12
<PAGE>
T. ROWE PRICE NEW INCOME FUND
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Par/Shares Value
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In thousands
Savings and Loan 0.5%
Dime Bancorp, Sr. Notes, 6.375%, 1/30/01 $10,000 $9,879
9,879
Telecommunications 2.7%
AT&T, 6.00%, 3/15/09 15,000 14,324
Sprint, 6.125%, 11/15/08 21,600 20,377
WorldCom, 6.40%, 8/15/05 18,500 18,170
52,871
Total Corporate Bonds and Notes (Cost $695,314) 662,687
ASSET-BACKED SECURITIES 14.8%
Auto-Backed 0.8%
Onyx Acceptance Owner Trust
5.78%, 2/15/03 5,000 4,990
5.83%, 3/15/04 10,000 9,964
14,954
Commercial Mortgage-Backed 1.8%
Heller Financial, 6.847%, 5/15/31 10,000 10,033
LB Commercial Conduit Trust, 6.78%, 10/15/30 10,000 10,056
Prudential Securities, 6.074%, 1/15/08 14,859 14,478
34,567
Credit Card-Backed 1.8%
Capital One Master Trust, 6.356%, 6/15/11 20,000 19,290
First USA Secured Note Trust, (144a), VR, 5.571%, 1/19/05 7,048 7,048
MBNA Master Credit Card Trust II, 5.65%, 2/15/06 10,000 9,775
36,113
Financial 0.9%
Atlas Air, ETC, 7.63%, 1/2/15 10,000 9,577
Banco Latinoamericano, (144a), 6.55%, 4/15/03 7,900 7,647
17,224
Home Equity Loans-Backed 3.0%
Amresco Residential Securities, 6.745%, 6/25/28 4,850 4,740
Chase Funding Mortgage Loan, 6.59%, 5/25/28 5,053 4,905
FURST Home Equity Loan Trust, 7.77%, 9/25/27 5,300 5,387
Green Tree Financial, 6.87%, 1/15/29 8,655 8,725
Money Store Trust
6.985%, 10/15/16 6,000 6,043
7.91%, 5/15/24 13,159 13,484
13
<PAGE>
T. ROWE PRICE NEW INCOME FUND
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Par/Shares Value
- --------------------------------------------------------------------------------
In thousands
Option One Mortgage Trust, 5.92%, 5/25/29 $10,000 $9,924
UCFC Home Equity Loan Trust, 7.325%, 1/10/27 5,000 5,043
58,251
Receivables-Backed 1.7%
CIT RV Trust
5.78%, 7/15/08 10,000 9,934
6.35%, 4/15/11 13,375 13,393
First Sierra Equipment Contract Trust, 5.73%, 9/15/04 10,000 9,936
33,263
Whole Loans-Backed 4.8%
BA Mortgage Securities, 7.00%, 7/25/28 20,600 20,355
CWMBS, 6.75%, 11/25/23 6,245 6,099
GE Capital Mortgage Services, REMIC
6.75%, 8/25/28 13,962 13,564
6.465%, 6/25/28 14,207 14,126
Norwest Asset Securities, 6.75%, 10/25/28 11,929 11,468
Residential Accredited Loans
6.75%, 7/25/28 7,500 7,309
7.25%, 11/25/27 10,153 10,222
Residential Funding, 6.50%, 3/25/29 9,984 9,350
92,493
Total Asset-Backed Securities (Cost $293,002) 286,865
EQUITY AND CONVERTIBLE SECURITIES 0.4%
Banking 0.0%
Silicon Valley Bancshares, 8.25% 30 683
683
Building and Real Estate 0.4%
Equity Residential Properties Trust, REIT 9 223
Reckson Associates Realty, REIT, Cv.
Pfd. (Series A), 7.625% 293 6,950
7,173
Total Equity and Convertible Securities (Cost $7,431) 7,856
14
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T. ROWE PRICE NEW INCOME FUND
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Par/Shares Value
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In thousands
U.S. GOVERNMENT MORTGAGE-
BACKED SECURITIES 23.8%
U.S. Government Agency Asset-Backed 0.1%
Federal National Mortgage Assn., Interest Only,
VR,1.302%, 6/25/28 ** $ 72,669 $3,100
3,100
U.S. Government Agency Obligations 10.4%
Federal Home Loan Mortgage
6.50%, 11/1/04 - 6/1/24 8,454 8,280
7.00%, 2/1/24 - 6/1/25 3,938 3,947
7.50%, 3/1 - 6/1/24 5,346 5,462
8.00%, 6/1/08 55 57
10.50%, 2/1/01 - 8/1/20 450 488
11.00%, 5/1/11 - 7/1/20 215 239
11.50%, 6/1/01 1 1
REMIC
5.50%, 10/15/20 3,042 3,017
6.50%, 7/15/11 - 6/15/23 42,473 42,098
7.00%, 8/15/09 - 9/15/24 40,600 40,800
Federal National Mortgage Assn.
6.00%, 7/1/13 - 2/1/14 57,491 56,074
6.50%, 2/1/26 - 3/1/29 42,382 41,389
8.75%, 3/1/10 8 9
201,861
U.S. Government Guaranteed Obligations 13.3%
Government National Mortgage Assn.
I
6.50%, 4/15/23 - 1/15/28 50,024 48,903
7.00%, 4/15/22 - 5/15/29 98,636 98,941
7.50%, 8/15/16 - 8/15/28 23,975 24,574
8.00%, 7/15/16 - 10/15/27 38,634 40,411
8.50%, 9/15/16 - 7/15/23 8,664 9,200
9.00%, 1/15/09 - 11/15/19 1,041 1,117
9.50%, 6/15/09 - 3/15/25 443 481
11.00%, 12/15/09 - 1/15/21 9,154 10,230
11.50%, 3/15/10 - 10/15/15 1,359 1,537
15
<PAGE>
T. ROWE PRICE NEW INCOME FUND
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Par/Shares Value
- --------------------------------------------------------------------------------
In thousands
II
7.00%, 12/20/23 - 5/20/28 $ 21,197 $ 21,248
8.50%, 9/20/26 48 51
9.00%, 6/20/16 - 2/20/18 770 827
GPM, I, 10.25%, 2/15/16 - 11/15/20 1,250 1,376
258,896
Total U.S. Government Mortgage-Backed Securities
(Cost $463,799) 463,857
U.S. GOVERNMENT OBLIGATIONS/AGENCIES 16.1%
U.S. Government Agency Obligations 6.3%
Federal Home Loan Mortgage, 5.00%, 2/15/01 $ 10,060 $ 9,957
Federal National Mortgage Assn.
5.125%, 2/13/04 40,000 38,514
5.75%, 2/15/08 60,000 58,191
Tennessee Valley Authority, 6.235%, 7/15/45 14,934 15,061
121,723
U.S. Treasury Obligations 9.8%
U.S. Treasury Bonds
5.25%, 11/15/28 4,500 4,074
5.50%, 8/15/28 47,850 44,648
6.50%, 11/15/26 41,300 43,639
U.S. Treasury Inflation-Indexed Notes
3.375%, 1/15/07 10,413 10,094
3.625%, 7/15/02 3,214 3,212
U.S. Treasury Notes
4.75%, 11/15/08 2,220 2,066
5.25%, 1/31/01 10,000 9,983
5.625%, 5/15/08 38,500 38,143
5.75%, 11/15/00 18,700 18,803
5.875%, 11/15/05 15,470 15,549
190,211
Total U.S. Government Obligations/Agencies
(Cost $329,894) 311,934
Money Market Funds 10.5%
Reserve Investment Fund, 4.96% # $ 203,329 $ 203,329
Total Money Market Funds (Cost $203,329) 203,329
16
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
99.7% of Net Assets (Cost $1,992,769) $ 1,936,528
Other Assets Less Liabilities 5,245
NET ASSETS $ 1,941,773
------------
# Seven day yield
Affiliated company
a Private placement
** For Interest Only securities, par amount represents notional principal,
on which the fund receives interest.
ETC Equipment Trust Certificate
EUR European Currency Unit
GPM Graduated Payment Mortgage
MTN Medium Term Note
REIT Real Estate Investment Trust
REMIC Real Estate Mortgage Investment Conduit
VR Variable rate
144a Security was purchased pursuant to Rule 144a under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers -- total of such securities at period-end amounts to
10.1% of net assets.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
May 31, 1999
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value
Affiliated companies (cost $203,329) $ 203,329
Other companies (cost $1,789,440) 1,733,199
Total investments in securities 1,936,528
Securities lending collateral 144,463
Other assets 33,307
Total assets 2,114,298
Liabilities
Obligation to return securities lending collateral 144,463
Other liabilities 28,062
Total liabilities 172,525
NET ASSETS $ 1,941,773
------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 2,697
Accumulated net realized gain/loss - net of distributions (16,753)
Net unrealized gain (loss) (56,241)
Paid-in-capital applicable to 228,542,310 shares of
$1.00 par value capital stock outstanding;
300,000,000 shares authorized 2,012,070
NET ASSETS $ 1,941,773
------------
NET ASSET VALUE PER SHARE $ 8.50
------------
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
- -----------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
5/31/99
Investment Income
Income
Interest and dividend income $ 142,134
Expenses
Investment management 9,740
Shareholder servicing 4,535
Custody and accounting 275
Prospectus and shareholder reports 164
Registration 77
Proxy and annual meeting 51
Legal and audit 21
Directors 13
Miscellaneous 12
Total expenses 14,888
Expenses paid indirectly (31)
Net expenses 14,857
Net investment income 127,277
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (19,896)
Futures (56)
Foreign currency transactions (71)
Net realized gain (loss) (20,023)
Change in net unrealized gain or loss on securities (85,943)
Net realized and unrealized gain (loss) (105,966)
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 21,311
------------
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
5/31/99 5/31/98
Increase (Decrease) in Net Assets
Operations
Net investment income $ 127,277 $ 120,563
Net realized gain (loss) (20,023) 51,953
Change in net unrealized gain or loss (85,943) 22,374
Increase (decrease) in net assets from operations 21,311 194,890
Distributions to shareholders
Net investment income (127,389) (120,455
Net realized gain (33,390) (8,527)
Decrease in net assets from distributions (160,779) (128,982)
Capital share transactions*
Shares sold 378,655 525,602
Distributions reinvested 118,923 79,742
Shares redeemed (491,927) (306,392)
Increase (decrease) in net assets from capital
share transactions 5,651 298,952
Net Assets
Increase (decrease) during period (133,817) 364,860
Beginning of period 2,075,590 1,710,730
End of period $1,941,773 $ 2,075,590
---------- -----------
*Share information
Shares sold 42,662 58,292
Distributions reinvested 13,507 8,829
Shares redeemed (55,845) (33,981)
Increase (decrease) in shares outstanding 324 33,140
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
May 31, 1999
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price New Income Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company and commenced operations on October 12, 1973.
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 initally 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.
21
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the
outstanding voting securities.
Currency Translation Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated
into U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes in foreign exchange rates on realized
and unrealized security gains and losses is reflected as a component of
such gains and losses.
Premiums and Discounts Premiums and discounts on debt securities, other
than mortgage-backed securities (MBS), are amortized for both financial
reporting and tax purposes. Premiums and discounts on all MBS are
recognized upon disposition or principal repayment as gain or loss for
financial reporting purposes. For tax purposes, premiums and discounts on
MBS acquired on or before June 8, 1997, are recognized upon disposition or
principal repayment as ordinary income. For MBS acquired after June 8,
1997, premiums are recognized as gain or loss; discounts are recognized as
gain or loss, except to the extent of accrued market discount.
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, 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.
Securities Lending The fund lends its securities to approved brokers to
earn additional income and receives cash and U.S. government securities as
collateral
22
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
against the loans. Cash collateral received is invested in a money market
pooled account by the fund's lending agent. Collateral is maintained over
the life of the loan in an amount not less than 100% of the value of loaned
securities. Although risk is mitigated by the collateral, the fund could
experience a delay in recovering its securities and a possible loss of
income or value if the borrower fails to return them. At May 31, 1999, the
value of loaned securities was $140,446,000; aggregate collateral consisted
of $144,463,000 in the securities lending collateral pool.
Other Purchases and sales of portfolio securities, other than short-term
and U.S. government securities, aggregated $810,452,000 and $1,124,861,000,
respectively, for the year ended May 31, 1999. Purchases and sales of U.S.
government securities aggregated $1,074,214,000 and $979,692,000,
respectively, for the year ended May 31, 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. As of May 31, 1999, the fund has capital loss
carryforwards for federal income tax purposes of $1,953,000, all of which
expires in 2007. For tax purposes, the fund deferred recognition of an
additional $17,199,000 of net realized capital losses until June 1, 1999.
The fund intends to retain gains realized in future periods that may be
offset by available capital loss carryforwards.
At May 31, 1999, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$1,992,769,000. Net unrealized loss aggregated $56,241,000 at period-end,
of which $9,334,000 related to appreciated investments and $65,575,000 to
depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management
fee, of which $780,000 was payable at May 31, 1999. The fee is computed
daily and paid monthly, and consists of an individual fund fee equal to
0.15% 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%
23
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
for the first $1 billion of assets to 0.30% for assets in excess of $80
billion. At May 31, 1999, and for the year then ended, the effective annual
group fee rate was 0.32%. The fund pays a pro-rata share of the group fee
based on the ratio of its net assets to those of the group.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund
receives certain other services. The manager computes the daily share price
and maintains the financial records of the fund. T. Rowe Price Services,
Inc. is the fund's transfer and dividend disbursing agent and provides
shareholder and administrative services to the fund. T. Rowe Price
Retirement Plan Services, Inc. provides subaccounting and recordkeeping
services for certain retirement accounts invested in the fund. The fund
incurred expenses pursuant to these related party agreements totaling
approximately $2,527,000 for the year ended May 31, 1999, of which $265,000
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 37.0% of the
outstanding shares of the fund at May 31, 1999. For the year then ended,
the fund was allocated $1,710,000 of Spectrum expenses, $135,000 of which
was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available
to the public. The Reserve Funds pay no investment management fees.
Distributions from the Reserve Funds to the fund for the year ended May 31,
1999, totaled $4,374,000 and are reflected as interest income in the
accompanying Statement of Operations.
24
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
T. Rowe Price New Income Fund,Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of T. Rowe
Price New Income Fund, Inc. (the "Fund") at May 31, 1999, and the results
of its operations, the changes in its net assets and the financial
highlights for each of the fiscal periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at May 31, 1999 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 17, 1999
25
<PAGE>
T. ROWE PRICE NEW INCOME FUND
- --------------------------------------------------------------------------------
- ----------------------------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 5/31/99
- ----------------------------------------------------------
We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distribution to shareholders included $33,390,000 from long-term
capital gains, subject to the 20% rate gains category.
For corporate shareholders, $498,000 of the fund's distributed income and
short-term capital gains qualified for the dividends-received deduction.
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 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
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
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
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
Roth IRA
Rollover IRA
SEP-IRA
SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase Pension and Profit Sharing Plans)
401(k)
403(b)
457 Deferred Compensation
RETIREMENT RESOURCES AT T. ROWE PRICE
Planning and Informational Guides
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
Investment Kits
The IRA Investing Kit
Roth IRA Conversion Kit
Rollover IRA Kit
The T. Rowe Price SIMPLE IRA Plan Kit
The T. Rowe Price SEP-IRA Plan
The Simplified Keogh Plan From
T. Rowe Price
The T. Rowe Price 401(k) Century Plan (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 Plaza 5
Mezzanine Level
21800 Oxnard Street, Suite 270
Woodland Hills, CA 91367
[LOGO OF T.ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. F43-050 5/31/99
