<PAGE>
Semiannual Report
Growth
Stock
Fund
June 30, 1996
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
Report Highlights
. Strong cash flows into equity funds and a robust economy helped drive the
stock market's advance to record highs during the past six months.
. Your fund generated good absolute returns but trailed the overall market
because of exposure to weak technology and health care stocks.
. Foreign stocks contributed positively to performance after lagging for two
years. We also added to technology and health care stocks after their recent
price declines.
. Stocks and bonds have diverged sharply so far this year. Rising interest
rates may pose a problem for the stock market and your fund if the trend
continues.
. The current financial environment is cloudier than it has been for some time,
but we believe the fund is well positioned to deliver good performance over the
long term.
<PAGE>
FELLOW SHAREHOLDERS
The U.S. stock market and the Growth Stock Fund continued to rally sharply
during the first half of the year. Record cash inflows into domestic equity
mutual funds, combined with a resurgent economy driven by higher consumer
spending, fueled the advance to new heights.
<TABLE>
<CAPTION>
PERFORMANCE COMPARISON
- ---------------------------------------------------------
Periods Ended 6/30/96 6 Months 12 Months
- ---------------------------------------------------------
<S> <C> <C>
Growth Stock Fund 7.67% 21.28%
.........................................................
S&P 500 10.10 26.00
.........................................................
Lipper Growth Funds Average 10.08 22.20
.........................................................
</TABLE>
Returns were good on an absolute basis but lagged the unmanaged Standard &
Poor's 500 Stock Index during the 6- and 12-month periods ended June 30 and
also trailed the average returns for similar funds. Performance over the past
six months was aided by the fund's exposure to foreign stocks, which did well
for the first time in two years. However, our holdings in the technology and
health care sectors hindered results relative to both the benchmark and the
overall market.
MARKET ENVIRONMENT
The resilient stock market continued to overcome an increasing number of
obstacles, such as rising interest rates, slowing corporate profits, a frothy
new issues market, and generally high valuations.
The stock and bond markets have diverged sharply so far this year. History
suggests that this situation will not last indefinitely. Interest rates are the
critical variable in the financial markets and are a particular factor for the
Growth Stock Fund due to its significant exposure to both financial and foreign
stocks.
Both the Federal Reserve and the bond market have been on a roller-coaster ride
during the last few years. In 1995, the bond market rebounded significantly from
1994, the worst calendar year on record for U.S. bonds. However, the first six
months of 1996 saw the bond market give back more than half of its 1995 advance.
The Fed, which eased twice last year as bonds rallied, may tighten later this
summer in response to concerns of rising inflation caused by above-trend
economic
1
<PAGE>
After lagging for the last two years, foreign investing finally helped overall
fund performance in the first half of 1996.
growth and a slight uptrend in wage pressures. This cyclically strong economy
creates a tougher environment for both bonds and equities.
INVESTMENT REVIEW
The strongest stock groups were those whose earnings growth rates are tied
closely to current economic activity such as industrial, retail, and energy
service. Within the portfolio, strong relative performance by industrial stocks,
including GE, Danaher, AlliedSignal, and Corning, contributed positively to
performance. Retail stocks such as Circuit City and Home Depot and energy
service companies such as Schlumberger and Cooper Cameron have also
outperformed.
The poorest performance came from the technology and health care sectors.
Software companies Intuit, Broderbund Software, and Adobe Systems and medical
device companies St. Jude Medical and Boston Scientific hurt fund results.
European stocks, the bulk of our foreign exposure, generated solid returns even
after deducting the effect of a stronger dollar. Far Eastern stock performance
was volatile, with the strongest advances coming early in the year. Latin
America also bounced back nicely after two tough years.
PORTFOLIO MANAGEMENT
Technology stocks outperformed the market every year between 1991 and 1995.
However, over the last nine months, the sector underperformed substantially. In
our annual report, we mentioned that 1996 would be a tougher year for
technology. Generally weak fundamentals, including softness in Europe, an
inventory correction, and the absence of major product cycles, were all
culprits.
Looking ahead, 1997 could shape up to be a strong product cycle year for the
technology sector. Major cycles are looming in the personal computer and digital
wireless markets, and the next generation electronic game platform is also on
the horizon. Many stocks with solid long-term potential have suffered price
declines of 40% to 50%. Because of the more attractive valuations and long-term
fundamentals,
2
<PAGE>
we added selectively to our technology investments, buying shares of high
quality companies serving growing markets such as Intel, Bay Networks, 3Com, and
Hewlett-Packard.
Health care is another sector with bright longer-term fundamentals that suffered
from selling pressure. The steady, stable earnings streams of these companies
are often not appreciated by investors during periods when the economy is
accelerating. We took advantage of this situation by buying shares in market
leaders such as Columbia/HCA and United HealthCare.
On the sales side, we harvested some profits in the financial services sector.
Early in the year we trimmed positions in Federal Home Loan Mortgage Corporation
(Freddie Mac) and NationsBank.
OUTLOOK
U.S. stocks benefited enormously over the past 18 months from low inflation,
higher-than-expected corporate earnings, and positive economic growth. It
currently appears that only one of those three factors remains intact: positive
growth.
Inflationary pressures appear to be building to a level that may force action by
the Fed later this year. Corporate profit growth peaked in 1995. As a result,
the environment for stocks is cloudier than it has been for some time. It would
not be surprising if the market corrected somewhat in response to higher
interest rates and slower earnings growth.
<TABLE>
<CAPTION>
PORTFOLIO CHARACTERISTICS
- -----------------------------------------------------------
Growth Stock
Domestic
As of 6/30/96 Portfolio S&P 500
- -----------------------------------------------------------
<S> <C> <C>
Earnings Growth Rate
Past 5 Years 18.5% 11.8%
........................................................
Projected 5 Years* 16.4 11.7
........................................................
Dividend Growth Rate
Past 5 Years 12.2 6.3
........................................................
Projected 5 Years* 12.5 8.5
........................................................
Return on Equity
Past 5 Years 18.8 16.4
........................................................
Projected 5 Years* 19.0 18.4
........................................................
Long-Term Debt as
Percent of Capital 29.7 33.4
...........................................................
P/E Ratio (12-month forward
projected earnings) 17.9X 15.9X
...........................................................
</TABLE>
*Earnings forecasts are based on T. Rowe Price research
and are in no way to be interpreted as predictions of future investment
returns.
3
<PAGE>
The steady, above-average earnings generated by the Growth Stock Fund's holdings
are appealing at this point in the economic cycle and could attract increasing
investor interest in coming months. We believe the fund is well positioned to
deliver solid performance relative to that of similarly managed funds.
Respectfully submitted,
/s/ John Gillespie
John Gillespie
President and
Chairman of the Investment Advisory Committee
July 19, 1996
[GROWTH STOCK FUND P/E RELATIVE TO THE S&P 500 P/E GRAPH APPEARS HERE]
4
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited June 30, 1996
<TABLE>
<CAPTION>
PORTFOLIO HIGHLIGHTS
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/96
------------------------------------------------------
<S> <C>
Freddie Mac 3.6%
......................................................
GE 2.8
......................................................
Vodafone 2.0
......................................................
Royal Dutch Petroleum 1.9
......................................................
Danaher 1.8
------------------------------------------------------
Great Lakes Chemical 1.8
......................................................
Berkshire Hathaway 1.8
......................................................
UNUM 1.7
......................................................
ACE Limited 1.6
......................................................
PartnerRe Holdings 1.5
------------------------------------------------------
Hutchison Whampoa 1.4
......................................................
Disney 1.4
......................................................
Fannie Mae 1.3
......................................................
AlliedSignal 1.3
......................................................
Circuit City Stores 1.2
------------------------------------------------------
United HealthCare 1.2
......................................................
Astra 1.1
......................................................
Ceridian 1.1
......................................................
Corning 1.1
......................................................
Boston Scientific 1.0
------------------------------------------------------
Genentech 1.0
......................................................
Elsevier 1.0
......................................................
BMC Software 1.0
......................................................
Reuters 0.9
......................................................
Norwest 0.9
------------------------------------------------------
Total 37.4%
</TABLE>
5
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited June 30, 1996
<TABLE>
<CAPTION>
PORTFOLIO HIGHLIGHTS
- -------------------------------------------------------------------------------
MAJOR PORTFOLIO CHANGES
Listed in descending order of size
6 Months Ended June 30, 1996
Ten Largest Purchases Ten Largest Sales
-----------------------------------------------------------------------
<S> <C>
United HealthCare* Schlumberger
..................................... ...............................
Columbia/HCA Healthcare* First Data
..................................... ...............................
Exide Time Warner**
..................................... ...............................
Wells Fargo* NationsBank**
..................................... ...............................
Cox Communications* Freddie Mac
..................................... ...............................
Cooper Cameron* Viacom**
..................................... ...............................
3Com* Electronic Arts**
..................................... ...............................
Bay Networks* Boeing**
..................................... ...............................
lntel* Eastman Kodak**
..................................... ...............................
Boston Chicken* Pacific Telesis**
..................................... ...............................
</TABLE>
* Position added
** Position eliminated
6
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited June 30, 1996
PERFORMANCE COMPARISON
----------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the
fund over the past 10 fiscal year periods or since inception (for funds
lacking 10-year records). The result is compared with a broad-based
average or index. The index return does not reflect expenses, which have
been deducted from the fund's return.
[GROWTH STOCK FUND GRAPH APPEARS HERE]
AVERAGE ANNUAL COMPOUND TOTAL RETURN
----------------------------------------------------------------------------
This table shows how the fund would have performed each year if its
actual (or cumulative) returns for the periods shown had been earned at
a constant rate.
<TABLE>
<CAPTION>
Periods Ended 6/30/96 1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth Stock Fund 21.28% 16.48% 15.63% 11.89%
.......................................................................
</TABLE>
Investment return and principal value represent past performance and
will vary. Shares may be worth more or less at redemption than at
original purchase.
7
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
----------------------------------------------------------------------------
6 Months
Ended Ended
6/30/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 23.35 $ 18.75 $ 20.42 $ 18.66 $ 18.75 $ 14.71
.......................................................................
Investment activities
Net investment income 0.11 0.23 0.18 0.17 0.18 0.24
Net realized and
unrealized gain (loss) 1.68 5.57 (0.01) 2.72 0.94 4.67
.......................................................................
Total from
investment activities 1.79 5.80 0.17 2.89 1.12 4.91
.......................................................................
Distributions
Net investment income - (0.23) (0.18) (0.14) (0.18) (0.25)
Net realized gain - (0.97) (1.66) (0.99) (1.03) (0.62)
.......................................................................
Total distributions - (1.20) (1.84) (1.13) (1.21) (0.87)
.......................................................................
NET ASSET VALUE
End of period $ 25.14 $ 23.35 $ 18.75 $ 20.42 $ 18.66 $ 18.75
-----------------------------------------------------------------------
Ratios/Supplemental Data
Total return 7.67% 30.97% 0.89% 15.56% 5.99% 33.80%
........................................................................................................
Ratio of expenses to
average net assets 0.78%+ 0.80% 0.81% 0.82% 0.83% 0.85%
........................................................................................................
Ratio of net investment
income to average
net assets 0.92%+ 1.09% 0.91% 0.86% 0.94% 1.40%
........................................................................................................
Portfolio turnover rate 62.4%+ 42.5% 54.0% 35.3% 27.4% 31.8%
........................................................................................................
Average commission
rate paid $ 0.0580 - - - - -
........................................................................................................
Net assets, end of period
(in millions) $ 3,063 $ 2,762 $ 2,068 $ 1,976 $ 1,946 $ 1,846
........................................................................................................
+Annualized.
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited June 30, 1996
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
COMMON STOCKS, RIGHTS,
AND WARRANTS 92.9%
FINANCIAL 18.9%
Bank and Trust 4.0%
<S> <C> <C>
Argentaria Banca de Espana (ESP) 70,000 $ 3,057
.......................................................................
Banca Fideuram (ITL) 7,260,000 15,741
.......................................................................
Cho Hung Bank (KRW) 609,886 7,457
.......................................................................
Lippo Bank (IDR) 2,000,000 2,857
.......................................................................
Lippo Bank, rights, 7/23/96 (IDR) 1,000,000 773
.......................................................................
Lojas American (BRL) 97,941,200 1,746
.......................................................................
Northern Trust 394,700 22,843
.......................................................................
Norwest 825,000 28,772
.......................................................................
Seoul Access Trust IDR* 140 2,030
.......................................................................
Societe Generale (FRF) 55,000 6,052
.......................................................................
Societe Generale de Surveillance (CHF) 8,320 19,932
.......................................................................
Toronto Dominion Bank (CAD) 750,000 13,156
.......................................................................
124,416
............
Insurance 6.7%
ACE Limited 1,075,000 50,525
.......................................................................
Erie Indemnity 178,800 7,286
.......................................................................
Foremost 169,500 9,619
.......................................................................
Harleysville Group 200,000 5,800
.......................................................................
Leucadia National 275,000 6,738
.......................................................................
PartnerRe Holdings# 1,055,409 28,437
.......................................................................
PartnerRe Holdings 300,000 8,981
.......................................................................
PartnerRe Holdings, 11/04/00, warrants * # 531,665 7,300
.......................................................................
UNUM 850,000 52,912
.......................................................................
Zurich Reinsurance 900,000 28,350
.......................................................................
205,948
............
Financial Services 8.2%
AMBAC 400,000 20,850
.......................................................................
Fairfax Financial (CAD)* 109,400 13,862
.......................................................................
Fannie Mae 1,220,400 40,883
.......................................................................
Freddie Mac 1,295,000 110,723
.......................................................................
Fund American Enterprises 250,000 20,250
.......................................................................
PMI Group 200,000 8,500
.......................................................................
</TABLE>
9
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
<S> <C> <C>
Quick & Reilly 337,500 $10,969
..........................................................................
Wells Fargo 100,000 23,888
..........................................................................
249,925
............
Total Financial 580,289
UTILITIES 0.7%
Telephone 0.7%
Telecom Italia Mobile (ITL) 2,000,000 4,473
..........................................................................
Telecom Italia, savings shares (ITL) 2,900,000 5,009
..........................................................................
Telekom Malaysia (MYR) 1,250,000 11,125
..........................................................................
Total Utilities 20,607
...........
CONSUMER NONDURABLES 18.2%
Beverages 1.7%
Grolsch (NLG) 350,000 14,366
..........................................................................
LVMH (FRF) 50,000 11,869
..........................................................................
PepsiCo 750,000 26,531
..........................................................................
52,766
...........
Food Processing 0.5%
Heinz 350,000 10,631
..........................................................................
Sara Lee 123,100 3,986
..........................................................................
14,617
...........
Hospital Supplies/Hospital Management 4.8%
Apria Healthcare * 669,900 21,018
..........................................................................
Boston Scientific * 700,000 31,500
..........................................................................
Cerner * 644,900 13,865
..........................................................................
Columbia/HCA Healthcare 500,000 26,687
..........................................................................
St. Jude Medical * 500,000 16,688
..........................................................................
United HealthCare 700,000 35,350
..........................................................................
145,108
............
Biotechnology 1.8%
Amgen * 200,000 10,775
..........................................................................
Biogen * 246,500 13,480
..........................................................................
Genentech * 600,000 31,425
..........................................................................
55,680
...........
Pharmaceuticals 4.9%
Ares-Serono (CHF) 15,000 13,198
..........................................................................
Astra (Class B) (SEK) 800,000 34,924
..........................................................................
</TABLE>
10
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
<S> <C> <C>
Medeva (GBP) 2,536,620 $ 9,927
...........................................................................
Medeva ADR 80,000 1,240
...........................................................................
Merck 150,000 9,694
...........................................................................
Mylan Laboratories 721,800 12,451
...........................................................................
Pfizer 400,000 28,550
...........................................................................
Sandoz (CHF) 22,000 25,182
...........................................................................
Schwarz Pharma AG (DEM) 65,000 4,873
...........................................................................
SmithKline Beecham ADR 197,200 10,723
...........................................................................
150,762
...........
Miscellaneous Consumer Products 4.5%
Corning 891,500 34,211
...........................................................................
First Brands 400,000 10,800
...........................................................................
Hasbro 475,000 16,981
...........................................................................
Newell 500,000 15,313
...........................................................................
P & G 190,000 17,219
...........................................................................
Philip Morris 150,000 15,600
...........................................................................
Tomkins (GBP) 1,500,000 5,614
...........................................................................
Tupperware 200,000 8,450
...........................................................................
Unilever N.V. ADR 100,000 14,513
...........................................................................
138,701
...........
Total Consumer Nondurables 557,634
...........
CONSUMER SERVICES 11.8%
General Merchandisers 1.2%
Circuit City Stores 1,035,000 37,389
...........................................................................
37,389
...........
Specialty Merchandisers 1.5%
General Nutrition * 500,000 8,719
...........................................................................
Home Depot 350,000 18,900
...........................................................................
Kohl's * 200,200 7,332
...........................................................................
Revco * 500,000 11,938
...........................................................................
46,889
...........
Entertainment and Leisure 2.8%
Disney 684,864 43,061
...........................................................................
Hutchison Whampoa (HKD) 7,000,000 44,039
...........................................................................
87,100
...........
</TABLE>
11
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
<S> <C> <C>
Media and Communications 5.1%
Elsevier (NLG) 2,000,000 $ 30,372
...........................................................................
Gaylord Entertainment 703,500 19,874
...........................................................................
Granada (GBP) 1,400,000 18,731
...........................................................................
Kinnevik (SEK) 225,000 6,832
...........................................................................
Reader's Digest (Class B) 110,800 4,363
...........................................................................
Ver Ned Uitgevers (NLG) 600,000 9,323
...........................................................................
Vodafone ADR 1,392,300 51,341
...........................................................................
Wolters Kluwer (NLG) 125,000 14,211
...........................................................................
155,047
............
Restaurants 1.2%
Boston Chicken * 600,000 19,462
...........................................................................
McDonald's 350,000 16,363
...........................................................................
35,825
............
Total Consumer Services 362,250
............
CONSUMER CYCLICALS 1.1%
Building and Real Estate 1.1%
Masco 231,900 7,015
...........................................................................
Starwood Lodging, REIT 700,000 25,463
...........................................................................
Total Consumer Cyclicals 32,478
............
TECHNOLOGY 8.2%
Electronic Components 2.7%
Altera * 449,900 17,068
...........................................................................
Analog Devices * 300,000 7,650
...........................................................................
Intel 300,000 22,031
...........................................................................
Linear Technology 350,000 10,478
...........................................................................
Maxim Integrated Products * 576,000 15,732
...........................................................................
Xilinx * 352,400 11,167
...........................................................................
84,126
............
Electronic Systems 0.6%
Hewlett-Packard 175,000 17,435
...........................................................................
17,435
............
Specialized Computer 0.1%
Silicon Graphics * 175,000 4,200
...........................................................................
4,200
...........
</TABLE>
12
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Telecommunications 4.8%
360 Communications * 500,000 $ 12,000
.............................................................................
3Com * 500,000 22,844
.............................................................................
AirTouch Communications * 300,000 8,475
.............................................................................
Bay Networks * 675,000 17,381
.............................................................................
Cox Communications (Class A) * 1,000,000 21,625
.............................................................................
LM Ericsson (Class B) ADR 1,020,000 21,866
.............................................................................
Omnipoint * 300,000 7,819
.............................................................................
Telecomunicacoes Brazil ADR 100,000 6,962
.............................................................................
Teleport Communications Group (Class A) 133,000 2,527
.............................................................................
Total Access Communication (144a) * 700,000 5,950
.............................................................................
United International Holdings (Class A) * 600,000 8,400
.............................................................................
Vodafone (GBP) 2,600,000 9,671
.............................................................................
145,520
............
Total Technology 251,281
............
CAPITAL EQUIPMENT 9.7%
Electrical Equipment 5.7%
AlliedSignal 715,000 40,844
.............................................................................
Exide + 1,100,000 26,675
.............................................................................
GE 1,000,000 86,500
.............................................................................
Getronics (NLG) 480,000 10,639
.............................................................................
Tyco International 250,000 10,187
.............................................................................
174,845
............
Machinery 4.0%
Danaher 1,300,000 56,550
.............................................................................
Mannesmann (DEM) 39,500 13,665
.............................................................................
SIG Schweis (CHF) 8,000 18,941
.............................................................................
Teleflex 375,600 17,935
.............................................................................
TriMas 700,000 16,362
.............................................................................
123,453
............
Total Capital Equipment 298,298
............
BUSINESS SERVICES AND TRANSPORTATION 12.8%
Environmental 0.4%
Rentokil Group (GBP) 1,900,000 12,054
.............................................................................
12,054
............
</TABLE>
13
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Miscellaneous Business Services 4.1%
ADT * 500,000 $ 9,438
...........................................................................
Assa-Abloy (SEK) 350,000 5,075
...........................................................................
Interpublic Group 400,000 18,750
...........................................................................
Mutual Risk Management 738,667 23,083
...........................................................................
Olsten 560,300 16,459
...........................................................................
Reuters ADR 400,000 28,975
...........................................................................
Securitas (Class B) (SEK) 1,050,000 22,046
...........................................................................
123,826
............
Airlines 0.4%
Swire Pacific (Class A) (HKD) 1,500,000 12,838
...........................................................................
12,838
............
Computer Services 2.7%
Automatic Data Processing 500,000 19,313
...........................................................................
Ceridian * 686,900 34,688
...........................................................................
Dassault Systems ADR 56,300 1,752
...........................................................................
First Data 350,971 27,946
...........................................................................
83,699
............
Computer Software 5.2%
Adobe Systems 500,000 17,844
...........................................................................
BMC Software * 500,000 29,813
...........................................................................
Broderbund Software * 300,000 9,713
...........................................................................
Informix * 400,000 8,975
...........................................................................
Intuit * 450,000 21,150
...........................................................................
Microsoft * 150,000 18,009
...........................................................................
Oracle Systems * 650,000 25,634
...........................................................................
PLATINUM technology * 750,000 11,297
...........................................................................
Sybase * 700,000 16,581
...........................................................................
159,016
............
Total Business Services and Transportation 391,433
............
ENERGY 4.4%
Energy Services 2.5%
BJ Services * 452,000 15,877
...........................................................................
Cooper Cameron * 600,000 26,250
...........................................................................
Halliburton 238,800 13,253
...........................................................................
Schlumberger 250,000 21,063
...........................................................................
76,443
...........
</TABLE>
14
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Integrated Petroleum - International 1.9%
Royal Dutch Petroleum ADR 375,000 $ 57,656
...........................................................................
57,656
...........................................................................
Total Energy 134,099
...........................................................................
PROCESS INDUSTRIES 3.5%
Specialty Chemicals 2.0%
A. Schulman 200,000 4,875
...........................................................................
Great Lakes Chemical 900,000 56,025
...........................................................................
60,900
............
Paper and Paper Products 1.5%
James River 500,000 13,187
...........................................................................
Kimberly-Clark 300,000 23,175
...........................................................................
Kimberly-Clark Mexico (Class A) (MXN) * 510,000 9,279
...........................................................................
45,641
............
Total Process Industries 106,541
............
BASIC MATERIALS 0.5%
Metals 0.4%
Nucor 225,000 11,391
...........................................................................
Rustenberg Platinum (ZAR) 250,000 3,894
...........................................................................
15,285
............
Miscellaneous 0.1%
Cemex ADR 225,000 1,730
...........................................................................
1,730
............
Total Basic Materials 17,015
............
MISCELLANEOUS 3.1%
Conglomerates 2.1%
AGAB (DEM) 30,466 3,005
...........................................................................
Berkshire Hathaway * 1,800 55,260
...........................................................................
Hagemeyer (NLG) 100,000 7,130
...........................................................................
Maculan (ATS) * 25,000 210
...........................................................................
65,605
............
Europe 0.1%
Huhtamaki Oy (FIM) 79,000 2,644
...........................................................................
Mediolanum (ITL) 50,000 498
...........................................................................
3,142
............
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE GROWTH STOCK FUND
- ---------------------------------------------------------------------------------------------
Shares/Par Value
- ---------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Far East 0.1%
Korea Asia Fund 300 $ 3,600
.........................................................................................
3,600
...........
Miscellaneous 0.8%
Hennes & Mauritz (Class B) (SEK) 35,000 3,251
.........................................................................................
Schibsted (NOK) 820,000 10,615
.........................................................................................
Zeneca Group 400,000 8,905
.........................................................................................
22,771
............
Total Miscellaneous 95,118
............
Total Common Stocks, Rights, and Warrants (Cost $1,883,600) 2,847,043
............
Preferred Stocks 0.5%
Banco Bradesco (BRL) 1,599,434,539 13,061
.........................................................................................
Deutsche Bank, 8.75%, participating certificates (DEM) 591 455
.........................................................................................
Deutsche Bank, 9.00%, participating certificates (DEM) 357 280
.........................................................................................
Lojas American (BRL) 55,966,400 1,103
.........................................................................................
Maculan (ATS) 35,000 294
.........................................................................................
Total Preferred Stocks (Cost $10,910) 15,193
............
Convertible Preferred Stocks 0.0%
Comptronix, 6.00%, Series A * 229 1
.........................................................................................
Total Convertible Preferred Stocks (Cost $0) 1
............
Convertible Bonds 0.1%
ADT, LYONS, Zero Coupon, 7/6/10 $2,550,000 1,420
.........................................................................................
Reliance Industries, 3.50%, 11/3/99 2,000,000 2,053
.........................................................................................
Total Convertible Bonds (Cost $3,400) 3,473
............
Short-Term Investments 6.6%
Commercial Paper 6.6%
American Home Food Products, 4(2), 5.42%, 7/19/96 10,000,000 9,973
.........................................................................................
Asset Securitization Cooperative, 4(2), 5.40%, 7/25/96 10,000,000 9,964
.........................................................................................
Caterpillar Financial Services, 5.35%, 7/9/96 10,000,000 9,988
.........................................................................................
CPC International, 4(2), 5.30%, 8/21/96 10,000,000 9,925
.........................................................................................
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE GROWTH STOCK FUND
- ---------------------------------------------------------------------------------------------
Shares/Par Value
- ---------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Falcon Asset Securitization, 4(2), 5.40%, 7/12 - 7/18/96 12,550,000 $ 12,524
.........................................................................................
Ford Motor Credit
5.34%, 7/5/96 10,300,000 10,294
....................................................................................
5.27%, 7/8/96 10,000,000 9,990
.........................................................................................
Great Lakes Chemical, 4(2), 5.33%, 7/10/96 10,000,000 9,987
.........................................................................................
International Lease Finance, 5.28%, 7/1/96 10,000,000 10,000
.........................................................................................
Investments in Commercial Paper through a joint account,
5.49% - 5.68%, 7/1/96 3,723,965 3,724
.........................................................................................
Island Finance Puerto Rico,
5.35%, 7/16/96 10,000,000 9,978
....................................................................................
5.40%, 7/29/96 10,000,000 9,958
.........................................................................................
Knight-Ridder, 5.40%, 7/19/96 10,000,000 9,973
.........................................................................................
Mobil Australia Finance, 4(2), 5.30%, 8/2/96 10,000,000 9,953
.........................................................................................
National Rural Utilities Cooperative Finance,
5.35%, 8/19/96 10,000,000 9,927
.........................................................................................
Preferred Receivables Funding
5.32%, 7/2/96 10,000,000 9,998
....................................................................................
5.40%, 7/10/96 15,000,000 14,980
.........................................................................................
Rockwell International, 5.40%, 7/2/96 10,000,000 9,998
.........................................................................................
Wells Fargo, VR, MTN, 5.58%, 9/16/96, 10,000,000 9,997
.........................................................................................
WMX Technologies, 4(2), 5.11%, 8/29/96 10,000,000 9,916
.........................................................................................
Total Short-Term Investments (Cost $201,047) 201,047
............
</TABLE>
17
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
- -------------------------------------------------------------------------------
In thousands
<S> <C>
Total Investments in Securities
100.1% of Net Assets (Cost $2,098,957) $ 3,066,757
Other Assets Less Liabilities (3,626)
.............
NET ASSETS $ 3,063,131
-------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 14,035
Accumulated net realized gain/loss - net of distributions 245,197
Net unrealized gain (loss) 967,810
Paid-in-capital applicable to 121,867,152 shares of $1.00 par
value capital stock outstanding; 200,000,000 shares authorized 1,836,089
.............
NET ASSETS $ 3,063,131
-------------
NET ASSET VALUE PER SHARE $ 25.14
-------------
</TABLE>
+ Affiliated company
* Non-income producing
# Securities contain some restrictions as to public resale--total of such
securities at period-end amounts to 1.17% of net assets.
MTN Medium term note
REIT Real Estate Investment Trust
VR Variable rate
4(2) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under section 4.2 of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors."
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 year-end amounts to
0.19% of net assets.
ATS Austrian schilling
BRL Brazilian cruziero
CAD Canadian dollar
CHF Swiss franc
DEM German deutschemark
ESP Spanish peseta
FIM Finnish mark
FRF French franc
GBP British sterling
HKD Hong Kong dollar
IDR Indonesian rupia
ITL Italian lira
KRW S. Korean won
MXN Mexican peso
MYR Malaysian ringgit
NLG Dutch guilder
NOK Norwegian krone
SEK Swedish krona
ZAR S. African rand
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
6 Months
Ended
6/30/96
<S> <C>
Investment Income
Income
Dividend (net of foreign taxes of $1,315) $ 19,706
Interest 5,114
..............
Total income 24,820
..............
Expenses
Investment management 8,519
Shareholder servicing 2,482
Custody and accounting 212
Prospectus and shareholder reports 58
Registration 24
Legal and audit 20
Directors 19
Miscellaneous 33
..............
Total expenses 11,367
..............
Net investment income 13,453
..............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 191,141
Foreign currency transactions (104)
..............
Net realized gain (loss) 191,037
..............
Change in net unrealized gain or loss
Securities 9,736
Other assets and liabilities
denominated in foreign currencies 4
..............
Change in net unrealized gain or loss 9,740
Net realized and unrealized gain (loss) 200,777
..............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 214,230
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/96 12/31/95
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 13,453 $ 26,393
Net realized gain (loss) 191,037 134,580
Change in net unrealized gain or loss 9,740 486,937
..........................
Increase (decrease) in net assets from operations 214,230 647,910
..........................
Distributions to shareholders
Net investment income - (25,931)
Net realized gain - (109,405)
..........................
Decrease in net assets from distributions - (135,336)
..........................
Capital share transactions *
Shares sold 263,352 343,600
Distributions reinvested - 128,459
Shares redeemed (176,279) (290,325)
..........................
Increase (decrease) in net assets from capital
share transactions 87,073 181,734
..........................
Net Assets
Increase (decrease) during period 301,303 694,308
Beginning of period 2,761,828 2,067,520
..........................
End of period $ 3,063,131 $ 2,761,828
--------------------------
*Share information
Shares sold 10,829 16,103
Distributions reinvested - 5,530
Shares redeemed (7,228) (13,638)
..........................
Increase (decrease) in shares outstanding 3,601 7,995
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Unaudited June 30, 1966
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Growth Stock 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 January 1, 1950.
Valuation Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price at the time 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 that are not traded on a
particular day and securities that are regularly traded in the over-the-
counter market are valued at the mean of the latest bid and asked prices.
Other equity securities are valued at a price within the limits of the
latest bid and asked prices deemed by the Board of Directors, or by persons
delegated by the Board, best to reflect fair value.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at their cost which, when combined
with accrued interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of
such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by or under the supervision of the
officers of the fund, as authorized by the Board of Directors.
Affiliated Companies Investments in companies 5% or more of whose
outstanding voting securities are held by the fund are defined as
"Affiliated Companies" in Section 2(a)(3) of the Investment Company Act of
1940.
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.
21
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
Premiums and Discounts Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis. Dividend income and distributions
to shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles.
NOTE 2 - INVESTMENT TRANSACTIONS
Commercial Paper Joint Account The fund, and other affiliated funds, may
transfer uninvested cash into a commercial paper joint account, the daily
aggregate balance of which is invested in high-grade commercial paper. All
securities purchased by the joint account satisfy the fund's criteria as to
quality, yield, and liquidity.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $977,696,000 and $858,510,000, respectively, for the
six months ended June 30, 1996.
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, 1996, the aggregate cost of investments for federal income tax
and financial reporting purposes was $2,098,957,000, and net unrealized gain
aggregated $967,800,000, of which $1,019,894,000 related to appreciated
investments and $52,094,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management
fee, of which $1,456,000 was payable at June 30, 1996. The fee is computed
22
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------------------------------------------------------
daily and paid monthly, and consists of an individual fund fee equal to
0.25% of average daily net assets and a group fee. The group fee is based on
the combined assets of certain mutual funds sponsored by the manager or Rowe
Price-Fleming International, Inc. (the group). The group fee rate ranges
from 0.48% for the first $1 billion of assets to 0.305% for assets in excess
of $50 billion. At June 30, 1996, and for the six months then ended, the
effective annual group fee rate was 0.33% and 0.34%, respectively. 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. (TRPS) 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. Additionally,
the fund is one of several T. Rowe Price mutual funds (the underlying funds)
in which the T. Rowe Price Spectrum Growth Fund (Spectrum) invests. In
accordance with an agreement among Spectrum, the underlying funds, the
manager, and TRPS, expenses from the operation of Spectrum are borne by the
underlying funds based on each underlying fund's proportionate share of
assets owned by Spectrum. The fund incurred expenses pursuant to these
related party agreements totaling approximately $2,249,000 for the six
months ended June 30, 1996, of which $299,000 was payable at period-end.
During the six months ended June 30, 1996, the fund, in the ordinary course
of business, placed security purchase and sale orders aggregating $4,013,000
with, certain affiliates of the manager in connection with the execution of
various portfolio transactions.
23
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- -------------------------------------------------------------------------------
TO HELP SHAREHOLDERS monitor their current investments and make
decisions that accurately reflect their financial goals, T. Rowe Price
offers a wide variety of information and services -- at no extra cost.
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. 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.
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
T. Rowe Price OnLine.
DISCOUNT BROKERAGE*
Individual Securities Stocks, bonds, options, precious metals,
and other securities at a savings over regular commission rates.
INVESTMENT INFORMATION
Combined Statement An overview of your T. Rowe Price accounts.
Shareholder Reports Fund managers' reviews of their strategies
and results.
The T. Rowe Price Report A 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,
Personal Strategy Planner, Retirees Financial Guide, and
Retirement Planning Kit.
*T. Rowe Price Discount Brokerage is a division of T. Rowe Price Investment
Services, Inc. Member NASD/SIPC.
24
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- --------------------------------------------------------------------
STOCK FUNDS
......................
Domestic
Balanced
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Dividend Growth
Equity Income
Equity Index
Growth & Income
Growth Stock
Health Sciences
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
OTC
Science & Technology
Small-Cap Value*
Spectrum Growth
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Stock
Japan
Latin America
New Asia
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 Insured
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 Insured
Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Government Bond
International Bond
Short-Term Global Income
MONEY MARKET
......................
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
......................
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
......................
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
*Closed to new investors.
25
<PAGE>
For yield, price, last transaction, and current balance, 24 hours, 7 days a
week, call: 1-800-638-2587 toll free
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. Rowe Price
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price Growth Stock
Fund/(R)/.
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