<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
Growth Stock Fund
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
GROWTH STOCK FUND
- -----------------
* Stocks concluded another powerful year, propelled by technology and a
narrow group of growth stocks.
* The fund posted solid returns for the 6- and 12-month periods ended
December 31, ahead of the S&P 500 but behind the Lipper Growth Funds
Average.
* Results versus Lipper were somewhat hampered because of the fund's
lower concentration in the explosive technology sector.
* While technology holdings were standout performers, we prefer to adopt
a more cautious approach to this area even at the cost of short-term
results.
* More traditional companies are likely to play an important role in
Internet technology, which will benefit portfolio holdings. We are
also optimistic about the prospects for overseas markets, particularly
in Europe.
================================================================================
UPDATES AVAILABLE
- -----------------
For updates on T. Rowe Price funds following the end of each calendar
quarter, please see our Web site at www.troweprice.com.
================================================================================
FELLOW SHAREHOLDERS
- -------------------
Last year was a fitting conclusion to the decade, the century, and the
millennium. The bull market stormed into the future, propelled by the narrow but
powerful rally in technology stocks. Internet stocks in particular were the
source of much of the market's strength. This explosive performance spread
through international markets as well, driving a relatively small group of
stocks to valuation levels not seen in years.
<PAGE>
********************************************************************************
PERFORMANCE COMPARISON
----------------------
Periods Ended 12/31/99 6 Months 12 Months
---------------------- -------- ---------
Growth Stock Fund 12.53% 22.15%
S&P 500 7.71 21.04
Lipper Growth Funds Average 15.57 29.27
********************************************************************************
The second half of 1999 was particularly volatile, as a steep correction in
the third quarter was followed by strong global rallies in the fourth. Your fund
returned 12.53% for the six-month period, ahead of the unmanaged Standard &
Poor's 500 Stock Index but behind the Lipper Growth Funds Average. Virtually all
performance over the past 12 months can be attributed to our technology
holdings. We entered the year underweighted in this sector, which hurt early
results. Subsequently, we shifted more assets into the group and regained lost
ground versus the S&P 500. However, we did not consider it prudent to focus too
heavily on technology shares just to keep up with some exceptionally aggressive
members of our Lipper peer group. As a result, we surpassed the broad index but
trailed the Lipper average for the full year.
YEAR-END DISTRIBUTIONS
- ----------------------
Your Board of Directors declared a $0.10 per share income dividend and a
$5.42 per share capital gain distribution, of which $5.10 was long term. These
were paid on December 16, 1999, to shareholders of record on December 14. You
should have received your check or statement reflecting them as well as Form
1099-DIV summarizing this information for 1999 tax purposes.
MARKET ENVIRONMENT
- ------------------
During the past six months, the U.S. stock market continued to benefit from
strong GDP growth, low inflation, and improvement in many international
economies. Japan and the rest of Asia enjoyed a general economic recovery and
some of the strongest stock market performance in the world. European markets as
a whole also began to do better. Growth was apparent not only in the small "hot"
economies such as Ireland and Spain, but also in the region's giant economies --
France, Germany, and the U.K.
Many central banks raised interest rates in response to rapid economic
growth and concerns about accelerating inflation. Higher rates did little to
slow rising stock markets in the aggregate, but they did channel market strength
into the technology sector and away from more traditional, interest
rate-sensitive sectors such as financial services. Within the technology arena,
investors couldn't get enough of stocks sporting "dot-com" names with a claim to
the Internet. It is virtually impossible to overstate the impact of the Internet
on portfolio holdings.
<PAGE>
********************************************************************************
PORTFOLIO CHARACTERISTICS
-------------------------
Growth Stock
Domestic
As of 12/31/99 Portfolio S&P 500
-------------- --------- -------
Earnings Growth Rate
Past 5 Years 17.2% 13.7%
Projected 5 Years * 16.7 13.9
Dividend Growth Rate
Past 5 Years 14.1 10.8
Projected 5 Years * 12.5 11.0
Return on Equity
Past 5 Years 23.7 23.7
Long-Term Debt as
Percent of Capital 23.0 27.8
P/E Ratio (12-month forward
projected earnings) 32.4X 28.1X
* Forecasts are based on T. Rowe Price research and are in no way
indicative of future investment returns.
********************************************************************************
A case in point is SAFEWAY, an extremely well run supermarket chain. At the
beginning of 1999, Safeway traded at $61 per share, or 28 times the company's
expected earnings in 2000 -- a high but fair value in our opinion, since the
company has consistently deliv- ered 15%-20% earnings growth and is expected t o
continue doing so. In 1999, earnings grew 17%, right in line with expectatio ns.
Yet the stock fell to $35 -- a loss of more than 40%! Why? Because the Internet
is changing retailing, leading to heavy media focus on new e-grocery sites such
as Peapod and Netgrocer. Safeway, a so-called "bricks and mortar" company, was
declared a loser by investors before the battle for market share had even begun.
We vigorously disagree and believe time will prove us right. In the meantime,
Safeway's share price languished despite the company's outstanding management
and consistent growth.
ORACLE is an example of a stock whose Internet connection made an
altogether different kind of impact. We bought the stock at mid-year for about
$35 a share after a strong second quarter for the company. In the second half,
Oracle reported mixed results and the stock still ended the year at $112, up
more than 200% in less than six months! Why? The company's database software is
used as the backbone for most Internet applications, and its new
business-to-business applications look promising. Some might regard a
price/earnings multiple of more than 70 to be somewhat excessive even in light
of so much promise, but as long as that promise is connected to the Internet,
investor s have been willing to pay the price.
<PAGE>
In the current market environment, speculation about a company's future is
given more weight than the facts we know about its present circumstances. In
addition, the histories of many wonderful corporations are being ignored in
favor of new Internet companies with no track records. This change in market
sentiment has been swift, relentless, and painful for investors who believe that
the past does matter and that the future will also belong to many traditional
companies with solid histories and sound management. For this reason, we have
been somewhat hesitant to jump with both feet aboard the dot-com bandwagon; we
would rather err on the side of caution, even if it costs us a bit in relative
performance over the short term.
INVESTMENT REVIEW
- -----------------
As in most years, 1999 offered several surprises in terms of economic
development and stock market performance. The U.S. economy showed no signs of
slowing, which had been widely expected. Asian economies sprang back to life far
more quickly than was forecast. The hiccup in technology spending expected in
the second half of 1999 did occur, but it was smaller than anticipated. These
three factors were very positive for the earnings of technology companies and
the performance of their stocks.
Also unexpected were the extraordinary valuations that investors were
willing to pay for select groups of stocks. As mentioned, there was no ceiling
on what investors would pay for Internet stocks, while tobacco and insurance
companies found no solid floor for their own share prices. These extremes were
highlighted by a price/earnings multiple of more than 200 for AMERICA ONLINE and
a multiple of six for PHILIP MORRIS.
***********************************************
[Sector Diversification pie
chart shown here; Technology
29%; Foreign 17%*; Consumer
Nondurables 14%; Consumer
Services 13%; Financial 12%;
Capital Equipment 4%; Other 8%;
Reserves 3%]
* Based on net assets of 12/31/99.
In the Statement of Net Assets
beginning on page 11, the foreign
holdings were classifed under
various industry sectors
***********************************************
<PAGE>
Your fund was initially positioned for the projected slowdown in 1999,
which never materialized. As we came to the conclusion that strong economic
growth would continue through the year, we aggressively added technology
holdings throughout the second quarter. This turned out to be a fortunate
decision as almost all of our 20 best-performing stocks were in this sector.
America Online, CISCO SYSTEMS, MICROSOFT, MAXIM INTEGRATED PRODUCTS, and NEXTEL
COMMUNICATIONS all made positive contributions. In other areas, we benefited
from large positions in CITIGROUP, GE, and WAL-MART.
Performance was hurt by a few companies, such as WASTE MANAGEMENT and
NETWORK ASSOCIATES, whose fundamentals failed to meet expectations, and by the
decline of large holdings like FREDDIE MAC and Safeway, solid enterprises that
were untouched by the Internet euphoria. We maintained and added to Freddie Mac
and Safeway, since we are sanguine about their prospects.
We beefed up our technology positions always keeping mind the fund's
mandate to own companies we believe can consistently grow their earnings.
Several software names, including VERITAS SOFTWARE, CITRIX SYSTEMS, and Oracle,
fit these criteria. We also bought shares of SOLECTRON and FLEXTRONICS
INTERNATIONAL, which should benefit from the trend to outsource technology
manufacturing. In addition, we purchased Nextel Communications, TELECOM ITALIA
MOBILE, NOKIA, and KYOCERA to position the portfolio for the coming development
of wireless data. During the summer, when Internet valuations dipped, we added
to America Online and established a position in YAHOO!.
As financial stocks fell during the third quarter, we initiated positions
in FIRSTAR and CAPITAL ONE FINANCIAL. While results to date have been less than
spectacular, we believe these stocks can perform well in 2000.
Most of our sales were made to reduce exposure to consumer nondurables,
banks, and insurance. As we look ahead to 2000 and beyond, we are comfortable
with our current stock and sector weightings.
OUTLOOK
- -------
The year closed with a roaring domestic economy, growing international
economies, and rising interest rates. We entered the New Year with a strangely
bifurcated stock market: Technology was in demand and expensive, while most
other stocks were shunned and substantially cheaper. The early days of 2000
redressed this imbalance to some extent, as the technology-heavy Nasdaq
experienced a steep correction while value shares and cyclicals started to
rally. It will take a bit longer to see whether or not this is the beginning of
a real change in investor sentiment.
We expect technology spending to remain strong, fueled by the Internet and
wireless applications, and our technology investments are positioned to benefit
from these trends. As the year progresses, we expect the U.S. economy to cool a
bit and traditional businesses to compete more effectively with new Internet
competitors. Perhaps more important, we believe investors will perceive how
traditional business models can continue to thrive alongside the Internet -- a
point the recent Christmas shopping season may have already made. This shifting
perception should reward many of our holdings whose valuations have been lowered
due to competitive uncertainty.
<PAGE>
********************************************************************************
Growth Stock Fund P/E Relative to the
S&P 500 P/E chart shown here; This
chart is inteneded to show the
history of the average (unweighted
P/E ratio of the fund's U.S.
portfolio companies compared with the
P/E ratio of the S&P 500 Stock Index.
Earnings per share are estimated by
the fund's investment manager at each
quarter-end.
********************************************************************************
We do not think the speculative exuberance over the Internet can continue
indefinitely, and any slackening in this area should help the fund relative to
more aggressive funds as the risks associated with high-flying stocks with no
earnings foundation become more apparent in 2000. We believe this would be a
healthy development.
Overseas, prospects look bright in Europe in particular. We expect further
economic recovery to boost European markets, and we believe the euro will gain
strength against the dollar in 2000. Short-term interest rates were raised in
fall 1999 by the European Central Bank, reversing ea rlier cuts, and inflation
appears likely to remain under control. The quest for shareholder value will
continue to drive more businesses to restructure and reposition themselves in an
expanding global economy.
As always, we will continue to work diligently on your behalf in our search
for attractive investments, both here and abroad.
Respectfully submitted,
/s/
Robert W. Smith
CHAIRMAN OF THE INVESTMENT ADVISORY COMMITTEE
January 21, 2000
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
TWENTY-FIVE LARGEST HOLDINGS
- ----------------------------
Percent of
Net Assets
12/31/99
- -----------------------------------------------------------------------
Microsoft 3.4%
- -----------------------------------------------------------------------
Citigroup 2.4
- -----------------------------------------------------------------------
Freddie Mac 2.3
- -----------------------------------------------------------------------
GE 2.2
- -----------------------------------------------------------------------
Tyco International 2.2
- -----------------------------------------------------------------------
Cisco Systems 2.0
- -----------------------------------------------------------------------
Wal-Mart 1.7
- -----------------------------------------------------------------------
MCI WorldCom 1.6
- -----------------------------------------------------------------------
Home Depot 1.5
- -----------------------------------------------------------------------
Dell Computer 1.4
- -----------------------------------------------------------------------
Corning 1.4
- -----------------------------------------------------------------------
Mannesmann 1.3
- -----------------------------------------------------------------------
America Online 1.3
- -----------------------------------------------------------------------
Intel 1.3
- -----------------------------------------------------------------------
Oracle 1.3
- -----------------------------------------------------------------------
Warner-Lambert 1.2
- -----------------------------------------------------------------------
Hutchison Whampoa 1.2
- -----------------------------------------------------------------------
Omnicom 1.1
- -----------------------------------------------------------------------
BMCSoftware 1.1
- -----------------------------------------------------------------------
Computer Associates 1.1
- -----------------------------------------------------------------------
Lucent Technologies 1.1
- -----------------------------------------------------------------------
Bristol-Myers Squibb 1.1
- -----------------------------------------------------------------------
Royal Dutch Petroleum 1.1
- -----------------------------------------------------------------------
Exxon Mobil 1.1
- -----------------------------------------------------------------------
Safeway 1.1
- -----------------------------------------------------------------------
Total 38.5%
Note: Table excludes reserves and certain positions being accumulated.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
MAJOR PORTFOLIO CHANGES
- -----------------------
Listed in descending order of size
6 Months Ended 12/31/99
TEN LARGEST PURCHASES
- ---------------------
FirStar *
Sprint
Philips Electronics *
Computer Associates *
Capital One Financial *
Wellpoint Health Networks
Telecom Italia Mobile
Flextronics International *
Ceridian *
AT&TLiberty Media *
TEN LARGEST SALES
- -----------------
Sprint
BMCSoftware
Halliburton **
Roche Holding **
GE
Aetna **
Wells Fargo
United HealthCare
EMC **
Waste Management **
* Position added
** Position eliminated
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------
PERFORMANCE COMPARISON
- ----------------------
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
***************************************
SEC Chart shown here; As of
12/31/99 Growth Stock Fund
$49,679; S&P 500 Index $53,278
***************************************
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- ------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 12/31/99 1 Year 3 Years 5 Years 10 Years
---------------------- ------ ------- ------- --------
Growth Stock Fund 22.15% 25.35% 25.71% 17.39%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND for a share outstanding throughout each period
- -------------------------------
FINANCIAL HIGHLIGHTS
- --------------------
Year
Ended
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
-------- -------- -------- -------- --------
NET ASSET VALUE
Beginning of period $ 32.07 $ 28.99 $ 26.18 $ 23.35 $ 18.75
- --------------------------------------------------------------------------
Investment activities
Net investment income 0.11 0.22 0.23 0.19 0.23
Net realized and
unrealized gain (loss) 6.61 7.38 6.65 4.89 5.57
- --------------------------------------------------------------------------
Total from
investment activities 6.72 7.60 6.88 5.08 5.80
- --------------------------------------------------------------------------
Distributions
Net investment income (0.10) (0.25) (0.20) (0.19) (0.23)
Net realized gain (5.42) (4.27) (3.87) (2.06) (0.97)
- --------------------------------------------------------------------------
Total distributions (5.52) (4.52) (4.07) (2.25) (1.20)
- --------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 33.27 $ 32.07 $ 28.99 $ 26.18 $ 23.35
Ratios/Supplemental Data
Total return** 22.15% 27.41% 26.57% 21.70% 30.97%
- --------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.74% 0.74% 0.75% 0.77% 0.80%
- --------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 0.31% 0.67% 0.75% 0.74% 1.09%
- --------------------------------------------------------------------------
Portfolio turnover rate 55.8% 54.8% 40.9% 49.0% 42.5%
- --------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 5,672 $ 5,041 $ 3,988 $ 3,431 $ 2,762
- --------------------------------------------------------------------------
** 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.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- ------------------------------- December 31, 1999
STATEMENT OF NET ASSETS
- -----------------------
Shares Value
In thousands
COMMON STOCKS 97.0%
- --------------------------------------------------------------------------------
FINANCIAL 13.6%
- ----------------
BANK AND TRUST 3.8%
Bank of America 480,625 $ 24,121
- ----------------------------------------------------------------------------
Bank of New York 1,300,000 52,000
- ----------------------------------------------------------------------------
FirStar 2,430,000 51,334
- ----------------------------------------------------------------------------
HSBC Holdings (GBP) 626,800 8,789
- ----------------------------------------------------------------------------
Mellon Financial 800,000 27,250
- ----------------------------------------------------------------------------
Wells Fargo 1,300,000 52,569
- ----------------------------------------------------------------------------
216,063
- ----------------------------------------------------------------------------
INSURANCE 1.1%
ACE Limited 2,050,000 34,209
- ----------------------------------------------------------------------------
PartnerRe 470,409 15,259
- ----------------------------------------------------------------------------
UNUMProvident 450,000 14,428
- ----------------------------------------------------------------------------
63,896
- ----------------------------------------------------------------------------
FINANCIAL SERVICES 8.7%
AMBAC Financial Group 200,000 10,437
- ----------------------------------------------------------------------------
American Express 50,000 8,312
- ----------------------------------------------------------------------------
Associates First Capital (Class A) 1,102,500 30,250
- ----------------------------------------------------------------------------
Capital One Financial 880,000 42,405
- ----------------------------------------------------------------------------
Citigroup 2,471,300 137,312
- ----------------------------------------------------------------------------
Compass Group (GBP) 2,000,000 27,460
- ----------------------------------------------------------------------------
<PAGE>
Fairfax Financial (CAD) * 70,400 11,973
- ----------------------------------------------------------------------------
Fannie Mae 870,400 54,346
- ----------------------------------------------------------------------------
Freddie Mac 2,825,000 132,952
- ----------------------------------------------------------------------------
Morgan Stanley Dean Witter 250,000 35,687
- ----------------------------------------------------------------------------
491,134
- ----------------------------------------------------------------------------
Total Financial 771,093
- ----------------------------------------------------------------------------
UTILITIES 2.2%
- --------------------------------------------------------------------------------
TELEPHONE 2.2%
AT&T Liberty Media * 870,000 49,373
- ----------------------------------------------------------------------------
Nextel Communications * 410,000 42,268
- ----------------------------------------------------------------------------
Nippon Telegraph & Telephone (JPY) 1,100 18,841
- ----------------------------------------------------------------------------
SBC Communications 325,000 15,844
- ----------------------------------------------------------------------------
Total Utilities 126,326
- ----------------------------------------------------------------------------
CONSUMER NONDURABLES 13.6%
- --------------------------------------------------------------------------------
BEVERAGES 0.6%
PepsiCo 1,001,300 $ 35,296
- ----------------------------------------------------------------------------
35,296
- ----------------------------------------------------------------------------
HOSPITAL SUPPLIES/HOSPITAL MANAGEMENT 2.5%
Baxter International 645,000 40,514
- ----------------------------------------------------------------------------
United HealthCare 822,400 43,690
- ----------------------------------------------------------------------------
Wellpoint Health Networks * 860,000 56,706
- ----------------------------------------------------------------------------
140,910
- ----------------------------------------------------------------------------
<PAGE>
BIOTECHNOLOGY 0.5%
Amgen * 480,000 28,815
- ----------------------------------------------------------------------------
28,815
- ----------------------------------------------------------------------------
PHARMACEUTICALS 7.2%
American Home Products 800,000 31,550
- ----------------------------------------------------------------------------
Bristol-Myers Squibb 984,600 63,199
- ----------------------------------------------------------------------------
Eli Lilly 520,000 34,580
- ----------------------------------------------------------------------------
Genetech * 300,000 40,350
- ----------------------------------------------------------------------------
Johnson & Johnson 355,000 33,059
- ----------------------------------------------------------------------------
Merck 665,000 44,597
- ----------------------------------------------------------------------------
Pfizer 1,485,000 48,170
- ----------------------------------------------------------------------------
Schering-Plough 1,035,000 43,664
- ----------------------------------------------------------------------------
Warner Lambert 845,000 69,237
- ----------------------------------------------------------------------------
408,406
- ----------------------------------------------------------------------------
MISCELLANEOUS CONSUMER PRODUCTS 2.8%
Colgate-Palmolive 300,000 19,500
- ----------------------------------------------------------------------------
Corning 605,100 78,020
- ----------------------------------------------------------------------------
Gillette 210,000 8,649
- ----------------------------------------------------------------------------
NIKE (Class B) 430,000 21,312
- ----------------------------------------------------------------------------
Philip Morris 1,275,900 29,585
- ----------------------------------------------------------------------------
157,066
- ----------------------------------------------------------------------------
Total Consumer Nondurables 770,493
- ----------------------------------------------------------------------------
CONSUMER SERVICES 14.8%
- --------------------------------------------------------------------------------
RESTAURANTS 0.4%
McDonald's 500,000 20,156
- ----------------------------------------------------------------------------
20,156
- ----------------------------------------------------------------------------
<PAGE>
GENERAL MERCHANDISERS 2.2%
Dayton Hudson 475,000 34,883
- ----------------------------------------------------------------------------
Kroger * 1,699,400 $ 32,076
- ----------------------------------------------------------------------------
Safeway * 1,710,000 60,812
- ----------------------------------------------------------------------------
127,771
- ----------------------------------------------------------------------------
SPECIALTY MERCHANDISERS 4.9%
Ahold NV (EUR) 500,000 14,803
- ----------------------------------------------------------------------------
Cifra (Class V) ADR * 581,000 11,638
- ----------------------------------------------------------------------------
CVS 947,100 37,825
- ----------------------------------------------------------------------------
Home Depot 1,200,000 82,275
- ----------------------------------------------------------------------------
Rentokil Group (GBP) 4,296,800 15,678
- ----------------------------------------------------------------------------
Staples * 978,000 20,232
- ----------------------------------------------------------------------------
Wal-Mart 1,360,000 94,010
- ----------------------------------------------------------------------------
276,461
- ----------------------------------------------------------------------------
HEALTH CARE SERVICES 0.3%
IMS Health 700,000 19,031
- ----------------------------------------------------------------------------
19,031
- ----------------------------------------------------------------------------
ENTERTAINMENT AND LEISURE 1.6%
Disney 200,000 5,850
- ----------------------------------------------------------------------------
MediaOne Group * 790,000 60,682
- ----------------------------------------------------------------------------
Mirage Resorts * 1,493,200 22,865
- ----------------------------------------------------------------------------
89,397
- ----------------------------------------------------------------------------
<PAGE>
MEDIA AND COMMUNICATIONS 5.4%
AMFM * 102,300 8,005
- ----------------------------------------------------------------------------
CBS * 950,000 60,741
- ----------------------------------------------------------------------------
Charter Communications (Class A) * 619,000 13,541
- ----------------------------------------------------------------------------
Clear Channel Communications * 469,100 41,867
- ----------------------------------------------------------------------------
Comcast (Class A Special) 780,000 39,414
- ----------------------------------------------------------------------------
Fox Entertainment Group (Class A) * 585,500 14,601
- ----------------------------------------------------------------------------
Infinity Broadcasting (Class A) * 1,005,700 36,394
- ----------------------------------------------------------------------------
Time Warner 400,000 28,975
- ----------------------------------------------------------------------------
Tribune 400,000 22,025
- ----------------------------------------------------------------------------
VNU (EUR) 692,000 36,374
- ----------------------------------------------------------------------------
Wolters Kluwer (EUR) * 206,204 6,979
- ----------------------------------------------------------------------------
308,916
- ----------------------------------------------------------------------------
Total Consumer Services 841,732
- ----------------------------------------------------------------------------
CONSUMER CYCLICALS 1.2%
- ------------------------
BUILDING AND REAL ESTATE 1.2%
Crescent Real Estate Equities, REIT 650,000 11,944
- ----------------------------------------------------------------------------
Masco 1,100,000 27,912
- ----------------------------------------------------------------------------
Security Capital U.S. Realty ADR * 670,000 $ 9,422
- ----------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, REIT 753,200 17,700
- ----------------------------------------------------------------------------
Total Consumer Cyclicals 66,978
- ----------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY 2.0%
- ---------------------------
NETWORKING 2.0%
Cisco Systems * 1,040,700 111,452
- ----------------------------------------------------------------------------
Total Electronic Technology 111,452
- ----------------------------------------------------------------------------
<PAGE>
TECHNOLOGY 33.7%
- -----------------
ELECTRONIC COMPONENTS 5.8%
Altera * 785,000 38,907
- ----------------------------------------------------------------------------
EPCOS (EUR) * 195,000 14,634
- ----------------------------------------------------------------------------
Intel 870,000 71,585
- ----------------------------------------------------------------------------
Kyocera (JPY) 106,000 27,493
- ----------------------------------------------------------------------------
Maxim Integrated Products * 1,172,800 55,305
- ----------------------------------------------------------------------------
Philips Electronics (EUR) * 390,000 53,037
- ----------------------------------------------------------------------------
Sony (JPY) 61,000 18,090
- ----------------------------------------------------------------------------
Texas Instruments 514,400 49,833
- ----------------------------------------------------------------------------
328,884
- ----------------------------------------------------------------------------
ELECTRONIC SYSTEMS 5.0%
Applied Materials * 420,000 53,196
- ----------------------------------------------------------------------------
Dell Computer * 1,590,000 81,040
- ----------------------------------------------------------------------------
Flextronics International * 973,800 44,825
- ----------------------------------------------------------------------------
Hewlett-Packard 445,000 50,702
- ----------------------------------------------------------------------------
Solectron * 560,000 53,270
- ----------------------------------------------------------------------------
283,033
- ----------------------------------------------------------------------------
SPECIALIZED COMPUTER 0.6%
Sun Microsystems * 440,000 34,059
- ----------------------------------------------------------------------------
34,059
- ----------------------------------------------------------------------------
Telecommunications 9.0%
General Instrument * 175,000 14,875
- ----------------------------------------------------------------------------
JDS Uniphase * 180,000 29,036
- ----------------------------------------------------------------------------
Lucent Technologies 855,000 63,965
- ----------------------------------------------------------------------------
Mannesmann (EUR) * 314,000 75,930
- ----------------------------------------------------------------------------
<PAGE>
MCI WorldCom * 1,719,000 91,161
- ----------------------------------------------------------------------------
Nokia ADR 180,000 34,200
- ----------------------------------------------------------------------------
Sprint 625,000 42,070
- ----------------------------------------------------------------------------
Telebras ADR 354,300 $ 45,527
- ----------------------------------------------------------------------------
Telecom Italia (EUR) 1,830,000 25,808
- ----------------------------------------------------------------------------
Telecom Italia Mobile, (EUR) 12,750,000 60,751
- ----------------------------------------------------------------------------
Vodafone AirTouch ADR 554,000 27,423
- ----------------------------------------------------------------------------
510,746
- ----------------------------------------------------------------------------
COMPUTER SERVICES 5.8%
America Online * 970,000 73,174
- ----------------------------------------------------------------------------
Automatic Data Processing 900,000 48,488
- ----------------------------------------------------------------------------
Ceridian * 1,288,300 27,779
- ----------------------------------------------------------------------------
Computer Associates 920,000 64,342
- ----------------------------------------------------------------------------
First Data 850,000 41,916
- ----------------------------------------------------------------------------
Fujitsu Limited (JPY) 690,000 31,471
- ----------------------------------------------------------------------------
Getronics (EUR) 150,644 12,019
- ----------------------------------------------------------------------------
Yahoo! * 70,500 30,507
- ----------------------------------------------------------------------------
329,696
- ----------------------------------------------------------------------------
COMPUTER SOFTWARE 7.5%
BMC Software * 807,800 64,548
- ----------------------------------------------------------------------------
Citrix Systems * 215,000 26,438
- ----------------------------------------------------------------------------
Microsoft * 1,665,000 194,337
- ----------------------------------------------------------------------------
Oracle * 635,000 71,140
- ----------------------------------------------------------------------------
Parametric Technology * 1,201,200 32,470
- ----------------------------------------------------------------------------
VERITAS Software * 232,150 33,219
- ----------------------------------------------------------------------------
422,152
- ----------------------------------------------------------------------------
Total Technology 1,908,570
- ----------------------------------------------------------------------------
<PAGE>
CAPITAL EQUIPMENT 5.7%
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT 2.1%
GE 795,000 123,026
- ----------------------------------------------------------------------------
123,026
- ----------------------------------------------------------------------------
CAPITAL EQUIPMENT 2.7%
Honeywell International 508,600 29,340
- ----------------------------------------------------------------------------
Tyco International 3,140,700 122,095
- ----------------------------------------------------------------------------
151,435
- ----------------------------------------------------------------------------
MACHINERY 0.9%
Danaher 600,000 28,950
- ----------------------------------------------------------------------------
Teleflex 660,400 20,679
- ----------------------------------------------------------------------------
49,629
- ----------------------------------------------------------------------------
Total Capital Equipment 324,090
- ----------------------------------------------------------------------------
BUSINESS SERVICES AND TRANSPORTATION 1.4%
- --------------------------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES 1.4%
Mutual Risk Management 860,332 $ 14,464
- ----------------------------------------------------------------------------
Omnicom 650,000 65,000
- ----------------------------------------------------------------------------
Total Business Services and Transportation 79,464
- ----------------------------------------------------------------------------
ENERGY 3.2%
- --------------------------------------------------------------------------------
ENERGY SERVICES 0.5%
Baker Hughes 1,300,000 27,381
- ----------------------------------------------------------------------------
27,381
- ----------------------------------------------------------------------------
<PAGE>
INTEGRATED PETROLEUM - INTERNATIONAL 2.7%
Chevron 375,000 32,484
- ----------------------------------------------------------------------------
Exxon Mobil 765,687 61,686
- ----------------------------------------------------------------------------
Royal Dutch Petroleum ADR 1,025,000 61,949
- ----------------------------------------------------------------------------
156,119
- ----------------------------------------------------------------------------
Total Energy 183,500
- ----------------------------------------------------------------------------
PROCESS INDUSTRIES 0.5%
- --------------------------------------------------------------------------------
PAPER AND PAPER PRODUCTS 0.5%
Kimberly-Clark 400,000 26,100
- ----------------------------------------------------------------------------
Total Process Industries 26,100
- ----------------------------------------------------------------------------
MISCELLANEOUS 5.1%
- --------------------------------------------------------------------------------
CONGLOMERATES 2.0%
Berkshire Hathaway (Class A) * 570 31,977
- ----------------------------------------------------------------------------
Hutchison Whampoa (HKD) 4,649,600 67,589
- ----------------------------------------------------------------------------
Tomkins (GBP) 4,140,100 13,375
- ----------------------------------------------------------------------------
112,941
- ----------------------------------------------------------------------------
Other Miscellaneous Common Stocks 3.1% 177,634
- ----------------------------------------------------------------------------
Total Miscellaneous 290,575
- ----------------------------------------------------------------------------
Total Common Stocks (Cost $3,230,125) 5,500,373
SHORT-TERM INVESTMENTS 2.9%
- --------------------------------------------------------------------------------
MONEY MARKET FUND 2.9%
Reserve Investment Fund, 6.16% # 166,929,739 $ 166,930
- ----------------------------------------------------------------------------
Total Short-Term Investments (Cost $166,930) 166,930
TOTAL INVESTMENTS IN SECURITIES
99.9% of Net Assets (Cost $3,397,055) $ 5,667,303
<PAGE>
OTHER ASSETS LESS LIABILITIES 5,028
NET ASSETS $ 5,672,331
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 1,043
Accumulated net realized gain/loss -
net of distributions 203,347
Net unrealized gain (loss) 2,270,238
Paid-in-capital applicable to 170,468,311
shares of $1.00 par value capital stock
outstanding; 200,000,000 shares authorized 3,197,703
NET ASSETS $ 5,672,331
NET ASSET VALUE PER SHARE $ 33.27
- ----------------------------------------------------------------
# Seven-day yield
* Non-income producing
ADR American Depository Receipt
REIT Real Estate Investment Trust
CAD Canadian dollar
EUR Euro
GBP British sterling
HKD Hong Kong dollar
JPY Japanese yen
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------
STATEMENT OF OPERATIONS
- ----------------------- In thousands
Year
Ended
12/31/99
INVESTMENT INCOME
Income
Dividend $ 42,546
Interest 11,309
- ---------------------------------------------------------------------
Total income 53,855
- ---------------------------------------------------------------------
Expenses
Investment management 29,222
Shareholder servicing 7,832
Custody and accounting 391
Prospectus and shareholder reports 330
Legal and audit 81
Registration 58
Directors 17
Miscellaneous 33
- ---------------------------------------------------------------------
Total expenses 37,964
Expenses paid indirectly (6)
- ---------------------------------------------------------------------
Net expenses 37,958
- ---------------------------------------------------------------------
Net investment income 15,897
- ---------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss)
Securities 818,269
Written options 491
Foreign currency transactions (730)
- ---------------------------------------------------------------------
Net realized gain (loss) 818,030
- ---------------------------------------------------------------------
Change in net unrealized gain or loss
Securities 222,508
Other assets and liabilities
denominated in foreign currencies (34)
- ---------------------------------------------------------------------
Change in net unrealized gain or loss 222,474
- ---------------------------------------------------------------------
Net realized and unrealized gain (loss) 1,040,504
- ---------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $1,056,401
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------- In thousands
Year
Ended
12/31/99 12/31/98
-------- --------
Increase (Decrease) in Net Assets
Operations
Net investment income $ 15,897 $ 29,789
Net realized gain (loss) 818,030 632,067
Change in net unrealized gain or loss 222,474 429,354
- ------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 1,056,401 1,091,210
- ------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (14,697) (34,624)
Net realized gain (795,142) (590,994)
- ------------------------------------------------------------------------------
Decrease in net assets from distributions (809,839) (625,618)
- ------------------------------------------------------------------------------
Capital share transactions *
Shares sold 572,132 685,694
Distributions reinvested 761,616 590,388
Shares redeemed (949,227) (688,824)
- ------------------------------------------------------------------------------
Increase (decrease)in net assets from capital
share transactions 384,521 587,258
- ------------------------------------------------------------------------------
Net Assets
Increase (decrease) during period 631,083 1,052,850
Beginning of period 5,041,248 3,988,398
- ------------------------------------------------------------------------------
End of period $5,672,331 $ 5,041,248
==============================================================================
*Share information
Shares sold 17,127 21,358
Distributions reinvested 24,481 19,818
Shares redeemed (28,337) (21,552)
- ------------------------------------------------------------------------------
Increase (decrease) in shares outstanding 13,271 19,624
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- ------------------------------- December 31, 1999
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.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company industry;
these principles may require the use of estimates by fund management.
VALUATION Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price on the day the valuations are
made. A security which is listed or traded on more than one exchange is valued
at the quotation on the exchange determined to be the primary market for such
security. Listed securities not traded on a particular day and securities
regularly traded in the over-the-counter market are valued at the mean of the
latest bid and asked prices. Other equity securities are valued at a price
within the limits of the latest bid and asked prices deemed by the Board of
Directors, or by persons delegated by the Board, best to reflect fair value.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
CURRENCY TRANSLATION Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and losses.
OTHER Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian and are used to reduce the
fund's custody charges.
<PAGE>
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.
OPTIONS Call and put options give the holder the right to purchase or sell,
respectively, a security at a specified price on a certain date. Risks arise
from possible illiquidity of the options market and from movements in security
values. Transactions in options written and related premiums received during the
year ended December 31, 1999, were as follows:
********************************************************************************
Number of
Contracts Premiums
--------- --------
Outstanding at beginning of period - $ -
Written 5,000 1,748,000
Exercised (1,000) (397,000)
Closed (4,000) (1,351,000)
Outstanding at end of period - $ -
********************************************************************************
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $2,742,293,000 and $3,075,388,000, respectively, for the
year ended December 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.
At December 31, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$3,397,055,000. Net unrealized gain aggregated $2,270,248,000 at period-end, of
which $2,383,189,000 related to appreciated investments and $112,941,000 to
depreciated investments.
<PAGE>
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $2,639,000 was payable at December 31, 1999. The fee is computed daily
and paid monthly, and consists of an individual fund fee equal to 0.25% of
average daily net assets and a group fee. The group fee is based on the combined
assets of certain mutual funds sponsored by the manager or Rowe Price-Fleming
International, Inc. (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.295% for assets in excess of $120 billion. At
December 31, 1999, and for the year then ended, the effective annual group fee
rate was 0.32%. The fund pays a pro-rata share of the group fee based on the
ratio of its net assets to those of the group.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of the fund. T. Rowe Price Services, Inc. is the fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc. provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $6,106,000 for the year ended
December 31, 1999, of which $561,000 was payable at period-end.
Additionally, the fund is one of several T. Rowe Price-sponsored mutual
funds (underlying funds) in which the T. Rowe Price Spectrum Funds (Spectrum)
may invest. Spectrum does not invest in the underlying funds for the purpose of
exercising management or control. Expenses associated with the operation of
Spectrum are borne by each underlying fund to the extent of estimated savings to
it and in proportion to the average daily value of its shares owned by Spectrum,
pursuant to special servicing agreements between and among Spectrum, the
underlying funds, T. Rowe Price, and, in the case of T. Rowe Price Spectrum
International, Rowe Price-Fleming International. Spectrum Growth Fund held
approximately 5.4% of the outstanding shares of the fund at December 31, 1999.
For the year then ended, the fund was allocated $744,000 of Spectrum expenses,
$93,000 of which was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the year ended December 31, 1999, totaled
$11,161,000 and are reflected as interest income in the accompanying Statement
of Operations.
During the year ended December 31, 1999, the fund, in the ordinary course
of business, placed security purchase and sale orders aggregating $19,479,000
with certain affiliates of the manager and paid commissions of $21,000 related
thereto.
================================================================================
<PAGE>
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
T. ROWE PRICE GROWTH STOCK FUND, INC.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
T. Rowe Price Growth Stock Fund, Inc. (the "Fund") at December 31, 1999, and the
results of its operations, the changes in its net assets and the financial
highlights for each of the fiscal periods presented, in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, 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
December 31, 1999 by correspondence with custodians, provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
January 20, 2000
================================================================================
T. ROWE PRICE GROWTH STOCK FUND
- -------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 12/31/99
- -----------------------------------------------------------
We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distributions to shareholders included:
* $46,946,000 from short-term capital gains,
* $748,196,000 from long-term capital gains, subject to the 20%
rate gains category,
For corporate shareholders, $30,456,000 of the fund's distributed income
and short-term capital gains qualified for the dividends-received deduction.
================================================================================
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- ----------------------------------
INVESTMENT SERVICES AND INFORMATION
- -----------------------------------
KNOWLEDGEABLE SERVICE REPRESENTATIVES
---------------------------------------
BY PHONE 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 [RegistrationMark] and the
T. Rowe Price Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
-------------------
INDIVIDUAL INVESTMENTS Stocks, bonds, options, precious metals, and other
securities at a savings -over full-service commission rates. **
INVESTMENT INFORMATION
----------------------
COMBINED STATEMENT Overview of all your accounts with T. Rowe Price.
SHAREHOLDER REPORTS Fund managers' reviews of their strategies and results.
T. ROWE PRICE REPORT Quarterly investment newsletter discussing markets and
financial strategies.
PERFORMANCE UPDATE Quarterly review of all T. Rowe Price fund results.
INSIGHTS Educational reports on investment strategies and financial
markets.
INVESTMENT GUIDES Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may vary
depending on size of order.
================================================================================
<PAGE>
T. Rowe Price Mutual Funds
- --------------------------
STOCK FUNDS
- -----------
DOMESTIC
- --------
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
INTERNATIONAL/GLOBAL
- --------------------
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
<PAGE>
BOND FUNDS
- ----------
DOMESTIC TAXABLE
- ----------------
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
DOMESTIC TAX-FREE
- -----------------
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
Virginia Tax-Free Bond
INTERNATIONAL/GLOBAL
- --------------------
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS
- ------------------
TAXABLE
- -------
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
TAX-FREE
- --------
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
<PAGE>
BLENDED ASSET FUNDS
- -------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
- ---------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Closed to new investors.
Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by SECURITY
BENEFIT LIFE INSURANCE COMPANY. In New York, it [#FSB201(11-96)] is issued by
FIRST SECURITY BENEFIT LIFE INSURANCE COMPANY of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
================================================================================
<PAGE>
T. ROWE PRICE ADVISORY SERVICES AND RETIREMENT RESOURCES
- --------------------------------------------------------
ADVISORY SERVICES,RETIREMENT RESOURCES
--------------------------------------
T. Rowe Price is your full-service retirement specialist.
We have developed unique advisory services that can help
you meet the most difficult retirement challenges. Our
broad array of retirement plans is suitable for
individuals, the self-employed, small businesses,
corporations, and nonprofit organizations. We also provide
recordkeeping, communications, and investment management
services, and our educational materials, self-help
planning guides, and software tools are recognized as
among the industry's best. For information or to request
literature, call us at 1-800-638-5660, or visit our Web
site at WWW.TROWEPRICE.COM.
ADVISORY SERVICES
-----------------
T. ROWE PRICE RETIREMENT INCOME MANAGER [SM] helps
retirees or those within two years of retirement determine
how much income they can take in retirement. The program
uses extensive statistical analysis and the input of
financial planning professionals to suggest an income plan
that best meets your objectives.
T. ROWE PRICE ROLLOVER INVESTMENT SERVICE offers asset
allocation advice to those planning a major change in
their qualified retirement plans, such as a 401(k)
rollover from a previous employer or an IRA transfer.
RETIREMENT RESOURCES AT T. ROWE PRICE
-------------------------------------
Traditional, Roth, and Rollover IRAs
SEP-IRA and SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase
Pension and Profit Sharing Plans)
401(k) and 403(b)
457 Deferred Compensation
PLANNING AND INFORMATIONAL GUIDES
---------------------------------
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
INSIGHTS REPORTS
----------------
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
<PAGE>
SOFTWARE PACKAGES
-----------------
T. Rowe Price Retirement Planning
AnalyzerTM CD-ROM or diskette $19.95.
To order, please call
1-800-541-5760. Also available
on the Internet for $9.95.
T. Rowe Price Variable Annuity AnalyzerTM
CD-ROM or diskette, free. To order,
please call 1-800-469-5304.
T. ROWE PRICE IMMEDIATE VARIABLE ANNUITY (INCOME ACCOUNT)
INVESTMENT KITS
---------------
We will be happy to send you one of our easy-to-follow
investment kits when you are ready to invest in any T.
Rowe Price retirement vehicle, including IRAs, qualified
plans, small-business plans, or our no-load variable
annuities.
================================================================================
T. ROWE PRICE INSIGHTS REPORTS
- ------------------------------
THE FUNDAMENTALS OF INVESTING
-----------------------------
Whether you are unsure how to get started or are saving for a specific
goal, such as retirement or college, the T. Rowe Price Insights series
can help you make informed investment decisions. These reports,
written in plain English about fundamental investment topics, can be
useful at every stage of your investment journey. They cover a range
of topics, from the basic, such as getting started with mutual funds,
to the more advanced, such as managing risk through diversification or
buying individual securities through a broker. To request one or more
Insights, call us at 1-800-638-5660.
INSIGHTS REPORTS
----------------
GENERAL INFORMATION
The ABCs of Giving
Back to Basics: The ABCs of Investing
The Challenge of Preparing for Retirement
Financial Planning After Retirement
Getting Started: Investing With Mutual Funds
The Roth IRA: A Review
Tax Information for Mutual Fund Investors
<PAGE>
INVESTMENT STRATEGIES
---------------------
Conservative Stock Investing
Dollar Cost Averaging
Equity Index Investing
Growth Stock Investing
Investing for Higher Yield
Managing Risk Through Diversification
The Power of Compounding
Value Investing
TYPES OF SECURITIES
-------------------
The Basics of International Stock Investing
The Basics of Tax-Free Investing
The Fundamentals of Fixed Income Investing
Global Bond Investing
Investing in Common Stocks
Investing in Emerging Growth Stocks
Investing in Financial Services Stocks
Investing in Health Care Stocks
Investing in High-Yield Municipal Bonds
Investing in Money Market Securities
Investing in Mortgage-Backed Securities
Investing in Natural Resource Stocks
Investing in Science and Technology Stocks
Investing in Small-Company Stocks
Understanding Derivatives
Understanding High-Yield "Junk" Bonds
BROKERAGE INSIGHTS
------------------
Combining Individual Securities With Mutual Funds
Getting Started: An Introduction to Individual Securities
What You Should Know About Bonds
What You Should Know About Margin and Short-Selling
What You Should Know About Options
What You Should Know About Stocks
T. Rowe Price Insights are also available for reading or downloading
on the Internet at WWW.TROWEPRICE.COM.
================================================================================
FOR FUND AND ACCOUNT INFORMATION
OR TO CONDUCT TRANSACTIONS,
24 HOURS, 7 DAYS A WEEK
By touch-tone telephone
TELE*ACCESS 1-800-638-2587
By Account Access on the Internet
WWW.TROWEPRICE.COM/ACCESS
<PAGE>
FOR ASSISTANCE
WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132
TO OPEN A BROKERAGE ACCOUNT
OR OBTAIN INFORMATION, CALL:
1-800-638-5660
INTERNET ADDRESS:
www.troweprice.com
PLAN ACCOUNT LINES FOR RETIREMENT
PLAN PARTICIPANTS:
The appropriate 800 number appears on
your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus appropriate
to the fund or funds covered in this
report.
WALK-IN INVESTOR CENTERS:
For directions, call 1-800-225-5132
or visit our Web site
BALTIMORE AREA
DOWNTOWN
101 East Lombard Street
OWINGS MILLS
Three Financial Center
4515 Painters Mill Road
BOSTON AREA
386 Washington Street
Wellesley
COLORADO SPRINGS
4410 ArrowsWest Drive
LOS ANGELES AREA
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
TAMPA
4200 West Cypress Street
10th Floor
WASHINGTON, D.C.
900 17th Street N.W.
Farragut Square
T. Rowe Price Investment Services, Inc., Distributor. F40-050 12/31/99
