<PAGE>
Semiannual Report
SCIENCE &
TECHNOLOGY
FUND
June 30, 1999
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
Science & Technology Fund
. The broad market, and technology stocks in particular, registered strong
returns during the first half of the year.
. The fund's returns for the 6- and 12-month periods ended June 30 far outpaced
the S&P 500 and were also ahead of the Lipper Science & Technology Fund
Index.
. Our main area of concentration continued to be the electronic technology
segment, which accounted for 73% of portfolio assets.
. Most of the segments in which we invest contributed positively to
performance, but enterprise software shares restrained results.
. We believe circumstances are aligning to create a favorable environment for
technology stocks through the rest of the year and into 2000.
<PAGE>
FELLOW SHAREHOLDERS
The equity markets and your fund delivered strong returns during the first six
months of the year, with most of the major indices generating double-digit
returns. Investors were encouraged by sustained economic growth and the absence
of inflationary pressures in the U.S., signs of stability and economic recovery
in Asia and Latin America, favorable resolution of the war in Kosovo, and the
continued flow of funds into equity mutual funds, including the Science &
Technology Fund.
During the first half of the year, the fund posted a return of 30.82%, compared
with 27.35% for the Lipper Science & Technology Fund Index and 12.38% for the
unmanaged Standard & Poor's 500 Stock Index. For the 12 months ended June 30,
the fund's 60.09% return slightly outpaced the Lipper Index of similar funds
while easily beating the S&P 500. The fund continued to take advantage of the
technology sector recovery, which began in early October 1998.
- ----------------------
PERFORMANCE COMPARISON
- ------------------------------------------------------------
Periods Ended 6/30/99 6 Months 12 Months
- ------------------------------------------------------------
Science & Technology Fund 30.82% 60.09%
S&P 500 12.38 22.76
Lipper Science & Technology
Fund Index 27.35 59.31
MARKET ENVIRONMENT
After a quick start to the year, technology stocks bounced around until early
April when concerns about slowing growth in the personal computer industry,
weaker demand from key European countries such as Germany and France, and fear
of a pause in information technology spending caused by the need to fix the Year
2000 bug caused a sharp correction in this sector. Almost as quickly, investors
overcame their fears and drove these stocks to new highs as the period ended.
Performance within the technology segment was more balanced than in previous
periods, with positive contributions across market capitalization and industry
segments. Standout performers were stocks of Internet and semiconductor-related
companies, while shares of enterprise software companies generally fared poorly.
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Although the personal computer and enterprise software segments remained
challenged by slower demand, price erosion, and Year 2000 cannibalization, most
other segments continued to improve. For example, during the past six months,
equilibrium was restored to most areas of the semiconductor industry, resulting
in faster revenue growth, improving visibility, and rising profit margins. In
addition, the wireless communications industry continued to add subscribers at
rates that outpaced consensus earnings expectations, while the vast amount of
cheap capital raised by newly public wireline communications companies in late
1998 and early 1999 is driving accelerated capital expenditures by both
incumbent and insurgent telecommunications companies. Finally, and perhaps most
important, the rapid development of the Internet has raised the competitive ante
for corporations around the globe, forcing them to spend more on information
technology in the hope of establishing or matching strategic differentiation.
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Information on Year-End Distributions
- --------------------------------------------------------------------------------
To help you with tax planning, we try to give you a good idea of the per-share
income and capital gain amounts our funds may distribute near year-end. In late
October, we will provide estimates of these amounts, which will be paid on
December 16, 1999, to shareholders of record on December 14. These preliminary
numbers will be included in The Price Report mailing to shareholders in late
October and will also be available on our Web site www.troweprice.com.
We hope that these preliminary numbers will be useful to you in approximating
the income and capital gains taxes you may pay on distributions to taxable
accounts. If your fund distributed any capital gains earlier in 1999, you can
find the amounts on your statements and should include them in your tax planning
calculations. Please keep in mind that the numbers are not final and are likely
to be revised before the December 14 declaration and record date. As the fall
progresses, you may want to check our Web site for revisions.
If you would like information on tax matters relating to mutual funds, please
visit our Web site to download our Insights report, Tax Information for Mutual
Fund Investors, or call 1-800-225-5132 to request a copy.
2
<PAGE>
Investment Philosophy
The salient characteristic of our approach is intensive, timely, hands-on
research in the areas of electronic technology, information services, media and
telecommunications services, and life sciences and health care. This involves
extensive company visits, interviews with customers and competitors,
participation at trade shows and industry symposiums, and detailed financial
analysis. We focus our internal resources on developing insights, relying on
external resources primarily for information. Given the inherent volatility of
the fund's universe, we usually maintain a modest cash position to permit
opportunistic purchases.
Our investment philosophy can be summarized by the following seven investment
principles:
. Stay exposed to long-term, secular investment themes;
. Diversify exposure among the most attractive segments of the science
and technology sector;
. Seek investments in companies that possess significant intellectual
property;
. Concentrate holdings in companies with sustainable business models;
. Gravitate toward companies embarking on significant new product
cycles;
. Emphasize companies whose management has both vision and a proven
track record; and
. Keep the portfolio fresh.
These principles have important ramifications for the profile of your fund.
First, our stock holdings will be concentrated in the secular themes. While
individual stock holdings may change frequently, the broad themes should be more
enduring. Second, in contrast to most technology sector funds, our investments
will be spread across a variety of segments within a broadly defined science and
technology sector. Third, the fund will not emphasize stocks of companies
selling commodity products in highly cyclical markets. Fourth, we prefer
companies whose destiny remains more in their own control rather than the
vagaries of the markets in which they participate. Fifth, our core holdings will
be in stocks of companies with, in our opinion, extremely capable management.
Finally, in addition to maintaining core positions in established, leadership
companies, our holdings may
3
<PAGE>
include investments across an array of smaller, more volatile companies.
By consistently applying these investment principles to the portfolio management
process, we hope to ensure that your fund remains exposed to the best-positioned
companies in the most rapidly growing areas of the science and technology
industry. Our investment approach is aggressive, and the potential long-term
rewards from an investment in this fund are likely to entail considerable price
fluctuations. However, we firmly believe that over time the rewards will
compensate for the risks. While the fund's scale and diversification make it
unlikely to be the top performer in any particular quarter, we manage the fund
to be in the hunt every year, with our primary objective being to generate
consistent absolute and superior relative performance over a longer-term
horizon.
OUR INVESTMENT APPROACH IS AGGRESSIVE, AND THE POTENTIAL LONG-TERM REWARDS FROM
AN INVESTMENT IN THIS FUND ARE LIKELY TO ENTAIL CONSIDERABLE PRICE FLUCTUATIONS.
Portfolio Review
The fund remains concentrated in the electronic technology segment, with 73% of
assets committed to this area, as can be seen in the chart on this page. Stocks
of software, hardware, and semiconductor companies dominate our holdings in this
segment. Shares of information services companies represent 13% of total assets,
with media and telecommunications services representing the balance of owned
securities. The fund's 25 largest holdings compose 72% of portfolio assets.
During the past six months, fund performance benefited mostly from our holdings
in the semiconductor and components and e-commerce segments. Communications chip
vendor Analog Devices and programmable logic vendor Xilinx were standout
performers in the semiconductor arena while Softbank, a Japanese technology
conglomerate with significant
- ----------------------
Sector Diversification
- --------------------------------------------------------------------------------
[PIE CHART APPEARS HERE]
Electronic Techmology 73%
Information Services 13%
Media Telecommunications Services 10%
Reserves 4%
Based on net assets as of 6/30/99.
4
<PAGE>
Internet holdings, was a stellar contributor from the e-commerce category. The
only segment detracting from performance during the period was enterprise
software, with Network Associates proving to be a particularly costly
investment. These stocks were challenged by the confluence of slowing demand and
reduced visibility due to concerns about the need of corporations to become Year
2000 compliant.
Significant purchases during the past six months included incremental buying in
Ascend Communications and AirTouch Communications, both the targets of
successfully completed mergers. New positions were initiated in database giant
Oracle and communications equipment manufacturer Tellabs (which we owned only
briefly). Reflecting concerns over both growth and pricing in the PC industry,
we eliminated our position in Intel, and also in Network Associates, as we lost
faith in its prospects for growth.
Outlook
As we enter the traditionally weaker summer months with the technology sector up
more than 100% from the lows established just nine months ago, valuations at or
near historical peak levels, and blatant signs of speculative froth in the
market for pure play Internet stocks, we maintain a healthy respect for the
volatility inherent in this sector. Nevertheless, while we cannot ignore the
likelihood of a modest correction between now and the end of the year, we firmly
believe that investors will be rewarded by staying the course as several
technology megacycles play out over the next few years.
As always, we appreciate your continued support.
Respectfully submitted,
/s/ Charles A. Morris
Charles A. Morris
President and Chairman of the Investment Advisory Committee
July 23, 1999
5
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/99
- --------------------------------------------------------------------------------
Analog Devices 4.4%
Microsoft 3.9
Adobe Systems 3.6
Xilinx 3.3
Lucent Technologies 3.2
- --------------------------------------------------------------------------------
Synopsys 3.2
Solectron 3.2
Maxim Integrated Products 3.2
MCI WorldCom 3.0
Cisco Systems 3.0
- --------------------------------------------------------------------------------
SCI Systems 2.9
Vodafone 2.9
First Data 2.8
EMC 2.8
Oracle 2.7
- --------------------------------------------------------------------------------
Altera 2.7
Nokia 2.7
Sun Microsystems 2.6
BMC Software 2.6
Hewlett-Packard 2.6
- --------------------------------------------------------------------------------
Parametric Technology 2.4
Texas Instruments 2.4
Intuit 2.4
PSINet 1.9
Dell Computer 1.9
- --------------------------------------------------------------------------------
Total 72.3%
Note: Table excludes reserves.
6
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
MAJOR PORTFOLIO CHANGES
(Listed in descending order of size)
6 Months Ended 6/30/99
Ten Largest Purchases Ten Largest Sales
- --------------------------------------------------------------------------------
Oracle * Ascend Communications ***
Ascend Communications *** America Online
Dell Computer Intel **
MCI WorldCom MCI WorldCom
Nokia EMC
BMC Software Tellabs **
EMC Softbank
AirTouch Communications *** Automatic Data Processing **
Microsoft Network Associates **
Tellabs * Nokia
* Position added
** Position eliminated
*** Acquired by another company
7
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
- --------------------------------------------------------------------------------
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with a broad-based average or index. The index
return does not reflect expenses, which have been deducted from the fund's
return.
Science & Technology Fund
- --------------------------------------------------------------------------------
As of 6/30/99
[LINE GRAPH APPEARS HERE]
Jun-89 10,000 10,000 10,000
Jun-90 11,649 11,861 14,021
Jun-91 12,510 11,766 14,434
Jun-92 14,188 13,408 16,981
Jun-93 16,122 18,037 23,775
Jun-94 16,348 17,848 24,590
Jun-95 20,611 27,411 41,341
Jun-96 25,970 31,068 51,800
Jun-97 34,982 37,332 57,355
Jun-98 45,533 44,323 66,166
Jun-99 55,895 70,611 105,928
- ------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Periods Ended 6/30/99 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Science & Technology Fund 60.09% 26.93% 33.92% 26.62%
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
8
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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Unaudited
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 37.67 $ 27.26 $ 29.71 $ 29.12 $ 21.64 $ 18.95
Investment activities
Net investment income (0.07) (0.18) (0.12) (0.09) (0.03) (0.09)
Net realized and
unrealized gain (loss) 11.68 11.58 0.54 4.28 12.05 3.08
Total from
investment activities 11.61 11.40 0.42 4.19 12.02 2.99
Distributions
Net realized gain -- (0.99) (2.87) (3.60) (4.54) (0.30)
NET ASSET VALUE
End of period $ 49.28 $ 37.67 $ 27.26 $ 29.71 $ 29.12 $ 21.64
-----------------------------------------------------------------------------------------
Ratios/Supplemental Data
Total return* 30.82% 42.35% 1.71% 14.23% 55.53% 15.79%
Ratio of total expenses to
average net assets 0.90%+ 0.94% 0.94% 0.97% 1.01% 1.11%
Ratio of net investment income
to average net assets (0.35)%+ (0.61)% (0.44)% (0.33)% (0.15)% (0.58)%
Portfolio turnover rate 157.6%+ 108.9% 133.9% 125.6% 130.3% 113.3%
Net assets, end of period
(in millions) $ 6,870 $ 4,696 $ 3,538 $ 3,292 $ 2,285 $ 915
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
9
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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Unaudited June 30, 1999
PORTFOLIO OF INVESTMENTS Shares Value
- ------------------------------------------------------------------------------
In thousands
COMMON STOCKS 96.2%
ELECTRONIC TECHNOLOGY 73.3%
Enterprise Software 12.8%
BMC Software * 3,300,000 $ 178,097
Citrix Systems * 1,200,000 67,612
Computer Associates 1,350,000 74,250
Great Plains Software * 475,000 22,236
Microsoft * 3,000,000 270,375
Novell * 3,000,000 79,500
Oracle * 5,000,000 185,625
877,695
------------
Consumer and Technical Software 10.7%
Adobe Systems 3,000,000 246,469
Avant * 1,350,000 17,002
National Instruments * 600,000 24,150
Parametric Technology * 12,000,000 166,875
Synopsys * + 4,000,000 220,625
Visio * 1,100,000 41,834
Wind River Systems * 1,000,000 16,031
732,986
------------
Semiconductors and Components 16.5%
Altera * 5,000,000 183,906
Analog Devices * 6,000,000 301,125
Burr Brown * 1,000,000 36,938
Maxim Integrated Products * 3,300,000 219,450
Texas Instruments 1,150,000 166,750
Xilinx * 4,000,000 229,125
1,137,294
------------
Semiconductor Equipment 4.7%
Applied Materials * 1,500,000 110,765
ASM Lithography * 1,000,000 59,219
Cognex * 1,000,000 31,531
KLA-Tencor * 1,000,000 64,844
Novellus Systems * 850,000 57,986
324,345
------------
10
<PAGE>
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Communication Equipment 9.9%
Cisco Systems * 3,200,000 $ 206,100
General Instrument * 1,600,000 68,000
Lucent Technologies 3,300,000 222,544
Nokia ADR 2,000,000 183,125
679,769
--------------
Hardware/Peripherals 18.7%
Dell Computer * 3,500,000 129,391
Electronics for Imaging * 1,500,000 76,781
EMC * 3,500,000 192,500
Hewlett-Packard 1,750,000 175,875
Sanmina * 1,500,000 113,812
SCI Systems * + 4,171,300 198,137
Solectron * 3,300,000 220,069
Sun Microsystems * 2,600,000 179,156
1,285,721
--------------
Total Electronic Technology 5,037,810
--------------
INFORMATION SERVICES 12.9%
Data Services 5.6%
Ceridian * 2,500,000 81,719
First Data 4,000,000 195,750
Gartner Group (Class A) * 3,650,000 74,825
National Data 750,000 32,062
384,356
--------------
E-Commerce 7.3%
America Online * 650,000 71,825
Intuit * 1,800,000 162,337
PSINet * 3,000,000 131,063
Softbank (JPY) 325,000 65,849
Sterling Commerce * 2,000,000 73,000
504,074
--------------
Total Information Services 888,430
--------------
MEDIA/TELECOMMUNICATIONS
SERVICES 8.8%
Media/Telecom Services 8.8%
MCI WorldCom * 2,400,000 206,475
11
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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Shares Value
- --------------------------------------------------------------------------------
In thousands
PanAmSat * 1,500,000 $ 58,313
Sprint PCS * 1,200,000 68,550
Viatel * 1,250,000 70,000
Vodafone ADR 1,000,000 197,000
Total Media/Telecommunications Services 600,338
--------------
Miscellaneous Common Stocks 1.2% 83,738
--------------
Total Common Stocks (Cost $4,572,530) 6,610,316
--------------
SHORT-TERM INVESTMENTS 4.7%
Money Market Funds 4.7%
Government Reserve Investment Fund, 4.77%#+ 321,055,565 321,056
Total Short-Term Investments (Cost $321,056) 321,056
--------------
Total Investments in Securities
100.9% of Net Assets (Cost $4,893,586) $ 6,931,372
Other Assets Less Liabilities (61,805)
--------------
NET ASSETS $ 6,869,567
--------------
# Seven-day yield
+ Affiliated company
* Non-income producing
ADR American Depository Receipt
JPY Japanese yen
The accompanying notes are an integral part of these financial statements.
12
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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Unaudited June 30, 1999
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value
Affiliated companies (cost $633,056) $ 739,818
Other companies (cost $4,260,530) 6,191,554
--------------
Total investments in securities 6,931,372
Other assets 34,023
--------------
Total assets 6,965,395
Liabilities
Total liabilities 95,828
--------------
NET ASSETS $ 6,869,567
--------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ (9,789)
Accumulated net realized gain/loss - net of distributions 1,146,394
Net unrealized gain (loss) 2,037,784
Paid-in-capital applicable to 139,401,130 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 3,695,178
--------------
NET ASSETS $ 6,869,567
--------------
NET ASSET VALUE PER SHARE $ 49.28
--------------
The accompanying notes are an integral part of these financial statements.
13
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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Unaudited
- -----------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/99
Investment Income
Income
Interest (including $11,725 from affiliated companies) $ 12,767
Dividend (net of foreign taxes of $126) 2,448
-------------
Total income 15,215
-------------
Expenses
Investment management 18,539
Shareholder servicing 5,794
Prospectus and shareholder reports 334
Registration 171
Custody and accounting 128
Legal and audit 10
Directors 9
Miscellaneous 31
-------------
Total expenses 25,016
Expenses paid indirectly (12)
-------------
Net expenses 25,004
-------------
Net investment income (9,789)
-------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 1,096,887
Foreign currency transactions (1,248)
-------------
Net realized gain (loss) 1,095,639
-------------
Change in net unrealized gain or loss
Securities (including $190,893 from affiliated companies) 463,306
Other assets and liabilities
denominated in foreign currencies (3)
-------------
Change in net unrealized gain or loss 463,303
-------------
Net realized and unrealized gain (loss) 1,558,942
-------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 1,549,153
-------------
The accompanying notes are an integral part of these financial statements.
14
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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Unaudited
- ------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/99 12/31/98
Increase (Decrease) in Net Assets
Operations
Net investment income $ (9,789) $ (22,554)
Net realized gain (loss) 1,095,639 162,261
Change in net unrealized gain or loss 463,303 1,274,809
--------------------------
Increase (decrease) in net assets from operations 1,549,153 1,414,516
--------------------------
Distributions to shareholders
Net investment income - -
Net realized gain - (119,458)
--------------------------
Decrease in net assets from distributions - (119,458)
--------------------------
Capital share transactions*
Shares sold 1,457,360 1,287,933
Distributions reinvested - 116,409
Shares redeemed (832,499) (1,542,339)
--------------------------
Increase (decrease) in net assets from capital
share transactions 624,861 (137,997)
--------------------------
Net Assets
Increase (decrease) during period 2,174,014 1,157,061
Beginning of period 4,695,553 3,538,492
--------------------------
End of period $6,869,567 $ 4,695,553
--------------------------
*Share information
Shares sold 34,736 42,952
Distributions reinvested - 3,545
Shares redeemed (19,975) (51,686)
--------------------------
Increase (decrease) in shares outstanding 14,761 (5,189)
The accompanying notes are an integral part of these financial statements.
15
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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Unaudited June 30, 1999
- ------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Science and Technology 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 September 30, 1987.
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.
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the outstanding
voting securities.
Currency Translation Assets and liabilities are translated into U.S. dollars
at the prevailing exchange rate at the end of the reporting period. Purchases
and sales of securities and income and expenses are translated into U.S. dollars
at the prevailing exchange rate on the dates of such transactions. The effect of
changes in foreign exchange rates on realized and unrealized security gains and
losses is reflected as a component of such gains and losses.
16
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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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. Expenses paid
indirectly reflect credits earned on daily, uninvested cash balances at
the custodian, used to reduce the fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $4,484,495,000 and $4,034,270,000, respectively,
for the six months ended June 30, 1999.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends
to continue to qualify as a regulated investment company and distribute
all of its taxable income.
At June 30, 1999, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$4,893,586. Net unrealized gain aggregated $2,037,786,000 at period-end,
of which $2,126,643,000 related to appreciated investments and $88,857,000
to depreciated investments.
17
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T. ROWE PRICE SCIENCE & TECHNOLOGY FUND
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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 $3,500,000 was payable at June 30, 1999. The fee
is computed daily and paid monthly, and consists of an individual fund fee
equal to 0.35% of average daily net assets and a group fee. The group fee
is based on the combined assets of certain mutual funds sponsored by the
manager or Rowe Price-Fleming International, Inc. (the group). The group
fee rate ranges from 0.48% for the first $1 billion of assets to 0.30% for
assets in excess of $80 billion. At June 30, 1999, and for the six months
then ended, the effective annual group fee rate was 0.32%. The fund pays a
pro-rata share of the group fee based on the ratio of its net assets to
those of the group.
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 $4,574,000 for the six months ended June
30, 1999, of which $887,000 was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and
other accounts managed by T. Rowe Price and its affiliates and are not
available to the public. The Reserve Funds pay no investment management
fees. Distributions from the Reserve Funds to the fund for the six months
ended June 30, 1999, totaled $11,725,000 and are reflected as interest
income in the accompanying Statement of Operations.
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T. ROWE PRICE SHAREHOLDER SERVICES
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INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe Price Web
site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets
and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services,
Inc., Member NASD/SIPC.
** Based on a January 1999 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of order.
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T. ROWE PRICE MUTUAL FUNDS
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STOCK FUNDS
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free**
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond***
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
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Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- -------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
- ---------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors. ** Formerly named Florida Insured Intermediate
Tax-Free. *** Formerly named Tax-Free Insured Intermediate Bond.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
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T. ROWE PRICE RETIREMENT PLANS AND RESOURCES
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RETIREMENT PLANS AND RESOURCES
We recognize that saving for retirement is the number one investment goal for
most Americans. We can help you meet your retirement needs, whether you are
starting an IRA or designing a retirement program for your employees. T. Rowe
Price offers an assortment of retirement plans for individuals, the
self-employed, small businesses, corporations, and nonprofit organizations. We
provide recordkeeping, communications, and investment management services, as
well as a variety of educational materials, self-help planning guides, and
software tools to help you choose and implement a retirement plan appropriate
for you. For information or to request literature, call us at 1-800-638-5660.
IRAs AND QUALIFIED PLANS
- --------------------------------------------------------------------------------
Traditional IRA Money Purchase Pension
Roth IRA "Paired" Plans (Money Purchase
Rollover IRA Pension and Profit Sharing Plans)
SEP-IRA 401(k)
SIMPLE IRA 403(b)
Profit Sharing 457 Deferred Compensation
RETIREMENT RESOURCES AT T. ROWE PRICE
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Planning and Informational Guides Investing for Retirement in Your 403(b)
Account
Minimum Required Distributions Guide The T. Rowe Price No-Load Variable
Retirement Planning Kit Annuity Information Kit
Retirees Financial Guide
Tax Considerations for Investors Insights Reports
Investment Kits The Challenge of Preparing for
Retirement
The IRA Investing Kit Financial Planning After Retirement
Roth IRA Conversion Kit The Roth IRA: A Review
Rollover IRA Kit
Software Packages
The T. Rowe Price SIMPLE IRA Plan Kit
The T. Rowe Price SEP-IRA Plan T. Rowe Price Retirement Planning
Analyzer(TM) CD-ROM or diskette
The Simplified Keogh Plan(R) From $19.95. To order, please call
T. Rowe Price 1-800-541-5760. Also available
The T. Rowe Price 401(k) Century on the Internet for $9.95.
Plan(R) (for small businesses)
T. Rowe Price Variable Annuity
Money Purchase Pension/Profit Sharing Analyzer(TM) CD-ROM or diskette, free
Plan Kit To order, please call 1-800-469-5304.
Many of these resources are also available for viewing or ordering on the
Internet at www.troweprice.com.
21
<PAGE>
For yield, price, last transaction, current balance, or to conduct transactions,
24 hours, 7 days a week, call Tele*Access/R/: 1-800-638-2587 toll free
For assistance with your existing fund account, call: Shareholder Service Center
1-800-225-5132 toll free 410-625-6500 Baltimore area
To open a brokerage account
or obtain information, call:
1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus appropriate to the fund or funds
covered in this report.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
4200 West Cypress St.
10th Floor
Tampa, FL 33607
4410 ArrowsWest Drive
Colorado Springs, CO 80907
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills, CA 91367
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. F6I-051 6/30/99
