T. Rowe Price
--------------------------------------------------------------------------------
Semiannual Report
Science & Technology Fund
--------------------------------------------------------------------------------
June 30, 2000
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REPORT HIGHLIGHTS
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SCIENCE & TECHNOLOGY FUND
-------------------------
* The broad stock market produced mixed results during the first half of
the year.
* Fund results lagged the S&P 500 and the Lipper peer group index due to
our conservative investment posture, although absolute performance was
strong during the past 12 months.
* We built significant positions in select emerging leaders during the
spri ng correction.
* While our near-term outlook is somewhat cautious, we believe our
portfolio of sound companies with secular growth potential will
continue to reward shareholders over time.
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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
-------------------
The equity markets delivered mixed results during the first six months of
the year, although most major indices ended with modest losses. While investors
remained enthusiastic about global economic growth and corporate earnings, worry
began to build about rising interest rates and the pace of future economic
expansion. With the Federal Reserve continuing its policy of monetary restraint
by raising short-term rates a total of one percentage point so far this year,
neither upward earnings revisions nor steady cash flows into equity funds
allowed the broad market to make real progress. Your fund's results reflected
the overall environment.
<PAGE>
*************************************************************
PERFORMANCE COMPARISON
----------------------
Periods Ended 6/30/00 6 Months 12 Months
--------------------- -------- ---------
Science &Technology Fund -2.70% 49.49%
S&P 500 -0.43 7.24
Lipper Science & Technology
Fund Index 8.92 82.97
*************************************************************
During the first half, the fund fell 2.70%, compared with a return of 8.92%
for the Lipper Science & Technology Fund Index and a decline of 0.43% for the
unmanaged Standard & Poor's 500 Stock Index. For the 12 months ended June 30,
the fund's 49.49% return far outpaced the S&P 500 but trailed the Lipper index
of similar funds. Our relatively conservative investment posture at the end of
1999, as well as our continuing bias toward stocks of established
larger-capitalization technology companies, were the primary factors behind the
lagging results versus our peers.
MARKET ENVIRONMENT
------------------
The first half marked one of the most volatile periods in stock market
history, with the Nasdaq Composite Index moving intraday, every day, at least
one percent in one direction or another. With stocks near historically high
valuations and liquidity limited, news releases and slight changes in investor
sentiment were able to push stock prices around considerably.
Technology stocks got off to a fast start in 2000. Growth was accelerating,
pricing was firm, profits were expanding, the capital markets were charitable,
and the much ballyhooed Y2K risk proved to be DOA. However, as the period
progressed, technology investors became increasingly concerned about the
viability of Internet company business models, the cash burn rates among
emerging telecommunications carriers, decelerating growth in the wireless and
semiconductor industries, and continued sluggish corporate PC sales.
Accordingly, technology stocks corrected significantly through late May before
staging a sharp rally in early June to finish the six months with modest gains.
During the period, standout performers were stocks of communications equipment
and semiconductor-related companies, while stocks of e-commerce, communications
services, and software companies fared poorly.
<PAGE>
INVESTMENT PHILOSOPHY
---------------------
The salient characteristic of our approach is intensive, timely, hands-on
research in the areas of communications, integrated circuits, software,
computing hardware, electronic commerce, information services, media, and life
sciences. This involves extensive company visits, customer and competitor
interviews, 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.
* Emphasize companies embarking on meaningful new product cycles.
* Seek companies whose management has both vision and a proven track
record.
* Keep the portfolio fresh.
These principles have important ramifications for your fund's profile.
First, our stock holdings will be concentrated in the secular themes. While
individual positions will change frequently, the 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 than in 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 include investments across an array of smaller, more volatile
companies.
<PAGE>
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 shareholders for their risks. Because the fund's scale
and diversification make it unlikely to be the top performer in any particular
quarter, we manage the fund with the objective of generating consistent absolute
and superior relative performance over a longer-term horizon.
PORTFOLIO REVIEW
----------------
The fund remained concentrated in the electronic technology segment, with
essentially all of our assets committed to this area. Stocks of communications
equipment, semiconductors, and enterprise software companies dominated our
holdings, representing over half of fund assets on a combined basis. The balance
of assets was diversified across an array of other technology-related
industries. The fund's 25 largest holdings constituted 75% of portfolio assets,
and the portfolio was essentially fully invested at the end of June, with only a
small cash position.
*************************************************************
Sector Diversification pie chart showing Communications
33%, Semiconductors 26%, Software 20%, Hardware 13%,
Information Services 6%, Reserves 2%
*************************************************************
During the past six months, fund performance was most positively affected
by our holdings in the semiconductor and commu nications equipment segments. Six
of our best-performing stocks were semicondu ctor-related companies, including
communications chip vendor ANALOG DEVICES an d programmable logic vendors XILINX
and ALTERA. These companies continue to benefit from the accelerating build-out
of digital wireless and data networks. Optical equipment vendor CIENA and a
restructured 3COM were the best of several strong contributors from the
communications equipment segment, while Internet software infrastructure
providers ORACLE and ARIBA were also among the top 10 performers.
In contrast, the fund suffered substantial losses in stocks of enterprise
software companies that stumbled during their transition from client-server to
Internet architectures. PARAMETRIC TECHNOLOGY, NOVELL, BMC SOFTWARE, and
MICROSOFT all reported disappointing financial results during the first half.
The fund also suffered from the spring e-commerce meltdown, as YAHOO! and
Internet incubators INTERNET CAPITAL GROUP and SOFTBANK declined significantly.
<PAGE>
During the volatile correction in technology stocks, we purchased
significant new positions in Ariba, CIENA, QUALCOMM, DOUBLECLICK, and APPLIED
MICRO CIRCUITS in an attempt to improve the growth profile of the portfolio.
Notable eliminations during the six months included 3Com (shortly after the
public flotation of its PALM subsidiary), AMERICA ONLINE (immediately after the
announced merger with Time Warner), and Microsoft (over the dual concerns of
legal challenges and sluggish operating profit growth). Proceeds from our sales
of WORLDCOM and MOTOROLA were used to finance alternative investments as the
technology sector corrected.
OUTLOOK
-------
Whi7le technology sector fundamentals remain excellent, there are signs
that we are nearing an inflection point in revenue growth and profit expansion
across several industry segments, and valuations remain stubbornly high. Should
these signs be confirmed in the months ahead, we would anticipate renewed
volatility with a downward bias. Moreover, until investors conclude that the
Federal Reserve is finished raising interest rates, the broader market is
unlikely to be a positive catalyst.
Given our somewhat cautious near-term outlook for the science and
technology sector, we will continue to concentrate our assets in stocks of
leadership companies that we believe possess the brightest secular growth
opportunities, while opportunistically building positions in the stocks of the
most promising emerging companies. By staying the course and depending upon the
same process and style that generated the strong returns enjoyed by shareholders
over the lifetime of the portfolio, we hope to extend the fund's successful
longer-term record.
As always, we appreciate your continued support.
Respectfully submitted,
Charles A. Morris
/s/
President and Chairman of the Investment Advisory Committee
July 21, 2000
<PAGE>
*************************************************************
ADVISOR SHARE CLASS CREATED
---------------------------
T. Rowe Price has introduced a new class of shares for
certain funds, including this one. The new Advisor Class
shares will be sold exclusively by financial intermediaries,
such as brokers and financial advisers, and will enhance our
ability to reach a new group of investors through this
expanding channel. Since the new share class has a modest
12b-1 fee (a distribution fee paid to the sales intermediary),
its performance will likely vary somewhat from your fund
shares even though both invest in the same portfolio.
We want to emphasize that the new class will have no
impact whatsoever on your investment in the fund or on the
returns provided to you by the fund. The daily net asset value
and expenses for the existing shares and the Advisor Class
shares are calculated separately. In due course, you will see
the Advisor Class share prices listed in newspapers and other
print and electronic media. Certain expenses associated with
the Advisor Class shares will be itemized in financial
statements in your fund's shareholder reports.
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T. Rowe Price Science & Technology Fund
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PORTFOLIO HIGHLIGHTS
--------------------
TWENTY-FIVE LARGEST HOLDINGS
----------------------------
Percent of
Net Assets
6/30/00
-----------
Oracle 5.4%
Cisco Systems 4.5
Analog Devices 4.3
Maxim Integrated Products 3.8
Xilinx 3.8
Vodafone Airtouch 3.8
Ariba 3.8
Altera 3.6
CIENA 3.5
Nokia 3.5
Nortel Networks 3.4
Sun Microsystems 3.2
<PAGE>
Texas Instruments 2.9
BMC Software 2.6
Applied Materials 2.6
WorldCom 2.3
VeriSign 2.2
Applied Micro Circuits 2.1
Dell Computer 2.1
Solectron 2.1
Electronic Arts 2.1
NEXTLINK Communications 2.0
EMC 1.9
Intuit 1.8
QUALCOMM 1.7
-----------
Total 75.0%
Note: Table excludes reserves.
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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 6/30/00
Ten Largest Purchases Ten Largest Sales
--------------------- -----------------
QUALCOMM * 3Com **
Motorola * America Online **
Ariba * Microsoft **
3Com Dell Computer
CIENA * Yahoo! **
BMC Software Motorola **
WorldCom WorldCom
Dell Computer Intel **
DoubleClick * SCISystems **
Applied Micro Circuits * Conexant Systems **
* Position added
** Position eliminated
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<PAGE>
T. Rowe Price Science & Technology Fund
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PERFORMANCE COMPARISON
----------------------
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with 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.
Lipper Science & S&P 500 Science &
Technology Fund Index Stock Index Technology Fund
--------------------- ----------- ---------------
6/30/90 10,000 10,000 10,000
6/91 9,920 10,739 10,295
6/92 11,304 12,180 12,111
6/93 15,207 13,840 16,957
6/94 15,048 14,034 17,538
6/95 23,111 17,694 29,485
6/96 26,194 22,294 36,945
6/97 31,475 30,030 40,907
6/98 37,369 39,088 47,191
6/99 59,532 47,983 75,550
6/00 108,925 51,459 112,939
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 6/30/00 1 Year 3 Years 5 Years 10 Years
--------------------- ------ ------- ------- --------
Science & Technology Fund 49.49% 40.29% 30.81% 27.43%
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 Science & Technology Fund
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Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
SCIENCE & TECHNOLOGY SHARES
6 Months Year
Ended Ended
6/30/00 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
------- -------- -------- -------- -------- --------
NET ASSET VALUE
Beginning of period $ 63.71 $ 37.67 $ 27.26 $ 29.71 $ 29.12 $ 21.64
--------------------------------------------------------------------------------
Investment activities
Net investment
income (loss) (0.15) (0.09) (0.18) (0.12) (0.09) (0.03)
Net realized and
unrealized gain (loss) (1.57) 36.85 11.58 0.54 4.28 12.05
--------------------------------------------------------------------------------
Total from
investment activiti (1.72) 36.76 11.40 0.42 4.19 12.02
--------------------------------------------------------------------------------
Distributions
Net realized gain - (10.72) (0.99) (2.87) (3.60) (4.54)
--------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 61.99 $ 63.71 $ 37.67 $ 27.26 $ 29.71 $ 29.12
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------
Total return~ (2.70)% 100.99% 42.35% 1.71% 14.23% 55.53%
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.85%+ 0.87% 0.94% 0.94% 0.97% 1.01%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (0.49)%+ (0.26)% (0.61)% (0.44)% (0.33)% (0.15)%
--------------------------------------------------------------------------------
Portfolio
turnover rate 124.1%+ 128.0% 108.9% 133.9% 125.6% 130.3%
--------------------------------------------------------------------------------
Net assets, end of
period (in millions) $ 14,127 $ 12,271 $ 4,696 $ 3,538 $ 3,292 $ 2,285
--------------------------------------------------------------------------------
~ 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.
================================================================================
<PAGE>
T. Rowe Price Science & Technology Fund
--------------------------------------------------------------------------------
Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
SCIENCE & TECHNOLOGY ADVISOR CLASS SHARES
3/31/00
Through
6/30/00
----------
NET ASSET VALUE
Beginning of period $ 71.08
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Investment activities
Net investment income (loss) (0.02)
Net realized and
unrealized gain (loss) (9.05)
--------------------------------------------------------------------------------
Total from
investment activities (9.07)
--------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 62.01
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------
Total return~ (12.76)%
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.71%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (0.59)%
--------------------------------------------------------------------------------
Portfolio turnover rate 124.1%
--------------------------------------------------------------------------------
Net assets, end of
period (in thousands) $ 506
--------------------------------------------------------------------------------
~ 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.
================================================================================
<PAGE>
T. Rowe Price Science & Technology Fund
--------------------------------------------------------------------------------
Unaudited June 30, 2000
PORTFOLIO OF INVESTMENTS
------------------------
Shares Value
----------- -----------
In thousands
COMMON STOCKS AND WARRANT 97.4%
INFORMATIO SERVICES 5.4%
------------------------
E-COMMERCE 5.4%
DoubleClick * 5,300,000 $ 202,062
--------------------------------------------------------------------------------
Internet Capital Group, (144a) *++ 1,000,000 22,163
--------------------------------------------------------------------------------
Internet Capital Group,
(144a), Warrants, 5/10/02 *++ 208,333 7,734
--------------------------------------------------------------------------------
Softbank (JPY) 1,550,000 210,358
--------------------------------------------------------------------------------
Verisign * 1,800,000 317,419
--------------------------------------------------------------------------------
Total Information Services 759,736
-----------
SEMICONDUCTORS 26.2%
---------------------
SEMICONDUCTORS & COMPONENTS 20.6%
Altera * 5,000,000 509,531
--------------------------------------------------------------------------------
Analog Devices * 8,000,000 608,000
--------------------------------------------------------------------------------
Applied Micro Circuits * 3,000,000 296,250
--------------------------------------------------------------------------------
Maxim Integrated Products * 8,000,000 543,250
--------------------------------------------------------------------------------
Texas Instruments 6,000,000 412,125
--------------------------------------------------------------------------------
Xilinx * 6,500,000 536,860
--------------------------------------------------------------------------------
2,906,016
-----------
SEMICONDUCTOR EQUIPMENT 5.6%
Applied Materials * 4,000,000 362,625
--------------------------------------------------------------------------------
ASM Lithography * 3,500,000 154,328
--------------------------------------------------------------------------------
Cognex * + 2,500,000 129,297
--------------------------------------------------------------------------------
KLA-Tencor * 2,500,000 146,484
--------------------------------------------------------------------------------
792,734
-----------
Total Semiconductors 3,698,750
-----------
<PAGE>
COMMUNICATIONS 33.1%
---------------------
COMMUNICATION EQUIPMENT 21.1%
CIENA * 3,000,000 499,969
--------------------------------------------------------------------------------
Cisco Systems * 10,000,000 635,312
--------------------------------------------------------------------------------
E-Tek Dynamics * 500,000 131,875
--------------------------------------------------------------------------------
JDS Uniphase * 2,000,000 179,766
--------------------------------------------------------------------------------
LM Ericsson ADR (Class B) 11,000,000 220,344
--------------------------------------------------------------------------------
Nokia ADR 10,000,000 499,375
--------------------------------------------------------------------------------
Nortel Networks 7,000,000 477,750
--------------------------------------------------------------------------------
QUALCOMM * 4,000,000 $ 239,875
--------------------------------------------------------------------------------
Xircom * + 2,000,000 95,062
--------------------------------------------------------------------------------
2,979,328
-----------
COMMUNICATION SERVICES 12.0%
Colt Telecom Group (GBP) * 5,500,000 183,751
--------------------------------------------------------------------------------
Exodus Communications * 4,250,000 195,898
--------------------------------------------------------------------------------
NEXTLINK Communications * 7,500,000 284,297
--------------------------------------------------------------------------------
PSINet * 7,000,000 175,656
--------------------------------------------------------------------------------
Vodafone Airtouch (GBP) 30,000,000 122,334
--------------------------------------------------------------------------------
Vodafone Airtouch ADR 10,000,000 414,375
--------------------------------------------------------------------------------
WorldCom * 7,000,000 321,344
--------------------------------------------------------------------------------
1,697,655
-----------
Total Communications 4,676,983
-----------
HARDWARE 12.6%
---------------
PERIPHERALS 2.4%
Electronics for Imaging * 2,500,000 63,125
--------------------------------------------------------------------------------
EMC * 3,500,000 269,281
--------------------------------------------------------------------------------
332,406
-----------
<PAGE>
SYSTEMS 5.3%
Dell Computer * 6,000,000 296,062
--------------------------------------------------------------------------------
Sun Microsystems * 5,000,000 454,844
--------------------------------------------------------------------------------
750,906
-----------
Contract Manufacturing 4.9%
Flextronics International * 3,350,000 230,208
--------------------------------------------------------------------------------
Sanmina * 2,000,000 170,938
--------------------------------------------------------------------------------
Solectron * 7,000,000 293,125
--------------------------------------------------------------------------------
694,271
-----------
Total Hardware 1,777,583
-----------
SOFTWARE 18.5%
---------------
ENTERPRISE SOFTWARE 13.7%
Ariba * 5,450,000 534,441
--------------------------------------------------------------------------------
BMC Software * 10,000,000 364,687
--------------------------------------------------------------------------------
Liberate Technologies * 2,000,000 58,688
--------------------------------------------------------------------------------
Oracle * 9,000,000 756,281
--------------------------------------------------------------------------------
VERITAS Software * 2,000,000 225,937
--------------------------------------------------------------------------------
1,940,034
-----------
CONSUMER AND MULTI MEDIA SOFTWARE 4.4%
Electronic Arts * + 4,000,000 $ 291,875
--------------------------------------------------------------------------------
Intuit * 6,000,000 247,875
--------------------------------------------------------------------------------
RealNetworks * 1,500,000 75,797
--------------------------------------------------------------------------------
615,547
-----------
TECHNICAL SOFTWARE 0.4%
Synopsys * 1,850,000 63,883
--------------------------------------------------------------------------------
63,883
-----------
Total Software 2,619,464
-----------
Other Miscellaneous Common Stocks 1.6% 220,341
-----------
Total Common Stocks and Warrants (Cost $9,835,729) 13,752,857
-----------
<PAGE>
CONVERTIBLE PREFERRED STOCKS 0.7%
----------------------------------
AllAdvantage *ss.++ 1,239,670 7,500
--------------------------------------------------------------------------------
idealab! (Series D) *ss.++ 1,000,000 100,000
--------------------------------------------------------------------------------
Total Convertible Preferred Stocks (Cost $107,500) 107,500
-----------
SHORT-TERM INVESTMENTS 2.3%
----------------------------
MONEY MARKET FUNDS 2.3%
Government Reserve Investment Fund, 6.27% # + 326,728,183 326,728
--------------------------------------------------------------------------------
Total Short-Term Investments (Cost $326,728) 326,728
-----------
TOTAL INVESTMENTS IN SECURITIES
100.4% of Net Assets (Cost $10,269,957) $ 14,187,085
Other Assets Less Liabilities (59,824)
-----------
NET ASSETS $ 14,127,261
-----------
# Seven-day yield
+ Affiliated company
++ Securities contain some restrictions as to
public resale--total of such securities at
period-end amounts to 0.2% of net assets.
ss Private Placement
* Non-income producing
ADR American Depository Receipt
GBP British sterling
JPY Japanese yen
144a Security was purchased pursuant to Rule
144a under the Securities Act of 1933 and
may not be resold subject to that rule except
to qualified institutional buyers--total of
such securities at period-end amounts to
0.2% of net assets.
The accompanying notes are an integral part of these financial statements.
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<PAGE>
T. Rowe Price Science & Technology Fund
Unaudited June 30, 2000
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
In thousands
ASSETS
------
Investments in securities, at value
Affiliated companies (cost $839,406) $ 842,962
Other companies (cost $9,430,551) 13,344,123
-------------
Total investments in securities 14,187,085
Other assets 140,382
-------------
Total assets 14,327,467
LIABILITIES
-----------
Total liabilities 200,206
-------------
NET ASSETS $ 14,127,261
-------------
NET ASSETS CONSIST OF:
Accumulated net investment income - net of distributions $ (33,803)
Accumulated net realized gain/loss - net of distributions 1,188,371
Net unrealized gain (loss) 3,917,128
Paid-in-capital applicable to 227,878,979 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 9,055,565
-------------
NET ASSETS $ 14,127,261
-------------
NET ASSET VALUE PER SHARE
Science & Technology shares
($14,126,754,842/227,870,822 shares outstanding) $ 61.99
-------------
Science & Technology Advisor Class shares
($505,855/8,157 shares outstanding) $ 62.01
-------------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Science & Technology Fund
--------------------------------------------------------------------------------
Unaudited
STATEMENT OF OPERATIONS
-----------------------
In thousands
6 Months
Ended
6/30/00
-------------
INVESTMENT INCOME (LOSS)
------------------------
Income
Interest (including $14,328 from affiliated companies) $ 20,806
Dividend (net of foreign taxes of $468) 3,671
-------------
Total Income 24,477
-------------
Expenses
Investment management 45,698
Shareholder servicing
Science & Technology shares 11,380
Science & Technology Advisor Class shares -
Registration 524
Prospectus and shareholder reports
Science & Technology shares 329
Science & Technology Advisor Class shares -
Custody and accounting 297
Legal and audit 22
Directors 15
Miscellaneous 60
-------------
Total expenses 58,325
Expenses paid indirectly (45)
-------------
Net expenses 58,280
-------------
Net investment income (loss) (33,803)
-------------
REALIZED AND UNREALIZED GAIN (LOSS)
-----------------------------------
Net realized gain (loss)
Securities 571,443
Foreign currency transactions (1,894)
-------------
Net realized gain (loss) 569,549
Change in net unrealized gain or loss on securities (998,685)
-------------
Net realized and unrealized gain (loss) (429,136)
-------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ (462,939)
-------------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Science & Technology Fund
--------------------------------------------------------------------------------
Unaudited
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
In thousands
6 Months Year
Ended Ended
6/30/00 12/31/99
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income (loss) $ (33,803) $ (18,136)
Net realized gain (loss) 569,549 2,299,852
Change in net unrealized gain or loss (998,685) 3,341,332
------------- -------------
Increase (decrease) in net assets from operations (462,939) 5,623,048
------------- -------------
Distributions to shareholders
Net realized gain
Science & Technology shares - (1,713,649)
------------- -------------
Capital share transactions *
Shares sold
Science & Technology shares 4,380,552 3,840,762
Science & Technology Advisor Class shares 517 -
------------- -------------
Increase in net assets from shares sold 4,381,069 3,840,762
Distributions reinvested
Science & Technology shares - 1,676,543
Shares redeemed
Science & Technology shares (2,061,501) (1,851,625)
------------- -------------
Increase (decrease) in net assets from
capital share transactions 2,319,568 3,665,680
------------- -------------
<PAGE>
NET ASSETS
----------
Increase (decrease) during period 1,856,629 7,575,079
Beginning of period 12,270,632 4,695,553
------------- -------------
END OF PERIOD $ 14,127,261 $ 12,270,632
------------- -------------
*Share information
Shares sold
Science & Technology shares 67,481 76,475
Science & Technology Advisor Class shares 8 -
Distributions reinvested
Science & Technology shares - 29,465
Shares redeemed
Science & Technology shares (32,198) (37,992)
------------- -------------
Increase (decrease) in shares outstanding 35,291 67,948
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Science & Technology Fund
--------------------------------------------------------------------------------
Unaudited June 30, 2000
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Science & Technology Fund, Inc. (the fund) is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The fund has two classes of sharesNScience & Technology,
offered since September 30, 1987, and Science & Technology Advisor Class, first
offered on March 31, 2000. Science & Technology Advisor Class sells its shares
only through financial intermediaries, which it compensates for distribution and
certain administrative services under a Board-approved Rule 12b-1 plan. Each
class has exclusive voting rights on matters related solely to that class,
separate voting rights on matters that relate to both classes, and, in all other
respects, the same rights and obligations as the other class. The fund seeks
long-term capital appreciation by investing primarily in the common stocks of
companies expected to benefit from the development, advancement, and use of
science and technology.
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.
<PAGE>
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 lo sses is reflected as a component of such gains and losses.
CLASS ACCOUNTING The Science & Technology Advisor Class pays distribution
and administrative expenses, in the form of Rule 12b-1 fees, in an amount not
exceeding 0.25% of the class's average net assets. Shareholder servicing,
prospectus, and shareholder report expenses are charged directly to the class to
which they relate. Expenses common to both classes, investment income, and
realized and unrealized gains and losses are allocated to the classes based upon
the relative daily net assets of each class. Income distributions are declared
and paid by each class on an annual basis.
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
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $10,509,737,000 and $8,112,990,000, respectively, for the
six months ended June 30, 2000.
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, 2000, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$10,269,957,000. Net unrealized gain aggregated $3,917,128,000 at period-end, of
which $4,728,968,000 related to appreciated investments and $811,840,000 to
depreciated investments.
NOTE 4 - FOREIGN TAXES
The fund is subject to foreign income taxes imposed by certain countries in
which it invests. Foreign income taxes are accrued by the fund and withheld from
dividend and interest income.
NOTE 5 - 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 $7,825,000 was payable at June 30, 2000. 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 0.295% for assets in excess of $120 billion. At
June 30, 2000, 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.
The manager has agreed to bear any expenses through December 31, 2001,
which would cause Science & Technology Advisor Class's ratio of total expenses
to average net assets to exceed 1.15%. Thereafter, through December 31, 2003,
Science & Technology Advisor Class is required to reimburse the manager for
these expenses, provided that its average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing its ratio of total
expenses to average net assets to exceed 1.15%.
<PAGE>
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 $9,035,000 for the six months
ended June 30, 2000, of which $1,654,000 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, 2000, totaled
$14,328,000 and are reflected as interest income in the accompanying Statement
of Operations.
================================================================================
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*AccessRegistration Mark 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. **
<PAGE>
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.
================================================================================
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
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.
<PAGE>
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. F61-051 6/30/00
