______________________
SEMIANNUAL REPORT
______________________
Small-Cap Value Fund
______________________
FOR YIELD, PRICE, LAST TRANSACTION,
AND CURRENT BALANCE, 24 HOURS,
7 DAYS A WEEK, CALL:
1-800-638-2587 toll free
625-7676 Baltimore area
______________________
FOR ASSISTANCE WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
______________________
T. ROWE PRICE
100 East Pratt Street
Baltimore, Maryland 21202
______________________
This report is authorized for distribution only to shareholders and to
others who have received a copy of the prospectus of the T. Rowe Price
Small-Cap Value Fund.
<PAGE>
- --------------------------------------------------------------------------------
Fellow Shareholders
- --------------------------------------------------------------------------------
"Mutual Funds Skyrocket"... "Best Quarter in 2 1\2 Years"... "Good Times
Roll." The national press used these headlines to describe the stock market's
performance during this year's second quarter. Spurred by continuing good
earnings reports and lower interest rates, every domestic stock index rose to an
all-time high.
The Small-Cap Value Fund kept pace in the quarter with the small-compa ny
stock sector as represented by the unmanaged Russell 2000 Index and finished the
first half ahead of this benchmark. The Nasdaq Composite's impressive
year-to-date showing was boosted by strong gains among technology stocks,
particularly Intel and Microsoft. As we have mentioned in the past, your fund
generally holds modest positions in volatile technology stocks. While we have
not enjoyed their big gains this year, neither are we vulnerable to a possible
sharp correction in those issues.
- --------------------------------------------------------------------------------
Performance Comparison
- --------------------------------------------------------------------------------
Periods Ended 6/30/95
---------------------
3 Months 6 Months
---------------------
Small-Cap Value Fund 9.9% 16.3%
S&P 500 9.6 20.2
Russell 2000 Index 9.4 14.4
Nasdaq Composite* 14.2 24.1
*Principal only; unmanaged
===============================================================================
- --------------------------------------------------------------------------------
TAKEOVER ACTIVITY
- --------------------------------------------------------------------------------
The bull market in stocks so far this year has been marked by an
extraordinary level of merger and acquisition activity that clearly benefited
your fund. In all of 1994, only three of the fund's portfolio companies were
acquired, accounting for less than 2% of our assets. In contrast, through early
July 1995 we had nine announced takeovers of portfolio companies representing
about 7% of assets. Four have been completed and appear on the list of our
largest sales during the quarter -- RE CAPITAL, FRITZ/INTERTRANS, MOORCO
INTERNATIONAL, and FLAIR.
<PAGE>
What accounts for the increased pace of mergers, especially among small
companies? There seems to be a confluence of reasons. First, acquiring companies
have the financial resources to buy. They are flush with cash after three strong
years of economic growth or have high-priced stock to use in a traditional stock
swap. Second, interest rates have fallen again in recent months, making
acquisition debt financing more attractive and, in many instances, more
available. Third, legal and regulatory barriers to economic consolidation have
been lowered in such industries as banking and broadcasting. Finally, American
companies seem more risk-averse regarding expansion than in years past, and are
more likely to enter a new line of business via acquisitions than through
construction of new facilities. Whatever the causes, the wave of small-company
mergers is having a positive effect on Small-Cap Value Fund and shows no sign of
abating.
- --------------------------------------------------------------------------------
PORTFOLIO REVIEW
- --------------------------------------------------------------------------------
Much of the quarter's purchase activity was concentrated in existing
holdings such as HS RESOURCES, POE & BROWN, and INACOM. New names among the top
purchases include AARON RENTS, one of the nation's leading companies in the
furniture and appliance leasing and rental business; COLUMBUS REALTY TRUST, a
Dallas-based REIT specializing in apartment buildings in the Southwest; UNIFIR
ST, a uniform rental company; and JP FOODSERVICE, a Maryland-based distributor
of food to restaurants and institutional food service providers.
Poe & Brown, the largest holding in the group just mentioned, is a good
example of the type of company we like to own. Poe & Brown is a rapidly growing
insurance broker, with a leading market share in Florida and a growing presence
in several other states. Two things set the company apart. First, CEO Hyatt
Brown manages the company for profit growth, not sales growth. Mr. Brown would
rather walk away from unprofitable business than gain a customer who "might" be
profitable next year. Second, the company is still relatively undiscovered by
the investment community. As a result, the stock price is somewhat undervalued
relative to its public competitors, especially considering its higher growth
rate.
- --------------------------------------------------------------------------------
OUTLOOK
- --------------------------------------------------------------------------------
The stock market's strong showing so far this year invites the question of
how much more it can rise. If interest rates fall further and corporate profits
continue to rise, the market will likely extend its winning streak. But our
experience tells us that all bull markets pause from time to time, and we see no
reason why this one should be any different.
New cash flow into the Small-Cap Value Fund has increased over the past two
months. While much of this new money may represent investment by committed
small-company investors, we believe some of it has been attracted by good stock
market performance and could just as easily leave at the first major downturn in
the market. Accordingly, we have allowed our cash reserves to increase to about
14% and have concentrated new purchases in lower-risk companies. Our desire to
temper the fund's downside volatility suggests caution in the current
environment.
Respectfully submitted,
[signature]
Preston G. Athey
President and Chairman of the
Investment Advisory Committee
July 20, 1995
<PAGE>
- --------------------------------------------------------------------------------
Twenty-Five Largest Holdings
June 30, 1995
- --------------------------------------------------------------------------------
Percent of
Company Net Assets
- ---------------------------------- --------
Electro Rent 2.3%
Seattle Filmworks 2.1
Grey Advertising 1.7
United Insurance 1.5
CSS Industries 1.4
DHTechnology 1.3
Unitog 1.3
Mutual Assurance 1.2
Silicon Valley Bancshares 1.2
Consolidated Products 1.2
McGrath RentCorp 1.1
Poe & Brown 1.1
Lunar 1.1
Foothill Group 1.1
Saga Communications 1.0
First Financial Fund 1.0
Builders Transport 1.0
Commercial Federal 1.0
Mine Safety Appliances 0.9
Owens & Minor 0.9
Milwaukee Insurance Group 0.9
HS Resources 0.9
Allied Capital Commercial 0.8
DAKA International 0.8
National Health Investors 0.8
Total 29.6%
===============================================================================
<PAGE>
- --------------------------------------------------------------------------------
Major Portfolio Changes
Three Months Ended June 30, 1995
- --------------------------------------------------------------------------------
TEN LARGEST PURCHASES
- --------------------------------------------------------------------------------
Cost (000)
--------
HS Resources $3,806
Aaron Rents* 2,514
Poe & Brown 2,221
EZ Communications 2,071
Columbus Realty Trust* 1,805
UniFirst 1,654
InaCom 1,471
JP Foodservice* 1,265
Oil-Dri 1,163
LeaRonal 1,144
================================================================================
- --------------------------------------------------------------------------------
TEN LARGEST SALES
- --------------------------------------------------------------------------------
Proceeds (000)
------------
RE Capital** $4,348
Fritz Companies** 3,557
La Quinta Inns 3,411
Intertrans** 2,688
Moorco International** 2,249
Flair** 2,100
Donnkenny** 1,555
Money Store** 1,022
Keane 504
Seattle Filmworks 480
* Position added
**Position eliminated
===============================================================================
- --------------------------------------------------------------------------------
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
Periods Ended June 30, 1995
Since Inception
1 Year 5 Years On 6/30/88
------- ------- -------------
17.06% 14.25% 12.71%
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>
- --------------------------------------------------------------------------------
Portfolio of Investments
- --------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund / June 30, 1995 (Unaudited)
(VALUES IN THOUSANDS)
Common Stocks & Warrants -- 83.9%
FINANCIAL -- 15.4%
Value
BANK & TRUST -- 3.3%
200,000 shs. *Commercial Federal $ 5,463
1,750 First National Bank of
Anchorage 2,721
110,000 Glacier Bancorp 2,063
450,000 ++*Guardian Bancorp 0
450,000 wts ++*Guardian Bancorp 0
80,000 shs. Hawkeye Bancorp 1,745
380,500 *Silicon Valley Bancshares 6,801
18,793
INSURANCE -- 7.0%
175,000 Capital Guaranty 3,150
175,000 Intercargo 1,947
55,000 *Markel 3,094
240,000 +*Milwaukee Insurance Group 4,905
232,575 *Mutual Assurance 6,890
69,100 NYMAGIC 1,097
269,500 Poe & Brown 6,434
500,000 Presidential Life 4,094
640,000 *United Insurance 8,480
40,091
FINANCIAL SERVICES -- 5.1%
276,248 Allied Capital Commercial 4,834
301,700 Allied Capital II 4,789
153,272 Allied Capital Lending 1,935
240,000 BHC Financial 3,885
250,000 Foothill Group (Class A) 6,375
132,300 Quick & Reilly 4,796
175,000 Sirrom Capital 2,363
28,977
TOTAL FINANCIAL 87,861
===============================================================================
<PAGE>
CONSUMER NONDURABLES -- 12.1%
BEVERAGES -- 0.2%
198,413 ++*Chalone Wine Group $ 1,191
142,857 wts ++*Chalone Wine Group,
7/19/98 214
1,405
FOOD PROCESSING -- 0.7%
40,000shs. *Smithfield Foods 855
135,000 Thorn Apple Valley 3,139
3,994
HOSPITAL SUPPLIES/HOSPITAL
MANAGEMENT -- 4.8%
220,000shs. Allied Healthcare Products 3,479
48,500 *E-Z-EM (Class A) 309
44,570 E-Z-EM (Class B) 245
200,000 *IGEN 1,225
205,000 Landauer 3,869
230,000 *Lunar 6,383
416,000 Owens & Minor 5,200
400,000 +*Safeguard Health 4,350
200,000 Sterile Concepts 2,475
27,535
PHARMACEUTICALS -- 1.1%
150,000 *COR Therapeutics 1,340
250,000 *Genetic Therapy 3,656
125,000 *Nexstar Pharmaceuticals 1,094
6,090
BIOTECHNOLOGY -- 0.3%
400,000 *Cell Genesys 1,875
MISCELLANEOUS CONSUMER PRODUCTS-- 5.0%
160,000 Boston Acoustics 3,020
173,000 *Chic by H.I.S. 1,946
250,000 Culp 2,031
225,000 *Cygne Designs 1,364
25,000 *Donnkenny 497
350,000 *ERO 3,063
128,500 Fab Industries 3,919
225,000 *Horace Small Apparel ADR 1,702
100,000 *Mace Security International 169
224,153 +Rauch Industries 2,059
250,000 Rival 3,625
282,500 Superior Surgical Mfg. 2,966
125,000 Thomas Industries 2,047
28,408
TOTAL CONSUMER NONDURABLES 69,307
================================================================================
<PAGE>
CONSUMER SERVICES -- 13.4%
SPECIALTY MERCHANDISERS -- 4.8%
440,000 *CSS Industries $ 7,920
200,000 *Designs 1,775
102,600 Frederick's of Hollywood
(Class A) 526
265,000 Frederick's of Hollywood
(Class B) 1,192
223,608 Genovese Drug Stores
(Class A) 2,544
508,700 Hancock Fabrics 4,642
80,905 shs. Haverty Furniture 809
235,000 *InaCom 3,055
110,000 *JP Foodservice 1,512
375,000 +*S & K Famous Brands 3,375
27,350
ENTERTAINMENT & LEISURE -- 4.6%
130,000 Bowl America (Class A) 1,040
150,000 *Carmike Cinemas (Class A) 3,638
521,172 *Consolidated Products 6,775
35,800 La Quinta Inns 967
112,500 *Longhorn Steaks 1,575
675,000 +*Seattle Filmworks 11,728
75,000 *Uno Restaurant 778
26,501
MEDIA & COMMUNICATIONS -- 4.0%
20,000 *American Radio Systems 465
130,000 +Courier 2,519
155,000 *EZ Communications 2,829
51,865 Grey Advertising 9,750
800,000 *MDC Corp. (Class A) 1,602
280,000 +*Saga Communications 5,810
22,975
TOTAL CONSUMER SERVICES 76,826
===============================================================================
CONSUMER CYCLICALS -- 5.0%
AUTOMOBILES & RELATED -- 0.9%
60,000 Myers Industries 863
200,000 +++*Republic Automotive Parts 2,938
25,500 *Republic Automotive Parts 303
100,000 *TBC 1,081
5,185
BUILDING & REAL ESTATE -- 3.0%
150,000 Bradley Real Estate, REIT 2,418
100,000 Columbus Realty Trust. 1,875
325,000 +*Homeowners Group 569
74,000 Liberty Homes (Class A) 666
176,000 National Health
Investors, REIT 4,796
146,156 Puerto Rican Cement 4,458
80,000 Sun Communities,
REIT 2,000
<PAGE>
$ 16,782
MISCELLANEOUS CONSUMER DURABLES -- 1.1%
115,000 *Chromcraft Revington 2,386
75,000 Juno Lighting 1,209
100,000 Pulaski Furniture 1,788
135,300 *Stanley Furniture 1,015
6,398
TOTAL CONSUMER CYCLICALS 28,365
- --------------------------------------------------------------------------------
TECHNOLOGY -- 5.1%
ELECTRONIC COMPONENTS -- 0.2%
58,700 shs. Badger Meter 1,387
ELECTRONIC SYSTEMS-- 0.6%
102,900 *CEM 1,248
175,000 Instron 2,078
3,326
INFORMATION PROCESSING -- 1.3%
270,000 +*DH Technology 7,458
AEROSPACE & DEFENSE-- 3.0%
279,400 +*COMARCO 2,602
170,000 *Nichols Research 2,890
225,800 Raven Industries 4,516
150,000 *Tech-Sym 4,106
48,800 *Woodward Governor 3,093
17,207
TOTAL TECHNOLOGY 29,378
===============================================================================
CAPITAL EQUIPMENT -- 2.8%
ELECTRICAL EQUIPMENT -- 0.7%
175,000 *Holophane 3,915
MACHINERY -- 2.1%
165,000 Alamo Group 2,867
268,000 Farrel 1,608
200,000 +*K-Tron 1,200
125,000 Scotsman Industries 2,313
400,000 *Sudbury 2,975
61,900 Versa Technologies 874
11,837
TOTAL CAPITAL EQUIPMENT 15,752
===============================================================================
BUSINESS SERVICES & TRANSPORTATION -- 17.0%
COMPUTER SERVICE & SOFTWARE -- 2.7%
180,000 Analysts International 4,657
180,000 *GBC Technologies 1,406
130,000 *Keane 3,234
160,000 *State of the Art 1,550
150,000 +Technalysis 1,763
150,000 *VMARK Software 2,625
15,235
<PAGE>
DISTRIBUTION SERVICES -- 0.8%
325,000 +*Allou Health & Beauty $ 2,641
180,000 VWR 1,755
4,396
ENVIRONMENTAL -- 2.0%
295,000 BHA Group (Class A) 3,872
400,000 *EMCON 1,800
125,000 shs. *Groundwater Technology 1,547
253,500 *Handex Environmental
Recovery 1,774
102,006 Heidemij ADR 975
221,300 *TRC 1,660
11,628
TRANSPORTATION SERVICES -- 1.8%
425,000 +*Builders Transport 4,834
126,200 International Shipholding 2,635
240,000 +*KLLM Transport 3,030
10,499
MISCELLANEOUS BUSINESS SERVICES -- 9.7%
2,000 Aaron Rents (Class A) 31
168,000 Aaron Rents (Class B) 2,583
500,000 AMRESCO 4,531
171,000 *CMG Information Services 3,270
574,500 +*Electro Rent 13,070
122,600 Insituform Mid-America 1,793
150,000 *Insituform Technologies
(Class A) 2,006
140,000 +L.E. Myers 1,733
380,000 McGrath RentCorp 6,508
100,600 Mine Safety Appliances 5,219
163,000 +*Right Management
Consultants 3,769
325,000 +Tab Products 1,950
143,600 UniFirst 1,939
330,000 Unitog 7,177
55,579
TOTAL BUSINESS SERVICES & TRANSPORTATION 97,337
===============================================================================
ENERGY -- 3.9%
ENERGY SERVICES -- 1.9%
85,000 *BJ Services 1,934
103,500 *Enterra 2,173
100,000 *Newpark Resources 2,063
200,000 *Offshore Logistics 2,775
63,800 Pitt-DesMoines 2,161
11,106
EXPLORATION & PRODUCTION -- 1.5%
225,000 *Convest Energy 738
130,800 Devon Energy 2,812
350,000 *HS Resources 4,900
8,450
<PAGE>
GAS TRANSMISSION -- 0.5%
130,000 +AlaTenn Resources $ 2,600
TOTAL ENERGY 22,156
===============================================================================
PROCESS INDUSTRIES -- 2.8%
DIVERSIFIED CHEMICALS -- 1.4%
300,000 shs. +Aceto 4,350
166,900 LeaRonal 3,526
7,876
SPECIALTY CHEMICALS -- 1.4%
171,000 *Specialty Chemical Resources 732
266,000 *Sybron Chemical 3,691
187,500 Synalloy 3,574
7,997
TOTAL PROCESS INDUSTRIES 15,873
===============================================================================
BASIC MATERIALS -- 3.8%
METALS -- 1.5%
354,000 *Lone Star Technologies 2,877
195,000 *Material Sciences 3,973
150,000 Steel Technologies 1,706
8,556
MINING -- 1.2%
550,000 *Dayton Mining 1,882
745,000 +*International Gold Resources 2,604
350,000 *TVX Gold ADR 2,537
7,023
MISCELLANEOUS MATERIALS -- 1.1%
300,000 Oil-Dri 4,462
64,300 Penn Virginia 1,825
6,287
TOTAL BASIC MATERIALS 21,866
===============================================================================
INVESTMENT COMPANIES -- 1.0%
466,795 *First Financial Fund 5,776
TOTAL INVESTMENT COMPANIES 5,776
===============================================================================
MISCELLANEOUS COMMON STOCKS -- 1.6% 8,987
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS & WARRANTS
(COST $371,274) 479,484
- --------------------------------------------------------------------------------
<PAGE>
Convertible Preferred Stocks -- 0.7%
80,000 ICO, $25.00 $ 1,630
41,000 Pacific Crest Capital,
Series A 697
203,000 Redwood Empire Bancorp,
7.875%, Series A 1,903
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $5,077) 4,230
===============================================================================
Convertible Bonds -- 2.3%
$ 700,000 Builders Transport, Sub.
Deb., 8.00%, 8/15/05 632
2,500,000 DAKA International,
7.00%, 3/15/03 4,825
1,000,000 Dayton Mining, 7.00%,
1/31/99 1,505
3,000,000 First Republic Bancorp, Sub.
Deb., 7.25%, 12/1/02 3,112
2,000,000 Glycomed, 7.50%, 1/1/03 1,260
2,000,000 PerSeptive Biosystems,
8.25%, 8/15/01 1,760
TOTAL CONVERTIBLE BONDS (COST $10,739) 13,094
===============================================================================
Short-Term Investments -- 13.8%
BANK NOTES -- 0.5%
3,000,000 Fifth Third Bank, 6.21%,
10/27/95 3,001
COMMERCIAL PAPER -- 9.6%
5,000,000 Asset Securitization
Cooperative, 4(2), 5.88%,
8/31/95 4,949
3,000,000 AT&T, 6.00%, 10/11/95 2,915
4,000 Cargill Financial Services,
6.10%, 7/3/95 4
2,000,000 Corporate Asset Funding,
6.05%, 7/17/95 1,994
5,500,000 Dover, 4(2), 5.98%, 7/7/95 5,474
2,000,000 Electronic Data Systems,
5.95%, 7/17/95 1,985
3,000,000 Fleet Mortgage Group,
6.00%, 7/21/95 2,985
1,000,000 Heinz (H. J.), 5.94%, 8/7/95 993
2,000,000 Kingdom of Sweden, 6.02%,
9/18/95 1,950
<PAGE>
3,000,000 New Center Asset Trust,
5.95%, 8/3/95 $ 2,979
5,000,000 Preferred Receivables
Funding, 5.97 - 6.00%,
7/5 - 7/25/95 4,981
5,000,000 Province of Quebec,
5.82%, 9/26/95 4,927
5,000,000 Raytheon, 4(2), 6.00%,
7/10/95 4,989
2,000,000 Statoil (Den Norske Stats
Oljeselskap), 5.96%,
7/6/95 1,992
2,000,000 Tasmanian Public Finance,
6.15%, 9/25/95 1,937
5,000,000 U.S. Bancorp, 5.97 - 6.05%,
7/11 - 7/19/95 4,957
1,500,000 UBS Finance (Delaware),
6.25%, 7/3/95 1,499
3,000,000 Yorkshire Building Society,
6.00%, 7/5/95 2,968
54,478
CERTIFICATES OF DEPOSIT -- 3.7%
2,000,000 Bank of Nova Scotia, 6.01%,
7/10/95 2,000
3,000,000 Banque Nationale de Paris,
6.05%, 7/6/95 3,000
3,000,000 Bayerische Hypotheken,
6.11%, 7/14/95 3,000
3,000,000 Commerzbank, 6.12%,
8/14/95 3,000
3,000,000 Credit Suisse, 6.27%,
10/12/95 3,003
2,000,000 Landes Bank Hesson Thurin,
6.08%, 7/25/95 2,000
3,000,000 National Westminster Bank,
6.09%, 7/28/95 3,001
2,000,000 Swiss Bank, 6.01%, 7/21/95 2,000
21,004
U.S. GOVERNMENT OBLIGATIONS -- 0.0%
100,000 U.S. Treasury Bills, 5.70%,
7/27/95 99
TOTAL SHORT-TERM INVESTMENTS (COST $78,582) 78,582
===============================================================================
TOTAL INVESTMENTS IN SECURITIES -- 100.7% OF NET ASSETS
(COST $465,672) $ 575,390
===============================================================================
<PAGE>
OTHER ASSETS LESS LIABILITIES $ (3,812)
---------
Net Assets.......................................... 571,578
=========
+ Affiliated company
* Non-income producing
++ Securities contain some restrictions as to public
resale--total of such securities at period-end
amounts to 0.8% of net assets.
REIT Real Estate Investment Trust
4(2) Commercial Paper sold within terms of a private
placement memorandum, exempt from registration
under section 4.2 of the Securities Act of 1933,
as amended, and may be sold only to dealers in that
program or other "accredited investors."
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund / June 30, 1995 (Unaudited)
(IN THOUSANDS)
ASSETS
Investments in securities, at value
Affiliated companies (cost $63,817) ...................... $ 91,856
Other companies (cost $401,855) .......................... 483,534
---------
Total investments in securities ........................... 575,390
Other assets ................................................ 4,188
--------
Total assets ................................................ 579,578
--------
LIABILITIES ................................................ 8,000
--------
NET ASSETS ................................................. $571,578
========
NET ASSETS CONSIST OF:
Accumulated net investment income - net of distributions ............ $ 2,493
Accumulated net realized gain/loss - net of distributions ........... 20,414
Net unrealized gain (loss) .......................................... 109,718
Paid-in-capital applicable to 36,690,958 shares of $0.01 par
value capital stock outstanding; 1,000,000,000 shares authorized .. 438,953
--------
NET ASSETS .......................................................... $571,578
========
NET ASSET VALUE PER SHARE ........................................... $ 15.58
========
The accompanying notes are an integral part of these financial statements.
===============================================================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund / Six Months Ended June 30, 1995 (Unaudited)
(IN THOUSANDS)
INVESTMENT INCOME
Income
Dividend .................................................... $3,044
Interest .................................................... 1,540
------
Total income ................................................ 4,584
------
Expenses
Investment management ....................................... 1,606
Shareholder servicing ....................................... 557
Custody and accounting ...................................... 68
Prospectus and shareholder reports .......................... 44
Registration ................................................ 20
Legal and audit ............................................. 14
Directors ................................................... 8
Miscellaneous ............................................... 16
------
Total expenses .............................................. 2,333
------
Net investment income ......................................... 2,251
------
REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on:
Securities ..................................................... 15,101
Futures ........................................................ 70
-------
Net realized gain (loss) ....................................... 15,171
-------
Change in net unrealized gain or loss on securities .............. 54,790
-------
Net realized and unrealized gain (loss) .......................... 69,961
-------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ............... $72,212
=======
The accompanying notes are an integral part of these financial statements.
===============================================================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund (Unaudited)
(IN THOUSANDS)
Six Months Ended Year Ended
June 30, 1995 Dec. 31, 1994
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income ............................ $ 2,251 $ 4,096
Net realized gain (loss) ......................... 15,171 27,741
Change in net unrealized gain or loss ............ 54,790 (38,135)
---------- ----------
Increase (decrease) in net assets from operations 72,212 (6,298)
---------- ----------
Distributions to shareholders
Net investment income ............................ -- (3,980)
Net realized gain ................................ -- (26,157)
---------- ----------
Decrease in net assets from distributions ........ -- (30,137)
---------- ----------
Capital share transactions*
Shares sold ...................................... 140,638 96,644
Distributions reinvested ......................... -- 28,782
Shares redeemed .................................. (49,707 (132,675)
Redemption fees received ......................... 3 --
---------- ----------
Increase (decrease) in net assets from
capital share transactions .................... 90,934 (7,249)
---------- ----------
Increase (decrease) in net assets .................. 163,146 (43,684)
NET ASSETS
Beginning of period ................................ 408,432 452,116
---------- ----------
End of period ...................................... $ 571,578 $ 408,432
========== ==========
*Share information
Shares sold ...................................... 9,723 6,579
Distributions reinvested ......................... -- 2,184
Shares redeemed .................................. (3,507) (9,091)
---------- ----------
Increase (decrease) in shares outstanding ........ 6,216 (328)
========== ==========
The accompanying notes are an integral part of these financial statements.
===============================================================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund / June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price at the time the valuations
are made. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market for
such security. Listed securities that are not traded on a particular day and
securities that are regularly traded in the over-the-counter market are valued
at the mean of the latest bid and asked prices. Other equity securities are
valued at a price within the limits of the latest bid and asked prices deemed by
the Board of Directors, or by persons delegated by the Board, best to reflect
fair value.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers who
make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors. B) Affiliated Companies -
Investments in companies 5% or more of whose outstanding voting securities are
held by the fund are defined as "Affiliated Companies" in Section 2(a)(3) of the
Investment Company Act of 1940. C) 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 an 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.
<PAGE>
- --------------------------------------------------------------------------------
NOTE 2 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $65,595,000 and $37,152,000, respectively, for the six
months ended June 30, 1995.
- --------------------------------------------------------------------------------
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, 1995, the aggregate cost of investments for federal income tax
and financial reporting purposes was $465,672,000 and net unrealized gain
aggregated $109,718,000, of which $132,877,000 related to appreciated
investments and $23,159,000 to depreciated investments.
- --------------------------------------------------------------------------------
NOTE 4 - RELATED PARTY TRANSACTIONS
- --------------------------------------------------------------------------------
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management fee,
of which $308,000 was payable at June 30, 1995. 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 0.31% for assets in excess of $34 billion. At June
30, 1995, and for the six months then ended, the effective annual Group Fee rate
was 0.34%. 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 $512,000 for the six months
ended June 30, 1995, of which $91,000 was payable at period-end.
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund (Unaudited)
For a share outstanding throughout each period
<S> <C> <C> <C> <C> <C> <C>
Six Months
Ended Year Ended December 31,
June 30, 1995 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD................................... $13.40 $14.68 $12.28 $10.37 $8.09 $9.53
------ ------ ------ ------ ------ ------
Investment Activities
Net investment income....................... 0.06 0.13 0.12 0.11 0.13* 0.23*
Net realized and unrealized
gain (loss)............................... 2.12 (0.35) 2.73 2.05 2.61 (1.31)
------ ------ ------ ------ ------ ------
Total from Investment Activities............ 2.18 (0.22) 2.85 2.16 2.74 (1.08)
Distributions
Net investment income....................... -- (0.14) (0.10) (0.10) (0.12) (0.24)
Net realized gain........................... -- (0.92) (0.35) (0.15) (0.34) (0.12)
------ ------ ------ ------ ------ ------
Total Distributions......................... -- (1.06) (0.45) (0.25) (0.46) (0.36)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD................ $15.58 $13.40 $14.68 $12.28 $10.37 $8.09
====== ====== ====== ====== ====== ======
RATIOS / SUPPLEMENTAL DATA
Total Return.................................. 16.3% (1.4)% 23.3% 20.9% 34.2%* (11.3)%*
Ratio of Expenses to Average
Net Assets.................................. 1.00%+ 0.97% 1.05% 1.25% 1.25%* 1.25%*
Ratio of Net Investment Income
to Average Net Assets....................... 0.97%+ 0.93% 0.91% 0.98% 1.31%* 2.57%*
Portfolio Turnover Rate....................... 17.0%+ 21.4% 11.8% 12.1% 30.5% 33.1%
Net Assets, End of Period
(in thousands)............................. $571,578 $408,432 $452,116 $264,021 $53,228 $26,438
<FN>
+Annualized.
*Excludes expenses in excess of a 1.25% voluntary expense limitation through December 31, 1993.
</FN>
</TABLE>
