<PAGE>
Annual Report
SMALL-CAP
VALUE FUND
-----------------
DECEMBER 31, 1997
-----------------
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
REPORT HIGHLIGHTS
Small-Cap Value Fund
. Recovering from the October sell-off that was triggered by a Far East
currency crisis, U.S. stocks rose strongly for the third straight year.
. The fund's returns of 14.98% and 27.92% for the 6- and 12-month periods,
respectively, exceeded the Russell 2000 Index and also the Lipper Small Cap
Fund Index for both periods.
. New positions spanned a variety of industries, from mobile telecommunications
to building products distribution. Our major sale, Suiza Foods, reflected its
expansion beyond the fund's market-cap guidelines.
. This could be a tough year for the U.S. stock market, but we will be alert
for value opportunities.
<PAGE>
FELLOW SHAREHOLDERS
The stock market's remarkable surge continued apace during the second half of
1997, with every major market index hitting multiple record highs. Most of the
gains occurred during the summer and early fall before turmoil in Asian stock
markets began to undermine investor confidence.
The Small-Cap Value Fund rose 14.98% for the period, well ahead of the
broad market as represented by the unmanaged Standard & Poor's 500 Stock
Index, the small-cap Russell 2000 Index, and also the Lipper Small Cap Fund
Index of the 30 largest small-cap mutual funds. For all of 1997, the S&P
500 enjoyed one of its finest years ever, rising over 33%. Small-cap stocks
scored strong gains but were unable to keep up with the S&P 500's
blistering pace.
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Periods Ended 12/31/97 6 Months 12 Months
- --------------------------------------------------------------------------------
Small-Cap Value Fund 14.98% 27.92%
S&P 500 10.58 33.36
Russell 2000 Index 11.04 22.36
Lipper Small Cap Fund Index 8.50 15.05
MARKET ENVIRONMENT
The stock market's superb performance throughout the year reflected
positive developments for two key variables that investors watch: interest
rates and corporate profits. Long-term bond rates fell approximately 80
basis points, a major positive move (100 basis points equal one percentage
point). Corporate profits, which had risen steadily throughout the decade,
continued to grow in 1997, although at a slower pace. The favorable climate
for interest rates was especially pronounced after April and played a major
role in the stock market's good performance during the second half of the
year.
Small-cap stocks got off to a poor start during the first quarter,
rebounded during the spring and summer, and then gave ground during the
fourth quarter. The value sector in which we concentrate did relatively
well for the year; in fact, indices of small-cap value stocks showed gains
nearly double those of small growth stocks. The reasons for this are
unclear, although the volatile technology sector did relatively poorly in
1997, clearly hurting growth stock results.
1
<PAGE>
THE "ASIAN CONTAGION" - HOW EXPOSED ARE WE?
Turmoil in Asian stock markets and economics has had a direct, if somewhat
muted, effect on the U.S. market over the past several months. But while Asian
economies are likely to slow -- and some may slip into recession in 1998 -- the
real impact on U.S. companies will be exacerbated by the precipitous declines of
several foreign currencies relative to the dollar. U.S. multinationals will
probably experience sharply lower overseas profits even if the physical volume
of goods and services they sell in Asia stays the same.
We know that stock prices reflect expectations about earnings and dividends. If
the problems of Asia are going to hurt corporate earnings, they will probably
also hurt the stock prices of companies most directly affected.
Given this scenario, how exposed is the Small-Cap Value Fund to the "Asian
Contagion"?
The simple answer is "relatively little." Small companies generally concentrate
on their local market as long as they can continue to meet their growth goals.
Expanding overseas presents a new set of risks and challenges that companies do
not take on cavalierly. Most of the companies in our fund are not seeking
overseas business and, therefore, are not directly affected by a drop in the
value of the Thai baht or a recession in Malaysia.
Let's look at the fund's top five holdings:
. Electro Rent leases and rents electronic equipment in the U.S. and Canada. The
company has a little business in Europe but no offices, and a 15% interest in
a small Japanese rental company.
Exposure to Asia: Negligible.
. Community First Bankshares is an expanding network of community banks based in
Fargo, North Dakota. All loans are to local consumers and businesses.
Exposure to Asia: None.
. McGrath RentCorp rents and sells primarily relocatable modular offices and
classrooms from offices in California and Texas. Essentially all of their
customers are in these two states.
Exposure to Asia: None.
. Allied Capital is a lender to small businesses in the United States. The
company has no offices outside the U.S. and concentrates its loans to consumer
and service companies.
Exposure to Asia: None.
. Silicon Valley Bancshares has developed a position as the banker of choice for
the venture capital community and the companies it finances. The bank does not
lend outside the U.S., nor does it have foreign offices. Some of its high-tech
customers sell to Asia and will be affected by a slowdown there.
Exposure to Asia: Negligible.
Certainly, there are companies in the portfolio with sales directly to Asian
consumers, but their weighting is slight. If the fund is affected by problems in
Asia, it is likely to be from a drop in the overall U.S. stock market that hurts
all stocks, not just those with direct Asian exposure.
2
<PAGE>
PORTFOLIO ACTIVITY
The major portfolio changes table that follows this letter shows the 10
largest purchases and sales during the past six months. The eight new names
in the portfolio span a variety of industries, including mobile
telecommunications (Commnet Cellular), real estate investment trusts
(Meridian Industrial Trust and First Washington Realty), medical devices
(Minntech), trucking (Landstar Systems), and building products distribution
(Cameron Ashley).
Cameron Ashley provides a good example of our investment process. Through
acquisitions, the company has built a powerful regional network of building
products distribution centers. While solidly profitable, Cameron Ashley's
results tend to reflect volatile commodity prices and, therefore, are
relatively unpredictable. The stock fell almost 30% below the year's high
after disappointing results were reported for the October fiscal quarter. A
long meeting with management convinced us that tighter controls over costs
are planned for 1998, and as a consequence a boost in earnings is likely.
The stock was at its lowest valuation to sales in four years and had a
credible catalyst to realize value. We were able to buy a large block at a
discount price in a well-managed company temporarily out of favor. This is
the essence of disciplined value investing.
The largest sale, Suiza Foods, deserves a comment. We bought Suiza in a
private placement of stock in July 1996. The company, a rapidly growing
consolidator of regional dairies, did everything that we expected -- and
more. Sales and earnings grew substantially; management effectively told
their story to new investors and Wall Street analysts alike; and the stock
responded in kind, tripling over an 18-month period. However, a proposed
merger with Morningstar Foods meant that Suiza's market capitalization
would exceed $1 billion, the level at which we begin to sell stocks no
longer considered "small-cap." CEO Gregg Engles has built a superb company
and should see continued success in the future. Our thanks to Gregg and his
team for helping us make about $20 million in profit on our investment in
Suiza.
3
<PAGE>
OUTLOOK
In our opinion, 1998 will prove to be a tough year for our stock market.
Problems in Asia will cause a marked slowdown in corporate profit growth,
with a consequent impact on stock prices. Volatility of stock prices may
rise as uncertainty rises. We hold close to 10% of the fund in cash
reserves, looking for opportunities to invest in conservatively managed
companies whose stocks are out of favor. If the market pulls back, we
intend to put the cash to work; in the meantime, we are maintaining a
conservative posture.
Respectfully submitted,
Preston G. Athey
President and Chairman of the Investment Advisory
Committee
January 19, 1998
4
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
<TABLE>
<CAPTION>
Percent of
Net Assets
12/31/97
- --------------------------------------------------------------------------------
<S> <C>
Electro Rent 1.8%
................................................................................
Community First Bankshares 1.5
................................................................................
McGrath RentCorp 1.5
................................................................................
Allied Capital 1.5
................................................................................
Silicon Valley Bancshares 1.5
- --------------------------------------------------------------------------------
Poe & Brown 1.4
................................................................................
Analogic 1.3
................................................................................
CORT Business 1.2
................................................................................
Commercial Federal 1.2
................................................................................
CSS Industries 1.1
- --------------------------------------------------------------------------------
Puerto Rican Cement 1.1
................................................................................
PXRE 1.1
................................................................................
Furon 1.1
................................................................................
Analysts International 1.1
................................................................................
UICI 1.1
- --------------------------------------------------------------------------------
Hancock Fabrics 1.0
................................................................................
Holophane 1.0
................................................................................
First Republic Bank 1.0
................................................................................
Post Properties 0.9
................................................................................
Landauer 0.9
- --------------------------------------------------------------------------------
Sun Communities 0.9
................................................................................
Grey Advertising 0.8
................................................................................
Consolidated Products 0.8
................................................................................
Giant Cement 0.8
................................................................................
Saga Communications 0.8
- --------------------------------------------------------------------------------
Total 28.4%
</TABLE>
5
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
MAJOR PORTFOLIO CHANGES
(Listed in descending order of size)
6 Months Ended 12/31/97
Ten Largest Purchases Ten Largest Sales
- --------------------------------------------------------------------------------
Commnet Cellular * Suiza Foods **
...................................... ...................................
Layne Christensen * DH Technology **
...................................... ...................................
Landstar Systems * Greenfield Industries **
...................................... ...................................
Meridian Industrial Trust * Versa Technologies **
...................................... ...................................
Greenfield Industries * Systems & Computer Technology
...................................... ...................................
First Washington Realty Trust * Quick & Reilly
...................................... ...................................
Minntech * Offshore Logistics
...................................... ...................................
Insituform Technologies FIserv **
...................................... ...................................
Strattec Security Financial Security Assurance
...................................... ...................................
Cameron Ashley * Sphere Drake Holdings **
...................................... ...................................
*Position added
**Position eliminated
6
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- ----------------------
PERFORMANCE COMPARSION
- --------------------------------------------------------------------------------
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.
SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
- ------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Since Inception
Periods Ended 12/31/97 1 Year 3 Years 5 Years Inception Date
- --------------------------------------------------------------------------------
Small-Cap Value Fund 27.92% 27.25% 20.17% 15.99% 6/30/88
................................................................................
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
7
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
Year
Ended
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 19.56 $ 16.53 $ 13.40 $ 14.68 $ 12.28
...................................................
Investment activities
Net investment income 0.21 0.22 0.18 0.13 0.12
Net realized and
unrealized gain (loss) 5.22 3.84 3.74 (0.35) 2.73
...................................................
Total from
investment activities 5.43 4.06 3.92 (0.22) 2.85
...................................................
Distributions
Net investment income (0.20) (0.23) (0.18) (0.14) (0.10)
Net realized gain (1.39) (0.80) (0.61) (0.92) (0.35)
...................................................
Total distributions (1.59) (1.03) (0.79) (1.06) (0.45)
...................................................
NET ASSET VALUE
---------------------------------------------------
End of period $ 23.40 $ 19.56 $ 16.53 $ 13.40 $ 14.68
---------------------------------------------------
Ratios/Supplemental Data
Total return 27.92% 24.61% 29.29% (1.38)% 23.30%
......................................................................................
Ratio of expenses to
average net assets 0.87% 0.94% 0.98% 0.97% 1.05%
......................................................................................
Ratio of net investment
income to average
net assets 1.01% 1.28% 1.59% 0.93% 0.91%
......................................................................................
Portfolio turnover rate 14.6% 15.2% 18.1% 21.4% 11.8%
......................................................................................
Average commission
rate paid $ 0.0305 $ 0.0296 - - -
......................................................................................
Net assets, end of period
(in millions) $ 2,088 $ 1,410 $ 936 $ 408 $ 452
......................................................................................
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
- ------------------------
PORTFOLIO OF INVESTMENTS Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
COMMON STOCKS 87.5%
FINANCIAL 14.0%
Bank and Trust 6.6%
Columbia Bancorp 65,000 $ 2,236
................................................................................
Commercial Federal 700,000 24,894
................................................................................
Community First Bankshares 600,000 32,175
................................................................................
First Bell Bancorp + 550,000 10,553
................................................................................
First National Bank of Anchorage 5,000 12,300
................................................................................
First Republic Bank *+ 639,400 20,421
................................................................................
Glacier Bancorp 205,300 5,043
................................................................................
Silicon Valley Bancshares *+ 545,000 30,452
................................................................................
138,074
...............
Insurance 6.0%
Financial Security Assurance 75,000 3,619
................................................................................
Markel * 68,800 10,741
................................................................................
Medical Assurance * 522,640 14,699
................................................................................
NYMAGIC 500,000 13,781
................................................................................
Poe & Brown + 652,900 29,136
................................................................................
Presidential Life 400,000 8,175
................................................................................
PXRE + 700,000 23,231
................................................................................
UICI * 640,000 22,440
................................................................................
125,822
...............
Financial Services 1.4%
Delta Financial * 475,000 6,353
................................................................................
Medallion Financial 280,000 6,090
................................................................................
Quick & Reilly 50,000 2,150
................................................................................
Sirrom Capital 250,000 13,094
................................................................................
27,687
...............
Total Financial 291,583
...............
UTILITIES 0.1%
Telephone 0.1%
Rural Cellular (Class A) * 208,500 2,724
................................................................................
Total Utilities 2,724
...............
</TABLE>
9
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
CONSUMER NONDURABLES 9.4%
Beverages 0.1%
Chalone Wine Group * 170,400 $ 1,981
................................................................................
Chalone Wine Group, Warrants, 7/19/98 * 142,857 495
................................................................................
2,476
...............
Food Processing 0.6%
CTB International * 325,000 4,692
................................................................................
Sylvan *+ 530,000 7,453
................................................................................
12,145
...............
Hospital Supplies/Hospital Management 2.6%
Allied Healthcare Products *+ 526,000 4,126
................................................................................
Intelligent Medical Imaging *+ 950,000 3,384
................................................................................
Landauer + 650,200 18,206
................................................................................
Lunar * 200,000 4,087
................................................................................
Minntech + 645,000 8,103
................................................................................
Optical Coating Laboratory 240,000 3,285
................................................................................
Owens & Minor 600,000 8,700
................................................................................
Safeguard Health *+ 400,000 5,450
................................................................................
55,341
...............
Pharmaceuticals 0.8%
Bone Care International *+ 650,000 6,602
................................................................................
COR Therapeutics * 200,000 4,512
................................................................................
Immulogic Pharmaceuticals * 200,000 378
................................................................................
Quidel *+ 1,200,000 4,313
................................................................................
15,805
...............
Biotechnology 0.4%
Cell Genesys * 1,075,000 9,104
................................................................................
9,104
...............
Health Care Services 0.3%
Harborside Healthcare * 77,100 1,523
................................................................................
Henry Schein * 128,625 4,518
................................................................................
6,041
...............
Miscellaneous Consumer Products 4.6%
American Safety Razor *+ 635,000 12,581
................................................................................
Applied Extrusion Technologies *+ 850,000 5,684
................................................................................
Boston Acoustics + 210,000 5,552
................................................................................
BWAY *+ 750,000 17,156
................................................................................
Chic by H.I.S. *+ 600,000 4,388
................................................................................
Culp 550,000 11,000
................................................................................
</TABLE>
10
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Fab Industries + 325,000 $ 10,116
................................................................................
Home Products International *+ 402,500 4,679
................................................................................
Horace Small Apparel ADR * 175,000 1,006
................................................................................
Martin Industries 400,000 2,175
................................................................................
QuikSilver * 86,400 2,489
................................................................................
Rival + 950,000 12,766
................................................................................
Superior Surgical Mfg. + 401,000 6,416
................................................................................
96,008
...............
Total Consumer Nondurables 196,920
...............
CONSUMER SERVICES 10.6%
Restaurants 1.7%
Consolidated Products *+ 1,069,500 17,513
................................................................................
Fresh Choice *+ 540,000 1,772
................................................................................
Rare Hospitality International * 345,000 3,127
................................................................................
Ruby Tuesday * 350,000 9,012
................................................................................
Uno Restaurant *+ 550,000 3,781
................................................................................
35,205
...............
General Merchandisers 0.3%
Fred's (Class A) 312,500 6,250
................................................................................
6,250
...............
Specialty Merchandisers 4.8%
Building Materials Holding * 425,000 4,489
................................................................................
Compucom Systems * 800,000 6,700
................................................................................
CSS Industries *+ 750,000 23,906
................................................................................
Dan River * 300,000 4,931
................................................................................
Designs * 200,000 597
................................................................................
Fabri-Centers of America (Class B) * 600,000 12,413
................................................................................
Genovese Drug Stores (Class A) 328,493 5,626
................................................................................
Hancock Fabrics + 1,500,000 21,750
................................................................................
Haverty Furniture + 450,000 6,131
................................................................................
S & K Famous Brands *+ 425,000 5,684
................................................................................
Stein Mart * 300,000 8,006
................................................................................
100,233
...............
Entertainment and Leisure 1.3%
Carmike Cinemas (Class A) * 254,400 7,298
................................................................................
North Face * 200,000 4,407
................................................................................
Seattle Filmworks *+ 1,425,000 15,942
................................................................................
27,647
...............
</TABLE>
11
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Media and Communications 2.5%
Commnet Cellular * 400,000 $ 14,275
................................................................................
Courier + 130,000 3,575
................................................................................
Grey Advertising 51,865 17,556
................................................................................
Saga Communications (Class A) * 820,312 17,432
................................................................................
52,838
...............
Total Consumer Services 222,173
...............
CONSUMER CYCLICALS 9.4%
Automobiles and Related 1.9%
Littelfuse * 90,000 2,213
................................................................................
Myers Industries 330,000 5,631
................................................................................
R & B * 387,000 3,773
................................................................................
Republic Automotive Parts *+ ++ 25,500 347
................................................................................
Republic Automotive Parts *+ 275,000 3,936
................................................................................
Strattec Security * 268,000 7,035
................................................................................
TBC *+ 1,650,000 15,830
................................................................................
38,765
...............
Building and Real Estate 6.1%
Apartment Investment & Management, REIT 134,000 4,925
................................................................................
First Washington Realty Trust, REIT 320,100 8,803
................................................................................
Glenborough Realty Trust, REIT 500,000 14,812
................................................................................
Innkeepers USA, REIT 850,000 13,175
................................................................................
Meridian Industrial Trust, REIT 325,000 8,288
................................................................................
National Health Investors, REIT 300,000 12,562
................................................................................
Pacific Gulf Properties, REIT 550,000 13,062
................................................................................
Post Properties, REIT 450,000 18,281
................................................................................
Skyline, REIT 335,600 9,229
................................................................................
Sun Communities, REIT 500,000 17,969
................................................................................
United Dominion Realty Trust, REIT 500,000 6,969
................................................................................
128,075
...............
Miscellaneous Consumer Durables 1.4%
Chromcraft Revington *+ 500,000 16,000
................................................................................
Ellett Brothers + 300,000 1,711
................................................................................
Juno Lighting 350,000 6,234
................................................................................
Stanley Furniture * 175,000 4,955
................................................................................
28,900
...............
Total Consumer Cyclicals 195,740
...............
</TABLE>
12
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
TECHNOLOGY 6.0%
Electronic Components 2.9%
Analogic + 709,000 $ 26,765
................................................................................
Badger Meter 100,000 4,075
................................................................................
PCD *+ 300,000 7,088
................................................................................
Pioneer-Standard Electronics 217,100 3,351
................................................................................
Planar Systems *+ 560,000 5,775
................................................................................
Special Devices *+ 450,000 13,162
................................................................................
60,216
...............
Electronic Systems 0.2%
CEM *+ 325,000 3,565
................................................................................
3,565
...............
Telecommunications Equipment 0.3%
Mosaix * 650,000 5,687
................................................................................
Syntellect *+ 700,000 1,291
................................................................................
6,978
...............
Aerospace and Defense 2.6%
COMARCO *+ 352,500 7,733
................................................................................
DONCASTERS ADR * 100,000 2,112
................................................................................
Nichols Research * 465,000 11,451
................................................................................
Raven Industries + 380,000 8,241
................................................................................
Tech-Sym * 200,000 5,087
................................................................................
TransTechnology 239,100 6,770
................................................................................
Woodward Governor 375,000 12,258
................................................................................
53,652
...............
Total Technology 124,411
...............
CAPITAL EQUIPMENT 3.2%
Electrical Equipment 1.6%
Holophane *+ 813,000 20,427
................................................................................
LSI Industries 324,500 5,800
................................................................................
Thomas Industries 375,000 7,406
................................................................................
33,633
...............
Other Capital Equipment 0.3%
Omniquip International 300,000 6,010
................................................................................
6,010
...............
Machinery 1.3%
Alamo Group + 650,000 14,097
................................................................................
</TABLE>
13
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Farrel + 465,500 $ 2,284
................................................................................
K-Tron *+ 250,000 4,359
................................................................................
Scotsman Industries 300,000 7,331
................................................................................
28,071
...............
Total Capital Equipment 67,714
...............
BUSINESS SERVICES AND
TRANSPORTATION 18.2%
Computer Service and Software 1.8%
Analysts International 650,000 22,587
................................................................................
State of the Art * 370,000 6,036
................................................................................
Systems & Computer Technology * 75,000 3,736
................................................................................
VMARK Software *+ 650,000 5,078
................................................................................
37,437
...............
Distribution Services 1.6%
Allou Health & Beauty * 450,000 3,319
................................................................................
JP Foodservice * 172,500 6,372
................................................................................
Richardson Electronics + 700,000 7,875
................................................................................
Valley National Gases *+ 650,000 7,089
................................................................................
VWR Scientific Products * 287,000 8,215
................................................................................
32,870
...............
Environmental 1.3%
BHA Group (Class A) + 550,000 10,519
................................................................................
EMCON *+ 600,000 3,038
................................................................................
Fluor Daniel / GTI * 148,851 1,414
................................................................................
International Technology *+ 850,000 6,375
................................................................................
TRC * 325,000 1,381
................................................................................
Waterlink * 311,900 5,146
................................................................................
27,873
...............
Transportation Services 2.4%
Builders Transport *+ 445,000 723
................................................................................
Frozen Food Express 600,000 5,438
................................................................................
International Shipholding + 664,000 11,454
................................................................................
Landstar Systems * 400,000 10,550
................................................................................
M.S. Carriers * 200,000 4,925
................................................................................
Midwest Express Holdings * 199,350 7,737
................................................................................
Transport Corp. of America *+ 575,000 9,200
................................................................................
50,027
...............
</TABLE>
14
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Miscellaneous Business Services 11.1%
Aaron Rents (Class A) + 55,500 $ 957
................................................................................
Aaron Rents (Class B) + 800,000 15,500
................................................................................
Allied Capital + 1,394,000 31,191
................................................................................
AMRESCO * 320,000 9,580
................................................................................
Business Resource Group *+ 380,000 1,223
................................................................................
CORT Business *+ 644,700 25,667
................................................................................
Electro Rent *+ 1,000,000 36,750
................................................................................
Insituform Technologies (Class A) *+ 1,500,000 11,625
................................................................................
Leasing Solutions *+ 442,800 10,572
................................................................................
McGrath RentCorp + 1,298,000 31,477
................................................................................
Mine Safety Appliances 100,600 6,740
................................................................................
MYR Group + 433,333 5,552
................................................................................
Right Management Consultants *+ 500,000 6,469
................................................................................
Sealright *+ 700,000 8,531
................................................................................
Shorewood Packaging * 80,900 2,174
................................................................................
Tab Products + 400,000 4,950
................................................................................
UniFirst 350,000 9,822
................................................................................
Unitog + 592,000 13,283
................................................................................
232,063
...............
Total Business Services and Transportation 380,270
...............
ENERGY 2.5%
Energy Services 1.2%
Carbo Ceramics 439,200 14,274
................................................................................
Newpark Resources * 150,000 2,625
................................................................................
Offshore Logistics * 150,000 3,235
................................................................................
Pitt-DesMoines 121,800 4,476
................................................................................
24,610
...............
Exploration and Production 1.1%
Cross Timbers Oil 103,500 2,581
................................................................................
Devon Energy 71,000 2,734
................................................................................
HS Resources *+ 1,000,000 13,812
................................................................................
Ocean Energy * 100,000 4,931
................................................................................
24,058
...............
Gas Transmission 0.2%
Atrion + 300,000 4,181
................................................................................
4,181
...............
Total Energy 52,849
...............
</TABLE>
15
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
PROCESS INDUSTRIES 7.3%
Diversified Chemicals 0.7%
Aceto + 400,000 $ 8,300
................................................................................
LeaRonal 300,000 7,050
................................................................................
15,350
...............
Specialty Chemicals 3.0%
Furon + 1,100,000 22,962
................................................................................
Hauser *+ 600,000 3,488
................................................................................
Sybron Chemical *+ 450,000 15,075
................................................................................
Synalloy + 530,750 7,862
................................................................................
Tuscarora + 722,500 12,689
................................................................................
62,076
...............
Paper and Paper Products 0.9%
Republic Group 400,000 6,550
................................................................................
Wausau Mosinee Paper 630,000 12,836
................................................................................
19,386
...............
Building and Construction 2.7%
Cameron Ashley 400,000 6,775
................................................................................
Giant Cement *+ 750,000 17,437
................................................................................
Layne Christensen *+ 600,000 7,838
................................................................................
Puerto Rican Cement + 470,000 23,588
................................................................................
55,638
...............
Total Process Industries 152,450
...............
BASIC MATERIALS 3.8%
Metals 1.6%
Cold Metal Products *+ 550,000 2,784
................................................................................
Gibraltar Steel * 450,000 8,775
................................................................................
Lone Star Technologies * 354,000 10,045
................................................................................
Material Sciences * 550,000 6,703
................................................................................
Steel Technologies 350,000 4,178
................................................................................
32,485
...............
Mining 0.9%
Dayton Mining (CAD) *+ 2,200,000 4,263
................................................................................
Delta Gold (AUD) 1,000,000 1,053
................................................................................
East Rand Gold & Uranium (ZAR) 1,350,000 1,664
................................................................................
</TABLE>
16
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Golden Star Resources (CAD) * 1,400,000 $ 4,988
................................................................................
Oryx Gold Holdings (ZAR) * 5,490,000 3,610
................................................................................
SAMAX Gold (CAD) * 272,300 810
................................................................................
TVX Gold * 600,000 2,025
................................................................................
18,413
...............
Miscellaneous Materials 1.3%
Oil-Dri + 500,000 8,250
................................................................................
Penn Virginia + 450,000 13,275
................................................................................
Synthetic Industries * 237,000 5,925
................................................................................
27,450
...............
Total Basic Materials 78,348
...............
INVESTMENT COMPANIES 0.4%
First Financial Fund 429,690 7,949
................................................................................
Total Investment Companies 7,949
...............
MISCELLANEOUS COMMON STOCKS 2.6%
Western Water * 350,000 3,719
................................................................................
Other Miscellaneous Common Stocks 51,149
................................................................................
Total Miscellaneous Common Stocks 54,868
...............
Total Common Stocks (Cost $1,202,342) 1,827,999
...............
PREFERRED STOCKS 0.2%
Prime Retail, Cum., 10.50% (Series A) 180,000 4,950
................................................................................
Total Preferred Stocks (Cost $3,454) 4,950
...............
CONVERTIBLE PREFERRED STOCKS 1.2%
Cross Timbers Oil (Series A) 344,400 12,571
................................................................................
International Technology, 7.00% + 127,900 2,590
................................................................................
Prime Retail, 8.50% (Series B) 300,000 7,200
................................................................................
Western Water (Series C) 2,030 1,518
................................................................................
Total Convertible Preferred Stocks (Cost $15,997) 23,879
...............
</TABLE>
17
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ---------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
CONVERTIBLE BONDS 0.5%
Builders Transport, Deb.
6.50%, 5/1/11 *+ $ 1,158,000 $ 567
.............................................................................................
8.00%, 8/15/05 *+ 1,700,000 884
.............................................................................................
Glycomed, Sub. Deb., 7.50%, 1/1/03 2,000,000 1,867
.............................................................................................
Leasing Solutions, Sub. Notes, 6.875%, 10/1/03 + 2,000,000 1,890
.............................................................................................
Offshore Logistics, Sub. Notes (144a) 6.00%, 12/15/03 3,000,000 3,472
.............................................................................................
PerSeptive Biosystems, Sub. Notes
(144a) 8.25%, 8/15/01 2,000,000 2,065
.............................................................................................
Richardson Electronics, Sr. Sub. Notes, 7.25%, 12/15/06 + 500,000 423
.............................................................................................
Total Convertible Bonds (Cost $10,286) 11,168
................
CORPORATE BONDS 0.4%
Delta Financial, 9.50%, 8/1/04 3,000,000 2,978
.............................................................................................
Owens & Minor, Sr. Sub. Notes, 10.875%, 6/1/06 2,000,000 2,220
.............................................................................................
Synthetic Industries, Sr. Sub. Notes, 9.25%, 2/15/07 2,000,000 2,100
.............................................................................................
Total Corporate Bonds (Cost $7,110) 7,298
................
SHORT-TERM INVESTMENTS 10.1%
Medium-Term Notes 0.5%
Morgan Stanley Group, VR, 6.176%, 3/18/98 10,000,000 10,010
.............................................................................................
10,010
................
Money Market Funds 9.0%
Reserve Investment Fund, 5.84% +# 188,415,921 188,416
.............................................................................................
188,416
................
Structured Investment Vehicles 0.5%
Short Term Card Account Trust, VR
(144a) 6.00%, 1/15/98 10,000,000 10,000
.............................................................................................
10,000
................
U.S. Government Obligations 0.1%
U.S. Treasury Bills, 4.955 - 5.61%, 1/22/98 - 4/2/98 2,500,000 2,481
.............................................................................................
2,481
................
Total Short-Term Investments (Cost $210,907) 210,907
................
</TABLE>
18
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
- -------------------------------------------------------------------------------------------------------------
In thousands
<S> <C>
Total Investments in Securities
99.9% of Net Assets (Cost $1,450,096) $ 2,086,201
Futures Contracts
In thousands
<CAPTION>
Contract Contract
Expiration Value Gain (Loss)
<S> <C> <C> <C> <C>
Long, 80 Russell 2000 Stock Index
contracts, $550,000 of U.S. Treasury Bills
pledged as initial margin 3/98 $ 17,654 $ 503
Net payments (receipts) of variation
margin to date (399)
...........
Variation margin receivable
(payable) on open futures contracts 104
Other Assets Less Liabilities 1,912
............
NET ASSETS $ 2,088,217
------------
</TABLE>
+ Affiliated company
* Non-income producing
++ Securities contain some restrictions as to public resale -- total of such
securities at year-end amounts to 0.02% of net assets.
# Seven-day yield
ADR American Depository Receipt
REIT Real Estate Investment Trust
VR Variable rate
144a Security was purchased pursuant to Rule 144a under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers -- total of such securities at year-end amounts to
0.74% of net assets.
AUD Australian dollar
CAD Canadian dollar
ZAR South African rand
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
December 31, 1997
- ------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value
Affiliated companies (cost $825,342) $ 1,129,105
Other companies (cost $624,754) 957,096
..............
Total investments in securities 2,086,201
Other assets 13,171
..............
Total assets 2,099,372
..............
Liabilities
Total liabilities 11,155
..............
NET ASSETS $ 2,088,217
--------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 739
Accumulated net realized gain/loss - net of distributions 12,694
Net unrealized gain (loss) 636,608
Paid-in-capital applicable to 89,242,600 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 1,438,176
..............
NET ASSETS $ 2,088,217
--------------
NET ASSET VALUE PER SHARE $ 23.40
--------------
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
12/31/97
Investment Income
Income
Dividend (including $7,961 from affiliated companies) $ 19,748
Interest (including $4,333 from affiliated companies) 12,651
..............
Total income 32,399
..............
Expenses
Investment management 11,594
Shareholder servicing 2,807
Custody and accounting 204
Prospectus and shareholder reports 197
Registration 150
Legal and audit 16
Directors 13
Miscellaneous 16
..............
Total expenses 14,997
..............
Net investment income 17,402
..............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 110,163
Futures (502)
Foreign currency transactions (51)
..............
Net realized gain (loss) 109,610
..............
Change in net unrealized gain or loss
Securities (including $186,487 from affiliated companies) 293,582
Futures 446
Other assets and liabilities
denominated in foreign currencies 3
..............
Change in net unrealized gain or loss 294,031
..............
Net realized and unrealized gain (loss) 403,641
..............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 421,043
--------------
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
12/31/97 12/31/96
Increase (Decrease) in Net Assets
Operations
Net investment income $ 17,402 $ 15,340
Net realized gain (loss) 109,610 61,605
Change in net unrealized gain or loss 294,031 188,653
...........................
Increase (decrease) in net assets from operations 421,043 265,598
...........................
Distributions to shareholders
Net investment income (16,703) (15,749)
Net realized gain (116,072) (54,759)
...........................
Decrease in net assets from distributions (132,775) (70,508)
...........................
Capital share transactions *
Shares sold 587,864 467,160
Distributions reinvested 126,742 67,615
Shares redeemed (324,546) (256,974)
Redemption fees received 60 513
...........................
Increase (decrease) in net assets from capital
share transactions 390,120 278,314
...........................
Net Assets
Increase (decrease) during period 678,388 473,404
Beginning of period 1,409,829 936,425
...........................
End of period $2,088,217 $ 1,409,829
---------------------------
* Share information
Shares sold 26,430 26,142
Distributions reinvested 5,520 3,482
Shares redeemed (14,781) (14,216)
...........................
Increase (decrease) in shares outstanding 17,169 15,408
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
December 31, 1997
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Small-Cap Value 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 June 30, 1988.
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.
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 amortized cost which, when combined with
accrued interest, approximates 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. Financial futures contracts are
valued at closing settlement prices.
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.
23
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
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.
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. Payments ("variation margin") made or received
by the fund to settle the daily fluctuations in the value of futures contracts
are recorded as unrealized gains or losses until the contracts are closed.
Unrealized gains and losses on futures contracts are included, in Other assets
and Liabilities, respectively, and in Change in net unrealized gain or loss in
the accompanying financial statements.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Futures Contracts At December 31, 1997, the fund was a party to futures
contracts, which provide for the future sale by one party and purchase by
another of a specified amount of a specific financial instrument at an agreed
upon price, date, time, and place. Risks arise from possible illiquidity of the
futures market and from movements in security values.
24
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Other Purchases and sales of portfolio securities, other than short-term and
U.S. government securities, aggregated $461,966,000 and $220,579,000,
respectively, for the year ended December 31, 1997.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
taxable income.
At December 31, 1997, the aggregate cost of investments for federal income tax
and financial reporting purposes was $1,450,096,000, and net unrealized gain
aggregated $636,105,000, of which $698,819,000 related to appreciated
investments and $62,714,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $1,174,000 was payable at December 31, 1997. 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. The
effective annual group fee rate was 0.32% at December 31, 1997, and 0.33% for
the year then ended. 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 $2,499,000 for the year ended
December 31, 1997, of which $237,000 was payable at period-end.
25
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the year ended December 31, 1997, totaled
$4,156,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the year ended December 31, 1997, the fund, in the ordinary course of
business, placed security purchase and sale orders aggregating $898,000 with
certain affiliates of the manager and paid commissions of $4,000 related
thereto.
- -----------------------------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 12/31/97
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code. The
amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distributions to shareholders included:
. $16,701,000 from short-term capital gains, and
. $99,371,000 from long-term capital gains; of which $32,554,000 was subject to
the 20% rate gains category.
For corporate shareholders, 36% of the fund's distributed income and short-term
capital gains qualified for the dividends-received deduction.
- --------------------------------------------------------------------------------
26
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
T. Rowe Price Small-Cap Value Fund, Inc.
We have audited the accompanying statement of assets and liabilities of T. Rowe
Price Small-Cap Value Fund, Inc., including the portfolio of investments, as of
December 31, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of T.
Rowe Price Small-Cap Value Fund, Inc. as of December 31, 1997, the results of
its operations, the changes in its net assets and financial highlights for each
of the respective periods stated in the first paragraph, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
January 21, 1998
27
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10 p.m.
ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and T. Rowe Price OnLine.
DISCOUNT BROKERAGE*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over regular commission rates.
INVESTMENT INFORMATION
Combined Statement Overview of your T. Rowe Price accounts.
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.
*A division of T. Rowe Price Investment Services, Inc. Member NASD/SIPC.
28
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK FUNDS BOND FUNDS
......................................... .................................... .....................................
<S> <C> <C>
Domestic Domestic Taxable International/Global
Blue Chip Growth Corporate Income Emerging Markets Bond
Capital Appreciation GNMA Global Government Bond
Capital Opportunity High Yield International Bond
Diversified Small-Cap Growth New Income
Dividend Growth Short-Term Bond MONEY MARKET FUNDS
Equity Income Short-Term U.S. Government .....................................
Equity Index 500 Spectrum Income Taxable
Extended Equity Market Index Summit GNMA
Financial Services Summit Limited-Term Bond Prime Reserve
Growth & Income U.S. Treasury Intermediate Summit Cash Reserves
Growth Stock U.S. Treasury Long-Term U.S. Treasury Money
Health Sciences
Media & Telecommunications* Domestic Tax-Free Tax-Free
Mid-Cap Growth
Mid-Cap Value California Tax-Free Bond California Tax-Free Money
New America Growth Florida Insured Intermediate Tax-Free New York Tax-Free Money
New Era Georgia Tax-Free Bond Summit Municipal
New Horizons** Maryland Short-Term Tax-Free Bond Money Market
Real Estate Maryland Tax-Free Bond Tax-Exempt Money
Science & Technology New Jersey Tax-Free Bond
Small-Cap Stock New York Tax-Free Bond BLENDED ASSET FUNDS
Small-Cap Value** Summit Municipal Income .....................................
Spectrum Growth Summit Municipal Intermediate Balanced
Total Equity Market Index Tax-Free High Yield Personal Strategy Balanced
Value Tax-Free Income Personal Strategy Growth
Tax-Free Insured Personal Strategy Income
International/Global Intermediate Bond Tax-Efficient Balanced
Tax-Free Short-Intermediate
Emerging Markets Stock Virginia Short-Term T. ROWE PRICE NO-LOAD
European Stock Tax-Free Bond VARIABLE ANNUITY
Global Stock Virginia Tax-Free Bond .....................................
International Discovery Equity Income Portfolio
International Stock International Stock Portfolio
Japan Limited-Term Bond Portfolio
Latin America Mid-Cap Growth Portfolio
New Asia New America Growth Portfolio
Spectrum International Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
</TABLE>
* Formerly the closed-end New Age Media Fund. Converted to open-end status on
7/28/97.
** Closed to new investors.
Please call for a prospectus. Read it carefully before you invest or send money.
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.
29
<PAGE>
For yield, price, last transaction, Investor Centers:
current balance, or to conduct 101 East Lombard St.
transactions, 24 hours, 7 days Baltimore, MD 21202
a week, call Tele*Access(R):
1-800-638-2587 toll free T. Rowe Price
Financial Center
For assistance with 10090 Red Run Blvd.
your existing Owings Mills, MD 21117
fund account, call:
Shareholder Service Center Farragut Square
1-800-225-5132 toll free 900 17th Street, N.W.
410-625-6500 Baltimore area Washington, D.C. 20006
To open a Discount Brokerage ARCO Tower
account or obtain information, 31st Floor
call: 1-800-638-5660 toll free 515 South Flower St.
Los Angeles, CA 90071
Internet address:
www.troweprice.com 4200 West Cypress St.
10th Floor
T. Rowe Price Associates Tampa, FL 33607
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.
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor.
