<PAGE>
T. ROWE RICE
- --------------------------------------------------------------------------------
Annual Report
Small-Cap Value Fund
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
SMALL-CAP VALUE FUND
- --------------------
* Powered by technology, the large-cap S&P 500 Stock Index returned over
20% for an unprecedented fifth straight year.
* Many stocks were left behind in the market's surge, including the
small-cap value sector.
* Reflecting the adverse environment for value stocks, the fund's return
was negative for the second half and positive but modest for the year.
* The pace of mergers and acquisitions involving portfolio companies
attests to their low stock valuations.
* When the current speculative fever subsides, a return to fundamental
investing principles should benefit small-cap value stocks.
================================================================================
UPDATES AVAILABLE
- -----------------
For updates on T. Rowe Price funds following the end of each calendar
quarter, please see our Web site at www.troweprice.com.
================================================================================
FELLOW SHAREHOLDERS
- -------------------
Extraordinary. That is a perfect word to describe the stock market's
remarkable performance again in 1999. For the fifth straight year, the U.S.
equity market, as measured by the S&P 500 Stock Index, posted returns in excess
of 20%, and small-cap stocks, as measured by the Russell 2000 Index, kept pace.
But the indices' results hid a divergence in returns for various sectors and
groups of stocks that was as wide as any in the past 50 years.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
----------------------
Periods Ended 12/31/99 6 Months 12 Months
---------------------- -------- ---------
Small-Cap Value Fund -3.05% 1.19%
S&P 500 7.71 21.04
Russell 2000 Index 10.96 21.26
Lipper Small-Cap Value
Fund Index -4.26 1.32
- --------------------------------------------------------------------------------
<PAGE>
The Small-Cap Value Fund reflected the subpar results of all value stocks,
but especially those of small companies. For the six-month period, the fund held
up a bit better than its new Lipper category, which is introduced with this
report. Previously, Lipper Inc. assigned a fund to a category based on its
objective as outlined in its prospectus. The new categories are based on the
major characteristics of each fund's actual portfolio holdings, such as market
capitalization, price/earnings ratios and other valuation measures, earnings
growth rates, and so on.
While the fund lagged well behind the Russell 2000 Index, which was boosted
by its technology component, it actually compared favorably to the Russell 2000
Value Index, which fell 1.5% for the year. The gap between small-cap growth and
small-cap value N termed "cavernous" by one observer N was the largest in the
20-year history of the Russell indices and extended a period of differentiated
performance that began in August 1998.
What caused such an enormous difference in relative returns? On the one
hand, inve stors simply bought the highest growth, most richly valued stocks.
Favored stocks were concentrated in telecommunications and technology,
especially Internet-related issues, and included hardware, software, and
component companies. Biotechnology stocks also fared well, particularly in the
fourth quarter. While your fund owns stocks in all of these industries, our
portfolio weightings are quite a bit lower than growth investors typically have.
On the other hand, the 20% of stocks with the lowest P/E ratios in the Russell
2000 actually fell more than 10% in 1999, while those in the second lowest P/E
quintile declined nearly 9%, according to a Prudential Securities study. Value
investors, who seek out undervalued companies, had no place to hide.
- --------------------------------------------------------------------------------
RUSSELL 2000 INDEX COMPARISON
-----------------------------
Periods Ended 12/31/99 12 Months 16 Months
---------------------- --------- ---------
Russell 2000 Growth Index 43.1% 94.9%
Russell 2000 Value Index -1.5 13.5
Differential (percentage points) 44.6 81.4
- --------------------------------------------------------------------------------
The fund did hold some very successful stocks in 1999 even in the midst of
a difficult environment. Our two largest holdings at year-end, Silicon Valley
Bancshares and Insituform Technologies, rose 190% and 95%, respectively.
Wireless provider Rura l Cellular rose 762%, and Optical Coating Laboratory
increased 306% before we sold our final holdings. Each of these companies
reported much better-than-expected results as the year unfolded, and their stock
prices responded accordingly.
YEAR-END DISTRIBUTIONS
- ----------------------
On December 14, 1999, the fund's Board of Directors declared an income
dividend of $0.17 per share, a long-term capital gain of $1.32 per share, and a
short-term gain of $0.03 per share payable to shareholders of record on that
date. You should have already received your check or statement reflecting these
distributions as well as our Form 1099-DIV reporting them for tax purposes for
taxable accounts.
<PAGE>
PORTFOLIO ACTIVITY
- ------------------
In our last two letters to you, we discussed the unprecedented surge in
takeover activity that has occurred in the small-cap sector and among fund
holdings since mid-1998. In 1999, there were 23 announced takeovers affecting
companies we own, a 44% increase over 1998. Of our 10 largest sales for the past
six months, nine involved companies that were targets of takeover bids. The nine
companies represented a wide range of businesses: lighting products, specialty
materials, cement, wireless telephone service, optical coatings, carpet backing,
software, and so on. Clearly, the merger wave is broad based, not concentrated
in any one industry.
Our 10 largest purchases showed a similar broad scope. Arch Chemicals makes
a number of specialty chemicals targeted to such growth areas as the electronics
industry. U.S. Aggregates, a Utah-based sand and gravel supplier, is poised to
benefit from a projected surge in road rebuilding and construction surrounding
the next Winter Olympics in Salt Lake City. StaffMark is a temporary staffing
company with a growing presence in information technology, while American
Capital Strategies provides mezzanine expansion capital to small and
medium-sized companies. The common trait these companies shared was their low
valuation: when purchased, each stock sold for a P/E ratio below 10 times, based
on 2000 estimated earnings.
- --------------------------------------------------------------------------------
THE YEAR WHEN EARNINGS DIDN'T MATTER
- ------------------------------------
We've already explained some of the factors that made the stock market's
performance in 1999 remarkable. What stood out, however, was the decoupling of
stock prices from company fundamentals. As shown in the chart, 1999 proved to be
the year when earnings did not matter.
Notice that an investor was far better off ignoring fundamentals such as
earnings in selecting stocks. Internet-related companies, precious few of which
are profitable, led the parade of rising stock prices, although biotechnology
companies (most of which also show red ink) also fared well.
The huge difference in results raises these questions: Do earnings matter?
Is the potential for future profits more important than the reality of profits
today? We don't believe that long-observed principles of investment have been
repealed permanently, but certainly in the short run investors have gravitated
to speculative stories at the expense of demonstrated performance.
There is no question that both biotechnology and the Internet will continue
to be profound and beneficial influences on our society and on business. The
issue for equity investors is whether the valuations accorded companies in those
industries today will allow positive returns going forward. The record of
previous speculative bubbles suggests they will not. When the inevitable
shakeout occurs, we believe the market will return to first principles:
profitability, cash flow, and valuation.
********************************************************************************
[Stock returns in 1999 disconnect
from earnings bar chart showing
returns by market cap (large, mid,
small, micro) for groups of stocks
with positive or negative earnings]
*******************************************************************************
<PAGE>
Source: FACTSET, T.Rowe Price Associates, Inc. Study includes 3,395 stocks
with the following characteristics: price greater than $5 and market cap greater
than $50 million on 12/31/98; excludes IPOs and companies taken over in 1999.
Earnings per share are for the current fiscal year.
- --------------------------------------------------------------------------------
OUTLOOK
- -------
The market's speculative environment could end quickly and, we suspect,
painfully, and a correction in technology stocks would likely affect the entire
stock market, our sector included. However, our value bias should temper the
decline among portfolio holdings.
Small-cap value stocks are demonstrably the best values in the market
today. Record takeover activity and corporate share repurchase announcements
confirm that this sector is cheap and that astute corporate investors are voting
with their wallets. When the speculative fever breaks, the return to fundamental
principles is likely to create a sustained period of good performance for small
value stocks and for your fund. Frankly, it can't come soon enough.
Respectfully submitted,
/s/
Preston G. Athey
President and Chairman of the Investment Advisory Committee
January 21, 2000
================================================================================
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
TWENTY-FIVE LARGEST HOLDINGS
- ----------------------------
Percent of
Net Assets
12/31/99
- --------------------------------------------------------------------------------
Silicon Valley Bancshares 3.6%
- --------------------------------------------------------------------------------
Insituform Technologies 3.4
- --------------------------------------------------------------------------------
Brown and Brown 2.5
- --------------------------------------------------------------------------------
Saga Communications 2.0
- --------------------------------------------------------------------------------
Electro Rent 1.8
- --------------------------------------------------------------------------------
McGrath RentCorp 1.8
- --------------------------------------------------------------------------------
Analogic 1.8
- --------------------------------------------------------------------------------
<PAGE>
AlliedCapital 1.8
- --------------------------------------------------------------------------------
Medical Assurance 1.5
- --------------------------------------------------------------------------------
HSResources 1.4
- --------------------------------------------------------------------------------
Community First Bankshares 1.2
- --------------------------------------------------------------------------------
Puerto Rican Cement 1.2
- --------------------------------------------------------------------------------
Aaron Rents 1.2
- --------------------------------------------------------------------------------
Sun Communities 1.1
- --------------------------------------------------------------------------------
Cross Timbers Oil 1.1
- --------------------------------------------------------------------------------
First Republic Bank 1.1
- --------------------------------------------------------------------------------
Pacific Gulf Properties 1.0
- --------------------------------------------------------------------------------
CSSIndustries 1.0
- --------------------------------------------------------------------------------
Markel 1.0
- --------------------------------------------------------------------------------
Neurocrine Biosciences 1.0
- --------------------------------------------------------------------------------
Consolidated Products 1.0
- --------------------------------------------------------------------------------
Landauer 1.0
- --------------------------------------------------------------------------------
CORTBusiness Services 0.9
- --------------------------------------------------------------------------------
ITGroup 0.9
- --------------------------------------------------------------------------------
Bone Care International 0.9
- --------------------------------------------------------------------------------
Total 37.2%
Note: Table excludes reserves and certain positions being accumulated.
================================================================================
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
MAJOR PORTFOLIO CHANGES
- -----------------------
Listed in descending order of size
6 Months Ended 12/31/99
TEN LARGEST PURCHASES
- ---------------------
Arch Chemicals *
Delphi Information Systems
U.S. Aggregates *
Juno Lighting
Pitt-DesMoines
London Pacific Group
American Capital Strategies
Waterlink *
TETRATechnologies
StaffMark *
TEN LARGEST SALES
- -----------------
Holophane **
Furon **
Giant Cement **
Commnet Cellular
Optical Coating Laboratory **
Synthetic Industries **
Rural Cellular
Ardent Software
OmniQuip International **
Scotsman Industries **
* Position added
** Position eliminated
================================================================================
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------
PERFORMANCE COMPARISON
- ----------------------
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
[SEC chart showing, As of 12/31/99
Small-Cap Value Fund $31,936;
Russell 2000 Index $35,164]
<PAGE>
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- ------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 12/31/99 1 Year 3 Years 5 Years 10 Years
---------------------- ------ ------- ------- --------
Small-Cap Value Fund 1.19% 4.25% 12.79% 12.31%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
Year
Ended
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
NET ASSET VALUE
Beginning of period $ 18.97 $ 23.40 $ 19.56 $ 16.53 $ 13.40
- --------------------------------------------------------------------------------
Investment activities
Net investment income
(loss) 0.17 0.25 0.21 0.22 0.18
Net realized and
unrealized gain (loss) - (3.23) 5.22 3.84 3.74
- --------------------------------------------------------------------------------
Total from
investment activities 0.17 (2.98) 5.43 4.06 3.92
- --------------------------------------------------------------------------------
Distributions
Net investment income (0.17) (0.25) (0.20) (0.23) (0.18)
Net realized gain (1.35) (1.20) (1.39) (0.80) (0.61)
- --------------------------------------------------------------------------------
Total distributions (1.52) (1.45) (1.59) (1.03) (0.79)
- --------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 17.62 $ 18.97 $ 23.40 $ 19.56 $ 16.53
Ratios/Supplemental Data
Total return* 1.19% (12.47)% 27.92% 24.61% 29.29%
- --------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.92% 0.87% 0.87% 0.94% 0.98%
- --------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 0.84% 1.02% 1.01% 1.28% 1.59%
- --------------------------------------------------------------------------------
Portfolio turnover rate 7.3% 17.3% 14.6% 15.2% 18.1%
- --------------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 1,262 $ 1,632 $ 2,088 $ 1,410 $ 936
- --------------------------------------------------------------------------------
* Total return reflects the rate that an investor would have earned on
an investment in the fund during each period, assuming reinvestment of
all distributions and payment of no redemption or account fees.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- ---------------------------------- December 31, 1999
PORTFOLIO OF INVESTMENTS
- ------------------------
Shares/Par Value
In thousands
COMMON STOCKS AND WARRANTS 92.3%
FINANCIAL==15.7%================================================================
Bank and Trust 6.6%
Community First Bankshares 1,000,000 $ 15,688
- --------------------------------------------------------------------------------
First International Bancorp + 470,000 3,819
- --------------------------------------------------------------------------------
First Republic Bank * + 600,000 14,100
- --------------------------------------------------------------------------------
Glacier Bancorp 260,150 4,227
- --------------------------------------------------------------------------------
Silicon Valley Bancshares * 905,000 44,854
- --------------------------------------------------------------------------------
82,688
- --------------------------------------------------------------------------------
Insurance 6.4%
Brown and Brown + 825,000 31,608
- --------------------------------------------------------------------------------
London Pacific Group ADR 75,000 2,700
- --------------------------------------------------------------------------------
Markel * 80,000 12,400
- --------------------------------------------------------------------------------
Medical Assurance * 870,000 18,433
- --------------------------------------------------------------------------------
NYMAGIC 450,000 5,934
- --------------------------------------------------------------------------------
Presidential Life 150,000 2,752
- --------------------------------------------------------------------------------
Pxre Group 50,000 650
- --------------------------------------------------------------------------------
Triad Guaranty * 275,000 6,248
- --------------------------------------------------------------------------------
80,725
- --------------------------------------------------------------------------------
Financial Services 2.7%
Allied Capital 1,247,000 22,797
- --------------------------------------------------------------------------------
American Capital Strategies 324,000 7,340
- --------------------------------------------------------------------------------
Delta Financial * 428,600 1,768
- --------------------------------------------------------------------------------
Medallion Financial 150,000 2,700
- --------------------------------------------------------------------------------
34,605
- --------------------------------------------------------------------------------
Total Financial 198,018
- --------------------------------------------------------------------------------
<PAGE>
UTILITIES==4.0%=================================================================
Telephone 0.8%
Commnet Cellular * 14,500 465
- --------------------------------------------------------------------------------
Rural Cellular (Class A) * 97,400 8,827
- --------------------------------------------------------------------------------
9,292
- --------------------------------------------------------------------------------
Electric Utilities 3.2%
Black Hills 400,000 8,875
- --------------------------------------------------------------------------------
Cleco 300,000 9,619
- --------------------------------------------------------------------------------
Northwestern Public Service 300,000 $ 6,600
- --------------------------------------------------------------------------------
Otter Tail Power 250,000 9,406
- --------------------------------------------------------------------------------
SIGCORP 275,000 6,256
- --------------------------------------------------------------------------------
40,756
- --------------------------------------------------------------------------------
Total Utilities 50,048
- --------------------------------------------------------------------------------
CONSUMER=NONDURABLES==9.4%======================================================
Beverages 0.2%
Chalone Wine Group * 250,000 2,133
- --------------------------------------------------------------------------------
2,133
- --------------------------------------------------------------------------------
Food Processing 0.3%
Sylvan * + 520,000 4,290
- --------------------------------------------------------------------------------
4,290
- --------------------------------------------------------------------------------
Hospital Supplies/Hospital Management 2.3%
Allied Healthcare Products * 310,000 794
- --------------------------------------------------------------------------------
Atrion * + 200,000 2,188
- --------------------------------------------------------------------------------
Intelligent Medical Imaging * + 800,000 64
- --------------------------------------------------------------------------------
IRIDEX * + 350,000 3,106
- --------------------------------------------------------------------------------
Landauer + 549,300 12,016
- --------------------------------------------------------------------------------
Lunar * 12,000 84
- --------------------------------------------------------------------------------
Minntech + 650,000 6,378
- --------------------------------------------------------------------------------
Owens & Minor 553,100 4,943
- --------------------------------------------------------------------------------
29,573
- --------------------------------------------------------------------------------
Pharmaceuticals 1.7%
Bone Care International * + 900,000 11,194
- --------------------------------------------------------------------------------
<PAGE>
NPS Pharmaceuticals * 300,000 3,759
- --------------------------------------------------------------------------------
Quidel * 950,000 6,517
- --------------------------------------------------------------------------------
21,470
- --------------------------------------------------------------------------------
Biotechnology 1.2%
Coulter Pharmaceutical * 118,000 2,685
- --------------------------------------------------------------------------------
Neurocrine Biosciences * 500,000 12,312
- --------------------------------------------------------------------------------
14,997
- --------------------------------------------------------------------------------
Miscellaneous Consumer Products 3.7%
Applied Extrusion Technologies * + 750,000 4,734
- --------------------------------------------------------------------------------
BWAY * + 750,000 4,594
- --------------------------------------------------------------------------------
CSS Industries * + 600,000 12,825
- --------------------------------------------------------------------------------
Culp + 600,000 3,787
- --------------------------------------------------------------------------------
Dan River * 400,000 $ 2,050
- --------------------------------------------------------------------------------
Fab Industries 100,000 1,081
- --------------------------------------------------------------------------------
Home Products International * 322,700 3,429
- --------------------------------------------------------------------------------
Liqui-Box 139,200 7,117
- --------------------------------------------------------------------------------
Martin Industries 400,000 638
- --------------------------------------------------------------------------------
Ocular Sciences * 150,000 2,831
- --------------------------------------------------------------------------------
Superior Surgical Mfg. + 398,900 3,590
- --------------------------------------------------------------------------------
46,676
- --------------------------------------------------------------------------------
Total Consumer Nondurables 119,139
- --------------------------------------------------------------------------------
CONSUMER=SERVICES==9.5%=========================================================
Restaurants 3.8%
Consolidated Products 1,207,580 12,227
- --------------------------------------------------------------------------------
Fresh Choice * + 540,000 1,333
- --------------------------------------------------------------------------------
Garden Fresh Restaurant * + 425,000 7,305
- --------------------------------------------------------------------------------
PJ America * 160,000 2,530
- --------------------------------------------------------------------------------
Rare Hospitality International * 400,000 8,675
- --------------------------------------------------------------------------------
Ruby Tuesday 600,000 10,912
- --------------------------------------------------------------------------------
Uno Restaurant 465,000 5,173
- --------------------------------------------------------------------------------
48,155
<PAGE>
- --------------------------------------------------------------------------------
General Merchandisers 0.3%
Bon-Ton Stores * 345,000 1,305
- --------------------------------------------------------------------------------
Fred's (Class A) 125,000 1,988
- --------------------------------------------------------------------------------
3,293
- --------------------------------------------------------------------------------
Specialty Merchandisers 2.5%
Building Materials * 450,000 4,584
- --------------------------------------------------------------------------------
Compucom Systems * 550,000 2,303
- --------------------------------------------------------------------------------
Goody's Family Clothing * 300,000 1,608
- --------------------------------------------------------------------------------
Hancock Fabrics + 1,500,000 4,688
- --------------------------------------------------------------------------------
Haverty Furniture 500,000 6,312
- --------------------------------------------------------------------------------
Jo Ann Stores (Class B) * 625,000 6,289
- --------------------------------------------------------------------------------
S & K Famous Brands * + 425,000 2,603
- --------------------------------------------------------------------------------
Stein Mart * 650,000 3,738
- --------------------------------------------------------------------------------
32,125
- --------------------------------------------------------------------------------
Entertainment and Leisure 0.3%
Seattle Filmworks * + 1,200,000 3,394
- --------------------------------------------------------------------------------
3,394
- --------------------------------------------------------------------------------
Media and Communications 2.6%
Big City Radio (Class A) * 400,000 $ 1,900
- --------------------------------------------------------------------------------
Courier + 234,000 5,499
- --------------------------------------------------------------------------------
Saga Communications (Class A) * 1,250,000 25,312
- --------------------------------------------------------------------------------
32,711
- --------------------------------------------------------------------------------
Total Consumer Services 119,678
- --------------------------------------------------------------------------------
CONSUMER=CYCLICALS==10.0%=======================================================
Automobiles and Related 2.5%
Keystone Automotive * 250,000 1,465
- --------------------------------------------------------------------------------
Littelfuse * 350,000 8,498
- --------------------------------------------------------------------------------
Myers Industries 165,000 2,599
- --------------------------------------------------------------------------------
R & B * 400,000 1,875
- --------------------------------------------------------------------------------
Strattec Security * + 275,000 8,972
- --------------------------------------------------------------------------------
TBC * + 1,400,000 8,662
- --------------------------------------------------------------------------------
32,071
- --------------------------------------------------------------------------------
<PAGE>
Building and Real Estate 5.5%
Capital Senior Living * 250,000 1,266
- --------------------------------------------------------------------------------
First Washington Realty Trust, REIT 400,000 7,475
- --------------------------------------------------------------------------------
Glenborough Realty Trust, REIT 550,000 7,356
- --------------------------------------------------------------------------------
Innkeepers USA, REIT 850,000 6,959
- --------------------------------------------------------------------------------
Kilroy Realty, REIT 100,000 2,200
- --------------------------------------------------------------------------------
National Health Investors, REIT 39,500 588
- --------------------------------------------------------------------------------
National Health Realty, REIT + 550,000 4,538
- --------------------------------------------------------------------------------
Pacific Gulf Properties, REIT 650,000 13,162
- --------------------------------------------------------------------------------
Skyline, REIT 425,000 9,988
- --------------------------------------------------------------------------------
Sun Communities, REIT 450,000 14,484
- --------------------------------------------------------------------------------
Western Water * + 664,500 789
- --------------------------------------------------------------------------------
68,805
- --------------------------------------------------------------------------------
Miscellaneous Consumer Durables 2.0%
Chromcraft Revington * + 1,000,000 10,500
- --------------------------------------------------------------------------------
CompX 250,000 4,594
- --------------------------------------------------------------------------------
Juno Lighting * + 235,000 2,482
- --------------------------------------------------------------------------------
Stanley Furniture * + 400,000 7,400
- --------------------------------------------------------------------------------
24,976
- --------------------------------------------------------------------------------
Total Consumer Cyclicals 125,852
- --------------------------------------------------------------------------------
TECHNOLOGY==6.7%================================================================
Electronic Components 2.6%
Analogic + 698,000 $ 22,903
- --------------------------------------------------------------------------------
Badger Meter 100,000 3,013
- --------------------------------------------------------------------------------
PCD * 356,700 2,385
- --------------------------------------------------------------------------------
Planar Systems * 400,000 2,625
- --------------------------------------------------------------------------------
Savoir Technology Group * 310,000 2,170
- --------------------------------------------------------------------------------
33,096
- --------------------------------------------------------------------------------
Electronic Systems 1.0%
CEM * + 299,000 3,186
- --------------------------------------------------------------------------------
EDO 200,000 1,175
- --------------------------------------------------------------------------------
<PAGE>
FLIR Systems * 325,000 5,261
- --------------------------------------------------------------------------------
Perceptron * + 650,000 2,620
- --------------------------------------------------------------------------------
12,242
- --------------------------------------------------------------------------------
Specialized Computer 0.5%
Delphi Information Systems, Warrants, 1/16/00 * + 1 217
- --------------------------------------------------------------------------------
Ebix.com * + 600,000 6,694
- --------------------------------------------------------------------------------
6,911
- --------------------------------------------------------------------------------
Telecommunications 0.2%
Syntellect * + 700,000 2,122
- --------------------------------------------------------------------------------
2,122
- --------------------------------------------------------------------------------
Aerospace and Defense 2.4%
COMARCO * + 400,000 9,450
- --------------------------------------------------------------------------------
DONCASTERS ADR * 100,000 900
- --------------------------------------------------------------------------------
OEA 900,000 4,388
- --------------------------------------------------------------------------------
Raven Industries + 350,000 5,162
- --------------------------------------------------------------------------------
TransTechnology 299,000 3,308
- --------------------------------------------------------------------------------
Woodward Governor 250,000 6,875
- --------------------------------------------------------------------------------
30,083
- --------------------------------------------------------------------------------
Total Technology 84,454
- --------------------------------------------------------------------------------
CAPITAL=EQUIPMENT==2.5%=========================================================
Electrical Equipment 1.8%
Franklin Electric 100,000 7,097
- --------------------------------------------------------------------------------
LSI Industries 400,000 8,575
- --------------------------------------------------------------------------------
Thomas Industries 350,000 7,153
- --------------------------------------------------------------------------------
22,825
- --------------------------------------------------------------------------------
Machinery 0.7%
Alamo Group + 550,000 $ 5,500
- --------------------------------------------------------------------------------
K-Tron * + 270,000 3,696
- --------------------------------------------------------------------------------
9,196
- --------------------------------------------------------------------------------
Total Capital Equipment 32,021
- --------------------------------------------------------------------------------
<PAGE>
BUSINESS=SERVICES=AND===========================================================
TRANSPORTATION==19.1%===========================================================
Computer Service and Software 1.9%
Analysts International 620,000 7,750
- --------------------------------------------------------------------------------
Ardent Software * 219,400 8,502
- --------------------------------------------------------------------------------
SPSS * 300,400 7,698
- --------------------------------------------------------------------------------
23,950
- --------------------------------------------------------------------------------
Distribution Services 0.7%
Richardson Electronics + 700,000 5,250
- --------------------------------------------------------------------------------
Sunsource 325,000 1,381
- --------------------------------------------------------------------------------
Valley National Gases * + 682,200 2,175
- --------------------------------------------------------------------------------
8,806
- --------------------------------------------------------------------------------
Environmental 1.5%
BHA Group (Class A) + 605,000 4,915
- --------------------------------------------------------------------------------
IT Group * + 900,000 8,269
- --------------------------------------------------------------------------------
TETRA Technologies * 344,100 2,495
- --------------------------------------------------------------------------------
Waterlink * + 500,000 1,250
- --------------------------------------------------------------------------------
Waterlink * +++ 666,350 1,499
- --------------------------------------------------------------------------------
18,428
- --------------------------------------------------------------------------------
Transportation Services 2.5%
Frozen Food Express 325,000 1,290
- --------------------------------------------------------------------------------
Hub Group (Class A) * 140,000 2,835
- --------------------------------------------------------------------------------
International Shipholding + 664,000 7,719
- --------------------------------------------------------------------------------
Landstar Systems * 250,000 10,492
- --------------------------------------------------------------------------------
M.S. Carriers * 100,000 2,369
- --------------------------------------------------------------------------------
Transport Corp. of America * + 590,000 7,209
- --------------------------------------------------------------------------------
31,914
- --------------------------------------------------------------------------------
Miscellaneous Business Services 11.8%
Aaron Rents (Class A) 65,500 1,195
- --------------------------------------------------------------------------------
Aaron Rents (Class B) 790,000 14,022
- --------------------------------------------------------------------------------
Business Resource Group * + 360,000 1,834
- --------------------------------------------------------------------------------
Children's Comprehensive Services * 200,000 1,163
- --------------------------------------------------------------------------------
<PAGE>
CORT Business Services * + 680,000 $ 11,857
- --------------------------------------------------------------------------------
Electro Rent * + 2,000,000 23,250
- --------------------------------------------------------------------------------
Insituform Technologies (Class A) * + 1,550,000 43,497
- --------------------------------------------------------------------------------
Ivex Packaging * 375,000 3,750
- --------------------------------------------------------------------------------
McGrath RentCorp + 1,298,000 23,202
- --------------------------------------------------------------------------------
MYR Group + 366,000 10,751
- --------------------------------------------------------------------------------
Packaged Ice * 500,000 1,633
- --------------------------------------------------------------------------------
Rainbow Rentals * + 355,000 2,607
- --------------------------------------------------------------------------------
Right Management Consultants * + 500,000 5,656
- --------------------------------------------------------------------------------
StaffMark * 225,000 1,702
- --------------------------------------------------------------------------------
Tab Products + 325,000 2,113
- --------------------------------------------------------------------------------
UniFirst 50,000 631
- --------------------------------------------------------------------------------
148,863
- --------------------------------------------------------------------------------
Airlines 0.7%
Midwest Express Holdings * 275,025 8,766
- --------------------------------------------------------------------------------
8,766
- --------------------------------------------------------------------------------
Total Business Services and Transportation 240,727
- --------------------------------------------------------------------------------
ENERGY==3.3%====================================================================
Energy Services 1.1%
Carbo Ceramics 200,000 4,369
- --------------------------------------------------------------------------------
Newpark Resources * 380,000 2,327
- --------------------------------------------------------------------------------
Pitt-DesMoines 275,000 6,772
- --------------------------------------------------------------------------------
13,468
- --------------------------------------------------------------------------------
Exploration and Production 2.2%
Brigham Exploration * 550,000 859
- --------------------------------------------------------------------------------
Chieftain International * 325,000 5,606
- --------------------------------------------------------------------------------
Cross Timbers Oil 300,000 2,719
- --------------------------------------------------------------------------------
HS Resources * + 1,000,000 17,250
- --------------------------------------------------------------------------------
Key Energy * 350,000 1,816
- --------------------------------------------------------------------------------
28,250
- --------------------------------------------------------------------------------
Total Energy 41,718
- --------------------------------------------------------------------------------
<PAGE>
PROCESS=INDUSTRIES==5.5%========================================================
Diversified Chemicals 1.1%
Aceto + 575,000 6,199
- --------------------------------------------------------------------------------
Arch Chemicals 359,250 7,522
- --------------------------------------------------------------------------------
13,721
- --------------------------------------------------------------------------------
Specialty Chemicals 1.1%
Eco Soil Systems * 350,000 $ 1,477
- --------------------------------------------------------------------------------
Hauser * 150,000 464
- --------------------------------------------------------------------------------
Synalloy + 450,000 3,487
- --------------------------------------------------------------------------------
Tuscarora + 730,000 8,760
- --------------------------------------------------------------------------------
14,188
- --------------------------------------------------------------------------------
Paper and Paper Products 1.1%
Republic Group 451,400 6,827
- --------------------------------------------------------------------------------
Wausau-Mosinee Paper 600,000 7,013
- --------------------------------------------------------------------------------
13,840
- --------------------------------------------------------------------------------
Building and Construction 2.2%
Cameron Ashley * 400,000 4,000
- --------------------------------------------------------------------------------
CorrPro * 300,000 1,763
- --------------------------------------------------------------------------------
Layne Christensen * + 600,000 4,275
- --------------------------------------------------------------------------------
Puerto Rican Cement + 450,000 15,300
- --------------------------------------------------------------------------------
U.S. Aggregates 245,000 2,940
- --------------------------------------------------------------------------------
28,278
- --------------------------------------------------------------------------------
Total Process Industries 70,027
- --------------------------------------------------------------------------------
BASIC=MATERIALS==4.6%===========================================================
Metals 2.4%
Cold Metal Products + 377,300 1,344
- --------------------------------------------------------------------------------
Gibraltar Steel 448,800 10,435
- --------------------------------------------------------------------------------
Lone Star Technologies * 300,000 8,363
- --------------------------------------------------------------------------------
Material Sciences * 620,000 6,316
- --------------------------------------------------------------------------------
Shiloh Industries * 290,000 3,317
- --------------------------------------------------------------------------------
29,775
- --------------------------------------------------------------------------------
<PAGE>
Mining 0.3%
GoldFields Limited (AUD) 105,000 75
- --------------------------------------------------------------------------------
Gold Fields Limited (ZAR) 736,922 3,562
- --------------------------------------------------------------------------------
Resolute Limited (EUR) 2,200,000 563
- --------------------------------------------------------------------------------
4,200
- --------------------------------------------------------------------------------
Miscellaneous Materials 1.9%
Ameron International + 225,000 8,902
- --------------------------------------------------------------------------------
Oil-Dri + 500,000 7,187
- --------------------------------------------------------------------------------
Penn Virginia + 500,000 8,375
- --------------------------------------------------------------------------------
24,464
- --------------------------------------------------------------------------------
Total Basic Materials 58,439
- --------------------------------------------------------------------------------
INVESTMENT=COMPANIES==0.3%======================================================
First Financial Fund 550,000 $ 4,228
- --------------------------------------------------------------------------------
Total Investment Companies 4,228
- --------------------------------------------------------------------------------
MISCELLANEOUS==1.7%=============================================================
Integrated Water Technology * +++ 200,000 231
- --------------------------------------------------------------------------------
Natrol * 400,000 2,862
- --------------------------------------------------------------------------------
Other Miscellaneous Common Stocks 17,986
- --------------------------------------------------------------------------------
Total Miscellaneous 21,079
- --------------------------------------------------------------------------------
Total Common Stocks and Warrants (Cost $1,022,972) 1,165,428
================================================================================
PREFERRED=STOCKS==0.3%==========================================================
Prime Retail, 10.50%, (Series A) 270,000 4,084
- --------------------------------------------------------------------------------
Total Preferred Stocks (Cost $4,724) 4,084
================================================================================
CONVERTIBLE=PREFERRED=STOCKS==1.5%==============================================
Chieftain Intl., $1.8125 42,800 1,091
- --------------------------------------------------------------------------------
Cross Timbers Oil (Series A) 480,390 11,469
- --------------------------------------------------------------------------------
IT Group, 7.00% + 165,000 3,032
- --------------------------------------------------------------------------------
Prime Retail, 8.50%, (Series B), REIT 280,000 3,308
- --------------------------------------------------------------------------------
Western Water (Series C) + 2,259 161
- --------------------------------------------------------------------------------
Total Convertible Preferred Stocks (Cost $22,316) 19,061
================================================================================
<PAGE>
CORPORATE=BONDS==0.2%===========================================================
Delta Financial, 9.50%, 8/1/04 $ 3,000,000 1,920
- --------------------------------------------------------------------------------
Total Corporate Bonds (Cost $2,989) 1,920
================================================================================
CONVERTIBLE=BONDS==0.6%=========================================================
Builders Transport, Deb., 6.50%, 5/1/11 1,158,000 6
- --------------------------------------------------------------------------------
Builders Transport, Deb., 8.00%, 8/15/05 1,700,000 8
- --------------------------------------------------------------------------------
Glycomed, Sub. Deb., 7.50%, 1/1/03 4,000,000 3,250
- --------------------------------------------------------------------------------
Offshore Logistics, Sub. Notes, (144a),
6.00%, 12/15/03 $ 2,000,000 $ 1,631
- --------------------------------------------------------------------------------
OHM, 8.00%, 10/1/06 29,000 26
- --------------------------------------------------------------------------------
Richardson Electronics, Sr. Sub. Notes,
7.25%, 12/15/06 + 3,516,000 2,901
- --------------------------------------------------------------------------------
Total Convertible Bonds (Cost $9,925) 7,822
================================================================================
SHORT-TERM=INVESTMENTS==5.1%====================================================
Money Market Funds 5.1%
Reserve Investment Fund, 6.16% # 64,202,952 64,203
Total Short-Term Investments (Cost $64,203) 64,203
Total Investments in Securities
100.0% of Net Assets (Cost $1,127,129) $ 1,262,518
Other Assets Less Liabilities (286)
NET ASSETS $ 1,262,232
# Seven-day yield
+ Affiliated company
* Non-income producing
++ Security contains some restrictions as to public resale -- total of
such securities at period-end amounts to 0.1% of net assets.
ADR American depository receipt
REIT Real Estate Investment Trust
144a Security was purchased pursuant to Rule 144a under the Securities Act
of 1933 and may not be resold subject to that rule except to qualified
institutional buyers -- total of such securities at period-end amounts
to 0.1% of net assets.
EUR Euro
ZAR South African rand
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND December 31, 1999
- ---------------------------------- -----------------
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------
ASSETS
- ------
Investments in securities, at value
Affiliated companies (cost $449,420) $ 487,165
Other companies (cost $677,709) 775,353
- ------------------------------------------------------------------------------
Total investments in securities 1,262,518
Other assets 9,890
- ------------------------------------------------------------------------------
Total assets 1,272,408
- ------------------------------------------------------------------------------
LIABILITIES
- -----------
Total liabilities 10,176
- ------------------------------------------------------------------------------
NET ASSETS $ 1,262,232
==============================================================================
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 443
Accumulated net realized gain/loss - net of distributions 42,526
Net unrealized gain (loss) 135,389
Paid-in-capital applicable to 71,621,067 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 1,083,874
- ------------------------------------------------------------------------------
NET ASSETS $ 1,262,232
==============================================================================
NET ASSET VALUE PER SHARE $ 17.62
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------
STATEMENT OF OPERATIONS
- ----------------------- In thousands
Year
Ended
12/31/99
Investment Income (Loss)
Income
Dividend (including $7,359 from affiliated companies) $ 20,559
Interest 3,642
- -------------------------------------------------------------------------------
Total income 24,201
- -------------------------------------------------------------------------------
Expenses
Investment management 9,213
Shareholder servicing 3,040
Prospectus and shareholder reports 208
Custody and accounting 145
Registration 45
Legal and audit 17
Directors 9
Miscellaneous 9
- -------------------------------------------------------------------------------
Total expenses 12,686
Expenses paid indirectly (14)
- -------------------------------------------------------------------------------
Net expenses 12,672
- -------------------------------------------------------------------------------
Net investment income (loss) 11,529
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (including $40,268 from affiliated companies) 119,195
Foreign currency transactions (9)
- -------------------------------------------------------------------------------
Net realized gain (loss) 119,186
Change in net unrealized gain or loss on securities
(including ($74,450) from affiliated companies) (131,399)
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (12,213)
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ (684)
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------- In thousands
Year
Ended
12/31/99 12/31/98
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 11,529 $ 19,695
Net realized gain (loss) 119,186 97,920
Change in net unrealized gain or loss (131,399) (369,820)
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from operations (684) (252,205)
- -------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (11,457) (20,063)
Net realized gain (90,988) (96,286)
- -------------------------------------------------------------------------------
Decrease in net assets from distributions (102,445) (116,349)
- -------------------------------------------------------------------------------
Capital share transactions *
Shares sold 320,585 456,561
Distributions reinvested 96,507 109,998
Shares redeemed (683,860) (654,433)
Redemption fees received 189 151
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions (266,579) (87,723)
- -------------------------------------------------------------------------------
Net Assets
Increase (decrease) during period (369,708) (456,277)
Beginning of period 1,631,940 2,088,217
- -------------------------------------------------------------------------------
End of period $1,262,232 $ 1,631,940
*Share information
Shares sold 17,358 20,522
Distributions reinvested 5,677 6,044
Shares redeemed (37,430) (29,793)
- -------------------------------------------------------------------------------
Increase (decrease) in shares outstanding (14,395) (3,227)
The accompanying notes are an integral part of these financial statements.
===============================================================================
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND December 31, 1999
- ---------------------------------- -----------------
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.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the outstanding
voting securities.
Currency Translation Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and losses.
Premiums and Discounts Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
<PAGE>
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian and are used to reduce the
fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
- --------------------------------
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $96,947,000 and $475,828,000, respectively, for the year
ended December 31, 1999.
NOTE 3 - FEDERAL INCOME TAXES
- -----------------------------
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
taxable income.
At December 31, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$1,127,129,000. Net unrealized gain aggregated $135,389,000 at period-end, of
which $349,633,000 related to appreciated investments and $214,244,000 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 $713,000 was payable at December 31, 1999. The fee is computed daily
and paid monthly, and consists of an individual fund fee equal to 0.35% of
average daily net assets and a group fee. The group fee is based on the combined
assets of certain mutual funds sponsored by the manager or Rowe Price-Fleming
International, Inc. (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.295% for assets in excess of $120 billion. At
December 31, 1999, and for the year then ended, the effective annual group fee
rate was 0.32%. The fund pays a pro-rata share of the group fee based on the
ratio of its net assets to those of the group.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of the fund. T. Rowe Price Services, Inc. is the fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc. provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $2,656,000 for the year ended
December 31, 1999, of which $241,000 was payable at period-end.
<PAGE>
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the year ended December 31, 1999, totaled
$2,308,000 and are reflected as interest income in the accompanying Statement of
Operations.
================================================================================
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of T. Rowe Price Small-Cap Value Fund,
Inc. (the "Fund") at December 31, 1999, and the results of its operations, the
changes in its net assets and the financial highlights for each of the fiscal
periods presented, in conformity with accounting principles generally accepted
in the United States. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1999 by
correspondence with custodians, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
January 20, 2000
================================================================================
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- ----------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 12/31/99
-----------------------------------------------------------
We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distributions to shareholders included: * $2,022,000 from
short-term capital gains, * $88,966,000 from long-term capital gains, subject to
the 20% rate gains category. For corporate shareholders, $13,688,000 of the
fund's distributed income and short-term capital gains qualified for the
dividends-received deduction.
================================================================================
1
T. ROWE PRICE SHAREHOLDER SERVICES
- ----------------------------------
INVESTMENT SERVICES AND INFORMATION
- -----------------------------------
KNOWLEDGEABLE SERVICE REPRESENTATIVES
---------------------------------------
BY PHONE 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10
p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
IN PERSON Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
----------------
CHECKING Available on most fixed income funds ($500 minimum).
AUTOMATIC INVESTING From your bank account or paycheck.
AUTOMATIC WITHDRAWAL Scheduled, automatic redemptions.
DISTRIBUTION OPTIONS Reinvest all, some, or none of your distributions.
AUTOMATED 24-HOUR SERVICES Including Tele*Access [RegistrationMark] and the
T. Rowe Price Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
-------------------
INDIVIDUAL INVESTMENTS Stocks, bonds, options, precious metals, and other
securities at a savings -over full-service commission rates. **
INVESTMENT INFORMATION
----------------------
COMBINED STATEMENT Overview of all your accounts with T. Rowe Price.
SHAREHOLDER REPORTS Fund managers' reviews of their strategies and results.
<PAGE>
T. ROWE PRICE REPORT Quarterly investment newsletter discussing markets and
financial strategies.
PERFORMANCE UPDATE Quarterly review of all T. Rowe Price fund results.
INSIGHTS Educational reports on investment strategies and financial
markets.
INVESTMENT GUIDES Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may vary
depending on size of order.
================================================================================
T. Rowe Price Mutual Funds
- --------------------------
STOCK FUNDS
- -----------
DOMESTIC
- --------
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
<PAGE>
INTERNATIONAL/GLOBAL
- --------------------
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
- ----------
DOMESTIC TAXABLE
- ----------------
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
DOMESTIC TAX-FREE
- -----------------
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
Virginia Tax-Free Bond
INTERNATIONAL/GLOBAL
- --------------------
Emerging Markets Bond
Global Bond
International Bond
<PAGE>
MONEY MARKET FUNDS
- ------------------
TAXABLE
- -------
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
TAX-FREE
- --------
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- -------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
- ---------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Closed to new investors.
Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by SECURITY
BENEFIT LIFE INSURANCE COMPANY. In New York, it [#FSB201(11-96)] is issued by
FIRST SECURITY BENEFIT LIFE INSURANCE COMPANY of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
================================================================================
<PAGE>
T. ROWE PRICE ADVISORY SERVICES AND RETIREMENT RESOURCES
- --------------------------------------------------------
ADVISORY SERVICES,RETIREMENT RESOURCES
--------------------------------------
T. Rowe Price is your full-service retirement specialist.
We have developed unique advisory services that can help
you meet the most difficult retirement challenges. Our
broad array of retirement plans is suitable for
individuals, the self-employed, small businesses,
corporations, and nonprofit organizations. We also provide
recordkeeping, communications, and investment management
services, and our educational materials, self-help
planning guides, and software tools are recognized as
among the industry's best. For information or to request
literature, call us at 1-800-638-5660, or visit our Web
site at WWW.TROWEPRICE.COM.
ADVISORY SERVICES
-----------------
T. ROWE PRICE RETIREMENT INCOME MANAGER [SM] helps
retirees or those within two years of retirement determine
how much income they can take in retirement. The program
uses extensive statistical analysis and the input of
financial planning professionals to suggest an income plan
that best meets your objectives.
T. ROWE PRICE ROLLOVER INVESTMENT SERVICE offers asset
allocation advice to those planning a major change in
their qualified retirement plans, such as a 401(k)
rollover from a previous employer or an IRA transfer.
RETIREMENT RESOURCES AT T. ROWE PRICE
-------------------------------------
Traditional, Roth, and Rollover IRAs
SEP-IRA and SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase
Pension and Profit Sharing Plans)
401(k) and 403(b)
457 Deferred Compensation
PLANNING AND INFORMATIONAL GUIDES
---------------------------------
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
INSIGHTS REPORTS
----------------
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
<PAGE>
SOFTWARE PACKAGES
-----------------
T. Rowe Price Retirement Planning
AnalyzerTM CD-ROM or diskette $19.95.
To order, please call
1-800-541-5760. Also available
on the Internet for $9.95.
T. Rowe Price Variable Annuity AnalyzerTM
CD-ROM or diskette, free. To order,
please call 1-800-469-5304.
T. ROWE PRICE IMMEDIATE VARIABLE ANNUITY (INCOME ACCOUNT)
INVESTMENT KITS
---------------
We will be happy to send you one of our easy-to-follow
investment kits when you are ready to invest in any T.
Rowe Price retirement vehicle, including IRAs, qualified
plans, small-business plans, or our no-load variable
annuities.
================================================================================
FOR FUND AND ACCOUNT INFORMATION
OR TO CONDUCT TRANSACTIONS,
24 HOURS, 7 DAYS A WEEK
By touch-tone telephone
TELE*ACCESS 1-800-638-2587
By Account Access on the Internet
WWW.TROWEPRICE.COM/ACCESS
FOR ASSISTANCE
WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132
TO OPEN A BROKERAGE ACCOUNT
OR OBTAIN INFORMATION, CALL:
1-800-638-5660
INTERNET ADDRESS:
www.troweprice.com
PLAN ACCOUNT LINES FOR RETIREMENT
PLAN PARTICIPANTS:
The appropriate 800 number appears on
your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
<PAGE>
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus appropriate
to the fund or funds covered in this
report.
WALK-IN INVESTOR CENTERS:
For directions, call 1-800-225-5132
or visit our Web site
BALTIMORE AREA
DOWNTOWN
101 East Lombard Street
OWINGS MILLS
Three Financial Center
4515 Painters Mill Road
BOSTON AREA
386 Washington Street
Wellesley
COLORADO SPRINGS
4410 ArrowsWest Drive
LOS ANGELES AREA
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
TAMPA
4200 West Cypress Street
10th Floor
WASHINGTON, D.C.
900 17th Street N.W.
Farragut Square
T. Rowe Price Investment Services, Inc., Distributor. F46-050 12/31/99
