Semiannual Report
U.S.Treasury Funds
November 30, 2000
T. Rowe Price
REPORT HIGHLIGHTS
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U.S. Treasury Funds
o Economic growth slowed and the Federal Reserve did not raise rates in
the last six months, improving the environment for Treasuries.
o The U.S. Treasury Money Fund outstripped its average competitor.
o The U.S. Treasury Intermediate Fund slightly lagged its Lipper peer
group average, but the U.S. Treasury Long-Term Fund outperformed by
emphasizing very long-term issues.
o As rates seemed more likely to decline, we shifted some of each fund's
assets into longer maturities.
o The Fed may lower rates in the next three to six months, and the
outlook for Treasuries in 2001 should be favorable.
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
Economic growth slowed in the six-month period ended November 30, 2000, and the
Federal Reserve kept short-term interest rates steady. High money market yields
and rising bond prices contributed to the favorable performance of the U.S.
Treasury funds.
MARKET ENVIRONMENT
The environment for Treasuries improved considerably since the end of May.
After raising short-term interest rates repeatedly over the previous 12
months, the Federal Reserve made its last tightening move on May 16, when
it boosted the federal funds target rate-an overnight interbank lending
rate-50 basis points (one half percentage point) to 6.50%. The rate
increases appear to have been successful in cooling both GDP growth and
consumer demand. At the same time, continued improvements in productivity
helped keep inflation at bay.
Ninety-day Treasury bill yields rose for most of the period, as you can see
in the chart below. In contrast, intermediate- and long-term bond yields
fell (and prices rose) as stock market volatility and concerns about a
slowing economy encouraged investors to seek the relative safety of the
Treasury market. In fact, Treasuries seem likely to outperform stocks this
year for the first time since 1993.
Interest Rate Levels
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30-Year 5-Year 90-Day
Treasury Treasury Treasury
Bond Note Bill
11/30/99 6.22 6.03 5.28
6.46 6.33 5.33
6.57 6.63 5.59
02/00 6.13 6.59 5.81
5.94 6.42 5.88
5.95 6.42 5.78
05/00 6.14 6.65 5.92
5.94 6.25 5.84
5.80 6.16 6.20
08/00 5.71 6.02 6.31
5.89 5.90 6.21
5.80 5.82 6.38
11/30/00 5.66 5.52 6.26
Long-term Treasury yields are usually higher than short-term yields.
However, the opposite was true in the last six months, creating an
"inverted yield curve." This reflected the Fed's tight monetary policy and
the government's increased emphasis on short-term securities for its
borrowing needs. In addition, the Treasury's buyback program and reduced
issuance of longer-term securities-both made possible by the increasing
federal budget surplus-helped push longer-term yields down.
U.S. TREASURY MONEY FUND
Performance Comparison
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Periods Ended 11/30/00 6 Months 12 Months
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U.S. Treasury Money Fund 2.85% 5.47%
Lipper U.S. Treasury Money
Market Funds Average 2.82 5.37
* Your investment in the U.S. Treasury Money Fund is neither
insured nor guaranteed by the U.S. government.
Your fund returned 2.85% in the last six months and 5.47% for the 12-month
period ended November 30. As shown in the table, the fund performed better
than its benchmark, the Lipper U.S. Treasury Money Market Funds Average, in
both periods. The fund's six-month dividend per share rose slightly, and
its seven-day compound yield climbed from 5.48% on May 31 to 5.97% at the
end of November.
We were able to stay a step ahead of our competitors by taking advantage of
changes in the direction of interest rates. While the Fed was raising rates
early in the year, we kept the fund's weighted average maturity short,
which allowed us to reinvest proceeds quickly from maturing securities into
higher-yielding issues. As the economy slowed during the last six months
and the Fed seemed less inclined to raise rates, we shifted assets into
longer-term Treasury bills to lock in their higher yields. Our actions
extended the fund's average maturity from 58 days at the end of May to 69
days on November 30.
As the Fed backed away from its tightening program, we changed the
portfolio's structure so that fund assets were concentrated in Treasuries
maturing in three to six months, rather than among issues with broadly
varying maturities. This is called a "bullet" strategy, and it tends to
perform better when interest rates are steady or declining.
U.S. TREASURY INTERMEDIATE FUND
Performance Comparison
-------------------------------------------------------------------------------
Periods Ended 11/30/00 6 Months 12 Months
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U.S. Treasury Intermediate Fund 7.20% 8.98%
Salomon Smith Barney 1-7 Year
Treasury Index 5.79 7.77
Lipper Average of Intermediate
U.S. Treasury Funds 7.60 9.11
Your fund returned a strong 7.20% for the six-month period ended November
30, reflecting income of $0.14 and a $0.21 increase in the fund's net asset
value (NAV). The fund's 12-month return of 8.98%, which represented income
of $0.28 and $0.10 in NAV appreciation, was also favorable.
The fund outperformed the Salomon Smith Barney 1-7 Year Treasury Index in
both periods because its duration was longer than that of the index.
(Duration is a measure of interest rate sensitivity. A security with a
four-year duration means that its price will rise by 4% with each
one-percentage-point fall in interest rates, and vice versa.) When
long-term rates decline, as they did for most of this year, Treasury funds
with longer durations perform better than those with shorter durations
because their holdings appreciate more. Unfortunately, the fund slightly
lagged its Lipper benchmark in both periods because its duration was
shorter than that of competing funds that own very long-term Treasuries.
At the end of May, we believed more Fed rate hikes were possible, so we
maintained a relatively cautious duration stance. This would have cushioned
the fund somewhat from falling bond prices because Treasuries with short
maturities are less sensitive to interest rate changes than long-term
issues. However, the economy showed increasing signs of slowing as the year
progressed, which led us to believe-correctly-that intermediate- and
long-term rates would fall. Therefore, we used our cash reserves to
purchase longer-term Treasury securities that would appreciate as rates
declined. By doing so, we extended the fund's duration from 4.1 years to
5.1 years over the past six months.
To keep the portfolio diversified, we maintained relatively high exposure
to Ginnie Mae securities, which yield more than comparable Treasuries and
yet have the same high credit quality. However, we emphasized lower-coupon
Ginnie Maes because they generally perform better than higher-coupon
mortgages in a falling interest rate environment. In addition, we continued
to use Treasury Inflation-Protected Securities (TIPS) to hedge against
inflation. Their principal value is adjusted monthly to reflect changes in
the consumer price index, and when interest rates and inflation increase,
they perform well relative to conventional Treasuries.
U.S. TREASURY LONG-TERM FUND
Performance Comparison
--------------------------------------------------------------------------------
Periods Ended 11/30/00 6 Months 12 Months
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U.S. Treasury Long-Term Fund 9.66% 14.58%
Salomon Smith Barney
Treasury Index 7.48 10.64
Lipper Average of General U.S.
Treasury Funds 8.50 11.92
Your fund posted a strong 9.66% return for the six-month period ended
November 30, thanks to income of $0.31 and a $0.70 increase in the fund's
net asset value (NAV). For the 12-month period, the fund's high 14.58%
return reflected an almost-balanced contribution of income ($0.62) and
price appreciation ($0.74).
The fund outperformed the Lipper Average of General U.S. Treasury Funds and
the Salomon Smith Barney Treasury Index in both periods, as shown in the
table, because its duration was longer. (See U.S. Treasury Intermediate for
an explanation of duration.) Long-term bond prices rise more than
short-term bond prices when interest rates fall, so the fund's emphasis on
long-term Treasuries gave it a performance advantage over its competitors,
particularly in the last six months.
At the end of May, the fund's duration was 9.5 years, reflecting some
caution on our part in case rates rose further. However, as the economy
showed clear signs of deceleration over the summer, we perceived that
long-term rates would decline. As with the U.S. Treasury Intermediate Fund,
we increased exposure to longer-term issues that would rise in price as
rates fell, thus boosting the fund's total return. As a result, the fund's
duration rose to 10.6 years at the end of November, making the portfolio
more sensitive to rate fluctuations.
To purchase additional Treasury securities, we trimmed our mortgage-backed
exposure to 11.6% of assets over the last six months. Although mortgages
have a yield advantage over comparable Treasuries, their potential for
price appreciation in a falling interest rate environment is limited
because homeowners are more likely to prepay their mortgages and refinance
at lower rates. We also reduced our positions in Treasury
Inflation-Protected Securities, or TIPS. (See U.S. Treasury Intermediate
for a description of these.) With the economy slowing and inflation
pressures likely to ease, we felt that conventional long-term Treasuries
offered a better combination of yield and appreciation potential. In
addition, TIPS have shorter durations, so they are more appropriate
holdings for the U.S. Treasury Intermediate Fund.
OUTLOOK
Stable inflation and accelerating productivity have bought the Fed time to
see if its rate increases in 1999 and the first half of 2000 will moderate
the economy's growth while maintaining full employment. Fortunately,
noninflationary growth appears sustainable: softening labor markets are
slowing income growth; weaker income growth is limiting demand; and more
moderate demand is cooling hiring plans. As a result, third-quarter GDP was
much lower than in recent quarters.
We believe that the environment for Treasuries in 2001 will be favorable.
Because high oil prices, disappointing corporate earnings, and high
short-term interest rates increase the risks of a "hard landing" for the
economy, we think the Federal Reserve will probably lower the fed funds
rate in the next three to six months. Treasury bond yields may continue to
decline, though not as dramatically as in the last six months unless the
economy or the stock market performs worse than expected. Regardless,
demand for Treasuries should remain steady due to technical factors, such
as limited new issuance and the continuation of the Treasury's buyback
program.
Respectfully submitted,
William T. Reynolds
President, T. Rowe Price U.S. Treasury Funds, Inc.
December 18, 2000
T. Rowe Price U.S. Treasury Funds
Portfolio Highlights
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KEY STATISTICS
5/31/00 11/30/00
U.S. Treasury Money Fund
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Price Per Share $ 1.00 $ 1.00
Dividends Per Share
For 6 months 0.025 0.028
For 12 months 0.046 0.053
Dividend Yield (7-Day Compound) * 5.48% 5.97%
Weighted Average Maturity (days) 58 69
Weighted Average Quality ** First Tier First Tier
U.S. Treasury Intermediate Fund
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Price Per Share $ 4.96 $ 5.17
Dividends Per Share
For 6 months 0.14 0.14
For 12 months 0.28 0.28
30-Day Dividend Yield *** 6.34% 5.84%
30-Day Standardized Yield to Maturity 6.89 5.98
Weighted Average Maturity (years) 5.8 6.5
Weighted Average Effective Duration (years 4.1 5.1
Weighted Average Quality **** AAA AAA
Portfolio Highlights
--------------------------------------------------------------------------------
KEY STATISTICS
5/31/00 11/30/00
U.S. Treasury Long-Term Fund
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Price Per Share $ 10.58 $ 11.28
Dividends Per Share
For 6 months 0.31 0.31
For 12 months 0.62 0.62
30-Day Dividend Yield *** 6.02% 5.52%
30-Day Standardized Yield to Maturity 6.27 5.68
Weighted Average Maturity (years) 15.7 16.3
Weighted Average Effective Duration (years 9.5 10.6
Weighted Average Quality **** AAA AAA
* Dividends earned and reinvested for the last seven days of each period
indicated are annualized and divided by the fund's net asset value per
share at the end of the period.
** All securities purchased in the money
fund are rated in the two highest categories (tiers) as established by
national rating agencies or, if unrated, are deemed of comparable quality
by T. Rowe Price.
*** Dividends earned for the last 30 days of each period
indicated are annualized and divided by the fund's net asset value per
share at the end of the period.
**** Based on T. Rowe Price research.
Note:Investments in the U.S. Treasury Funds are not insured or guaranteed by the
U.S. government.
T. Rowe Price U.S. Treasury Funds
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Performance Comparison
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These charts show the value of a hypothetical $10,000 investment in each 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.
U.S. TREASURY MONEY FUND
---------------------------------------------------------------------------
As of 11/30/00
Lipper U.S.
Treasury U.S.
Money Market Treasury
Funds Average Money Fund
11/90 10,000 10,000
11/91 10,577 10,557
11/92 10,940 10,911
11/93 11,219 11,187
11/94 11,593 11,559
11/95 12,200 12,164
11/96 12,780 12,748
11/97 13,395 13,364
11/98 14,038 14,011
11/99 14,635 14,608
11/00 15,429 15,407
U.S. TREASURY INTERMEDIATE FUND
---------------------------------------------------------------------------
As of 11/30/00
U.S.
Salomon Treasury
Smith Barney Intermediate
1-7 Year Fund
11/90 10,000 10,000
11/91 11,264 11,278
11/92 12,151 12,164
11/93 13,172 13,294
11/94 13,034 13,013
11/95 14,668 14,942
11/96 15,631 15,591
11/97 16,588 16,549
11/98 18,003 18,350
11/99 18,342 17,963
11/00 19,767 19,576
U.S.Treasury Long-Term Fund
---------------------------------------------------------------------------
U.S.
Salomon Treasury
Smith Barney Long-Term
Treasury Index Fund
11/30/90 10,000 10,000
11/30/91 11,321 11,280
11/30/92 12,346 12,289
11/30/93 13,834 14,100
11/30/94 13,338 13,167
11/30/95 15,667 16,678
11/30/96 16,487 17,172
11/30/97 17,700 18,898
11/30/98 19,643 21,700
11/30/99 19,322 20,074
11/30/00 21,378 23,001
Average Annual Compound Total Return
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This table shows how each 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 11/30/00 1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------------------------
U.S. Treasury Money Fund 5.47% 4.86% 4.84% 4.42%
U.S. Treasury Intermediate 8.98 5.76 5.55 6.95
U.S. Treasury Long-Term Fun 14.58 6.77 6.64 8.69
Investment return represents past performance and will vary. Shares of the
bond funds may be worth more or less at redemption than at original
purchase, as their principal value will fluctuate. Investments in the Money
Fund are not insured or guaranteed by the FDIC or any other government
agency. Although it seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund.
T. Rowe Price U.S. Treasury Money Fund
--------------------------------------------------------------------------------
Unaudited
For a share outstanding throughout each period
Financial Highlights
--------------------------------------------------------------------------------
6 Months Year
Ended Ended
11/30/00 5/31/00 5/31/99 5/31/98 5/31/97 5/31/96
NET ASSET VALUE
Beginning of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Investment activities
Net investment
income (loss) 0.028 0.046 0.044 0.048 0 .046 0.050
Distributions
Net investment income (0.028) (0.046) (0.044) (0.048) (0.046) (0.050)
NET ASSET VALUE
End of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
---------------------------------------------------------
Ratios/Supplemental Data
Total return(diamond) 2.85% 4.75% 4.46% 4.91% 4.74 5.08%
Ratio of total expenses
to average net asset 0.48% 0.48% 0.51% 0.51% 0.56% 0.53%
Ratio of net
investment income
loss) to average
net assets 5.63%! 4.66% 4.37% 4.82% 4 .65% 4.93%
Net assets,
end of period
(in thousands) $912,994 $927,410 $889,945 $846,586 $821,075 $760,010
(diamond) Total return reflects the rate that an investor would have earned
on an investment in the fund during each period, assuming reinvestment
of all distributions.
! Annualized The accompanying notes are an integral part of these
financial statements.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Intermediate Fund
--------------------------------------------------------------------------------
Unaudited
For a share outstanding throughout each period
Financial Highlights
--------------------------------------------------------------------------------
6 Months Year
Ended Ended
11/30/00 5/31/00 5/31/99 5/31/98 5/31/97 5/31/96
NET ASSET VALUE
Beginning of period $ 4.96 $ 5.19 $ 5.30 $ 5.12 $ 5.11 $ 5.25
Investment activities
Net investment
income (loss) 0.14 0.28 0.27 0.30 0.31 0.33
Net realized and
unrealized gain (los 0.21 (0.18) (0.04) 0.18 0.01 (0.14)
Total from
investment activitie 0.35 0.10 0.23 0.48 0.32 0.19
Distributions
Net investment incom (0.14) (0.28) (0.27) (0.30) (0.31) (0.33)
Net realized gain -- (0.05) 0.07) -- -- --
Total distributions (0.14) (0.33) (0.34) (0.30) (0.31) (0.33)
NET ASSET VALUE
End of period $ 5.17 $ 4.96 $ 5.19 $ 5.30 $ 5.12 $ 5.11
------------------------------------------------------------
Ratios/Supplemental Data
Total return(diamond 7.20% 1.97% 4.28% 9.58% 6 .48 3.52%
Ratio of total
expensesto average
net asset 0.62%! 0.64% 0.62% 0.61% 0 .64 0.65%
Ratio of net
investment income
(loss) to average
net assets 5.62%! 5.49% 5.02% 5.72% 6 .11% 6.14%
Portfolio turnover
rate 142.8%! 48.5% 61.2% 112.8% 57.9% 40.7%
Net assets, end of
period in thousands) $244,964 $230,350 $255,987 $203,027 $180,609 $174,176
(diamond) Total return reflects the rate that an investor would have earned on
an investment in the fund during each period, assuming reinvestment
of all distributions.
! Annualized The accompanying notes are an integral part of
these financial statements.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Long-Term Fund
--------------------------------------------------------------------------------
Unaudited
For a share outstanding throughout each period
Financial Highlights
--------------------------------------------------------------------------------
6 Months Year
Ended Ended
11/30/00 5/31/00 5/31/99 5/31/98 5/31/97 5/31/96
NET ASSET VALUE
Beginning of $ 10.58 $ 11.07 $ 11.39 $ 10.17 $ 10.02 $ 10.54
Investment
activities
Net investment
income (loss) 0.31 0.62 0.62 0.63 0.63 0.65*
Net realized
and unrealized
gain (loss) 0.70 (0.38) (0.25) 1.22 0.15 (0.52)
Total from
investment
activities 1.01 0.24 0.37 1.85 0.78 0.13
Distributions
Net investment
income (0.31) (0.62) (0.62) (0.63) (0.63) (0.65)
Net realized gain -- (0.11) (0.07) -- -- --
Total distributions (0.31) (0.73) (0.69) (0.63) (0.63) (0.65)
NET ASSET VALUE
End of period $ 11.28 $ 10.58 $ 11.07 $ 11.39 $ 1 0.17 $ 10.02
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Ratios/Supplemental Data
Total return(diamond 9.66% 2.43% 3.06% 18.58% 7.97% 1.02%*
Ratio of total
expenses to average
net assets 0.62%! 0.64% 0.66% 0.67% 0.80% 0.80%*
Ratio of net
investment income
loss) to average
net assets 5.65%! 5.89% 5.30% 5.71% 6 .22% 6.05%*
Portfolio turnover 12.9%! 21.7% 74.1% 80.8% 6 7.6% 60.1%
Net assets,
end of period
in thousands) $302,431 $299,840 $333,535 $275,850 $71,263 $70,326
(diamond) 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. * Excludes expenses in excess of a 0.80% voluntary expense
limitation in effect through 5/31/99.
! Annualized The accompanying notes are an integral part of these financial
statements.
T. Rowe Price U.S. Treasury Money Fund
--------------------------------------------------------------------------------
Unaudited November 30, 2000
Portfolio of Investments Par Value
--------------------------------------------------------------------------------
In thousands
U.S. TREASURY OBLIGATIONS 99.0%
U.S. Treasury Bills
6.005%, 3/1/01 $ 5,434 $ 5,352
6.01%, 1/11 - 2/22/01 7,827 7,730
6.015%, 12/14/00 - 3/15/01 50,448 49,578
6.02%, 12/7 - 12/14/00 37,933 37,874
6.03%, 3/1 - 5/24/01 40,000 39,116
6.035%, 12/7/00 30,000 29,970
6.04%, 12/7/00 25,000 24,975
6.045%, 12/7/00 - 4/26/01 45,000 44,2611
6.058%, 1/11/01 10,000 9,931
6.06%, 2/22/01 2,113 2,083
6.07%, 2/22/01 27,810 27,421
6.078%, 2/22 - 3/8/01 70,000 68,901
6.10%, 2/22/01 30,000 29,578
6.105%, 2/22 - 3/8/01 20,964 20,621
6.115%, 3/1/01 10,000 9,847
6.135%, 3/1/01 20,000 19,693
6.145%, 2/22/01 2,899 2,858
6.15%, 1/11/01 1,314 1,305
6.155%, 1/11/01 1,316 1,307
6.16%, 2/8/01 30,000 29,646
6.163%, 1/11/01 1,442 1,432
6.175%, 1/25/01 30,000 29,717
6.223%, 2/8/01 40,000 39,523
6.31%, 12/21/00 50,000 49,825
6.365%, 12/18/00 1,180 1,176
6.37%, 12/18/00 1,106 1,103
6.435%, 12/15/00 50,000 49,875
U.S. Treasury Notes
4.50%, 1/31/01 50,000 49,848
5.25%, 1/31/01 50,000 49,909
5.375%, 2/15/01 100,000 99,791
5.625%, 2/28/01 50,000 49,924
6.50%, 5/31/01 10,000 10,011
Total U.S. Treasury Obligations
(Cost $904,042) 904,042
Total Investments in Securities
99.0% of Net Assets (Cost $904,042) $ 904,042
Other Assets Less Liabilities 8,952
NET ASSETS $ 912,994
-----------
T. Rowe Price U.S. Treasury Money Fund
--------------------------------------------------------------------------------
Unaudited November 30, 2000
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $904,042) $ 904,042
Receivable for investment securities sold 49,850
Other assets 11,394
Total assets 965,286
Liabilities
Payable for investment securities purchased 49,875
Other liabilities 2,417
Total liabilities 52,292
NET ASSETS $ 912,994
---------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 82
Accumulated net realized gain/loss - net of distributions 217
Paid-in-capital applicable to 912,772,921 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 912,695
NET ASSETS $ 912,994
---------------
NET ASSET VALUE PER SHARE $ 1.00
---------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Intermediate Fund
--------------------------------------------------------------------------------
Unaudited November 30, 2000
Statement of Net Assets Shares/Par Value
--------------------------------------------------------------------------------
In thousands
U.S. GOVERNMENT OBLIGATIONS 85.0%
U.S. Treasury Obligations 85.0%
U.S. Treasury Bonds
9.375%,2/15/06 $ 5,150 $ 6,037
11.625%,11/15/04 3,800 4,606
12.00%,5/15/05 19,300 24,144
Principal Only, 5/15/10 39,800 23,596
U.S. Treasury Inflation-Indexed Notes
3.375%,1/15/07 8,988 8,761
3.625%,7/15/02 15,539 15,535
U.S. Treasury Notes
6.00%,8/15/09 2,500 2,584
6.125%,8/15/07 24,200 25,052
6.25%,2/15/07 10,300 10,700
6.50%,8/15/05 - 2/15/10 60,150 63,391
7.00%,7/15/06 22,200 23,772
Total U.S. Government Obligations
(Cost $203,886) 208,178
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES 13.7%
U.S. Government Guaranteed Obligations 13.7%
Government National Mortgage Assn.
I
6.00%,12/15/08 - 3/15/11 630 619
6.50%,8/15/02 - 2/15/29 24,991 24,448
7.00%,7/15 - 9/15/16 1,222 1,233
7.50%,10/15/07 - 11/15/17 1,650 1,685
8.00%,2/15/08 - 10/15/25 1,352 1,389
8.50%,8/15/04 - 4/15/23 709 727
9.00%,5/15/01 - 11/15/25 444 454
9.50%,12/15/24 - 5/15/25 489 509
10.00%,8/15/19 63 66
10.50%,11/15/14 67 72
11.00%,12/15/09 - 12/15/19 509 549
11.50%,3/15/10 - 2/15/18 933 1,007
12.50%,10/15/13 - 3/15/15 95 104
Government National Mortgage Assn.
II
9.00%,10/20/16 - 2/20/27 $ 73 $ 76
9.50%,1/20 - 11/20/25 97 100
10.50%,1/20/16 - 6/20/19 370 393
GPM, I, 11.00%,9/15/10 29 31
Midget, I
9.50%,2/15/01 - 12/15/05 104 106
10.00%,5/15/04 - 9/15/05 78 79
10.50%,3/15/01 - 9/15/04 13 14
Total U.S. Government Mortgage-Backed Securities
(Cost $33,246) 33,661
Money Market Funds 0.4%
Government Reserve Investment Fund, 6.53% # 1,002 1,002
Total Money Market Funds (Cost $1,002) 1,002
T. Rowe Price U.S. Treasury Intermediate Fund
--------------------------------------------------------------------------------
Value
--------------------------------------------------------------------------------
In thousands
Total Investments in Securities
99.1% of Net Assets (Cost $238,134) $ 242,841
Futures Contracts
In Thousands
Contract Unrealized
Expiration Value Gain (Loss)
---------- ----------- -----------
Long, 220 U.S. Treasury
5-year Note, Contracts,
$211,125 par of 7% U.S.
Treasury Notes pledged
as initial margin 3/01 $ 22,464 $ 130
Net payments (receipts)
of variation
margin to date (45)
Variation margin receivable
(payable) on open futures contracts 85
Other Assets Less Liabilities 2,038
NET ASSETS $ 244,964
----------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ (917)
Accumulated net realized gain/loss - net of distributions (7,614)
Net unrealized gain (loss) 4,837
Paid-in-capital applicable to 47,372,802 shares
of $0.01 par value capital stock outstanding; 2,000,000,000
shares of the Corporation authorized 248,658
NET ASSETS $ 244,964
---------
NET ASSET VALUE PER SHARE $ 5.17
---------
# Seven-day yield
GPM Graduated Payment Mortgage
The accompanying note are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Intermediate Fund
--------------------------------------------------------------------------------
Unaudited November 30, 2000
Statement of Net Assets Shares/Par Value
--------------------------------------------------------------------------------
In thousands
U.S. GOVERNMENT OBLIGATIONS 85.4%
U.S. Treasury Obligations 85.4%
U.S. Treasury Bonds
6.00%,2/15/26 $ 3,700 $ 3,821
6.25%,8/15/23 22,000 23,336
7.125%,2/15/23 22,700 26,539
7.25%,5/15/16 31,950 36,881
7.625%,2/15/25 16,275 20,211
8.75%,5/15/17 30,000 39,525
8.875%,2/15/19 30,900 41,684
Principal Only, 11/15/21 22,000 6,586
U.S. Treasury Inflation-Indexed Notes
3.375%,1/15/07 2,603 2,538
3.625%,7/15/02 2,982 2,981
U.S. Treasury Notes
Zero Coupon,5/15/16 70,000 28,799
Zero Coupon,11/15/16 50,000 19,975
6.125%,12/31/01 5,250 5,255
Total U.S. Government Obligations (Cost 258,131
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES 11.6%
U.S. Government Guaranteed Obligations 11.6%
Government National Mortgage Assn.
I
6.50%,7/15/09 - 8/15/28 6,195 6,106
7.50%,1/15 - 12/15/28 5,792 5,860
8.00%,2/15/04 - 3/15/17 511 524
8.50%,12/15/05 - 2/15/27 2,258 2,318
9.00%,11/15/04 - 8/15/25 3,790 3,975
9.50%,8/15/09 - 12/15/17 4,010 4,212
10.00%,12/15/17 - 7/15/22 518 545
10.50%,5/15/13 - 7/15/19 160 171
11.50%,10/15/10 - 8/15/15 78 84
II
7.00%, 11/20/23 - 1/20/24 27 26
8.50%, 10/20/24 261 268
Government National Mortgage Assn.
REMIC
6.35%,1/20/28 $ 5,000 $ 4,568
6.50%,5/20/28 4,837 4,473
7.00%,5/16/24 2,000 2,029
Interest Only, 8.00%, 6/16/23 ** 302 51
Total U.S. Government Mortgage-Backed
Securities (Cost $35,960) 35,210
MONEY MARKET FUNDS 2.0%
Government Reserve Investment Fund, 6.53 5,975 5,975
Total Money Market Funds (Cost $5,975) 5,975
Total Investments in Securities
99.0% of Net Assets (Cost $287,990) $ 299,316
Futures Contracts
In thousands
Contract Unrealized
Expiration Value Gain (Loss)
---------- ------------- -----------
Long, 50 U.S. Treasury
30-year Note, Contracts,
$116,000 par of 8.75% U.S.
Treasury Bonds pledged as
initial margin 3/01 $ 5,132 $ 54
Net payments (receipts) of
variation margin to date (13)
Variation margin receivable
(payable) on open futures
contracts 41
Other Assets Less Liabilities $ 3,074
NET ASSETS $ 302,431
---------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 12
Accumulated net realized gain/loss - net of distributions (1,877)
Net unrealized gain (loss) 11,380
Paid-in-capital applicable to 26,819,461 shares of $0.01
par value capital stock outstanding; 2,000,000,000 shares
of the Corporation authorized 292,916
NET ASSETS $ 302,431
---------
NET ASSET VALUE PER SHARE $ 11.28
---------
** For Interest Only securities, amount represents notional principal on
which the fund receives interest
# Seven-day yield
REMIC Real Estate Mortgage Investment Conduit
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Long-Term Fund
--------------------------------------------------------------------------------
Unaudited
Statements of Operations
--------------------------------------------------------------------------------
In thousands Money Intermediate Long-Term
Fund Fund Fund
6 Months 6 Months 6 Months
Ended Ended Ended
11/30/00 11/30/00 11/30/00
Investment Income (loss)
Interest income $ 28,092 $ 7,346 $ 9,416
Expenses
Investment management 1,454 431 549
Shareholder servicing 619 215 305
Custody and accounting 61 52 50
Prospectus and shareholder
reports 31 10 7
Registration 19 13 11
Legal and audit 5 5 5
Directors 4 3 4
Miscellaneous 3 2 2
Total expenses 2,196 731 933
Expenses paid indirectly (6) -- --
Net expenses 2,190 731 933
Net investment income (loss) 25,902 6,615 8,483
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 2 (1,727) (531)
Futures -- 70 95
Net realized gain (loss) 2 (1,657) (436)
Change in net unrealized gain or loss
Securities -- 11,449 19,336
Futures -- 130 54
Change in net unrealized gain
or loss -- 11,579 19,390
Net realized and unrealized gain (los 2 9,922 18,954
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 25,904 $ 16,537 $ 27,437
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Money Fund
--------------------------------------------------------------------------------
Unaudited
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
In thousands
x 6 Months Year
x Ended Ended
x 11/30/00 5/31/00
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 25,902 $ 42,724
Net realized gain (loss) 2 30
Increase (decrease) in net assets
from operations 25,904 42,754
Distributions to shareholders
Net investment income (25,902) (42,724)
Capital share transactions *
Shares sold 565,255 2,512,141
Distributions reinvested 24,911 40,913
Shares redeemed (604,584) (2,515,619)
Increase (decrease) in net
assets from capital
share transactions (14,418) 37,435
Net Assets
Increase (decrease) during period (14,416) 37,465
Beginning of period 927,410 889,945
End of period $ 912,994 $ 927,410
-----------------------
*Share information
Shares sold 565,255 2,512,141
Distributions reinvested 24,911 40,913
Shares redeemed (604,584) (2,515,619)
Increase (decrease) in shares
outstanding (14,418) 37,435
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Intermediate Fund
--------------------------------------------------------------------------------
Unaudited
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
11/30/00 5/31/00
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 6,615 $ 13,409
Net realized gain (loss) (1,657) (6,458)
Change in net unrealized
gain or loss 11,579 (2,366)
Increase (decrease) in net assets
from operations 16,537 4,585
Distributions to shareholders
Net investment income (6,615) (13,409)
Net realized gain -- (2,460)
Decrease in net assets from
distributions (6,615) (15,869)
Capital share transactions *
Shares sold 31,084 75,533
Distributions reinvested 5,512 13,264
Shares redeemed (31,904) (103,150)
Increase (decrease) in
net assets from capital
share transactions 4,692 (14,353)
Net Assets
Increase (decrease) during period 14,614 (25,637)
Beginning of period 230,350 255,987
End of period $ 244,964 $ 230,350
-----------------------
*Share information
Shares sold 6,138 14,978
Distributions reinvested 1,087 2,638
Shares redeemed (6,307) (20,516)
Increase (decrease) in
shares outstanding 918 (2,900)
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Long-Term Fund
--------------------------------------------------------------------------------
Unaudited
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
11/30/00 5/31/00
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 8,483 $ 19,134
Net realized gain (loss) (436) (2,077)
Change in net unrealized gain or loss 19,390 (10,189)
Increase (decrease) in net assets from
operations 27,437 6,868
Distributions to shareholders
Net investment income (8,483) (19,134)
Net realized gain -- (3,483)
Decrease in net assets from
distributions (8,483) (22,617)
Capital share transactions *
Shares sold 25,826 80,055
Distributions reinvested 8,001 21,607
Shares redeemed (50,190) (119,608)
Increase (decrease in net
assets from capital (16,363) (17,946)
Net Assets
Increase (decrease) during period 2,591 (33,695)
Beginning of period 299,840 333,535
End of period $ 302,431 $ 299,840
-----------------------
*Share information
Shares sold 2,372 7,506
Distributions reinvested 730 2,044
Shares redeemed (4,612) (11,337)
Increase (decrease) in shares
outstanding (1,510) (1,787)
The accompanying notes are an integral part of these financial statements.
T. Rowe Price U.S. Treasury Funds
--------------------------------------------------------------------------------
Unaudited November 30, 2000
Notes to Financial Statements
--------------------------------------------------------------------------------
Note 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price U.S. Treasury Funds, Inc. (the corporation) is registered
under the Investment Company Act of 1940 as a diversified, open-ended,
management investment company. The U.S. Treasury Money Fund (the Money
Fund), the U.S. Treasury Intermediate Fund (the Intermediate Fund), and the
U.S. Treasury Long-Term Fund (the Long-Term Fund) are three portfolios
established by the corporation and commenced operations on June 28, 1982,
September 29, 1989, and September 29, 1989, respectively. The Money Fund
seeks maximum preservation of capital and liquidity and, consistent with
these goals, the highest possible current income. The Intermediate Fund
seeks a high level of income consistent with maximum credit protection and
moderate fluctuation in principal. The Long-Term Fund seeks the highest
level of income consistent with maximum credit protection.
The accompanying financial statements were prepared in accordance with
generally accepted accounting principles, which require the use of
estimates made by fund management.
Valuation - Debt securities are generally traded in the over-the-counter
market. Except for securities held by the Money Fund, investments in
securities are stated at fair value as furnished by dealers who make
markets in such securities or by an independent pricing service, which
considers yield or price of bonds of comparable quality, coupon, maturity,
and type, as well as prices quoted by dealers who make markets in such
securities. Securities held by the Money Fund are valued at amortized cost.
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.
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 that fund, as authorized by the Board of Directors.
Premiums and Discounts - Premiums and discounts on debt securities, other
than mortgage-backed securities (MBS), are amortized for both financial
reporting and tax purposes. Premiums and discounts on all MBS are
recognized upon disposition or principal repayment as gain or loss for
financial reporting purposes. For tax purposes, premiums and discounts on
MBS acquired on or before June 8, 1997, are recognized upon disposition or
principal repayment as ordinary income. For MBS acquired after June 8,
1997, premiums are recognized as gain or loss; discounts are recognized as
gain or loss, except to the extent of accrued market discount.
In November, 2000, the American Institute of Certified Public Accountants
issued a revised Audit and Accounting Guide - Audits of Investment
Companies (the guide), which will be adopted by the fund as of June 1,
2001. The guide requires all premiums and discounts on debt securities to
be amortized, and gain/loss on paydowns of MBS to be accounted for as
interest income. Upon adoption, each fund will adjust the cost of its debt
securities, and corresponding unrealized gain/loss thereon, in the amount
of the cumulative amortization that would have been recognized had
amortization been in effect from the purchase date of each holding. This
adjustment will have no effect on the funds' net assets or results of
operations.
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. Distributions to shareholders
are recorded by each fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax
regulations and may differ from net investment income and realized gains
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 each fund's custody
charges. Payments ("variation margin") made or received by each 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 Change in
net unrealized gain or loss in the accompanying financial statements.
Note 2 - INVESTMENT TRANSACTIONS
Consistent with their investment objective, the Intermediate and Long-Term
Funds engage in the following practices to manage exposure to certain risks
or enhance performance. The investment objective, policies, program, and
risk factors of each fund are described more fully in each fund's
prospectus and Statement of Additional Information.
Futures Contracts - During the six months ended November 30, 2000, the
Intermediate and Long-Term Funds were 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.
Other - Purchases and sales of U.S. government securities, other than
short-term securities, for the six months ended November 30, 2000, were as
follows:
--------------------------------------------------------------------------------
Intermediate Long-Term
Fund Fund
U.S. government securities
Purchases 181,604,000 $18,942,000
Sales 163,115,000 37,211,000
Note 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since each fund intends
to continue to qualify as a regulated investment company and distribute all
of its taxable income. As of May 31, 2000, the Intermediate Fund had
capital loss carryforwards for federal income tax purposes of $842,000, all
of which expires in 2008. As of May 31, 2000, the Long-Term Fund had
capital loss carryforwards for federal income tax purposes of $293,000, all
of which expires in 2008. Each Fund intends to retain gains realized in
future periods that may be offset by available capital loss carryforwards.
At November 30, 2000, the costs of investments for the Money, Intermediate,
and Long-Term Funds for federal income tax purposes were substantially the
same as for financial reporting and totaled $904,042,000, $238,134,000, and
$287,990,000, respectively. For the Money Fund, amortized cost is
equivalent to value; and for the Intermediate and Long-Term Funds, net
unrealized gain (loss) on investments was as follows:
--------------------------------------------------------------------------------
Intermediate Long-Term
Fund Fund
Appreciated investments $5,617,000 $12,358,000
Depreciated investments (910,000) (1,032,000)
Net unrealized gain (loss) $4,707,000 $11,326,000
-------------------------------
Note 4 - RELATED PARTY TRANSACTIONS
Each fund is managed by T. Rowe Price Associates, Inc. (the manager or
Price Associates). The investment management agreement between each fund
and the manager provides for an annual investment management fee, of which
$237,000, $72,000, and $88,000 were payable at November 30, 2000, by the
Money, Intermediate, and Long-Term Funds, respectively. The fee is computed
daily and paid monthly, and consists of an individual fund fee equal to
0.05% of average daily net assets for the Intermediate and Long-Term Funds,
and a group fee. The Money Fund does not have an individual fee, only a
group fee. The group fee is based on the combined assets of certain mutual
funds sponsored by the manager or T. Rowe Price 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 November 30,
2000, and for the six months then ended, the effective annual group fee
rate was 0.32%. Each 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, each fund has entered into agreements with Price Associates
and two wholly owned subsidiaries of Price Associates, pursuant to which
each fund receives certain other services. Price Associates computes the
daily share price and maintains the financial records of each fund. T. Rowe
Price Services Inc., is each fund's transfer and dividend disbursing agent
and provides shareholder and administrative services to the funds. T. Rowe
Price Retirement Plan Services, Inc., provides subaccounting and
recordkeeping services for certain retirement accounts invested in each
fund. The Money, Intermediate, and Long-Term Funds incurred expenses
pursuant to these related party agreements totaling approximately $553,000,
$211,000, and $129,000, respectively, for the six months ended November 30,
2000, of which $100,000, $36,000, and $26,000, respectively, were payable
at period-end.
Additionally, the Long-Term Fund is one of several T. Rowe Price-sponsored
mutual funds (underlying funds) in which the T. Rowe Price Spectrum Funds
(Spectrum) may invest. Spectrum does not invest in the underlying funds for
the purpose of exercising management or control. Expenses associated with
the operation of Spectrum are borne by each underlying fund to the extent
of estimated savings to it and in proportion to the average daily value of
its shares owned by Spectrum, pursuant to special servicing agreements
between and among Spectrum, the underlying funds, Price Associates, and, in
the case of T. Rowe Price Spectrum International, T. Rowe Price
International. Spectrum Income Fund held approximately 55.4% of the
outstanding shares of the Long-Term Fund at November 30, 2000. For the six
months then ended, the Long-Term Fund was allocated $194,000 of Spectrum
expenses, $26,000 of which was payable at period-end.
The funds may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by Price Associates. The Reserve Funds are
offered as cash management options only to mutual funds and other accounts
managed by Price Associates or T. Rowe Price International and are not
available to the public. The Reserve Funds pay no investment management
fees. Distributions from the Reserve Funds to the Intermediate and
Long-Term Funds for the six months ended November 30, 2000, totaled
$160,000 and $67,000, respectively, and are reflected as interest income in
the accompanying Statement of Operations.
T. Rowe Price Shareholder Services
--------------------------------------------------------------------------------
Investment Services and Information
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to
10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed-income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(registered trademark)
and the T. Rowe Price Web site on the Internet. Address:
www.troweprice.com.
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and
other securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and
results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a July 2000 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
Developing Technologies
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
BLENDED ASSET FUNDS
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
BOND FUNDS
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Spectrum Income
Summit GNMA
U.S. Bond Index
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 Tax-Free Bond
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
INTERNATIONAL/GLOBAL FUNDS
Stock
Emerging Europe & Mediterranean
Emerging Markets Stock
European Stock
Global Stock
Global Technology
International Discovery*
International Equity Index
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
Bond
Emerging Markets Bond
International Bond
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, which contains complete information,
including fees and expenses. 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.
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 ManagerSM 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
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
For the hearing impaired, call:
1-800-367-0763
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
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 at
www.troweprice.com/investorcenters
Baltimore Area
Downtown - new address
105 East Lombard Street
Owings Mills
Three Financial Center
4515 Painters Mill Road
Boston Area
386 Washington Street
Wellesley
Colorado Springs
2260 Briargate Parkway
Los Angeles Area
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
San Francisco Area
1990 North California Boulevard
Suite 100
Walnut Creek
Tampa
4200 West Cypress Street
10th Floor
Washington, D.C.
900 17th Street N.W.
Farragut Square
T. Rowe Price Invest with Confidence (registered trademark)
T. Rowe Price Investment Services, Inc., Distributor C07-051 11/30/00
