<PAGE>
Semiannual Report
MID-CAP
GROWTH
FUND
JUNE 30, 1999
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
Mid-Cap Growth Fund
. U.S. stocks continued their record run in the first half of 1999, and
mid-cap stocks were among the leaders in the second quarter.
. The fund produced solid gains in the 6- and 12-month periods, but results
were mixed compared with its benchmarks.
. Business services remains our top industry allocation, followed by the
consumer, technology, and health care industries.
. Though mid-cap stocks surged in the second quarter, valuations remain
compelling compared with large-caps.
<PAGE>
FELLOW SHAREHOLDERS
The U.S. stock market continued its long, upward climb in the first half of
1999. Large-company stocks, as measured by the S&P 500, continued to lead the
market, gaining 12.38% compared with 6.87% for the S&P MidCap Index. However,
this result masked a strong resurgence by small- and mid-cap stocks starting in
April.
After a 22.00% gain in 1998, the Mid-Cap Growth Fund rose a solid 11.27% in the
first half of 1999, as shown in the table. This result exceeded the return of
the S&P MidCap Index, but lagged the Russell Midcap Growth Index and, by a
slight margin, the Lipper Mid Cap Fund Index. For the 12-month period, the fund
rose 16.41%, a good return in absolute terms but a mixed result against the
various benchmarks. June 30 marked your fund's seventh birthday, and over that
period it has gained 345.65% (for an average annual return of 23.80%), versus
235.19% for the S&P MidCap Index. For the past five years, the fund delivered an
average annual return of 24.65%, compared with 22.28% for the S&P MidCap Index.
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Periods Ended 6/30/99 6 Months 12 Months
- --------------------------------------------------------------------------------
Mid-Cap Growth Fund 11.27% 16.41%
S&P MidCap Index 6.87 17.18
Russell Midcap Growth Index 14.19 20.31
Lipper Mid Cap Fund Index 11.90 13.61
MARKET ENVIRONMENT
The U.S. economy continued its robust growth in the first half, driven by
exuberant consumer spending. Unemployment hovered close to 30-year lows;
consumer confidence measures were at record highs; and the savings rate dipped
below zero for the first time, meaning that Americans were actually
disinvesting. Asian economies began to strengthen somewhat, and energy prices
rebounded sharply from their lows of last December. Since weak Asian demand and
low energy prices have been two of the key underpinnings of the disinflationary
environment of the last couple of years, investors sold bonds, causing interest
rates to rise from about 5% at year-end to about 6% at the end
1
<PAGE>
of June. The Federal Reserve, in an effort to preempt the first hints of
inflation, nudged up short-term interest rates on June 30, the first such
increase in two years. While markets are often affected by events in Washington,
the impeachment process effectively paralyzed the political agenda for the last
year.
The stock market's first half rally came in spite of rising interest rates.
Sentiment remained ebullient, especially toward technology stocks--and Internet
stocks in particular. Technology stocks gained over 30% in the first half, and
have now more than doubled from their lows of October 1998. The Internet sector
rose about 50% in the first half, although these stocks had a volatile second
quarter that ended with a slight overall decline. The quarterly lows for many of
these stocks were less than half of their highs for the quarter. This was a
speculative market, and the best-performing stocks tended to be those with slim
prospects of earnings or cash flows in the intermediate future.
Beyond the Internet, the big story of the first half may have been the
resurgence of small- and mid-cap stocks after more than five years of large-cap
hegemony. While large-caps continued their outperformance in the first quarter,
the market's leadership changed abruptly in April, and small-caps, mid-caps, and
cyclicals outperformed in the second quarter. It is not yet certain whether the
small- and mid-cap move was
- -------------------------------------
INFORMATION ON YEAR-END DISTRIBUTIONS
- --------------------------------------------------------------------------------
To help you with tax planning, we try to give you a good idea of the per-share
income and capital gain amounts our funds may distribute near year-end. In late
October, we will provide estimates of these amounts, which will be paid on
December 16, 1999, to shareholders of record on December 14. These preliminary
numbers will be included in The Price Report mailing to shareholders in late
October and will also be available on our Web site--www.troweprice.com.
We hope that these preliminary numbers will be useful to you in approximating
the income and capital gains taxes you may pay on distributions to taxable
accounts.
If your fund distributed any capital gains earlier in 1999, you can find the
amounts on your statements and should include them in your tax planning
calculations. Please keep in mind that the numbers are not final and are likely
to be revised before the December 14 declaration and record date. As the fall
progresses, you may want to check our Web site for revisions.
If you would like information on tax matters relating to mutual funds, please
visit our Web site to download our Insights report, Tax Information for Mutual
Fund Investors, or call 1-800-225-5132 to request a copy.
2
<PAGE>
simply a technical bounce from the lowest relative valuations in 40 years,
reached in March, or an inflection point at which investors began to recognize
the attractiveness of these sectors.
PORTFOLIO REVIEW
Given the magnitude of the technology rally, it is not surprising that
technology stocks represented four of the top 10 contributors to the fund's
performance in the first half, even though our technology positions tend to be
smaller than the average position in the fund. We do this to reduce specific
stock risk and dampen the portfolio's volatility. The top technology
contributors in the half included SCI Systems, a leading electronic
manufacturing outsourcing company that we bought at depressed prices this
spring, and Xilinx, a leading specialty semi-conductor company that is
benefiting from strong demand and a new product cycle.
The two top contributors to performance for both the 6- and 12-month periods
were companies that are benefiting from the use of technology. The best
performer was Western Wireless, a leading rural cellular service provider in the
mountain states, which is posting strong subscriber growth. It recently spun out
to its shareholders a subsidiary, VoiceStream Wireless, an urban wireless
company that we believe has a chance to leverage its regional operation to
become a much more valuable national wireless provider. The fund's second best
contributor was long-time holding Circuit City Stores, a leading consumer
electronics retailer. The stock nearly doubled in the first half as investors
realized that the company was beginning to benefit from a huge new wave of
products such as digital televisions, digital video disc players, and digital
camcorders.
The worst detractor to first half performance was Network Associates, a network
security software company that fell well short of earnings expectations after
stumbling badly integrating several acquisitions. We eliminated the stock. The
second worst performer in the period was Omnicare, a provider of pharmaceuticals
and related services to nursing homes. The company recently announced
disappointing earnings related to changes in Medicare reimbursement policies.
Investor sentiment toward the health care services sector is extremely negative
(note that four of our worst 10 performers this year are in this segment). The
basic issue is that everyone favors more and better health care, but no one
wants to pay for it. The federal government, as the largest payer, is
3
<PAGE>
squeezing the revenues of many of these companies. Nevertheless, we believe that
valuations in this sector are overly depressed, and that the stocks of the
better companies, like Omnicare, will recover and perform well over time.
As we noted in previous reports, the merger boom in Corporate America continues
to have an effect on the fund at the margin. In the last six months, another
half dozen or so of our holdings have been acquired or announced they were being
acquired, including Alza, General Nutrition, Omnipoint, Saville Systems, Outdoor
Systems, and Richfood Holdings. While we never invest in a company simply
because we think it might be an acquisition candidate, our valuation discipline
tends to lead us to companies that are attractive to corporate acquirers.
The fund remains well diversified across industry sectors. We sold some of our
technology holdings as the sector appreciated. Significant new holdings since
our last report include Republic Services Group, a solid waste company, Ingram
Micro, a leading electronics distributor, and NOVA, a credit card processor.
Though the Mid-Cap Growth Fund's first half performance was roughly in line with
its various benchmarks, this was not as strong a period as many others in the
fund's history. This is primarily attributable to our lack of emphasis on
technology and telecommunications, particularly the high-flying Internet and
telecommunications companies where we view valuations as problematic. While we
have benefited somewhat from Internet-related investments, we find ourselves
increasingly on the sidelines because valuations appear high. Although we feel a
bit like
INVESTMENT STRATEGY AND OUTLOOK
- ----------------------
SECTOR DIVERSIFICATION
- ---------------------------------------------------------------------------
12/31/98 6/30/99
- ---------------------------------------------------------------------------
Financial 10% 10%
Health Care 11 12
Consumer 20 20
Technology 15 12
Business Services 29 31
Energy 2 3
Industrial 4 5
Basic Materials - -
Reserves 9 7
- ---------------------------------------------------------------------------
Total 100% 100%
4
<PAGE>
. . . MAINTAINING VALUATION DISCIPLINE . . . HAS BEEN REWARDED IN THE LONG RUN.
wallflowers at a boisterous party, in the past we have found that maintaining
valuation discipline under similar circumstances has been rewarded in the long
run.
We have stated before that we view the Internet as one of the great
technological advances of the modern age. In rapid fashion, the Internet is
transforming paradigms across industries just as profoundly as the changes
triggered by the development of national transportation and communications
networks and the introduction of electricity in the late nineteenth century.
Many industries and companies will experience great leaps in efficiency that
will change business processes, alter pricing structures, and upset the status
quo. Nevertheless, a speculative frenzy has developed in our capital markets,
where the normal market discipline of demanding profitability, or at least a
roadmap to positive cash flow, has not applied to Internet companies. The
current collective wisdom advocates massive spending to build first mover
advantages and gain category dominance. While this sounds impressive,
profitability must follow within a reasonable time frame, or else we will find
that significant companies have been built on business models lacking long-term
viability. This might be analogous to building a house without a foundation.
Some of the current Internet favorites may prove to be the blue chip companies
of the new century. However, many will flounder and even disappear. The current
beneficent environment for Internet stocks will likely end long before we have
to sort out the winners from the losers. However, the longer the current
speculation persists, the more Internet spending will affect non-Internet
companies, positively and negatively. For instance, while the broadcasting
industry is benefiting mightily from Internet advertising, bookstores are
suffering from slower growth as Internet retailers garner incremental share,
albeit at prices that do not appear to be viable in the long run.
Moving beyond the Internet, we believe that earnings growth remains the key
driver to continued small- and mid-cap outperformance relative to larger
companies. The fact of the matter is that large U.S. companies have grown their
earnings at a faster rate than small- and mid- caps over the last few years.
This is a direct outgrowth, in our opinion, of a revolution in American
corporate management philosophy that emphasizes efficiency, return on
investment, and shareholder value. Large-company earnings have grown much faster
than sales over this
5
<PAGE>
period, and the key question is, How long can this last? At some point, the
higher internal growth of small- and mid-cap companies will be recognized,
probably as large-cap earnings momentum begins to slow. Even though mid-cap
stocks have recovered slightly from their record low relative valuations in
April, we believe they remain compelling in comparison with large-caps. We
continue to believe that the Mid-Cap Growth Fund remains well positioned to
achieve attractive returns over time.
On a final note, we are delighted to report that John Wakeman has been named
executive vice president of the fund. John has been an integral part of the
portfolio management team since we started in 1992, and this appointment
recognizes his substantial contribution and role.
Respectfully submitted,
/s/ Brian W.H. Berghuis
Brian W.H. Berghuis
President and Chairman of the Investment Advisory Committee
/s/ John F. Wakeman
John F. Wakeman
Executive Vice President
July 19, 1999
6
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/99
- ----------------------------------------------
Circuit City Stores 2.5%
Affiliated Computer Services 2.0
Galileo International 1.8
Republic Services 1.8
NOVA 1.7
- ----------------------------------------------
Waddell & Reed Financial 1.7
Warnaco Group 1.7
SCI Systems 1.7
Western Wireless 1.6
Jones Apparel Group 1.6
- ----------------------------------------------
Outdoor Systems 1.4
Analog Devices 1.4
Whole Foods Market 1.4
Suiza Foods 1.4
BJ Services 1.4
- ----------------------------------------------
VoiceStream Wireless 1.4
U.S. Foodservice 1.4
Royal Caribbean Cruises 1.3
Xilinx 1.3
BJ's Wholesale Club 1.3
- ----------------------------------------------
Premier Parks 1.3
PMC-Sierra 1.3
Synopsys 1.2
SunGard Data Systems 1.2
Family Dollar Stores 1.2
- ----------------------------------------------
Total 38.0%
Note: Table excludes reserves.
7
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTRIBUTIONS TO THE CHANGE IN NET ASSET VALUE PER SHARE
6 Months Ended 6/30/99
Ten Best Contributors Ten Worst Contributors
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Western Wireless 68(cent) Network Associates ** -31(cent)
Circuit City Stores 45 Omnicare 31
SCI Systems * 27 Romac International 25
Xilinx 27 AmeriSource Health * 14
BJ Services 26 MSC 13
PMC-Sierra 25 Total Renal Care Holdings 12
Univision Communications 24 Henry Schein 12
Smith International 24 Allied Waste Industries ** 11
Jones Apparel Group 22 Suiza Foods 10
Analog Devices 21 NOVA 10
- -------------------------------------- ------------------------------------------
Total 309(cent) Total -169(cent)
12 Months Ended 6/30/99
Ten Best Contributors Ten Worst Contributors
- --------------------------------------------------------------------------------
Western Wireless 72(cent) Omnicare -34(cent)
Circuit City Stores 51 Warnaco Group 25
Xilinx 50 Paging Network ** 25
Biogen 48 Romac International 24
PMC-Sierra 35 Quorum Health Group ** 21
Analog Devices 35 Corporate Express ** 21
Univision Communications 32 Security Capital Group ** 20
Gilead Sciences 28 MSC 19
Netscape Communications *** 28 Renaissance Worldwide ** 19
SCISystems * 27 Ocean Energy 17
- -------------------------------------- ------------------------------------------
Total 406(cent) Total -225(cent)
</TABLE>
* Position added
** Position eliminated
*** Position added and eliminated
8
<PAGE>
T. ROWE PRICE MID-CAP GROWTH 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 a broad-based average or index. The index
return does not reflect expenses, which have been deducted from the fund's
return.
MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
S&P MidCap Index Lipper Mid Cap Fund Index Mid-Cap Growth Fund
6/30/92 10,000 10,000 10,000
6/30/93 12,269 12,304 13,692
6/30/94 12,262 12,381 14,810
6/30/95 15,002 15,505 18,698
6/30/96 18,241 19,930 25,139
6/30/97 22,496 22,315 29,470
6/30/98 28,604 27,213 38,282
6/30/99 33,519 30,916 44,565
- ---------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Since Inception
Periods Ended 6/30/99 1 Year 3 Years 5 Years Inception Date
- --------------------------------------------------------------------------------
Mid-Cap Growth Fund 16.41% 21.03% 24.65% 23.80% 6/30/92
- --------------------------------------------------------------------------------
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
9
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 34.08 $ 28.60 $ 24.43 $ 20.13 $ 14.85 $ 15.18
---------------------------------------------------------------------------------------
Investment activities
Net investment income (0.03) (0.03) (0.03) (0.01) - -*
Net realized and
unrealized gain (loss) 3.87 6.24 4.50 5.00 6.07 0.04
---------------------------------------------------------------------------------------
Total from
investment activities 3.84 6.21 4.47 4.99 6.07 0.04
---------------------------------------------------------------------------------------
Distributions
Net realized gain - (0.73) (0.30) (0.69) (0.79) (0.37)
---------------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 37.92 $ 34.08 $ 28.60 $ 24.43 $ 20.13 $ 14.85
---------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C> <C>
Total return* 11.27% 22.00% 18.33% 24.84% 40.95% 0.29%*
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.88% 0.91% 0.95% 1.04% 1.25% 1.25%*
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets (0.17)% (0.14)% (0.14)% (0.11)% (0.01)% 0.02%*
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 53.3% 46.7% 42.6% 38.1% 57.5% 48.7%
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 4,308 $ 3,310 $ 1,839 $ 1,021 $ 264 $ 101
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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 1.25% voluntary expense limitation in
effect through 12/31/95.
+ Annualized
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- ----------------------------------------------------------------------
Unaudited June, 30, 1999
- ------------------------
PORTFOLIO OF INVESTMENTS Shares/Par Value
- ----------------------------------------------------------------------
In thousands
COMMON STOCKS 92.7%
FINANCIAL 9.4%
Bank and Trust 0.8%
North Fork Bancorporation 1,650,000 $ 35,166
35,166
---------------
Insurance 3.9%
ACE Limited 750,000 21,188
E.W. Blanch 287,700 19,618
Fairfax Financial (CAD) * 81,000 21,728
MGIC Investment 675,000 32,822
Protective Life 1,050,000 34,650
Radian Group 750,000 36,609
166,615
---------------
Financial Services 4.7%
Capital One Financial 825,000 45,942
Heller Financial 1,500,000 41,719
The CIT Group (Class A) 1,525,000 44,034
Waddell & Reed Financial (Class A) 1,475,000 40,470
Waddell & Reed Financial (Class B) 1,200,000 32,400
204,565
---------------
Total Financial 406,346
---------------
HEALTH CARE 12.4%
Pharmaceuticals 2.5%
ALZA (Class A) * 900,000 45,787
Shire Pharmaceuticals ADR * 445,400 11,525
Teva Pharmaceutical Industries ADR 1,000,000 49,375
106,687
---------------
Biotechnology 3.5%
Biogen * 710,000 45,684
Centocor * 400,000 18,663
Gilead Sciences * 912,500 47,621
MedImmune * 488,400 33,165
Sepracor * 82,200 6,669
151,802
---------------
11
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------
In thousands
Medical Instruments and Devices 2.0%
Millipore 490,000 $ 19,876
Sybron International * 1,725,000 47,545
Waters * 378,600 20,113
87,534
---------------
Health Care Services 4.4%
Covance * 1,625,000 38,898
HCR Manor Care * 1,200,000 29,025
Omnicare 3,200,000 40,400
Total Renal Care Holdings * 2,250,000 35,016
Wellpoint Health Networks * 525,000 44,559
187,898
---------------
Total Health Care 533,921
---------------
CONSUMER 19.9%
Soft Goods Retailers 1.7%
Family Dollar Stores 2,150,000 51,600
Saks * 750,000 21,656
73,256
---------------
Hard Goods Retailers 8.9%
AutoZone * 1,000,000 30,125
BJ's Wholesale Club * 1,900,000 57,118
Borders Group * 1,346,200 21,287
Circuit City Stores 1,150,000 106,950
Costco Companies * 450,000 36,014
General Nutrition * 305,300 7,108
Kroger * 800,000 22,350
Shopko Stores * 1,202,700 43,598
Whole Foods Market * 1,275,000 61,240
385,790
---------------
Consumer Non-Durables 3.9%
Boyds Collection Limited * 1,550,000 26,835
Jones Apparel Group * 1,975,000 67,767
Warnaco Group (Class A) 2,675,000 71,556
166,158
---------------
Restaurants 1.2%
Outback Steakhouse * 1,300,000 50,984
50,984
---------------
12
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- ----------------------------------------------------------------------
Shares/Par Value
- ----------------------------------------------------------------------
In thousands
Food and Beverages 1.4%
Suiza Foods * 1,450,000 $ 60,719
60,719
----------------
Entertainment 2.8%
Mirage Resorts * 330,700 5,539
Premier Parks * 1,525,000 56,044
Royal Caribbean Cruises 1,325,000 57,969
119,552
----------------
Total Consumer 856,459
----------------
TECHNOLOGY 12.4%
Computer Hardware 2.1%
Sanmina * 250,000 18,969
SCI Systems * 1,500,000 71,250
90,219
----------------
Computer Software 3.5%
BMC Software * 500,000 26,984
Citrix Systems * 225,000 12,677
Intuit * 275,000 24,802
Parametric Technology * 2,200,000 30,594
Synopsys * 975,000 53,777
148,834
----------------
Peripherals 0.8%
Molex (Class A) 1,132,900 35,934
35,934
----------------
Semiconductors & Components 5.6%
Analog Devices * 1,225,000 61,480
KLA-Tencor * 350,000 22,695
Maxim Integrated Products * 650,000 43,225
PMC-Sierra * 940,000 55,431
Xilinx * 1,000,000 57,281
240,112
----------------
E-Commerce 0.4%
Sterling Commerce * 500,000 18,250
18,250
----------------
Total Technology 533,349
----------------
13
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- ----------------------------------------------------------------------------
Shares/Par Value
- ----------------------------------------------------------------------------
In thousands
BUSINESS SERVICES 30.5%
Telecom Services 4.7%
Crown Castle International * 1,000,000 $ 20,781
Omnipoint * 1,200,000 34,688
Rogers Communications * 950,000 15,378
Voicestream Wireless * 2,111,300 60,106
Western Wireless 2,625,000 70,957
201,910
-------------
Computer Services 10.6%
Acxiom * 1,475,000 36,829
Affiliated Computer Services (Class A) * 1,700,000 86,063
Ceridian * 964,100 31,514
Concord EFS * 300,000 12,703
DST Systems 142,400 8,953
Galileo International 1,450,000 77,484
National Data 1,050,000 44,888
NOVA * 2,950,000 73,750
Saville Systems ADR * + 2,200,000 31,969
SunGard Data Systems * 1,550,000 53,475
457,628
-------------
Distribution 5.0%
AmeriSource Health * 1,650,000 42,075
Henry Schein * 1,025,000 32,512
Ingram Micro * 1,700,000 43,775
MSC * 1,300,000 13,325
Richfood Holdings 1,325,000 23,353
U.S. Foodservice * 1,400,000 59,675
214,715
-------------
Transportation 0.2%
C.H. Robinson Worldwide 265,000 9,706
9,706
-------------
Media and Advertising 3.2%
Catalina Marketing * 400,000 36,800
Clear Channel Communications * 200,000 13,787
Outdoor Systems * 1,686,900 61,572
Univision Communications * 425,000 28,050
140,209
-------------
14
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------
In thousands
Environmental 1.8%
Republic Services (Class A) * 3,100,000 $ 76,725
76,725
--------------
Miscellaneous Business Services 5.0%
CIBER * 2,300,000 43,987
Gartner Group (Class A) * 1,789,800 36,691
Interim Services * 1,825,000 37,641
Robert Half International * 725,000 18,850
Romac International * 2,135,000 18,881
Sodexho Marriott Services * 833,000 15,983
Viad 1,350,000 41,766
213,799
--------------
Total Business Services 1,314,692
--------------
ENERGY 3.0%
Energy Services 3.0%
BJ Services * 2,050,000 60,347
Ocean Energy * 2,098,500 20,198
Smith International * 1,107,400 48,103
Total Energy 128,648
--------------
INDUSTRIAL 5.1%
Defense and Aerospace 0.6%
BE Aerospace * + 1,362,600 25,506
25,506
--------------
Specialty Chemicals 0.7%
Great Lakes Chemical 650,000 29,941
29,941
--------------
Machinery 3.8%
Danaher 800,000 46,500
Pentair 775,000 35,456
Teleflex 925,000 40,180
United Rentals * 1,450,000 42,775
164,911
--------------
Total Industrial 220,358
--------------
Total Common Stocks (Cost $3,018,143) 3,993,773
--------------
15
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------
In thousands
<S> <C> <C>
SHORT-TERM INVESTMENTS 9.3%
Money Market Funds 9.3%
Government Reserve Investment Fund, 4.77%, #+ 400,478,333 $ 400,477
400,477
------------
U.S. Government Obligations 0.0%
U.S. Treasury Bills, 4.42%, 8/26/99 $ 50,000 50
U.S. Treasury Bills, 4.525%, 8/26/99 500,000 496
546
------------
Total Short-Term Investments (Cost $401,023) 401,023
------------
Total Investments in Securities
102.0% of Net Assets (Cost $3,419,166) 4,394,796
Other Assets Less Liabilities (86,557)
------------
NET ASSETS $ 4,308,239
------------
</TABLE>
# Seven-day yield
* Non-income producing
+ Affiliated company
ADR American Depository Receipt
CAD Canadian dollar
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1999
<TABLE>
<CAPTION>
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------------------------
<S> <C>
In thousands
Assets
Investments in securities, at value
Affiliated companies (cost $471,185) $ 457,953
Other companies (cost $2,947,981) 3,936,843
------------
Total investments in securities 4,394,796
Other assets 13,941
------------
Total assets 4,408,737
Liabilities
Total liabilities 100,498
------------
NET ASSETS $ 4,308,239
------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ (3,121)
Accumulated net realized gain/loss - net of distributions 261,491
Net unrealized gain (loss) 975,630
Paid-in-capital applicable to 113,601,262 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 3,074,239
------------
NET ASSETS $ 4,308,239
------------
NET ASSET VALUE PER SHARE $ 37.92
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
- -----------------------
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/99
<S> <C>
Investment Income
Income
Interest (including $8,511 from affiliated companies) $ 8,537
Dividend 4,618
----------------
Total income 13,155
----------------
Expenses
Investment management 12,328
Shareholder servicing 3,448
Prospectus and shareholder reports 204
Registration 168
Custody and accounting 101
Directors 7
Legal and audit 6
Miscellaneous 18
----------------
Total expenses 16,280
Expenses paid indirectly (4)
----------------
Net expenses 16,276
----------------
Net investment income (3,121)
----------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 235,479
Futures (1,891)
----------------
Net realized gain (loss) 233,588
Change in net unrealized gain or loss on securities 197,384
----------------
Net realized and unrealized gain (loss) 430,972
----------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 427,851
----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/99 12/31/98
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ (3,121) $ (3,371)
Net realized gain (loss) 233,588 78,308
Change in net unrealized gain or loss 197,384 418,865
-------------------------------
Increase (decrease) in net assets from operations 427,851 493,802
-------------------------------
Distributions to shareholders
Net investment income - -
Net realized gain - (68,042)
-------------------------------
Decrease in net assets from distributions - (68,042)
-------------------------------
Capital share transactions*
Shares sold 1,107,588 1,717,440
Distributions reinvested - 65,226
Shares redeemed (537,375) (736,903)
-------------------------------
Increase (decrease) in net assets from capital
share transactions 570,213 1,045,763
-------------------------------
Net Assets
Increase (decrease) during period 998,064 1,471,523
Beginning of period 3,310,175 1,838,652
-------------------------------
End of period $ 4,308,239 $ 3,310,175
===============================
*Share information
Shares sold 32,154 55,088
Distributions reinvested - 2,129
Shares redeemed (15,679) (24,377)
-------------------------------
Increase (decrease) in shares outstanding 16,475 32,840
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1999
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Mid-Cap Growth 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, 1992.
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.
Short-term debt securities are valued at amortized cost which, when
combined with accrued interest, approximates fair value.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
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
20
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
of securities and income and expenses are translated into U.S. dollars at
the prevailing exchange rate on the dates of such transactions. The effect
of changes in foreign exchange rates on realized and unrealized security
gains and losses is reflected as a component of such gains and losses.
Premiums and Discounts Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis. Dividend income and
distributions to shareholders are recorded by the fund on the ex-dividend
date. Income and capital gain distributions are determined in accordance
with federal income tax regulations and may differ from those determined in
accordance with generally accepted accounting principles. Expenses paid
indirectly reflect credits earned on daily, uninvested cash balances at the
custodian, used to reduce the fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $1,452,019,000 and $908,899,000, respectively, for
the six months ended June 30, 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 June 30, 1999, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$3,419,166,000. Net unrealized gain aggregated $975,630,000 at period-end,
of which $1,147,427,000 related to appreciated investments and $171,797,000
to depreciated investments.
21
<PAGE>
T. ROWE PRICE MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
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 $2,277,000 was payable at June 30, 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
Price Associates (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.30% for assets in excess of $80 billion. At
June 30, 1999, and for the six months then ended, the effective annual
group fee rate was 0.32%. The fund pays a pro-rata share of the group fee
based on the ratio of its net assets to those of the group.
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 $2,673,000 for the six months ended June 30, 1999, of which
$522,000 was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available
to the public. The Reserve Funds pay no investment management fees.
Distributions from the Reserve Funds to the fund for the six months ended
June 30, 1999, totaled $8,511,000 and are reflected as interest income in
the accompanying Statement of Operations.
22
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to
10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele(*)Access((R)) and 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 January 1999 survey for representative-assisted stock
trades. Services vary by firm, and commissions may vary depending on
size of order.
23
<PAGE>
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
Total Equity Market Index
Value
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
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. ** Formerly named Florida Insured Intermediate
Tax-Free. *** Formerly named Tax-Free Insured Intermediate Bond.
+ 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.
24
<PAGE>
T. ROWE PRICE RETIREMENT PLANS AND RESOURCES
- --------------------------------------------------------------------------------
RETIREMENT PLANS AND RESOURCES
We recognize that saving for retirement is the number one investment goal
for most Americans. We can help you meet your retirement needs, whether you
are starting an IRA or designing a retirement program for your employees.
T. Rowe Price offers an assortment of retirement plans for individuals, the
self-employed, small businesses, corporations, and nonprofit organizations.
We provide recordkeeping, communications, and investment management
services, as well as a variety of educational materials, self-help planning
guides, and software tools to help you choose and implement a retirement
plan appropriate for you. For information or to request literature, call us
at 1-800-638-5660.
IRAs AND QUALIFIED PLANS
- --------------------------------------------------------------------------------
Traditional IRA
Roth IRA
Rollover IRA
SEP-IRA
SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase
Pension and Profit Sharing Plans)
401(k)
403(b)
457 Deferred Compensation
RETIREMENT RESOURCES AT T. ROWE PRICE
- --------------------------------------------------------------------------------
Planning and Informational Guides
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
Investment Kits
The IRA Investing Kit
Roth IRA Conversion Kit
Rollover IRA Kit
The T. Rowe Price SIMPLE IRA Plan Kit
The T. Rowe Price SEP-IRA Plan
The Simplified Keogh Plan(R) From
T. Rowe Price
The T. Rowe Price 401(k) Century
Plan(R) (for small businesses)
Money Purchase Pension/Profit Sharing
Plan Kit
Investing for Retirement in Your 403(b)
Account
The T. Rowe Price No-Load Variable
Annuity Information Kit
Insights Reports
The Challenge of Preparing for
Retirement
Financial Planning After Retirement
The Roth IRA: A Review
Software Packages
T. Rowe Price Retirement Planning
Analyzer(TM) 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
Analyzer(TM) CD-ROM or diskette, free.
To order, please call 1-800-469-5304.
Many of these resources are also available for viewing or ordering on the
Internet at www.troweprice.com.
25
<PAGE>
For yield, price, last transaction, current balance, or to conduct transactions,
24 hours, 7 days a week, call Tele*Access(R): 1-800-638-2587 toll free
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a brokerage account or obtain information, call:
1-800-638-5660 toll free
Internet address:
www.troweprice.com
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.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
4200 West Cypress St.
10th Floor
Tampa, FL 33607
4410 ArrowsWest Drive
Colorado Springs, CO 80907
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills, CA 91367
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor.
