T. Rowe Price
--------------------------------------------------------------------------------
Semiannual Report
Blue Chip Growth Fund
--------------------------------------------------------------------------------
June 30, 2000
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REPORT HIGHLIGHTS
================================================================================
BLUE CHIP GROWTH FUND
---------------------
* A volatile equity market produced mixed results among many sectors in
the first half of 2000.
* In a challenging period, the Blue Chip Growth Fund posted strong
returns and exceeded its benchmarks.
* Our focus on high-quality companies, especially in the technology and
health care sectors, benefited performance.
* We expect economic growth to moderate, but corporate profit growth
should support stock prices.
================================================================================
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.
================================================================================
<PAGE>
FELLOW SHAREHOLDERS
-------------------
The Federal Reserve continued to raise interest rates during the six months
ended June 30, 2000, trying to slow a fast-paced economy. Investors reacted by
selling off more-speculative technology investments and rotating to the stocks
of companies that app eared to have more solid financial fundamentals, including
strong profitability. The activity heightened volatility, spurring large
single-day gains and losses among the major market indices. By the end of the
period, however, most well-established technology companies had rebounded, and
steady growth firms in other industries advanced.
*************************************************************
PERFORMANCE COMPARISON
----------------------
Periods Ended 6/30/00 6 Months 12 Months
--------------------- -------- ---------
Blue Chip Growth Fund 6.88% 16.77%
S&P 500 -0.43 7.24
Lipper Large-Cap Core
Funds Average 1.27 11.37
*************************************************************
Your fund's investment strategy helped guide it to several
better-performing stocks of early 2000, particularly in the technology and
health care sectors. Its six-month advance of 6.88% significantly outpaced both
the Standard & Poor's 500 Stock Index and the Lipper Large-Cap Core Funds
Average. These results contributed to a strong 12-month total return of 16.77%,
also superior to both benchmarks.
MARKET ENVIRONMENT
------------------
The past six months were a roller coaster ride in the equity markets. The
year started with renewed concerns about economic overheating, as first-quarter
GDP growth steamed ahead at a 5.4% rate. At the same time, consumer demand rose
7% and business fixed investment rose 17%. The Fed indicated that it viewed
these growth levels as unsustainable and inflationary, and indeed, signs of
inflation became evident in labor costs and basic goods. The central bank
responded by raising the federal funds target rate three times in the first half
of 2000 by a total of 100 basis points (1%), the most recent move being a 50-
basis-point hike on May 16. Since beginning its tightening program in mid-1999,
the Fed has raised short-term rates by 175 basis points, to 6.5%.
<PAGE>
With rates soaring, investors reversed course. They feared that the Fed's
medicine might work too well, slowing the economy enough to harm corporate
results, and that higher rates would be particularly damaging to early-stage,
speculative companies. Therefore, technology-related firms that offered more
promise than profitsNgenerally the market's biggest winners in 1999Nsold off
sharply in March, April, and May of 2000. The software segment of the technology
universe was particularly deflated in the wake of the Justice Department's
antitrust litigation against Microsoft.
Because so much investor attention has lately been focused on
technology-related industries, the market as a whole weakened in sync with the
sudden bear market for tech stocks. For example, many banks and other financials
sagged as rates rose, and major retailers struggled as investors feared that
higher rates would dampen consumer spending. However, the market's decline
didn't last. After the May rate hike, investors grew more confident that the Fed
was nearing the end of its tightening program and celebrated by pushing stock
prices up again in a variety of industries.
***************************************************************
ADVISOR SHARE CLASS CREATED
---------------------------
T. Rowe Price has introduced a new class of shares for
certain funds, including this one. The new Advisor Class shares
will be sold exclusively by financial intermediaries, such as
brokers and financial advisers, and will enhance our ability to
reach a new group of investors through this expanding channel.
Since the new share class has a modest 12b-1 fee (a
distribution fee paid to the sales intermediary), its
performance will likely vary somewhat from your fund shares
even though both invest in the same portfolio.
We want to emphasize that the new class will have no
impact whatsoever on your investment in the fund or on the
returns provided to you by the fund. The daily net asset value
and expenses for the existing shares and the Advisor Class
shares are calculated separately. In due course, you will see
the Advisor Class share prices listed in newspapers and other
print and electronic media. Certain expenses associated with
the Advisor Class shares will be itemized in financial
statements in your fund's shareholder reports.
***************************************************************
<PAGE>
This time, however, investors were more selective with their purchases.
When technology stocks rebounded strongly in June, for example, the winners were
stable companies with strong earnings and cash flow. Companies without good
prospects for solid profitability were crushed. Some of our concerns over the
valuations of these types of companies, expressed in our last report to you,
were validated. In general, investors began to gravitate to more moderately
priced stocks with reliable, if not spectacular, earnings growth projections.
Investors also focused on the potential threat of a hard landing in the economy.
For this reason, stable-growth consumer issues and pharmaceuticals did well.
Finally, while value stocks in general underperformed growth stocks, some
lower-priced issues with positive prospects, notably in the energy and insurance
sectors, benefited from renewed investor focus on valuation.
PORTFOLIO REVIEW
----------------
Technology proved to be among the most important contributors to the fund's
relative showing in the first half. Since our stake in tech-nology companies is
smaller than in some of our competitors, our losses during the second-quarter
bear market proved comparatively moderate. However, the nature of the tech
sector's rebound in June was also quite favorable for your fund. Our strategic
focus on companies with long-term sustainable earnings growth, strong
management, and dominant market positions led us to companies that performed
well. HEWLETT-PACKARD, ORACLE, and CISCO SYSTEMS are all long-term holdings that
offer very strong earnings growth, and each were top performers in the first
half.
Our significant bet on semiconductor stocks also continued to generate
strong returns. INTEL has been a controversial stock, but it powered ahead on
new growth initiatives and was our third-best performer. ALTERA and XILINX
(leaders in the programmable logic device area), along with MAXIM INTEGRATED
PRODUCTS and TEXAS INSTRUMENTS (which hold dominant positions in the analog and
digital signal processor markets), provided stellar results. Each of these
long-time holdings enjoys protected niche positions, generates very high
margins, and is well positioned to participate in the exploding growth in the
telecommunications sector. APPLIED MATERIALS, the leader in semicon-ductor
equipment, and SIEBEL SYSTEMS, the top producer of customer relationship
software, also were top-20 contributors.
A substantial stake in telecommunications equipment makers also boosted
results. CORNING, a dominant producer of fiber-optic components, appreciated
sharply and became one of our largest holdings. Because demand for fiber-optic
telecom equipment is so buoyant, we have invested in several businesses offering
highly attractive earnings growth. NORTEL NETWORKS probably has the controlling
position in high-level optical telecom systems. Leading optics component
manufacturers JDS UNIPHASE and SDL were both very strong for your fund. JDS
Uniphase also recently announced that it will acquire SDL, creating a powerhouse
to rival Corning.
<PAGE>
Slowly but surely, the health care sector has begun to assert itself. In
particular, pharmaceutical giants Warner-Lambert, PFIZER, ELI LILLY, and
AMERICAN HOME PRODUCTS were among the fund's top first-half performers.
Warner-Lambert and Pfizer completed their merger in the half, and the combined
entity (called Pfizer) represented our largest holding at mid-year. Our
substantial position in both predecessor companies produced solid results over
several years, and the new Pfizer appears well positioned to generate 25%
earnings growth for several years. While results among health care firms outside
of pharmaceuticals were mixed, quality franchises performed rather well. For
example, well-managed UNITEDHEALTH GROUP advanced strongly this year,
particularly compared with other health care services companies. In related
areas, WATERS CORPORATION, a leading supplier of medical instrumentation used
for drug discovery in the pharmaceutical and biotech industries, continued its
record of steady, strong top- and bottom-line growth, and the stock appreciated
sharply. Biotech leaders GENENTECH and MEDIMMUNE produced smaller but still
meaningful gains, especially considering their relatively modest weight in the
fund.
***************************************************************
Sector Diversification pie chart based on net assets
as of 6/30/00 with the following segments: Business
services and transportation, 14%. Capital equipment and
process industries, 5%. Technology, 27%. Consumer
services and cyclicals, 11%. Financial, 17%. Energy and
utilities, 7%. Consumer nondurables, 18%. Reserves, 1%.
***************************************************************
We would be remiss if we failed to mention top performers of other, less-
newsworthy industries. Several of these contrib-utors are gratifying because
they were mediocre performers last year, but patience (and trust in their strong
fundamentals) allowed for a happier result this year. TYCO INTERNATIONAL
received a clean bill of health from the SEC on its accounting practices and the
stock rebounded sharply. SAFE WAY, STATE STREET, and BANK OF NEW YORK dispelled
earlier concerns that the Internet would jeopardize their business models, and
each produced strong earnings growth and stock performance. PEPSICO, a much
maligned stock in recent years, also began to generate stronger earnings and
improved stock performance. Finally, CITIGROUP and VIACOM (parent of CBS and
Viacom) continued to produce very strong gains for your fund. These long-term
holdings generate tremendous free cash flow and are run by disciplined
manage-ment driven to grind out consistent, solid results.
<PAGE>
Results were restrained by several weak performers in the computer software
sector. MICROSOFT was the biggest detractor to results, and BMC SOFTWARE also
declined sharply. Although we are quite concerned that the government's
antitrust actions could be quite damaging to Microsoft, particularly if the
company is split, we believe there is a greater probability that lesser
sanctions will ultimately be imposed. We have been more concerned that the
company's core businesses may be slowing, although our recent checks provide
some assurance on this issue. Consequently, we are maintaining our position.
Conversely, BMC has been more problematic, missing earnings projections once
again in the second quarter. Our only solace is that we did not fully trust in
management's recent assertions that the business was on track, and our position
size was moderate. We are collecting more data, but we are more inclined to sell
than buy given our current assessment of this business.
There were weak spots in a few other sectors. AMERICA ONLINE churned in the
$50 to $60 range as investors evaluated its proposed merger with TIME WARNER. We
are generally constructive on the combined entity and are encouraged that the
stock has held up much better than most Internet-related issues. Although we
trimmed Time Warner to control risk should the deal be disallowed by regulators,
we continued to add to AOL. HOME DEPOT corrected quite substantially as
investors feared that higher interest rates would lead to slowing housing
turnover and slower earnings growth. In fact, Home Depot's business has slowed
modestly, but we added to the stock on weakness, and it has rebounded nicely in
the last few weeks. In contrast, Procter and Gamble has experienced sharply
slower growth for several quarters and recently replaced top management. We sold
our modest position after the first of its two recent quarterly earnings misses
because we believed that the company would not generate consistent, high-quality
earnings growth for perhaps an extended period.
STRATEGY
--------
We continued to focus on maintaining positions in core holdings as long as
the fundamentals remained strong and the valuations were reasonable. As usual,
cash inflows were invested opportunistically in existing holdings. For example,
additions to America Online, VODAFONE AIRTOUCH, NEXTEL COMMUNICATIONS, and
FLEXTRONICS INTERNATIONAL (a leading contract manufacturer of electronic
products) were significant enough to be included in the 10-largest purchases of
the fund for the past six months.
*****************************
LUCENT TECHNOLOGIES, AT&T,
AND SPRINT WERE ELIMINATED
AFTER CAREFUL ANALYSIS
REVEALED FUNDAMENTAL FLAWS . . .
*****************************
<PAGE>
However, we did establish some major new positions. Nortel Networks was the
largest for the six-month period. As noted earlier, the company enjoys a
commanding position in the market for sophisticated optical telecommunications
systems, and the stock has been a solid performer since we bought it. Pharmacia
& Upjohn recently purchased Monsanto, and the combined company has a very solid
product pipeline with minimal patent expirations. The new PHARMACIA appears to
be well positioned for above-average earnings growth for several years. Siebel
Systems and Waters Corporation were noted as solid contributors to first-half
performance, even though we didn't own them at the beginning of the period. Both
companies have strong product lineups, offer a record of profitable growth, and
operate in very fertile growth areas. LOWE'S was also a top-10 purchase in the
first half. The company is a strong second to Home Depot in the home improvement
retailing area. We think this will continue to be a solid growth area, and the
two companies dominate the industry (with Lowe's selling at a sharp valuation
discount).
There were a few notable sales in the first half. Time Warner was trimmed
aggressively, but much of the proceeds were redeployed into AOL. Lucent
Technologies, AT&T, and Sprint were eliminated after careful analysis revealed
fundamental flaws, but also because we saw better growth opportunities in
comparable companies such as Cisco, Nortel, and WORLDCOM. Fortunately, Citrix
Systems was eliminated at a substantial profit (at a price much higher than
current prices) due to concerns regarding earnings deceleration that proved to
be well founded.
OUTLOOK
-------
It appears that the Fed has slowed its campaign to raise rates, although
further rate hikes this year remain a strong possibility. We expect that, as a
result of the Fed's efforts, the economy will slow but continue to grow. This
scenario could spell trouble in some sectors, especially among technology stocks
whose valuations have again become stretched. Overall, however, a more moderate
but sustainable economic growth rate should help support continued good news in
corporate earnings.
As always, it is our primary goal to identify blue chip companies with
leading market positions, seasoned management, and strong financial
fundamentals. Although the stock prices of these market leaders are rarely
inexpensive, we see several reasons to continue our faith in them:
* Inflation and interest rate data are largely positive. Although
inflation pressures have appeared in some economic data, the Fed has
thus far been very effective in controlling growth before inflation
becomes obvious to the consumer. On balance, we believe that inflation
and interest rates will increase but at a manageable pace.
<PAGE>
* Earnings growth continues to be very strong at many high-quality U.S.
companies, and the valuations of selected companies remain reasonable.
* Our investment universe offers investors top-notch, entrepreneurial
management that prioritizes shareholder interests, as well as sound
business models that have proved very profitable to date.
* Many of our holdings generate significant free cash flow that has been
used to repurchase shares or make acquisitions in a m anner that
benefits shareholders. In the past, this attribute of the companies in
your fund has proved particularly advant ageous in challenging market
environments.
We believe we can enhance returns and lower risk over time by investing in
"all season" growth companiesNthose that can generate earnings growth regardless
of the economic or interest rate environmentNand by striving to buy such
companies at reasonable valuations. We appreciate your continued support in this
endeavor.
Respectfully submitted,
Larry J. Puglia
/s/
President and Chairman of the Investment Advisory Committee
July 19, 2000
================================================================================
<PAGE>
T. Rowe Price Blue Chip Growth Fund
--------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
--------------------
TWENTY-FIVE LARGEST HOLDINGS
----------------------------
Percent of
Net Assets
6/30/00
-----------
Pfizer 4.6%
Citigroup 2.9
Cisco Systems 2.8
Intel 2.7
Microsoft 2.5
Corning 2.4
GE 2.4
Tyco International 2.2
Oracle 2.2
Viacom 1.8
Freddie Mac 1.8
America Online 1.6
UnitedHealth Group 1.5
Wal-Mart 1.5
WorldCom 1.4
Dell Computer 1.4
Exxon Mobil 1.3
Safeway 1.3
Texas Instruments 1.2
Altera 1.2
Nokia 1.2
Applied Materials 1.2
Home Depot 1.1
Waters Corporation 1.1
Bank of New York 1.1
-----------
Total 46.4%
Note: Table excludes reserves.
================================================================================
<PAGE>
T. Rowe Price Blue Chip Growth Fund
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PORTFOLIO HIGHLIGHTS
--------------------
MAJOR PORTFOLIO CHANGES
-----------------------
Listed in descending order of size
6 Months Ended 6/30/00
Ten Largest Purchases Ten Largest Sales
--------------------- -----------------
Nortel Networks * Time Warner
Pharmacia & Upjohn * MediaOne Group **
AT&T * Lucent Technologies **
Siebel Systems * Bristol-Myers Squibb
America Online Citrix Systems **
Vodafone AirTouch Johnson & Johnson
Waters Corporation * Sprint **
Nextel Communications 3Com **
Flextronics International AT&T **
Lowe's * Motorola
* Position added
** Position eliminated
================================================================================
T. Rowe Price Blue Chip 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 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.
Blue Chip
S&P 500 Growth Fund
------- -----------
6/30/93 10,000 10,000
6/94 10,140 11,026
6/95 12,784 13,827
6/96 16,109 17,682
6/97 21,698 23,444
6/98 28,243 30,419
6/99 34,670 36,648
6/00 37,181 42,793
<PAGE>
AVERAGE ANNUAL COMPOUND TOTAL RETURN
------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative)returns for the periods shown had been earned at a constant rate.
Since Inception
Periods Ended 6/30/00 1 Year 3 Years 5 Years Inception Date
--------------------- ------ ------- ------- --------- ---------
Blue Chip Growth Fund 16.77% 22.21% 25.35% 23.08% 6/30/93
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
T. Rowe Price Blue Chip Growth Fund
--------------------------------------------------------------------------------
Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
BLUE CHIP GROWTH SHARES
6 Months Year
Ended Ended
6/30/00 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
------- -------- -------- -------- -------- --------
NET ASSET VALUE
Beginning of period $ 36.34 $ 30.60 $ 24.17 $ 19.06 $ 15.09 $ 11.11
--------------------------------------------------------------------------------
Investment activities
Net investment
income (loss) (0.02) 0.03 0.11 0.13 0.14 0.16*
Net realized and
unrealized gain(loss) 2.52 6.07 6.82 5.12 4.05 4.05
--------------------------------------------------------------------------------
Total from
investment activities 2.50 6.10 6.93 5.25 4.19 4.21
--------------------------------------------------------------------------------
Distributions
Net investment income - (0.03) (0.11) (0.12) (0.14) (0.15)
Net realized gain - (0.33) (0.39) (0.02) (0.08) (0.08)
--------------------------------------------------------------------------------
Total distributions - (0.36) (0.50) (0.14) (0.22) (0.23)
--------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 38.84 $ 36.34 $ 30.60 $ 24.17 $ 19.06 $ 15.09
--------------------------------------------------------------------------------
<PAGE>
RATIOS/SUPPLEMENTAL DATA
------------------------
Total return~ 6.88% 20.00% 28.84% 27.56% 27.75% 37.90%*
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.92%+ 0.91% 0.91% 0.95% 1.12% 1.25%*
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (0.12)%+ 0.10% 0.43% 0.86% 0.87% 1.27%*
--------------------------------------------------------------------------------
Portfolio
turnover rate 50.9%+ 41.3% 34.5% 23.7% 26.3% 38.1%
--------------------------------------------------------------------------------
Net assets, end of
period (in millions) $ 7,479 $ 6,709 $ 4,330 $ 2,345 $ 540 $ 146
--------------------------------------------------------------------------------
~ 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 12/31/96.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Blue Chip Growth Fund
--------------------------------------------------------------------------------
Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
BLUE CHIP GROWTH ADVISOR CLASS SHARES
3/31/00
Through
6/30/00
----------
NET ASSET VALUE
Beginning of period $ 38.63
--------------------------------------------------------------------------------
Investment activities
Net realized and
unrealized gain (loss) 0.23
--------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 38.86
--------------------------------------------------------------------------------
<PAGE>
RATIOS/SUPPLEMENTAL DATA
------------------------
Total return~ 0.60%
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.67%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 0.06%
--------------------------------------------------------------------------------
Portfolio turnover rate 50.9%
--------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 452
--------------------------------------------------------------------------------
~ 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.
================================================================================
T. Rowe Price Blue Chip Growth Fund
--------------------------------------------------------------------------------
Unaudited June 30, 2000
STATEMENT OF NET ASSETS
-----------------------
Shares Value
----------- -----------
In thousands
COMMON STOCKS 99.2%
FINANCIAL 16.7%
----------------
BANK AND TRUST 5.2%
Bank of America 400,000 $ 17,200
--------------------------------------------------------------------------------
Bank of New York 1,810,000 84,165
--------------------------------------------------------------------------------
Chase Manhattan 300,000 13,819
--------------------------------------------------------------------------------
Firstar 2,800,000 58,975
--------------------------------------------------------------------------------
Mellon Financial 1,900,000 69,231
--------------------------------------------------------------------------------
State Street 755,000 80,077
--------------------------------------------------------------------------------
Wells Fargo 1,700,000 65,875
--------------------------------------------------------------------------------
389,342
-----------
<PAGE>
INSURANCE 2.1%
ACE Limited 1,940,000 54,320
--------------------------------------------------------------------------------
American International Group 310,000 36,425
--------------------------------------------------------------------------------
Marsh & McLennan 667,000 69,660
--------------------------------------------------------------------------------
160,405
-----------
FINANCIAL SERVICES 9.4%
American Express 1,420,000 74,018
--------------------------------------------------------------------------------
Associates First Capital (Class A) 820,000 18,296
--------------------------------------------------------------------------------
Capital One Financial 1,300,000 58,013
--------------------------------------------------------------------------------
Charles Schwab 370,000 12,441
--------------------------------------------------------------------------------
Citigroup 3,650,000 219,912
--------------------------------------------------------------------------------
Fannie Mae 1,540,000 80,369
--------------------------------------------------------------------------------
Freddie Mac 3,340,000 135,270
--------------------------------------------------------------------------------
Goldman Sachs Group 70,000 6,641
--------------------------------------------------------------------------------
Morgan Stanley Dean Witter 820,000 68,265
--------------------------------------------------------------------------------
Providian Financial 325,000 29,250
--------------------------------------------------------------------------------
702,475
-----------
Total Financial 1,252,222
-----------
UTILITIES 2.7%
---------------
TELEPHONE 2.7%
AT&T Liberty Media Group * 1,270,000 30,797
--------------------------------------------------------------------------------
Nextel Communications * 1,300,000 79,503
--------------------------------------------------------------------------------
Verizon Communications 100,000 $ 6,225
--------------------------------------------------------------------------------
Vodafone AirTouch ADR 2,000,000 82,875
--------------------------------------------------------------------------------
Total Utilities 199,400
-----------
<PAGE>
CONSUMER NONDURABLES 17.8%
---------------------------
BEVERAGES 1.6%
Coca-Cola 725,000 41,642
--------------------------------------------------------------------------------
PepsiCo 1,810,000 80,432
--------------------------------------------------------------------------------
122,074
-----------
FOOD PROCESSING 0.2%
Quaker Oats 160,000 12,020
--------------------------------------------------------------------------------
12,020
-----------
HOSPITAL SUPPLIES/HOSPITAL MANAGEMENT 0.9%
Baxter International 860,000 60,469
--------------------------------------------------------------------------------
Medtronic 100,000 4,981
--------------------------------------------------------------------------------
65,450
-----------
PHARMACEUTICALS 11.8%
American Home Products 1,270,000 74,613
--------------------------------------------------------------------------------
Amgen * 590,000 41,466
--------------------------------------------------------------------------------
Bristol-Myers Squibb 500,000 29,125
--------------------------------------------------------------------------------
Eli Lilly 820,000 81,897
--------------------------------------------------------------------------------
Genetech * 400,000 68,800
--------------------------------------------------------------------------------
Johnson & Johnson 130,000 13,244
--------------------------------------------------------------------------------
MedImmune * 680,000 50,299
--------------------------------------------------------------------------------
Merck 680,000 52,105
--------------------------------------------------------------------------------
Pfizer 7,125,000 342,000
--------------------------------------------------------------------------------
Pharmacia 1,225,000 63,317
--------------------------------------------------------------------------------
Schering-Plough 1,360,000 68,680
--------------------------------------------------------------------------------
885,546
-----------
<PAGE>
HEALTH CARE SERVICES 2.8%
CIGNA 572,000 53,482
--------------------------------------------------------------------------------
UnitedHealth Group 1,300,000 111,475
--------------------------------------------------------------------------------
Wellpoint Health Networks * 575,000 41,652
--------------------------------------------------------------------------------
206,609
-----------
MISCELLANEOUS CONSUMER PRODUCTS 0.5%
Philip Morris 640,000 17,000
--------------------------------------------------------------------------------
Philips Electronics 485,000 23,037
--------------------------------------------------------------------------------
40,037
-----------
Total Consumer Nondurables 1,331,736
-----------
CONSUMER SERVICES 10.6%
------------------------
GENERAL MERCHANDISERS 2.0%
Target 610,000 $ 35,380
--------------------------------------------------------------------------------
Wal-Mart 1,925,000 110,928
--------------------------------------------------------------------------------
146,308
-----------
SPECIALTY MERCHANDISERS 4.2%
Circuit City Stores 100,000 3,319
--------------------------------------------------------------------------------
CVS 1,360,000 54,400
--------------------------------------------------------------------------------
Home Depot 1,690,000 84,394
--------------------------------------------------------------------------------
Kroger * 2,140,000 47,214
--------------------------------------------------------------------------------
Lowe's 700,000 28,744
--------------------------------------------------------------------------------
Safeway * 2,125,000 95,891
--------------------------------------------------------------------------------
The Gap 10,000 312
--------------------------------------------------------------------------------
314,274
-----------
ENTERTAINMENT AND LEISURE 0.5%
McDonald's 500,000 16,469
--------------------------------------------------------------------------------
MGM Grand++ * 796,189 24,298
--------------------------------------------------------------------------------
40,767
-----------
<PAGE>
MEDIA AND COMMUNICATIONS 3.9%
Clear Channel Communications * 950,000 71,250
--------------------------------------------------------------------------------
Comcast (Class A Special) * 550,000 22,292
--------------------------------------------------------------------------------
Infinity Broadcasting (Class A) * 1,360,000 49,555
--------------------------------------------------------------------------------
Time Warner 130,000 9,880
--------------------------------------------------------------------------------
Viacom (Class B) * 2,020,000 137,739
--------------------------------------------------------------------------------
290,716
-----------
Total Consumer Services 792,065
-----------
CONSUMER CYCLICALS 0.1%
------------------------
MISCELLANEOUS CONSUMER DURABLES 0.1%
Eastman Kodak 25,000 1,488
--------------------------------------------------------------------------------
Masco 100,000 1,806
--------------------------------------------------------------------------------
Total Consumer Cyclicals 3,294
-----------
TECHNOLOGY 26.7%
-----------------
ELECTRONIC COMPONENTS 9.3%
Altera * 890,000 90,696
--------------------------------------------------------------------------------
Analog Devices * 430,000 32,680
--------------------------------------------------------------------------------
EMC * 210,000 16,157
--------------------------------------------------------------------------------
Flextronics International * 1,100,000 $ 75,591
--------------------------------------------------------------------------------
Intel 1,510,000 201,821
--------------------------------------------------------------------------------
Maxim Integrated Products * 1,210,000 82,166
--------------------------------------------------------------------------------
Motorola 160,000 4,650
--------------------------------------------------------------------------------
SDL * 151,000 43,068
--------------------------------------------------------------------------------
Texas Instruments 1,360,000 93,415
--------------------------------------------------------------------------------
Xilinx * 665,000 54,925
--------------------------------------------------------------------------------
695,169
-----------
<PAGE>
ELECTRONIC SYSTEMS 5.6%
Agilent Technologies * 220,000 16,225
--------------------------------------------------------------------------------
Applied Materials * 955,000 86,577
--------------------------------------------------------------------------------
Hewlett-Packard 640,000 79,920
--------------------------------------------------------------------------------
Nokia ADR 1,780,000 88,889
--------------------------------------------------------------------------------
PE Biosystems 300,000 19,762
--------------------------------------------------------------------------------
Solectron * 1,000,000 41,875
--------------------------------------------------------------------------------
Waters Corporation * 676,000 84,373
--------------------------------------------------------------------------------
417,621
-----------
INFORMATION PROCESSING 1.4%
Dell Computer * 2,100,000 103,622
--------------------------------------------------------------------------------
103,622
-----------
SPECIALIZED COMPUTER 0.6%
Sun Microsystems * 550,000 50,033
--------------------------------------------------------------------------------
50,033
-----------
TELECOMMUNICATIONS 9.4%
China Mobile ADR * 10,000 1,778
--------------------------------------------------------------------------------
Cisco Systems * 3,250,000 206,476
--------------------------------------------------------------------------------
Corning 665,000 179,467
--------------------------------------------------------------------------------
JDS Uniphase * 577,000 69,150
--------------------------------------------------------------------------------
LM Ericsson (Class B) ADR 1,300,000 26,041
--------------------------------------------------------------------------------
Nortel Networks 1,135,000 77,464
--------------------------------------------------------------------------------
QUALCOMM * 100,000 5,997
--------------------------------------------------------------------------------
Sprint PCS * 340,000 20,230
--------------------------------------------------------------------------------
Tellabs * 150,000 10,270
--------------------------------------------------------------------------------
WorldCom * 2,275,000 104,437
--------------------------------------------------------------------------------
701,310
-----------
<PAGE>
AEROSPACE AND DEFENSE 0.4%
United Technologies 550,000 32,381
--------------------------------------------------------------------------------
32,381
-----------
Total Technology 2,000,136
-----------
CAPITAL EQUIPMENT 5.2%
-----------------------
ELECTRICAL EQUIPMENT 4.6%
GE 3,340,000 $ 177,020
--------------------------------------------------------------------------------
Tyco International 3,520,000 166,760
--------------------------------------------------------------------------------
343,780
-----------
MACHINERY 0.6%
Danaher 880,000 43,505
--------------------------------------------------------------------------------
43,505
-----------
Total Capital Equipment 387,285
-----------
BUSINESS SERVICES AND TRANSPORTATION 13.0%
-------------------------------------------
COMPUTER SERVICE AND SOFTWARE 11.6%
America Online * 2,200,000 116,050
--------------------------------------------------------------------------------
Automatic Data Processing 1,225,000 65,614
--------------------------------------------------------------------------------
BMC Software * 1,000,000 36,469
--------------------------------------------------------------------------------
Computer Associates 640,000 32,760
--------------------------------------------------------------------------------
First Data 1,360,000 67,490
--------------------------------------------------------------------------------
Intuit * 300,000 12,394
--------------------------------------------------------------------------------
Lexmark International Group (Class A) * 10,000 672
--------------------------------------------------------------------------------
Macromedia * 82,000 7,926
--------------------------------------------------------------------------------
Microsoft * 2,350,000 187,927
--------------------------------------------------------------------------------
Oracle * 1,925,000 161,760
--------------------------------------------------------------------------------
Peregrine Systems * 100,000 3,481
--------------------------------------------------------------------------------
Siebel Systems * 460,000 75,253
--------------------------------------------------------------------------------
Verisign * 61,000 10,757
--------------------------------------------------------------------------------
VERITAS Software * 515,000 58,179
--------------------------------------------------------------------------------
Yahoo! * 220,000 27,259
--------------------------------------------------------------------------------
863,991
-----------
<PAGE>
MISCELLANEOUS BUSINESS SERVICES 0.7%
Omnicom 575,000 51,211
--------------------------------------------------------------------------------
51,211
-----------
RAILROADS 0.7%
Kansas City Southern Industries 622,000 55,164
--------------------------------------------------------------------------------
55,164
-----------
Total Business Services and Transportation 970,366
-----------
ENERGY 4.3%
------------
ENERGY SERVICES 0.6%
Baker Hughes 1,360,000 $ 43,520
--------------------------------------------------------------------------------
43,520
-----------
INTEGRATED PETROLEUM - DOMESTIC 0.2%
Amerada Hess 300,000 18,525
--------------------------------------------------------------------------------
18,525
-----------
INTEGRATED PETROLEUM - INTERNATIONAL 3.5%
BP Amoco ADR 790,000 44,684
--------------------------------------------------------------------------------
Chevron 740,000 62,761
--------------------------------------------------------------------------------
Exxon Mobil 1,270,115 99,704
--------------------------------------------------------------------------------
Royal Dutch Petroleum 890,000 54,791
--------------------------------------------------------------------------------
261,940
-----------
Total Energy 323,985
-----------
PROCESS INDUSTRIES 0.4%
------------------------
PAPER AND PAPER PRODUCTS 0.4%
Kimberly-Clark 610,000 34,999
--------------------------------------------------------------------------------
Total Process Industries 34,999
-----------
Total Miscellaneous Common Stocks 1.7% 127,530
-----------
Total Common Stocks (Cost $5,011,745) 7,423,018
-----------
<PAGE>
SHORT-TERM INVESTMENTS 2.5%
----------------------------
MONEY MARKET FUNDS 2.5%
Reserve Investment Fund, 6.68%, # + 188,453,884 188,454
--------------------------------------------------------------------------------
Total Short-Term Investments (Cost $188,454) 188,454
-----------
101.8% of Net Assets (Cost $5,200,199) $ 7,611,472
Other Assets Less Liabilities (132,161)
-----------
NET ASSETS $ 7,479,311
-----------
NET ASSETS CONSIST OF:
----------------------
Accumulated net investment income - net of distributions $ (4,176)
Accumulated net realized gain/loss - net of distributions 219,350
Net unrealized gain (loss) 2,411,273
Paid-in-capital applicable to 192,586,603 shares of $0.0001 par
value capital stock outstanding; 1,000,000,000 shares authorized 4,852,864
-----------
NET ASSETS $ 7,479,311
-----------
NET ASSET VALUE PER SHARE
Blue Chip Growth shares
($7,478,858,746/192,574,972 shares outstanding) $ 38.84
-----------
Blue Chip Growth Advisor Class shares
($452,026/11,631 shares outstanding) $ 38.86
-----------
# Seven-day yield
* Non-income producing
+ Affiliated company
++ Securities contain some restrictions as to
public resale - total of such securities at
period-end amounts to 0.3% of net assets.
ADR American Depository Receipt
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Blue Chip Growth Fund
--------------------------------------------------------------------------------
Unaudited
STATEMENT OF OPERATIONS
-----------------------
In thousands
6 Months
Ended
6/30/00
-----------
INVESTMENT INCOME (LOSS)
------------------------
Income
Dividend $ 23,402
Interest (includes $4,103 from affiliated companies) 4,106
-----------
Total income 27,508
-----------
Expenses
Investment management 21,324
Shareholder servicing
Blue Chip Growth shares 9,762
Blue Chip Growth Advisor Class shares -
Prospectus and shareholder reports
Blue Chip Growth shares 271
Blue Chip Growth Advisor Class shares -
Custody and accounting 148
Registration 87
Legal and audit 14
Directors 10
Miscellaneous 31
-----------
Total expenses 31,647
Expenses paid indirectly (6)
-----------
Net expenses 31,641
-----------
Net investment income (loss) (4,133)
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
-----------------------------------
Net realized gain (loss)
Securities 113,799
Foreign currency transactions (420)
-----------
Net realized gain (loss) 113,379
Change in net unrealized gain or loss on securities 365,461
-----------
Net realized and unrealized gain (loss) 478,840
-----------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 474,707
-----------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Blue Chip Growth Fund
--------------------------------------------------------------------------------
Unaudited
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
In thousands
6 Months Year
Ended Ended
6/30/00 12/31/99
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income (loss) $ (4,133) $ 5,440
Net realized gain (loss) 113,379 157,750
Change in net unrealized gain or loss 365,461 902,436
------------- -------------
Increase (decrease) in net assets from operations 474,707 1,065,626
------------- -------------
Distributions to shareholders
Net investment income
Blue Chip Growth shares - (5,483)
Net realized gain
Blue Chip Growth shares - (60,286)
Decrease in net assets from distributions - (65,769)
------------- -------------
Capital share transactions *
Shares sold
Blue Chip Growth shares 1,394,070 2,780,647
Blue Chip Growth Advisor Class shares 450 -
------------- -------------
Increase in net assets from shares sold 1,394,520 2,780,647
Distributions reinvested
Blue Chip Growth shares - 64,447
Shares redeemed
Blue Chip Growth shares (1,098,879) (1,466,122)
------------- -------------
Increase (decrease) in net assets from
capital share transactions 295,641 1,378,972
------------- -------------
NET ASSETS
Increase (decrease) during period 770,348 2,378,829
Beginning of period 6,708,963 4,330,134
------------- -------------
END OF PERIOD $ 7,479,311 $ 6,708,963
------------- -------------
* Share information
Shares sold
Blue Chip Growth shares 37,984 86,086
Blue Chip Growth Advisor Class shares 12 -
Distributions reinvested
Blue Chip Growth shares - 1,870
Shares redeemed
Blue Chip Growth shares (30,001) (44,881)
------------- -------------
Increase (decrease) in shares outstanding 7,995 43,075
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Blue Chip Growth Fund
--------------------------------------------------------------------------------
Unaudited June 30, 2000
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Blue Chip Growth Fund, Inc. (the fund) is registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The fund has two classes of sharesNBlue Chip Growth, offered
since June 30, 1993, and Blue Chip Growth Advisor Class, first offered on March
31, 2000. Blue Chip Growth Advisor Class sells its shares only through financial
intermediaries, which it compensates for distribution and certain administrative
services under a Board-approved Rule 12b-1 plan. Each class has exclusive voting
rights on matters related solely to that class, separate voting rights on
matters that relate to both classes, and, in all other respects, the same rights
and obligations as the other class. The fund seeks long-term capital growth and,
secondarily, income by investing in the common stocks of large and medium-sized
blue chip growth companies.
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.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
AFFILIATED COMPANIES As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the outstanding
voting securities.
CURRENCY TRANSLATION Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and losses.
<PAGE>
OTHER Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian and are used to reduce the
fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $2,211,777,000 and $1,743,711,000, respectively, for the
six months ended June 30, 2000.
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, 2000, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$5,200,199,000. Net unrealized gain aggregated $2,411,273,000 at period-end, of
which $2,521,659,000 related to appreciated investments and $110,386,000 to
depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $3,788,000 was payable at June 30, 2000. The fee is computed daily and
paid monthly, and consists of an individual fund fee equal to 0.30% of average
daily net assets and a group fee. The group fee is based on the combined assets
of certain mutual funds sponsored by the manager or Rowe Price-Fleming
International, Inc. (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.295% for assets in excess of $120 billion. At
June 30, 2000, 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.
The manager has agreed to bear any expenses through December 31, 2001,
which would cause Blue Chip Growth Advisor Class's ratio of total expenses to
average net assets to exceed 1.05%. Thereafter, through December 31, 2003, Blue
Chip Growth Advisor Class is required to reimburse the manager for these
expenses, provided that its average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing its ratio of
expenses to average net assets to exceed 1.05%.
<PAGE>
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 $7,991,000 for the six months
ended June 30, 2000, of which $1,476,000 was payable at period-end.
Additionally, the 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, T. Rowe Price, and, in the case of T. Rowe Price Spectrum
International, Rowe Price-Fleming International. Spectrum Growth Fund held
approximately 5.1% of the outstanding Blue Chip Growth shares at June 30, 2000.
For the six months then ended, the Blue Chip Growth shares were allocated
$334,000 of Spectrum expenses, $107,000 of which 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, 2000, totaled
$4,103,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the six months ended June 30, 2000, the fund, in the ordinary course
of business, placed security purchase and sale orders aggregating $1,211,000
with certain affiliates of the manager and paid commissions of $2,000 related
thereof.
================================================================================
<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*AccessRegistration Mark 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.
================================================================================
<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
Tax-Efficient 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
<PAGE>
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
<PAGE>
TAX-FREE
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
---------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
--------------------------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or
any other government agency. Although the funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in the funds.
Please call for a prospectus, 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.
================================================================================
<PAGE>
T. Rowe Price Advisory Services and Retirement Resources
--------------------------------------------------------------------------------
ADVISORY SERVICES, RETIREMENT RESOURCES
T. Rowe Price is your full-service retirement specialist. We have developed
unique advisory services that can help you meet the most difficult retirement
challenges. Our broad array of retirement plans is suitable for individuals, the
self-employed, small businesses, corporations, and nonprofit organizations. We
also provide recordkeeping, communications, and investment management services,
and our educational materials, self-help planning guides, and software tools are
recognized as among the industry's best. For information or to request
literature, call us at 1-800-638-5660, or visit our Web site at
WWW.TROWEPRICE.COM.
ADVISORY SERVICES
-----------------
T. ROWE PRICE RETIREMENT INCOME 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
<PAGE>
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
INTERNET ADDRESS:
www.troweprice.com
<PAGE>
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
BALTIMORE AREA
DOWNTOWN
101 East Lombard Street
OWINGS MILLS
Three Financial Center
4515 Painters Mill Road
BOSTON AREA
386 Washington Street
Wellesley
COLORADO SPRINGS
4410 ArrowsWest Drive
LOS ANGELES AREA
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
TAMPA
4200 West Cypress Street
10th Floor
WASHINGTON, D.C.
900 17th Street N.W.
Farragut Square
T. Rowe Price Investment Services, Inc., Distributor. F93-051 6/30/00
