Semiannual Report
New Age
Media Fund
June 30, 1997
T. Rowe Price
Report Highlights
o The stock market soared to record highs despite a sell-off
in March, as small-cap issues followed the lead of their
blue chip counterparts.
o Several groups that had lagged in the first quarter
rebounded strongly in the second, including technology and
media and telecommunications stocks.
o Based on net asset value, the fund returned 16.62% for the
second quarter and 7.88% for the first half.
o We made modest changes to the fund's sector diversification
during the quarter, including a reduction in the content
area from 28% of net assets to 22%. In anticipation of
converting the fund to open-end status, we increased cash
reserves to enhance liquidity.
o We are optimistic about the prospects for media,
telecommunications, and technology shares because of major
changes taking place on a global scale.
Fellow Shareholders
Stocks continued their relentless surge to record heights during
the past six months, despite a significant correction in March.
Large-capitalization stocks led the broad market upward, but
smaller-cap issues also sprang to life following a lengthy
period of lagging performance.
PERFORMANCE REVIEW
The past few months were rewarding for media,
telecommunications, and technology stocks, helping your fund
generate a strong second quarter return and boosting the
six-month return well into positive territory. The discount
between the fund's net asset value (NAV) and its share price on
the New York Stock Exchange, which began the year at 17%,
continued to narrow following the announcement of our intent to
convert the fund to open-end status and stood at 4.8% on June
30. The fund's NYSE share price rose from $13.00 on March 31 to
$15.625 on June 30, resulting in a 20.19% gain for shareholders
compared with a 17.46% return for the unmanaged Standard &
Poor's 500 Stock Index. The fund's NAV rose from $14.08 to
$16.42 during the quarter, a gain of 16.62%.
Performance Comparison
Periods Ended 6/30/97 3 Months 6 Months
____________________________________________________
New Age Media Fund
Based on NAV 16.62% 7.88%
Based on NYSE
Share Price 20.19 23.81
S&P 500 17.46 20.61
You may already have voted on the proposal to convert the fund
to open-end status. Assuming the proposal is approved at the
fund's annual meeting on July 23, the name of the fund will
change on July 28 to the T. Rowe Price Media &
Telecommunications Fund. As part of the transition, the fund
expects to make a special dividend and capital gain distribution
of about $0.03 per share on July 25 to shareholders of record as
of July 22, 1997. The exact amount of the distribution, which
reflects gains realized by the fund in 1996, will be announced
July 11.
MARKET ENVIRONMENT
The Federal Reserve's decision not to raise the federal funds
rate in May was the catalyst for the stock market's strong
rebound from the April lows to record territory near the end of
June. Performance varied among sectors, as the ability to meet
or exceed earnings expectations served as the primary force
behind winning and losing stocks. Mutual fund inflows retreated
from their record levels but were strong enough to help power
the strong rally.
Technology stocks, particularly networking and software issues,
rebounded sharply from an earlier rout.
Media and telecommunications shares were mixed earlier in the
period but picked up strength during the past three months.
Technology stocks, particularly networking and software issues,
rebounded sharply from an earlier rout. Content providers fared
well as a combination of attractive valuations and stable
fundamentals provided a refuge for investors. Distribution
stocks were generally strong, especially those in the cable
television sector, where Microsoft's announcement of a $1
billion investment in Comcast rekindled investor interest.
Businesses driven by advertising revenue, such as newspapers and
radio, benefited from a healthy environment. International
stocks performed well but could not keep pace with the surging
U.S. market.
The Microsoft-Comcast investment was the major event in the
media and telecommunications arena in the first half of 1997.
The size of the investment highlights the strategic importance
of advanced communications networks and could have substantial
long-term implications. We would not be surprised to see other
leading technology companies (or perhaps Microsoft again) make
similar investments to further accelerate the development of
these networks.
Merger and acquisition activity remained brisk. Major content
transactions included News Corporation's agreement to acquire
International Family Entertainment, owner of the Family Channel,
Westinghouse's purchase of Gaylord Entertainment's country music
cable networks, and the planned purchase of CUC International by
HFS. News Corporation was also active in the distribution sector
with an agreement to merge its planned satellite television
service with Primestar, a satellite television service owned and
operated by a consortium of cable television companies and GE.
There was also substantial consolidation activity in the
technology sector, with 3Com's acquisition of U.S. Robotics and
Ascend Communications' purchase of Cascade Communications. While
there were no major new transactions among telecommunications
companies, AT&T expressed an interest in merging with a regional
Bell operating company. We continue to expect mergers and
acquisitions among media and telecommunications companies as
they seek the economic and strategic benefits of larger scale.
PORTFOLIO REVIEW
The fund's sector diversification changed only modestly since
our interim report to you dated March 31. We trimmed content
holdings from 28% of net assets to 22% on June 30. Distribution
and technology holdings were reduced during the first quarter,
and their respective weightings of approximately 19% and 17%
were little changed in the past three months. The percentage of
international stocks in the portfolio fell from 14% after the
first quarter to 11% at the end of June, the low end of our
long-term objective.
Sector Diversification pie chart 6/30/97
Other and Reserves 31%
Content 22%
International 11%
Technology 17%
Distribution 19%
Based on net assets of 6/30/97
In anticipation of the fund's conversion to open-end status, we
increased cash reserves to enhance liquidity. We invested a
substantial portion of the reserves in S&P 500 Index futures to
maintain an exposure to stocks while achieving our liquidity
objectives. Assuming the conversion proceeds as planned, we
expect to redeploy these assets into equities during the second
half of the year.
In the content area, we eliminated positions in Gaylord
Entertainment, whose business mix is changing due to a
significant asset sale, and in Reader's Digest and Scholastic
because of concerns about underlying fundamentals. New
investments include Omnicom, a leading advertising agency, and
newspaper publishers Knight-Ridder and Tribune. Major
contributors to positive performance included America Online,
Gartner Group, and First Data. Among the laggards were Reader's
Digest and Scholastic.
In the distribution sector, we took advantage of the March-April
correction to add to Jacor Communications and Outdoor Systems.
Near the end of the period, we initiated a position in Paging
Network, the largest provider of paging services. Major
contributors to positive results in this area included American
Radio Systems, Jacor Communications, and Outdoor Systems, while
portfolio disappointments included Metro Networks, SmarTalk
TeleServices, and Pegasus Communications. The last three met
earnings expectations but were victims of the general bias
against small-cap stocks.
Technology holdings generally rewarded investors. New positions
included U.S. Robotics, a networking company acquired by 3Com,
and Synopsys, a leading provider of semiconductor design
software. We eliminated networking equipment provider FORE
Systems and reduced exposure to semiconductor manufacturers
Intel, Maxim Integrated Products, and Xilinx. Cisco Systems,
Microsoft, and Security Dynamics Technologies benefited fund
performance significantly.
The fund's international holdings posted mixed results. We
further reduced our positions in FlexTech, a U.K. content
provider, and in Central European Media Enterprises, a leading
television broadcaster in central Europe. Positive contributions
from Grupo Iusacell and Cellular Communications International
were offset by declines in Central European Media Enterprises,
Getty Communications, and other foreign holdings.
INVESTMENT APPROACH AND OUTLOOK
We continue to believe that the media and telecommunications
industries lie at a powerful crossroads where economic,
regulatory, and technological forces will create some of the
most dynamic sectors of the global economy. Although
technological and regulatory advances have been more
evolutionary than revolutionary, they have still been
significant.
Consider many of the changes that have taken place in the
average U.S. household over the past few years. Personal
computers have gone from workplace computational devices to a
multimedia platform for business, personal productivity, and
entertainment. Cellular communications devices have gone from a
toy of the rich to a necessity for managing busy lifestyles.
Satellite television has gone from a curiosity to a very
competitive video service offering. On-line services have become
an essential tool for many small businesses as well as a
meaningful competitor with television for our leisure time.
Three trends-digitization of media, deregulation of
communications, and the deployment of high-speed, wide bandwidth
communications networks-will continue to foster changes in the
way we communicate, educate, and conduct commerce. These forces
will create new businesses and challenge existing ones. For
example, telecommunications services companies are benefiting
from the deployment of advanced communications services based on
new, digital equipment. At the same time, they are being forced
to compete with new entrants as a result of changes in
government regulations and broadcast spectrum auctions.
The potential of digital technologies is best exemplified by the
Internet.
Multimedia products and on-line services have become
strategically important offerings for traditional publishers
because more powerful computers and communications networks have
changed the way many of their products are used.
Key to developments in the media and telecommunications
industries has been the digitization of all forms of media and
the ongoing transition from analog to digital communications
networks. The potential of digital technologies is best
exemplified by the Internet, which has evolved from a medium
dominated by academics and government employees to a mass medium
with far-reaching implications. We believe that the Internet of
1997 is analogous to the PC of the 1980s: slow, awkward, and
often frustrating, but representing a paradigm shift in cost
structures and technical capabilities. While wishing to minimize
the hyperbole, we believe that deregulation and the rise of the
Internet will affect almost every industry. Consider the
following:
o The Internet is cheaper and improving at a faster rate than
other communication channels. Consumers and businesses are
often willing to trade early-stage quality of service for
features such as lower price and convenience, especially if
service quality improves steadily.
o Internet infrastructure, services, and applications are the
subject of intense intellectual focus and financial
investment on a global scale.
Developments such as the $1 billion investment by Microsoft in
Comcast confirm our optimism about the long-term wealth building
opportunities in the media and telecommunications sector.
Although there will be the inevitable hype about developments
that never materialize, there will also be fundamental changes
in the ways the average business and household function that
will create growth opportunities for some companies while
hurting the prospects of others.
In assessing the confluence of these factors, we look for themes
to help guide us to the most fertile fields for individual stock
selection. We continually reassess our expectations against
changes in company fundamentals, government regulation, and the
ability of companies to secure attractive financing. Here are
some of the themes we attempt to exploit and some fund holdings
that may benefit:
o Growth in electronic commerce (First Data, CUC
International, and Sterling Commerce).
o Global demand for quality entertainment (Disney, Time
Warner).
o Consolidation of the broadcasting and outdoor advertising
industries (Westinghouse, Jacor Communications, Outdoor
Systems).
o Increasing use of wireless voice, video, and data systems
(PanAmSat, LM Ericsson, Vodafone).
o Growth in networked communications infrastructure (Cisco
Systems, 3Com, Security Dynamics Technologies).
o The increasing pervasiveness of technology in
communications and entertainment (Microsoft, Oracle, Intel,
Xilinx).
While themes help us identify potentially profitable fields, we
use a bottom-up approach to stock selection. In general, we try
to buy stocks where the twin engines of underlying growth and
valuation expansion can help propel stock prices over an
extended period. In areas such as technology, valuations are
rarely cheap but growth opportunities are compelling. We seek to
own the stocks of leading companies in good businesses because
we feel the market rewards sustained superior growth. This
approach also allows us to take a long-term view of fundamentals
when stock prices experience their inevitable fluctuations.
Examples of these investments include large-cap companies such
as Microsoft and Cisco Systems and mid-caps such as Sterling
Commerce and Outdoor Systems.
We know that growth investing carries higher-than-average risk
and seek to offset some of this by investing a portion of assets
in "value" stocks. These are stocks whose prices, in our view,
reflect an overly negative view of a company or industry.
Examples of such holdings include Time Warner, Comcast, and
Paging Network. Looking ahead, we expect to have a modest bias
toward mid- to large-cap companies to meet the greater liquidity
needs of an open-end fund-assuming the fund's conversion is
approved.
We would like to thank our shareholders for their support and
reaffirm our commitment to seizing long-term, wealth-building
opportunities on their behalf.
Respectfully submitted,
Brian D. Stansky
Chairman of the Investment Advisory Committee
July 8, 1997
New Age Media Fund
Portfolio Highlights
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/97
_________________________________________________________
Outdoor Systems 3.1%
Jacor Communications 2.3
CUC International 2.2
Sterling Commerce 2.1
First Data 2.0
_________________________________________________________
Time Warner 2.0
America Online 1.9
BMC Software 1.7
Cellular Communications International 1.7
Cisco Systems 1.7
_________________________________________________________
Disney 1.7
American Radio Systems 1.7
LM Ericsson 1.7
Microsoft 1.6
New York Times 1.6
_________________________________________________________
Security Dynamics Technologies 1.5
Xilinx 1.5
Telecom Liberty Media 1.5
3Com 1.5
Getty Communications 1.5
_________________________________________________________
SmarTalk TeleServices 1.5
Universal Outdoor Holdings 1.5
Maxim Integrated Products 1.4
Central European Media Enterprises 1.3
Intel 1.2
_________________________________________________________
Total 43.4%
New Age Media Fund
CONTRIBUTIONS TO THE CHANGE IN NET ASSET VALUE PER SHARE
3 Months Ended 6/30/97
Ten Best Contributors
___________________________________________________
U.S. Robotics 12 (cents)
Outdoor Systems 11
America Online 10
Security Dynamics Technologies 10
Jacor Communications 9
Cisco Systems 9
Grupo Iusacell 8
First Data 8
Gartner Group 7
Microsoft 7
___________________________________________________
Total 91 (cents)
Ten Worst Contributors
___________________________________________________
Central European Media Enterprises - 6 (cents)
Reader's Digest** 3
Omnipoint** 2
3Com 1
Getty Communications 1
Scholastic** 1
Gaylord Entertainment** --
Pegasus Communications --
PanAmSat --
FORE Systems --
___________________________________________________
Total -14 (cents)
6 Months Ended 6/30/97
Ten Best Contributors
___________________________________________________
America Online 17 (cents)
Grupo Iusacell 13
U.S. Robotics 12
Outdoor Systems 12
Jacor Communications 10
Xilinx 9
American Radio Systems 9
Microsoft* 8
Maxim Integrated Products 8
Gartner Group 8
Total 106 (cents)
Ten Worst Contributors
__________________________________________________
3Com - 20 (cents)
FORE Systems** 14
Scholastic** 14
Shiva** 12
Cascade Communications 11
Reader's Digest** 9
Omnipoint** 8
Macromedia** 8
Ascend Communications 5
AT&T** 5
__________________________________________________
Total -106 (cents)
* Position added
** Position eliminated
New Age Media 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.
New Age Media Fund
Performance Comparison
as of 6/30/97
<TABLE>
<CAPTION>
New Age
Media Fund S&P 500
<S> <C> <C>
10/13/93 $ 10,000 $ 10,000
6/30/94 8,485 9,823
6/30/95 11,694 12,385
6/30/96 14,748 15,605
6/30/97 15,189 21,019
</TABLE>
Average Annual Compound Total Return
This table shows how the fund would have performed each year if
its actual (or cumulative) returns for the periods shown had
been earned at a constant rate.
Periods Ended Since Inception
6/30/97 1 Year 3 Years Inception Date
_____________________________________________________________
New Age Media
Fund 2.99% 21.42% 11.91% 10/13/93
Investment return and principal value represent past performance
and will vary. Shares may be worth more or less at redemption
than at original purchase.
New Age Media Fund
Financial Highlights
For a share outstanding throughout each period
6 Months Year 10/13/93
Ended Ended to
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93
NET ASSET
VALUE
Beginning of
period $ 15.22 $ 17.99 $ 13.44 $ 13.57 $ 13.93
Investment
activities
Net invest-
ment income (0.01) (0.11) (0.04) (0.01) 0.01
Net realized
and unreal-
ized gain
(loss) 1.19 0.36 5.79 (0.11) (0.37)
Total from
investment
activities 1.18 0.25 5.75 (0.12) (0.36)
Distributions
Net invest-
ment income - - (0.07) (0.01) -
Net real-
ized gain - (3.09) (1.13) - -
Total distri-
butions - (3.09) (1.20) (0.01) -
Share repur-
chases 0.02 0.07 - - -
NET ASSET
VALUE, END
OF PERIOD $ 16.42 $ 15.22 $ 17.99 $ 13.44 $ 13.57
MARKET VALUE,
END OF
PERIOD $ 15.63 $ 12.63 $ 14.88 $ 10.75 $ 13.38
Total invest-
ment return
Per share
market value 23.81% 5.65% 49.26% (19.57%) (10.80%)
Per share
net asset
value 7.88% 1.78% 43.30% (0.88%) (2.58%)
Ratios/Supplemental Data
Ratio of
expenses to
average
net assets 1.26%! 1.22% 1.25% 1.35% 1.30%!
Ratio of
net invest-
ment income
to average
net assets (0.08%)! (0.55%) (0.25%) (0.15%) 0.24%!
Portfolio
turnover
rate 35.2%! 102.9% 118.9% 133.9% 58.7%!
Average
commission
rate paid $ 0.0419 $ 0.0487 - - -
Net assets,
end of period
(in
thousands) $ 238,035 $ 222,556 $ 268,782 $ 200,996 $202,911
! Annualized.
The accompanying notes are an integral part of these financial
statements.
New Age Media Fund
Unaudited
June 30, 1997
Statement of Net Assets
Shares/Par Value
In thousands
Common Stocks and Warrants 69.3%
CONTENT 21.8%
A. H. Belo (Class A) 50,000 $ 2,081
America Online * 80,000 4,450
CUC International * 205,000 5,292
Disney 50,000 4,012
DST Systems * 60,000 1,999
First Data 110,000 4,833
Gartner Group (Class A) * 72,100 2,589
Golden Books Family Entertainment * 75,000 947
Houghton Mifflin 22,300 1,489
Knight-Ridder 25,000 1,227
New York Times (Class A) 75,000 3,712
Omnicom 20,000 1,232
Premenos Technology * 100,000 863
SABRE Group Holdings * 100,000 2,712
Sterling Commerce * 150,000 4,931
Telecom Liberty Media (Series A) * 150,000 3,567
Time Warner 100,000 4,825
Tribune 25,000 1,202
Total Content 51,963
DISTRIBUTION 19.4%
Aerial Communications * 110,100 950
American Radio Systems (Class A) * 100,000 3,987
BHC Communications (Class A) 20,000 2,393
Centennial Cellular (Class A) * 150,000 2,353
Comcast (Class A Special) 100,000 2,134
Communications Broadband,
Warrants, 9/23/04 * 335,731 0
Cox Communications (Class A) * 100,000 2,400
Jacor Communications * 145,668 5,585
Lamar Advertising * 100,000 2,562
Metro Networks * 100,000 2,438
Outdoor Systems * 194,700 7,423
Paging Network * 150,000 1,320
PanAmSat * 45,382 $ 1,325
Pegasus Communications * 150,000 1,622
SmarTalk TeleServices * 225,000 3,516
Universal Outdoor Holdings * 100,000 3,494
Westinghouse 50,000 1,156
World Com 50,000 1,598
Total Distribution 46,256
TECHNOLOGY 17.5%
3Com * 78,750 3,541
Analog Devices * 100,000 2,656
Ascend Communications * 15,000 589
BMC Software * 75,000 4,158
Cascade Communications * 100,000 2,759
Cisco Systems * 60,000 4,030
Intel 20,000 2,832
Intuit * 75,000 1,718
Maxim Integrated Products * 60,000 3,409
Microsoft * 30,000 3,794
Oracle * 50,000 2,517
Security Dynamics Technologies * 100,000 3,681
Synopsys * 61,200 2,259
Xilinx * 75,000 3,677
Total Technology 41,620
INTERNATIONAL 10.6%
Cellular Communications
International * 125,000 4,141
Central European Media
Enterprises (Class A) * 120,000 3,165
FlexTech (GBP) * 225,000 2,435
Getty Communications ADS * 244,700 3,533
Grupo Iusacell (Series D) ADR * 190,000 2,802
LM Ericsson (Class B) ADR 100,000 3,941
Scandinavian Broadcasting Systems * 125,000 2,719
Vodafone ADR 50,000 2,422
Total International 25,158
Total Common Stocks & Warrants
(Cost $123,481) 164,997
Preferred Stocks 0.3%
Crystal Dynamics (Series D) * 166,667 $ 625
Total Preferred Stocks
(Cost $1,250) 625
Convertible Preferred Stocks 1.4%
Celcore (Series C) ! * 250,000 1,500
Communications Broadband (Series C) * 1,000,000 0
Golden Books Financing, 8.75% 30,000 1,857
Total Convertible Preferred
Stocks (Cost $5,009) 3,357
Short-Term Investments 28.8%
U.S. Government Agency Obligations 28.0%
Federal Home Loan Bank,
5.47%, 7/3/97 $ 6,723,000 6,721
Federal Home Loan Mortgage,
5.40 - 5.52%, 7/2 - 8/1/97 50,000,000 49,917
Federal National Mortgage
Assn., 5.42%, 7/10/97 10,000,000 9,986
66,624
U.S. Government Obligations 0.8%
U.S. Treasury Bills, 5.365%, 9/18/97 2,000,000 1,977
1,977
Total Short-Term Investments
(Cost $68,601) 68,601
Total Investments in Securities
99.8% of Net Assets
(Cost $198,341) $ 237,580
Futures Contracts
In thousands
Unrealized
Contract Gain
Expiration Value (Loss)
Long, 50
Standard &
Poor's 500
Stock Index
contracts,
$1,200,000 of
U.S. Treasury
Bills pledged
as initial
margin 9/97 $ 22,256 $ 3,286
Net payments
(receipts)
of variation
margin to
date (3,478)
Variation
margin
receivable
(payable)
on open
futures
contracts (192)
Other Assets Less Liabilities 647
NET ASSETS $ 238,035
___________
Net Assets Consist of:
Accumulated
net investment
income - net
of distri-
butions $ (84)
Accumulated
net realized
gain/loss -
net of distri-
butions (5,891)
Net unrealized
gain (loss) 42,525
Paid-in-capital
applicable to
14,501,066
shares of
$0.0001 par
value capital
stock out-
standing;
1,000,000,000
shares authorized 201,485
NET ASSETS $ 238,035
__________
NET ASSET VALUE PER SHARE $ 16.42
__________
! Affiliated company
* Non-income producing
GBP British sterling
New Age Media Fund
Statement of Operations
In thousands
6 Months
Ended
6/30/97
Investment Income
Income
Interest $ 921
Dividend 367
Total income 1,288
Expenses
Investment management 1,199
Custody and accounting 56
Legal and audit 47
Shareholder servicing 24
Prospectus and shareholder reports 9
Directors 7
Registration 4
Miscellaneous 26
Total expenses 1,372
Net investment income (84)
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (3,832)
Futures 1,383
Foreign currency transactions (18)
Net realized gain (loss) (2,467)
Change in net unrealized gain or loss
Securities 16,335
Futures 3,286
Change in net unrealized gain or loss 19,621
Net realized and unrealized gain (loss) 17,154
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 17,070
________
The accompanying notes are an integral part of these financial
statements.
New Age Media Fund
Unaudited
Statement of Changes in Net Assets
In thousands
The accompanying notes are an integral part of these financial
statements.
6 Months Year
Ended Ended
6/30/97 12/31/96
Increase (Decrease) in Net Assets
Operations
Net investment income $ (84) $ (1,535)
Net realized gain (loss) (2,467) 31,863
Change in net unrealized
gain or loss 19,621(26,626)
Increase (decrease) in net
assets from operations 17,070 3,702
Distributions to shareholders
Net realized gain -- (45,196)
Capital share transactions
Shares repurchased* (1,591) (4,732)
Net Assets
Increase (decrease) during period 15,479 (46,226)
Beginning of period 222,556 268,782
End of period $ 238,035 $ 222,556
________________________
* Shares repurchased
Number of shares (126) (310)
Weighted average
discount from net
asset value per share 17.20% 17.97%
The accompanying notes are an integral part of these financial
statements.
New Age Media Fund
Unaudited June 30, 1997
Notes to Financial Statements
Note 1 - Significant Accounting Policies
T. Rowe Price New Age Media Fund, Inc. (the fund) is registered
under the Investment Company Act of 1940 as a diversified,
closed-end management investment company and commenced
operations on October 13, 1993.
Valuation Equity securities 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.
Short-term debt securities are valued at amortized cost which,
when combined with accrued interest, approximates fair value.
Financial futures contracts are valued at closing settlement
prices.
For purposes of determining the fund's net asset value per
share, the U.S. dollar value of all assets and liabilities
initially expressed in foreign currencies is determined by using
the mean of the bid and offer prices of such currencies against
U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures
are inappropriate or are deemed not to reflect fair value are
stated at fair value as determined in good faith by or under the
supervision of the officers of the fund, as authorized by the
Board of Directors.
Affiliated Companies Investments in companies 5% or more of
whose outstanding voting securities are held by the fund are
defined as "Affiliated Companies" in Section 2(a)(3) of the
Investment Company Act of 1940.
Currency Translation Assets and liabilities are translated into
U.S. dollars at the prevailing exchange rate at the end of the
reporting period. Purchases and sales of securities and income
and expenses are translated into U.S. dollars at the prevailing
exchange rate on the dates of such transactions. The effect of
changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such
gains and losses.
Premiums and Discounts Premiums and discounts on debt securities
are amortized for both financial reporting and tax purposes.
Other Income and expenses are recorded on the accrual basis.
Investment transactions are accounted for on the trade date.
Realized gains and losses are reported on the identified cost
basis. Dividend income and distributions to shareholders are
recorded by the fund on the ex-dividend date. Income and capital
gain distributions are determined in accordance with federal
income tax regulations and may differ from those determined in
accordance with generally accepted accounting principles.
Payments ("variation margin") made or received by the fund to
settle the daily fluctuations in the value of futures contracts
are recorded as unrealized gains or losses until the contracts
are closed. Unrealized gains and losses on futures contracts are
included in Change in net unrealized gain or loss in the
accompanying financial statements.
Note 2 - Investment Transactions
Consistent with its investment objective, the fund engages in
the following practices to manage exposure to certain risks or
enhance performance. The investment objective, policies,
program, and risk factors of the fund are described more fully
in the fund's prospectus and Statement of Additional
Information.
Futures Contracts At June 30, 1997, the fund was a party to
futures contracts, which provide for the future sale by one
party and purchase by another of a specified amount of a
specific financial instrument at an agreed upon price, date,
time, and place. Risks arise from possible illiquidity of the
futures market and from movements in security values.
Other Purchases and sales of portfolio securities, other than
short-term securities, aggregated $32,388,000 and $95,796,000,
respectively, for the six months ended June 30, 1997.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the fund
intends to continue to qualify as a regulated investment company
and distribute all of its taxable income.
At June 30, 1997, the aggregate cost of investments for federal
income tax and financial reporting purposes was $198,341,000,
and net unrealized gain aggregated $39,239,000, of which
$44,663,000 related to appreciated investments and $5,424,000 to
depreciated investments.
Note 4 - Related Party Transactions
The investment management and administration agreement between
the fund and T. Rowe Price Associates, Inc. (the manager)
provides for an annual investment management fee, of which
$211,000 was payable at June 30, 1997. The fee, is computed
weekly and paid monthly, at the annual rate of 1.10% of the
fund's weekly net assets.
The Manager and its subsidiaries, under separate agreements with
the fund are responsible for maintaining the financial records
of the fund, including calculating the fund's net asset value
per share and providing certain shareholder services for all
accounts. The fund incurred expenses pursuant to these related
party agreements totaling approximately $34,000 for the six
months ended June 30, 1997, of which $6,000 was payable at
period-end.
Note 5 - Fund conversion to open-end status
A shareholder vote on the Board-approved plan to convert the
fund to an open-end management investment company is scheduled
for July 23, 1997. If majority shareholder approval is received,
the fund will convert to open-end status on or about July 25,
1997, and the fund shares will then be redeemable, and will be
offered for sale, by the fund on a continuous basis at per-share
net asset value. During the six months ended June 30, 1997, the
fund made repurchases of its shares in the open market which had
the effect of increasing the net asset value per share of the
remaining shares outstanding.
New Age Media Fund
T. Rowe Price Shareholder Services
Investment Services And Information
Knowledgeable Service Representatives
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
Account Services
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(registered
trademark) and T. Rowe Price OnLine.
Discount Brokerage*
Individual Investments Stocks, bonds, options, precious metals,
and other securities at a savings over regular commission rates.
Investment Information
Combined Statement Overview of your T. Rowe Price accounts.
Shareholder Reports Fund managers' reviews of their strategies
and results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund
results.
Insights Educational reports on investment strategies and
financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing,
Personal Strategy Planner, Retirees Financial Guide, and
Retirement Planning Kit.
*A division of T. Rowe Price Investment Services, Inc. Member
NASD/SIPC.
Officers and Directors
James S. Riepe, Chairman of the Board
Jeffrey H. Donahue, Director
A. MacDonough Plant, Director
Charles A. Morris, Executive Vice President
Brian D. Stansky, Executive Vice President
Robert N. Gensler, Vice President
Lise J. Buyer, Vice President
Henry H. Hopkins, Vice President
John F. Wakeman, Vice President
Lenora V. Hornung, Secretary
Carmen F. Deyesu, Treasurer
David S. Middleton, Controller
J. Jeffrey Lang, Assistant Vice President
Manager
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Telephone 410-345-2000
Custodian
Custodial Trust Company
101 Carnegie Center
Princeton, New Jersey 08540
Transfer and Dividend Paying Agent
and Registrar:
State Street Bank and Trust Co.
225 Franklin Street
Boston, Massachusetts 02110
For information on the fund, including the NAV, please call toll
free 1-800-231-8432
Invest With Confidence
T. Rowe Price
F95-051 6/30/97
