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Previous: HALDOR INVESTMENT ADVISORS L P, 13F-HR, 2000-07-13 |
Next: PRICE T ROWE PERSONAL STRATEGY FUNDS INC, N-30D, 2000-07-13 |
<PAGE>
--------------------------------------------------------------------------------
Annual Report - Financial Statements
--------------------------------------------------------------------------------
T. ROWE PRICE
PERSONAL STRATEGY INCOME FUND
------------
MAY 31, 2000
------------
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
May 31, 2000
--------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Ended
5/31/00 5/31/99 5/31/98 5/31/97 5/31/96
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 13.35 $ 13.13 $ 11.98 $ 11.85 $ 10.94
Investment activities
Net investment income (loss) 0.54* 0.51* 0.50* 0.51* 0.50*
Net realized and
unrealized gain (loss) 0.02 0.31 1.43 1.10 0.98
Total from investment
activities 0.56 0.82 1.93 1.61 1.48
Distributions
Net investment income (0.54) (0.50) (0.50) (0.50) (0.47)
Net realized gain (0.37) (0.10) (0.28) (0.98) (0.10)
Total distributions (0.91) (0.60) (0.78) (1.48) (0.57)
NET ASSET VALUE
End of period $ 13.00 $ 13.35 $ 13.13 $ 11.98 $ 11.85
-----------------------------------------------------
Ratios/Supplemental Data
Total return+ 4.39%* 6.43%* 16.61%* 14.70%* 13.84%*
Ratio of total expenses
to average net assets 0.90%* 0.90%* 0.95%* 0.95%* 0.95%*
Ratio of net investment
income (loss) to average
net assets 4.06%* 3.91%* 4.13%* 4.38%* 4.31%*
Portfolio turnover rate 45.4% 48.9% 30.9% 44.8% 34.1%
Net assets,
end of period (in thousands) $ 198,885 $ 208,208 $ 85,898 $ 44,368 $ 25,545
</TABLE>
+ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.90% voluntary expense limitation in
effect through 5/31/00 and expenses in excess of a 0.95% voluntary expense
limitation in effect through 5/31/98.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
May 31, 2000
------------------------
PORTFOLIO OF INVESTMENTS Shares/Par Value
--------------------------------------------------------------------------------
In thousands
COMMON STOCKS AND RIGHTS 41.5%
FINANCIAL 6.5%
Bank and Trust 3.0%
Abbey National (GBP) 13,300 $ 177
ABN Amro (EUR) 3,300 75
Allied Irish Banks (EUR) * 6,200 57
Australia & New Zealand Banking Group ADR 2,500 87
Banca Intesa (EUR) 28,100 111
Banca Popolare di Milano (EUR) 1,700 11
Banco Bradesco ADR 5,400 37
Banco de Bilbao Vizcaya Argentaria ADR 11,800 164
Banco Frances del Rio de la Plata ADR 4,035 78
Bank of America 10,700 595
Bank of New York 6,000 282
Bank One 9,800 324
Bankgesellschaft Berlin (EUR) * 3,200 50
Banque National de Paris (EUR) 1,000 90
Barclay's (GBP) 5,800 150
Charter One Financial 1,396 32
Chase Manhattan 3,000 224
Chittenden 5,100 141
Citizens Banking 2,800 51
Commonwealth Bank of Australia (AUD) 6,200 99
DBS Group Holdings (SGD) 6,978 70
Downey Financial 5,800 173
Dresdner Bank (EUR) 5,100 209
First Bell Bancorp 600 9
First Mariner Bancorp 600 4
First Security 1,000 16
Firstar 8,800 225
Frankfort First Bancorp 300 4
Glacier Bancorp 3,010 38
HSBC Holdings (GBP) 24,126 266
Industrial Bank of Japan (JPY) 15,000 117
KBC Bancassurance Holding (EUR) 1,300 56
Marshall & Ilsley 200 10
3
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Mellon Financial 15,100 $ 582
Overseas Chinese Bank (SGD) 8,400 47
Societe Generale (EUR) 540 31
Southwest Bancorporation * 6,000 119
State Street 2,600 290
Sumitomo Bank (JPY) 12,000 157
Summit Bancorp 1,300 37
Svenska Handelsbanken (Series A) (SEK) 5,900 83
Unicredito (EUR) 26,600 118
Washington Mutual 4,990 143
Wells Fargo 5,800 262
WestAmerica 2,600 74
---------
5,975
---------
Insurance 1.7%
ACE Limited 6,500 174
Aegon (EUR) 1,800 65
Allied Zurich (GBP) 14,700 165
American General 3,500 224
American International Group 906 102
AMP Limited (AUD) 4,200 37
Brown and Brown 2,800 131
Harleysville Group 1,900 32
Istituto Nazionale delle Assicurazioni (EUR) 20,800 46
London Pacific Group ADR 3,600 34
Marsh & McLennan 2,200 242
Medical Assurance 4,425 50
PartnerRe Holdings 2,800 104
Schweizerische Rueckversicherungs (CHF) 65 125
Selective Insurance 1,000 19
St. Paul 11,100 416
Sumitomo Marine & Fire Insurance (JPY) 30,000 188
UnumProvident 24,400 554
W. R. Berkley 1,900 42
XL Capital (Class A) 9,500 565
---------
3,315
---------
Financial Services 1.8%
American Express 8,700 468
Amvescap (GBP) 6,300 83
4
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Associates First Capital (Class A) 2,800 $ 77
AXA (EUR) 800 118
Capital One Financial 4,300 203
Charles Schwab 1,800 52
Citigroup 12,573 782
Delta Financial * 2,200 4
Fannie Mae 12,800 770
Financial Federal * 2,600 46
Freddie Mac 10,700 476
Goldman Sachs Group 200 15
Grupo Financiero Banamex (MXN) * 14,000 46
ING Groep (EUR) 2,550 152
ITLA Capital * 1,200 16
Morgan Stanley Dean Witter 2,700 194
Pearson (GBP) 3,800 113
Providian Financial 700 62
---------
3,677
---------
Total Financial 12,967
---------
UTILITIES 2.5%
Telephone 1.7%
ALLTEL 300 20
AT&T 6,175 214
AT&T Liberty Media Group * 2,300 102
BellSouth 5,400 252
British Telecommunications ADR 1,000 146
Cable & Wireless ADR 1,100 25
Compania de Telecomunicaciones de Chile (Class A) ADR 2,700 53
GTE 700 44
KPN (EUR) 1,000 90
Nextel Communications * 2,100 195
Nippon Telegraph & Telephone (JPY) 23 273
Portugal Telecom (EUR) 2,200 24
Rural Cellular (Class A) * 700 47
SBC Communications 4,500 197
Sprint 7,500 454
Swisscom (CHF) 191 67
5
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Tele Danmark A/S (DKK) 300 $ 21
Telebras ADR 1,600 185
Telecom Corp. of New Zealand ADR 5,400 151
Telecom Italia (EUR) 10,500 145
Telecom Italia Mobile (EUR) 19,200 200
Telefonica de Espana ADR 2,182 133
Telefonos de Mexico (Class L) ADR 4,500 219
Western Wireless * 800 38
---------
3,295
---------
Electric Utilities 0.7%
Cleco 4,100 140
Electrabel (EUR) 137 32
Empresa Nacional de Electricidad Chile ADR * 3,332 39
Enersis ADS * 900 19
FirstEnergy 7,595 191
GPU 2,100 59
Hong Kong Electric (HKD) 14,000 47
Iberdrola (EUR) 9,800 125
National Grid (GBP) 4,600 35
PECO Energy 3,200 141
Powergen (GBP) 5,500 36
TXU 6,000 215
Unicom 6,000 250
Unisource Energy 700 11
Veba (EUR) 2,410 122
---------
1,462
---------
Water Utilities 0.1%
Suez Lyonnaise des Eaux (EUR) 1,200 201
United Water Resources 800 28
---------
229
---------
Total Utilities 4,986
---------
CONSUMER NONDURABLES 7.3%
Cosmetics 0.4%
Chattem * 2,300 27
International Flavors & Fragrances 18,100 615
Kao (JPY) 7,000 213
---------
855
---------
6
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
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Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Beverages 0.5%
Anheuser-Busch 5,500 $ 426
Coca-Cola 1,700 91
Compania Cervecerias Unidas ADR 1,300 29
Diageo ADR 2,250 78
Fomento Economico Mexica UBD
(Represents 1 Class B and 4 Series D shares) (MXN) 5,600 21
LVMH (EUR) 231 94
PepsiCo 6,200 252
---------
991
---------
Food Processing 1.0%
American Italian Pasta * 2,300 57
Associated British Foods (GBP) 14,100 95
Cadbury Schweppes ADR 3,000 81
Campbell 11,300 350
Carrefour (EUR) 3,200 227
Danisco (DKK) 200 7
Eridania Beghin-Say (EUR) 540 50
General Mills 11,820 469
International Multifoods 6,400 89
Nestle (CHF) 83 158
Quaker Oats 300 22
Ralston Purina 13,100 243
Sara Lee 5,400 97
Seneca Foods (Class A) * 800 9
Seneca Foods (Class B) * 700 8
Unilever 2,217 113
---------
2,075
---------
Hospital Supplies/Hospital Management 0.5%
Airgas * 3,700 20
Baxter International 2,700 180
Cephalon * 900 46
Lincare * 3,000 87
Medtronic 200 10
Mentor 5,100 123
Molecular Devices * 900 48
Quorum Health Group * 1,400 14
Renal Care Group * 3,450 82
Smith & Nephew (GBP) 26,000 70
7
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Steris * 3,900 $ 35
Terumo (JPY) 7,000 224
---------
939
---------
Pharmaceuticals 2.8%
American Home Products 24,260 1,307
Amgen * 1,800 115
AstraZeneca Group ADR 4,600 193
AstraZeneca Group (GBP) 2,100 89
AstraZeneca Group (SEK) 1,614 68
Aurora Biosciences * 900 43
Boron Lepore & Associates * 1,100 8
Bristol-Myers Squibb 2,200 121
Daiichi Pharmaceutical (JPY) 2,000 37
Eli Lilly 2,800 213
Genetech * 1,300 140
Glaxo Wellcome ADR 4,100 231
Imclone Systems * 300 21
Immunomedics * 600 7
Incyte Pharmaceuticals * 300 16
Johnson & Johnson 400 36
MedImmune * 600 93
Merck 2,100 157
Novartis (CHF) 300 443
Noven Pharmaceuticals * 700 13
NPS Pharmaceuticals * 1,100 14
Pfizer 12,260 546
Pharmacia 8,426 438
Schering-Plough 4,400 213
Takeda Chemical Industries (JPY) 5,000 341
Triangle Pharmaceuticals * 2,400 15
Warner-Lambert 5,400 659
---------
5,577
---------
Biotechnology 0.1%
Abegenix * 200 16
Alkermes * 1,200 44
Anesta * 1,200 18
COR Therapeutics * 700 44
Cubist Pharmaceuticals * 400 12
8
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Gilead Sciences * 200 $ 11
Inhale Therapeutic Systems * 1,900 138
Neurocrine Biosciences * 600 13
Serologicals * 2,000 8
Viropharma * 800 9
---------
313
---------
Health Care Services 0.4%
AmeriPath * 4,300 37
CIGNA 1,900 169
Orthodontic Centers of America * 1,500 34
Packard BioScience * 900 13
UnitedHealth Group 4,600 343
Wellpoint Health Networks * 2,000 145
---------
741
---------
Miscellaneous Consumer Products 1.6%
Bridgestone (JPY) 2,000 46
Colgate-Palmolive 9,600 505
Cone Mills * 4,600 27
Culp 1,700 11
Dan River * 6,600 33
Electrolux (Class B) (SEK) 1,900 32
Energizer Holdings * 4,366 74
Harcourt General 7,400 292
Kuraray (JPY) 3,000 31
Lion Nathan (NZD) 20,000 40
Mattel 21,400 290
Mitsui (JPY) 21,000 148
Philip Morris 19,850 519
Philips Electronics 4,564 202
Polymer Group 1,800 13
Quicksilver * 1,500 20
Reebok * 1,500 21
Sola * 6,000 30
Stride Rite 4,800 32
Textron 5,600 351
Tomkins (GBP) 23,700 68
Unifi * 3,400 43
US Can * 6,600 109
9
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
UST 14,300 238
WestPoint Stevens 1,100 $ 11
------------
3,186
------------
Total Consumer Nondurables 14,677
------------
CONSUMER SERVICES 4.7%
Restaurants 0.1%
Applebee's 700 22
Buca * 4,700 66
PJ America * 1,200 13
Ruby Tuesday 3,800 38
Uno Restaurant 1,700 21
------------
160
------------
General Merchandisers 0.5%
Bon-Ton Stores * 5,300 12
Casey's General Stores 10,500 124
Columbia Sportswear * 2,700 71
JUSCO (JPY) 6,000 103
Marui (JPY) 6,000 110
Target 2,300 144
Tesco (GBP) 50,821 153
Wal-Mart 6,000 346
------------
1,063
------------
Specialty Merchandisers 1.4%
Circuit City Stores 1,100 55
CompuCom Systems * 6,900 17
CVS 4,868 212
Home Depot 5,100 249
Kroger * 6,900 137
Lowes 2,200 102
Nordstrom 11,300 284
O'Charley's * 4,000 56
Omron (JPY) 9,000 232
Priceline.com * 100 4
PurchasePro.com * 700 15
Safeway * 7,300 337
The Gap 100 3
10
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Toys 'R' Us * 35,000 551
Tupperware 18,800 $ 415
Urban Outfitters * 2,700 24
Wild Oats Markets * 1,400 13
-----------
2,706
-----------
Entertainment and Leisure 1.3%
Disney 21,700 916
Houghton Mifflin 300 12
Hutchison Whampoa (HKD) 47,300 545
McDonald's 2,300 82
Papa John's * 2,400 60
Reader's Digest (Class A) 13,300 451
Sharp (JPY) 6,000 108
Sonic * 1,100 30
Viacom (Class B) * 7,101 440
-----------
2,644
-----------
Media and Communications 1.3%
American Tower Systems (Class A) * 400 15
Asatsu (JPY) 4,000 130
Classic Communications * 1,700 12
Clear Channel Communications * 3,100 232
Comcast (Class A Special) * 1,400 53
Elsevier (EUR) 2,400 22
Emmis Broadcasting (Class A) * 2,600 89
Granada Group (GBP) 3,500 31
Infinity Broadcasting (Class A) * 4,500 142
Mediaset (EUR) 4,700 73
News 1,900 87
Pegasus Communications * 1,200 50
Publishing & Broadcasting (AUD) 10,400 77
R.R. Donnelley 31,300 773
Sinclair Broadcast Group (Class A) * 4,800 39
Time Warner 2,100 166
Vodafone Airtouch ADR 12,050 552
Young Broadcasting (Class A) * 1,400 32
-----------
2,575
-----------
11
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Printing and Publishing 0.1%
Reed International (GBP) 14,200 $ 94
-----------
94
-----------
Total Consumer Services 9,242
-----------
CONSUMER CYCLICALS 2.8%
Automobiles and Related 0.3%
A.O. Smith (Class B) 6,350 133
Cycle & Carriage (SGD) 4,000 8
DaimlerChrysler (EUR) 1,400 76
Fiat (EUR) * 1,500 38
Honda ADR 1,300 88
Keystone Automotive * 1,500 11
Littelfuse * 3,900 156
Strattec Security * 1,000 35
Volkswagen (EUR) 1,900 76
Volvo (Class B) (SEK) 700 17
Volvo, Rights (SEK) * 700 0
-----------
638
-----------
Building and Real Estate 1.3%
Apartment Investment & Management, REIT 1,100 44
Arden Realty, REIT 2,500 57
Cemex (Represents 2 Class A and 1 Class B shares) (MXN) 9,200 39
Cheung Kong Holdings (HKD) 29,000 265
City Developments (SGD) 4,000 13
DBS Land (SGD) 11,000 13
EastGroup Properties, REIT 4,200 90
Federal Realty Investment Trust, REIT 19,100 419
First Washington Realty Trust, REIT 2,100 44
Glenborough Realty Trust, REIT 3,100 48
JP Realty, REIT 3,100 56
Parkway Properties, REIT 3,700 111
Reckson Associates Realty (Class B), REIT 1,471 34
Reckson Associates Realty, REIT 17,900 393
RMC (GBP) 3,000 38
Simon DeBartolo Group, REIT 15,368 377
Singapore Land (SGD) 8,000 13
12
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Starwood Hotels & Resorts, REIT 14,300 $ 423
Westfield Trust (AUD) 34,900 62
Woodhead Industries 3,300 53
-----------
2,592
-----------
Miscellaneous Consumer Durables 1.2%
CompX 2,800 53
Corning 3,700 716
Eastman Kodak 12,900 771
Harman International 1,700 98
Intranet Solutions * 1,400 27
Masco 3,700 73
OCE (EUR) 400 6
Ricoh (JPY) 9,000 188
Sony (JPY) 4,000 362
-----------
2,294
-----------
Total Consumer Cyclicals 5,524
-----------
TECHNOLOGY 4.8%
Electronic Components 1.6%
Altera * 3,300 284
American Superconductor * 800 21
Analog Devices * 1,400 108
Analogic 2,400 87
ASM Lithography (EUR) * 600 22
Benchmark Electronics * 2,800 95
Burr Brown * 2,500 142
EMC 400 47
Epcos (EUR) * 100 12
Exar * 900 62
Flextronics International * 3,600 196
Intel 5,100 636
Maxim Integrated Products * 4,400 279
Methode Electronics (Class A) 3,500 126
PMC-Sierra * 600 92
QuickLogic * 1,200 31
Rohm (JPY) 1,000 312
SDL * 500 113
13
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
SIPEX * 2,200 $ 48
Spirent (GBP) 11,400 64
Texas Instruments 5,000 361
Xilinx * 2,200 167
-----------
3,305
-----------
Electronic Systems 0.9%
Applied Materials * 3,100 259
Applied Micro Circuits * 800 80
Armor Holdings * 4,900 54
Hewlett-Packard 2,100 252
Lifeline Systems * 2,000 24
Lo-Jack * 3,400 24
Nokia ADR 15,100 785
PE Biosystems 800 44
Solectron * 3,200 106
STMicroelectronics (EUR) 1,800 107
-----------
1,735
-----------
Information Processing 0.4%
Adecco (CHF) 52 41
Cybersource * 500 7
Dell Computer * 7,300 315
F.Y.I. * 3,200 105
Hitachi ADR 1,700 208
Source Information Management * 2,500 34
-----------
710
-----------
Office Automation 0.1%
Technitrol 2,900 200
-----------
200
-----------
Specialized Computer 0.1%
Sun Microsystems * 1,900 145
Virata * 600 25
-----------
170
-----------
Aerospace and Defense 0.1%
DONCASTERS ADR * 600 7
Harsco 200 5
Honeywell International 1,300 71
United Technologies 2,100 127
Woodward Governor 1,300 32
-----------
242
-----------
14
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Telecommunications 1.6%
Aether Systems * 200 $ 28
Airgate PCS * 400 12
Airnet Commerce * 200 3
Alcatel Alsthom (EUR) 2,570 142
Avant * 1,600 25
Cisco Systems * 10,200 580
Deutsche Telekom (EUR) 6,400 397
Ditech Communications * 800 66
France Telecom ADR 2,200 319
JDS Uniphase * 1,700 150
LM Ericsson (Class B) ADR 22,400 459
Marconi (GBP) 4,600 56
NEXTLINK Communications * 600 42
Nortel Networks 3,400 185
QUALCOMM * 700 46
Singapore Telecommunications (SGD) 37,000 50
Sonera Group (EUR) 2,100 106
Sprint PCS * 800 44
Tele Norte Leste Participacoes ADR 187 4
Tellabs * 200 13
Telstra (AUD) 16,000 62
Vyyo * 900 13
West TeleServices * 1,700 45
WorldCom * 7,381 278
-----------
3,125
-----------
Total Technology 9,487
-----------
EDUCATION 0.0%
ITT Educational Service * 700 12
Societe BIC (EUR) 1,900 84
-----------
Total Education 96
-----------
CAPITAL EQUIPMENT 1.2%
Electrical Equipment 1.0%
ABB (CHF) 353 44
15
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Bang & Olufsen (Class B) (DKK) 1,000 $ 36
Canon (JPY) 4,000 184
GE 11,400 600
Getronics (EUR) 1,200 20
hi/fn * 1,300 38
LSI Industries 2,800 48
Matsushita Electric Industrial (JPY) 11,000 260
Mitsubishi Electric (JPY) 21,000 206
Tyco International 12,094 569
-----------
2,005
-----------
Machinery 0.2%
Danaher 3,200 154
Deere 3,500 145
GKN (GBP) 3,000 42
Kennametal 2,600 69
NN Ball & Roller 1,700 15
-----------
425
-----------
Total Capital Equipment 2,430
-----------
BUSINESS SERVICES AND TRANSPORTATION 3.8%
Computer Service and Software 1.9%
724 Solutions * 100 4
Actuate * 600 14
America Online 5,500 291
Analysts International 2,900 23
Ariba * 1,000 52
Automatic Data Processing 4,600 253
BISYS Group * 900 59
BMC Software * 2,800 123
Cambridge Technology Partners * 1,400 11
Computer Associates 2,200 113
Concord Communications * 1,000 25
Digital Impact * 900 10
Electronic Arts * 500 32
Electronic Data Systems 100 6
First Data 4,618 259
Fujitsu (JPY) 8,000 226
16
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Great Plains Software * 1,100 $ 46
iGATE Capital * 2,500 39
Interact Commerce * 1,300 20
Intuit * 700 25
Jack Henry & Associates 500 22
Keynote Systems * 2,400 84
Lexmark International Group (Class A) * 300 21
Loislaw * 700 5
Microsoft * 7,500 469
net.Genesis * 900 17
NetIQ * 1,300 44
Netsolve * 600 15
Network Solutions (Class A) * 200 30
Ondisplay * 100 5
Oracle * 6,300 452
Peerless Systems * 2,800 7
PeopleSoft * 330 5
Peregrine Systems * 700 14
Progress Software * 7,200 111
PSINet * 1,600 42
Quest Software * 500 20
SAP (EUR) 220 86
Sema (GBP) 1,900 27
Siebel Systems * 1,700 199
Softbank, (New shares) (JPY) * 400 60
Softbank (JPY) 200 31
Sonicwall * 100 6
SPSS * 1,400 35
SunGard Data Systems * 200 7
Synopsys * 200 9
VERITAS Software * 1,825 213
Verity * 300 10
Viasoft * 4,700 39
Vitria Technology * 1,100 38
Websense * 300 6
WebTrends * 1,700 44
Yahoo! * 600 68
Zebra Technologies (Class A) * 800 38
-----------
3,910
-----------
17
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Distribution Services 0.2%
Compass Group (GBP) 3,000 $ 34
MSC * 2,700 62
Performance Food Group * 1,000 32
Primesource 800 4
SCP Pool * 3,300 111
SunSource 1,800 8
TNT Post Groep (EUR) 900 22
United Stationers * 2,900 93
Watsco (Class A) 4,050 60
-----------
426
-----------
Environmental 0.1%
CUNO * 2,400 67
IT Group * 2,700 16
Rentokil Group (GBP) 3,400 30
Waterlink * 2,600 7
-----------
120
-----------
Transportation Services 0.2%
Bergesen (Class A) (NOK) 2,400 50
C.H. Robinson Worldwide 1,600 73
Comfort Systems USA * 5,900 36
EGL * 2,050 49
Expeditors International of Washington 1,800 73
Frozen Food Express 1,000 3
Heartland Express * 300 5
Hub Group (Class A) * 500 6
International Shipholding 700 5
Mitsubishi Heavy Industries (JPY) 7,000 24
-----------
324
-----------
Miscellaneous Business Services 1.0%
Answerthink Consulting Group * 1,300 23
British Airport Authorities (GBP) 5,300 39
Consolidated Graphics * 3,200 33
Electro Rent * 4,200 46
G&K Services 1,700 43
H&R Block 6,700 207
Hays (GBP) 7,700 43
Herman Miller 900 24
18
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Insituform Technologies (Class A) * 3,600 $ 124
Iron Mountain * 2,800 102
Ivex Packaging * 5,100 46
kforce.com * 2,600 33
Kuoni Reisen Holdings (CHF) 2 1
Maximus * 2,900 60
McGrath RentCorp 1,400 22
Metamor Worldwide * 1,300 30
MPW Industrial Services Group * 3,300 23
New England Business Service 4,700 69
Omnicom 2,000 168
Strayer Education 2,600 65
Tetra Tech * 4,462 99
Vedior (EUR) 1,700 20
Visual Networks * 1,100 54
Waste Management 32,606 664
-----------
2,038
-----------
Airlines 0.1%
Midwest Express Holdings * 2,500 52
Singapore Airlines (SGD) 9,000 79
-----------
131
-----------
Railroads 0.3%
Kansas City Southern Industries 2,000 135
Norfolk Southern 30,000 534
669
-----------
Total Business Services and Transportation 7,618
-----------
ENERGY 3.7%
Energy Services 0.6%
Baker Hughes 22,900 830
Cooper Cameron * 500 35
Grant Prideco * 800 19
Smith International * 700 55
Tokyo Electric Power (JPY) 6,000 150
Weatherford International * 800 35
-----------
1,124
-----------
19
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Exploration and Production 0.7%
Barrett Resources * 3,600 $ 142
Chieftain International * 3,300 73
Forest Oil * 3,500 56
Key Energy * 6,300 68
National Oilwell * 2,000 52
Noble Affiliates 3,300 130
Santos (AUD) 11,000 28
Unocal 18,600 715
-----------
1,264
-----------
Integrated Petroleum - Domestic 0.5%
Amerada Hess 1,200 80
Conoco (Class B) 7,069 201
USX-Marathon 26,900 731
-----------
1,012
-----------
Integrated Petroleum - International 1.9%
BP Amoco ADR 28,402 1,544
Chevron 2,300 213
ENI SPA ADR 1,900 103
Exxon Mobil 11,493 958
Repsol ADR 2,200 46
Royal Dutch Petroleum 7,100 443
Shell Transport & Trading ADR 2,300 116
Texaco 3,400 195
TotalFinaElf ADR 574 45
TotalFinaElf (EUR) 1,311 207
-----------
3,870
-----------
Total Energy 7,270
-----------
PROCESS INDUSTRIES 2.2%
Diversified Chemicals 0.4%
Arch Chemicals 5,200 90
Cabot Microelectronics * 1,200 39
Dow Chemical 2,900 311
DuPont 2,402 118
Hercules 15,300 253
-----------
811
-----------
20
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Specialty Chemicals 0.9%
3M 5,400 $ 463
A. Schulman 1,400 17
Akzo Nobel (EUR) 600 23
BASF (EUR) 2,730 112
Great Lakes Chemical 5,740 159
Hauser * 2,550 4
Imperial Chemical ADR 1,000 31
MacDermid 800 16
Norsk Hydro (NOK) 1,600 61
Pall 16,600 349
Sumitomo Chemicals (JPY) 52,000 251
Waters * 2,500 236
------
1,722
------
Paper and Paper Products 0.7%
Buckeye Technologies * 1,100 21
Dai Nippon Printing (JPY) 8,000 136
Fort James 24,300 550
Jefferson Smurfit (EUR) 147 0
Kimberly-Clark 8,300 502
Kimberly-Clark de Mexico (Class A) (MXN) 35,100 109
Smurfit-Stone Container * 900 13
------
1,331
------
Forest Products 0.1%
Weyerhaeuser 5,600 278
------
278
------
Building and Construction 0.1%
Heidelberg Zement (EUR) 200 12
Layne Christensen * 4,100 18
Simpson Manufacturing * 700 33
Trex * 900 40
U.S. Aggregates 1,900 36
------
139
------
Total Process Industries 4,281
------
21
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
BASIC MATERIALS 0.7%
Metals 0.6%
Alcoa 8,610 $ 503
Gibraltar Steel 1,500 24
Material Sciences * 4,800 52
Matthews International (Class A) 5,400 136
Pechiney (EUR) 700 29
Phelps Dodge 9,100 408
------
1,152
------
Mining 0.1%
Battle Mountain Gold * 14,200 28
Lihir Gold * 47,140 15
Rio Tinto (AUD) 7,200 103
Rio Tinto (GBP) 2,000 29
Union Miniere (EUR) 1,100 39
------
214
------
Miscellaneous Materials 0.0%
Malayan Cement (MYR) 15,750 6
6
------
Total Basic Materials 1,372
------
MISCELLANEOUS 0.0%
Conglomerates 0.0%
Orkla (Class A) (NOK) 1,000 17
------
Total Miscellaneous 17
------
FOREIGN 1.3%
Europe 1.0%
Aventis (EUR) 2,900 189
Bank Of Scotland (GBP) 15,700 147
BG Group (GBP) 12,122 72
Cap Gemini (EUR) 300 56
Credit Suisse Group (CHF) 1,300 243
CSM (EUR) 1,200 25
Deutz (EUR) * 8,200 38
22
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
DnB Holding (NOK) 4,600 $ 16
eircom (EUR) * 6,300 18
EM.TV & Merchandising (EUR) * 500 34
Lafarge (EUR) 400 31
Merck KGaA (EUR) 1,600 51
Metro (EUR) * 500 16
Munich Re (EUR) * 870 253
Nordic Baltic Holding (DKK) 15,244 98
OMV (EUR) 100 9
Prosegur Seguridad (EUR) 2,800 36
Publicis (EUR) 235 97
Radiometer (DKK) 800 26
Sandvik (SEK) 1,400 31
Securitas (Class B) (SEK) 1,500 35
SGL Carbon (EUR) * 300 20
Singapore Press (SGD) 4,000 60
Sommer Allibert (EUR) 4,300 132
Sulzer Winterthur (CHF) * 64 43
Svenska Cellulosa (SEK) 2,100 42
Swatch (CHF) 79 20
Thomson CSF (EUR) * 200 8
Tullow Oil (EUR) * 100 0
Unibail (EUR) 200 26
------
1,872
------
Far East 0.1%
Nippon Express (JPY) 17,000 95
------
95
------
Other Foreign 0.2%
Bouygues (EUR) 51 31
Carso Global Telecom (MXN) * 22,800 52
Pao de Acucar GDR 2,300 69
Siemens (EUR) 1,400 205
Unibanco GDR 1,200 29
Woolworths (AUD) 27,800 92
------
478
------
Total Foreign 2,445
------
Total Common Stocks and Rights (Cost $71,091) 82,412
------
23
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
CORPORATE BONDS 18.9%
Allied Holdings, Gtd. Sr. Sub. Notes, 8.625%, 10/1/07 $ 250,000 $ 221
American Builders & Contractors Supply, Sr. Sub. Notes
10.625%, 5/15/07 300,000 246
American Express, 7.60%, 8/15/02 300,000 301
American Standard, 9.25%, 12/1/16 55,000 55
Amerigas Partners, Sr. Notes, 10.125%, 4/15/07 100,000 100
Amkor Technology, 9.25%, 5/1/06 175,000 169
Associated Materials, Sr. Sub. Notes, 9.25%, 3/1/08 200,000 186
Avis Rent A Car, Sr. Sub. Notes, 11.00%, 5/1/09 250,000 254
B&G Foods, Sr. Sub. Notes, 9.625%, 8/1/07 500,000 340
Bally Total Fitness, Sr. Sub. Notes, 9.875%, 10/15/07 350,000 322
BBV International Finance, 7.00%, 12/1/25 1,000,000 898
BG Transco Holdings
4.188%, 12/14/22 1,000 1
7.00%, 12/16/24 1,000 1
7.057%, 12/14/09 1,000 2
BWAY, Sr. Sub. Notes, 10.25%, 4/15/07 200,000 188
CE Electric UK Funding, (144a), 6.853%, 12/30/04+ 1,850,000 1,778
Chancellor Media, 8.00%, 11/1/08 250,000 250
Charter Communication, Sr. Notes, 8.25%, 4/1/07 500,000 422
Chattem, Sr. Sub. Notes, 12.75%, 6/15/04 200,000 206
Cinemark USA, Sr. Sub. Notes, 8.50%, 8/1/08 250,000 138
Coinmach, Sr. Sub. Notes, 11.75%, 11/15/05 150,000 143
Comcast Cable Communications, 8.50%, 5/1/27 1,850,000 1,878
Communications & Power Industries, Sr. Sub. Notes
12.00%, 8/1/05 200,000 150
Consolidated Container, Sr. Sub. Notes, 10.125%, 7/15/09 300,000 295
Container Corp of America
Sr. Notes, 9.75%, 4/1/03 100,000 101
Gtd., 10.75%, 5/1/02 100,000 102
Courtyard by Marriott II, Sr. Secured Notes, 10.75%, 2/1/08 500,000 490
Dan River, Sr. Sub. Notes, 10.125%, 12/15/03 100,000 96
Delta Air Lines, ETC, 10.00%, 5/17/10 146,000 151
Doane Pet Care, Sr. Sub. Notes, 9.75%, 5/15/07 829,000 721
Dyersburg, Sr. Sub. Notes, 9.75%, 9/1/07 150,000 38
Dyncorp, Sr. Sub. Notes, 9.50%, 3/1/07 75,000 60
24
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Energy Corp. of America, Sr. Sub. Notes
9.50%, 5/15/07 $ 500,000 $ 330
Fairfax Financial, 8.25%, 10/1/15 1,850,000 1,555
Ford Motor Credit, Sr. Notes, 5.80%, 1/12/09 1,000,000 857
Frontier Oil, 11.75%, 11/15/09 250,000 241
Frontiervision, Sr. Notes, 11.00%, 10/15/06 500,000 496
Global Crossing Holdings Limited, (144a)
9.50%, 11/15/09 300,000 283
Halliburton, 5.625%, 12/1/08 1,000,000 869
Harrahs, 7.875%, 12/15/05 500,000 460
Hawk, Sr. Notes, 10.25%, 12/1/03 400,000 364
Herff Jones, Sr. Sub. Notes, 11.00%, 8/15/05 150,000 155
Hollinger International Publishing, Gtd. Notes
9.25%, 3/15/07 500,000 485
Intermedia Communications, Sr. Notes, 9.50%, 3/1/09 200,000 184
International Cabletel, Sr. Notes, STEP, 0%, 2/1/06 500,000 457
International Game Technology, 8.375%, 5/15/09 500,000 462
International Home Foods, Gtd. Sr. Sub. Notes
10.375%, 11/1/06 500,000 491
International Wire, Sr. Sub. Notes, 11.75%, 6/1/05 200,000 204
Intertek Finance, Sr. Sub. Notes, 10.25%, 11/1/06 100,000 83
Iron Mountain, Sr. Sub. Notes, 8.75%, 9/30/09 150,000 133
ISP Holdings, Sr. Notes, 9.75%, 2/15/02 150,000 146
Jitney-Jungle Stores, Sr. Sub. Notes, 12.00%, 3/1/06* 350,000 53
Lear, 7.96%, 5/15/05 125,000 116
Lennar, (144a), 9.95%, 5/1/10+ 100,000 95
Lockheed Martin, 8.20%, 12/1/09 800,000 781
Mastec, Sr. Sub. Notes, 7.75%, 2/1/08 250,000 230
Mediacom, Sr. Notes, 7.875%, 2/15/11 500,000 432
Metromedia Fiber Network, Sr. Notes, 10.00%, 11/15/08 250,000 237
Metronet Communications, Sr. Disc. Notes
STEP, 0%, 6/15/08 350,000 280
Midland Bank, Sub. Notes, 7.65%, 5/1/25 1,000,000 986
Newport News Shipbuilding, Sr. Notes, 8.625%, 12/1/06 500,000 480
Nextel Communications, Sr. Disc. Notes
STEP, 0%, 10/31/07 900,000 641
Nextlink Communications, Sr. Disc. Notes
STEP, 0%, 6/1/09 750,000 427
25
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
Norfolk Southern, 8.625%, 5/15/10 $1,000,000 $ 1,014
Northern Trust, 6.65%, 11/9/04 1,000,000 953
Northland Cable Television, Sr. Sub. Notes
10.25%, 11/15/07 150,000 134
NTL, Sr. Notes, Zero Coupon, 4/1/08 750,000 467
Orange, Sr. Notes, 9.00%, 6/1/09 500,000 510
Orion Power Holdings, (144a), 12.00%, 5/1/10+ 200,000 201
Owens & Minor, Sr. Sub. Notes, 10.875%, 6/1/06 50,000 51
Packaging Corp. of America, 9.625%, 4/1/09 500,000 490
Paine Webber, Sr. Notes, 6.55%, 4/15/08 1,850,000 1,618
Premier Parks, Sr. Disc. Notes
STEP, 0%, 4/1/08 500,000 329
Price Communications Wireless, 9.125%, 12/15/06 500,000 501
Pride Petroleum Services, Sr. Notes, 9.375%, 5/1/07 100,000 97
Principal Mutual, (144a), 8.00%, 3/1/44+ 850,000 740
Quest Diagnostics, Gtd. Sr. Sub. Notes, 10.75%, 12/15/06 150,000 158
Qwest Communications, Sr. Disc. Notes
STEP, 0%, 10/15/07 600,000 477
Sr. Notes, 7.50%, 11/1/08 50,000 47
R & B Falcon, Sr. Notes, 6.95%, 4/15/08 500,000 420
Raytheon, 5.70%, 11/1/03 500,000 465
Rogers Cablesystems, Sr. Sec. 2nd Priority Notes
10.00%, 3/15/05 90,000 91
Safelite Glass, Sr. Sub. Notes, 9.875%, 12/15/06* 50,000 0
Six Flags Entertainment, Sr. Notes, 8.875%, 4/1/06 500,000 470
Sprint, 6.125%, 11/15/08 900,000 784
Station Casinos, 10.125%, 3/15/06 200,000 202
Tenet Healthcare, Sr. Notes, 8.00%, 1/15/05 250,000 234
TravelCenters of America, Sr. Sub. Notes, 10.25%, 4/1/07 500,000 472
United International Holdings, Sr. Disc. Notes
10.75%, 2/15/08 300,000 180
US Can, Sr. Gtd. Notes, 10.125%, 10/15/06 100,000 104
Venture Holdings Trust, Sr. Sub. Notes, 9.50%, 7/1/05 150,000 117
VoiceStream Wireless, 10.375%, 11/15/09 500,000 506
Westinghouse Air Brake, Sr. Notes, 9.375%, 6/15/05 500,000 482
Westpoint Stevens, 7.875%, 6/15/05 175,000 147
WorldCom, 7.75%, 4/1/07 1,850,000 1,824
--------
Total Corporate Bonds (Cost $42,274) 37,601
--------
26
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Shares/Par Value
--------------------------------------------------------------------------------
In thousands
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES 13.3%
Federal National Mortgage Assn.
6.50%, 12/1/14 $ 1,499,851 $ 1,424
Government National Mortgage Assn.
I
6.00%, 5/15/26 - 12/15/28 500,064 457
6.50%, 4/15/26 - 5/15/29 15,185,560 14,211
7.00%, 2/15/27 - 1/15/29 8,172,131 7,846
7.50%, 9/15/22 - 12/15/25 625,223 616
8.00%, 1/15/22 - 10/15/24 266,937 269
8.50%, 9/15/24 132,679 135
10.50%, 2/15 - 8/15/13 5,501 6
II
7.00%, 7/20/27 - 4/20/30 1,517,931 1,453
8.00%, 10/20/25 70,023 70
--------
Total U.S. Government Mortgage-Backed Securities (Cost $27,872) 26,487
--------
U.S. GOVERNMENT OBLIGATIONS/
AGENCIES 14.4%
Federal National Mortgage Assn
7.00%, 4/18/22 1,250,000 1,238
Tennessee Valley Authority
5.88%, 4/1/36 2,475,000 2,311
6.235%, 7/15/45 500,000 496
U.S. Treasury Bonds
5.50%, 8/15/28 1,600,000 1,441
6.75%, 8/15/26 7,945,000 8,394
U.S. Treasury Inflation-Indexed Notes
3.625%, 7/15/02 1,842,404 1,827
U.S. Treasury Notes
5.50%, 7/31/01 7,650,000 7,541
6.125%, 8/15/07 5,500,000 5,382
--------
Total U.S. Government Obligations/Agencies (Cost $29,256) 28,630
--------
27
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Par/Shares Value
--------------------------------------------------------------------------------
In thousands
SHORT-TERM INVESTMENTS 10.9%
Money Market Funds 10.9%
Reserve Investment Fund, 6.48% # 21,692,350 $ 21,692
--------
Total Short-Term Investments (Cost $21,692) 21,692
--------
Total Investments in Securities
99.0% of Net Assets (Cost $192,185) $196,822
Other Assets Less Liabilities 2,063
--------
NET ASSETS $198,885
--------
+ Private placement
# Seven-day yield
* Non-income producing
144a Security was purchased pursuant to Rule 144a under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers - total of such securities at period-end amounts to
1.6% of net assets.
ADR American Depository Receipt
ADS American Depository Share
ETC Equipment Trust Certificate
GDR Global Depository Receipt
REIT Real Estate Investment Trust
STEP Stepped coupon note for which the interest rate will adjust on specified
future date(s)
AUD Australian dollar
CHF Swiss franc
DKK Danish krone
EUR Euro
GBP British sterling
HKD Hong Kong dollar
JPY Japanese yen
MYR Malaysian ringgit
MXN Mexican peso
NOK Norwegian krone
NZD New Zealand dollar
SEK Swedish krona
SGD Singapore dollar
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
May 31, 2000
-----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $192,185) $ 196,822
Securities lending collateral 27,079
Other assets 2,975
----------
Total assets 226,876
----------
Liabilities
Obligation to return securities lending collateral 27,079
Other liabilities 912
----------
Total liabilities 27,991
----------
NET ASSETS $ 198,885
----------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 1,501
Accumulated net realized gain/loss - net of distributions 1,152
Net unrealized gain (loss) 4,634
Paid-in-capital applicable to 15,303,366 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares authorized 191,598
----------
NET ASSETS $ 198,885
----------
NET ASSET VALUE PER SHARE $ 13.00
----------
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
-----------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
In thousands
Year
Ended
5/31/00
Investment Income (Loss)
Income
Interest $ 8,601
Dividend 1,479
Securities lending 54
--------
Total income 10,134
--------
Expenses
Investment management 1,044
Shareholder servicing 572
Custody and accounting 154
Prospectus and shareholder reports 41
Legal and audit 14
Directors 6
Registration 3
Miscellaneous 4
--------
Total expenses 1,838
Expenses paid indirectly (1)
--------
Net expenses 1,837
--------
Net investment income (loss) 8,297
--------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 2,227
Foreign currency transactions (3)
--------
Net realized gain (loss) 2,224
--------
Change in net unrealized gain or loss
Securities (2,190)
Other assets and liabilities
denominated in foreign currencies (3)
--------
Change in net unrealized gain or loss (2,193)
--------
Net realized and unrealized gain (loss) 31
--------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 8,328
--------
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
In thousands
Year
Ended
5/31/00 5/31/99
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 8,297 $ 7,527
Net realized gain (loss) 2,224 4,794
Change in net unrealized gain or loss (2,193) (1,503)
--------- ---------
Increase (decrease) in net assets from operations 8,328 10,818
--------- ---------
Distributions to shareholders
Net investment income (8,306) (6,611)
Net realized gain (5,649) (1,572)
--------- ---------
Decrease in net assets from distributions (13,955) (8,183)
--------- ---------
Capital share transactions*
Shares sold 69,461 175,277
Distributions reinvested 13,769 8,046
Shares redeemed (86,926) (63,648)
--------- ---------
Increase (decrease) in net assets from capital
share transactions (3,696) 119,675
--------- ---------
Net Assets
Increase (decrease) during period (9,323) 122,310
Beginning of period 208,208 85,898
--------- ---------
End of period $ 198,885 $ 208,208
--------- ---------
*Share information
Shares sold 5,314 13,292
Distributions reinvested 1,066 616
Shares redeemed (6,674) (4,852)
--------- ---------
Increase (decrease) in shares outstanding (294) 9,056
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
May 31, 2000
-----------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Personal Strategy Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940. The Personal Strategy
Income Fund (the fund), a diversified, open-end management investment
company, is one of the portfolios established by the corporation and
commenced operations on July 29, 1994. The fund seeks the highest total
return over time, consistent with a primary emphasis on income and a
secondary emphasis on capital growth, by investing in a diversified
portfolio typically consisting of about 40% stocks, 40% bonds, and 20%
money market securities.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company
industry; these principles may require the use of estimates by fund
management.
Valuation Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price on the day the
valuations are made. A security which is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Listed securities not traded on a
particular day and securities regularly traded in the over-the-counter
market are valued at the mean of the latest bid and asked prices. Other
equity securities are valued at a price within the limits of the latest
bid and asked prices deemed by the Board of Directors, or by persons
delegated by the Board, best to reflect fair value.
Debt securities are generally traded in the over-the-counter market and
are valued at a price deemed best to reflect fair value as quoted by
dealers who make markets in these securities or by an independent pricing
service.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of
such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by or under the supervision of the
officers of the fund, as authorized by the Board of Directors.
32
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
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, other
than mortgage-backed securities (MBS), are amortized for both financial
reporting and tax purposes. Premiums and discounts on all MBS are
recognized upon disposition or principal repayment as gain or loss for
financial reporting purposes. For tax purposes, premiums and discounts on
MBS acquired on or before June 8, 1997, are recognized upon disposition or
principal repayment as ordinary income. For MBS acquired after June 8,
1997, premiums are recognized as gain or loss; discounts are recognized as
gain or loss, except to the extent of accrued market discount.
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
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.
Securities Lending The fund lends its securities to approved brokers to
earn additional income and receives cash and U.S. government securities as
collateral against the loans. Cash collateral received is invested in a
money market pooled account by the fund's lending agent. Collateral is
maintained over the life of the loan in an amount not less than 100% of the
value of loaned securities.
33
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
--------------------------------------------------------------------------------
Although risk is mitigated by the collateral, the fund could experience a
delay in recovering its securities and a possible loss of income or value
if the borrower fails to return them. At May 31, 2000, the value of loaned
securities was $26,535,000; aggregate collateral consisted of $27,079,000
in the securities lending collateral pool.
Other Purchases and sales of portfolio securities, other than short-term
and U.S. government securities, aggregated $57,698,000 and $78,021,000,
respectively, for the year ended May 31, 2000. Purchases and sales of U.S.
government securities aggregated $24,752,000 and $16,864,000,
respectively, for the year ended May 31, 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 May 31, 2000, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$192,185,000. Net unrealized gain aggregated $4,637,000 at period-end, of
which $17,040,000 related to appreciated investments and $12,403,000 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 $80,000 was payable at May 31, 2000. The fee is
computed daily and paid monthly, and consists of an individual fund fee
equal to 0.15% 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 May 31, 2000, and for the year
then ended, the effective annual group fee rate was 0.32%. The fund pays a
pro-rata share of the group fee based on the ratio of its net assets to
those of the group.
Under the terms of the investment management agreement, the manager is
required to bear any expenses through May 31, 2000, which would cause the
34
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T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
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fund's ratio of total expenses to average net assets to exceed 0.90%.
Thereafter, through May 31, 2002, the fund is required to reimburse the
manager for these expenses, provided that average net assets have grown or
expenses have declined sufficiently to allow reimbursement without causing
the fund's ratio of total expenses to average net assets to exceed 0.90%.
Pursuant to this and a previous agreement, $86,000 of unaccrued fees were
repaid during the year ended May 31, 2000, and $10,000 remains subject to
reimbursement through May 31, 2002.
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 $575,000 for the year ended May 31, 2000, of which $42,000
was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available
to the public. The Reserve Funds pay no investment management fees.
Distributions from the Reserve Funds to the fund for the year ended May 31,
2000, totaled $1,182,000 and are reflected as interest income in the
accompanying Statement of Operations.
During the year ended May 31, 2000, the fund, in the ordinary course of
business, placed security purchase and sale orders aggregating $1,000 with
certain affiliates of the manager and paid $10 in commissions.
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T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
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---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Directors of T. Rowe Price Personal Strategy Funds, Inc. and
Shareholders of T. Rowe Price Personal Strategy Income Fund
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
T. Rowe Price Personal Strategy Income Fund (one of the portfolios
comprising T. Rowe Price Personal Strategy Funds, Inc., hereafter referred
to as the "Fund") at May 31, 2000, and the results of its operations, the
changes in its net assets and the financial highlights for each of the
fiscal periods presented, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at May 31, 2000 by
correspondence with custodians, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 19, 2000
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<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
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TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 5/31/00
--------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue
Service. The amounts shown may differ from those elsewhere in this report
because of differences between tax and financial reporting requirements.
The fund's distributions to shareholders included $5,649,000 from long-term
capital gains, subject to the 20% rate gains category.
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<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
--------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R)and the T.
Rowe Price Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals,
and other securities at a savings over full-service commission
rates. **
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe
Price.
Shareholder Reports Fund managers' reviews of their strategies
and results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund
results.
Insights Educational reports on investment strategies and
financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing,
Personal Strategy Planner, Retirees Financial Guide, and
Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price
Investment Services, Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may vary
depending on size of order.
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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
BOND FUNDS
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by
investing in the funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
39
<PAGE>
For fund and account information or to conduct transactions,
24 hours, 7 days a week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132
To open a brokerage account or obtain information, call:
1-800-638-5660
Internet address:
www.troweprice.com
Plan Account Lines for retirement plan participants: The appropriate 800 number
appears on your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
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
Invest With Confidence(R)
[LOGO OF T. ROWE PRICE]
T. Rowe Price Investment Services, Inc., Distributor.
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