Item 1. Report to Shareholders
DECEMBER 31, 2004
BLUE CHIP GROWTH FUND
Annual Report
T. ROWE PRICE
The views and opinions in this report were current as of December 31, 2004. They
are not guarantees of performance or investment results and should not be taken
as investment advice. Investment decisions reflect a variety of factors, and the
managers reserve the right to change their views about individual stocks,
sectors, and the markets at any time. As a result, the views expressed should
not be relied upon as a forecast of the fund's future investment intent. The
report is certified under the Sarbanes-Oxley Act of 2002, which requires mutual
funds and other public companies to affirm that, to the best of their knowledge,
the information in their financial reports is fairly and accurately stated in
all material respects.
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T. ROWE PRICE BLUE CHIP GROWTH FUND
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Fellow Shareholders
After a difficult summer correction, equity markets advanced in the second half
of 2004. Several events, including the resolution of the presidential election,
some moderation in energy prices, and strong corporate earnings bolstered stock
prices, especially in the fourth quarter. However, for the past six and 12
months, large-cap growth stocks continued to generate relatively mediocre
results. We believe that several factors, including attractive valuations,
strong dividend growth, and benefit from the declining dollar, could support
improved performance for large-cap growth stocks in 2005.
PERFORMANCE COMPARISON
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Periods Ended 12/31/04 6 Months 12 Months
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Blue Chip Growth Fund 6.15% 9.25%
Blue Chip Growth Fund-
Advisor Class 6.12 9.10
Blue Chip Growth Fund-R Class 5.95 8.83
S&P 500 Stock Index 7.19 10.88
Lipper Large-Cap Growth
Funds Index 5.16 7.45
Russell 1000 Growth Index 3.47 6.30
The portfolio produced solid returns that outperformed our style-specific
Russell 1000 Growth Index and the Lipper peer group of large-cap growth funds
for the past six and 12 months. However, results for both periods lagged the S&P
500 Stock Index. Advisor Class and R Class shares performed similarly but
trailed the fund's performance because of their differing fee structures. As
shown in the average annual returns table on page 12, your portfolio has
performed in line with the S&P 500 for the past 5- and 10-year periods and
handily outperformed Lipper's average annualized returns for large-cap growth
funds.
MARKET ENVIRONMENT
For the six-month period, small- and mid-cap stocks, especially value shares,
continued to outperform large-cap stocks in general, and growth-oriented stocks
in particular. Large-cap U.S. stocks fell in the third quarter as the economy
moved through a period of softer-than-expected growth and investors grew
concerned about an earnings growth slowdown. The economic deceleration was
partially attributable to rising oil prices, which neared $50 per barrel at the
end of September, higher short-term interest
rates, and uncertainty regarding the upcoming presidential election. Large-cap
growth stocks were particularly hard hit as the technology and health care
stocks corrected significantly.
Several concerns were resolved in the fourth quarter: The presidential election
was decided without controversy, energy prices retreated from record highs, and
consumer confidence, corporate spending, and corporate profits improved. Stocks
rallied in response, but several risks remain. Energy prices are volatile, and
the continuing war in Iraq and the threat of global terrorism are related
concerns. We expect interest rates to increase, but perhaps only modestly.
However, the sharp decline in the dollar raises the possibility that rates would
need to rise more than anticipated to attract foreign capital.
We believe strong corporate profit growth, the related increase in free cash
flow at many companies, and slowly improving capital expenditures could more
than offset these risks. Free cash flow margin and the level of cash on
corporate balance sheets stand at multi-decade highs while capital spending, in
our view, is unsustainably low. Dividend growth, which is more prevalent at
large-cap growth companies, could also support investment gains.
PORTFOLIO REVIEW
The portfolio's consumer discretionary holdings (our strongest sector
contributor for the past six months), and the retail area in particular,
provided several large second-half contributors. Significant overweight
positions in Target, Home Depot, and Best Buy produced excellent gains. Target's
sales of its underperforming Mervyn's division and its Marshall Fields
department store segment proved to be major positives. Home Depot has executed
well, but some are concerned that rising interest rates could hurt housing
demand and, ultimately, revenue gains. We think the company will do well in most
scenarios, and its current valuation compensates for these risks. Although
Wal-Mart was disappointing, we think it is reasonably valued and offers good
growth prospects. Consequently, we added to our position on price weakness.
(Please refer to our portfolio of investments for a complete listing of the
fund's holdings and the amount each represents of the portfolio.)
The health care sector contains several consistent-growth companies, but
performance was mixed; health care services, device manufacturers, and biotechs
continued to outperform large pharmaceutical companies. UnitedHealth Group (the
portfolio's second-largest holding) and
WellPoint, which merged with Anthem in the fourth quarter and is now the
nation's largest health insurer, both trended steadily higher over the past six
months and have been major outperformers for the portfolio for several years.
Amgen, Johnson & Johnson, and to a lesser extent Wyeth were also important
contributors. Amgen has required patience and was an inconsistent performer
until recently due to concerns over reimbursement for its anemia drug, Aranesp,
but it appears well positioned for solid growth. Note: Due to its merger with
Anthem, WellPoint is listed as our largest purchase for the past six months in
the table on page 10.
SECTOR DIVERSIFICATION
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Periods Ended 6/30/04 12/31/04
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Financials 22.0 22.7%
Information Technology 22.0 20.7
Consumer Discretionary 15.8 16.3
Health Care 16.5 15.9
Industrials and Business Services 12.1 12.1
Energy 3.8 4.4
Consumer Staples 4.5 4.3
Telecommunications Services 1.7 2.0
Materials 1.2 1.5
Utilities 0.0 0.0
Other and Reserves 0.4 0.1
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Total 100% 100%
Historical weightings reflect current industry/sector classifications.
Manufacturers with durable growth characteristics underperformed some deep
cyclicals. However, GE, Tyco International, and Danaher were solid second-half
gainers. We like each of these companies because of their first-rate management,
extraordinary free cash flow, and disciplined capital allocation processes. We
are particularly impressed with GE's improving business prospects in its energy
services and aerospace services businesses.
Only select technology stocks worked in the second half of 2004. Dell was our
top information technology contributor for the period. The company is taking
market share in its storage, server, and printer segments and continues to
generate superior free cash flow growth. Adobe Systems and Oracle were solid
performers in the software industry. We significantly added to Oracle, the
portfolio's second-largest purchase for the past six months. Internet-based
companies eBay and Google were also strong second-half gainers. Both are
positioned to produce strong growth, but their rich valuations cause us some
concern--and we have been willing to reduce positions at certain price levels.
Despite their overall lackluster third-quarter performance, financial stocks
(our second-best contributors for the second half) produced solid fourth-quarter
gains. The portfolio's returns relative to the S&P 500 benefited from our
overweight in capital markets, especially trust banks and brokers, and solid
stock selection. Franklin Resources and Legg Mason continue to gather assets and
generate solid earnings and dividend growth. Sallie Mae, Citigroup, American
Express, Bank of America, and Northern Trust each have shown improving results
in a difficult environment, and investors recognized the strength of their
franchises.
Various business services and consumer stocks were major positives for the fund.
Carnival, the leading cruise ship operator, continued to experience improving
demand and pricing, stronger earnings growth, and prodigious free cash flow.
Starbucks, which we've also held for several years, also produced solid
second-half gains.
The list of six-month detractors was dominated by technology and health care
companies. Pfizer was our largest loser. As our longtime investors know, we are
usually willing to hold a lagging stock if we feel the valuation is compelling
and the fundamentals are sound or poised to improve. However, in the past month,
three unfavorable developments emerged. The first is an aggressive patent
challenge to Lipitor by Ranbaxy (an Indian company), which could have merit.
Second, Pfizer's pain reliever, Celebrex, was shown in one study to have
unfavorable cardiovascular side effects. Celebrex will probably stay on the
market, but prescriptions filled have declined dramatically.We were fortunate to
have avoided owning Merck, which declined precipitously after its Vioxx
painkiller was removed from the market. Additionally, Lyrica--Pfizer's
replacement product for Neurontin--was deemed a controlled substance and has not
yet received approval for the treatment of epilepsy. We sold a significant
portion of our position believing these factors make achieving Pfizer's growth
goals much more difficult.
Forest Laboratories turned in disappointing results for the past six months
after being a solid performer. The company's Alzheimer's product Namenda
experienced a lackluster launch. Perhaps of greater concern, antidepressant
Lexapro, its largest-selling drug, faces a patent challenge in May 2005.
Normally, patent challenges by generic drugmakers are anticipated and frequently
defeated. However, given the importance of the product and concerns about the
entire antidepressant category, we reduced our position. We have learned in over
a decade of managing the fund that it can pay to sell all (or at least some) of
a position if there is a major risk that can be better evaluated later.
Among our technology companies, bellwethers such as Cisco Systems, Microsoft,
and Intel were poor performers. Analog semiconductor makers Maxim Integrated
Products and Analog Devices were also under pressure. We benefited, compared
with the average growth fund, by underweighting information technology,
particularly semiconductor holdings. However, we are becoming more positive
about the sector because valuations are reasonable, balance sheets are strong,
and cash generation and dividend growth are improving. Our analysts' view is
that an inventory correction will end in early 2005. Important improvements are
also taking place at tech companies such as Intel, which could result in a
greater focus on return on invested capital and better returns for shareholders.
That said, we intend to increase our tech weighting slowly because valuations
are reasonable but not compelling, there are other attractive alternatives, and
we believe a cautious but opportunistic approach is warranted.
Other significant second-half detractors included financial services leaders
American International Group (AIG) and Marsh & McLennan, gaming equipment maker
International Game Technology, and post-secondary education provider Apollo
Group. Despite various regulatory concerns surrounding AIG, the company is well
positioned for continued growth and reasonably valued in our view. Marsh &
McLennan is a more complex situation where the regulatory actions taken against
the company will likely affect profitability (but probably less than many
feared). After selling at much higher prices, we recently began adding to our
modest position. International Gaming Technology has provided mediocre
performance, and we are carefully evaluating our position given a delay in
earnings acceleration. Conversely, Apollo was a major long-term winner, and we
took some profits prior to and during its fourth-quarter decline. We think this
well-managed company should continue to prosper, and we intend to maintain a
position.
STRATEGY
We seek out companies with durable, sustainable earnings and above-average cash
flow growth. The free cash flow we prize has become even more valuable now that
tax laws are giving dividends more favorable treatment.
Additions to existing holdings such as Oracle, Wal-Mart, Ameritrade, State
Street, Intel, and Microsoft were significant enough to be included
in the 10-largest purchases for the past six months. ChevronTexaco was our
largest new purchase in the second half; it has lagged recently, is attractively
valued, and generates strong dividend growth. We are not aggressively increasing
our energy exposure and trimmed some holdings in the volatile energy services
area, but Chevron has solid fundamentals and we have successfully owned it
before. We bought Google on the initial public offering and added to it because
we think it has a strong business model and should produce solid growth for
several years. We reestablished a position in Kohl's after we saw management
changes, improvement in merchandising practices, and the addition of several
important new product lines including Estee Lauder, and because of our analysts'
conviction that it is a compelling growth idea. Elan, also a new position, is
one of the few foreign stocks we own; it is based in Ireland, and we own
American Depository Receipts or ADRs. The company received FDA approval for
Antegren, now called Tysabri, a product that appears to be a significant
improvement in the treatment of multiple sclerosis. The company has several
other products and compounds in late-stage development, but Tysabri alone could
drive sustainable earnings growth.
Our largest sale was a reduction in Pfizer for the reasons outlined earlier. We
also sharply reduced our holding in Fannie Mae because we favor other ideas in
the financial area. Fannie Mae has had to raise significant amounts of capital
and will not have audited financial statements for an extended period. Research
in Motion, Guidant, 3M, and Symantec were other significant second-half
eliminations. Research in Motion, the leading maker of BlackBerry wireless
devices, had been an extraordinary performer. Concerns about the validity of the
company's patents (as well as its extended valuation) caused us to sell. Guidant
is being acquired by Johnson & Johnson, which limits its upside and drove our
sale. Symantec had generated good returns over several years, but announced a
merger with Veritas Software. Since we also owned Veritas, we elected to
eliminate Symantec.
OUTLOOK
In our last letter, we pointed out that many investors had become pessimistic
and that some concerns could recede over time. In fact, energy prices have
moderated, the election was decided without a protracted dispute, and consumer
confidence and corporate earnings are solid. However, geopolitical risks such as
terrorism will be a concern for decades
to come, but on balance may be improving. There is a risk of a continued sharp
decline in the dollar, but this isn't likely in our view.
Finally, there is moderate valuation risk in the market because stocks have
rebounded sharply and are somewhat more expensive. Earnings continue to march
ahead, however, which could ultimately reduce this risk. We believe
high-quality, consistent-growth companies that have lagged are attractive at
current prices. Ultimately, there continues to be a solid case for investing in
U.S. stocks for the following reasons:
1. Earnings growth remains strong at many high-quality U.S. companies, many of
which do not need a robust economic recovery to produce strong profit
growth.
2. Valuations have increased as the market has rallied. However, the stocks of
many consistent-growth companies moved up only moderately and still remain
reasonably valued, particularly because earnings have maintained and
enhanced through the downturn.
3. Companies have reduced expenses significantly. Consequently, a pickup in
revenue growth could result in strong profit growth.
4. Many of our holdings generate significant free cash flow and free cash flow
margins are at multi-decade highs. Shareholder-oriented management teams can
use this cash to pay dividends--which now receive more favorable tax
treatment--repurchase shares, or make value-added acquisitions.
As always, we will strive to enhance returns while managing risk by investing in
quality companies with durable, sustainable earnings and cash flow growth. We
appreciate your continued confidence in this endeavor.
Respectfully submitted,
Larry J. Puglia
President and chairman of the Investment Advisory Committee
January 14, 2005
The committee chairman has day-to-day responsibility for managing the portfolio
and works with committee members in developing and executing the fund's
investment program.
RISKS OF STOCK INVESTING
The fund's share price can fall because of weakness in the stock markets, a
particular industry, or specific holdings. Stock markets can decline for many
reasons, including adverse political or economic developments, changes in
investor psychology, or heavy institutional selling. The prospects for an
industry or company may deteriorate because of a variety of factors, including
disappointing earnings or changes in the competitive environment. In addition,
the investment manager's assessment of companies held in a fund may prove
incorrect, resulting in losses or poor performance even in rising markets.
GLOSSARY
Dividend yield: The annual dividend of a stock divided by the stock's price.
Free cash flow: The excess cash a company is generating from its operations that
can be taken out of the business for the benefit of shareholders, such as
dividends, share repurchases, investments, and acquisitions.
Lipper indexes: Fund benchmarks that consist of a small number (10 to 30) of the
largest mutual funds in a particular category as tracked by Lipper Inc.
Price/book ratio: A valuation measure that compares a stock's market price to
its book value, i.e., the company's net worth divided by the number of
outstanding shares.
Price/earnings ratio (P/E): A valuation measure calculated by dividing the price
of a stock by its current or projected earnings per share. This ratio gives
investors an idea of how much they are paying for current or future earnings
power.
Russell 1000 Growth Index: A market-capitalization weighted index of those firms
in the Russell 1000 with higher price-to-book ratios and higher forecasted
growth values.
S&P 500 Stock Index: An unmanaged index that tracks the stocks of 500 primarily
large-cap U.S. companies.
T. ROWE PRICE BLUE CHIP GROWTH FUND
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PORTFOLIO HIGHLIGHTS
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TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
12/31/04
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Citigroup 3.5%
UnitedHealth Group 3.4
Microsoft 3.1
GE 3.1
Danaher 2.1
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American International Group 2.1
Dell 2.0
Tyco International 1.9
WellPoint 1.9
State Street 1.8
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Wal-Mart 1.8
Target 1.7
Amgen 1.6
Home Depot 1.6
Cisco Systems 1.5
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UPS 1.4
Pfizer 1.4
Carnival 1.4
American Express 1.4
Schlumberger 1.3
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Johnson & Johnson 1.3
International Game Technology 1.2
Yahoo! 1.2
eBay 1.2
Best Buy 1.2
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Total 46.1%
T. ROWE PRICE BLUE CHIP GROWTH FUND
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PORTFOLIO HIGHLIGHTS
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MAJOR PORTFOLIO CHANGES
Listed in descending order of size
6 Months Ended 12/31/04
Largest Purchases Largest Sales
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WellPoint * Pfizer
Oracle Fannie Mae
Wal-Mart Research In Motion ***
ChevronTexaco ** EchoStar Communications
AmeriTrade Forest Laboratories
State Street Coca-Cola
Google ** Lexmark International
Intel Guidant ***
Kohl's ** St. Paul Companies
Microsoft 3M ***
* Merger
** Position added
*** Position eliminated
T. ROWE PRICE BLUE CHIP GROWTH FUND
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GROWTH OF $10,000
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This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
[Graphic Omitted]
BLUE CHIP GROWTH FUND
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As of 12/31/04
Blue Chip Growth Fund $ 31,129
S&P 500 Stock Index $ 31,258
Lipper Large-Cap Growth Funds Index $ 22,900
S&P 500 Stock Lipper Large-Cap Blue Chip
Index Growth Funds Index Growth Fund
12/94 $10,000 $10,000 $10,000
12/95 13,758 13,492 13,790
12/96 16,917 16,266 17,617
12/97 22,561 20,754 22,472
12/98 29,008 28,323 28,953
12/99 35,112 38,185 34,743
12/00 31,915 30,671 33,865
12/01 28,122 23,350 28,983
12/02 21,907 16,786 21,960
12/03 28,190 21,312 28,494
12/04 31,258 22,900 31,129
Note: Performance for Advisor and R Class shares will vary due to their
differing fee structures. See returns table on the next page.
T. ROWE PRICE BLUE CHIP GROWTH FUND
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AVERAGE ANNUAL COMPOUND TOTAL RETURN
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This table shows how the fund and its benchmarks would have performed if their
actual (or cumulative) returns for the periods shown had been earned at a
constant rate.
Since Inception
Periods Ended 12/31/04 1 Year 5 Years 10 Years Inception Date
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Blue Chip Growth Fund 9.25% -2.17% 12.03% - -
S&P 500 Stock Index 10.88 -2.30 12.07 - -
Lipper Large-Cap
Growth Funds Index 7.45 -9.72 8.64 - -
Blue Chip Growth Fund-
Advisor Class 9.10 - - -3.53% 3/31/00
S&P 500 Stock Index 10.88 - - -2.88
Lipper Large-Cap Growth
Funds Index 7.45 - - -11.67
Blue Chip Growth Fund-
R Class 8.83 - - 20.24 9/30/02
S&P 500 Stock Index 10.88 - - 21.40
Lipper Large-Cap Growth
Funds Index 7.45 - - 16.99
Current performance may be higher or lower than the quoted past performance,
which cannot guarantee future results. Share price, principal value, and return
will vary, and you may have a gain or loss when you sell your shares. For the
most recent month-end performance information, please visit our Web site
(troweprice.com) or contact a T. Rowe Price representative at 1-800-225-5132.
Average annual total return figures include changes in principal value,
reinvested dividends, and capital gain distributions. Returns do not reflect
taxes that the shareholder may pay on fund distributions or the redemption of
fund shares. When assessing performance, investors should consider both short-
and long-term returns.
T. ROWE PRICE BLUE CHIP GROWTH FUND
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FUND EXPENSE EXAMPLE
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As a mutual fund shareholder, you may incur two types of costs: (1) transaction
costs such as redemption fees or sales loads and (2) ongoing costs, including
management fees, distribution and service (12b-1) fees, and other fund expenses.
The following example is intended to help you understand your ongoing costs (in
dollars) of investing in the fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 invested at the beginning of the most recent six-month period and held
for the entire period.
Please note that the fund has three share classes: The original share class
("investor class") charges no distribution and service (12b-1) fee; Advisor
Class shares are offered only through unaffiliated brokers and other financial
intermediaries and charge a 0.25% 12b-1 fee; R Class shares are available to
retirement plans serviced by intermediaries and charge a 0.50% 12b-1 fee. Each
share class is presented separately in the table.
Actual Expenses
The first line of the following table ("Actual") provides information about
actual account values and expenses based on the fund's actual returns. You may
use the information in this line, together with your account balance, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
Hypothetical Example for Comparison Purposes
The information on the second line of the table ("Hypothetical") is based on
hypothetical account values and expenses derived from the fund's actual expense
ratio and an assumed 5% per year rate of return before expenses (not the fund's
actual return). You may compare the ongoing costs of investing in the fund with
other funds by contrasting this 5% hypothetical example and the 5% hypothetical
examples that appear in the shareholder reports of the other funds. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period.
Note: T. Rowe Price charges an annual small-account maintenance fee of $10,
generally for accounts with less than $2,000 ($500 for UGMA/UTMA). The fee is
waived for any investor whose T. Rowe Price mutual fund accounts total $25,000
or more, accounts employing automatic investing, and IRAs and other retirement
plan accounts that utilize a prototype plan sponsored by T. Rowe Price (although
a separate custodial or administrative fee may apply to such accounts). This fee
is not included in the accompanying table. If you are subject to the fee, keep
it in mind when you are estimating the ongoing expenses of investing in the fund
and when comparing the expenses of this fund with other funds.
You should also be aware that the expenses shown in the table highlight only
your ongoing costs and do not reflect any transaction costs, such as redemption
fees or sales loads. Therefore, the second line of the table is useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. To the extent a fund charges transaction costs,
however, the total cost of owning that fund is higher.
T. ROWE PRICE BLUE CHIP GROWTH FUND
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Beginning Ending Expenses Paid
Account Value Account Value During Period*
7/1/04 12/31/04 7/1/04 to 12/31/04
- --------------------------------------------------------------------------------
Investor Class
Actual $1,000 $1,061.50 $4.51
Hypothetical (assumes 5%
return before expenses) 1,000 1,020.76 4.42
Advisor Class
Actual 1,000 1,061.20 5.03
Hypothetical (assumes 5%
return before expenses) 1,000 1,020.26 4.93
R Class
Actual 1,000 1,059.50 6.73
Hypothetical (assumes 5%
return before expenses) 1,000 1,018.60 6.60
*Expenses are equal to the fund's annualized expense ratio for the six-month
period, multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half year (184) divided by the
days in the year (366) to reflect the half-year period. The annualized expense
ratio of the investor class was 0.87%, the Advisor Class was 0.97%, and the R
Class was 1.30%.
T. ROWE PRICE BLUE CHIP GROWTH FUND
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FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
Investor Class
Year
Ended
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
NET ASSET VALUE
Beginning of period $ 28.45 $ 21.95 $ 28.97 $ 33.85 $ 36.34
Investment activities
Net investment income (loss) 0.16 0.02 - (0.02) (0.03)
Net realized and
unrealized gain (loss) 2.47 6.51 (7.02) (4.86) (0.84)
Total from
investment activities 2.63 6.53 (7.02) (4.88) (0.87)
Distributions
Net investment income (0.16) (0.03) - - -
Net realized gain - - - - (1.62)
Total distributions (0.16) (0.03) - - (1.62)
NET ASSET VALUE
End of period $ 30.92 $ 28.45 $ 21.95 $ 28.97 $ 33.85
------------------------------------------------
Ratios/Supplemental Data
Total return^ 9.25% 29.75% (24.23)% (14.42)% (2.53)%
Ratio of total expenses to
average net assets 0.88% 0.95% 0.96% 0.96% 0.91%
Ratio of net investment
income (loss) to average
net assets 0.56% 0.10% 0.00% (0.06)% (0.09)%
Portfolio turnover rate 31.9% 32.6% 46.2% 48.3% 50.9%
Net assets, end of period
(in millions) $ 7,236 $ 6,300 $ 4,482 $ 6,242 $ 7,113
^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.
The accompanying notes are an integral part of these financial statements.
T. ROWE PRICE BLUE CHIP GROWTH FUND
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FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
Advisor Class
Year 3/31/00
Ended Through
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
NET ASSET VALUE
Beginning of period $ 28.48 $ 21.97 $ 29.02 $ 33.91 $ 38.63
Investment activities
Net investment income (loss) 0.13 0.02 - (0.01) 0.02*
Net realized and
unrealized gain (loss) 2.46 6.52 (7.04) (4.88) (3.12)
Total from
investment activities 2.59 6.54 (7.04) (4.89) (3.10)
Distributions
Net investment income (0.14) (0.03) - - -
Net realized gain - - - - (1.62)
Tax return of capital - - (0.01) - -
Total distributions (0.14) (0.03) (0.01) - (1.62)
NET ASSET VALUE
End of period $ 30.93 $ 28.48 $ 21.97 $ 29.02 $ 33.91
------------------------------------------------
Ratios/Supplemental Data
Total return^ 9.10% 29.77% (24.26)% (14.42)% (8.15)%
Ratio of total expenses to
average net assets 0.98% 0.98% 0.99% 0.99% 0.69%!
Ratio of net investment
income (loss) to average
net assets 0.49% 0.07% (0.01)% (0.04)% 0.25%!
Portfolio turnover rate 31.9% 32.6% 46.2% 48.3% 50.9%!
Net assets, end of period
(in thousands) $996,280 $769,970 $538,571 $469,089 $ 2,831
*The amount presented is calculated pursuant to a methodology prescribed by the
Securities and Exchange Commission for a share outstanding throughout the
period. The per-share amounts for the investment activities of the Advisor
Class may be inconsistent with the aggregate amounts presented elsewhere in the
financial statements for the fund, due to the partial year of operations for
the Advisor Class and the timing of sales and redemptions of shares in relation
to fluctuating market values for the investment portfolio.
^Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
!Annualized
The accompanying notes are an integral part of these financial statements.
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
R Class
Year 9/30/02
Ended Through
12/31/04 12/31/03 12/31/02
NET ASSET VALUE
Beginning of period $ 28.31 $ 21.93 $ 20.37
Investment activities
Net investment income (loss) 0.02 (0.01)* (0.02)*
Net realized and unrealized
gain (loss) 2.48 6.42 1.58**
Total from investment activities 2.50 6.41 1.56
Distributions
Net investment income (0.08) (0.03) -
NET ASSET VALUE
End of period $ 30.73 $ 28.31 $ 21.93
----------------------------------------
Ratios/Supplemental Data
Total return^ 8.83% 29.23%* 7.66%*
Ratio of total expenses to
average net assets 1.26% 1.35%* 1.35%!*
Ratio of net investment
income (loss) to average
net assets 0.25% (0.25%)* (0.28%)!*
Portfolio turnover rate 31.9% 32.6% 46.2%!
Net assets, end of period
(in thousands) $31,211 $ 1,509 $ 108
* Excludes expenses in excess of a 1.35% contractual expense limitation in
effect through 4/30/06.
** The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout the
period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund shares in
relation to fluctuating market values for the investment portfolio.
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
December 31, 2004
PORTFOLIO OF INVESTMENTS (1) Shares Value
- --------------------------------------------------------------------------------
(Cost and value in $ 000s)
COMMON STOCKS 99.9%
CONSUMER DISCRETIONARY 16.3%
Automobiles 0.7%
Harley-Davidson 890,000 54,068
54,068
Hotels, Restaurants & Leisure 3.7%
Carnival 1,960,000 112,955
International Game Technology 2,980,000 102,452
Marriott, Class A 520,000 32,749
McDonald's 830,000 26,610
Starbucks * 460,000 28,686
303,452
Household Durables 0.3%
Fortune Brands 310,000 23,926
23,926
Internet & Catalog Retail 1.4%
Amazon.com * 340,000 15,058
eBay * 860,000 100,001
115,059
Media 5.4%
Clear Channel Communications 610,000 20,429
Comcast, Class A * 1,330,000 43,677
EchoStar Communications, Class A 950,000 31,578
Liberty Media, Class A * 2,200,000 24,156
McGraw-Hill 25,000 2,289
News Corp, Class A * 3,300,000 61,578
Omnicom 220,000 18,550
Scripps, Class A 950,000 45,866
Time Warner * 4,510,000 87,674
Viacom, Class B 2,450,000 89,156
Washington Post, Class B 23,000 22,609
447,562
Multiline Retail 2.0%
Kohl's * 575,000 28,273
Target 2,635,000 136,835
165,108
Specialty Retail 2.8%
Best Buy 1,670,000 99,232
Home Depot 3,130,000 133,776
233,008
Total Consumer Discretionary 1,342,183
CONSUMER STAPLES 4.3%
Beverages 0.9%
Coca-Cola 300,000 12,489
PepsiCo 1,180,000 61,596
74,085
Food & Staples Retailing 2.3%
CVS 160,000 7,211
Sysco 910,000 34,735
Wal-Mart 2,800,000 147,896
189,842
Household Products 0.4%
Procter & Gamble 640,000 35,251
35,251
Personal Products 0.2%
Gillette 310,000 13,882
13,882
Tobacco 0.5%
Altria Group 665,000 40,632
40,632
Total Consumer Staples 353,692
ENERGY 4.4%
Energy Equipment & Services 3.8%
Baker Hughes 2,100,000 89,607
BJ Services 700,000 32,578
Schlumberger 1,580,000 105,781
Smith International * 1,300,000 70,733
Transocean * 340,000 14,412
313,111
Oil & Gas 0.6%
ChevronTexaco 640,000 33,606
ExxonMobil 130,000 6,664
Murphy Oil 130,000 10,459
50,729
Total Energy 363,840
FINANCIALS 22.7%
Capital Markets 9.4%
AmeriTrade * 4,000,000 56,880
Bank of New York 1,120,000 37,430
Charles Schwab 2,620,000 31,335
Franklin Resources 1,330,000 92,635
Goldman Sachs 730,000 75,949
Legg Mason 1,090,000 79,853
Mellon Financial 2,100,000 65,331
Merrill Lynch 1,400,000 83,678
Morgan Stanley 640,000 35,533
Northern Trust 1,450,000 70,441
State Street 3,070,000 150,799
779,864
Commercial Banks 2.7%
Bank of America 2,000,000 93,980
U.S. Bancorp 1,900,000 59,508
Wells Fargo 1,150,000 71,473
224,961
Consumer Finance 2.4%
American Express 2,000,000 112,740
SLM Corporation 1,510,000 80,619
193,359
Diversified Financial Services 3.5%
Citigroup 6,000,000 289,080
289,080
Insurance 3.9%
American International Group 2,645,000 173,697
Hartford Financial Services 1,150,000 79,706
Marsh & McLennan 1,330,000 43,757
St. Paul Companies 640,000 23,725
320,885
Thrifts & Mortgage Finance 0.8%
Fannie Mae 200,000 14,242
Freddie Mac 700,000 51,590
65,832
Total Financials 1,873,981
HEALTH CARE 15.9%
Biotechnology 3.3%
Amgen * 2,100,000 134,715
Biogen Idec * 700,000 46,627
Genentech * 500,000 27,220
Gilead Sciences * 1,760,000 61,582
270,144
Health Care Equipment & Supplies 2.3%
Biomet 445,000 19,309
Boston Scientific * 925,000 32,884
Medtronic 1,750,000 86,922
St. Jude Medical * 440,000 18,449
Stryker 640,000 30,880
188,444
Health Care Providers & Services 5.3%
UnitedHealth Group 3,200,000 281,696
WellPoint * 1,375,000 158,125
439,821
Pharmaceuticals 5.0%
Abbott Laboratories 680,000 31,722
Elan ADR * 1,180,000 32,155
Eli Lilly 200,000 11,350
Forest Laboratories * 640,000 28,710
Johnson & Johnson 1,630,000 103,375
Pfizer 4,300,000 115,627
Teva Pharmaceutical ADR 1,330,000 39,714
Wyeth 1,300,000 55,367
418,020
Total Health Care 1,316,429
INDUSTRIALS & BUSINESS SERVICES 12.1%
Aerospace & Defense 1.6%
General Dynamics 300,000 31,380
Honeywell International 1,130,000 40,013
Lockheed Martin 925,000 51,384
Rockwell Collins 170,000 6,705
129,482
Air Freight & Logistics 1.4%
UPS, Class B 1,360,000 116,225
116,225
Commercial Services & Supplies 1.3%
Apollo Group, Class A * 665,000 53,672
Cendant 1,600,000 37,408
ChoicePoint * 300,000 13,797
104,877
Industrial Conglomerates 5.0%
GE 6,950,000 253,675
Tyco International 4,500,000 160,830
414,505
Machinery 2.8%
Danaher 3,070,000 176,249
Deere 750,000 55,800
232,049
Total Industrials & Business Services 997,138
INFORMATION TECHNOLOGY 20.7%
Communications Equipment 3.2%
Cisco Systems * 6,500,000 125,450
Corning * 1,900,000 22,363
Juniper Networks * 1,720,000 46,767
Nokia ADR 790,000 12,379
QUALCOMM 1,460,000 61,904
268,863
Computers & Peripherals 2.6%
Dell * 3,950,000 166,453
IBM 235,000 23,167
Lexmark International * 170,000 14,450
QLogic * 200,000 7,346
211,416
Internet Software & Services 2.2%
Google, Class A * 200,000 38,620
IAC/InterActiveCorp * 1,360,000 37,563
Yahoo! * 2,710,000 102,113
178,296
IT Services 2.1%
Accenture, Class A * 1,000,000 27,000
Affiliated Computer Services, Class A * 790,000 47,550
Automatic Data Processing 550,000 24,393
First Data 950,000 40,413
Fiserv * 860,000 34,563
173,919
Semiconductor & Semiconductor Equipment 4.5%
Analog Devices 1,760,000 64,979
Intel 4,030,000 94,262
KLA-Tencor * 280,000 13,042
Maxim Integrated Products 2,140,000 90,715
Microchip Technology 300,000 7,998
Texas Instruments 1,760,000 43,331
Xilinx 2,100,000 62,265
376,592
Software 6.1%
Adobe Systems 1,030,000 64,622
Electronic Arts * 25,000 1,542
Intuit * 1,150,000 50,612
Microsoft 9,640,000 257,484
Oracle * 4,060,000 55,703
SAP ADR 1,000,000 44,210
VERITAS Software * 950,000 27,123
501,296
Total Information Technology 1,710,382
MATERIALS 1.5%
Chemicals 0.2%
Monsanto 100,000 5,555
Potash Corp./Saskatchewan 130,000 10,798
16,353
Metals & Mining 1.3%
BHP Billiton (AUD) 3,400,000 40,689
Nucor 1,300,000 68,042
108,731
Total Materials 125,084
TELECOMMUNICATION SERVICES 2.0%
Diversified Telecommunication Services 0.3%
Telus 820,000 23,698
23,698
Wireless Telecommunication Services 1.7%
America Movil ADR, Series L 200,000 10,470
Nextel Communications, Class A * 3,300,000 99,000
Vodafone ADR 1,300,000 35,594
145,064
Total Telecommunication Services 168,762
Total Common Stocks (Cost $6,116,906) 8,251,491
SHORT-TERM INVESTMENTS 0.8%
Money Market Fund 0.8%
T. Rowe Price Reserve Investment Fund, 2.28% #! 69,489,083 69,489
Total Short-Term Investments (Cost $69,489) 69,489
Total Investments in Securities
100.7% of Net Assets (Cost $6,186,395) $8,320,980
----------
(1) Denominated in U.S. dollars unless otherwise noted
# Seven-day yield
* Non-income producing
! Affiliated company - See Note 4
ADR American Depository Receipts
AUD Australian dollar
The accompanying notes are an integral part of these financial statements.
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
December 31, 2004
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
(In thousands except shares and per share amounts)
Assets
Investments in securities, at value
Affiliated companies (cost $69,489) $ 69,489
Non-affiliated companies (cost $6,116,906) 8,251,491
Total investments in securities 8,320,980
Other assets 31,713
Total assets 8,352,693
Liabilities
Total liabilities 89,379
NET ASSETS $ 8,263,314
---------------
Net Assets Consist of:
Undistributed net realized gain (loss) $ (1,059,088)
Net unrealized gain (loss) 2,134,587
Paid-in-capital applicable to 267,259,944 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares authorized 7,187,815
NET ASSETS $ 8,263,314
---------------
NET ASSET VALUE PER SHARE
Investor Class
($7,235,823,226/234,034,238 shares outstanding) $ 30.92
---------------
Advisor Class
($996,279,902/32,209,991 shares outstanding) $ 30.93
---------------
R Class
($31,210,839/1,015,715 shares outstanding) $ 30.73
---------------
The accompanying notes are an integral part of these financial statements.
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
12/31/04
Investment Income (Loss)
Income
Dividend $ 108,013
Securities lending 86
Total income 108,099
Expenses
Investment management 46,135
Shareholder servicing
Investor Class 16,752
Advisor Class 831
R Class 65
Rule 12b-1 fees
Advisor Class 2,050
R Class 73
Prospectus and shareholder reports
Investor Class 333
Advisor Class 13
R Class 9
Custody and accounting 317
Registration 109
Legal and audit 38
Directors 16
Miscellaneous 87
Reductions/repayments of fees and expenses
Expenses (reimbursed by) repaid to manager 1
Total expenses 66,829
Expenses paid indirectly (2)
Net expenses 66,827
Net investment income (loss) 41,272
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 110,207
Foreign currency transactions (139)
Net realized gain (loss) 110,068
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
12/31/04
Change in net unrealized gain (loss)
Securities 542,909
Other assets and liabilities
denominated in foreign currencies 2
Change in net unrealized gain (loss) 542,911
Net realized and unrealized gain (loss) 652,979
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 694,251
---------------
The accompanying notes are an integral part of these financial statements.
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
12/31/04 12/31/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 41,272 $ 5,726
Net realized gain (loss) 110,068 (184,521)
Change in net unrealized gain (loss) 542,911 1,761,118
Increase (decrease) in net assets
from operations 694,251 1,582,323
Distributions to shareholders
Net investment income
Investor Class (37,617) (6,682)
Advisor Class (4,363) (808)
R Class (78) (1)
Decrease in net assets from distributions (42,058) (7,491)
Capital share transactions *
Shares sold
Investor Class 1,522,583 1,289,603
Advisor Class 252,576 196,170
R Class 33,064 1,460
Distributions reinvested
Investor Class 36,586 6,546
Advisor Class 4,283 799
R Class 78 1
Shares redeemed
Investor Class (1,197,047) (883,927)
Advisor Class (106,863) (134,017)
R Class (5,767) (216)
Increase (decrease) in net assets from
capital share transactions 539,493 476,419
Net Assets
Increase (decrease) during period 1,191,686 2,051,251
Beginning of period 7,071,628 5,020,377
End of period $ 8,263,314 $ 7,071,628
----------- -----------
(Including undistributed net investment income
of $0 at 12/31/04 and $0 at 12/31/03)
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
12/31/04 12/31/03
*Share information
Shares sold
Investor Class 52,710 52,766
Advisor Class 8,687 8,044
R Class 1,160 56
Distributions reinvested
Investor Class 1,191 238
Advisor Class 139 29
R Class 3 -
Shares redeemed
Investor Class (41,291) (35,804)
Advisor Class (3,656) (5,549)
R Class (200) (8)
Increase (decrease) in shares outstanding 18,743 19,772
The accompanying notes are an integral part of these financial statements.
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
December 31, 2004
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Blue Chip Growth Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 (the 1940 Act) as a diversified, open-end
management investment company. The fund seeks to provide long-term capital
growth. Income is a secondary objective. The fund has three classes of shares:
the Blue Chip Growth Fund original share class, referred to in this report as
the Investor Class, offered since June 30, 1993, Blue Chip Growth Fund--Advisor
Class (Advisor Class), offered since March 31, 2000, and Blue Chip Growth
Fund--R Class (R Class), offered since September 30, 2002. Advisor Class shares
are sold only through unaffiliated brokers and other unaffiliated financial
intermediaries, and R Class shares are available to retirement plans serviced by
intermediaries. The Advisor Class and R Class each operate under separate
Board-approved Rule 12b-1 plans, pursuant to which each class compensates
financial intermediaries for distribution, shareholder servicing, and/or certain
administrative services. Each class has exclusive voting rights on matters
related solely to that class, separate voting rights on matters that relate to
all classes, and, in all other respects, the same rights and obligations as the
other classes.
The accompanying financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America, which
require the use of estimates made by fund management.
Valuation
The fund values its investments and computes its net asset value per share at
the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day
that the NYSE is open for business. Equity securities listed or regularly traded
on a securities exchange or in the over-the-counter market are valued at the
last quoted sale price or, for certain markets, the official closing price at
the time the valuations are made, except for OTC Bulletin Board securities,
which are valued at the mean of the latest bid and asked prices. A security that
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 are valued at the mean of the latest
bid and asked prices for domestic securities and the last quoted sale price for
international securities.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation.
Other investments, including restricted securities, and those 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 the T. Rowe Price
Valuation Committee, established by the fund's Board of Directors.
Most foreign markets close before the close of trading on the NYSE. If the fund
determines that developments between the close of a foreign market and the close
of the NYSE will, in its judgment, materially affect the value of some or all of
its portfolio securities, which in turn will affect the fund's share price, the
fund will adjust the previous closing prices to reflect the fair value of the
securities as of the close of the NYSE, as determined in good faith by the T.
Rowe Price Valuation Committee, established by the fund's Board of Directors. A
fund may also fair value securities in other situations, such as when a
particular foreign market is closed but the fund is open. In deciding whether to
make fair value adjustments, the fund reviews a variety of factors, including
developments in foreign markets, the performance of U.S. securities markets, and
the performance of instruments trading in U. S. markets that represent foreign
securities and baskets of foreign securities. The fund uses outside pricing
services to provide it with closing market prices and information used for
adjusting those prices. The fund cannot predict how often it will use closing
prices and how often it will adjust those prices. As a means of evaluating its
fair value process, the fund routinely compares closing market prices, the next
day's opening prices in the same markets, and adjusted prices.
Currency Translation
Assets, including investments, and liabilities denominated in foreign currencies
are translated into U.S. dollar values each day at the prevailing exchange rate,
using the mean of the bid and asked prices of such currencies against U.S.
dollars as quoted by a major bank. Purchases and sales of securities, income,
and expenses are translated into U.S. dollars at the prevailing exchange rate on
the date of the transaction. The effect of changes in foreign currency exchange
rates on realized and unrealized security gains and losses is reflected as a
component of security gains and losses.
Class Accounting
The Advisor Class and R Class each pay distribution, shareholder servicing,
and/or certain administrative expenses in the form of Rule 12b-1 fees, in an
amount not exceeding 0.25% and 0.50%, respectively, of the class's average daily
net assets. Shareholder servicing, prospectus, and shareholder report expenses
incurred by each class are charged directly to the class to which they relate.
Expenses common to all classes, investment income, and realized and unrealized
gains and losses are allocated to the classes based upon the relative daily net
assets of each class.
Rebates and Credits
Subject to best execution, the fund may direct certain security trades to
brokers who have agreed to rebate a portion of the related brokerage commission
to the fund in cash. Commission rebates are included in realized gain on
securities in the accompanying financial statements and totaled $373,000 for the
year ended December 31, 2004. Additionally, the fund earns credits on
temporarily uninvested cash balances at the custodian that reduce the fund's
custody charges. Custody expense in the accompanying financial statements is
presented before reduction for credits, which are reflected as expenses paid
indirectly.
In-Kind Redemptions
In certain circumstances, the fund may distribute portfolio securities rather
than cash as payment for a redemption of fund shares (in-kind redemption). For
financial reporting purposes, the fund recognizes a gain on in-kind redemptions
to the extent the value of the distributed securities on the date of redemption
exceeds the cost of those securities. Gains and losses realized on in-kind
redemptions ar not recognized for tax purposes, and are reclassified from
undistributed realized gain (loss) to paid-in capital. During the year ended
December 31, 2004, the fund realized $4,445,000 of net gain on $8,769,000 of
in-kind redemptions.
Investment Transactions, Investment Income, and Distributions
Income and expenses are recorded on the accrual basis. Dividends received from
mutual fund investments are reflected as dividend income; capital gain
distributions are reflected as realized gain/loss. Dividend income and capital
gain distributions are recorded on the ex-dividend date. Investment transactions
are accounted for on the trade date. Realized gains and losses are reported on
the identified cost basis. Distributions to shareholders are recorded on the
ex-dividend date. Income distributions are declared and paid by each class on an
annual basis. Capital gain distributions, if any, are declared and paid by the
fund, typically on an annual basis. During the year ended December 31, 2004, the
fund received a one-time special dividend on a security held in its portfolio
(Microsoft Corp.). The dividend, which totaled $29,075,000, represents 27% of
dividend income reflected in the accompanying financial statements and is not
expected to recur.
Other
In the normal course of business, the fund enters into contracts that provide
general indemnifications. The fund's maximum exposure under these arrangements
is dependent on claims that may be made against the fund in the future and,
therefore, cannot be estimated; however, based on experience, the risk of
material loss from such claims is considered remote.
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. It
receives as collateral cash and U.S. government securities valued at 102% to
105% of the value of the securities on loan. Cash collateral is invested in a
money market pooled trust managed by the fund's lending agent in accordance with
investment guidelines approved by fund management. Collateral is maintained over
the life of the loan in an amount not less than the value of loaned securities,
as determined at the close of fund business each day; any additional collateral
required due to changes in security values is delivered to the fund the next
business day. 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 the securities. Securities lending revenue
recognized by the fund consists of earnings on invested collateral and borrowing
fees, net of any rebates to the borrower and compensation to the lending agent.
At December 31, 2004, there were no securities on loan.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $2,898,423,000 and $2,393,386,000, respectively, for the year ended
December 31, 2004.
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 under Subchapter M of the
Internal Revenue Code and distribute to shareholders all of its taxable income
and gains. Federal income tax regulations differ from generally accepted
accounting principles; therefore, distributions determined in accordance with
tax regulations may differ significantly in amount or character from net
investment income and realized gains for financial reporting purposes. Financial
reporting records are adjusted for permanent book/tax differences to reflect tax
character. Financial records are not adjusted for temporary differences.
Distributions during the year ended December 31, 2004 totaled $42,058,000 and
were characterized as ordinary income for tax purposes. At December 31, 2004,
the tax-basis components of net assets were as follows:
- --------------------------------------------------------------------------------
Unrealized appreciation $2,193,589,000
Unrealized depreciation (59,002,000)
Net unrealized appreciation (depreciation) 2,134,587,000
Capital loss carryforwards (1,059,088,000)
Paid-in capital 7,187,815,000
Net assets $8,263,314,000
--------------
The fund intends to retain realized gains to the extent of available capital
loss carryforwards for federal income tax purposes. During the year ended
December 31, 2004, the fund utilized $102,375,000 of capital loss carryforwards.
As of December 31, 2004, the fund had $382,759,000 of capital loss carryforwards
that expire in 2009, $433,036,000 that expire in 2010, and $243,293,000 that
expire in 2011.
For the year ended December 31, 2004, the fund recorded the following permanent
reclassifications to reflect tax character. Reclassifications to paid-in capital
relate primarily to redemptions in kind and per share rounding of distributions.
Results of operations and net assets were not affected by these
reclassifications.
- --------------------------------------------------------------------------------
Undistributed net investment income $ 786,000
Undistributed net realized gain (4,257,000)
Paid-in capital 3,471,000
At December 31, 2004, the cost of investments for federal income tax purposes
was $6,186,395,000.
NOTE 4 - RELATED PARTY TRANSACTIONS
The fund is managed by T. Rowe Price Associates, Inc. (the manager or Price
Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. The
investment management agreement between the fund and the manager provides for an
annual investment management fee, which is computed daily and paid monthly. The
fee consists of an individual fund fee, equal to 0.30% of the fund's average
daily net assets, and the fund's pro-rata share of a group fee. The group fee is
calculated based on the combined net assets of certain mutual funds sponsored by
Price Associates (the group) applied to a graduated fee schedule, with rates
ranging from 0.48% for the first $1 billion of assets to 0.295% for assets in
excess of $120 billion. The fund's portion of the group fee is determined by the
ratio of its average daily net assets to those of the group. At December 31,
2004, the effective annual group fee rate was 0.31%, and investment management
fee payable totaled $4,248,000.
The Advisor Class and R Class are also subject to a contractual expense
limitation through the limitation dates indicated in the table below. During the
limitation period, the manager is required to waive its management fee and
reimburse a class for any expenses, excluding interest, taxes, brokerage
commissions, and extraordinary expenses, that would otherwise cause the class's
ratio of total expenses to average net assets (expense ratio) to exceed its
expense limitation. Through the repayment date, each class is required to repay
the manager for expenses previously reimbursed and management fees waived to the
extent the class's net assets have grown or expenses have declined sufficiently
to allow repayment without causing the class's expense ratio to exceed its
expense limitation.
- --------------------------------------------------------------------------------
Advisor Class R Class
Expense Limitation 1.05% 1.35%
Limitation Date 4/30/06 4/30/06
Repayment Date 4/30/08 4/30/08
For the year ended December 31, 2004, each class operated below its expense
limitation.
In addition, the fund has entered into service agreements with Price Associates
and two wholly owned subsidiaries of Price Associates (collectively, Price).
Price Associates computes the daily share prices and maintains the financial
records of the fund. T. Rowe Price Services, Inc., provides shareholder and
administrative services in its capacity as the fund's transfer and dividend
disbursing agent. T. Rowe Price Retirement Plan Services, Inc., provides
subaccounting and recordkeeping services for certain retirement accounts
invested in the Investor Class and R Class. For the year ended December 31,
2004, expenses incurred pursuant to
these service agreements were $82,000 for Price Associates, $3,987,000 for T.
Rowe Price Services, Inc., and $7,954,000 for T. Rowe Price Retirement Plan
Services, Inc. At period-end, a total of $1,181,000 of these expenses was
payable.
Additionally, the fund is one of several mutual funds in which certain college
savings plans managed by Price Associates may invest. As approved by the fund's
Board of Directors, shareholder servicing costs associated with each college
savings plan are borne by the fund in proportion to the average daily value of
its shares owned by the college savings plan. For the year ended December 31,
2004, the fund was charged $501,000 for shareholder servicing costs related to
the college savings plans, of which $357,000 was for services provided by Price
and $39,000 was payable at period-end. At December 31, 2004, approximately 3.1%
of the outstanding shares of the Investor Class were held by college savings
plans.
The fund is also one of several mutual funds sponsored by Price Associates
(underlying Price funds) in which the T. Rowe Price Spectrum Funds (Spectrum
Funds) may invest. The Spectrum Funds do not invest in the underlying Price
funds for the purpose of exercising management or control. Pursuant to a special
servicing agreement, expenses associated with the operation of the Spectrum
Funds are borne by each underlying Price fund to the extent of estimated savings
to it and in proportion to the average daily value of its shares owned by the
Spectrum Funds. Expenses allocated under this agreement are reflected as
shareholder servicing expense in the accompanying financial statements. For the
year ended December 31, 2004, the fund was allocated $571,000 of Spectrum Funds'
expenses, of which $412,000 related to services provided by Price and $61,000
was payable at period-end. At December 31, 2004, approximately 5.5% of the
outstanding shares of the Investor Class were held by the Spectrum Funds.
The fund may invest in the T. Rowe Price Reserve Investment Fund and the T. Rowe
Price Government Reserve Investment Fund (collectively, the Reserve Funds),
open-end management investment companies managed by Price Associates and
affiliates of the fund. The Reserve Funds are offered as cash management options
to mutual funds, trusts, and other accounts managed by Price Associates and/or
its affiliates, and are not available for direct purchase by members of the
public. The Reserve Funds pay no investment management fees. During the year
ended December 31, 2004, dividend income from the Reserve Funds totaled
$286,000, and the value of shares of the Reserve Funds held at December 31, 2004
and December 31, 2003 was $69,489,000 and $1,000, respectively.
As of December 31, 2004, T. Rowe Price Group, Inc. and/or its wholly owned
subsidiaries owned 50,136 shares of the Investor Class, representing less than
1% of the fund's net assets.
NOTE 5 - INTERFUND BORROWING
Pursuant to its prospectus, the fund may borrow up to 33 1/3% of its total
assets. The fund is party to an interfund borrowing agreement between itself and
other T. Rowe Price-sponsored mutual funds, which permits it to borrow or lend
cash at rates beneficial to both the borrowing and lending funds. Loans totaling
10% or more of a borrowing fund's total assets are collateralized at 102% of the
value of the loan; loans of less than 10% are unsecured. During the year ended
December 31, 2004, the fund had outstanding borrowings on 15 days, in the
average amount of $13,180,000, and at an average annual rate of 1.47%.
T. ROWE PRICE BLUE CHIP GROWTH FUND
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
T. Rowe Price Blue Chip Growth Fund, Inc.
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 Blue Chip Growth
Fund, Inc. (the "Fund") at December 31, 2004, 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 of America. 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 the auditing standards
of the Public Company Accounting Oversight Board (United States). Those
standards 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 December 31, 2004 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 11, 2005
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 12/31/04
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code. The
amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
For taxable non-corporate shareholders, $42,058,000 of the fund's income and
short-term capital gains represents qualified dividend income subject to the 15%
rate category.
For corporate shareholders, $42,058,000 of the fund's income and short-term
capital gains qualified for the dividends-received deduction.
INFORMATION ON PROXY VOTING POLICIES, PROCEDURES, AND RECORDS
- --------------------------------------------------------------------------------
A description of the policies and procedures used by T. Rowe Price funds and
portfolios to determine how to vote proxies relating to portfolio securities is
available in each fund's Statement of Additional Information, which you may
request by calling 1-800-225-5132 or by accessing the SEC's Web site,
www.sec.gov. The description of our proxy voting policies and procedures is also
available on our Web site, www.troweprice.com. To access it, click on the words
"Company Info" at the top of our homepage for individual investors. Then, in the
window that appears, click on the "Proxy Voting Policy" navigation button in the
top left corner.
Each fund's most recent annual proxy voting record is available on our Web site
and through the SEC's Web site. To access it through our Web site, follow the
directions above, then click on the words "Proxy Voting Record" at the bottom of
the Proxy Voting Policy page.
HOW TO OBTAIN QUARTERLY PORTFOLIO HOLDINGS
- --------------------------------------------------------------------------------
The fund files a complete schedule of portfolio holdings with the Securities and
Exchange Commission for the first and third quarters of each fiscal year on Form
N-Q. The fund's Form N-Q is available electronically on the SEC's Web site
(www.sec.gov); hard copies may be reviewed and copied at the SEC's Public
Reference Room, 450 Fifth St. N.W., Washington, DC 20549. For more information
on the Public Reference Room, call 1-800-SEC-0330.
T. ROWE PRICE BLUE CHIP GROWTH FUND
- --------------------------------------------------------------------------------
ABOUT THE FUND'S DIRECTORS AND OFFICERS
- --------------------------------------------------------------------------------
Your fund is governed by a Board of Directors that meets regularly to review
investments, performance, compliance matters, advisory fees, expenses, and other
business affairs, and is responsible for protecting the interests of
shareholders. The majority of the fund's directors are independent of T. Rowe
Price Associates, Inc. (T. Rowe Price); "inside" directors are officers of T.
Rowe Price. The Board of Directors elects the fund's officers, who are listed in
the final table. The business address of each director and officer is 100 East
Pratt Street, Baltimore, MD 21202. The Statement of Additional Information
includes additional information about the fund directors and is available
without charge by calling a T. Rowe Price representative at 1-800-225-5132.
Independent Directors
Name
(Year of Birth) Principal Occupation(s) During Past 5 Years
Year Elected * and Directorships of Other Public Companies
Anthony W. Deering Director, Chairman of the Board, President, and
(1945) Chief Executive Officer, The Rouse Company, real
2001 estate developers; Director, Mercantile Bank
(4/03 to present)
Donald W. Dick, Jr. Principal, EuroCapital Advisors, LLC, an
(1943) acquisition and management advisory firm
1993
David K. Fagin Director, Golden Star Resources Ltd., Canyon
(1938) Resources Corp. (5/00 to present), and Pacific
1993 Rim Mining Corp. (2/02 to present); Chairman and
President, Nye Corp.
Karen N. Horn Managing Director and President, Global Private
(1943) Client Services, Marsh Inc. (1999-2003); Managing
2003 Director and Head of International Private
Banking, Bankers Trust (1996-1999); Director, Eli
Lilly and Company and Georgia Pacific
(5/04 to present)
F. Pierce Linaweaver President, F. Pierce Linaweaver & Associates,
(1934) Inc., consulting environmental and civil engineers
2001
John G. Schreiber Owner/President, Centaur Capital Partners, Inc., a
(1946) real estate investment company; Partner,
2001 Blackstone Real Estate Advisors, L.P.; Director,
AMLI Residential Properties Trust and The Rouse
Company, real estate developers
*Each independent director oversees 112 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
Inside Directors
Name
(Year of Birth)
Year Elected *
[Number of T. Rowe Price Principal Occupation(s) During Past 5 Years
Portfolios Overseen] and Directorships of Other Public Companies
James A.C. Kennedy, CFA Director and Vice President, T. Rowe Price and
(1953) T. Rowe Price Group, Inc.; Director, T. Rowe
1997 Price Global Investment Services Limited and
[43] T. Rowe Price International, Inc.
James S. Riepe Director and Vice President, T. Rowe Price; Vice
(1943) Chairman of the Board, Director, and Vice
1993 President, T. Rowe Price Group, Inc.; Chairman of
[112] the Board and Director, T. Rowe Price Global Asset
Management Limited, T. Rowe Price Global
Investment Services Limited, T. Rowe Price
Investment Services, Inc., T. Rowe Price
Retirement Plan Services, Inc., and T. Rowe Price
Services, Inc.; Chairman of the Board, Director,
President, and Trust Officer, T. Rowe Price Trust
Company; Director, T. Rowe Price International,
Inc.; Chairman of the Board, Blue Chip Growth Fund
*Each inside director serves until retirement, resignation, or election of a
successor.
Officers
Name (Year of Birth)
Title and Fund(s) Served Principal Occupation(s)
Jeffrey W. Arricale, CPA (1971) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.; formerly
student, The Wharton School, University
of Pennsylvania (to 2001); Manager,
Assurance, KPMG LLP (to 1999)
P. Robert Bartolo, CPA (1972) Vice President, T. Rowe Price; formerly
Vice President, Blue Chip Growth Fund intern, T. Rowe Price (to 2001)
Stephen V. Booth, CPA (1961) Vice President, T. Rowe Price, T. Rowe
Vice President, Blue Chip Growth Fund Price Group, Inc., and T. Rowe Price
Trust Company
Joseph A. Carrier (1960) Vice President, T. Rowe Price, T. Rowe
Treasurer, Blue Chip Growth Fund Price Group, Inc., T. Rowe Price
Investment Services, Inc., and T. Rowe
Price Trust Company
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
D. Kyle Cerminara, CFA (1977) Vice President, T. Rowe Price
Vice President, Blue
Chip Growth Fund
Donald J. Easley, CFA (1971) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.
Henry M. Ellenbogen (1971) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.; formerly
Executive Vice President, Business
Development, HelloAsia (to 2001); Chief
of Staff, U.S. Representative Peter
Deutsch (to 1999)
Roger L. Fiery III, CPA (1959) Vice President, T. Rowe Price, T. Rowe
Vice President, Blue Chip Growth Fund Price Group, Inc., T. Rowe Price
International, Inc., and T. Rowe Price
Trust Company
Robert N. Gensler (1957) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.
John R. Gilner (1961) Chief Compliance Officer and Vice
Chief Compliance Officer, President, T. Rowe Price; Vice
Blue Chip Growth Fund President, T. Rowe Price Investment
Services, Inc., and T. Rowe Price Group,
Inc.
Gregory S. Golczewski (1966) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Trust Company
Henry H. Hopkins (1942) Director and Vice President, T. Rowe
Vice President, Blue Chip Growth Fund Price Investment Services, Inc., T. Rowe
Price Services, Inc., and T. Rowe Price
Trust Company; Vice President, T. Rowe
Price, T. Rowe Price Group, Inc.,
T. Rowe Price International, Inc., and
T. Rowe Price Retirement Plan Services,
Inc.
Thomas J. Huber, CFA (1966) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.
Kris H. Jenner, MD, D. Phil. (1962) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Patricia B. Lippert (1953) Assistant Vice President, T. Rowe Price
Secretary, Blue Chip Growth Fund and T. Rowe Price Investment Services,
Inc.
Timothy E. Parker (1974) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.; formerly
student, Darden Graduate School,
University of Virginia (to 2001);
Financial Analyst, Robert W. Baird &
Co., Inc. (to 1999)
Larry J. Puglia, CFA, CPA (1960) Vice President, T. Rowe Price and
President, Blue Chip Growth Fund T. Rowe Price Group, Inc.
Karen M. Regan (1967) Vice President, T. Rowe Price
Vice President, Blue Chip Growth Fund
Jeffrey Rottinghaus, CPA (1970) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.; formerly
student, the Wharton School, University
of Pennsylvania (to 2001); Information
Technology Consultant, Kelly-Lewey &
Associates (to 1999)
Robert W. Sharps, CFA, CPA (1971) Vice President, T. Rowe Price and
Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc.
Robert W. Smith (1961) Vice President, T. Rowe Price, T. Rowe
Vice President, Blue Chip Growth Fund Price Group, Inc., and T. Rowe Price
International, Inc.
Julie L. Waples (1970) Vice President, T. Rowe Price
Vice President, Blue Chip Growth Fund
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Item 2. Code of Ethics.
The registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR,
applicable to its principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. A copy of this code of ethics is filed as an exhibit to this Form
N-CSR. No substantive amendments were approved or waivers were granted to this
code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors/Trustees has determined that Mr. David K.
Fagin qualifies as an audit committee financial expert, as defined in Item 3 of
Form N-CSR. Mr. Fagin is considered independent for purposes of Item 3 of Form
N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) - (d) Aggregate fees billed to the registrant for the last two fiscal years
for professional services rendered by the registrant's principal accountant were
as follows:
2004 2003
Audit Fees $23,270 $25,034
Audit-Related Fees 3,018 1,499
Tax Fees 6,311 6,502
All Other Fees - 124
Audit fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the accountant in
connection with statutory and regulatory filings. Audit-related fees include
amounts reasonably related to the performance of the audit of the registrant's
financial statements, specifically the issuance of a report on internal
controls. Tax fees include amounts related to tax compliance, tax planning, and
tax advice. Other fees include the registrant's pro-rata share of amounts for
agreed-upon procedures in conjunction with service contract approvals by the
registrant's Board of Directors/Trustees.
(e)(1) The registrant's audit committee has adopted a policy whereby audit and
non-audit services performed by the registrant's principal accountant for the
registrant, its investment adviser, and any entity controlling, controlled by,
or under common control with the investment adviser that provides ongoing
services to the registrant require pre-approval in advance at regularly
scheduled audit committee meetings. If such a service is required between
regularly scheduled audit committee meetings, pre-approval may be authorized by
one audit committee member with ratification at the next scheduled audit
committee meeting. Waiver of pre-approval for audit or non-audit services
requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50 percent of the hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
(g) The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by the registrant's principal accountant for non-audit services
rendered to the registrant, its investment adviser, and any entity controlling,
controlled by, or under common control with the investment adviser that provides
ongoing services to the registrant were $903,000 and $821,000, respectively, and
were less than the aggregate fees billed for those same periods by the
registrant's principal accountant for audit services rendered to the T. Rowe
Price Funds.
(h) All non-audit services rendered in (g) above were pre-approved by the
registrant's audit committee. Accordingly, these services were considered by the
registrant's audit committee in maintaining the principal accountant's
independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable. The complete schedule of investments is included in Item 1 of
this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial officer
have evaluated the registrant's disclosure controls and procedures within 90
days of this filing and have concluded that the registrant's disclosure controls
and procedures were effective, as of that date, in ensuring that information
required to be disclosed by the registrant in this Form N-CSR was recorded,
processed, summarized, and reported timely.
(b) The registrant's principal executive officer and principal financial officer
are aware of no change in the registrant's internal control over financial
reporting that occurred during the registrant's second fiscal quarter covered by
this report that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is
attached.
(2) Separate certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(3) Written solicitation to repurchase securities issued by closed-end
companies: not applicable.
(b) A certification by the registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940,
is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
T. Rowe Price Blue Chip Growth Fund, Inc.
By /s/ James S. Riepe
-----------------------------------
James S. Riepe
Principal Executive Officer
Date February 18, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ James S. Riepe
-----------------------------------
James S. Riepe
Principal Executive Officer
Date February 18, 2005
By /s/ Joseph A. Carrier
-----------------------------------
Joseph A. Carrier
Principal Financial Officer
Date February 18, 2005