N-Q 1 scsnq.htm NQ~ SMALL-CAP STOCK FUND T. Rowe Price Small-Cap Stock Fund, Inc. - 9/30/06 NQ
ITEM 1. SCHEDULE OF INVESTMENTS
T. ROWE PRICE SMALL-CAP STOCK FUND     
Unaudited  September 30, 2006 
Portfolio of Investments †  Shares/$ Par  Value 
(Cost and value in $000s)     
 
COMMON STOCKS 93.6%     
CONSUMER DISCRETIONARY 12.0%     
Auto Components 0.3%     
Strattec Security (1)(2)  190,600  7,294 
TRW (2)  710,600  17,104 
    24,398 
Automobiles 0.0%     
Winnebago  40,000  1,255 
    1,255 
Distributors 0.2%     
Keystone Automotive (2)  475,000  18,060 
    18,060 
Diversified Consumer Services 1.1%     
Corinthian Colleges (2)  2,550,000  27,565 
Matthews International, Class A  1,444,600  53,176 
    80,741 
Hotels, Restaurants & Leisure 3.1%     
Applebee's  1,057,512  22,747 
BJ's Restaurants (2)  756,300  16,646 
CEC Entertainment (2)  464,000  14,621 
Panera Bread, Class A (2)  550,000  32,038 
PF Chang's China Bistro (2)  420,000  14,578 
Red Robin Gourmet Burgers (1)(2)  827,500  38,156 
Ruby Tuesday  400,800  11,299 
Sonic (2)  1,976,625  44,691 
Texas Roadhouse, Class A (2)  170,000  2,088 
The Cheesecake Factory (2)  1,296,000  35,238 
    232,102 
Household Durables 0.4%     
Jarden (2)  825,000  27,200 
    27,200 
Internet & Catalog Retail 0.3%     
priceline.com (2)  570,000  20,970 
    20,970 
Leisure Equipment & Products 1.0%     
Brunswick  785,200  24,491 
MarineMax (2)  722,000  18,375 
Polaris Industries  80,000  3,292 
Pool  775,537  29,858 
    76,016 
Media 0.8%     
Emmis Communications (2)  644,300  7,893 
Entercom Communications  458,500  11,554 
Scholastic (2)  1,353,800  42,171 
Young Broadcasting (2)  430,700  990 
    62,608 
Multiline Retail 0.2%     
Big Lots (2)  745,000  14,758 
    14,758 
Specialty Retail 4.2%     
AC Moore Arts & Crafts (2)  313,800  5,972 
AnnTaylor Stores (2)  1,693,700  70,898 
Borders Group  1,725,000  35,190 
Christopher & Banks  923,950  27,238 
Cost Plus (2)  950,000  11,372 
Hibbett Sporting Goods (2)  900,000  23,562 
Hot Topic (2)  1,695,000  18,882 
J Crew Group (2)  172,500  5,187 
Monro Muffler Brake (1)  875,000  29,759 
Petco (2)  1,500,000  42,960 
Select Comfort (2)  375,000  8,205 
The Finish Line, Class A  450,000  5,679 
Zumiez (2)  900,000  24,300 
    309,204 
Textiles, Apparel & Luxury Goods 0.4%     
Under Armour (2)  283,162  11,332 
Warnaco Group (2)  800,000  15,472 
    26,804 
Total Consumer Discretionary    894,116 

CONSUMER STAPLES 1.4%  		   
Food & Staples Retailing 1.1%     
Casey's General Stores  1,698,000  37,815 
Pantry (2)  585,000  32,976 
Wild Oats Markets (2)  881,900  14,260 
    85,051 
Food Products 0.1%     
ADM Cranberry (2)(3)  164  55 
Makepeace (2)  164  1,640 
Seneca Foods, Class B (2)  72,000  1,982 
Seneca Foods, Class A (2)  187,600  5,084 
    8,761 
Personal Products 0.2%     
Bare Escentuals (2)  155,000  4,208 
Chattem (2)  243,000  8,534 
    12,742 
Total Consumer Staples    106,554 

ENERGY 5.3%  		   
Energy Equipment & Services 3.3%     
FMC Technologies (2)  1,210,000  64,977 
Grant Prideco (2)  250,000  9,508 
Hanover Compressor (2)  1,625,000  29,607 
Hydril (2)  373,300  20,927 
Input/Output (2)  1,400,000  13,902 
Key Energy Services (2)  250,600  3,408 
Seacor (2)  899,500  74,209 
Superior Well Services (2)  37,430  741 
Union Drilling (2)  500,000  5,500 
W-H Energy Services (2)  473,900  19,653 
    242,432 
Oil, Gas & Consumable Fuels 2.0%     
Bill Barrett (2)  1,363,000  33,475 
Forest Oil (2)  1,575,100  49,757 
Foundation Coal Holdings  1,000,000  32,370 
Geomet (2)  295,000  2,773 
Mariner Energy (2)  1,649,728  30,306 
    148,681 
 
Total Energy    391,113 

FINANCIALS 18.2%  		   
 
Capital Markets 2.2%     
Affiliated Managers Group (2)  550,000  55,060 
Investors Financial Services  751,000  32,353 
Marketaxess (2)  1,000,000  10,470 
Penson Worldwide (2)  800,000  14,360 
Piper Jaffray Cos (1)(2)  835,000  50,618 
    162,861 
Commercial Banks 6.6%     
Boston Private Financial  750,000  20,910 
Cascade Bancorp  800,000  30,040 
Chittenden  2,010,187  57,672 
Citizens Banking  1,613,500  42,371 
Frontier Financial  691,650  17,941 
Glacier Bancorp  1,163,420  39,754 
Pinnacle Financial Partners (1)(2)  650,000  23,270 
Placer Sierra Bancshares  875,000  19,434 
Preferred Bank  200,000  11,994 
Prosperity Bancshares  1,100,000  37,444 
Provident Bankshares  952,078  35,275 
Sandy Spring Bancorp  670,000  23,691 
Signature Bank (2)  600,000  18,558 
Texas Capital Bancshares (2)  849,100  15,895 
Valley National Bancorp  1,595,311  40,792 
WestAmerica  1,190,000  60,107 
    495,148 
Insurance 4.4%     
Aspen Insurance Holdings  1,300,000  33,579 
Assured Guaranty  1,890,000  49,008 
Bristol West Holdings  1,250,000  18,187 
Horace Mann Educators  775,000  14,903 
Infinity Property & Casualty  998,900  41,085 
Markel (2)  110,000  45,173 
National Financial Partners  338,000  13,868 
Ohio Casualty  2,495,700  64,564 
PartnerRe  365,000  24,663 
Selective Insurance  400,000  21,044 
    326,074 
Real Estate Investment Trusts (REITs) 3.0%     
DiamondRock Hospitality, REIT  912,300  15,153 
EastGroup Properties, REIT  887,600  44,256 
Equity Lifestyle Properties, REIT  315,000  14,399 
Essex Property Trust, REIT  100,000  12,140 
Glenborough Realty Trust, REIT  750,000  19,297 
LaSalle Hotel Properties, REIT  495,400  21,471 
Parkway Properties, REIT  399,700  18,582 
PS Business Parks, REIT  600,000  36,180 
Reckson Associates Realty, REIT  265,900  11,380 
Washington SBI, REIT  825,000  32,835 
    225,693 
Thrifts & Mortgage Finance 2.0%     
First Niagara Financial  2,500,000  36,450 
Harbor Florida Bancshares (1)  1,500,000  66,465 
NewAlliance Bancshares  3,000,000  43,950 
    146,865 
 
Total Financials    1,356,641 

HEALTH CARE 13.9%  		   
 
Biotechnology 3.7%     
Alexion Pharmaceutical (2)  375,000  12,742 
Alkermes (2)  938,700  14,878 
Altus Pharmaceuticals (2)  169,682  2,710 
Amylin Pharmaceuticals (2)  430,000  18,950 
Cephalon (2)  353,517  21,830 
Cubist Pharmaceuticals (2)  947,200  20,592 
CV Therapeutics (2)  104,300  1,162 
Cytokinetics (2)  300,000  1,929 
deCode genetics (2)  683,703  3,760 
Incyte Genomics (2)  1,625,000  6,874 
InterMune (2)  1,250,000  20,525 
Martek Biosciences (2)  700,800  15,074 
Memory Pharmaceuticals (2)  366,000  373 
Myogen (2)  530,700  18,617 
Myriad Genetics (2)  1,000,000  24,650 
Neurocrine Biosciences (2)  437,500  4,703 
NPS Pharmaceuticals (2)  164,000  625 
ONYX Pharmaceuticals (2)  375,000  6,484 
Rigel Pharmaceuticals (2)  648,400  6,659 
Senomyx (2)  600,000  9,222 
Tercica (2)  250,000  1,333 
Theravance (2)  279,800  7,566 
Trimeris (2)  500,000  4,400 
Vertex Pharmaceuticals (2)  1,500,000  50,475 
    276,133 
Health Care Equipment & Supplies 4.5%     
Analogic  434,500  22,299 
DJO (2)  668,000  27,742 
Edwards Lifesciences (2)  589,900  27,483 
Greatbatch (2)  712,300  16,112 
Home Diagnostics (2)  219,000  2,867 
Integra LifeSciences (2)  1,251,000  46,887 
Northstar Neuroscience (2)  325,000  4,290 
NuVasive (2)  550,000  11,061 
Nxstage Medical (2)  814,300  7,141 
ResMed (2)  2,000,000  80,500 
Stereotaxis (2)  600,000  6,210 
Steris  1,000,100  24,062 
Thoratec (2)  1,475,000  23,025 
Wright Medical Group (2)  1,350,000  32,738 
    332,417 
Health Care Providers & Services 4.2%     
AMERIGROUP (2)  860,000  25,413 
Centene (2)  1,350,000  22,194 
Healthspring (2)  400,000  7,700 
Henry Schein (2)  1,269,400  63,648 
LifePoint Hospitals (2)  1,300,000  45,916 
Odyssey Healthcare (2)  235,000  3,332 
Sunrise Senior Living (1)(2)  2,738,200  81,790 
Symbion (2)  899,000  16,505 
United Surgical Partners International (2)  1,627,500  40,411 
Visicu (2)  43,000  386 
VistaCare, Class A (2)  500,000  5,200 
    312,495 
Life Sciences Tools & Services 0.1%     
Exelixis (2)  995,000  8,667 
Nektar Therapeutics (2)  175,100  2,523 
    11,190 
Pharmaceuticals 1.4%     
Alexza Pharmaceuticals (2)  250,000  2,032 
Atherogenics (2)  950,000  12,511 
Inspire Pharmaceuticals (2)  1,220,000  6,210 
Medicines Company (2)  600,000  13,536 
Medicis Pharmaceutical, Class A  1,200,000  38,820 
Noven Pharmaceuticals (2)  986,300  23,790 
Xenoport (2)  400,000  8,148 
    105,047 
Total Health Care    1,037,282 

INDUSTRIALS & BUSINESS SERVICES 17.5%  		   
Aerospace & Defense 2.2%     
Argon (2)  450,000  10,786 
Armor Holdings (2)  1,077,300  61,762 
Moog, Class A (2)  1,025,000  35,526 
Teledyne Technologies (2)  1,425,000  56,430 
    164,504 
Air Freight & Logistics 1.1%     
EGL (2)  1,222,300  44,541 
Pacer International  285,000  7,911 
UTi Worldwide  1,102,800  30,845 
    83,297 
Airlines 0.2%     
Frontier Airlines Holdings (2)  710,000  5,858 
Midwest Air Group (2)  555,600  4,378 
    10,236 
Building Products 0.1%     
Trex (2)  326,600  7,891 
    7,891 
Commercial Services & Supplies 4.0%     
Angelica (1)  700,000  11,907 
G & K Services, Class A  962,700  35,071 
Herman Miller  1,490,700  50,997 
Kforce (2)  1,261,200  15,046 
LECG (1)(2)  1,250,000  23,450 
Multi-Color (1)  435,000  12,506 
Pike Electric (2)  698,000  10,400 
Resources Global Professionals (2)  1,520,000  40,721 
Ritchie Bros Auctioneers  679,500  36,428 
Synagro Technologies  2,300,000  9,706 
Waste Connections (2)  1,050,000  39,806 
West Corporation (2)  301,908  14,582 
    300,620 
Construction & Engineering 0.2%     
Insituform Technologies, Class A (2)  698,100  16,950 
    16,950 
Electrical Equipment 2.4%     
A.O. Smith  1,745,700  68,833 
Baldor Electric (1)  1,818,400  56,061 
Belden CDT  1,245,000  47,596 
Woodward Governor  269,100  9,026 
    181,516 
Machinery 5.2%     
3-D Systems (2)  494,400  9,067 
Accuride (2)  1,498,300  16,496 
Actuant, Class A  1,053,600  52,786 
Cascade  440,000  20,086 
ESCO Technologies (2)  580,200  26,713 
Graco  1,020,000  39,841 
Harsco  929,600  72,184 
IDEX  406,950  17,519 
Lindsay Manufacturing (1)  1,062,200  30,538 
RBC Bearings (1)(2)  1,036,400  25,029 
Toro  1,790,000  75,484 
    385,743 
Road & Rail 0.8%     
Heartland Express  533,448  8,365 
Knight Transportation  2,035,800  34,507 
Ryder System  280,000  14,470 
    57,342 
Trading Companies & Distributors 1.3%     
Applied Industrial Technologies  630,400  15,382 
Electro Rent (2)  564,300  9,599 
H&E Equipment Services (2)  391,200  9,541 
Interline Brands (2)  1,145,000  28,259 
NuCo2 (1)(2)  900,000  24,210 
Transdigm Group (2)  219,800  5,367 
    92,358 
 
Total Industrials & Business Services    1,300,457 
 
INFORMATION TECHNOLOGY 18.0%     
 
Communications Equipment 0.8%     
ADTRAN  1,050,000  25,032 
Finisar (2)  5,250,000  19,058 
IXIA (2)  975,000  8,687 
Packeteer (2)  477,500  4,111 
Tekelec (2)  416,700  5,400 
    62,288 
Computers & Peripherals 0.5%     
Emulex (2)  1,050,000  19,079 
Intermec (2)  250,000  6,590 
Synaptics (2)  544,000  13,257 
    38,926 
Electronic Equipment & Instruments 2.4%     
Cogent (2)  312,000  4,284 
DTS (2)  575,000  12,179 
Global Imaging Systems (2)  192,800  4,255 
KEMET (2)  1,845,000  14,889 
Littelfuse (2)  838,801  29,106 
Mercury Computer Systems (2)  118,300  1,402 
Methode Electronics  954,700  9,079 
MTS Systems  900,000  29,106 
National Instruments  600,000  16,404 
Newport (2)  789,600  12,870 
Orbotech (2)  775,000  18,368 
Plexus (2)  325,000  6,240 
Scansource (2)  624,200  18,932 
    177,114 
Internet Software & Services 1.9%     
24/7 Media (2)  2,000,000  17,080 
Bankrate (2)  600,000  15,936 
CNET Networks (2)  2,800,000  26,824 
Digital Insight (2)  620,000  18,178 
Digital River (2)  531,400  27,165 
Digitas (2)  1,250,000  12,025 
Websense (2)  950,000  20,530 
WebSideStory (2)  400,000  5,284 
    143,022 
IT Services 2.7%     
CACI International, Class A (2)  720,800  39,651 
Global Payments  1,176,000  51,756 
Heartland Payment  387,700  10,080 
Iron Mountain (2)  433,200  18,602 
Maximus  833,300  21,749 
MPS Group (2)  2,621,800  39,616 
RightNow Technologies (2)  1,284,000  20,043 
    201,497 
Semiconductor & Semiconductor Equipment 4.2%     
AMIS Holdings (2)  700,000  6,643 
Atheros Communications (2)  550,000  9,971 
ATMI (2)  298,500  8,677 
Brooks-Pri Automation (2)  1,145,000  14,942 
Cabot Microelectronics (2)  430,000  12,393 
Conexant Systems (2)  12,750,000  25,500 
Credence Systems (2)  1,450,000  4,133 
Cymer (2)  830,000  36,445 
Entegris (2)  3,752,372  40,938 
Exar (2)  1,163,000  15,456 
FEI (2)  800,000  16,888 
Lattice Semiconductor (2)  2,268,800  15,473 
Microsemi (2)  180,000  3,393 
MKS Instruments (2)  951,200  19,319 
ON Semiconductor (2)  62,000  365 
PDF Solutions (1)(2)  1,400,000  15,344 
Power Integrations (2)  795,000  15,582 
Semtech (2)  1,764,000  22,509 
Silicon Laboratories (2)  800,000  24,816 
Virage Logic (2)  400,000  3,644 
    312,431 
Software 5.5%     
Altiris (2)  700,000  14,763 
Bottomline Technologies (2)  900,000  8,784 
Catapult Communications (2)  468,600  3,917 
FactSet Research Systems  1,100,000  53,427 
FileNet (2)  1,250,000  43,538 
Hyperion Solutions (2)  750,000  25,860 
Internet Security Systems (2)  901,400  25,023 
Jack Henry & Associates  2,970,100  64,659 
Kronos (2)  950,000  32,386 
Motive (2)  851,000  1,966 
Open Solutions (2)  476,800  13,737 
Progress Software (2)  900,000  23,400 
Quest Software (2)  1,515,500  21,641 
Red Hat (2)  856,700  18,059 
SPSS (2)  536,400  13,372 
THQ (2)  1,000,000  29,170 
Wind River Systems (2)  1,300,000  13,923 
    407,625 
 
Total Information Technology    1,342,903 

MATERIALS 3.8%  		   
 
Chemicals 2.6%     
Airgas  1,620,000  58,596 
Arch Chemicals (1)  1,198,100  34,086 
Ferro  1,097,400  19,512 
MacDermid  875,000  28,543 
Material Sciences (2)  691,100  6,883 
Minerals Technologies  600,400  32,061 
Symyx Technologies (2)  575,000  12,184 
    191,865 
Containers & Packaging 0.1%     
Chesapeake Corp.  710,000  10,160 
Smurfit-Stone Container (2)  191,100  2,140 
    12,300 
Metals & Mining 1.1%     
Adrian Steel (1)  13,000  5,109 
Coal Creek  9,295  3,021 
Gibraltar Industries  559,800  12,416 
Lihir Gold (AUD) (2)  7,971,900  17,191 
Meridian Gold (2)  1,700,000  42,262 
    79,999 
Total Materials    284,164 

TELECOMMUNICATION SERVICES 0.8%  		   
Diversified Telecommunication Services 0.7%     
Ntelos (2)  853,050  10,893 
Premiere Global Services (2)  1,120,000  9,722 
Time Warner Telecom, Class A (2)  1,550,000  29,466 
    50,081 
Wireless Telecommunication Services 0.1%     
SBA Communications (2)  400,000  9,732 
    9,732 
Total Telecommunication Services    59,813 

TRUSTS & MUTUAL FUNDS 0.6%  		   
Trusts & Mutual Funds 0.6%     
iShares Russell 2000  600,000  43,200 
Total Trusts & Mutual Funds    43,200 

UTILITIES 2.1%  		   
Electric Utilities 1.3%     
Cleco  817,200  20,626 
El Paso Electric (2)  701,200  15,665 
Empire District Electronics  740,600  16,575 
Unisource Energy  1,224,700  40,819 
    93,685 
Gas Utilities 0.6%     
SEMCO Energy (2)  1,300,000  7,332 
Southwest Gas  1,250,000  41,650 
    48,982 
Independent Power Producers & Energy Traders 0.2%     
Black Hills  400,000  13,444 
    13,444 
Total Utilities    156,111 
Total Common Stocks (Cost $5,131,172)    6,972,354 

SHORT-TERM INVESTMENTS 6.2%  		   
Money Market Funds 6.1%     
T. Rowe Price Reserve Investment Fund, 5.37% (1)(4)  453,094,031  453,094 
    453,094 
U.S. Government Agency Obligations 0.1%     
U.S. Treasury Bills, 4.742%, 11/2/06 (5)  7,500,000  7,469 
    7,469 
Total Short-Term Investments (Cost $460,563)    460,563 

Total Investments in Securities  		   
99.8% of Net Assets (Cost $5,591,735)  $  7,432,917 


 
 
            
†  Denominated in U.S. dollars unless otherwise noted 
(1)  Affiliated Company 
(2)  Non-income producing 
(3)  Restricted Security 
(4)  Seven-day yield 
(5)  All or a portion of this security is pledged to cover margin requirements on futures 
  contracts at September 30, 2006. 
AUD  Australian Dollar 
REIT  Real Estate Investment Trust 





(1) Affiliated Companies 
($ 000s) 

The fund may invest in certain securities that are considered affiliated companies. As defined by the 1940 Act, an affiliated company is one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control.

    Purchase    Sales    Investment   
Value 
Affiliate    Cost    Cost    Income‡    9/30/06    12/31/05 
Adrian Steel  $  -  $  -  $  39  $  5,109  $  4,745 
Angelica    -    -    231    11,907    11,578 
Arch Chemicals    -    -    719    34,086    35,823 
Baldor Electric    6,797    -    869    56,061    * 
Consolidated Graphics  -    22,293    -    -    46,957 
Harbor Florida                     
Bancshares    5,197    -    1,196    66,465    50,451 
J. Jill Group    -    -    -    -    15,224 
LECG    2,881    -    -    23,450    * 
Lifeline Systems    -    -    -    -    25,461 
Lindsay Manufacturing  -    -    196    30,538    20,426 
Monro Muffler Brake  1,601    -    144    29,759    25,014 
Multi-Color    11,639    -    36    12,506    * 
NuCo2    24,469    -    -    24,210    - 
PDF Solutions    4,786    -    -    15,344    * 
Pinnacle Financial                     
Partners    6,412    -    -    23,270    10,509 
Piper Jaffray Cos    -    7,342    -    50,618    40,097 
RBC Bearings    12,882    -    -    25,029    * 
Red Robin Gourmet                     
Burgers    7,814    -    -    38,156    * 
Strattec Security    -    -    -    7,294    7,704 
Sunrise Senior Living  -    -    -    81,790    92,305 
T. Rowe Price Reserve                   
Investment Fund,                     
5.37%    ¤    ¤    21,620    453,094    637,218 
Totals          $  25,050  $  988,686  $  1,023,512 




‡  Includes dividend income of $25,050 and no interest income. 
*  The issuer was not considered an affiliated company at December 31, 2005. 
¤  Purchase and sale information not shown for cash management funds. 




Open Futures Contracts at September 30, 2006 were as follows: 
($ 000s) 

      Contract    Unrealized 
  Expiration     Value    Gain (Loss) 
Long, 463 Russell 2000 contracts,           
$7,000 par of 4.742% U.S. Treasury Bills           
pledged as initial margin     12/06  $   169,481  $  3,797 
Net payments (receipts) of variation           
margin to date          (5,024) 
Variation margin receivable (payable)           
on open futures contracts        $  (1,227) 





(3) Restricted Securities 
($ 000s) 

The fund may invest in securities that cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules. The total restricted securities (excluding 144A issues) at period-end amounts to $55 and represents 0.0% of net assets.

  Acquisition    Acquisition 
Description  Date    Cost 
ADM Cranberry  6/30/00  $  0 
Totals    $  0 



The fund has registration rights for certain restricted securities held as of September 30, 2006. Any costs related to such registration are borne by the issuer.




The accompanying notes are an integral part of this Portfolio of Investments.

 



T. Rowe Price Small-Cap Stock Fund   
Unaudited   September 30, 2006 
Notes To Portfolio of Investments   

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

T. Rowe Price Small-Cap Stock 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 by investing primarily in stocks of small companies.

The accompanying portfolio of investments was prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates made by fund management. Fund management believes that estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the portfolio of investments may differ from the value the fund receives upon sale of the securities.

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 (OTC) 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. Debt securities with original maturities of less than one year are valued at amortized cost in local currency, which approximates fair value when combined with accrued interest.

Investments in mutual funds are valued at the mutual fund's closing net asset value per share on the day of valuation. Financial futures contracts are valued at closing settlement prices.

Other investments 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 when and how often it will use closing prices and when it will adjust those prices to reflect fair value. 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.

Investment Transactions

Investment transactions are accounted for on the trade date.

NOTE 2 - INVESTMENT TRANSACTIONS

Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks or to 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.

Restricted Securities

The fund may invest in securities that are subject to legal or contractual restrictions on resale. Although certain of these securities may be readily sold, for example, under Rule 144A, others may be illiquid, and their sale may involve substantial delays and additional costs, and prompt sale at an acceptable price may be difficult.

Futures Contracts

The fund may invest in futures contracts, which provide for the future sale by one party and purchase by another of a specified amount of a specific financial instrument at an agreed upon price, date, time, and place. Risks arise from possible illiquidity of the futures market and from movements in security values.

NOTE 3 - FEDERAL INCOME TAXES

At September 30, 2006, the cost of investments for federal income tax purposes was $5,591,735,000. Net unrealized gain aggregated $1,844,979,000 at period-end, of which $2,151,697,000 related to appreciated investments and $306,718,000 related to depreciated investments.

NOTE 4 - RELATED PARTY TRANSACTIONS

The fund may invest in the T. Rowe Price Reserve Investment Fund and the T. Rowe Price Government Reserve Investment Fund (collectively, the T. Rowe Price Reserve Funds), open-end management investment companies managed by Price Associates and affiliates of the fund. The T. Rowe Price 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 T. Rowe Price Reserve Funds pay no investment management fees.

For the period ended September 30, 2006, total realized gain/loss on all affiliated companies was $30,704,000.





Item 2. 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-Q 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 most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits.

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.





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 Small-Cap Stock Fund, Inc.

By  /s/ Edward C. Bernard 
  Edward C. Bernard 
  Principal Executive Officer 
 
Date  November 17, 2006 

     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/ Edward C. Bernard 
  Edward C. Bernard 
  Principal Executive Officer 
 
Date  November 17, 2006 

By  /s/ Joseph A. Carrier 
  Joseph A. Carrier 
  Principal Financial Officer 
 
Date  November 17, 2006