N-CSR 1 bcg.txt T. ROWE PRICE BLUE CHIP GROWTH FUND Item 1. Report to Shareholders T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- December 31, 2003 Certified Annual Report This report is certified under the Sarbanes-Oxley Act of 2002, which requires that public companies, including mutual funds, affirm that the information provided in their annual and semiannual shareholder reports fully and fairly represents their financial position. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report Performance Comparison -------------------------------------------------------------------------------- This chart shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The result is compared with benchmarks, which may include a broad-based market index and a peer group average or index. Market indexes do not include expenses, which are deducted from fund returns as well as mutual fund averages and indexes. [Graphic Omitted] BLUE CHIP GROWTH FUND -------------------------------------------------------------------------------- As of 12/31/03 Blue Chip Growth Fund $28,722 S&P 500 Stock Index $28,563 Lipper Large-Cap Core Funds Index $24,271 Lipper S&P 500 Large-Cap Blue Chip Stock Core Funds Growth Index Index Fund -------------------------------------------------------------------------------- 12/93 $10,000 $10,000 $10,000 12/94 10,132 9,892 10,080 12/95 13,940 13,033 13,900 12/96 17,140 15,620 17,758 12/97 22,859 20,184 22,653 12/98 29,392 25,621 29,186 12/99 35,576 30,578 35,022 12/00 32,337 28,325 34,137 12/01 28,493 24,689 29,215 12/02 22,196 19,447 22,136 12/03 28,563 24,271 28,722 Note: Performance for the Advisor and R Class shares will vary due to their differing fee structures. See returns table on the next page. Average Annual Compound Total Return -------------------------------------------------------------------------------- Since Inception Periods Ended 12/31/03 1 Year 5 Years 10 Years Inception Date -------------------------------------------------------------------------------- Blue Chip Growth Fund 29.75% -0.32% 11.13% - - S&P 500 Stock Index 28.68 -0.57 11.07 Lipper Large-Cap Growth Funds Index 26.96 -5.53 7.77 Lipper Large-Cap Core Funds Index 24.80 -1.08 9.27 Blue Chip Growth Fund- Advisor Class 29.77 - - -6.64% 3/31/00 S&P 500 Stock Index 28.68 - - -6.24* Lipper Large-Cap Core Funds Index 24.80 - - -7.01* Lipper Large-Cap Growth Funds Index 26.96 - - -16.15* Blue Chip Growth Fund- R Class 29.23 - - 30.20 9/30/02 S&P 500 Stock Index 28.68 - - 30.51** Lipper Large-Cap Core Funds Index 24.80 - - 25.68** Lipper Large-Cap Growth Funds Index 26.96 - - 25.20** * Benchmark since-inception data are for the time period 3/31/00-12/31/03. ** Benchmark since-inception data are for the time period 9/30/02-12/31/03. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. Past performance cannot guarantee future results. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report Dear Shareholder, We are pleased to report that the Blue Chip Growth Fund, Blue Chip Growth Fund-Advisor Class, and Blue Chip Growth Fund-R Class generated solid returns for the 12-month period ended December 31, 2003. The fund's 2003 return outpaced the Lipper Large-Cap Core Funds Index and the S&P 500 Stock Index. The fund especially benefited from stock selection in the telecom services and health care sectors. As you know, the fund's investment objective is to provide long-term capital growth through investments primarily in large and medium-sized, high-quality U.S. growth stocks. These are firms that, in our view, are well established in their industries and have the potential for above-average earnings and cash flow growth. [Graphic Omitted] Major Index Returns -------------------------------------------------------------------------------- Period Ended 12/31/03 12-Month Return S&P 500 Stock Index 29% S&P MidCap 400 Index 36% Russell 2000 Index 47% Nasdaq Composite 50% The Major Index Returns table shows how various domestic stock market benchmarks performed over the past 12 months. As you can see, domestic stocks registered solid returns, with the technology-laden Nasdaq Composite and the small-cap Russell 2000 Index showing the best results. Mid-cap stocks outperformed large-cap stocks, as represented by the S&P 500 Stock Index. The Top 5 Sectors table shows how the fund's assets were allocated as of December 31, 2003. Financials were the largest sector allocation at 23.4% of net assets, down from 25.8% a year earlier. Health care holdings were trimmed to 17.3% from 20.3%, while our allocation to consumer discretionary stocks rose to 16.3% from 12.9% at the end of 2002. Top 5 Sectors -------------------------------------------------------------------------------- Percent of Net Assets 12/31/02 12/31/03 Financials 25.8% 23.4% Information Technology 21.1 21.7 Health Care 20.3 17.3 Consumer Discretionary 12.9 16.3 Industrials and Business Services 7.6 9.2 For comparison purposes, we have restated the historical weightings to incorporate changes to the sector and industry classification system. The Best and Worst Conributors table shows the best and worst contributors to the fund's performance during the year. Diversified financial services giant Citigroup and communications equipment provider Cisco Systems were the top positive contributors, while health care services provider HCA was the worst detractor. Best and Worst Contributors -------------------------------------------------------------------------------- 12 Months Ended 12/31/03 Best Contributors -------------------------------------------------------------------------------- Citigroup Cisco Systems UnitedHealth Group Nextel Communications Tyco International Worst Contributors -------------------------------------------------------------------------------- HCA ** Freddie Mac Baxter International ** Automatic Data Processing ** Johnson & Johnson ** Position eliminated Finally, I'm sure you are aware that mutual fund companies have recently come under scrutiny for their trading policies. The investigations have led to allegations that executives of several mutual fund companies permitted or engaged in improper mutual fund trading. In addition, certain intermediaries that process fund transactions are alleged to have assisted some investors in executing improper mutual fund trades. I want T. Rowe Price shareholders to know that we emphatically condemn the abuses that have been revealed or alleged against other firms in our industry. Our firm has not entered and will not enter into any agreements with any investors or intermediaries that authorize after-hours trading or excessive short-term trading in any of our funds. T. Rowe Price investors can be assured that our firm unequivocally opposes illegal or inappropriate trading of any nature and has policies and procedures in place designed to protect the best interests of our long-term shareholders. No T. Rowe Price executives or portfolio managers or investment personnel of the T. Rowe Price mutual funds have engaged in any inappropriate trading of T. Rowe Price mutual funds. You may find out more about our trading policies and the steps we take to protect your interests by visiting our Web site (troweprice.com). These policies are also spelled out in your fund's prospectus. We thank you for your continued support. Respectfully, James S. Riepe Chairman January 20, 2004 T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report Financial Highlights For a share outstanding throughout each period -------------------------------------------------------------------------------- Blue Chip Growth Class Year Ended 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 NET ASSET VALUE Beginning of period $ 21.95 $ 28.97 $ 33.85 $ 36.34 $ 30.60 Investment activities Net investment income (loss) 0.02 - (0.02) (0.03) 0.03 Net realized and unrealized gain (loss) 6.51 (7.02) (4.86) (0.84) 6.07 Total from investment activities 6.53 (7.02) (4.88) (0.87) 6.10 Distributions Net investment income (0.03) - - - (0.03) Net realized gain - - - (1.62) (0.33) Total distributions (0.03) - - (1.62) (0.36) NET ASSET VALUE End of period $ 28.45 $ 21.95 $ 28.97 $ 33.85 $ 36.34 ----------------------------------------------------- Ratios/Supplemental Data Total return^ 29.75% (24.23)% (14.42)% (2.53)% 20.00% Ratio of total expenses to average net assets 0.95% 0.96% 0.96% 0.91% 0.91% Ratio of net investment income (loss) to average net assets 0.10% 0.00% (0.06)% (0.09)% 0.10% Portfolio turnover rate 32.6% 46.2% 48.3% 50.9% 41.3% Net assets, end of period (in millions) $ 6,300 $ 4,482 $ 6,242 $ 7,113 $ 6,709 ^ 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 -------------------------------------------------------------------------------- Certified Annual Report Financial Highlights For a share outstanding throughout each period -------------------------------------------------------------------------------- Advisor Class Year 3/31/00 Ended Through 12/31/03 12/31/02 12/31/01 12/31/00 NET ASSET VALUE Beginning of period $ 21.97 $ 29.02 $ 33.91 $ 38.63 Investment activities Net investment income (loss) 0.02 - (0.01) 0.02* Net realized and unrealized gain (loss) 6.52 (7.04) (4.88) (3.12) Total from investment activities 6.54 (7.04) (4.89) (3.10) Distributions Net investment income (0.03) - - - Net realized gain - - - (1.62) Tax return of capital - (0.01) - - Total distributions (0.03) (0.01) - (1.62) NET ASSET VALUE End of period $ 28.48 $ 21.97 $ 29.02 $ 33.91 -------------------------------------------------- Ratios/Supplemental Data Total return^ 29.77% (24.26)% (14.42)% (8.15)% Ratio of total expenses to average net assets 0.98% 0.99% 0.99% 0.69%! Ratio of net investment income (loss) to average net assets 0.07% (0.01)% (0.04)% 0.25%! Portfolio turnover rate 32.6% 46.2% 48.3% 50.9% Net assets, end of period (in thousands) $ 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 -------------------------------------------------------------------------------- Certified Annual Report Financial Highlights For a share outstanding throughout each period -------------------------------------------------------------------------------- R Class Year 9/30/02 Ended Through 12/31/03 12/31/02 NET ASSET VALUE Beginning of period $ 21.93 $ 20.37 Investment activities Net investment income (loss) (0.01)* (0.02)* Net realized and unrealized gain (loss) 6.42 1.58** Total from investment activities 6.41 1.56 Distributions Net investment income (0.03) - NET ASSET VALUE End of period $ 28.31 $ 21.93 --------------------------- Ratios/Supplemental Data Total return^ 29.23%* 7.66%* Ratio of total expenses to average net assets 1.35%* 1.35%!* Ratio of net investment income (loss) to average net assets (0.25%)* (0.28%)!* Portfolio turnover rate 32.6% 46.2%! Net assets, end of period (in thousands) $ 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 -------------------------------------------------------------------------------- Certified Annual Report December 31, 2003 Portfolio of Investments (ss.) Shares Value -------------------------------------------------------------------------------- ($ 000s) COMMON STOCKS 100.4% CONSUMER DISCRETIONARY 16.3% Automobiles 1.0% Harley-Davidson 1,500,000 71,295 71,295 Hotels, Restaurants & Leisure 2.8% Carnival 1,500,000 59,595 International Game Technology 2,000,000 71,400 McDonald's 1,000,000 24,830 MGM Mirage * 340,000 12,787 Starbucks * 910,000 30,085 198,697 Internet & Catalog Retail 0.6% eBay * 640,000 41,338 41,338 Media 8.4% Clear Channel Communications 2,170,000 101,621 Comcast, Class A * 2,575,000 80,546 Disney 1,000,000 23,330 EchoStar Communications, Class A * 1,600,000 54,400 Omnicom 532,000 46,459 Scripps, Class A 520,000 48,953 Time Warner * 3,400,000 61,166 Univision Communications, Class A * 1,540,000 61,123 Viacom, Class B 2,660,000 118,051 595,649 Multiline Retail 1.3% Family Dollar Stores 70,000 2,512 Kohl's * 10,000 449 Target 2,230,000 85,632 88,593 Specialty Retail 2.2% Best Buy 890,000 46,493 Home Depot 3,000,000 106,470 TJX 100,000 2,205 155,168 Total Consumer Discretionary 1,150,740 CONSUMER STAPLES 5.3% Beverages 1.8% Coca-Cola 1,500,000 76,125 PepsiCo 1,150,000 53,613 129,738 Food & Staples Retailing 2.0% Sysco 1,210,000 45,048 Wal-Mart 1,630,000 86,471 Walgreen 325,000 11,824 143,343 Food Products 0.1% General Mills 100,000 4,530 4,530 Household Products 0.3% Procter & Gamble 190,000 18,977 18,977 Personal Products 0.5% Estee Lauder, Class A 370,000 14,526 Gillette 550,000 20,202 34,728 Tobacco 0.6% Altria Group 770,000 41,904 41,904 Total Consumer Staples 373,220 ENERGY 2.8% Energy Equipment & Services 2.8% Baker Hughes 1,810,000 58,210 BJ Services * 790,000 28,361 Schlumberger 1,300,000 71,136 Smith International * 1,000,000 41,520 199,227 Oil & Gas 0.0% Exxon Mobil 40,000 1,640 1,640 Total Energy 200,867 FINANCIALS 23.4% Capital Markets 8.5% Bank of New York 1,000,000 33,120 Charles Schwab 2,500,000 29,600 Franklin Resources 820,000 42,689 Goldman Sachs Group 675,000 66,643 Legg Mason 442,000 34,114 Mellon Financial 2,320,000 74,495 Merrill Lynch 1,550,000 90,907 Morgan Stanley 1,300,000 75,231 Northern Trust 1,120,000 51,990 State Street 2,000,000 104,160 602,949 Commercial Banks 3.0% Bank of America 890,000 71,583 U.S. Bancorp 2,410,000 71,770 Wells Fargo 1,180,000 69,490 212,843 Consumer Finance 1.6% American Express 1,120,000 54,018 SLM Corporation 1,580,000 59,534 113,552 Diversified Financial Services 4.0% Citigroup 5,830,000 282,988 282,988 Insurance 4.6% Ambac 50,000 3,470 American International Group 2,350,000 155,758 Hartford Financial Services 950,000 56,078 Marsh & McLennan 1,300,000 62,257 Travelers Property Casualty, Class A 2,800,000 46,984 324,547 Thrifts & Mortgage Finance 1.7% Fannie Mae 1,300,000 97,578 Freddie Mac 300,000 17,496 115,074 Total Financials 1,651,953 HEALTH CARE 17.2% Biotechnology 2.6% Amgen * 1,580,000 97,644 Genentech * 280,000 26,200 Gilead Sciences * 790,000 45,930 MedImmune * 460,000 11,684 181,458 Health Care Equipment & Supplies 1.8% Boston Scientific * 1,120,000 41,171 Guidant 160,000 9,632 Medtronic 1,240,000 60,277 Stryker 235,000 19,977 131,057 Health Care Providers & Services 5.0% AmerisourceBergen 25,000 1,404 Anthem * 100,000 7,500 Cardinal Health 275,000 16,819 Medco * 400,000 13,596 UnitedHealth Group, 3,815,000 221,957 WellPoint Health Networks * 950,000 92,140 353,416 Pharmaceuticals 7.8% Abbott Laboratories 1,150,000 53,590 Eli Lilly 610,000 42,901 Forest Laboratories * 1,150,000 71,070 Johnson & Johnson 1,500,000 77,490 Pfizer 7,450,000 263,209 Wyeth 1,000,000 42,450 550,710 Total Health Care 1,216,641 INDUSTRIALS & BUSINESS SERVICES 9.2% Aerospace & Defense 0.7% General Dynamics 275,000 24,857 Honeywell International 100,000 3,343 Lockheed Martin 400,000 20,560 48,760 Air Freight & Logistics 0.7% UPS, Class B 655,000 48,830 48,830 Commercial Services & Supplies 1.9% Apollo Group, Class A * 1,162,000 79,016 Cendant * 1,450,000 32,292 ChoicePoint * 325,000 12,379 Waste Management 275,000 8,140 131,827 Industrial Conglomerates 3.6% 3M 220,000 18,707 General Electric 4,100,000 127,018 Tyco International 4,000,000 106,000 251,725 Machinery 2.3% Danaher 1,400,000 128,450 Deere 415,000 26,996 Illinois Tool Works 130,000 10,908 166,354 Total Industrials & Business Services 647,496 INFORMATION TECHNOLOGY 21.2% Communications Equipment 3.2% Cisco Systems * 6,600,000 160,314 Nokia ADR 1,700,000 28,900 QLogic * 400,000 20,640 QUALCOMM 325,000 17,527 Research In Motion * 40,000 2,684 230,065 Computer & Peripherals 2.1% Dell * 2,900,000 98,484 EMC * 190,000 2,455 IBM 100,000 9,268 Lexmark International * 470,000 36,961 147,168 Internet Software & Services 1.4% InterActiveCorp * 1,525,000 51,743 Yahoo! * 1,120,000 50,591 102,334 IT Services 3.8% Accenture, Class A * 1,400,000 36,848 Affiliated Computer Services, Class A * 1,000,000 54,460 First Data 2,500,000 102,725 Fiserv * 1,090,000 43,066 Paychex 370,000 13,764 SunGard Data Systems * 610,000 16,903 267,766 Semiconductor & Semiconductor Equipment 5.2% Analog Devices 1,510,000 68,931 Applied Materials * 2,200,000 49,390 Intel 2,490,000 80,178 Maxim Integrated Products 1,810,000 90,138 Texas Instruments 1,500,000 44,070 Xilinx * 820,000 31,767 364,474 Software 5.5% Adobe Systems 790,000 31,047 Intuit * 1,330,000 70,370 Microsoft 7,975,000 219,631 Oracle * 100,000 1,320 Siebel Systems * 1,240,000 17,199 Symantec * 820,000 28,413 Synopsys * 200,000 6,752 VERITAS Software * 400,000 14,864 389,596 Total Information Technology 1,501,403 MATERIALS 0.4% Metals & Mining 0.4% Alcoa 790,000 30,020 Total Materials 30,020 TELECOMMUNICATION SERVICES 3.5% Wireless Telecommunication Services 3.5% Nextel Communications, Class A * 3,650,000 102,419 Vodafone ADR 5,900,000 147,736 Total Telecommunication Services 250,155 Total Miscellaneous Common Stock 1.1% 74,573 Total Common Stocks (Cost $5,505,392) 7,097,068 SHORT-TERM INVESTMENTS 0.0% Money Market Fund 0.0% T. Rowe Price Reserve Investment Fund, 1.13% # 1,000 1 Total Short-Term Investments (Cost $1) 1 Total Investments in Securities 100.4% of Net Assets (Cost $5,505,393) $7,097,069 ----------- (ss.) Denominated in U.S. dollars unless otherwise noted # Seven-day yield * Non-income producing ADR American Depository Receipts The accompanying notes are an integral part of these financial statements. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report December 31, 2003 Statement of Assets and Liabilities -------------------------------------------------------------------------------- ($ 000s) Assets Investments in securities, at value (cost $5,505,393) $ 7,097,069 Other assets 27,454 Total assets 7,124,523 Liabilities Total liabilities 52,895 NET ASSETS $ 7,071,628 ------------ Net Assets Consist of: Undistributed net realized gain (loss) (1,164,899) Net unrealized gain (loss) 1,591,676 Paid-in-capital applicable to 248,517,201 shares of $0.0001 par value capital stock outstanding; 1,000,000,000 shares authorized 6,644,851 NET ASSETS $ 7,071,628 ------------ NET ASSET VALUE PER SHARE Blue Chip Growth Class ($6,300,148,185/221,424,106 shares outstanding) $ 28.45 ------------ Advisor Class ($769,970,117/27,039,789 shares outstanding) $ 28.48 ------------ R Class ($1,509,286/53,306 shares outstanding) $ 28.31 ------------ The accompanying notes are an integral part of these financial statements. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report Statement of Operations -------------------------------------------------------------------------------- ($ 000s) Year Ended 12/31/03 Investment Income (Loss) Income Dividend $ 62,008 Securities lending 31 Total income 62,039 Expenses Investment management 36,657 Shareholder servicing Blue Chip Growth Class 16,432 Advisor Class 626 R Class 1 Distribution and service Advisor Class 1,579 R Class 2 Prospectus and shareholder reports Blue Chip Growth Class 515 Advisor Class 1 R Class 1 Custody and accounting 284 Registration 95 Legal and audit 38 Directors 31 Miscellaneous 54 Reductions/repayments pursuant to expense limitation Expenses (reimbursed by) repaid to manager (1) Total expenses 56,315 Expenses paid indirectly (2) Net expenses 56,313 Net investment income (loss) 5,726 Statement of Operations -------------------------------------------------------------------------------- ($ 000s) Year Ended 12/31/03 Realized and Unrealized Gain (Loss) Net realized gain (loss) Securities (184,241) Foreign currency transactions (280) Net realized gain (loss) (184,521) Change in net unrealized gain (loss) on securities 1,761,118 Net realized and unrealized gain (loss) 1,576,597 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 1,582,323 ----------- The accompanying notes are an integral part of these financial statements. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report Statement of Changes in Net Assets -------------------------------------------------------------------------------- ($ 000s) Year Ended 12/31/03 12/31/02 Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 5,726 $ (111) Net realized gain (loss) (184,521) (475,496) Change in net unrealized gain (loss) 1,761,118 (1,152,131) Increase (decrease) in net assets from operations 1,582,323 (1,627,738) Distributions to shareholders Net investment income Blue Chip Growth Class (6,682) - Advisor Class (808) - R Class (1) - Tax return of capital Advisor class - (245) Decrease in net assets from distributions (7,491) (245) Capital share transactions * Shares sold Blue Chip Growth Class 1,289,603 1,093,942 Advisor Class 196,170 251,622 R Class 1,460 100 Distributions reinvested Blue Chip Growth Class 6,546 - Advisor Class 799 244 R Class 1 - Shares redeemed Blue Chip Growth Class (883,927) (1,355,267) Advisor Class (134,017) (53,645) R Class (216) - Increase (decrease) in net assets from capital share transactions 476,419 (63,004) Net Assets Increase (decrease) during period 2,051,251 (1,690,987) Beginning of period 5,020,377 6,711,364 End of period $ 7,071,628 $ 5,020,377 ------------------------------ Statement of Changes in Net Assets -------------------------------------------------------------------------- ($ 000s) Year Ended 12/31/03 12/31/02 *Share information Shares sold Blue Chip Growth Class 52,766 43,856 Advisor Class 8,044 10,496 R Class 56 5 Distributions reinvested Blue Chip Growth Class 238 - Advisor Class 29 11 Shares redeemed Blue Chip Growth Class (35,804) (55,121) Advisor Class (5,549) (2,158) R Class (8) - Increase (decrease) in shares outstanding 19,772 (2,911) The accompanying notes are an integral part of these financial statements. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report December 31, 2003 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: Blue Chip Growth (Blue Chip Class), offered since June 30, 1993, Blue Chip Growth--Advisor Class (Advisor Class), offered since March 31, 2000, and Blue Chip Growth--R Class (R Class), offered since September 30, 2002. Advisor Class shares are sold only through brokers and other 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 and 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 official closing price for certain markets, at the time the valuations are made. 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 ask 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 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 NYSE. Normally, developments that could affect the values of securities that occur between the close of a foreign market and the close of the NYSE will not be reflected in security valuations used by the fund to compute its share price. However, if developments are so significant that they will, in the judgment of the fund, clearly and materially affect security values, such valuations may be adjusted to reflect the estimated 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. 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 ask 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 and 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. Income distributions are declared and paid by each class on an annual basis. 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 $360,000 for the year ended December 31, 2003. 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. 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 on an annual basis. Capital gain distributions, if any, are typically declared and paid on an annual basis. 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, 2003, there were no securities on loan. Other Purchases and sales of portfolio securities, other than short-term securities, aggregated $2,423,778,000 and $1,919,079,000, respectively, for the year ended December 31, 2003. 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, 2003 totaled $7,491,000 and were characterized as ordinary income for tax purposes. At December 31, 2003, the tax-basis components of net assets were as follows: -------------------------------------------------------------------------------- Unrealized appreciation $ 1,678,622,000 Unrealized depreciation (90,383,000) Net unrealized appreciation (depreciation) 1,588,239,000 Capital loss carryforwards (1,161,462,000) Paid-in capital 6,644,851,000 Net assets $ 7,071,628,000 -------------------- Pursuant to federal income tax regulations applicable to investment companies, the fund has elected to treat net capital losses realized between November 1 and December 31 of each year as occurring on the first day of the following tax year. Consequently, $3,437,000 of realized losses reflected in the accompanying financial statements will not be recognized for tax purposes until 2004. The fund intends to retain realized gains to the extent of available capital loss carryforwards for federal income tax purposes. As of December 31, 2003, the fund had $485,133,000 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, 2003, the fund recorded the following permanent reclassifications to reflect tax character. Reclassifications to paid-in capital relate primarily to per-share rounding of distributions. Results of operations and net assets were not affected by these reclassifications. -------------------------------------------------------------------------------- Unrealized net investment income $ 1,765,000 Unrealized net realized gain 268,000 Paid-in capital (2,033,000) At December 31, 2003, the cost of investments for federal income tax purposes was $5,508,830,000. 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, 2003, the effective annual group fee rate was 0.32%, and investment management fee payable totaled $3,615,000. 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 December 31, 2003 April 30, 2004 Repayment Date December 31, 2005 April 30, 2006 At December 31, 2003, expenses previously reimbursed by the manager remain subject to repayment in the amount of $1,000 through April 30, 2006 for the R Class. For the year ended December 31, 2003, the Advisor 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 Blue Chip Growth class, Advisor Class and R Class. Expenses incurred pursuant to these service agreements totaled $11,871,000 for the year ended December 31, 2003, of which $1,117,000 was payable at period-end. 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, 2003, the fund was charged $425,000 for shareholder servicing costs related to the college savings plans, of which $315,000 was for services provided by Price and $52,000 was payable at period-end. At December 31, 2003, approximately 2.4% of the outstanding shares of the Blue Chip Growth 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, 2003, the fund was allocated $494,000 of Spectrum Funds' expenses, of which $354,000 related to services provided by Price and $42,000 was payable at period-end. At December 31, 2003, approximately 4.2% of the outstanding shares of the Blue Chip Growth 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. The Reserve Funds are offered as cash management options only to mutual funds, trusts, and other accounts managed by Price Associates and/or its affiliates, and are not available to the public. The Reserve Funds pay no investment management fees. During the year ended December 31, 2003, dividend income from the Reserve Funds totaled $184,000. 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, 2003, the fund had outstanding borrowings on seven days, in the average amount of $11,343,000, and at an average annual rate of 1.51%. At December 31, 2003, the fund had outstanding borrowings of $12,200,000, at an annual rate of 1.30%. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report Report of Independent Auditors -------------------------------------------------------------------------------- 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, 2003, 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 auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2003 by correspondence with custodians, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Baltimore, Maryland January 26, 2004 T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report Tax Information (Unaudited) for the Tax Year Ended 12/31/03 -------------------------------------------------------------------------------- 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, $7,491,000 of the fund's income and short-term capital gains represents qualified dividend income subject to the 15% rate category. For corporate shareholders, $7,491,000 of the fund's income and short-term capital gains qualified for the dividends-received deduction. Information on Proxy Voting -------------------------------------------------------------------------------- A description of the policies and procedures that the T. Rowe Price Blue Chip Growth Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request by calling 1-800-225-5132. It also appears in the fund's Statement of Additional Information (Form 485B), which can be found on the SEC's Web site, www.sec.gov. T. Rowe Price Blue Chip Growth Fund -------------------------------------------------------------------------------- Certified Annual Report About the Fund's Directors and Officers -------------------------------------------------------------------------------- Your fund is governed by a Board of Directors that meets regularly to review investments, performance, expenses, and other business matters, 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 (Date 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 (1/28/45) Chief Executive Officer, The Rouse Company, 2001 real estate developers; Director, Mercantile Bank (4/03 to present) Donald W. Dick, Jr. Principal, EuroCapital Advisors, LLC, an (1/27/43) acquisition and management advisory firm 1993 David K. Fagin Director, Golden Star Resources Ltd., Canyon (4/9/38) Resources Corp. (5/00 to present), and Pacific Rim 1993 Mining Corp. (2/02 to present); Chairman and President, Nye Corp. Karen N. Horn Managing Director and President, Global Private (9/21/43) Client Services, Marsh Inc.; Managing Director 2003 and Head of International Private Banking, Bankers Trust; Director, Eli Lilly and Company F. Pierce Linaweaver President, F. Pierce Linaweaver & Associates, (8/22/34) Inc., consulting environmental and civil engineers 2001 John G. Schreiber Owner/President, Centaur Capital Partners, Inc., a (10/21/46) real estate investment company; Senior Advisor 2001 and Partner, Blackstone Real Estate Advisors, L.P.; Director, AMLI Residential Properties Trust, Host Marriott Corp., and The Rouse Company Hubert D. Vos** Owner/President, Stonington Capital Corp., (8/2/33) a private investment company 1993 Paul M. Wythes** Founding Partner, Sutter Hill Ventures, a (6/23/33) venture capital limited partnership, providing 1993 equity capital to young high-technology companies throughout the United States; Director, Teltone Corp. * Each independent director oversees 107 T. Rowe Price portfolios and serves until retirement, resignation, or election of a successor. ** Retired from Board of Directors effective December 31, 2003. Inside Directors Name (Date 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 (8/15/53) and T. Rowe Price Group, Inc. 1997 [39] James S. Riepe Director and Vice President, T. Rowe Price; Vice (6/25/43) Chairman of the Board, Director, and Vice 1993 President, T. Rowe Price Group, Inc.; Chairman [107] of 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 M. David Testa, CFA, CIC Chief Investment Officer, Director, and Vice (4/22/44) President, T. Rowe Price; Vice Chairman of 1993 the Board, Chief Investment Officer, Director, [107] and Vice President, T. Rowe Price Group, Inc.; Chairman of the Board and Director, T. Rowe Price International, Inc.; Director, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited; Director and Vice President, T. Rowe Price Trust Company * Each inside director serves until retirement, resignation, or election of a successor. Officers Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) Jeffrey A. Arricale, CPA (4/11/71) Vice President, T. Rowe Price; formerly Vice President, Blue Chip Growth Fund Manager, Assurance, KPMG LLP (to 1999); student, The Wharton School, University of Pennsylvania (to 2001) Stephen V. Booth (6/21/61) 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 (12/30/60) Vice President, T. Rowe Price, T. Rowe Treasurer, Blue Chip Growth Fund Price Group, Inc., and T. Rowe Price Investment Services, Inc. Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe Price International for at least five years. Officers (continued) Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) Donald J. Easley, CFA (11/28/71) Vice President, T. Rowe Price Vice President, Blue Chip Growth Fund and T. Rowe Price Group, Inc. Henry M. Ellenbogen (1/21/71) Vice President, T. Rowe Price; formerly Vice President, Blue Chip Growth Fund Chief of Staff, U.S. Representative Peter Deutsch (to 1999); Executive Vice President, Business Development, HelloAsia (to 2001) Roger L. Fiery III, CPA (2/10/59) 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 (10/18/57) Vice President, T. Rowe Price and Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc. Henry H. Hopkins (12/23/42) Director and Vice President, T. Rowe Vice President, Blue Chip Growth Fund Price Group, Inc., T. Rowe Price Investment Services, Inc., T. Rowe Price Services, Inc., and T. Rowe Price Trust Company; Vice President, T. Rowe Price, T. Rowe Price International, Inc., and T. Rowe Price Retirement Plan Services, Inc. Thomas J. Huber, CFA (9/23/66) Vice President, T. Rowe Price and Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc. Kris H. Jenner, MD, D. Phil. (2/5/62) Vice President, T. Rowe Price and Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc. Christopher R. Leonard, CFA (1/11/73) Vice President, T. Rowe Price and Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc. Patricia B. Lippert (1/12/53) Assistant Vice President, T. Rowe Price Secretary, Blue Chip Growth Fund and T. Rowe Price Investment Services, Inc. Timothy E. Parker (11/9/74) Vice President, T. Rowe Price; formerly Vice President, Blue Chip Growth Fund Financial Analyst, Robert W. Baird & Co., Inc. (to 1999); student, Darden Graduate School, University of Virginia (to 2001) Larry J. Puglia, CFA, CPA (8/25/60) Vice President, T. Rowe Price President, Blue Chip Growth Fund and T. Rowe Price Group, Inc. Karen M. Regan (4/16/67) Assistant Vice President, T. Rowe Price Vice President, Blue Chip Growth Fund Jeffrey Rottinghaus, CPA (2/20/70) Vice President, T. Rowe Price; Vice President, Blue Chip Growth Fund formerly Information Technology Consultant, Kelly-Lewey & Associates (to 1999); student, The Wharton School, University of Pennsylvania (to 2001) Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe Price International for at least five years. Officers (continued) Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) Robert W. Sharps, CFA (6/10/71) Vice President, T. Rowe Price and Vice President, Blue Chip Growth Fund T. Rowe Price Group, Inc. Robert W. Smith (4/11/61) 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 (5/12/70) 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. As of the end of the period covered by this report, 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: 2003 2002 Audit Fees $25,034 $18,116 Audit-Related Fees 1,499 -- Tax Fees 6,502 4,386 All Other Fees 124 315 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) Not applicable. (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 $719,000 and $671,000, 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. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 9. 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 changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits. (a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is attached. (a)(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. (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 13, 2004 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 13, 2004 By /s/ Joseph A. Carrier Joseph A. Carrier Principal Financial Officer Date February 13, 2004