U.S. Large-Cap Core Fund TRULX. U.S. Large-Cap Core Fund Advisor Class PAULX. U.S. Large-Cap Core Fund I Class RCLIX SEMIANNUAL REPORT

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1 SEMIANNUAL REPORT June 30, 2018 TRULX T. ROWE PRICE U.S. Large-Cap Core Fund PAULX U.S. Large-Cap Core Fund Advisor Class RCLIX U.S. Large-Cap Core Fund I Class The fund invests in large-cap U.S. companies using both growth and value strategies. For more insights from T. Rowe Price investment professionals, go to troweprice.com.

2 HIGHLIGHTS The U.S. Large-Cap Core Fund returned 1.81% for the six-month reporting period, underperforming its S&P 500 Index benchmark and performing in line with the Lipper Large-Cap Core Funds Index. Stock selection in information technology, consumer discretionary, health care, and utilities produced many of the portfolio s top absolute contributors, while our shares in consumer staples, materials, industrials and business services, and energy detracted. The fund s largest sector allocations were in the information technology, health care, and financials sectors accounting for almost 60% of our assets. In the near term, we acknowledge that strong earnings growth could continue to buttress stocks. However, in the intermediate term, we are mindful of potential risks from slowing economic growth, geopolitical shocks, and protectionist trade policies. Go Paperless Sign up for e-delivery of your statements, confirmations, and prospectuses or shareholder reports. TO ENROLL: If you invest directly with T. Rowe Price, go to troweprice.com/paperless. If you invest through an investment advisor, a bank, or a brokerage firm, please contact that organization and ask if it can provide electronic documentation. It s fast receive your statements and confirmations faster than U.S. mail. It s convenient access your important account documents whenever you need them. It s secure we protect your online accounts using True Identity to confirm new accounts and make verification faster and more secure. It can save you money where applicable, T. Rowe Price passes on the cost savings to fund holders.* Log in to your account at troweprice.com for more information. * Certain mutual fund accounts that are assessed an annual account service fee can also save money by switching to e-delivery.

3 CIO Market Commentary Dear Shareholder U.S. stocks recorded decent gains in the first half of 2018, but unlike last year, investors had to absorb some bumps along the way. In February, volatility spiked and the S&P 500 Index briefly tumbled over 10% from its highs, putting it in correction territory. The major U.S. benchmarks recovered their losses in the spring, eventually bringing the technology-focused Nasdaq Composite Index and the smaller-cap indexes to new highs. Volatility stayed somewhat elevated, however, and many investors clearly remained anxious as the first half of your fund s fiscal year ended. Solid corporate and economic fundamentals initially seemed to promise that 2017 s strong stock market momentum might carry forward into Continued global synchronized growth led to strong profits for many multinationals. In the U.S., earnings for the S&P 500 rose by nearly 25% in the first quarter versus a year before, according to FactSet the best performance since the recovery from the financial crisis. Profit growth also picked up in Europe, Japan, and emerging markets, even as growth in many international economies cooled a bit. Inflation fears presented the first obstacle to the markets in February, however. Stocks tumbled on news that hourly wages had jumped in January, sparking fears that the Federal Reserve would pick up its pace of interest rate increases in order to head off inflation. Wage growth moderated in the following months, but a series of strong economic reports raised growth expectations and sent long-term interest rates to multiyear peaks by May. Investors also worried that the massive U.S. fiscal stimulus from December s tax cuts and March s spending bill might overheat the economy, though interest rates fell back in late May and June as Fed officials stressed their intention to move slowly in tightening monetary policy. Trade tensions soon emerged as a second impediment for the markets. The Trump administration began implementing a more populist trade stance in March, announcing tariffs on steel and aluminum imports, threatening to withdraw from the North American Free Trade Agreement (NAFTA), and later raising the possibility of taxing auto imports. The administration also announced a steady escalation in possible tariffs on Chinese goods, eventually targeting a list of $200 billion in Chinese imports. China and other U.S. trading partners vowed to retaliate proportionately. 1

4 Investors initially seemed willing to dismiss the tit-for-tat threats as negotiating tactics, but evidence eventually emerged that even the prospect of tariffs was impacting corporate strategies and profit outlooks. Stocks slumped on June 21, after German automaker Daimler lowered its earnings guidance due to possible tariff increases on SUVs it manufactures in the U.S. and sells in China. A few days later, Harley-Davidson revealed that it was planning to move some of its motorcycle production to Europe to avoid retaliatory tariffs recently announced by the European Union. Boeing, Caterpillar, and other leading exporters suffered declines as trade tensions worsened, but small-caps, which typically have far less international exposure, fared much better than large-caps in the first half of the year. Growth shares continued to outperform value shares despite the strong performance of energy stocks, which benefited from a rise in oil prices to multiyear highs. Stocks in overseas markets reacted particularly poorly to growing trade fears and fell for the period. A decline in many currencies relative to the dollar also weighed on international bond and stock returns for U.S. investors. Meanwhile, technology shares continued to dominate, with much of the market s overall gain to date in 2018 concentrated in a handful of mega-cap companies able to leverage dominant Internet platforms. Data breaches and concerns about the growing power of these firms resulted in calls for government intervention in early For now, however, the threat of increased regulation seems a longer-term one that appears minor in comparison to the powerful fundamental strength of these companies. T. Rowe Price s global team of industry experts is monitoring the possible impact of tariffs and other challenges on a wide range of companies from the global tech titans to small, domestic firms that get little analyst coverage on Wall Street. While the rest of 2018 may bring further surprises, you can rest assured that your portfolio manager is drawing on a wide range of insights in seeking to provide shareholders with superior returns while minimizing the impact of unforeseen political events or other pitfalls. Thank you for your continued confidence in T. Rowe Price. Sincerely, Robert Sharps Group Chief Investment Officer 2

5 Management s Discussion of Fund Performance INVESTMENT OBJECTIVE The fund seeks to provide long-term capital growth. FUND COMMENTARY How did the fund perform in the past six months? The U.S. Large-Cap Core Fund returned 1.81% in the six months ended June 30, The fund underperformed its benchmark, the S&P 500, which returned 2.65%, and performed in line with the Lipper Large-Cap Core Funds Index. Returns for the Advisor and I Class shares reflect their different fee structures. (Past PERFORMANCE COMPARISON performance cannot guarantee future results.) Six-Month Period Ended 6/30/18 Total Return What factors influenced the U.S. Large-Cap Core Fund 1.81% fund s performance? U.S. Large-Cap Core Fund Advisor Class 1.68 Our selection of stocks in U.S. Large-Cap Core Fund I Class 1.93 the information technology, S&P 500 Index 2.65 consumer discretionary, Lipper Large-Cap Core Funds Index 1.85 health care, and utilities sectors produced many of the portfolio s top absolute contributors. Our shares in the consumer staples, materials, industrials and business services, and energy sectors detracted on an absolute basis. Relative to the fund s S&P 500 benchmark, stock selection in health care and financials notably outperformed, while our shares in energy, consumer discretionary, and consumer staples underperformed. Our top absolute contributors came from a variety of sectors. Consumer discretionary stock Amazon.com was the top contributor in absolute terms. Most of Amazon.com s rise occurred during the beginning of the period when technology-based stocks rallied strongly. Subscription service Amazon Prime and Amazon Web Service, the cloud computing and data storage unit, have a wide lead on the competition, and we believe the company can benefit from ongoing growth. Another top absolute contributor that benefited from the technology stock rally was Microsoft, the fund s largest holding. Health care equipment supplier Becton, Dickinson & Company performed very well throughout the period, benefiting from continued growth in revenue and earnings, which was helped by its purchase of medical products supplier C.R. Bard. Stock selection in health care aided absolute performance, including 3

6 managed care provider UnitedHealth Group, diversified health care conglomerate Danaher, and life sciences equipment provider Thermo Fisher Scientific. Stock selection of insurance companies within the financials sector bolstered the portfolio s absolute performance. Insurers XL Group, Marsh & McLennan, and Willis Towers Watson are examples of our bullish sentiment toward property and casualty insurers given that these companies are trading at attractive valuations and stand to benefit from rising insurance premiums. Our shares in XL Group, in particular, surged after French financial company AXA agreed to buy it at a premium. (Please refer to the portfolio of investments for a complete list of holdings and the amount each represents in the portfolio.) Our absolute detractors also came from a variety of sectors. Our shares in global tools maker Stanley Black & Decker fell on weakness in housing as well as uncertainty about new steel trade tariffs, and Philip Morris, an international seller of tobacco-based products, performed poorly following the surprisingly weak growth of iqos, a heat-not-burn e-cigarette device, in Japan, one of the company s key growth markets. Kraft Heinz shares fell amid a challenging U.S. retail environment for packaged food companies, and multinational finance and insurance company American International Group faced multiple natural disasters in 2017 that continued to negatively impact its property and casualty business segment. However, we continue to believe that American International Group has long-term upside potential due to rising insurance premiums. Our shares in Wells Fargo traded lower after the Federal Reserve restricted the bank from increasing its total assets until it changes its governance and risk management practices. How is the fund positioned? The fund s largest allocations at the end of the period were in the information technology, health care, and financials sectors accounting for almost 60% of the portfolio. Within financials, we invested in quality companies that trade at reasonable valuations and can benefit from deregulation, lowered taxes, and higher interest rates. In health care, we favored companies that were well positioned to take advantage of long-term industry trends, such as costsaving distribution methods and highly innovative and effective therapies. We were underweight consumer discretionary as many brick-and-mortar retailers face significant online challenges, but the fund had select exposure to Internet and direct marketing retailers. Our modest underweight to consumer staples reflected a relative dearth of opportunities as companies in the current environment face deflationary food prices and competitive pressure from online retailers. 4

7 SECTOR DIVERSIFICATION Percent of Net Assets 12/31/17 6/30/18 Information Technology 20.5% 24.5% Health Care Financials Consumer Discretionary Industrials and Business Services Energy Consumer Staples Utilities Materials Real Estate Telecommunication Services Other and Reserves Total 100.0% 100.0% Historical weightings reflect current industry/sector classifications. Our top five holdings, Microsoft, Alphabet, Apple, ExxonMobil, and Medtronic (a medical device company) represent a variety of sectors. We found attractive buying opportunities within information technology, and while we remained underweight in the sector, it represented our largest absolute weighting. We added opportunistically to Apple and sold some from Cisco Systems, a manufacturer of networking hardware and software, on strength. Some of our notable initiations were in paper-based consumer products company Kimberly-Clark because of its attractive valuations and potential for growth, oil field services company Schlumberger due to its potential to benefit from higher oil prices and international exposure, and pharmaceutical Pfizer, an attractively priced stock that we believed was underappreciated by the market for its pipeline of oncology and other drugs. We trimmed Becton, Dickinson & Company and Danaher on strength, with the latter falling out of our list of top 10 stocks. We eliminated several stocks to fund higher-conviction ideas. We eliminated Wells Fargo following the bank s steady stream of regulatory challenges and missteps. We used those proceeds to purchase shares in First Republic Bank, a small bank that is growing, and to add to shares in U.S. Bancorp, a conservative bank that was attractively priced and offered the potential for high returns. We eliminated the aforementioned XL Group on strength after an announcement that it would be acquired by financial company AXA. Comcast was eliminated from the portfolio because we were unclear about management s motivation for getting into a bidding war to purchase another media company. We saw no further reason to continue holding Kraft Heinz following missed earnings and continued competitive pressures. 5

8 What is portfolio management s outlook? We believe the U.S. is in the later stages of economic and market cycles, and as a result, we maintain our cautious view on equities. In the near term, we acknowledge that strong earnings growth could continue to buttress stocks. However, in the intermediate term, we are mindful of potential risks from slowing economic growth, geopolitical shocks, and protectionist trade policies. We believe the Federal Reserve is likely to continue with further rate hikes in 2018, but at a measured pace. In our view, the overall shape of the yield curve is a more important focus given the impact that a steepening or flattening curve would have on earnings, particularly in the financials sector. Within the portfolio, we expect stock selection will be the primary driver of longer-term outperformance. We believe careful fundamental research will be necessary to find opportunities, and we will continue to search for investment opportunities in select areas of the market, utilizing our bottom-up stock selection approach. As always, we rely on our global research team of industry specialists to uncover fundamentally sound companies and remain committed to providing quality risk-adjusted returns over the long term. The views expressed reflect the opinions of T. Rowe Price as of the date of this report and are subject to change based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. 6

9 RISKS OF STOCK INVESTING As with all stock and bond mutual funds, a fund s share price can fall because of weakness in the stock or bond 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. Funds investing in stocks with a dividend orientation may have somewhat lower potential for price appreciation than those concentrating on rapidly growing firms. Also, a company may reduce or eliminate its dividend. 7

10 PORTFOLIO HIGHLIGHTS TWENTY-FIVE LARGEST HOLDINGS Percent of net Assets 6/30/18 Microsoft 3.1% Alphabet 3.0 Apple 2.9 ExxonMobil 2.8 Medtronic 2.5 U.S. Bancorp 2.4 JPMorgan Chase 2.4 Becton, Dickinson & Company 2.4 Visa 2.3 UnitedHealth Group 2.2 Honeywell International 2.1 Amazon.com 2.1 Facebook 2.1 Cisco Systems 2.0 Waste Connections 2.0 DowDuPont 2.0 Danaher 2.0 Marsh & McLennan 1.8 Home Depot 1.7 Fidelity National Information 1.7 Willis Towers Watson 1.7 Schlumberger 1.7 American Water Works 1.6 Dollar General 1.6 American International Group 1.6 Total 53.7% Note: The information shown does not reflect any exchange-traded funds (ETFs), cash reserves, or collateral for securities lending that may be held in the portfolio. 8

11 GROWTH OF $10,000 This table 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 include a broad-based market index and may also include 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. U.S. LARGE-CAP CORE FUND $40,000 34,000 28,000 22,000 16,000 10,000 6/26/09 6/10 6/11 6/12 6/13 6/14 6/15 6/16 6/17 6/18 As of 6/30/18 U.S. Large-Cap Core Fund S&P 500 Index Lipper Large-Cap Core Funds Index* $34,179 35,718 31,912 Performance for the Advisor and I Class shares will vary due to their differing fee structures. See returns table on the next page. *Lipper data start at 6/30/09. 9

12 AVERAGE ANNUAL COMPOUND TOTAL RETURN Since Inception Periods Ended 6/30/18 one Year Five Years Inception Date U.S. Large-Cap Core Fund 10.72% 13.14% 14.61% 6/26/09 U.S. Large-Cap Core Fund Advisor Class /26/09 U.S. Large-Cap Core Fund I Class /29/16 The fund s performance information represents only past performance and is not necessarily an indication of future results. Current performance may be lower or higher than the performance data cited. 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, please visit our website (troweprice.com) or contact a T. Rowe Price representative at or, for Advisor and I Class shares, This table shows how the fund would have performed each year if its actual (or cumulative) returns for the periods shown had been earned at a constant rate. 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 distributions or the redemption of shares. When assessing performance, investors should consider both short- and long-term returns. 10

13 EXPENSE RATIO U.S. Large-Cap Core Fund 0.79% U.S. Large-Cap Core Fund Advisor Class 1.05 U.S. Large-Cap Core Fund I Class 0.63 The expense ratio shown is as of the fund s fiscal year ended 12/31/17. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, includes acquired fund fees and expenses but does not include fee or expense waivers. FUND EXPENSE EXAMPLE 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, the Advisor Class shares are offered only through unaffiliated brokers and other financial intermediaries and charge a 0.25% 12b-1 fee, and I Class shares are available to institutionally oriented clients and impose no 12b-1 or administrative fee payment. 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 on 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 on 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. 11

14 FUND EXPENSE EXAMPLE (CONTINUED) Note: T. Rowe Price charges an annual account service fee of $20, generally for accounts with less than $10,000. The fee is waived for any investor whose T. Rowe Price mutual fund accounts total $50,000 or more; accounts electing to receive electronic delivery of account statements, transaction confirmations, prospectuses, and shareholder reports; or accounts of an investor who is a T. Rowe Price Personal Services or Enhanced Personal Services client (enrollment in these programs generally requires T. Rowe Price assets of at least $250,000). 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. U.S. LARGE-CAP CORE FUND Beginning ending Expenses Paid Account Value Account Value During Period* 1/1/18 6/30/18 1/1/18 to 6/30/18 Investor Class Actual $1, $1, $3.80 Hypothetical (assumes 5% return before expenses) 1, , Advisor Class Actual 1, , Hypothetical (assumes 5% return before expenses) 1, , I Class Actual 1, , Hypothetical (assumes 5% return before expenses) 1, , * Expenses are equal to the fund s annualized expense ratio for the 6-month period, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (181), and divided by the days in the year (365) to reflect the half-year period. The annualized expense ratio of the Investor Class was 0.76%, the Advisor Class was 1.02%, and the I Class was 0.59%. 12

15 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period Investor Class 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 NET ASSET VALUE Beginning of period $ $ $ $ $ $ Investment activities Net investment income (1) 0.11 (3) 0.23 (3) (2) Net realized and unrealized gain/loss Total from investment activities Distributions Net investment income (0.21) (0.19) (0.11) (0.10) (0.10) Net realized gain (0.50) (0.89) (1.90) (0.83) Total distributions (0.71) (0.19) (1.00) (2.00) (0.93) NET ASSET VALUE End of period $ $ $ $ $ $

16 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 Ratios/Supplemental Data Total return (4) 1.81% (3) 20.93% (3) 7.11% 8.20% 11.89% 31.78% (2) Ratio of total expenses to average net assets 0.76% (3)(5) 0.75% (3) 0.81% 0.99% 1.15% 1.15% (2) Ratio of net investment income to average net assets 0.95% (3)(5) 1.03% (3) 1.10% 0.83% 0.53% 0.68% (2) Portfolio turnover rate 37.5% 60.5% 79.7% 57.5% 70.7% 68.7% Net assets, end of period (in thousands) $ 510,193 $ 493,676 $ 307,568 $ 181,605 $ 99,721 $ 78,837 (1) (2) (3) (4) (5) Per share amounts calculated using average shares outstanding method. Excludes expenses in excess of a 1.15% contractual expense limitation in effect through 4/30/16. Excludes fund level expenses waived ratably across all classes in accordance with SEC rules. 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. Total return is not annualized for periods less than one year. Annualized The accompanying notes are an integral part of these financial statements. 14

17 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period Advisor Class 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 NET ASSET VALUE Beginning of period $ $ $ $ $ $ Investment activities Net investment income (1) 0.08 (2) 0.16 (2) (3) Net realized and unrealized gain/loss Total from investment activities Distributions Net investment income (0.08) (0.12) (0.11) (0.09) (0.10) Net realized gain (0.50) (0.89) (1.90) (0.83) Total distributions (0.58) (0.12) (1.00) (1.99) (0.93) NET ASSET VALUE End of period $ $ $ $ $ $

18 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 Ratios/Supplemental Data Total return (4) 1.68% (2) 20.64% (2) 6.77% 7.99% 11.85% 31.74% (3) Ratio of total expenses to average net assets 1.02% (2)(5) 1.01% (2) 1.10% 1.15% 1.20% 1.20% (3) Ratio of net investment income to average net assets 0.67% (2)(5) 0.72% (2) 0.81% 0.83% 0.49% 0.61% (3) Portfolio turnover rate 37.5% 60.5% 79.7% 57.5% 70.7% 68.7% Net assets, end of period (in thousands) $ 17,154 $ 21,351 $ 29,144 $ 21,804 $ 2,229 $ 1,570 (1) (2) (3) (4) (5) Per share amounts calculated using average shares outstanding method. Excludes fund level expenses waived ratably across all classes in accordance with SEC rules. Excludes expenses in excess of a 1.20% contractual expense limitation in effect through 4/30/18. 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. Total return is not annualized for periods less than one year. Annualized The accompanying notes are an integral part of these financial statements. 16

19 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period I Class 6 Months Ended 6/30/18 Year Ended 12/31/17 11/29/16 (1) Through 12/31/16 NET ASSET VALUE Beginning of period $ $ $ Investment activities Net investment income (2) 0.14 (3) 0.30 (3)(4) 0.04 (3) Net realized and unrealized gain/loss Total from investment activities Distributions Net investment income (0.24) (0.19) Net realized gain (0.50) Total distributions (0.74) (0.19) NET ASSET VALUE End of period $ $ $ Ratios/Supplemental Data Total return (5) 1.93% (3) 21.12% (3)(4) 0.58% (3) Ratio of total expenses to average net assets 0.59% (3)(6) 0.60% (3)(4) 0.59% (3)(6) Ratio of net investment income to average net assets 1.17% (3)(6) 1.28% (3)(4) (3) (6) 2.05% Portfolio turnover rate 37.5% 60.5% 79.7% Net assets, end of period (in thousands) $ 30,768 $ 20,344 $ 249 (1) (2) (3) (4) (5) (6) Inception date Per share amounts calculated using average shares outstanding method. See Note 5. Excludes expenses in excess of a 0.05% contractual operating expense limitation in effect through 4/30/19. Includes investment-related costs borne by the fund in excess of the expense limitation (see Note 5). 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. Total return is not annualized for periods less than one year. Annualized The accompanying notes are an integral part of these financial statements. 17

20 June 30, 2018 (Unaudited) PORTFOLIO OF INVESTMENTS Shares $ Value (Cost and value in $000s) COMMON STOCKS 96.8% CONSUMER DISCRETIONARY 10.5% Hotels, Restaurants & Leisure 2.9% McDonald's 27,900 4,372 MGM Resorts International 157,600 4,575 Yum! Brands 89,507 7,001 15,948 Internet & Direct Marketing Retail 3.5% Amazon.com (1) 6,957 11,825 Booking Holdings (1) 3,679 7,458 19,283 Media 0.8% Charter Communications, Class A (1) 15,100 4,427 4,427 Multiline Retail 1.6% Dollar General 92,442 9,115 9,115 Specialty Retail 1.7% Home Depot 48,916 9,544 9,544 Total Consumer Discretionary 58,317 CONSUMER STAPLES 5.8% Food Products 3.0% Mondelez International, Class A 212,226 8,702 Tyson Foods, Class A 119,669 8,239 16,941 Household Products 1.5% Kimberly-Clark 76,700 8,080 8,080 18

21 (Cost and value in $000s) Shares $ Value Tobacco 1.3% Philip Morris International 89,378 7,216 7,216 Total Consumer Staples 32,237 ENERGY 6.0% Energy Equipment & Services 1.6% Schlumberger 138,200 9,264 9,264 Oil, Gas & Consumable Fuels 4.4% EOG Resources 13,571 1,689 ExxonMobil 190,720 15,778 TransCanada 162,227 7,008 24,475 Total Energy 33,739 FINANCIALS 15.7% Banks 6.9% First Republic Bank 51,900 5,023 JPMorgan Chase 128,431 13,383 KeyCorp 342,170 6,686 U.S. Bancorp 272,119 13,611 38,703 Capital Markets 2.4% Charles Schwab 101,200 5,172 Intercontinental Exchange 108,053 7,947 13,119 Insurance 6.4% American International Group 166,245 8,814 Chubb 62,008 7,876 Marsh & McLennan 120,883 9,909 Willis Towers Watson 61,635 9,344 35,943 Total Financials 87,765 19

22 (Cost and value in $000s) HEALTH CARE 17.1% Shares $ Value Biotechnology 1.1% Alexion Pharmaceuticals (1) 49,000 6,083 6,083 Health Care Equipment & Supplies 6.9% Becton, Dickinson & Company 55,490 13,293 Danaher 110,362 10,891 Medtronic 164,459 14,079 38,263 Health Care Providers & Services 3.6% CVS Health 121,650 7,828 UnitedHealth Group 50,365 12,357 20,185 Life Sciences Tools & Services 2.6% Agilent Technologies 126,070 7,796 Thermo Fisher Scientific 32,885 6,812 14,608 Pharmaceuticals 2.9% Johnson & Johnson 70,500 8,554 Pfizer 214,300 7,775 16,329 Total Health Care 95,468 INDUSTRIALS & BUSINESS SERVICES 8.5% Aerospace & Defense 1.2% Northrop Grumman 21,300 6,554 6,554 Air Freight & Logistics 0.8% C.H. Robinson Worldwide 52,125 4,361 4,361 Airlines 1.0% Delta Air Lines 112,800 5,588 5,588 20

23 (Cost and value in $000s) Shares $ Value Commercial Services & Supplies 2.0% Waste Connections 146,026 10,993 10,993 Industrial Conglomerates 2.1% Honeywell International 82,627 11,902 11,902 Machinery 1.4% Stanley Black & Decker 61,226 8,132 8,132 Total Industrials & Business Services 47,530 INFORMATION TECHNOLOGY 24.5% Communications Equipment 2.0% Cisco Systems 258,078 11,105 11,105 Electronic Equipment, Instruments & Components 1.5% Corning 301,100 8,283 8,283 Internet Software & Services 5.0% Alphabet, Class C (1) 14,806 16,519 Facebook, Class A (1) 59,321 11,527 28,046 IT Services 6.9% Accenture, Class A 47,007 7,690 Fidelity National Information Services 88,319 9,364 Fiserv (1) 117,034 8,671 Visa, Class A 96,486 12,780 38,505 Semiconductors & Semiconductor Equipment 3.1% Broadcom 28,700 6,964 Intel 99,100 4,926 Texas Instruments 49,180 5,422 17,312 21

24 (Cost and value in $000s) Shares $ Value Software 3.1% Microsoft 174,131 17,171 17,171 Technology Hardware, Storage & Peripherals 2.9% Apple 88,397 16,363 16,363 Total Information Technology 136,785 MATERIALS 2.0% Chemicals 2.0% DowDuPont 166,500 10,976 Total Materials 10,976 REAL ESTATE 1.4% Real Estate Investment Trusts 1.4% American Tower, REIT 52,084 7,509 Total Real Estate 7,509 UTILITIES 5.3% Electric Utilities 2.8% Eversource Energy 115,700 6,781 NextEra Energy 51,019 8,522 15,303 Gas Utilities 0.9% Atmos Energy 57,971 5,225 5,225 Water Utilities 1.6% American Water Works 106,934 9,130 9,130 Total Utilities 29,658 Total Common Stocks (Cost $455,424) 539,984 22

25 (Cost and value in $000s) SHORT-TERM INVESTMENTS 3.4% Money Market Funds 3.4% Shares $ Value T. Rowe Price Government Reserve Fund, 1.91% (2)(3) 19,101,240 19,101 19,101 Total Short-Term Investments (Cost $19,101) 19,101 Total Investments in Securities 100.2% of Net Assets (Cost $474,525) $ 559,085 Shares are denominated in U.S. dollars unless otherwise noted. (1) Non-income producing (2) (3) Seven-day yield Affiliated Company REIT A domestic Real Estate Investment Trust whose distributions pass-through with original tax character to the shareholder 23

26 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 that is under common ownership or control. The following securities were considered affiliated companies for all or some portion of the six months ended June 30, Net realized gain (loss), investment income, change in net unrealized gain/loss, and purchase and sales cost reflect all activity for the period then ended. Affiliate Net Realized Gain (Loss) Change in Net Unrealized Gain/Loss Investment Income T. Rowe Price Government Reserve Fund $ $ $ 128 Totals $ # $ $ 128+ Supplementary Investment Schedule Value Affiliate 12/31/17 Purchase Cost Sales Cost Value 6/30/18 T. Rowe Price Government Reserve Fund $ 19,296 $ 19,101 $ 19,101^ # Capital gain distributions from mutual funds represented $0 of the net realized gain (loss). + Investment income comprised $128 of dividend income and $0 of interest income. Purchase and sale information not shown for cash management funds. ^ The cost basis of investments in affiliated companies was $19,101. The accompanying notes are an integral part of these financial statements. 24

27 June 30, 2018 (Unaudited) STATEMENT OF ASSETS AND LIABILITIES ($000s, except shares and per share amounts) Assets Investments in securities, at value (cost $474,525) $ 559,085 Receivable for shares sold 723 Dividends receivable 569 Receivable for investment securities sold 488 Other assets 59 Total assets 560,924 Liabilities Payable for investment securities purchased 1,382 Payable for shares redeemed 1,064 Investment management fees payable 250 Due to affiliates 34 Other liabilities 79 Total liabilities 2,809 N E T A S S E T S $ 5 5 8,

28 June 30, 2018 (Unaudited) STATEMENT OF ASSETS AND LIABILITIES ($000s, except shares and per share amounts) Net Assets Consist of: Undistributed net investment income $ 2,620 Accumulated undistributed net realized gain 22,174 Net unrealized gain 84,560 Paid-in capital applicable to 23,024,504 shares of $ par value capital stock outstanding; 1,000,000,000 shares authorized 448,761 N E T A S S E T S $ 5 5 8, NET ASSET VALUE PER SHARE Investor Class ($510,193,100 / 21,048,481 shares outstanding) $ Advisor Class ($17,153,497 / 708,574 shares outstanding) $ I Class ($30,768,280 / 1,267,449 shares outstanding) $ The accompanying notes are an integral part of these financial statements. 26

29 Unaudited STATEMENT OF OPERATIONS ($000s) 6 Months Ended 6/30/18 Investment Income (Loss) Dividend income $ 4,709 Expenses Investment management 1,479 Shareholder servicing Investor Class $ 409 Advisor Class 16 I Class Rule 12b-1 fees Advisor Class 24 Prospectus and shareholder reports Investor Class 23 Advisor Class 2 25 Custody and accounting 91 Registration 49 Legal and audit 14 Directors 1 Proxy and annual meeting 2 Miscellaneous 7 Waived / paid by Price Associates (29) Total expenses 2,089 Net investment income 2,620 Realized and Unrealized Gain / Loss Net realized gain (loss) Securities 18,356 Foreign currency transactions 2 Net realized gain 18,358 Change in net unrealized gain/loss on securities (11,236) Net realized and unrealized gain / loss 7,122 INCR EASE IN NET ASSETS FROM OPERATIO NS $ 9,742 The accompanying notes are an integral part of these financial statements. 27

30 Unaudited STATEMENT OF CHANGES IN NET ASSETS ($000s) 6 Months Ended 6/30/18 Year Ended 12/31/17 Increase (Decrease) in Net Assets Operations Net investment income $ 2,620 $ 4,334 Net realized gain 18,358 16,628 Change in net unrealized gain / loss (11,236) 58,266 Increase in net assets from operations 9,742 79,228 Distributions to shareholders Net investment income Investor Class (4,167) Advisor Class (64) I Class (201) Net realized gain Investor Class (9,922) Advisor Class (401) I Class (418) Decrease in net assets from distributions (15,173) Capital share transactions* Shares sold Investor Class 92, ,873 Advisor Class 2,917 12,839 I Class 12,238 20,545 Distributions reinvested Investor Class 13,865 Advisor Class 464 I Class 401 Shares redeemed Investor Class (85,071) (107,245) Advisor Class (7,501) (26,028) I Class (2,201) (1,359) Increase in net assets from capital share transactions 13, ,355 28

31 Unaudited STATEMENT OF CHANGES IN NET ASSETS ($000s) 6 Months Ended 6/30/18 Year Ended 12/31/17 Net Assets Increase during period 22, ,410 Beginning of period 535, ,961 End of period $ 55 8,115 $ 53 5,371 Undistributed net investment income 2,620 *Share information Shares sold Investor Class 3,827 9,757 Advisor Class I Class Distributions reinvested Investor Class 585 Advisor Class 20 I Class 17 Shares redeemed Investor Class (3,515) (4,774) Advisor Class (309) (1,139) I Class (90) (58) Increase in shares outstanding 537 5,866 The accompanying notes are an integral part of these financial statements. 29

32 Unaudited NOTES TO FINANCIAL STATEMENTS, 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. The fund has three classes of shares: the U.S. Large-Cap Core Fund (Investor Class), the U.S. Large-Cap Core Fund Advisor Class (Advisor Class), and the U.S. Large-Cap Core Fund I Class (I Class). Advisor Class shares are sold only through unaffiliated brokers and other unaffiliated financial intermediaries. I Class shares generally are available only to investors meeting a $1,000,000 minimum investment or certain other criteria. The Advisor Class operates under a Board-approved Rule 12b-1 plan pursuant to which the class compensates financial intermediaries for distribution, shareholder servicing, and/or certain administrative services; the Investor and I Classes do not pay Rule 12b-1 fees. 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. NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 (ASC 946). The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), including, but not limited to, ASC 946. GAAP requires the use of estimates made by management. Management believes that estimates and valuations are appropriate; however, actual results may differ from those estimates, and the valuations reflected in the accompanying financial statements may differ from the value ultimately realized upon sale or maturity. Investment Transactions, Investment Income, and Distributions Investment transactions are accounted for on the trade date basis. Income and expenses are recorded on the accrual basis. Realized gains and losses are reported on the identified cost 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. Income tax-related interest and penalties, if incurred, are recorded as income tax expense. Distributions from REITs are initially recorded as dividend income and, to the extent such represent a return of capital or capital gain for tax purposes, are reclassified when such information becomes available. Income distributions, if any, are declared and paid by each class annually. Distributions to shareholders are recorded on the ex-dividend date. A capital gain distribution may also be declared and paid by the fund annually. 30

33 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 respective date of such transaction. The portion of the results of operations attributable to changes in foreign exchange rates on investments is not bifurcated from the portion attributable to changes in market prices. 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 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. To the extent any expenses are waived or reimbursed in accordance with an expense limitation (see Note 5), the waiver or reimbursement is charged to the applicable class or allocated across the classes in the same manner as the related expense. The Advisor Class pays Rule 12b-1 fees, in an amount not exceeding 0.25% of the class s average daily net assets. Rebates 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 reflected as realized gain on securities in the accompanying financial statements and totaled $1,000 for the six months ended June 30, New Accounting Guidance In March 2017, the FASB issued amended guidance to shorten the amortization period for certain callable debt securities held at a premium. The guidance is effective for fiscal years and interim periods beginning after December 15, Adoption will have no effect on the fund s net assets or results of operations. Indemnification In the normal course of business, the fund may provide indemnification in connection with its officers and directors, service providers, and/or private company investments. The fund s maximum exposure under these arrangements is unknown; however, the risk of material loss is currently considered to be remote. NOTE 2 - VALUATION The fund s financial instruments are valued and each class s net asset value (NAV) per share is computed at the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day the NYSE is open for business. However, the NAV per share may be calculated at a time other than the normal close of the NYSE if trading on the NYSE is restricted, if the NYSE closes earlier, or as may be permitted by the SEC. 31

34 Fair Value The fund s financial instruments are reported at fair value, which GAAP defines as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The T. Rowe Price Valuation Committee (the Valuation Committee) is an internal committee that has been delegated certain responsibilities by the fund s Board of Directors (the Board) to ensure that financial instruments are appropriately priced at fair value in accordance with GAAP and the 1940 Act. Subject to oversight by the Board, the Valuation Committee develops and oversees pricing-related policies and procedures and approves all fair value determinations. Specifically, the Valuation Committee establishes procedures to value securities; determines pricing techniques, sources, and persons eligible to effect fair value pricing actions; oversees the selection, services, and performance of pricing vendors; oversees valuation-related business continuity practices; and provides guidance on internal controls and valuation-related matters. The Valuation Committee reports to the Board and has representation from legal, portfolio management and trading, operations, risk management, and the fund s treasurer. Various valuation techniques and inputs are used to determine the fair value of financial instruments. GAAP establishes the following fair value hierarchy that categorizes the inputs used to measure fair value: Level 1 quoted prices (unadjusted) in active markets for identical financial instruments that the fund can access at the reporting date Level 2 inputs other than Level 1 quoted prices that are observable, either directly or indirectly (including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads) Level 3 unobservable inputs Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use to price the financial instrument. Unobservable inputs are those for which market data are not available and are developed using the best information available about the assumptions that market participants would use to price the financial instrument. GAAP requires valuation techniques to maximize the use of relevant observable inputs and minimize the use of unobservable inputs. When multiple inputs are used to derive fair value, the financial instrument is assigned to the level within the fair value hierarchy based on the lowest-level input that is significant to the fair value of the financial instrument. Input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level but rather the degree of judgment used in determining those values. 32

35 Valuation Techniques 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. OTC Bulletin Board securities are valued at the mean of the closing 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 closing bid and asked prices. Actively traded equity securities listed on a domestic exchange generally are categorized in Level 1 of the fair value hierarchy. OTC Bulletin Board securities, certain preferred securities, and equity securities traded in inactive markets generally are categorized in Level 2 of the fair value hierarchy. Investments in mutual funds are valued at the mutual fund s closing NAV per share on the day of valuation and are categorized in Level 1 of the fair value hierarchy. Assets and liabilities other than financial instruments, including short-term receivables and payables, are carried at cost, or estimated realizable value, if less, which approximates fair value. Thinly traded financial instruments 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 Valuation Committee. The objective of any fair value pricing determination is to arrive at a price that could reasonably be expected from a current sale. Financial instruments fair valued by the Valuation Committee are primarily private placements, restricted securities, warrants, rights, and other securities that are not publicly traded. Subject to oversight by the Board, the Valuation Committee regularly makes good faith judgments to establish and adjust the fair valuations of certain securities as events occur and circumstances warrant. For instance, in determining the fair value of an equity investment with limited market activity, such as a private placement or a thinly traded public company stock, the Valuation Committee considers a variety of factors, which may include, but are not limited to, the issuer s business prospects, its financial standing and performance, recent investment transactions in the issuer, new rounds of financing, negotiated transactions of significant size between other investors in the company, relevant market valuations of peer companies, strategic events affecting the company, market liquidity for the issuer, and general economic conditions and events. In consultation with the investment and pricing teams, the Valuation Committee will determine an appropriate valuation technique based on available information, which may include both observable and unobservable inputs. The Valuation Committee typically will afford greatest weight to actual prices in arm s length transactions, to the extent they represent orderly transactions between market participants, transaction information can 33