Item 1. Report to Shareholders
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
June 30, 2003
Certified
Financials
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
Financial Highlights For a share outstanding throughout each period
- --------------------------------------------------------------------------------
6 Months Year
Ended Ended
6/30/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98
NET ASSET VALUE
Beginning of
period $ 23.67 $ 30.84 $ 35.50 $ 39.56 $ 33.38 $ 26.38
Investment activities
Net investment
income (loss) 0.17* 0.34* 0.32* 0.33* 0.34* 0.33*
Net realized and
unrealized gain
(loss) 2.56 (7.17) (4.65) (3.98) 6.49 7.10
Total from
investment
activities 2.73 (6.83) (4.33) (3.65) 6.83 7.43
Distributions
Net investment
income (0.16) (0.34) (0.33) (0.33) (0.34) (0.34)
Net realized
gain -- -- -- (0.08) (0.31) (0.09)
Total
distributions (0.16) (0.34) (0.33) (0.41) (0.65) (0.43)
NET ASSET VALUE
End of
period $ 26.24 $ 23.67 $ 30.84 $ 35.50 $ 39.56 $ 33.38
- --------------------------------------------------------------------------------
Ratios/Supplemental Data
Total return^ 11.57%* (22.21%)* (12.17%)* (9.30%)* 20.64%* 28.31%*
Ratio of total
expenses to
average net
assets 0.35%*! 0.35%* 0.35%* 0.35%* 0.40%* 0.40%*
Ratio of net
investment
income (loss)
to average
net assets 1.43%*! 1.27%* 1.00%* 0.85%* 0.98%* 1.17%*
Portfolio
turnover rate 2.0%! 6.6% 4.0% 9.1% 5.2% 4.7%
Net assets,
end of period
(in millions) $ 3,226 $ 2,708 $ 3,473 $ 4,045 $ 5,049 $ 3,347
^ 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 and payment of no redemption or account fees.
* Excludes expenses in excess of a 0.40% contractual expense limitation in
effect through 12/31/99 and a 0.35% contractual expense limitation in
effect through 12/31/03.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited) June 30, 2003
Statement of Net Assets Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Common Stocks 97.5%
CONSUMER DISCRETIONARY 10.8%
Auto Components 0.2%
Johnson Controls 31,197 $ 2,670
Delphi 195,758 1,689
Dana 53,003 613
Cooper Tire 26,973 475
Goodyear Tire & Rubber (misc. symbol) 58,770 309
Visteon 43,150 296
6,052
Automobiles 0.6%
GM 195,285 7,030
Ford Motor (misc. symbol) 638,267 7,015
Harley-Davidson 105,286 4,197
18,242
Distributors 0.1%
Genuine Parts 61,020 1,953
1,953
Hotels, Restaurants & Leisure 1.1%
McDonald's 443,779 9,790
Carnival 218,593 7,107
Starbucks * 136,671 3,351
Marriott, Class A 82,072 3,153
Yum! Brands * 102,267 3,023
International Game Technology * 29,456 3,014
Starwood Hotels & Resorts Worldwide, REIT 70,807 2,024
Hilton 129,746 1,660
Harrah's Entertainment * 39,071 1,572
Wendys 39,985 1,158
Darden Restaurants 60,797 1,154
37,006
Household Durables 0.5%
Fortune Brands 52,344 $ 2,732
Newell Rubbermaid 95,878 2,685
Centex 21,818 1,697
Whirlpool 24,053 1,532
Leggett & Platt 66,846 1,370
Pulte 21,289 1,313
Black & Decker 27,764 1,206
KB Home 16,534 1,025
Stanley Works 30,987 855
Maytag 27,779 679
Snap-On 20,550 597
American Greetings, Class A*(misc. symbol) 22,092 434
Tupperware 18,802 270
16,395
Internet & Catalog Retail 0.4%
e-Bay * 111,176 11,582
11,582
Leisure Equipment & Products 0.2%
Mattel 153,859 2,911
Eastman Kodak 102,172 2,794
Hasbro 59,049 1,033
Brunswick 32,217 806
7,544
Media 4.0%
Viacom, Class B * 614,831 26,844
AOL Time Warner * 1,573,274 25,314
Comcast, Class A * 786,482 23,736
Disney 715,263 14,127
Clear Channel Communications * 215,002 9,114
Gannett 93,052 7,147
Tribune 106,527 5,145
Omnicom 65,637 4,706
McGraw-Hill 67,600 4,191
New York Times, Class A 53,168 2,419
Univision Communications,
Class A*(misc. symbol) 79,543 2,418
Knight-Ridder 28,675 1,977
Interpublic Group 134,655 1,802
Dow Jones (misc. symbol) 28,513 $ 1,227
Meredith 17,414 766
130,933
Multiline Retail 1.1%
Target 317,441 12,012
Kohl's * 118,600 6,094
Sears 110,422 3,715
Federated Department Stores 66,273 2,442
Family Dollar Stores 59,757 2,280
May Department Stores 101,631 2,262
Dollar General 117,433 2,144
J.C. Penney 93,071 1,568
Nordstrom (misc. symbol) 48,014 937
Big Lots * 41,720 628
Dillards, Class A 30,467 410
34,492
Specialty Retail 2.3%
Home Depot 811,823 26,888
Lowe's 271,901 11,678
GAP 311,619 5,846
Best Buy * 112,323 4,933
Bed Bath & Beyond * 102,057 3,961
TJX 183,289 3,453
Staples * 165,762 3,042
The Limited 181,191 2,808
AutoZone *(misc. symbol) 34,095 2,590
Tiffany 50,909 1,664
Autonation * 102,900 1,618
Office Depot * 106,607 1,547
Radio Shack 58,777 1,546
Sherwin-Williams 51,849 1,394
Toys "R" Us * 72,878 883
Circuit City Stores 74,187 653
74,504
Textiles, Apparel, & Luxury Goods 0.3%
Nike, Class B 92,035 $ 4,923
Liz Claiborne 37,627 1,326
Jones Apparel Group * 44,912 1,314
V. F. 38,147 1,296
Reebok * 20,930 704
9,563
Total Consumer Discretionary 348,266
CONSUMER STAPLES 11.4%
Beverages 2.8%
Coca-Cola 864,691 40,130
PepsiCo 601,877 26,784
Anheuser-Busch 291,775 14,895
Coca-Cola Enterprises 157,465 2,858
Pepsi Bottling Group 96,861 1,939
Brown-Forman, Class B 21,311 1,675
Coors, Class B 12,759 625
88,906
Food & Staples Retailing 3.8%
Wal-Mart 1,531,259 82,183
Walgreen 357,869 10,772
Sysco 227,292 6,828
Costco Wholesale * 158,868 5,814
Kroger * 266,287 4,442
CVS 136,201 3,818
Safeway * 152,844 3,127
Albertson's (misc. symbol) 131,125 2,517
Supervalu 47,573 1,014
Winn-Dixie (misc. symbol) 50,186 618
121,133
Food Products 1.2%
General Mills 128,194 6,078
Sara Lee 274,050 5,155
Kellogg 142,999 4,915
ConAgra 187,234 4,419
Wrigley 78,204 4,397
Heinz 122,298 $ 4,033
Campbell Soup 143,918 3,526
Hershey Foods 47,277 3,293
Archer-Daniels-Midland 223,635 2,878
McCormick 49,100 1,336
40,030
Household Products 2.0%
Procter & Gamble 450,970 40,218
Colgate-Palmolive 187,405 10,860
Kimberly-Clark 179,000 9,333
Clorox 76,223 3,251
63,662
Personal Products 0.5%
Gillette 364,604 11,616
Avon 82,203 5,113
Alberto Culver, Class B (misc. symbol) 20,794 1,063
17,792
Tobacco 1.1%
Altria Group 708,071 32,175
UST 57,943 2,030
R.J. Reynolds Tobacco 29,200 1,086
35,291
Total Consumer Staples 366,814
ENERGY 5.6%
Energy Equipment & Services 0.8%
Schlumberger 203,556 9,683
Baker Hughes 117,498 3,944
Halliburton 153,044 3,520
Transocean * 111,843 2,457
BJ Services * 54,967 2,054
Nabors Industries * 51,576 2,040
Noble Drilling * 47,200 1,619
Rowan * 33,860 759
26,076
Oil & Gas 4.8%
Exxon Mobil 2,337,707 $ 83,947
ChevronTexaco 373,868 26,993
ConocoPhillips 237,402 13,010
Occidental Petroleum 131,972 4,428
Devon Energy 80,351 4,291
Anadarko Petroleum 86,844 3,862
Burlington Resources 70,641 3,819
Apache 56,088 3,649
Marathon Oil 108,498 2,859
Unocal 90,436 2,595
EOG Resources 39,826 1,666
Kerr-McGee 35,043 1,570
Amerada Hess 31,305 1,539
Sunoco 26,518 1,001
Ashland 23,286 714
155,943
Total Energy 182,019
FINANCIALS 20.0%
Capital Markets 3.4%
J.P. Morgan Chase 710,569 24,287
Morgan Stanley 377,391 16,134
Merrill Lynch 323,565 15,104
Goldman Sachs Group 164,325 13,762
Bank of New York 266,798 7,670
Lehman Brothers 84,461 5,615
Charles Schwab 467,246 4,715
State Street 115,286 4,542
Mellon Financial 150,437 4,175
Franklin Resources 90,432 3,533
Northern Trust 77,183 3,226
Bear Stearns 34,452 2,495
T. Rowe Price Group 42,713 1,612
Janus Capital Group 82,997 1,361
Federated Investors, Class B 39,200 1,075
109,306
Commercial Banks 6.2%
Bank of America 524,198 $ 41,427
Wells Fargo 590,357 29,754
Wachovia 474,266 18,952
U.S. Bancorp 672,122 16,467
Bank One 406,193 15,102
Fifth Third Bancorp 201,946 11,580
FleetBoston Financial 365,669 10,864
National City 214,468 7,015
SunTrust 98,586 5,850
BB&T (misc. symbol) 164,036 5,626
PNC Financial Services Group 99,419 4,853
KeyCorp 148,655 3,757
SouthTrust 120,409 3,275
Comerica 60,556 2,816
AmSouth 124,417 2,717
Regions Financial 76,750 2,593
Charter One Financial 79,506 2,479
Marshall & Ilsley 76,002 2,324
Synovus Financial (misc. symbol) 106,845 2,297
Union Planters 69,428 2,154
First Tennessee National 44,011 1,933
North Fork Bancorporation 56,630 1,929
Zions Bancorp 32,065 1,623
Huntington Bancshares 81,408 1,589
198,976
Consumer Finance 1.2%
American Express 458,437 19,167
MBNA 446,722 9,310
SLM Corporation 160,365 6,282
Capital One Financial (misc. symbol) 79,309 3,900
Providian Financial * 102,081 945
39,604
Diversified Financial Services 2.6%
Citigroup 1,800,263 77,051
Principal Financial Group 116,371 3,753
Moody's 52,406 2,762
83,566
Insurance 4.4%
American International Group 909,771 $ 50,201
Marsh & McLennan 187,109 9,555
Allstate 244,612 8,720
MetLife 264,544 7,492
Prudential Financial 196,930 6,627
Progressive Corporation 76,043 5,559
AFLAC 179,973 5,534
Travelers Property Casualty, Class B 350,078 5,521
Hartford Financial Services Group 97,464 4,908
XL Capital, Class A 47,290 3,925
Chubb 64,680 3,881
ACE Limited 91,709 3,145
John Hancock Financial Services 100,511 3,089
Loews 64,527 3,051
St. Paul Companies 79,552 2,904
Aon 107,178 2,581
AMBAC 37,404 2,478
MBIA 50,364 2,455
Lincoln National (misc. symbol) 62,359 2,222
Cincinnati Financial (misc. symbol) 56,584 2,099
Jefferson Pilot 49,977 2,072
SAFECO 47,979 1,693
Torchmark 41,241 1,536
UnumProvident 98,714 1,324
142,572
Real Estate 0.4%
Equity Office Properties, REIT 143,433 3,874
Simon Property Group, REIT 64,737 2,527
Equity Residential, REIT 95,785 2,486
Plum Creek Timber (misc. symbol) 64,704 1,679
Apartment Investment & Management,
Class A, REIT 33,100 1,145
11,711
Thrifts & Mortgage Finance 1.8%
Fannie Mae 346,847 23,391
Washington Mutual 330,505 13,650
Freddie Mac 242,993 12,337
Golden West Financial 53,255 4,261
Countrywide Financial 44,209 $ 3,076
MGIC Investment 34,694 1,618
58,333
Total Financials 644,068
HEALTH CARE 14.5%
Biotechnology 1.3%
Amgen * 441,256 29,317
MedImmune * 87,847 3,195
Genzyme * 75,995 3,177
Chiron * 65,058 2,844
Biogen * 51,941 1,974
40,507
Health Care Equipment & Supplies 1.9%
Medtronic 426,648 20,466
Boston Scientific * 142,265 8,692
Baxter International 206,499 5,369
Guidant 108,424 4,813
Stryker 68,937 4,782
St. Jude Medical * 62,096 3,571
Becton, Dickinson 88,301 3,431
Zimmer Holdings * 68,434 3,083
Biomet 90,837 2,603
Applied Biosystems Group - Applera 73,765 1,404
C. R. Bard 18,138 1,293
Waters Corporation * 44,199 1,288
Millipore * 17,323 769
Bausch & Lomb 19,048 714
62,278
Health Care Providers & Services 1.7%
UnitedHealth Group 212,694 10,688
Cardinal Health 157,337 10,117
HCA 178,689 5,725
Wellpoint Health Networks * 51,907 4,376
Anthem * 49,100 3,788
McKesson HBOC 101,614 3,632
Aetna 52,860 3,182
AmerisourceBergen 38,885 $ 2,697
Quest Diagnostics *(misc. symbol) 37,100 2,367
CIGNA 48,700 2,286
Tenet Healthcare * 166,128 1,935
Health Management, Class A 84,193 1,553
IMS Health 83,865 1,509
Humana * 57,988 875
Manor Care * 33,671 842
Quintiles Transnational * 40,153 570
HealthSouth *(misc. symbol) 136,887 71
56,213
Pharmaceuticals 9.6%
Pfizer 2,762,975 94,356
Johnson & Johnson 1,038,964 53,714
Merck 784,740 47,516
Eli Lilly 393,502 27,140
Abbott Laboratories 545,147 23,856
Wyeth 464,569 21,161
Bristol-Myers Squibb 678,570 18,423
Schering-Plough 515,204 9,583
Forest Labs * 127,236 6,966
Allergan 45,688 3,522
Watson Pharmaceuticals * 37,430 1,511
King Pharmaceuticals * 82,574 1,219
308,967
Total Health Care 467,965
INDUSTRIALS & BUSINESS SERVICES 10.1%
Aerospace & Defense 1.7%
United Technologies 163,724 11,596
Boeing 293,782 10,083
Honeywell International 297,557 7,989
Lockheed Martin 158,496 7,540
Northrop Grumman 64,247 5,544
General Dynamics 70,057 5,079
Raytheon 143,699 4,719
Rockwell Collins 62,051 1,528
Goodrich 39,839 837
54,915
Air Freight & Logistics 1.0%
UPS, Class B 392,379 $ 24,995
Fedex 104,712 6,495
Ryder System 22,318 572
32,062
Airlines 0.2%
Southwest Airlines 270,034 4,645
Delta (misc. symbol) 44,023 646
5,291
Building Products 0.2%
Masco 171,955 4,101
American Standard * 25,520 1,887
5,988
Commercial Services & Supplies 0.9%
Cendant * 358,234 6,563
Waste Management 206,600 4,977
Apollo Group, Class A * 60,744 3,752
Pitney Bowes 82,303 3,161
H&R Block 62,088 2,685
Cintas 59,202 2,098
Avery Dennison 38,270 1,921
Equifax 48,895 1,271
Robert Half International * 60,061 1,138
R.R. Donnelley 38,971 1,019
Deluxe Corp. 21,793 976
Allied Waste Industries * 72,871 732
Hudson Highland Group *(misc. symbol) 2,925 56
30,349
Construction & Engineering 0.0%
Fluor 27,310 918
McDermott International * 20,811 132
1,050
Electrical Equipment 0.4%
Emerson Electric 147,544 7,539
Rockwell Automation 64,087 1,528
Cooper Industries 32,053 1,324
American Power Conversion * 69,666 1,086
Thomas & Betts *(misc. symbol) 19,390 280
Power-One * 30,900 221
11,978
Industrial Conglomerates 4.1%
GE 3,499,399 $ 100,362
3M 136,195 17,567
Tyco International 699,573 13,278
Textron 47,602 1,857
133,064
Machinery 1.2%
Illinois Tool Works 107,088 7,052
Caterpillar 120,586 6,712
Deere 83,199 3,802
Danaher 53,551 3,644
Ingersoll-Rand, Class A 59,372 2,809
PACCAR 40,674 2,748
Dover 71,430 2,140
ITT Industries 32,476 2,126
Eaton 25,839 2,031
Parker Hannifin 41,392 1,738
Pall 42,693 961
Navistar * 23,970 782
Cummins Engine (misc. symbol) 14,761 530
Crane (misc. symbol) 20,341 460
37,535
Road & Rail 0.4%
Union Pacific 88,579 5,139
Burlington Northern Santa Fe 130,748 3,719
Norfolk Southern 134,905 2,590
CSX 74,134 2,231
13,679
Trading Companies & Distributors 0.0%
W. W. Grainger 32,162 1,504
1,504
Total Industrials & Business Services 327,415
INFORMATION TECHNOLOGY 15.8%
Communications Equipment 2.3%
Cisco Systems * 2,457,274 $ 41,012
QUALCOMM 276,246 9,876
Motorola 810,866 7,646
Corning * 442,437 3,270
Lucent Technologies * 1,448,865 2,941
JDS Uniphase * 497,611 1,747
Scientific-Atlanta (misc. symbol) 53,524 1,276
Comverse Technology * 65,292 981
Tellabs * 147,222 967
CIENA * 164,795 855
Avaya * 127,533 824
ADC Telecommunications *(misc. symbol) 286,029 666
Andrew *(misc. symbol) 32,300 297
72,358
Computer & Peripherals 3.8%
IBM 605,076 49,919
Dell Computer * 898,848 28,727
Hewlett-Packard 1,069,406 22,778
EMC * 765,556 8,015
Sun Microsystems * 1,129,026 5,194
Lexmark International, Class A * 44,767 3,168
Apple Computer * 127,922 2,446
Network Appliance *(misc. symbol) 119,415 1,936
NCR * 33,788 866
Gateway * 117,522 429
123,478
Electronic Equipment & Instruments 0.4%
Agilent Technologies * 164,164 3,210
Molex 67,332 1,817
Jabil Circuit * 69,054 1,526
Thermo Electron * 57,772 1,214
Sanmina-SCI * 178,797 1,128
Solectron * 289,214 1,082
Symbol Technologies 80,249 1,044
Tektronix * 30,539 660
PerkinElmer (misc. symbol) 43,376 599
12,280
Internet Software & Services 0.2%
Yahoo! * 211,048 $ 6,914
Monster Worldwide *(misc. symbol) 39,007 770
7,684
IT Services 1.2%
First Data 262,950 10,897
Automatic Data Processing 208,980 7,076
Paychex 131,571 3,856
Electronic Data Systems 165,212 3,544
Concord EFS *(misc. symbol) 178,286 2,624
SunGard Data Systems * 99,626 2,581
Computer Sciences * 65,045 2,479
Fiserv * 67,923 2,419
Unisys * 115,684 1,421
Sabre Holdings, Class A 50,214 1,238
Convergys * 59,064 945
39,080
Office Electronics 0.1%
Xerox * 273,474 2,896
2,896
Semiconductor & Semiconductor Equipment 3.2%
Intel 2,287,316 47,539
Texas Instruments 604,958 10,647
Applied Materials * 580,359 9,204
Analog Devices * 127,194 4,429
Maxim Integrated Products 113,045 3,865
Linear Technology 109,070 3,513
KLA-Tencor *(misc. symbol) 66,339 3,084
Xilinx * 118,649 3,003
Micron Technology * 213,223 2,480
Broadcom, Class A * 98,105 2,444
Altera * 132,846 2,179
Novellus Systems * 51,991 1,904
QLogic * 32,561 1,574
NVIDIA *(misc. symbol) 55,179 1,270
National Semiconductor * 63,597 1,254
Teradyne * 64,406 1,115
LSI Logic *(misc. symbol) 133,965 948
Advanced Micro Devices *(misc. symbol) 118,765 $ 761
PMC-Sierra *(misc. symbol) 57,510 675
Applied Micro Circuits * 103,778 628
102,516
Software 4.6%
Microsoft 3,758,094 96,245
Oracle * 1,836,587 22,076
Computer Associates 202,285 4,507
VERITAS Software * 145,271 4,165
Electronic Arts * 50,939 3,769
Intuit * 71,988 3,205
Adobe Systems 80,314 2,576
Symantec * 52,100 2,285
PeopleSoft * 110,618 1,946
Siebel Systems * 169,215 1,614
BMC Software *(misc. symbol) 81,514 1,331
Citrix Systems * 58,930 1,200
Mercury Interactive *(misc. symbol) 30,226 1,167
Compuware * 134,287 775
Autodesk 38,819 627
Novell * 124,889 385
Parametric Technology * 95,904 292
148,165
Total Information Technology 508,457
MATERIALS 2.6%
Chemicals 1.4%
DuPont 348,832 14,525
Dow Chemical 317,124 9,818
Praxair 56,590 3,401
Air Products and Chemicals 78,963 3,285
PPG Industries 59,328 3,010
Rohm & Haas 77,725 2,412
Ecolab 91,734 2,349
Monsanto 90,714 1,963
Sigma Aldrich 24,712 1,339
Engelhard 44,859 1,111
International Flavors & Fragrances 33,430 $ 1,068
Eastman Chemical 26,217 830
Hercules * 36,386 360
Great Lakes Chemical 17,492 357
45,828
Construction Materials 0.0%
Vulcan Materials (misc. symbol) 34,967 1,296
1,296
Containers & Packaging 0.2%
Sealed Air * 29,373 1,400
Pactiv * 54,804 1,080
Ball 19,666 895
Bemis 18,199 852
Temple-Inland (misc. symbol) 18,344 787
5,014
Metals & Mining 0.5%
Alcoa 296,098 7,551
Newmont Mining (misc. symbol) 140,176 4,550
Nucor 27,517 1,344
Freeport McMoRan Copper Gold,
Class B (misc. symbol) 51,560 1,263
Phelps Dodge * 30,908 1,185
USX-U.S. Steel Group 36,351 595
Worthington Industries 28,792 386
Allegheny Technologies 31,176 206
17,080
Paper & Forest Products 0.5%
International Paper 168,209 6,010
Weyerhaeuser 76,618 4,137
MeadWestvaco 70,513 1,742
Georgia-Pacific 86,727 1,643
Boise Cascade 21,108 505
Louisiana Pacific * 34,618 375
14,412
Total Materials 83,630
TELECOMMUNICATION SERVICES 3.8%
Diversified Telecommunication Services 3.3%
Verizon Communications 963,026 $ 37,991
SBC Communications 1,161,647 29,680
BellSouth 649,087 17,285
AT&T 274,897 5,292
Alltel 108,489 5,231
Sprint 315,275 4,540
Qwest Communications International * 597,916 2,858
Centurytel (misc. symbol) 49,428 1,723
Citizens Communications * 97,470 1,256
105,856
Wireless Telecommunication Services 0.5%
AT&T Wireless * 949,163 7,793
Nextel Communications,
Class A *(misc. symbol) 359,620 6,502
Sprint PCS *(misc. symbol) 361,253 2,077
16,372
Total Telecommunication Services 122,228
UTILITIES 2.9%
Electric Utilities 2.2%
Southern Company 248,603 7,746
Dominion Resources 108,637 6,982
Exelon 113,368 6,781
FPL Group 64,565 4,316
Entergy 78,954 4,167
American Electric Power 136,133 4,061
FirstEnergy 104,293 4,010
Progress Energy 84,342 3,703
Consolidated Edison 78,253 3,387
Public Service Enterprise 79,349 3,352
PG&E * 143,217 3,029
PPL 58,976 2,536
TXU 111,373 2,500
Ameren 56,409 2,488
DTE Energy 58,923 2,277
CINergy 61,726 $ 2,271
XCEL Energy 137,477 2,068
Constellation Energy Group 57,888 1,986
Edison International * 114,353 1,879
Pinnacle West Capital 32,097 1,202
CenterPoint Energy (misc. symbol) 105,946 863
Teco Energy (misc. symbol) 62,004 743
CMS Energy (misc. symbol) 52,720 427
Allegheny Energy (misc. symbol) 45,515 385
Texas Genco Holdings 5,052 117
73,276
Gas Utilities 0.3%
Kinder Morgan 43,162 2,359
Sempra Energy 72,695 2,074
KeySpan 54,949 1,948
NiSource 93,165 1,770
NICOR (misc. symbol) 15,926 591
Peoples Energy 12,426 533
9,275
Multi-Utilities & Unregulated Power 0.4%
Duke Energy 311,360 6,211
El Paso Energy (misc. symbol) 208,625 1,686
Williams Companies 181,298 1,432
AES *(misc. symbol) 214,433 1,362
Calpine *(misc. symbol) 132,129 872
Dynegy, Class A * 127,085 534
Mirant *(misc. symbol) 144,458 419
12,516
Total Utilities 95,067
Total Common Stocks (Cost $2,899,000) 3,145,929
Short-Term Investments 2.4%
U.S. Government Obligations 0.2%
U.S. Treasury Bills, 1.058%, 8/14/03 ** 6,000,000 $ 5,992
5,992
Money Market Funds 2.2%
T. Rowe Price Reserve Investment
Fund, 1.16% # 72,518,307 $ 72,518
72,518
Total Short-Term Investments (Cost $78,510) 78,510
SECURITIES LENDING COLLATERAL 1.7%
Money Market Trust 1.7%
State Street Bank and Trust Company of
New Hampshire, N.A. Securities Lending
Quality Trust units 55,037,537 55,038
Total Securities Lending Collateral
(Cost $55,038) 55,038
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Financials
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
101.6% of Net Assets (Cost $3,032,548) $3,279,477
Futures Contracts
Contract Unrealized
Expiration Value Gain (Loss)
------------ --------- -----------
In thousands
Long, 322 S&P 500
Stock Index
contracts,
$4,840,000 of U.S.
Treasury Bills
pledged as initial
margin 9/03 $ 78,351 $ (40)
Net payments
(receipts) of
variation
margin to date 40
Variation margin
receivable (payable)
on open futures
contracts -
Other Assets Less
Liabilities (53,081)
NET ASSETS $ 3,226,396
--------------------
Net Assets Consist of:
Undistributed net investment income (loss) $ 1,240
Undistributed net realized gain (loss) (174,096)
Net unrealized gain (loss) 246,889
Paid-in-capital applicable to 122,939,638 shares
of $0.01 par value capital stock outstanding;
1,000,000,000 shares of the Corporation authorized 3,152,363
NET ASSETS $ 3,226,396
--------------------
NET ASSET VALUE PER SHARE $ 26.24
--------------------
# Seven-day yield
* Non-income producing
(misc. symbol) All or a portion of this security is on loan at June 30, 2003-See
Note 2
** All or a portion of this security is pledged to cover margin requirements
on futures contracts at June 30, 2003
REIT Real Estate Investment Trust
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/03
Investment Income (Loss)
Income
Dividend $ 24,746
Income distributions from mutual funds 427
Securities lending 88
Interest 31
Total income 25,292
Expenses
Shareholder servicing 3,394
Investment management 1,029
Prospectus and shareholder reports 254
Custody and accounting 141
Registration 30
Directors 11
Legal and audit 10
Miscellaneous 112
Total expenses 4,981
Expenses paid indirectly (4)
Net expenses 4,977
Net investment income (loss) 20,315
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 1,476
Futures 5,820
Net realized gain (loss) 7,296
Change in net unrealized gain (loss)
Securities 299,963
Futures 1,560
Change in net unrealized gain (loss) 301,523
Net realized and unrealized gain (loss) 308,819
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 329,134
--------------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/03 12/31/02
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 20,315 $ 38,847
Net realized gain (loss) 7,296 (67,280)
Change in net unrealized gain (loss) 301,523 (750,059)
Increase (decrease) in net assets
from operations 329,134 (778,492)
Distributions to shareholders
Net investment income (19,255) (38,667)
Capital share transactions *
Shares sold 460,509 832,702
Distributions reinvested 18,886 37,875
Shares redeemed (271,336) (817,712)
Redemption Fee 41 9
Increase (decrease) in net assets
from capital share transactions 208,100 52,874
Net Assets
Increase (decrease) during period 517,979 (764,285)
Beginning of period 2,708,417 3,472,702
End of period $ 3,226,396 $ 2,708,417
--------------- ---------------
*Share information
Shares sold 19,066 30,831
Distributions reinvested 759 1,495
Shares redeemed (11,326) (30,477)
Increase (decrease) in shares outstanding 8,499 1,849
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited) June 30, 2003
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Index Trust, Inc. (the trust) is registered under the Investment
Company Act of 1940 (the 1940 Act). The Equity Index 500 Fund (the fund), a
diversified, open-end management investment company, is one of the port-folios
established by the trust and commenced operations on March 30, 1990. The fund
seeks to match the performance of the Standard & Poor's 500 Stock
Index(registered trademark).
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
Investments are valued 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 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.
Short-term debt securities are valued at amortized cost, which approximates fair
value when combined with accrued interest.
Investments in mutual funds are valued at the closing net asset value per share
of the mutual fund on the day of valuation. Financial futures contracts are
valued at closing settlement prices.
Other investments and those for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Premiums and Discounts
Premiums and discounts on debt securities are amortized for financial reporting
purposes.
Expenses Paid Indirectly
Certain security trades are directed to brokers who have agreed to rebate a
portion of the related commission to the fund to pay fund expenses.
Additionally, credits earned on temporarily uninvested cash balances at the
custodian are used to reduce the fund's custody charges. Total expenses in the
accompanying statement of operations are presented before reduction for rebates
and credits, which totaled $4,000 and $0, respectively, for the six months ended
June 30, 2003.
Redemption Fees
A 0.5% fee is assessed on redemptions of fund shares held less than 6 months.
Such fees are deducted from redemption proceeds and retained by the fund, and
have the primary effect of increasing paid-in capital.
In-Kind Redemptions
In certain circumstances, the fund may distribute portfolio securities rather
than cash as payment for a redemption of fund shares (in-kind redemption). For
financial reporting purposes, the fund recognizes a gain (loss) on in-kind
redemptions to the extent fair value of the distributed securities on the date
of redemption exceeds cost. Gains and losses realized on in-kind redemptions are
not recognized for tax purposes, and are reclassified from undistributed
realized gain (loss) to paid-in capital. During the six months ended June 30,
2003, the fund realized $8,463,000 of net gain on $16,732,000 of in-kind
redemptions.
Other
Income and expenses are recorded on the accrual basis. Investment transactions
are accounted for on the trade date. Realized gains and losses are reported on
the identified cost basis. Dividend income and distributions to shareholders are
recorded by the fund on the ex-dividend date. Payments ("variation margin") made
or received by the fund to settle the daily fluctuations in the value of futures
contracts are recorded as unrealized gains or losses until the contracts are
closed. Unrealized gains and losses on futures contracts are included in Change
in net unrealized gain or loss in the accompanying financial statements.
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.
Futures Contracts
During the six months ended June 30, 2003, the fund was a party to futures
contracts, which provide for the future sale by one party and purchase by
another of a specified amount of a specific financial instrument at an agreed
upon price, date, time, and place. Risks arise from possible illiquidity of the
futures market and from movements in security values.
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 June 30, 2003, the value of loaned securities was $53,303,000; aggregate
collateral consisted of $55,038,000 in the money market pooled trust.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $226,180,000 and $28,285,000, respectively, for the six months ended
June 30, 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 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 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. Temporary differences are not adjusted. The amount and
character of tax-basis distributions and composition of net assets are finalized
at fiscal year-end; accordingly, tax-basis balances have not been determined as
of June 30, 2003.
For tax purposes, 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, $1,093,000 of realized losses recognized
for financial reporting purposes in the year ended December 31, 2002 were
recognized for tax purposes on January 1, 2003. Further, the fund intends to
retain realized gains to the extent of available capital loss carryforwards. As
of December 31, 2002, the fund had $182,156,000 of unused capital loss
carryforwards, of which $67,420,000 expire in 2009, and $114,736,000 expire in
2010.
At June 30, 2003, the cost of investments for federal income tax purposes
was $3,032,548,000. Net unrealized gain aggregated $246,889,000 at period-end,
of which $719,172,000 related to appreciated investments and $472,283,000
related to depreciated investments.
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 equal to 0.15% of the fund's average daily
net assets. The fee is computed daily and paid monthly. At June 30, 2003,
investment management fee payable totaled $255,000.
Under the terms of the investment management agreement, the manager is required
to bear any expenses, excluding interest, taxes, brokerage commissions, and
extraordinary expenses, through December 31, 2003, which would cause the fund's
ratio of total expenses to average net assets (expense ratio) to exceed 0.35%.
Thereafter, through December 31, 2005, the fund is required to reimburse the
manager for these expenses, provided that average net assets have grown or
expenses have declined sufficiently to allow reimbursement without causing the
fund's expense ratio to exceed 0.35%. Pursuant to this agreement, $1,105,000 of
management fees were not accrued by the fund for the six months ended June 30,
2003. At June 30, 2003, unaccrued management fees in the amount of $2,689,000
remain subject to reimbursement by the fund through December 31, 2004, and
$1,105,000 through December 31, 2005.
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 price 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 fund. Expenses incurred pursuant to these service agreements
totaled $2,292,000 for the six months ended June 30, 2003, of which $500,000 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 six months ended June 30,
2003, the fund was charged $419,000 for shareholder servicing costs related to
the college savings plans, of which $332,000 was for services provided by Price
and $81,000 was payable at period-end. At June 30, 2003, approximately 5.1% of
the outstanding shares of the fund 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 Retirement Funds (Retirement
Funds) may invest. The Retirement Funds do not invest in the underlying Price
funds for the purpose of exercising management or control. Pursuant to special
servicing agreements, expenses associated with the operation of the Retirement
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
Retirement Funds. Expenses allocated under these agreements are reflected as
shareholder servicing expense in the accompanying financial statements. For the
six months ended June 30, 2003, the fund was allocated $35,000 of Retirement
Funds' expenses, of which $19,000 related to services provided by Price and
$2,000 was payable at period-end. At June 30, 2003, approximately 0.8% of the
outstanding shares of the fund were held by the Retirement Funds.
Consistent with its investment objective, the fund may invest in T. Rowe Price
Group, Inc. Additionally, the fund may invest in the T. Rowe Price Reserve
Investment Fund and 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. Distributions from the Reserve
Funds to the fund for the six months ended June 30, 2003, totaled $427,000.
Item 2. Code of Ethics.
Not required at this time.
Item 3. Audit Committee Financial Expert.
Not required at this time.
Item 4. Principal Accountant Fees and Services.
Not required at this time.
Item 5. Audit Committee of Listed Registrants.
Not required at this time.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved]
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) Not required at this time.
(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 Index Trust, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date August 13, 2003
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 August 13, 2003
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date August 12, 2003