Item 1. Report to Shareholders
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
June 30, 2004
Certified Semiannual 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 Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report (Unaudited)
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
6 Months Year
Ended Ended
6/30/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99
NET ASSET VALUE
Beginning of
period $ 29.95 $ 23.67 $ 30.84 $ 35.50 $ 39.56 $ 33.38
Investment
activities
Net investment
income (loss) 0.19* 0.37* 0.34* 0.32* 0.33* 0.34*
Net realized
and unrealized
gain (loss) 0.78 6.28 (7.17) (4.65) (3.98) 6.49
Total from
investment
activities 0.97 6.65 (6.83) (4.33) (3.65) 6.83
Distributions
Net investment
income (0.19) (0.37) (0.34) (0.33) (0.33) (0.34)
Net realized gain - - - - (0.08) (0.31)
Total distributions (0.19) (0.37) (0.34) (0.33) (0.41) (0.65)
NET ASSET VALUE
End of period $ 30.73 $ 29.95 $ 23.67 $ 30.84 $ 35.50 $ 39.56
-----------------------------------------------------------
Ratios/
Supplemental Data
Total return^ 3.25%* 28.31%* (22.21)%* (12.17)%* (9.30)%* 20.64%*
Ratio of total
expenses to
average net assets 0.35%*+ 0.35%* 0.35%* 0.35%* 0.35%* 0.40%*
Ratio of net
investment income
(loss) to average
net assets 1.27%*+ 1.44%* 1.27%* 1.00%* 0.85%* 0.98%*
Portfolio
turnover rate 7.4%+ 1.2% 6.6% 4.0% 9.1% 5.2%
Net assets,
end of period
(in millions) $ 4,287 $ 3,885 $ 2,708 $ 3,473 $ 4,045 $ 5,049
^ 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 4/30/05.
+ Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report (Unaudited) June 30, 2004
PORTFOLIO OF INVESTMENTS (1) Shares/$ Par Value
- --------------------------------------------------------------------------------
(Cost and value in $ 000s)
COMMON STOCKS 97.7%
CONSUMER DISCRETIONARY 10.7%
Auto Components 0.2%
Johnson Controls 74,894 3,998
Delphi 229,158 2,447
Dana 58,903 1,155
Cooper Tire 29,973 689
Goodyear Tire & Rubber *ss. 71,470 650
Visteon 50,150 585
9,524
Automobiles 0.7%
Ford Motor ss. 717,767 11,233
GM 221,985 10,343
Harley-Davidson 118,086 7,314
28,890
Distributors 0.1%
Genuine Parts ss. 69,120 2,743
2,743
Hotels, Restaurants & Leisure 1.3%
McDonald's 495,879 12,893
Carnival 249,093 11,707
Starbucks * 157,471 6,847
International Game Technology 136,024 5,251
Marriott, Class A 89,372 4,458
Yum! Brands * 114,967 4,279
Starwood Hotels & Resorts Worldwide, Class B 81,407 3,651
Hilton ss. 150,846 2,815
Harrah's Entertainment ss. 44,771 2,422
Wendy's 44,185 1,539
Darden Restaurants ss. 65,997 1,356
57,218
Household Durables 0.5%
Fortune Brands 57,444 4,333
Pulte 50,278 2,616
Newell Rubbermaid 106,978 2,514
Centex 48,036 2,198
Leggett & Platt ss. 78,946 2,109
Black & Decker 31,264 1,942
Whirlpool 27,553 1,890
Stanley Works ss. 33,887 1,545
KB Home 18,034 1,238
Maytag 32,279 791
Snap-On ss. 22,250 746
21,922
Internet & Catalog Retail 0.6%
eBay * 258,852 23,801
23,801
Leisure Equipment & Products 0.2%
Mattel 167,459 3,056
Eastman Kodak ss. 112,872 3,046
Brunswick ss. 36,917 1,506
Hasbro 69,949 1,329
8,937
Media 3.5%
Time Warner * 1,803,374 31,703
Comcast, Class A * 884,782 24,800
Viacom, Class B 680,231 24,298
Disney 807,763 20,590
Gannett 106,552 9,041
Clear Channel Communications 240,502 8,887
Tribune 129,627 5,903
McGraw-Hill 75,000 5,743
Omnicom ss. 74,037 5,619
Univision Communications, Class A * 128,043 4,088
New York Times, Class A ss. 57,868 2,587
Interpublic Group * 162,455 2,231
Knight-Ridder ss. 30,975 2,230
Dow Jones ss. 31,813 1,435
Meredith 19,514 1,072
150,227
Multiline Retail 1.0%
Target 354,441 15,053
Kohl's * 132,700 5,611
J.C. Penney 114,871 4,337
Federated Department Stores 70,773 3,475
Sears 87,322 3,297
May Department Stores 112,931 3,104
Dollar General 129,633 2,536
Nordstrom 54,214 2,310
Family Dollar Stores 66,957 2,037
Dillards, Class A 33,667 751
Big Lots * 49,720 719
43,230
Specialty Retail 2.3%
Home Depot 876,423 30,850
Lowe's 308,901 16,233
GAP 356,019 8,634
Best Buy 127,723 6,481
Staples 196,662 5,764
TJX 194,589 4,697
Bed Bath & Beyond * 118,657 4,562
The Limited 185,991 3,478
AutoZone * 34,395 2,755
Sherwin-Williams 56,649 2,354
Office Depot * 123,207 2,207
Tiffany 57,809 2,130
RadioShack 63,577 1,820
Autonation * 105,200 1,799
Toys "R" Us * 85,578 1,363
Boise Cascade 34,508 1,299
Circuit City Stores ss. 80,187 1,038
97,464
Textiles, Apparel, & Luxury Goods 0.3%
Nike, Class B 103,635 7,850
V. F. 43,147 2,101
Jones Apparel Group ss. 49,412 1,951
Liz Claiborne 45,727 1,645
Reebok ss. 24,030 865
14,412
Total Consumer Discretionary 458,368
CONSUMER STAPLES 10.9%
Beverages 2.7%
Coca-Cola 955,491 48,233
PepsiCo 671,777 36,196
Anheuser-Busch 317,575 17,149
Coca-Cola Enterprises 185,965 5,391
Pepsi Bottling Group 100,461 3,068
Brown-Forman, Class B ss. 47,522 2,294
Coors, Class B 14,559 1,053
113,384
Food & Staples Retailing 3.3%
Wal-Mart 1,689,959 89,162
Walgreen 403,669 14,617
Sysco 251,092 9,007
Costco Wholesale 179,968 7,391
CVS 158,801 6,673
Kroger * 292,687 5,327
Safeway * 175,244 4,441
Albertson's ss. 148,125 3,931
Supervalu 53,473 1,637
Winn-Dixie ss. 55,086 396
142,582
Food Products 1.2%
Sara Lee 310,050 7,128
General Mills 149,094 7,086
Kellogg 160,799 6,730
ConAgra 208,234 5,639
Wrigley 87,904 5,542
Heinz 138,298 5,421
Hershey Foods 101,554 4,699
Campbell Soup 160,918 4,326
Archer-Daniels-Midland 254,235 4,266
McCormick 54,100 1,839
52,676
Household Products 2.0%
Procter & Gamble 1,011,440 55,063
Kimberly-Clark 197,600 13,018
Colgate-Palmolive 210,105 12,280
Clorox 83,223 4,476
84,837
Personal Products 0.6%
Gillette 394,904 16,744
Avon Products 186,706 8,615
Alberto Culver, Class B 35,141 1,762
27,121
Tobacco 1.1%
Altria Group 804,671 40,274
UST 65,443 2,356
R.J. Reynolds Tobacco ss. 33,500 2,264
44,894
Total Consumer Staples 465,494
ENERGY 6.4%
Energy Equipment & Services 0.9%
Schlumberger 231,356 14,693
Halliburton 172,544 5,221
Baker Hughes 130,398 4,910
Transocean, Class C *ss. 125,543 3,633
BJ Services * 63,467 2,909
Nabors Industries * 58,376 2,640
Noble Drilling * 53,100 2,012
Rowan * 41,860 1,019
37,037
Oil & Gas 5.5%
Exxon Mobil 2,573,307 114,281
ChevronTexaco 424,968 39,994
ConocoPhillips 269,102 20,530
Occidental Petroleum 154,372 7,473
Devon Energy 94,351 6,227
Anadarko Petroleum 100,544 5,892
Burlington Resources 156,782 5,672
Apache 128,576 5,600
Marathon Oil 135,498 5,127
Unocal 103,136 3,919
Valero Energy 49,900 3,681
Kerr-McGee 59,443 3,196
Kinder Morgan 50,262 2,980
Amerada Hess ss. 35,305 2,796
EOG Resources 45,826 2,736
Williams Companies 203,198 2,418
El Paso Energy ss. 255,025 2,010
Sunoco 31,018 1,973
Ashland 27,386 1,446
237,951
Total Energy 274,988
FINANCIALS 19.8%
Capital Markets 3.4%
J.P. Morgan Chase 816,869 31,670
Morgan Stanley 432,591 22,828
Merrill Lynch 377,665 20,386
Goldman Sachs Group 190,125 17,902
Bank of New York 306,298 9,030
Lehman Brothers 108,861 8,192
State Street 131,986 6,473
Charles Schwab 544,646 5,234
Franklin Resources 100,032 5,010
Mellon Financial 168,137 4,931
Northern Trust 86,783 3,669
Bear Stearns 41,352 3,486
T. Rowe Price Group ss. 50,013 2,521
E*TRADE Group * 146,500 1,633
Janus Capital Group ss. 92,297 1,522
Federated Investors, Class B ss. 42,800 1,299
145,786
Commercial Banks 6.0%
Bank of America 802,306 67,891
Wells Fargo 659,557 37,746
Wachovia 517,366 23,023
Bank One 440,093 22,445
U.S. Bancorp 745,922 20,558
Fifth Third Bancorp 221,446 11,909
National City ss. 242,768 8,499
BB&T 220,136 8,138
SunTrust 110,786 7,200
PNC Financial Services Group 110,319 5,856
SouthTrust 130,309 5,057
KeyCorp 163,355 4,883
M & T Bank 46,900 4,094
Charter One Financial 88,506 3,911
Comerica 67,956 3,729
AmSouth Bancorporation 138,617 3,531
Marshall & Ilsley 88,802 3,471
Regions Financial 86,950 3,178
Synovus Financial 121,045 3,065
North Fork Bancorporation ss. 67,930 2,585
First Horizon National 48,911 2,224
Union Planters 73,928 2,204
Zions Bancorp 35,765 2,198
Huntington Bancshares 91,308 2,091
259,486
Consumer Finance 1.3%
American Express 502,837 25,836
MBNA 501,722 12,940
SLM Corporation 174,865 7,073
Capital One Financial 94,009 6,428
Providian Financial * 114,781 1,684
53,961
Diversified Financial Services 2.4%
Citigroup 2,035,263 94,640
Principal Financial Group 124,371 4,326
Moody's 58,806 3,802
102,768
Insurance 4.5%
American International Group 1,031,571 73,530
Allstate 275,112 12,806
MetLife 297,444 10,663
Saint Paul Companies 262,081 10,625
Prudential 210,130 9,765
Marsh & McLennan 205,909 9,344
AFLAC 200,073 8,165
Hartford Financial Services 114,364 7,861
Progressive Corporation 86,143 7,348
Chubb 74,380 5,071
ACE 110,609 4,677
Loews 73,527 4,409
XL Capital ss. 54,190 4,089
Aon 122,878 3,498
Lincoln National 70,259 3,320
MBIA 57,164 3,265
Ambac 42,404 3,114
Cincinnati Financial ss. 66,058 2,875
Jefferson Pilot 54,277 2,757
SAFECO ss. 55,079 2,424
Torchmark ss. 43,341 2,332
UnumProvident ss. 116,914 1,859
193,797
Real Estate 0.4%
Equity Office Properties, REIT 158,233 4,304
Simon Property Group, REIT 82,337 4,234
Equity Residential, REIT 108,485 3,225
ProLogis Trust, REIT 71,900 2,367
Plum Creek Timber ss. 72,504 2,362
Apartment Investment &
Management, REIT, Class A 35,800 1,114
17,606
Thrifts & Mortgage Finance 1.8%
Fannie Mae 381,447 27,220
Freddie Mac 270,493 17,122
Washington Mutual 339,305 13,111
Countrywide Financial 109,717 7,708
Golden West Financial 60,955 6,482
MGIC Investment ss. 39,294 2,981
Sovereign Bancorp 120,200 2,636
77,260
Total Financials 850,664
HEALTH CARE 13.1%
Biotechnology 1.2%
Amgen * 494,756 26,999
Biogen Idec * 133,727 8,458
Gilead Sciences * 84,000 5,628
Genzyme * 87,695 4,151
Chiron * 73,658 3,288
MedImmune * 96,747 2,264
50,788
Health Care Equipment & Supplies 2.2%
Medtronic 477,148 23,247
Boston Scientific * 324,530 13,890
Stryker 154,774 8,512
Zimmer Holdings * 95,934 8,461
Baxter International 242,399 8,365
Guidant 123,924 6,925
St. Jude Medical * 69,096 5,227
Becton, Dickinson 100,101 5,185
Biomet 99,937 4,441
Waters Corporation * 49,199 2,351
C. R. Bard 41,476 2,350
Applied Biosystems Group - Applera 81,065 1,763
Hospira * 60,444 1,668
Bausch & Lomb 21,048 1,370
Millipore * 19,623 1,106
94,861
Health Care Providers & Services 2.0%
UnitedHealth Group 243,094 15,133
Cardinal Health 169,337 11,862
HCA 193,289 8,039
WellPoint Health Networks * 60,507 6,777
Caremark RX * 179,400 5,909
Aetna 59,860 5,088
Anthem * 54,500 4,881
Medco * 105,925 3,972
McKesson 115,514 3,966
CIGNA 56,100 3,860
Quest Diagnostics 40,800 3,466
AmerisourceBergen 43,785 2,617
Tenet Healthcare * 183,128 2,456
Express Scripts * 30,500 2,417
IMS Health 93,165 2,184
Health Management ss. 93,693 2,101
Manor Care 35,171 1,149
Humana * 62,888 1,063
86,940
Pharmaceuticals 7.7%
Pfizer 2,993,075 102,603
Johnson & Johnson 1,171,064 65,228
Merck 874,340 41,531
Eli Lilly 441,402 30,859
Abbott Laboratories 608,147 24,788
Wyeth 518,869 18,762
Bristol-Myers Squibb 759,770 18,614
Schering-Plough 577,304 10,669
Forest Laboratories * 145,036 8,213
Allergan 51,388 4,600
Mylan Laboratories 103,300 2,092
Watson Pharmaceuticals * 42,030 1,131
King Pharmaceuticals * 92,774 1,062
330,152
Total Health Care 562,741
INDUSTRIALS & BUSINESS SERVICES 11.2%
Aerospace & Defense 1.9%
United Technologies 201,024 18,390
Boeing 333,382 17,032
Honeywell International 339,757 12,445
Lockheed Martin 175,796 9,155
General Dynamics 78,657 7,811
Northrop Grumman 141,594 7,604
Raytheon 176,899 6,328
Rockwell Collins 69,451 2,314
Goodrich 46,039 1,488
82,567
Air Freight & Logistics 1.0%
UPS, Class B 443,479 33,336
Fedex 117,712 9,616
Ryder System ss. 25,518 1,023
43,975
Airlines 0.1%
Southwest Airlines 309,734 5,194
Delta *ss. 48,523 346
5,540
Building Products 0.2%
Masco 177,655 5,539
American Standard * 84,360 3,401
8,940
Commercial Services & Supplies 1.1%
Cendant 400,134 9,795
Waste Management 228,900 7,016
Apollo Group, Class A * 69,444 6,131
Pitney Bowes 91,003 4,027
H&R Block ss. 69,988 3,337
Cintas 67,402 3,213
R.R. Donnelley 85,571 2,826
Avery Dennison 43,070 2,757
Robert Half International ss. 66,761 1,987
Allied Waste Industries * 125,571 1,655
Equifax 53,295 1,319
Deluxe Corporation 21,593 939
45,002
Construction & Engineering 0.0%
Fluor 33,310 1,588
1,588
Electrical Equipment 0.4%
Emerson Electric 165,344 10,508
Rockwell Automation 72,687 2,726
Cooper Industries, Class A 35,953 2,136
American Power Conversion 77,166 1,516
Thomas & Betts 22,290 607
Power-One *ss. 30,600 336
17,829
Industrial Conglomerates 4.5%
General Electric Capital 4,158,899 134,749
3M 306,990 27,632
Tyco International 789,173 26,153
Textron 54,202 3,217
191,751
Machinery 1.5%
Illinois Tool Works 121,888 11,688
Caterpillar 134,686 10,700
Deere 97,999 6,874
Danaher 122,902 6,373
Ingersoll-Rand, Class A 68,472 4,677
PACCAR 69,361 4,022
Eaton 59,578 3,857
Dover 80,030 3,369
ITT Industries 36,476 3,028
Parker Hannifin 48,592 2,889
Pall 49,493 1,296
Navistar *ss. 27,870 1,080
Cummins Engine ss. 17,061 1,066
Crane 24,341 764
61,683
Road & Rail 0.4%
Union Pacific 101,879 6,056
Burlington Northern Santa Fe 146,648 5,143
Norfolk Southern 152,405 4,042
CSX 85,234 2,793
18,034
Trading Companies & Distributors 0.1%
W. W. Grainger 35,562 2,045
2,045
Total Industrials & Business Services 478,954
INFORMATION TECHNOLOGY 16.8%
Communications Equipment 3.0%
Cisco Systems * 2,660,474 63,053
QUALCOMM 318,146 23,218
Motorola 923,366 16,851
Corning * 539,437 7,045
Lucent Technologies *ss. 1,690,065 6,389
Avaya *ss. 173,533 2,740
JDS Uniphase *ss. 568,511 2,155
Scientific-Atlanta 61,124 2,109
Comverse Technology * 77,592 1,547
Tellabs *ss. 165,722 1,448
Andrew *ss. 64,200 1,285
QLogic * 36,961 983
ADC Telecommunications *ss. 317,529 902
CIENA * 222,895 829
130,554
Computer & Peripherals 3.5%
IBM 661,076 58,274
Dell * 994,748 35,632
Hewlett-Packard 1,211,606 25,565
EMC * 961,656 10,963
Sun Microsystems * 1,299,826 5,641
Lexmark International, Class A * 51,067 4,930
Apple Computer * 148,622 4,836
Network Appliance *ss. 136,915 2,948
NCR * 36,588 1,814
Gateway * 159,322 717
151,320
Electronic Equipment & Instruments 0.5%
Agilent Technologies * 190,364 5,574
Solectron * 382,014 2,472
Molex ss. 74,032 2,375
Jabil Circuit *ss. 78,654 1,981
Thermo Electron * 64,072 1,970
Sanmina-SCI *ss. 204,097 1,857
Symbol Technologies 91,349 1,346
Tektronix 32,039 1,090
PerkinElmer ss. 49,676 995
19,660
Internet Software & Services 0.5%
Yahoo! * 530,096 19,258
Monster Worldwide * 45,607 1,173
20,431
IT Services 1.2%
First Data 343,277 15,283
Automatic Data Processing 231,880 9,711
Paychex 147,671 5,003
Electronic Data Systems ss. 190,612 3,650
Computer Sciences * 74,145 3,443
Fiserv * 76,923 2,992
SunGard Data Systems * 112,426 2,923
Affiliated Computer Services, Class A * 53,200 2,816
Unisys * 130,884 1,817
Sabre Holdings 54,614 1,513
Convergys * 58,264 897
50,048
Office Electronics 0.1%
Xerox *ss. 316,974 4,596
4,596
Semiconductor & Semiconductor
Equipment 3.6%
Intel 2,544,916 70,240
Texas Instruments 681,858 16,487
Applied Materials * 662,359 12,995
Analog Devices 148,294 6,982
Maxim Integrated Products 127,045 6,660
Broadcom, Class A * 122,205 5,715
Linear Technology 121,670 4,802
Xilinx 135,849 4,525
KLA-Tencor * 76,939 3,799
Micron Technology * 240,923 3,689
Altera * 147,146 3,270
National Semiconductor * 141,294 3,107
Advanced Micro Devices *ss. 143,965 2,289
Novellus Systems * 59,391 1,867
Teradyne * 75,906 1,723
NVIDIA * 63,079 1,293
LSI Logic *ss. 152,065 1,159
PMC-Sierra * 70,910 1,018
Applied Micro Circuits *ss. 118,078 628
152,248
Software 4.4%
Microsoft 4,252,994 121,465
Oracle * 2,050,587 24,463
Electronic Arts * 120,378 6,567
Computer Associates 229,385 6,437
Symantec * 123,000 5,385
VERITAS Software * 169,471 4,694
Adobe Systems 93,314 4,339
Intuit * 77,388 2,986
PeopleSoft * 145,118 2,685
Siebel Systems * 199,415 2,130
Autodesk 45,119 1,932
Mercury Interactive *ss. 36,626 1,825
BMC Software * 87,514 1,619
Citrix Systems * 66,730 1,359
Novell * 152,689 1,281
Compuware * 151,987 1,003
Parametric Technology * 108,704 543
190,713
Total Information Technology 719,570
MATERIALS 2.9%
Chemicals 1.5%
DuPont 392,832 17,450
Dow Chemical 367,524 14,958
Praxair 127,780 5,100
Air Products and Chemicals 91,163 4,781
PPG Industries 67,128 4,195
Monsanto 104,914 4,039
Rohm & Haas 87,425 3,635
Ecolab ss. 101,634 3,222
Sigma Aldrich 27,612 1,646
Engelhard 48,559 1,569
Eastman Chemical 30,517 1,411
International Flavors & Fragrances 36,430 1,362
Hercules * 45,386 553
Great Lakes Chemical 19,292 522
64,443
Construction Materials 0.0%
Vulcan Materials 40,167 1,910
1,910
Containers & Packaging 0.2%
Sealed Air * 32,473 1,730
Ball 22,466 1,619
Pactiv * 62,204 1,551
Temple-Inland 21,344 1,478
Bemis 40,998 1,158
7,536
Metals & Mining 0.7%
Alcoa 342,298 11,306
Newmont Mining 176,076 6,825
Phelps Dodge * 36,908 2,861
Freeport McMoRan Copper Gold ss. 75,460 2,502
Nucor ss. 31,317 2,404
USX-U.S. Steel Group 47,251 1,659
Worthington Industries ss. 35,092 720
Allegheny Technologies ss. 35,276 637
28,914
Paper & Forest Products 0.5%
International Paper 191,409 8,556
Weyerhaeuser 94,218 5,947
Georgia-Pacific 100,527 3,717
MeadWestvaco 82,413 2,422
Louisiana Pacific 43,918 1,039
21,681
Total Materials 124,484
TELECOMMUNICATION SERVICES 3.3%
Diversified Telecommunication
Services 2.7%
Verizon Communications 1,082,526 39,176
SBC Communications 1,305,947 31,669
BellSouth 725,287 19,017
Sprint ss. 561,351 9,880
Alltel 121,389 6,145
AT&T 311,397 4,556
Qwest Communications International * 704,816 2,530
Centurytel 55,828 1,677
Citizens Communications *ss. 114,970 1,391
116,041
Wireless Telecommunication Services 0.6%
AT&T Wireless * 1,058,263 15,155
Nextel Communications, Class A * 437,820 11,672
26,827
Total Telecommunication Services 142,868
UTILITIES 2.6%
Electric Utilities 1.8%
Exelon 258,336 8,600
Southern Company ss. 289,503 8,439
TXU 127,973 5,184
Entergy 90,054 5,044
American Electric Power 155,933 4,990
FirstEnergy 130,593 4,886
FPL Group 72,665 4,647
PG&E * 163,917 4,580
Progress Energy 97,242 4,284
Consolidated Edison ss. 96,553 3,839
Edison International 129,353 3,308
PPL 69,676 3,198
Ameren ss. 71,509 3,072
DTE Energy 67,623 2,741
CINergy 70,726 2,688
XCEL Energy 157,177 2,626
Pinnacle West Capital ss. 36,497 1,474
CenterPoint Energy ss. 122,146 1,405
Teco Energy ss. 76,304 915
Allegheny Energy *ss. 50,515 778
CMS Energy *ss. 66,420 606
77,304
Gas Utilities 0.1%
KeySpan 62,549 2,296
NiSource 103,565 2,136
NICOR ss. 19,326 656
Peoples Energy ss. 15,026 633
5,721
Multi-Utilities & Unregulated Power 0.7%
Dominion Resources 128,837 8,127
Duke Energy 360,360 7,312
Public Service Enterprise 93,249 3,733
Sempra Energy 89,795 3,091
Constellation Energy Group 66,588 2,524
AES * 251,033 2,493
Calpine *ss. 165,429 714
Dynegy, Class A *ss. 151,885 647
28,641
Total Utilities 111,666
Total Common Stocks (Cost $3,461,132) 4,189,797
SHORT-TERM INVESTMENTS 3.2%
Money Market Fund 3.0%
T. Rowe Price Reserve Investment
Fund, 1.16% # 126,720,580 126,721
U.S. Treasury Obligations 0.2%
U.S. Treasury Bills, 1.037%, 8/12/04 ++ 7,000,000 6,992
Total Short-Term Investments (Cost $133,713) 133,713
SECURITIES LENDING COLLATERAL 1.9%
Money Market Trust 1.9%
State Street Bank and Trust Company
of New Hampshire N.A. Securities
Lending Quality Trust units, 1.22% # 81,705,101 81,705
Total Securities Lending Collateral
(Cost $81,705) 81,705
Total Investments in Securities
102.8% of Net Assets (Cost $3,676,550) $4,405,215
----------
Futures Contracts
($ 000s)
Contract Unrealized
Expiration Value Gain (Loss)
---------- ---------- -----------
Long, 353 September S&P 500
contracts, $5,950 par of 1.037%
U.S. Treasury Bills pledged as
initial margin 9/04 $ 100,640 $ 790
Net payments (receipts) of
variation margin to date (384)
Variation margin receivable
(payable)on open futures
contracts $ 406
----------
(1) Denominated in U.S. dollars unless otherwise noted
# Seven-day yield
* Non-income producing
ss. All or a portion of this security is on loan at June 30, 2004 - See Note 2
++ All or a portion of this security is pledged to cover margin requirements
on futures contracts at June 30, 2004.
REIT Real Estate Investment Trust
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
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Certified Semiannual Report (Unaudited) June 30, 2004
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
(In thousands except shares and per share amounts)
Assets
Investments in securities, at value (cost $3,676,550) $ 4,405,215
Other assets 26,248
Total assets 4,431,463
Liabilities
Total liabilities 144,791
NET ASSETS $ 4,286,672
----------------
Net Assets Consist of:
Undistributed net investment income (loss) $ 400
Undistributed net realized gain (loss) (91,751)
Net unrealized gain (loss) 729,455
Paid-in-capital applicable to 139,497,235 shares
of $0.01 par value capital stock outstanding;
1,000,000,000 shares of the Corporation authorized 3,648,568
NET ASSETS $ 4,286,672
----------------
NET ASSET VALUE PER SHARE $ 30.73
----------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report (Unaudited)
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
($ 000s)
6 Months
Ended
6/30/04
Investment Income (Loss)
Income
Dividend $ 33,502
Securities lending 99
Interest 34
Total income 33,635
Expenses
Shareholder servicing 4,021
Investment management 3,109
Custody and accounting 163
Prospectus and shareholder reports 131
Registration 52
Legal and audit 10
Directors 6
Miscellaneous 157
Reductions/repayments pursuant to expense limitation
Investment management fees (waived) repaid (393)
Total expenses 7,256
Net investment income (loss) 26,379
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 76,584
Futures 6,277
Net realized gain (loss) 82,861
Change in net unrealized gain (loss)
Securities 23,097
Futures (2,883)
Change in net unrealized gain (loss) 20,214
Net realized and unrealized gain (loss) 103,075
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 129,454
----------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report (Unaudited)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
($ 000s)
6 Months Year
Ended Ended
6/30/04 12/31/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 26,379 $ 45,797
Net realized gain (loss) 82,861 15,501
Change in net unrealized gain (loss) 20,214 763,875
Increase (decrease) in net
assets from operations 129,454 825,173
Distributions to shareholders
Net investment income (26,227) (45,987)
Capital share transactions *
Shares sold 769,590 927,373
Distributions reinvested 25,720 45,115
Shares redeemed (497,346) (574,733)
Redemption Fee 44 79
Increase (decrease) in net
assets from capital
share transactions 298,008 397,834
Net Assets
Increase (decrease) during period 401,235 1,177,020
Beginning of period 3,885,437 2,708,417
End of period $ 4,286,672 $ 3,885,437
-------------- ---------------
(Including undistributed net investment income
of $400 at 6/30/04 and $248 at 12/31/03)
*Share information
Shares sold 25,280 35,870
Distributions reinvested 847 1,698
Shares redeemed (16,381) (22,258)
Increase (decrease) in shares outstanding 9,746 15,310
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report (Unaudited) June 30, 2004
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 portfolio
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(R).
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 at the time the valuations are made, except for OTC
Bulletin Board securities, which are valued at the mean of the latest bid and
asked prices. A security that is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market for
such security. Listed securities not traded on a particular day are valued at
the mean of the latest bid and asked prices. Debt securities with original
maturities of less than one year are valued at amortized cost in local currency,
which approximates fair value when combined with accrued interest.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Financial futures contracts are valued
at closing settlement prices.
Other investments and those for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by the T. Rowe Price Valuation Committee,
established by the fund's Board of Trustees.
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 $2,000 for the
six months ended June 30, 2004. Additionally, the fund earns credits on
temporarily uninvested cash balances at the custodian that reduce
the fund's custody charges. Custody expense in the accompanying financial
statements is presented before reduction for credits.
Redemption Fees
A 0.5% fee is assessed on redemptions of fund shares held less than 90 days to
deter short-term trading and protect the interests of long-term shareholders.
Redemption fees are withheld from proceeds that shareholders receive from the
sale or exchange of fund shares. The fees are paid to 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 on in-kind redemptions
to the extent the value of the distributed securities on the date of redemption
exceeds the cost of those securities. Gains and losses realized on in-kind
redemptions 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, 2004, the fund realized $81,301,000 of net gain on $130,887,000
of in-kind redemptions.
Investment Transactions, Investment Income, and Distributions
Income and expenses are recorded on the accrual basis. Premiums and discounts on
debt securities are amortized for financial reporting purposes. Dividends
received from mutual fund investments are reflected as dividend income; capital
gain distributions are reflected as realized gain/lo ss. 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. Payments ("variation margin") made or
received 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 other assets
and other liabilities, respectively, and in the change in net unrealized gain or
loss in the accompanying financial statements. Distributions to shareholders are
recorded on the ex-dividend date. Income distributions are declared and paid on
a quarterly basis. Capital gain distributions, if any, are declared and paid by
the fund, typically 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.
Futures Contracts
During the six months ended June 30, 2004, 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, 2004, the value of loaned securities was $80,047,000; aggregate
collateral consisted of $81,705,000 in the money market pooled trust.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $451,446,000 and $149,737,000, respectively, for the six months ended
June 30, 2004.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and distribute to shareholders all of its taxable income
and gains. Federal income tax regulations differ from generally accepted
accounting principles; therefore, distributions determined in accordance with
tax regulations may differ 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. 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, 2004.
The fund intends to retain realized gains to the extent of available capital
loss carryforwards. As of December 31, 2003, the fund had $170,632,000 of unused
capital loss carryforwards, of which $55,895,000 expire in 2009, and
$114,737,000 expire in 2010.
At June 30, 2004, the cost of investments for federal income tax purposes was
$3,676,550,000. Net unrealized gain aggregated $729,455,000 at period-end, of
which $1,092,498,000 related to appreciated investments and $363,043,000 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, 2004, investment
management fee payable totaled $484,000.
The fund is also subject to a contractual expense limitation through April 30,
2005. During the limitation period, the manager is required to waive its
management fee and reimburse the fund for any expenses, excluding interest,
taxes, brokerage commissions, and extraordinary expenses, that would otherwise
cause the fund's ratio of total expenses to average net assets (expense ratio)
to exceed its expense limitation of 0.35%. Through April 30, 2007, the fund is
required to repay the manager for expenses previously reimbursed and management
fees waived to the extent its net assets have grown or expenses have declined
sufficiently to allow repayment without causing the fund's expense ratio to
exceed its expense limitation. Pursuant to this agreement, at June 30, 2004,
management fees waived remain subject to repayment by the fund in the following
amounts: $2,689,000 through December 31,
2004, $1,304,000 through December 31, 2005, and $393,000 through April 30, 2007.
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 $2,436,000 for the six months ended June 30, 2004, of which $476,000 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,
2004, the fund was charged $461,000 for shareholder servicing costs related to
the college savings plans, of which $326,000 was for services provided by Price
and $92,000 was payable at period-end. At June 30, 2004, approximately 6.5% 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 a special
servicing agreement, 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 this agreement are reflected as
shareholder servicing expense in the accompanying financial statements. For the
six months ended June 30, 2004, the fund was allocated $375,000 of Retirement
Funds' expenses, of which $241,000 related to services provided by Price and
$64,000 was payable at period-end. At June 30, 2004, approximately 7.8% 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 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 to mutual funds, trusts, and other accounts managed by Price Associates
and/or its affiliates, and are not available for direct purchase by members of
the public. The Reserve Funds pay no investment management fees. During the six
months ended June 30, 2004, dividend income from the Reserve Funds totaled
$495,000.
T. Rowe Price Equity Index 500 Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report
INFORMATION ON PROXY VOTING
- --------------------------------------------------------------------------------
A description of the policies and procedures that the T. Rowe Price Equity Index
500 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.
Item 2. Code of Ethics.
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 is filed as an
exhibit to the registrant's annual Form N-CSR. No substantive amendments were
approved or waivers were granted to this code of ethics during the registrant's
most recent fiscal half-year.
Item 3. Audit Committee Financial Expert.
Disclosure required in registrant's annual Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Disclosure required in registrant's annual Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable. The complete schedule of investments is included in Item 1 of
this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 10. 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 11. Exhibits.
(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is filed
with the registrant's annual Form N-CSR.
(2) Separate certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(3) Written solicitation to repurchase securities issued by closed-end
companies: not applicable.
(b) A certification by the registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940,
is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
T. Rowe Price Index Trust, Inc.
By: /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date: August 16, 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: August 16, 2004
By: /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date: August 16, 2004