Item 1. Report to Shareholders.
T. Rowe Price New America Growth Portfolio
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Certified Financials
Financial Highlights
T. Rowe Price New America Growth Portfolio
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Certified Financials
(Unaudited)
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
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NET ASSET VALUE
Beginning
of period $ 12.99 $ 18.12 $ 20.91 $ 26.18 $ 24.74 $ 21.35
Investment activities
Net investment
income (loss) (0.02) (0.05) (0.04) (0.04) (0.07) (0.08)
Net realized
and unrealized
gain (loss) 2.24 (5.08) (2.44) (2.64) 3.10 3.97
Total from
investment
activities 2.22 (5.13) (2.48) (2.68) 3.03 3.89
Distributions
Net realized
gain -- -- (0.31) (2.59) (1.59) (0.50)
NET ASSET VALUE
End of period $ 15.21 $ 12.99 $ 18.12 $ 20.91 $ 26.18 $ 24.74
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Ratios/Supplemental Data
Total return^ 17.09% (28.31)% (11.84)% (10.62)% 12.75% 18.51%
Ratio of total
expenses to
average net
assets 0.85%! 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of net
investment
income (loss)
to average
net assets (0.28)%! (0.29)% (0.20)% (0.18)% (0.30)% (0.34)%
Portfolio
turnover rate 49.2%! 62.7% 56.4% 89.2% 42.1% 46.0%
Net assets,
end of period
(in thousands) $ 60,247 $ 55,871 $ 90,282 $108,835 $125,974 $ 18,989
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized
The accompanying notes are an integral part of these financial statements.
Statement of Net Assets
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T. Rowe Price New America Growth Portfolio
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Certified Financials
June 30, 2003 (Unaudited)
Shares Value
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In thousands
Common Stocks 98.8%
CONSUMER DISCRETIONARY 16.5%
Automobiles 1.3%
Harley-Davidson 19,300 $ 769
769
Hotels, Restaurants & Leisure 0.3%
Starbucks * 7,600 186
186
Household Durables 0.5%
Harman International 3,900 309
309
Media 7.1%
AOL Time Warner * 18,800 302
Clear Channel Communications * 4,400 187
Echostar Communications
Class A * 13,300 460
Getty Images * 10,400 430
Liberty Media, Class A * 103,700 1,199
Scripps, Class A 4,300 381
Univision Communications
Class A * 14,250 433
Viacom, Class B * 19,801 865
4,257
Multiline Retail 4.2%
Dollar General 27,950 510
Family Dollar Stores 15,900 607
Kohl's * 14,700 755
Target 16,900 640
2,512
Specialty Retail 3.1%
Home Depot 9,900 328
Ross Stores 11,500 492
Weight Watchers * 17,900 814
Williams-Sonoma * 8,900 260
1,894
Total Consumer Discretionary 9,927
CONSUMER STAPLES 3.3%
Food & Staples Retailing 3.3%
Costco Wholesale * 7,300 $ 267
Sysco 37,150 1,116
Wal-Mart 10,700 574
Total Consumer Staples 1,957
ENERGY 3.6%
Energy Equipment & Services 3.6%
Baker Hughes 23,225 780
Diamond Offshore Drilling 33,850 710
Smith International * 18,400 676
Total Energy 2,166
FINANCIALS 11.3%
Capital Markets 4.3%
Goldman Sachs Group 10,250 858
Neuberger Berman 5,700 228
Northern Trust 13,000 543
State Street 8,800 347
Waddell & Reed Financial
Class A 24,000 616
2,592
Consumer Finance 0.5%
SLM Corporation 7,200 282
282
Diversified Financial Services 1.6%
Citigroup 23,200 993
993
Insurance 4.6%
AMBAC 8,850 586
American International Group 13,000 718
Marsh & McLennan 17,800 909
Travelers Property Casualty
Class A 34,157 543
2,756
Thrifts & Mortgage Finance 0.3%
Freddie Mac 4,200 213
213
Total Financials 6,836
HEALTH CARE 19.2%
Biotechnology 2.3%
Amgen * 7,100 472
Cephalon * 7,150 294
Gilead Sciences * 6,300 350
MedImmune * 7,000 255
1,371
Health Care Equipment & Supplies 3.6%
Biomet 6,300 181
Dentsply International 27,250 1,114
Medtronic 8,800 $ 422
Stryker 7,000 486
2,203
Health Care Providers & Services 7.6%
Anthem * 11,200 864
Laboratory Corporation
of America * 20,500 618
Omnicare 50,900 1,720
UnitedHealth Group, 21,500 1,080
Wellpoint Health Networks * 3,600 304
4,586
Pharmaceuticals 5.7%
Abbott Laboratories 15,800 691
Allergan 3,200 247
Eli Lilly 7,000 483
Forest Labs * 6,300 345
Pfizer 48,600 1,659
3,425
Total Health Care 11,585
INDUSTRIALS & BUSINESS SERVICES 9.3%
Air Freight & Logistics 2.1%
UPS, Class B 19,700 1,255
1,255
Commercial Services & Supplies 4.3%
Apollo Group, Class A * 14,700 908
ChoicePoint * 45,400 1,567
Education Management * 2,000 107
2,582
Industrial Conglomerates 1.0%
GE 22,400 642
642
Machinery 0.9%
Danaher 7,700 524
524
Trading Companies & Distributors 1.0%
Fastenal 17,600 597
597
Total Industrials & Business Services 5,600
INFORMATION TECHNOLOGY 30.2%
Communications Equipment 3.4%
Cisco Systems * 101,950 $ 1,702
Nokia ADR 8,900 146
QUALCOMM 5,800 207
2,055
Computer & Peripherals 1.1%
Dell Computer * 21,900 700
700
Electronic Equipment & Instruments 1.7%
CDW * 22,100 1,012
1,012
Internet Software & Services 1.5%
Expedia, Class A * 8,400 642
InterActiveCorp * 6,300 249
891
IT Services 12.3%
Accenture, Class A * 36,200 655
Affiliated Computer Services
Class A * 21,200 969
BISYS Group * 17,700 325
Certegy * 27,100 752
Concord EFS * 42,350 623
First Data 40,800 1,691
Fiserv * 37,200 1,325
SunGard Data Systems * 42,400 1,099
7,439
Semiconductor & Semiconductor Equipment 5.3%
Analog Devices * 10,800 376
Applied Materials * 52,700 836
Intersil Holding, Class A * 16,300 434
KLA-Tencor * 8,800 409
Maxim Integrated Products 15,100 516
Microchip Technology 24,500 603
3,174
Software 4.9%
Adobe Systems 11,300 362
Mercury Interactive * 10,350 400
Microsoft 62,000 1,588
Siebel Systems * 15,700 150
Symantec * 10,150 445
2,945
Total Information Technology 18,216
TELECOMMUNICATION SERVICES 1.6%
Wireless Telecommunication Services 1.6%
Vodafone ADR 48,700 $ 957
Total Telecommunication Services 957
Total Miscellaneous Common Stocks 3.8% 2,264
Total Common Stocks (Cost $50,928) 59,508
Short-Term Investments 1.2%
Money Market Funds 1.2%
T. Rowe Price Reserve Investment
Fund, 1.16% # 765,912 766
Total Short-Term Investments
(Cost $766) 766
Total Investments in Securities
100.0% of Net Assets (Cost $51,694) $ 60,274
Other Assets Less Liabilities (27)
NET ASSETS $ 60,247
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Net Assets Consist of:
Undistributed net investment income (loss) $ (77)
Undistributed net realized gain (loss) (19,228)
Net unrealized gain (loss) 8,580
Paid-in-capital applicable to
3,962,183 shares of $0.0001 par
value capital stock outstanding;
1,000,000,000 shares of the
Corporation authorized 70,972
NET ASSETS $ 60,247
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NET ASSET VALUE PER SHARE $ 15.21
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# Seven-day yield
* Non-income producing
ADR American Depository Receipt
The accompanying notes are an integral part of these financial statements.
Statement of Operations
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T. Rowe Price New America Growth Portfolio
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Certified Financials
(Unaudited)
In thousands
6 Months
Ended
6/30/03
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Investment Income (Loss)
Income
Dividend $ 151
Income distributions from mutual funds 6
Total income 157
Expenses
Investment management and administrative expense 234
Net investment income (loss) (77)
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on securities (1,757)
Change in net unrealized gain
or loss on securities 10,518
Net realized and unrealized gain (loss) 8,761
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 8,684
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The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
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T. Rowe Price New America Growth Portfolio
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Certified Financials
(Unaudited)
In thousands
6 Months Year
Ended Ended
6/30/03 12/31/02
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Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ (77) $ (200)
Net realized gain (loss) (1,757) (9,171)
Change in net unrealized gain (loss) 10,518 (15,620)
Increase (decrease) in net
assets from operations 8,684 (24,991)
Capital share transactions *
Shares sold 5,619 17,353
Shares redeemed (9,927) (26,773)
Increase (decrease) in net
assets from capital
share transactions (4,308) (9,420)
Net Assets
Increase (decrease) during period 4,376 (34,411)
Beginning of period 55,871 90,282
End of period $ 60,247 $ 55,871
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*Share information
Shares sold 414 1,204
Shares redeemed (752) (1,886)
Increase (decrease) in
shares outstanding (338) (682)
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
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T. Rowe Price New America Growth Portfolio
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Certified Financials
June 30, 2003 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Equity Series, Inc. (the corporation) is registered under the
Investment Company Act of 1940 (the 1940 Act). The New America Growth
Portfolio (the fund), a diversified, open-end management investment
company, is one of the portfolios established by the corporation and
commenced operations on March 31, 1994. The fund seeks to provide long-term
growth of capital by investing primarily in the common stocks of companies
operating in sectors T. Rowe Price believes will be the fastest growing in
the United States. Shares of the fund are currently offered only through
certain insurance companies as an investment medium for both variable
annuity contracts and variable life insurance policies.
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, or
official closing price for certain markets, at the time the valuations are
made. A security that is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market
for such security. Listed securities not traded on a particular day are
valued at the mean of the latest bid and ask prices for domestic securities
and the last quoted sale price for international securities.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
Other investments and those for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by or under the supervision of the
officers of the fund, as authorized by the Board of Directors.
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.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $13,479,000 and $17,027,000, 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, $784,000 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 $16,687,000 of unused
capital loss carryforwards, of which $7,025,000 expire in 2009, and
$9,662,000 expire in 2010.
At June 30, 2003, the cost of investments for federal income tax purposes
was $51,694,000. Net unrealized gain aggregated $8,580,000 at period-end,
of which $12,095,000 related to appreciated investments and $3,515,000
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 and administrative agreement between the fund and the
manager provides for an all-inclusive annual fee equal to 0.85% of the
fund's average daily net assets. The fee is computed daily and paid
monthly. The agreement provides that investment management, shareholder
servicing, transfer agency, accounting, and custody services are provided
to the fund, and interest, taxes, brokerage commissions, directors' fees
and expenses, and extraordinary expenses are paid directly by the fund. At
June 30, 2003, $68,000 was payable under the agreement.
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 $6,000.
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 Equity Series, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date August 22, 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 22, 2003
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date August 22, 2003