Item 1. Report to Shareholders
T. Rowe Price Personal Strategy Balanced Portfolio
Certified Financials
Financial Highlights
T. Rowe Price Personal Strategy Balanced Portfolio
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
NET ASSET
VALUE
Beginning
of period $ 13.22 $ 14.72 $ 15.54 $ 16.00 $ 16.16 $ 15.13
Investment
activities
Net investment
income (loss) 0.17* 0.36 0.43 0.49 0.49 0.47
Net realized
and
unrealized
gain (loss) 1.22 (1.50) (0.82) 0.35 0.80 1.65
Total from
investment
activities 1.39 (1.14) (0.39) 0.84 1.29 2.12
Distributions
Net investment
income (0.16) (0.36) (0.43) (0.48) (0.49) (0.48)
Net realized
gain -- -- -- (0.82) (0.96) (0.61)
Total
distributions (0.16) (0.36) (0.43) (1.30) (1.45) (1.09)
NET ASSET
VALUE
End of
period $ 14.45 $ 13.22 $ 14.72 $ 15.54 $ 16.00 $ 16.16
---------------------------------------------------------------
Ratios/
Supplemental
Data
Total return^ 10.57%* (7.80)% (2.41)% 5.41% 8.41% 14.32%
Ratio of
total expenses
to average
net assets 0.89%!* 0.90% 0.90% 0.90% 0.90% 0.90%
Ratio of
net investment
income (loss)
to average
net assets 2.47%!* 2.57% 2.91% 3.08% 3.03% 3.04%
Portfolio
turnover
rate 69.6%! 100.9% 81.5% 55.4% 51.3% 47.6%
Net assets,
end of period
(in thousands) $ 95,453 $ 89,690 $103,413 $109,713 $ 85,259 $ 79,475
^ 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.
* See Note 5. Excludes expenses permanently waived (0.01% of average net
assets) related to investments in T. Rowe Price mutual funds.
! Annualized
The accompanying notes are an integral part of these financial statements.
Statement of Net Assets
T. Rowe Price Personal Strategy Balanced Portfolio
Certified Financials
June 30, 2003 (Unaudited)
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Common Stocks 65.7%
CONSUMER DISCRETIONARY 9.4%
Auto Components 0.1%
Denso (JPY) 3,700 $ 59
Keystone Automotive * 1,000 18
Michelin (EUR) 779 30
Strattec Security * 300 16
123
Automobiles 0.9%
Ford Motor 30,000 330
Fuji Heavy Industries (JPY) 8,000 36
Harley-Davidson 2,700 108
Honda Motor (JPY) 2,500 95
Nissan Motor (JPY) 7,000 67
Peugeot (EUR) 1,368 67
Toyota Motor (JPY) 4,800 124
Volkswagen (EUR) 1,784 75
902
Distributors 0.0%
Cycle & Carriage (SGD) 2,501 7
7
Hotels, Restaurants & Leisure 1.0%
Applebee's 775 24
BUCA * 1,300 7
Carnival 4,600 150
CEC Entertainment * 500 18
Cheesecake Factory * 1,300 47
Chicago Pizza & Brewery * 400 4
Enterprise Inns (GBP) 4,096 55
Hilton Group (GBP) 16,210 49
International Game Technology * 700 72
MGM Mirage * 400 14
O' Charley's * 900 19
Red Robin Gourmet Burgers * 400 8
Ruby Tuesday 2,100 52
Sonic * 1,425 36
Starbucks * 3,600 88
Starwood Hotels & Resorts
Worldwide, REIT 6,700 192
Whitbread (GBP) 6,773 76
911
Household Durables 0.8%
Electrolux, Series B (SEK) 2,484 $ 49
Funai Electric (JPY) 300 33
Harman International 1,600 127
Newell Rubbermaid 6,800 190
Persimmon (GBP) 5,918 47
Pioneer (JPY) 2,300 52
SEB (EUR) 260 23
Sony (JPY) 3,000 85
Thomson (EUR) 1,801 28
Tupperware 12,200 175
809
Internet & Catalog Retail 0.0%
Alloy Online * 2,500 16
e-Bay * 100 11
27
Leisure Equipment & Products 0.5%
Brunswick 1,900 47
Eastman Kodak 10,600 290
Konica (JPY) 3,000 34
Polaris Industries 200 12
Sammy Corporation (JPY) 400 11
SCP Pool * 2,550 88
482
Media 3.5%
Aegis (GBP) 37,729 49
AOL Time Warner * 12,800 206
British Sky Broadcast (GBP) * 5,747 64
Clear Channel Communications * 8,701 369
Comcast, Class A * 4,716 142
Comcast, Class A, Special * 7,700 222
Disney 19,100 377
Echostar Communications
Class A * 5,800 201
Emmis Communications * 1,000 23
Entercom Communications * 400 20
Getty Images * 400 17
Liberty Media, Class A * 29,776 344
News Corporation (AUD) 6,005 45
News Corporation ADR 1,000 30
Omnicom 1,900 136
Publicis Groupe (EUR) 1,953 53
Reader's Digest, Class A 8,700 117
Scholastic * 1,400 42
Scripps, Class A 1,100 98
Sinclair Broadcast Group
Class A * 1,800 $ 21
Singapore Press (SGD) 3,000 31
Univision Communications
Class A *(ss.) 5,200 158
Viacom, Class B * 9,790 427
VNU (EUR) 2,758 85
Young Broadcasting, Class A * 800 17
3,294
Multiline Retail 0.8%
Debenhams (GBP) 4,791 33
Kohl's * 3,200 164
Marui (JPY) 4,000 36
Neiman Marcus, Class A * 1,600 59
Nordstrom 8,300 162
Target 7,200 272
726
Specialty Retail 1.6%
AnnTaylor Stores * 1,500 43
Best Buy * 2,900 127
Charles Vogele (CHF) * 827 27
Christopher & Banks * 850 32
Esprit Holdings (HKD) 10,000 25
Grupo Elektra (MXN) 19,700 60
Home Depot 17,900 593
Kingfisher (GBP) 9,816 45
Linens 'n Things * 1,100 26
Stein Mart * 600 4
The Finish Line, Class A * 800 18
Too * 1,300 26
Toys "R" Us * 35,300 428
Ultimate Electronics * 400 5
Valora (CHF) 128 26
Weight Watchers * 400 18
1,503
Textiles, Apparel, & Luxury Goods 0.2%
Adidas-Salomon (EUR) 435 37
Culp * 100 1
Dan River, Class A * 1,600 4
Sanyo Shokai (JPY) 5,000 30
Stride Rite 3,500 35
Unifi * 1,300 8
Yue Yuen Industrial (HKD) 43,000 110
225
Total Consumer Discretionary 9,009
CONSUMER STAPLES 5.3%
Beverages 0.8%
Allied Domecq (GBP) 10,267 $ 57
Anheuser-Busch 1,800 92
Coca-Cola 5,200 241
Heineken (EUR) 760 27
Kirin Brewery (JPY) (ss.) 6,000 42
Lion Nathan (NZD) 16,300 59
Orkla, Series A (NOK) (ss.) 1,442 25
PepsiCo 4,250 189
Remy Cointreau (EUR) 1,203 37
769
Food & Staples Retailing 1.5%
Carrefour (EUR) 1,967 97
Casey's General Stores 4,600 65
Casino Guichard-Perrachon (EUR) 615 48
CVS 18,100 507
FamilyMart (JPY) 1,100 20
Great Atlantic & Pacific
Tea Company * 2,500 22
J. Sainsbury (GBP) 24,374 102
Metro (EUR) 2,115 69
Performance Food Group * 100 4
Sysco 2,900 87
Wal-Mart 5,000 268
Wal-Mart de Mexico (MXN) 42,100 124
Wild Oats Markets * 1,300 14
Woolworths (AUD) 7,616 64
1,491
Food Products 1.3%
American Italian Pasta, Class A *(ss.) 400 17
Associated British Foods (GBP) 7,274 65
Campbell Soup 10,600 260
CSM (EUR) 1,967 43
General Mills 8,360 396
International Multifoods * 800 18
Nestle (CHF) 653 135
Parmalat Finanz (EUR) (ss.) 38,210 120
Seneca Foods, Class A * 300 5
Seneca Foods, Class B * 100 2
Unilever (GBP) 19,132 153
1,214
Household Products 0.6%
Colgate-Palmolive 4,460 $ 259
Kao (JPY) 2,000 37
Kimberly-Clark 3,500 183
Procter & Gamble 900 80
559
Personal Products 0.2%
Chattem * 400 8
Estee Lauder, Class A 1,800 60
Fancl (JPY) 600 18
Gillette 1,400 45
L'Oreal (EUR) 778 55
186
Tobacco 0.9%
Altria Group 13,480 612
UST 6,130 215
827
Total Consumer Staples 5,046
ENERGY 4.5%
Energy Equipment & Services 1.3%
Atwood Oceanics * 1,100 30
Baker Hughes 14,500 487
BJ Services * 3,600 135
Cooper Cameron * 100 5
FMC Technologies * 2,700 57
Grant Prideco * 300 4
Hydril * 400 11
Key Energy Services * 1,300 14
Lone Star Technologies *(ss.) 300 6
National Oilwell * 1,600 35
Saipem (EUR) (ss.) 4,564 34
Schlumberger 4,600 219
Seacor Smit * 1,500 55
Smedvig, Series A (NOK) 1,471 9
Smith International * 4,200 154
TGS Nopec Geophysical (NOK) * 1,181 13
W-H Energy Services * 1,000 19
1,287
Oil & Gas 3.2%
BP (GBP) 11,862 82
BP ADR 12,838 539
ChevronTexaco 1,124 81
Cia Espanola de Petroleos (EUR) 4,536 124
ENI (EUR) (ss.) 8,102 123
ENI SPA ADR (ss.) 300 23
Exxon Mobil 14,114 $ 507
Forest Oil * 1,400 35
Marathon Oil 12,360 326
Noble Energy 1,600 61
Norsk Hydro (NOK) (ss.) 1,346 66
OMV (EUR) 50 6
Petroleo Brasileiro (Petrobras) ADR 3,900 69
Shell Transport & Trading (GBP) 24,300 161
Shell Transport & Trading ADR 4,900 195
Statoil (NOK) 15,111 129
Tonen General Sekiyu (JPY) 4,000 28
Total, Series B (EUR) 904 137
Ultra Petroleum * 800 10
Unocal 8,030 230
Woodside Petroleum (AUD) 5,233 44
XTO Energy 3,500 70
3,046
Total Energy 4,333
FINANCIALS 14.9%
Capital Markets 2.4%
Bank of New York 4,600 132
Charles Schwab 6,950 70
Deutsche Bank (EUR) 1,342 87
Franklin Resources 1,400 55
Goldman Sachs Group 2,500 209
Investor's Financial Services 1,100 32
Legg Mason 1,500 98
Macquarie Bank (AUD) 3,724 72
Mellon Financial 23,680 657
Merrill Lynch 5,600 261
Morgan Stanley 4,000 171
Neuberger Berman 900 36
Nomura Securities (JPY) 4,000 51
Northern Trust 3,800 159
State Street 6,000 236
2,326
Commercial Banks 4.9%
77 Bank (JPY) 10,000 45
ABN Amro Holdings (EUR) 2,685 51
Alliance & Leicester (GBP) 9,498 130
Anglo Irish Bank (EUR) 10,790 95
Australia & New Zealand
Banking (AUD) 13,216 165
Australia & New Zealand
Banking ADR 900 $ 56
Banca Intesa (EUR) 42,558 136
Banco BPI (EUR) 10,434 30
Banco Santander ADR 7,245 148
Banco Santander Central
Hispano (EUR) 12,397 109
Bank of America 9,900 782
Bank of Yokohama (JPY) (ss.) 13,000 42
Bank One 7,090 264
Barclays (GBP) 8,555 64
BCE (EUR) 1,618 15
BNP Paribas (EUR) (ss.) 3,170 161
Boston Private Financial (ss.) 700 15
Chittenden 2,975 81
Citizens Banking 2,000 54
DBS (SGD) 6,489 38
Dexia (EUR) 3,216 41
Glacier Bancorp 742 18
HBOS (GBP) 11,541 150
HSBC Holdings (GBP) 18,897 224
Jyske Bank (DKK) * 1,019 41
National Australia Bank (AUD) 7,190 162
Nordea (SEK) 18,239 88
Provident Bankshares 1,700 43
Royal Bank of Scotland (GBP) 5,440 153
SEB, Series A (SEK) 7,243 74
Southwest Bancorp * 1,400 45
Standard Chartered (GBP) 6,711 82
Sumitomo Mitsui Financial (JPY) (ss.) 16 35
Svenska Handelsbanken
Series A (SEK) 6,329 104
U.S. Bancorp 18,300 448
UniCredito Italiano (EUR) 19,520 93
Valley National Bancorp 2,342 62
Wells Fargo 4,400 222
WestAmerica 1,800 78
4,644
Consumer Finance 0.8%
Aiful (JPY) 900 39
American Express 11,050 462
Bradford & Bingley (GBP) 17,876 93
SLM Corporation 4,300 168
762
Diversified Financial Services 1.1%
Citigroup 21,650 $ 927
ING Groep (EUR) 4,340 75
1,002
Insurance 3.6%
Allianz (EUR) 409 34
AMBAC 2,000 133
American International Group 10,998 607
Aviva (GBP) 2,552 18
AXA (EUR) 3,616 56
AXA Asia Pacific (AUD) (ss.) 36,949 61
Brown and Brown 1,300 42
CNP Assurances (EUR) 2,180 92
Hannover Re (EUR) 1,257 33
Harleysville Group 700 16
Hartford Financial Services Group 3,300 166
Horace Mann Educators 3,900 63
Markel * 200 51
Marsh & McLennan 5,900 301
Millea Holdings (JPY) 6 46
Munich Re (EUR) 320 33
Ohio Casualty * 3,500 46
PartnerRe 1,200 61
Progressive Corporation 1,100 80
Prudential (GBP) 7,225 44
QBE Insurance (AUD) 10,274 64
RAS (EUR) 6,289 96
Royal & Sun Alliance (GBP) 20,837 48
SAFECO 10,800 381
Selective Insurance 1,400 35
Sompo Japan Insurance (JPY) 5,000 27
St. Paul Companies 5,100 186
Travelers Property Casualty
Class A 8,992 143
Triad Guaranty * 500 19
UnumProvident 11,400 153
W. R. Berkley 1,250 66
XL Capital, Class A 3,300 274
3,475
Real Estate 1.4%
AMP Diversified Property (AUD) 18,681 38
Arden Realty, REIT 1,300 34
Corio (EUR) 1,148 37
EastGroup Properties, REIT 1,600 43
Essex Property Trust, REIT 100 6
Federal Realty Investment
Trust, REIT 7,000 $ 224
Gables Residential Trust, REIT 1,300 39
General Property Trust (AUD) 48,081 94
Glenborough Realty Trust, REIT 1,400 27
Goldcrest (JPY) 700 18
Land Securities Group (GBP) 2,066 27
LaSalle Hotel Properties, REIT 600 9
Manufactured Home
Communities, REIT 400 14
Parkway Properties, REIT 1,200 51
Reckson Associates Realty, REIT 8,000 167
Reckson Associates
Realty, Class B, REIT 426 9
Simon Property Group, REIT 6,896 269
Sun Hung Kai Properties (HKD) 11,000 55
Vallehermoso (EUR) 1,810 20
Washington, REIT 1,500 41
Wereldhave (EUR) 614 39
Westfield Trust (AUD) 28,810 67
1,328
Thrifts & Mortgage Finance 0.7%
Fannie Mae 7,920 534
Frankfort First 100 2
Freddie Mac 3,080 157
693
Total Financials 14,230
HEALTH CARE 7.9%
Biotechnology 0.9%
Abgenix *(ss.) 200 2
Alexion Pharmaceutical * 200 3
Alkermes * 1,700 18
Amgen * 4,800 319
Amylin Pharmaceuticals * 700 15
Cephalon *(ss.) 576 24
CSL (AUD) 1,614 13
Cubist Pharmaceuticals * 300 3
CV Therapeutics * 200 6
deCODE GENETICS * 200 1
Exelixis * 1,300 9
Genentech * 200 14
Gilead Sciences * 3,500 195
Incyte * 400 2
MedImmune * 3,200 116
Myriad Genetics * 100 $ 1
Neurocrine Biosciences * 500 25
NPS Pharmaceuticals * 400 10
OSI Pharmaceuticals * 200 7
Regeneron Pharmaceuticals * 100 2
Trimeris *(ss.) 400 18
Tularik * 600 6
Vertex Pharmaceuticals * 48 1
Vicuron Pharmaceuticals * 300 4
ViroPharma * 400 1
815
Health Care Equipment & Supplies 0.6%
Analogic 600 29
Boston Scientific * 2,300 140
DJ Orthopedics * 400 4
Edwards Lifesciences * 1,100 35
Elekta (SEK) * 2,083 26
EPIX Medical * 400 6
Matthews International, Class A 2,700 67
Medtronic 2,500 120
Nektar Therapeutics * 300 3
Nobel Biocare (SEK) 217 14
Olympus Optical (JPY) 1,000 21
St. Jude Medical * 500 29
Steris * 1,500 35
Stryker 800 55
Wilson Greatbatch Technologies * 800 29
613
Health Care Providers & Services 1.5%
Alliance UniChem (GBP) 7,692 63
AmerisourceBergen 500 35
AMN Healthcare Services *(ss.) 100 1
Anthem * 100 8
Cardinal Health 2,000 129
Celesio (EUR) (ss.) 1,194 47
Cross Country Healthcare * 400 5
HCA 400 13
Henry Schein * 1,300 68
Hooper Holmes 2,800 18
Lifeline Systems * 500 14
LifePoint Hospitals * 200 4
Mid-Atlantic Medical Services * 1,100 57
Renal Care Group * 450 16
Suzuken (JPY) 800 19
UnitedHealth Group 14,300 719
WellChoice * 400 $ 12
Wellpoint Health Networks * 2,800 236
1,464
Pharmaceuticals 4.9%
Abbott Laboratories 5,300 232
Allergan 200 15
Altana (EUR) 1,203 76
AstraZeneca (GBP) 2,530 102
AstraZeneca ADR 4,200 171
Biovail * 3,900 183
Eisai (JPY) 2,000 41
Eli Lilly 1,600 110
Eon Labs * 300 11
Forest Labs * 2,900 159
Galen (GBP) 6,219 53
GlaxoSmithKline (GBP) 7,301 148
Hisamitsu Pharmaceutical (JPY) 2,000 22
Johnson & Johnson 6,260 324
Medicines Company * 600 12
Merck 6,900 418
Novartis (CHF) 5,496 218
Noven Pharmaceuticals * 1,600 16
Novo Nordisk (DKK) 775 27
Pfizer 28,200 963
Sanofi-Synthelabo (EUR) 2,436 143
Schering-Plough 19,100 355
Schwarz Pharma (EUR) 3,320 128
Takeda Chemical Industries (JPY) 2,000 74
Wyeth 13,780 628
4,629
Total Health Care 7,521
INDUSTRIALS & BUSINESS SERVICES 7.3%
Aerospace & Defense 0.1%
Armor Holdings * 2,500 34
European Aeronautic Defense
& Space (EUR) (ss.) 3,414 42
General Dynamics 600 43
Thales (EUR) 604 18
137
Air Freight & Logistics 0.3%
Expeditors International
of Washington 800 28
Forward Air * 1,100 28
Pacer International * 1,400 26
Ryder System 1,400 $ 36
UPS, Class B 1,800 114
UTi Worldwide 1,400 44
276
Airlines 0.1%
Frontier Airlines * 1,300 12
Midwest Express Holdings * 1,100 3
Singapore Airlines (SGD) 6,000 35
50
Building Products 0.0%
Central Glass (JPY) 6,000 35
Simpson Manufacturing * 100 4
39
Commercial Services & Supplies 2.1%
Apollo Group, Class A * 4,350 269
Buhrmann (EUR) 3,286 23
Cendant * 5,500 101
Central Parking 2,500 31
ChoicePoint * 1,300 45
CompX International 900 5
Consolidated Graphics * 1,000 23
Davis Service Group (GBP) 10,835 68
Electro Rent * 1,100 12
G&K Services, Class A 1,200 35
H&R Block 4,000 173
Herman Miller 2,400 48
Ionics * 1,500 33
Layne Christensen * 300 2
New England Business Service 1,500 45
R.R. Donnelley 16,600 434
Resources Connection * 2,000 48
SOURCECORP * 1,000 21
Spherion * 1,700 12
Tetra Tech *(ss.) 2,690 46
United Stationers * 1,400 51
Waste Management 20,422 492
Waterlink * 1,300 0
West Corporation * 700 19
2,036
Construction & Engineering 0.2%
Acciona (EUR) 1,218 58
Eiffage (EUR) 190 18
HOCHTIEF (EUR) 1,148 18
Insituform Technologies, Class A * 1,300 23
JGC (JPY) 6,000 41
158
Electrical Equipment 0.2%
A.O. Smith 2,700 $ 76
American Superconductor * 400 2
Belden 3,100 49
Draka (EUR) * 1,193 11
LSI Industries 850 9
Paxar * 3,700 41
PECO II * 1,000 1
Sumitomo Electric Industries (JPY) 3,000 22
Woodward Governor 200 9
220
Industrial Conglomerates 2.1%
3M 2,770 357
DCC (EUR) 3,886 53
FKI (GBP) 23,694 31
GE 14,000 402
Hutchison Whampoa (HKD) 21,600 132
Sembcorp Industries (SGD) 101,000 73
Siemens (EUR) 2,298 113
Tyco International 43,052 817
1,978
Machinery 1.4%
Actuant, Class A * 920 44
Cuno * 1,000 36
Danaher 5,200 354
Deere 6,300 288
Fanuc (JPY) 1,400 70
Graco 1,000 32
Harsco 2,100 76
IDEX 300 11
Joy Global * 600 9
Lindsay Manufacturing 1,000 23
Mitsubishi Heavy
Industries (JPY) 23,000 60
Pall 7,400 166
Reliance Steel & Aluminum 600 12
Saurer (CHF) * 564 15
Singulus Technology (EUR) *(ss.) 1,677 29
SKF, Series B (SEK) (ss.) 1,550 45
Weir Group (GBP) 9,846 38
1,308
Marine 0.0%
International Shipholding * 200 2
2
Road & Rail 0.6%
Arriva (GBP) 10,998 $ 63
Burlington Northern Santa Fe 5,200 148
Heartland Express * 351 8
Knight Transportation * 100 2
Nippon Express (JPY) 10,000 39
Norfolk Southern 15,300 294
554
Trading Companies & Distributors 0.1%
Hagemeyer (EUR) 1,560 6
Mitsubishi (JPY) 9,000 62
MSC Industrial Direct, Class A * 500 9
Sumitomo (JPY) 9,000 42
Watsco 100 2
121
Transportation Infrastructure 0.1%
Kamigumi (JPY) 9,000 45
45
Total Industrials & Business Services 6,924
INFORMATION TECHNOLOGY 7.6%
Communications Equipment 1.5%
Black Box 1,200 43
Cisco Systems * 25,000 417
Corning * 62,100 459
Emulex * 600 14
Lucent Technologies * 92,900 189
Nokia (EUR) 3,348 55
Nokia ADR 10,200 168
Packeteer * 800 12
QUALCOMM 1,600 57
Riverstone Networks * 2,300 3
Sagem (EUR) 570 46
Stratos Lightwave * 117 0
Tekelec * 600 7
1,470
Computer & Peripherals 0.5%
Creative Technology (SGD) 3,600 29
Dell Computer * 8,700 278
IBM 400 33
Lexmark International, Class A * 1,100 78
Mitsumi Electric (JPY) (ss.) 2,200 23
Synaptics * 1,000 13
454
Electronic Equipment & Instruments 0.3%
Artesyn Technologies * 2,000 $ 11
Hosiden (JPY) 3,400 25
KEMET * 3,200 32
Kyocera (JPY) 600 34
Littelfuse * 1,700 38
Methode Electronics, Class A 2,300 25
Newport * 1,200 18
Nippon Electric Glass (JPY) 3,000 32
Plexus * 3,100 36
Shimadzu (JPY) 10,000 32
Technitrol * 1,600 24
Woodhead Industries 1,500 19
326
Internet Software & Services 0.6%
Digital Impact * 300 1
InterActiveCorp * 7,100 281
Internet Security Systems * 1,400 20
MatrixOne * 3,100 18
Netegrity * 1,400 8
Sonicwall * 500 2
Webex Communications *(ss.) 200 3
Websense * 500 8
Yahoo! * 5,700 187
528
IT Services 1.5%
Accenture, Class A * 5,200 94
Affiliated Computer Services
Class A * 4,900 224
BISYS Group * 1,400 26
CACl International, Class A * 1,200 41
Cap Gemini (EUR) * 499 18
First Data 13,268 550
Fiserv * 3,400 121
Global Payments 1,300 46
Iron Mountain * 2,450 91
Itochu Techno-Science (JPY) 900 21
LogicaCMG (GBP) 9,515 22
ManTech, Class A * 500 10
Maximus * 2,100 58
MPS Group * 3,700 25
Paychex 2,300 67
SunGard Data Systems * 1,800 47
Teleplan (EUR) * 199 1
Thiel Logistik (EUR) * 2,088 $ 9
1,471
Office Electronics 0.3%
Canon (JPY) 3,000 138
Neopost (EUR) * 945 40
Seiko Epson, 144A (JPY) *(ss.) 4,100 122
300
Semiconductor & Semiconductor
Equipment 1.3%
Analog Devices * 6,000 209
Applied Materials * 7,900 125
ATMI * 1,800 45
Cabot Microelectronics * 600 30
Entegris * 2,600 35
Exar * 1,900 30
Intel 4,600 96
Jenoptik (EUR) 3,756 48
KLA-Tencor * 1,100 51
Lattice Semiconductor * 300 2
Maxim Integrated Products 7,100 243
MKS Instruments * 2,300 42
Mykrolis * 3,100 31
QLogic * 1,900 92
Rohm (JPY) 200 22
Semtech * 2,600 37
Texas Instruments 3,100 55
Xilinx * 900 23
1,216
Software 1.6%
Actuate * 1,300 4
Adobe Systems 1,800 58
Autodesk 600 10
Catapult Communications * 300 3
Concord Communications * 400 6
Factset Research Systems 1,400 62
FileNet * 1,000 18
Intuit * 2,200 98
Jack Henry & Associates 3,900 69
Kronos * 1,800 91
Magma Design Automation * 200 3
Mercury Interactive * 400 15
Microsoft 27,780 711
Midway Games * 2,900 11
NEC Soft (JPY) 1,500 33
NetIQ * 484 7
Progress Software * 1,600 33
Quest Software * 800 $ 10
Renaissance Learning *(ss.) 100 2
SAP (EUR) 906 107
SPSS * 900 15
Symantec * 1,800 79
Trend Micro (JPY) * 1,000 16
Verisity Ltd. * 600 7
VERITAS Software * 1,175 34
Verity * 1,400 18
Wind River Systems * 2,200 8
1,528
Total Information Technology 7,293
MATERIALS 4.3%
Chemicals 2.4%
Agrium 22,700 249
Airgas 3,600 60
Arch Chemicals 2,400 46
BASF (EUR) 2,321 99
Degussa (EUR) (ss.) 3,547 103
Dow Chemical 11,500 356
DuPont 7,684 320
Ferro 1,600 36
Great Lakes Chemical 5,810 119
Hercules * 14,900 147
Hitachi Chemical (JPY) 2,600 27
IMC Global 3,600 24
International Flavors & Fragrances 7,100 227
Kaneka (JPY) 14,000 86
MacDermid 200 5
Material Sciences 1,200 12
Minerals Technologies 1,600 78
Potash Corp./Saskatchewan 2,600 166
Scotts, Class A * 800 40
Shin-Etsu Chemical (JPY) 2,400 82
Symyx Technologies * 100 2
2,284
Construction Materials 0.3%
Aggregate Industries (GBP) 44,817 59
Boral (AUD) 38,092 129
Cemex Participating Certificates
(Represents 2 Series A and
1 Series B shares) (MXN) 15,458 69
HeidelbergCement (EUR) 603 13
Italcementi (EUR) (ss.) 2,673 30
RMC (GBP) 4,788 $ 37
337
Containers & Packaging 0.0%
Constar International * 500 4
Smurfit-Stone Container *(ss.) 300 4
8
Metals & Mining 1.1%
Alcoa 8,068 206
Anglo American (GBP) 3,360 51
BHP Steel (AUD) 38,584 96
Gerdau ADR 8,670 102
Gibraltar Steel 200 4
Lihir Gold (AUD) 21,900 19
Newmont Mining 298 10
NN, Inc. 400 5
Phelps Dodge * 11,400 437
SSAB Svenskt Stal
Series A (SEK) 4,669 62
Voest-Alpine (EUR) 1,150 46
1,038
Paper & Forest Products 0.5%
Buckeye Technologies * 2,500 17
MeadWestvaco 8,000 198
Paperlinx (AUD) 17,367 54
Potlatch 200 5
Weyerhaeuser 3,100 167
441
Total Materials 4,108
TELECOMMUNICATION SERVICES 2.7%
Diversified Telecommunication Services 1.1%
AT&T 2,795 54
Cable & Wireless (GBP) 26,900 50
Carso Global Telecom (MXN) * 71,400 91
Portugal Telecom (EUR) 4,813 35
Royal KPN (EUR) * 15,804 112
SBC Communications 6,320 161
Sprint 17,200 248
TDC A/S (DKK) 1,168 35
Tele2 AB, Series B (SEK) *(ss.) 1,957 73
Telecom Italia (EUR) (ss.) 10,062 91
Telmex ADR, Series L 2,800 88
1,038
Wireless Telecommunication Services 1.6%
America Movil ADR, Series L 3,900 73
China Unicom (HKD) 26,000 $ 18
Debitel (EUR) 1,530 15
KDDI (JPY) 35 136
Nextel Communications
Class A * 13,000 235
Orange (EUR) * 5,990 53
SK Telecom ADR 2,250 42
Smartone
Telecommunications (HKD) 26,000 30
Telecom Italia Mobile (EUR) 21,948 108
Vodafone (GBP) 32,785 64
Vodafone ADR 36,500 717
Western Wireless, Class A * 600 7
1,498
Total Telecommunication Services 2,536
UTILITIES 1.8%
Electric Utilities 1.5%
Cleco 1,200 21
Constellation Energy Group 5,200 178
E.On (EUR) 3,450 178
El Paso Electric * 1,000 12
Exelon 3,675 220
FirstEnergy 6,587 253
Hokuriku Electric Power (JPY) 2,500 37
Hong Kong Electric (HKD) 10,100 40
Iberdrola (EUR) 7,384 128
MVV Energie (EUR) 751 13
Tohoku Electric Power (JPY) 5,500 81
TXU 11,040 248
Unisource Energy 700 13
1,422
Gas Utilities 0.2%
Australian Gas Light (AUD) 8,965 66
Centrica (GBP) 45,241 131
Tokyo Gas (JPY) 11,000 32
229
Water Utilities 0.1%
Severn Trent (GBP) 3,696 42
42
Total Utilities 1,693
Total Common Stocks (Cost $56,559) 62,693
Preferred Stocks 0.1%
Hugo Boss (EUR) (ss.) 2,293 $ 34
Porsche (EUR) 163 69
Total Preferred Stocks (Cost $87) 103
Corporate Bonds 8.3%
ABN Amro Bank
7.125%, 6/18/07 40,000 47
AIG Sunamerica Global Financing XII
144A, 5.30%, 5/30/07 100,000 110
American Electric Power, Series C
5.375%, 3/15/10 30,000 32
American Express
3.00%, 5/16/08 30,000 30
AOL Time Warner
7.625%, 4/15/31 45,000 52
Appalachian Power, Series E
4.80%, 6/15/05 50,000 53
Asian Developement Bank
6.25%, 6/15/11 (AUD) 295,000 212
AT&T Wireless Group
7.875%, 3/1/11 45,000 53
Baker Hughes, 6.875%, 1/15/29 65,000 78
Bank of America
4.875%, 9/15/12 65,000 69
Bank of New York
2.20%, 5/12/06 40,000 40
Bank One, 5.25%, 1/30/13 85,000 91
BB&T, 6.50%, 8/1/11 20,000 23
BHP Billiton Finance
4.80%, 4/15/13 40,000 42
Black Hills, 6.50%, 5/15/13 20,000 20
Boeing, 5.125%, 2/15/13 30,000 32
Bottling Group
144A, 4.625%, 11/15/12 45,000 47
British Telecommunications
VR, 8.375%, 12/15/10 40,000 51
Canadian National Railway
4.40%, 3/15/13 40,000 40
Canadian Natural Resources
7.20%, 1/15/32 90,000 111
Caterpillar Financial Services
2.59%, 7/15/06 40,000 40
CE Electric UK Funding
144A, 6.853%, 12/30/04 55,000 $ 57
Chevron Phillips Chemical
5.375%, 6/15/07 40,000 43
Cincinnati Gas & Electric
5.70%, 9/15/12 45,000 49
CIT Group
7.125%, 10/15/04 20,000 21
7.75%, 4/2/12 60,000 72
Citigroup
3.50%, 2/1/08 50,000 51
5.625%, 8/27/12 70,000 77
Clear Channel Communications
4.625%, 1/15/08 80,000 84
Coca Cola Enterprises
6.125%, 8/15/11 45,000 52
Comcast, 5.85%, 1/15/10 80,000 88
ConocoPhillips, 5.90%, 10/15/32 45,000 48
Consolidated Edison
4.875%, 2/1/13 30,000 32
Consumers Energy
144A, 4.25%, 4/15/08 20,000 21
Countrywide Home Loans
5.50%, 2/1/07 35,000 38
Cox Communications
7.875%, 8/15/09 45,000 55
Credit Suisse First Boston (USA)
6.50%, 1/15/12 65,000 74
Devon Financing
6.875%, 9/30/11 40,000 47
Diageo, 3.50%, 11/19/07 50,000 51
DPL, 8.25%, 3/1/07 20,000 23
Entergy Gulf States
144A, 5.20%, 12/3/07 45,000 47
Federal Republic of Germany
5.00%, 5/20/05 (EUR) 460,000 556
First Union, 6.40%, 4/1/08 20,000 23
FirstEnergy, 7.375%, 11/15/31 45,000 51
Ford Motor Credit
6.50%, 1/25/07 40,000 42
France Telecom
VR, 9.25%, 3/1/11 20,000 25
Franklin Resources
3.70%, 4/15/08 15,000 15
Fund American Companies
5.875%, 5/15/13 20,000 $ 21
GE Capital
3.50%, 5/1/08 55,000 57
6.00%, 6/15/12 100,000 113
General Motors
8.375%, 7/15/33 30,000 30
GMAC, 5.85%, 1/14/09 110,000 110
Goldman Sachs Group
4.125%, 1/15/08 60,000 63
6.125%, 2/15/33 20,000 21
Government of Canada
3.50%, 6/1/04 (CAD) 610,000 452
5.25%, 6/1/12 (CAD) 595,000 464
Household Finance
5.75%, 1/30/07 20,000 22
6.375%, 11/27/12 15,000 17
IBM, 4.25%, 9/15/09 55,000 58
Inco, 7.75%, 5/15/12 55,000 66
Inter American Develop Bank
5.00%, 11/15/06 (AUD) 500,000 338
International Lease Finance
6.375%, 3/15/09 100,000 112
J. P. Morgan Chase
5.75%, 1/2/13 50,000 54
John Deere Capital
7.00%, 3/15/12 55,000 65
Johnson & Johnson
3.80%, 5/15/13 40,000 40
Kaneb Pipe Line Operating Partners
5.875%, 6/1/13 30,000 31
Kinder Morgan, 6.50%, 9/1/12 50,000 57
Lehman Brothers
4.00%, 1/22/08 30,000 31
Lowes, 6.50%, 3/15/29 40,000 45
Marsh & McLennan
3.625%, 2/15/08 40,000 41
Masco, 5.875%, 7/15/12 80,000 88
McCormick, 6.40%, 2/1/06 125,000 136
Monsanto, 4.00%, 5/15/08 40,000 41
Morgan Stanley, 3.625%, 4/1/08 30,000 31
Nationwide Financial Services
5.90%, 7/1/12 100,000 108
News America
144A, 6.55%, 3/15/33 50,000 53
NiSource Finance
7.625%, 11/15/05 35,000 $ 39
Noram Energy, 6.50%, 2/1/08 19,000 21
Northern Trust, 4.60%, 2/1/13 30,000 31
Occidental Petroleum
4.25%, 3/15/10 20,000 21
Oncor Electric Delivery
7.00%, 9/1/22 25,000 28
Pemex Project Funding Master Trust
7.375%, 12/15/14 45,000 49
144A, 7.375%, 12/15/14 15,000 16
Pinnacle West Capital
6.40%, 4/1/06 45,000 49
Potash Corp./Saskatchewan
4.875%, 3/1/13 25,000 25
Potomac Electric Power
3.75%, 2/15/06 40,000 41
PPL Energy, 6.40%, 11/1/11 75,000 83
Principal Mutual Life
144A, 8.00%, 3/1/44 150,000 171
Prudential, 3.75%, 5/1/08 40,000 41
PSEG Power, 8.625%, 4/15/31 30,000 39
Quebec Province
5.00%, 7/17/09 55,000 60
Republic of Chile
5.50%, 1/15/13 45,000 48
Republic of Italy
2.50%, 3/31/06 40,000 41
Rouse, 8.43%, 4/27/05 125,000 137
SCA Coordination Center
144A, 4.50%, 7/15/15 30,000 30
Scotland International Finance
144A, 6.50%, 2/15/11 ++ 100,000 109
Sealed Air
144A, 5.375%, 4/15/08 40,000 42
Sempra Energy, 6.00%, 2/1/13 50,000 55
Southern Power, 6.25%, 7/15/12 55,000 62
Sprint, 6.375%, 5/1/09 75,000 82
State Street, 7.65%, 6/15/10 70,000 87
TXU Energy
144A, 7.00%, 3/15/13 30,000 33
Unilever, 5.90%, 11/15/32 50,000 54
Union Pacific, 6.50%, 4/15/12 55,000 64
United Mexican States
6.375%, 1/16/13 55,000 59
UST, 6.625%, 7/15/12 70,000 $ 81
Verizon Florida
6.125%, 1/15/13 35,000 40
Verizon Global Funding
7.375%, 9/1/12 15,000 18
7.75%, 12/1/30 30,000 38
Verizon Virginia
4.625%, 3/15/13 30,000 31
Viacom, 5.625%, 8/15/12 30,000 33
Washington Mutual
5.50%, 1/15/13 70,000 76
Wells Fargo Financial
5.50%, 8/1/12 90,000 100
Weyerhaeuser, 5.95%, 11/1/08 40,000 44
XL Capital Finance
6.50%, 1/15/12 65,000 74
Total Corporate Bonds (Cost $7,228) 7,932
Asset-Backed Securities 1.1%
Capital Auto Receivables Asset Trust
Series 2002-2, Class CERT
4.18%, 10/15/07 151,519 155
Chase Manhattan Auto Owner Trust
Series 2001-B, Class CTFS
3.75%, 5/15/08 63,535 65
Series 2003-A, Class A4
2.06%, 12/15/09 80,000 79
CIT RV Trust
Series 1998-A, Class A4
6.09%, 2/15/12 182,114 186
Citibank Credit Card Issuance Trust
Series 2000-C1, Class C1
7.45%, 9/15/07 125,000 138
Harley-Davidson Motorcycle Trust
Series 2002-1, Class B
4.36%, 1/15/10 80,817 85
Series 2003-1, Class B
2.39%, 11/15/10 17,758 18
Series 2003-2, Class 2B
144A, 1.89%, 2/15/11 73,404 73
MBNA Master Credit Card Trust II
Series 2000-D, Class C
144A, 8.40%, 9/15/09 125,000 146
Reliant Energy Transition Bond
Series 2001-1, Class A4
5.63%, 9/15/15 100,000 $ 112
Total Asset-Backed Securities
(Cost $1,012) 1,057
Non-U.S. Government Mortgage-Backed Securities 1.6%
Banc of America Commercial Mortgage
Series 2003-1, Class A2, CMO
4.648%, 9/11/36 100,000 104
BankBoston Home Equity Loan Trust
Series 1998-1, Class A6
6.35%, 2/25/13 110,588 116
Chase Funding Mortgage Loan
Series 2003-3, Class 1M1
4.537%, 9/25/32 50,000 50
Series 2002-1, Class 1A3
5.03%, 12/25/23 175,000 180
Series 2002-2, Class 1M1
5.599%, 9/25/31 20,000 21
DLJ Commercial Mortgage
Series 1999-CG2, Class A1B, CMO
7.30%, 6/10/32 75,000 90
J.P. Morgan Chase Commercial Mortgage Securities
Series 2001-CIB2, Class A2, CMO
6.244%, 4/15/35 100,000 114
Series 2001-CIBC, Class A3, CMO
6.26%, 3/15/33 250,000 290
J.P. Morgan Commercial Mortgage Financial Corp.
Series 1999-PLS1, Class A2, CMO
7.10%, 2/15/32 80,000 95
Mellon Residential Funding
Series 2001-HEIL, Class A3
5.945%, 2/25/11 170,844 172
Salomon Brothers Mortgage Securities VII
Series 2001-C1, Class A2, CMO
6.226%, 12/18/35 150,000 169
Summit Mortgage Trust
Series 2002, Class A2, CMO
144A, VR, 6.32%, 7/1/03 125,000 128
Total Non-U.S. Government Mortgage-
Backed Securities (Cost $1,444) 1,529
U.S. Government Mortgage-Backed Securities 5.3%
Federal Home Loan Mortgage
5.00%, 12/1/08 152,014 $ 157
7.00%, 6/1/32 160,083 168
ARM, 4.687%, 7/1/03 83,581 87
Federal National Mortgage Assn.
6.00%, 10/1/13 - 12/1/31 143,351 150
6.50%, 5/1/17 - 12/1/32 365,425 383
7.00%, 4/1/32 43,194 45
CMO
5.50%, 7/25/28 275,000 280
Interest Only
5.50%, 11/25/28 - 12/1/32+ 144,894 20
6.50%, 2/1/32+ 104,913 11
TBA
4.50%, 1/1/18 225,000 230
5.00%, 1/1/18 - 1/1/33 301,000 310
5.50%, 1/1/33 765,000 791
6.00%, 1/1/33 143,000 148
Government National Mortgage Assn.
4.50%, 5/15/18 209,147 $ 216
6.00%, 4/15/26 - 3/20/33 232,095 244
6.50%, 3/15/26 - 9/20/32 341,522 359
7.00%, 9/20/27 196,400 207
8.00%, 10/15/25 - 6/15/26 74,248 81
8.50%, 12/15/24 7,247 8
11.50%, 11/15/19 12,032 14
TBA
4.50%, 1/1/18 140,000 144
6.00%, 1/1/33 925,000 968
Total U.S. Government Mortgage-Backed
Securities (Cost $4,973) 5,021
U.S. Government Obligations/Agencies 7.2%
Federal Home Loan Banks
5.75%, 5/15/12 285,000 328
Federal Home Loan Mortgage
4.625%, 2/15/07 (EUR) 890,000 1,090
Federal National Mortgage Assn.
6.00%, 5/15/11 310,000 362
7.125%, 1/15/30 240,000 312
U.S. Treasury Bonds
5.375%, 2/15/31 80,000 $ 90
6.25%, 8/15/23 - 5/15/30 685,000 845
6.375%, 8/15/27 50,000 62
7.50%, 11/15/16 160,000 218
U.S. Treasury Notes
2.125%, 8/31/04 510,000 516
3.25%, 12/31/03-8/15/07 140,000 143
3.50%, 11/15/06 815,000 859
3.875%, 2/15/13 55,000 57
4.25%, 11/15/03 ** 595,000 602
4.75%, 11/15/08 10,000 11
5.875%, 11/15/04 280,000 298
6.50%, 8/15/05 990,000 1,097
Total U.S. Government
Obligations/Agencies (Cost $6,320) 6,890
Domestic Bond Mutual Funds 7.6%
T. Rowe Price Institutional
High Yield Fund, 7.99% p 683,278 7,256
Total Domestic Bond
Mutual Funds (Cost $7,168) 7,256
Short-Term Investments 5.5%
Money Market Funds 5.5%
T. Rowe Price Reserve Investment
Fund, 1.16% # 5,243,587 5,244
Total Short-Term Investments
(Cost $5,244) 5,244
Securities Lending Collateral 1.3%
Money Market Pooled Account 1.1%
Investment in money market pooled
account managed by
JPMorgan Chase Bank,
London 1,090,861 1,091
Money Market Trust 0.2%
State Street Bank and Trust Company of
New Hampshire N.A. Securities Lending Quality
Trust units 167,369 167
Total Securities Lending Collateral
(Cost $1,258) 1,258
T. Rowe Price Personal Strategy Balanced Portfolio
Certified Financials
June 30, 2003 (Unaudited)
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
103.7% of Net Assets (Cost $91,293) $98,983
Forward Currency Exchange Contracts
In thousands
Unrealized
Counterparty Settlement Receive Deliver Gain (Loss)
- ------------ ---------- ----------------- --------------- -----------
Morgan
Stanley 7/2/03 AUD 200 USD 134 $ -
Morgan
Stanley 7/2/03 USD 129 AUD 200 (5)
Morgan
Stanley 7/2/03 USD 414 EUR 350 11
Morgan
Stanley 7/2/03 EUR 350 USD 402 1
Morgan
Stanley 7/25/03 USD 442 CAD 600 -
Morgan
Stanley 7/25/03 USD 404 EUR 350 2
Morgan
Stanley 7/25/03 USD 133 AUD 200 (1)
Morgan
Stanley 8/28/03 USD 134 AUD 200 -
Morgan
Stanley 8/28/03 USD 401 EUR 350 (1)
Net unrealized gain (loss) on open forward
currency exchange contracts 7
Futures Contracts
Contract Unrealized
Expiration Value Gain (Loss)
---------- -------- -----------
In thousands
Short, 2 Five year U.S.
Treasury Note contracts,
$3,000 of U.S. Treasury
Notes pledged as initial
margin 9/03 $ (230) $ 1
Short, 11 Ten year U.S.
Treasury Note contracts,
$23,000 of U.S. Treasury
Notes pledged as initial
margin 9/03 (1,292) 13
Net payments (receipts)
of variation margin to date (18)
Variation margin receivable
(payable) on open futures
contracts (4)
Other Assets Less Liabilities (3,533)
NET ASSETS $ 95,453
---------
Net Assets Consist of:
Undistributed net investment income (loss) $ 64
Undistributed net realized gain (loss) (7,889)
Net unrealized gain (loss) 7,715
Paid-in-capital applicable to 6,607,563 shares
of $0.0001 par value capital stock outstanding;
1,000,000,000 shares of the Corporation authorized 95,563
NET ASSETS $ 95,453
---------
NET ASSET VALUE PER SHARE $ 14.45
---------
# Seven-day yield
* Non-income producing
+ Interest Only security for which the fund receives interest on notional
principal (par)
(ss.) 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
++ Security contains restrictions as to public resale pursuant to the
Securities Act of 1933 and related rules -- total of such securities at
period-end amounts to $109,000 and represents 0.1% of net assets
144A Security was purchased pursuant to Rule 144A under the Securities Act of
1933 and may be resold in transactions exempt from registration only to
qualified institutional buyers -- total of such securities at period-end
amounts to $1,205,000 and represents 1.3% of net assets
p SEC yield
ADR American Depository Receipts
ARM Adjustable Rate Mortgage
AUD Australian dollar
CAD Canadian dollar
CHF Swiss franc
CMO Collateralized Mortgage Obligation
DKK Danish krone
EUR Euro
GBP British pound
HKD Hong Kong dollar
JPY Japanese yen
MXN Mexican peso
NOK Norwegian krone
NZD New Zealand dollar
REIT Real Estate Investment Trust
SEK Swedish Krona
SGD Singapore dollar
TBA To Be Announced security was purchased on a forward commitment basis
USD United States dollar
VR Variable Rate
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Personal Strategy Balanced Portfolio
Certified Financials
(Unaudited)
In thousands
6 Months
Ended
6/30/03
Investment Income (Loss)
Income
Interest $ 771
Dividend (net of foreign taxes of $39) 624
Income distributions from mutual funds 91
Securities lending 6
Other 3
Total income 1,495
Investment management and administrative expense 397
Net investment income (loss) 1,098
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (2,071)
Futures (111)
Foreign currency transactions (1)
Net realized gain (loss) (2,183)
Change in net unrealized gain (loss)
Securities 10,122
Futures 53
Other assets and liabilities
denominated in foreign currencies 4
Change in net unrealized gain (loss) 10,179
Net realized and unrealized gain (loss) 7,996
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 9,094
----------
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Personal Strategy Balanced Portfolio
Certified Financials
(Unaudited)
In thousands
6 Months Year
Ended Ended
6/30/03 12/31/02
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 1,098 $ 2,525
Net realized gain (loss) (2,183) (4,115)
Change in net unrealized
gain (loss) 10,179 (6,788)
Increase (decrease) in net
assets from operations 9,094 (8,378)
Distributions to shareholders
Net investment income (1,050) (2,517)
Capital share transactions *
Shares sold 5,707 16,924
Distributions reinvested 1,050 2,516
Shares redeemed (9,038) (22,268)
Increase (decrease) in net
assets from capital share
transactions (2,281) (2,828)
Net Assets
Increase (decrease) during period 5,763 (13,723)
Beginning of period 89,690 103,413
End of period $ 95,453 $ 89,690
------------------------------------
*Share information
Shares sold 422 1,203
Distributions reinvested 76 184
Shares redeemed (676) (1,625)
Increase (decrease) in shares outstanding (178) (238)
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Personal Strategy Balanced Portfolio
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 Personal Strategy Balanced
Portfolio (the fund), a diversified, open-end management investment company, is
one of the portfolios established by the corporation and commenced operations on
December 30, 1994. The fund seeks the highest total return over time consistent
with an emphasis on both capital appreciation and income. 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.
Debt securities are generally traded in the over-the-counter market. Securities
with original maturities of one year or more are valued at prices furnished by
dealers who make markets in such securities or by an independent pricing
service, which considers yield or price of bonds of comparable quality, coupon,
maturity, and type, as well as prices quoted by dealers who make markets in such
securities. Securities with original maturities 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 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.
Most foreign markets close before the NYSE. Developments that could affect the
values of securities that occur between the close of a foreign market and the
close of the NYSE normally will not be reflected in security valuations.
However, if such developments are so significant that they will, in the judgment
of the officers of the fund, clearly and materially affect the value of
securities, the previous closing prices may be adjusted to reflect the fair
value of the securities as of the close of the NYSE, as determined in good faith
by or under the supervision of the officers of the fund, as authorized by the
Board of Directors.
Currency Translation
Assets, including investments, and liabilities denominated in foreign currencies
are translated into U.S. dollar values each day at the prevailing exchange rate,
using the mean of the bid and ask prices of such currencies against U.S. dollars
as quoted by a major bank. Purchases and sales of securities, income, and
expenses are translated into U.S. dollars at the prevailing exchange rate on the
date of the transaction. The effect of changes in foreign currency exchange
rates on realized and unrealized security gains and losses is reflected as a
component of such gains and losses.
Premiums and Discounts
Premiums and discounts on debt securities are amortized for financial reporting
purposes.
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 and forward currency exchange
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.
Forward Currency Exchange Contracts
During the six months ended June 30, 2003, the fund was a party to forward
currency exchange contracts under which it is obligated to exchange currencies
at specified future dates and exchange rates. Risks arise from the possible
inability of counterparties to meet the terms of their agreements and from
movements in currency values.
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 and/or interest rates.
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 account 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 $1,203,000; aggregate collateral consisted of $1,258,000 in the
money market pooled account.
Other
Purchases and sales of portfolio securities, other than short-term and U.S.
government securities, aggregated $16,025,000 and $18,255,000, respectively, for
the six months ended June 30, 2003. Purchases and sales of U.S. government
securities aggregated $14,486,000 and $15,580,000, 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, $935,000 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 $4,794,000 of unused capital loss carryforwards,
of which $1,433,000 expire in 2009, and $3,361,000 expire in 2010.
At June 30, 2003, the cost of investments for federal income tax purposes was
$91,293,000. Net unrealized gain aggregated $7,715,000 at period-end, of which
$11,470,000 related to appreciated investments and $3,755,000 related to
depreciated investments.
NOTE 4 - FOREIGN TAXES
The fund is subject to foreign income taxes imposed by certain countries in
which it invests. Foreign income taxes are accrued by the fund as a reduction of
income.
NOTE 5 - 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 0.90% 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, $89,000 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 $23,000.
The fund may invest in T. Rowe Price Institutional High Yield Fund, Inc. (High
Yield Fund), an open-end management investment company managed by Price
Associates, as a means of gaining efficient and cost-effective exposure to the
high yield bond markets. On May 20, 2003, the fund purchased 681,532 shares of
High Yield Fund, at the net asset value per share on that date, by transferring
portfolio securities valued at $7,149,000 to High Yield Fund. For financial
reporting and tax purposes, the fund realized a net gain of $356,000 on the
transfer, reflecting the amount that fair value of the transferred securities on
the date of transfer exceeded cost. At June 30, 2003, the fund held
approximately 1.2% of High Yield Fund's outstanding shares and, during the six
months then ended, the fund received distributions from High Yield Fund in the
amount of $68,000.
The High Yield Fund pays an annual all-inclusive management and administrative
fee to Price Associates equal to 0.50% of average daily net assets. Because the
fund indirectly bears its proportionate share of this fee, Price Associates has
agreed to permanently reduce the fund's investment management fee by the amount
of expense incurred by High Yield Fund as a result of the fund's investment
therein. Pursuant to this agreement, the fund's management fee was reduced by
$4,000 during the six months ended June 30, 2003.
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