Item 1. Report to Shareholders
T. Rowe Price Equity Income Portfolio
- --------------------------------------------------------------------------------
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.
Financial Highlights
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
(Unaudited)
For a share outstanding throughout each period
----------------------------------------------------------------
Equity
Income
Class 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 $ 20.19 $ 16.36 $ 19.17 $ 19.55 $ 18.73 $ 19.25
Investment
activities
Net investment
income
(loss) 0.14 0.30 0.29 0.28 0.37 0.38
Net realized and
unrealized gain
(loss) 0.76 3.83 (2.79) (0.02) 1.95 0.33
Total from
investment
activities 0.90 4.13 (2.50) 0.26 2.32 0.71
Distributions
Net investment
income (0.13) (0.30) (0.29) (0.28) (0.37) (0.38)
Net realized
gain (0.10) -- (0.02) (0.36) (1.13) (0.85)
Total
distributions (0.23) (0.30) (0.31) (0.64) (1.50) (1.23)
NET ASSET
VALUE
End of period $ 20.86 $ 20.19 $ 16.36 $ 19.17 $ 19.55 $ 18.73
----------------------------------------------------------------
Ratios/
Supplemental
Data
Total return^ 4.49% 25.50% (13.12)% 1.46% 13.05% 3.72%
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 1.37%! 1.73% 1.66% 1.50% 1.98% 1.90%
Portfolio
turnover
rate 17.3%! 12.7% 17.1% 17.2% 38.7% 32.6%
Net assets,
end of
period
(in thousands) $1,123,461 $1,051,180 $753,065 $775,573 $645,106 $595,433
^ 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.
Financial Highlights
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
(Unaudited)
For a share outstanding throughout each period
----------------------------------------------
Equity Income-II Class 6 Months Year 4/30/02
Ended Ended Through
6/30/04 12/31/03 12/31/02
NET ASSET VALUE
Beginning
of period $ 20.17 $ 16.35 $ 19.43
Investment
activities
Net investment
income 0.11 0.24 0.21
Net realized and
unrealized gain
(loss) 0.76 3.84 (3.08)
Total from
investment
activities 0.87 4.08 (2.87)
Distributions
Net investment
income (0.11) (0.26) (0.21)
Net realized gain (0.10) -- --
Total distributions (0.21) (0.26) (0.21)
NET ASSET VALUE
End of period $ 20.83 $ 20.17 $ 16.35
-------------------------------------------
Ratios/Supplemental Data
Total return!^ 4.34% 25.17% (14.79)%
Ratio of total expenses to
average net assets 1.10%! 1.10% 1.10%!
Ratio of net investment
income (loss) to average
net assets 1.13%! 1.54% 2.15%!
Portfolio turnover rate 17.3%! 12.7% 17.1%!
Net assets, end of period
(in thousands) $ 104,706 $ 56,676 $ 672
^ 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.
Portfolio of Investments (1)
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
June 30, 2004 (Unaudited)
Shares/$ Par Value
- --------------------------------------------------------------------------------
(Cost and value in $ 000s)
COMMON STOCKS 94.6%
CONSUMER DISCRETIONARY 17.2%
Automobiles 0.4%
Ford Motor 294,800 $ 4,614
4,614
Distributors 0.9%
Genuine Parts 282,350 11,204
11,204
Hotels, Restaurants & Leisure 2.5%
Hilton 444,100 8,287
McDonald's 437,200 11,367
Starwood Hotels &
Resorts Worldwide 237,905 10,670
30,324
Household Durables 2.0%
Fortune Brands 144,000 10,862
Newell Rubbermaid 559,900 13,157
24,019
Leisure Equipment & Products 2.0%
Eastman Kodak 418,400 11,288
Hasbro 178,100 3,384
Mattel 578,500 10,558
25,230
Media 7.6%
Comcast, Class A * 471,863 13,226
Disney 553,600 14,111
Dow Jones 264,400 11,925
Knight-Ridder 131,900 9,497
New York Times, Class A 337,500 15,090
Time Warner * 867,200 15,245
Viacom, Class B 417,500 14,913
94,007
Multiline Retail 0.5%
May Department Stores 220,100 6,050
6,050
Specialty Retail 1.3%
Home Depot 316,200 11,130
Toys "R" Us * 316,600 5,044
16,174
Total Consumer Discretionary 211,622
CONSUMER STAPLES 5.9%
Food & Staples Retailing 0.0%
Winn-Dixie 19,500 140
140
Food Products 2.6%
Campbell Soup 394,500 10,604
ConAgra 158,500 4,292
General Mills 201,300 9,568
Unilever GDS (EUR) 113,300 7,743
32,207
Household Products 2.1%
Clorox 123,400 6,636
Colgate-Palmolive 121,900 7,125
Kimberly-Clark 180,100 11,865
25,626
Tobacco 1.2%
Altria Group 142,300 7,122
UST 204,600 7,366
14,488
Total Consumer Staples 72,461
ENERGY 10.4%
Energy Equipment & Services 0.9%
Baker Hughes 91,400 3,441
Schlumberger 112,500 7,145
10,586
Oil & Gas 9.5%
Amerada Hess 258,100 20,439
Anadarko Petroleum 158,200 9,271
BP ADR 237,796 12,739
ChevronTexaco 237,076 22,311
El Paso Energy 369,400 2,911
Exxon Mobil 542,622 24,098
Marathon Oil 79,500 3,008
Royal Dutch Petroleum ADS 334,900 17,304
Unocal 118,500 4,503
116,584
Total Energy 127,170
FINANCIALS 18.1%
Capital Markets 2.9%
Charles Schwab 394,200 3,788
Federated Investors, Class B 78,700 2,388
Janus Capital Group 121,700 2,007
Mellon Financial 316,700 9,289
Morgan Stanley 235,700 12,438
Northern Trust 125,000 5,285
35,195
Commercial Banks 5.8%
Bank of America 248,320 21,013
Bank of Ireland (EUR) 122,700 1,638
Bank One 337,327 17,204
Mercantile Bankshares 137,850 6,454
National City 172,300 6,032
SunTrust 158,200 10,281
Wells Fargo 101,860 5,830
Wilmington Trust 76,200 2,836
71,288
Consumer Finance 1.0%
American Express 236,600 12,156
12,156
Diversified Financial Services 1.5%
Citigroup 183,364 8,526
J.P. Morgan Chase 262,570 10,180
18,706
Insurance 5.7%
Chubb 124,400 8,482
Lincoln National 211,247 9,981
Marsh & McLennan 378,700 17,185
SAFECO 278,900 12,272
Saint Paul Companies 323,046 13,096
UnumProvident 577,600 9,184
70,200
Real Estate 0.5%
Simon Property Group, REIT 121,636 6,255
6,255
Thrifts & Mortgage Finance 0.7%
Fannie Mae 127,200 9,077
9,077
Total Financials 222,877
HEALTH CARE 9.5%
Biotechnology 0.6%
MedImmune * 314,000 7,348
7,348
Health Care Equipment & Supplies 1.0%
Baxter International 363,000 12,527
12,527
Health Care Providers & Services 0.9%
CIGNA 165,000 11,354
11,354
Pharmaceuticals 7.0%
Abbott Laboratories 181,800 7,410
Bristol-Myers Squibb 717,700 17,583
Johnson & Johnson 296,500 16,515
Merck 434,500 20,639
Schering-Plough 496,800 9,181
Wyeth 394,300 14,258
85,586
Total Health Care 116,815
INDUSTRIALS & BUSINESS SERVICES 13.8%
Aerospace & Defense 4.7%
Honeywell International 579,700 21,234
Lockheed Martin 238,900 12,442
Raytheon 347,600 12,434
Rockwell Collins 335,900 11,192
57,302
Commercial Services & Supplies 1.3%
Dun & Bradstreet * 97,400 5,251
Waste Management 362,072 11,097
16,348
Electrical Equipment 2.5%
Cooper Industries, Class A 242,667 14,417
Emerson Electric 94,800 6,024
Hubbell, Class B 38,400 1,794
Rockwell Automation 215,100 8,068
30,303
Industrial Conglomerates 2.1%
GE 795,300 25,768
25,768
Machinery 0.8%
Pall 358,600 9,392
9,392
Road & Rail 2.0%
Norfolk Southern 332,000 8,805
Union Pacific 278,100 16,533
25,338
Trading Companies & Distributors 0.4%
W. W. Grainger 79,900 4,594
4,594
Total Industrials & Business Services 169,045
INFORMATION TECHNOLOGY 4.2%
Communications Equipment 1.7%
Lucent Technologies * 863,800 3,265
Motorola 655,600 11,965
Nokia ADR 372,400 5,415
20,645
Computer & Peripherals 1.0%
Hewlett-Packard 554,836 11,707
11,707
Semiconductor & Semiconductor Equipment 0.4%
Agere Systems, Class A * 112,247 258
Texas Instruments 202,500 4,897
5,155
Software 1.1%
Microsoft 472,700 13,500
13,500
Total Information Technology 51,007
MATERIALS 6.2%
Chemicals 3.1%
Dow Chemical 275,400 11,209
DuPont 238,200 10,581
Great Lakes Chemical 211,100 5,712
Hercules * 358,000 4,364
International
Flavors & Fragrances 180,000 6,732
38,598
Construction Materials 0.1%
Vulcan Materials 39,700 1,888
1,888
Metals & Mining 1.2%
Alcoa 155,800 5,146
Nucor 122,900 9,434
14,580
Paper & Forest Products 1.8%
International Paper 314,353 14,052
MeadWestvaco 256,700 7,544
21,596
Total Materials 76,662
TELECOMMUNICATION SERVICES 5.3%
Diversified Telecommunication Services 5.3%
Alltel 219,900 11,131
AT&T 311,640 4,559
Qwest Communications
International * 2,546,800 9,143
SBC Communications 457,568 11,096
Sprint 677,700 11,928
Verizon Communications 478,342 17,311
Total Telecommunication Services 65,168
UTILITIES 4.0%
Electric Utilities 1.6%
FirstEnergy 199,420 7,460
Teco Energy 97,100 1,164
TXU 258,100 10,456
19,080
Gas Utilities 0.7%
NiSource 443,500 9,145
9,145
Multi-Utilities & Unregulated Power 1.7%
Constellation Energy Group 236,500 8,963
Duke Energy 578,000 11,728
20,691
Total Utilities 48,916
Total Common Stocks
(Cost $1,020,577) 1,161,743
CONVERTIBLE PREFERRED STOCKS 0.4%
Ford Motor Company
Capital Trust II 43,000 2,355
UnumProvident *!!@ 114,700 2,845
Total Convertible Preferred Stocks
(Cost $5,017) 5,200
CONVERTIBLE BONDS 0.4%
Lucent Technologies
8.00%, 8/1/31 5,035,000 5,674
Total Convertible Bonds
(Cost $5,454) 5,674
SHORT-TERM INVESTMENTS 4.5%
Money Market Fund 4.5%
T. Rowe Price Reserve Investment
Fund, 1.16% # 54,933,912 54,934
Total Short-Term Investments
(Cost $54,934) 54,934
Total Investments in Securities
99.9% of Net Assets
(Cost $1,085,982) $ 1,227,551
------------------
(1) Denominated in U.S dollars unless otherwise noted
# Seven-day yield
* Non-income producing
!! Security contains restrictions as to public resale pursuant to the
Securities Act of 1933 and related rules--total value of such securities at
period end amounts to $2,845 and represents 0.2% of net assets.
@ Valued by the T. Rowe Price Valuation Committee, established by the fund's
Board of Directors.
ADR American Depository Receipts
ADS American Depository Shares
EUR Euro
GDS Global Depository Shares
REIT Real Estate Investment Trust
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
June 30, 2004 (Unaudited)
(In thousands except shares and per share amounts)
Assets
Investments in securities, at value
(Cost $1,085,982) $ 1,227,551
Other assets 5,184
Total assets 1,232,735
Liabilities
Total liabilities 4,568
NET ASSETS $ 1,228,167
-------------------
Net Assets Consist of:
Undistributed net investment income (loss) $ 395
Undistributed net realized gain (loss) 10,990
Net unrealized gain (loss) 141,569
Paid-in-capital applicable to 58,885,826 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares of the Corporation authorized 1,075,213
NET ASSETS $ 1,228,167
-------------------
NET ASSET VALUE PER SHARE
Equity Income Class
($1,123,461,189/53,859,079
shares outstanding) $ 20.86
-------------------
Equity Income-II Class
($104,705,521/5,026,747
shares outstanding) $ 20.83
-------------------
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
(Unaudited)
($ 000s)
6 Months
Ended
6/30/04
Investment Income (Loss)
Income
Dividend $ 12,524
Interest 325
Securities lending 14
Total income 12,863
Expenses
Investment management and administrative expense 4,924
Rule 12B-1 fees - Equity Income-II Class 98
Total Expenses 5,022
Net investment income (loss) 7,841
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 11,155
Foreign currency transactions (17)
Net realized gain (loss) 11,138
Change in net unrealized gain (loss) on securities 31,516
Net realized and unrealized gain (loss) 42,654
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 50,495
-------------------
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
(Unaudited)
($ 000s)
6 Months Year
Ended Ended
6/30/04 12/31/03
Increase (Decrease) in Net Assets
Operations
Net investment
income (loss) $ 7,841 $ 15,055
Net realized
gain (loss) 11,138 15,755
Change in net
unrealized
gain (loss) 31,516 181,366
Increase (decrease)
in net assets
from operations 50,495 212,176
Distributions to shareholders
Net investment income
Equity Income Class (6,958) (14,793)
Equity Income-II Class (488) (428)
Net realized gain
Equity Income Class (5,344) --
Equity Income-II Class (381) --
Decrease in net assets from distributions (13,171) (15,221)
Capital share transactions *
Shares sold
Equity Income Class 101,065 187,127
Equity Income-II Class 52,833 52,936
Distributions reinvested
Equity Income Class 12,302 14,793
Equity Income-II Class 869 428
Shares redeemed
Equity Income Class (75,916) (93,846)
Equity Income-II Class (8,166) (4,274)
Increase (decrease) in
net assets from capital
share transactions 82,987 157,164
Net Assets
Increase (decrease) during period 120,311 354,119
Beginning of period 1,107,856 753,737
End of period $ 1,228,167 $ 1,107,856
------------------------------------
(Including undistributed net investment income
of $395 at 6/30/04 and $0 at 12/31/03)
Statement of Changes in Net Assets
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
(Unaudited)
($ 000s)
6 Months Year
Ended Ended
6/30/04 12/31/03
*Share information
Shares sold
Equity Income Class 4,912 10,703
Equity Income-II Class 2,572 2,989
Distributions reinvested
Equity Income Class 603 827
Equity Income-II Class 43 23
Shares redeemed
Equity Income Class (3,709) (5,505)
Equity Income-II Class (398) (243)
Increase (decrease)
in shares outstanding 4,023 8,794
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
June 30, 2004 (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 Equity Income Portfolio (the
fund) is a diversified, open-end management investment company and is one
portfolio established by the corporation. The fund seeks to provide substantial
dividend income as well as long-term growth of capital through investments in
the common stocks of established companies. 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 fund
has two classes of shares: the Equity Income Portfolio original share class
(Equity Income Class), offered since March 31, 1994, and Equity Income
Portfolio-II (Equity Income-II class), offered since April 30, 2002. Equity
Income-II shares are sold through financial intermediaries, which it compensates
for distribution, shareholder servicing, and/or certain administrative services
under a Board-approved Rule 12b-1 plan. Each class has exclusive voting rights
on matters related solely to that class, separate voting rights on matters that
relate to both classes, and, in all other respects, the same rights and
obligations as the other class.
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 or, for certain markets, the official closing 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 for domestic securities and the last quoted sales 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 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.
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 Directors.
Most foreign markets close before the close of trading on the NYSE. If the fund
determines that developments between the close of a foreign market and the close
of the NYSE will, in its judgment, materially affect the value of some or all of
its portfolio securities, which in turn will affect the fund's share price, the
fund will adjust the previous closing prices to reflect the fair value of the
securities as of the close of the NYSE, as determined in good faith by the T.
Rowe Price Valuation Committee, established by the fund's Board of Directors. A
fund may also fair value securities in other situations, such as when a
particular foreign market is closed but the fund is open. In deciding whether to
make fair value adjustments, the fund reviews a variety of factors, including
developments in foreign markets, the performance of U.S. securities markets, and
the performance of instruments trading in U. S. markets that represent foreign
securities and baskets of foreign securities. The fund uses outside pricing
services to provide it with closing market prices and information used for
adjusting those prices. The fund cannot predict how often it will use closing
prices and how often it will adjust those prices. As a means of evaluating its
fair value process, the fund routinely compares closing market prices, the next
day's opening prices in the same markets, and adjusted prices.
Currency Translation
Assets, including investments, and liabilities denominated in foreign currencies
are translated into U.S. dollar values each day at the prevailing exchange
rate, using the mean of the bid and asked prices of such currencies against U.S.
dollars as quoted by a major bank. Purchases and sales of securities, income,
and expenses are translated into U.S. dollars at the prevailing exchange rate on
the 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 security gains and losses.
Class Accounting
Equity Income-II pays distribution, shareholder servicing, and/or certain
administrative expenses in the form of Rule 12b-1 fees, in an amount not
exceeding 0.25% of the class's average daily net assets. Management and
administrative fee expenses, investment income, and realized and unrealized
gains and losses are allocated to the classes based upon the relative daily net
assets of each class.
Rebates
Subject to best execution, the fund may direct certain security trades to
brokers who have agreed to rebate a portion of the related brokerage commission
to the fund in cash. Commission rebates are included in realized gain on
securities in the accompanying financial statements.
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/loss. 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. Distributions to shareholders are
recorded on the ex-dividend date. Income distributions are declared and paid by
each class 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.
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, 2004, there were no securities on
loan.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $165,665,000 and $96,406,000, 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.
At June 30, 2004, the cost of investments for federal income tax purposes was
$1,085,982,000. Net unrealized gain aggregated $141,569,000 at period-end, of
which $201,014,000 related to appreciated investments and $59,445,000 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, 2004, $891,000 was payable
under the agreement.
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 $284,000.
T. Rowe Price Equity Income Portfolio
Certified Semiannual Report
Information on Proxy Voting
- --------------------------------------------------------------------------------
A description of the policies and procedures that the T. Rowe Price Equity
Income Portfolio 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 Equity Series, 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