Item 1. Report to Shareholders
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
Value shares
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 $15.56 $18.88 $19.15 $17.50 $18.31 $18.24
Investment activities
Net investment
income (loss) 0.08 0.18 0.17 0.24 0.22 0.19
Net realized and
unrealized
gain (loss) 1.37 (3.31) 0.13** 2.48 1.38 1.04
Total from
investment
activities 1.45 (3.13) 0.30 2.72 1.60 1.23
Distributions
Net investment income - (0.15) (0.17) (0.23) (0.21) (0.20)
Net realized gain - (0.04) (0.40) (0.84) (2.20) (0.96)
Total distributions - (0.19) (0.57) (1.07) (2.41) (1.16)
NET ASSET VALUE
End of period $17.01 $15.56 $18.88 $19.15 $17.50 $18.31
---------------------------------------------------------
Ratios/Supplemental Data
Total return^ 9.32% (16.58)% 1.60% 15.75% 9.16% 6.85%
Ratio of total
expenses to
average net
assets 1.00%+ 0.95% 0.94% 0.91% 0.92% 0.98%
Ratio of net
investment
income (loss)
to average
net assets 1.09%+ 1.01% 0.93% 1.38% 1.14% 1.06%
Portfolio
turnover rate 23.0%+ 29.6% 42.2% 55.9% 67.8% 72.1%
Net assets,
end of period
(in millions) $1,259 $1,140 $1,322 $ 989 $ 851 $ 775
^ 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.
** The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout
the period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund shares in
relation to fluctuating market values for the investment portfolio.
+ Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
Value-Advisor Class shares
6 Months Year 3/31/00
Ended Ended Through
6/30/03 12/31/02 12/31/01 12/31/00
NET ASSET VALUE
Beginning of period $ 15.51 $ 18.84 $ 19.14 $ 17.57
Investment activities
Net investment
income (loss) 0.08 0.10 0.10 0.17*
Net realized and
unrealized gain (loss) 1.36 (3.24) 0.17** 2.45
Total from
investment activities 1.44 (3.14) 0.27 2.62
Distributions
Net investment income - (0.15) (0.17) (0.21)
Net realized gain - (0.04) (0.40) (0.84)
Total distributions - (0.19) (0.57) (1.05)
NET ASSET VALUE
End of period $ 16.95 $ 15.51 $ 18.84 $ 19.14
---------------------------------------------
Ratios/Supplemental Data
Total return^ 9.28% (16.67)% 1.45% 15.11%*
Ratio of total expenses to
average net assets 1.05%+ 1.08% 1.06% 1.10%*+
Ratio of net investment
income (loss) to average
net assets 1.03%+ 1.08% 0.78% 1.04%*+
Portfolio turnover rate 23.0%+ 29.6% 42.2% 55.9%
Net assets, end of period
(in thousands) $51,582 $47,116 $ 8,673 $ 77
^ 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.
* Excludes expenses in excess of a 1.10% voluntary expense limitation in
effect through 12/31/03.
** The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout
the period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund shares in
relation to fluctuating market values for the investment portfolio.
+ Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited) June 30, 2003
STATEMENT OF NET ASSETS Shares Value
- --------------------------------------------------------------------------------
In thousands
COMMON STOCKS 96.6%
CONSUMER DISCRETIONARY 22.1%
AUTO COMPONENTS 0.2%
Delphi 300,000 $ 2,589
2,589
AUTOMOBILES 0.6%
Ford Motor 699,817 7,691
7,691
HOTELS, RESTAURANTS & LEISURE 3.7%
Fairmont Hotels 450,000 10,530
Hilton 1,000,000 12,790
McDonald's 650,000 14,339
Starwood Hotels & Resorts Worldwide, REIT 375,000 10,721
48,380
HOUSEHOLD DURABLES 1.7%
Fortune Brands 250,000 13,050
Sony ADR 350,000 9,800
22,850
LEISURE EQUIPMENT & PRODUCTS 1.9%
Eastman Kodak 300,000 8,205
Hasbro 950,000 16,616
24,821
MEDIA 10.1%
AOL Time Warner * 1,300,000 20,917
Comcast, Class A * 424,950 12,825
Comcast, Class A, Special * 625,000 18,019
Disney 829,400 16,381
Dow Jones 325,000 13,985
Liberty Media, Class A * 1,750,000 20,230
Pearson (GBP) 750,000 7,016
Reuters (GBP) 2,000,000 5,810
Viacom, Class B * 325,000 14,189
Washington Post, Class B 4,000 2,932
132,304
MULTILINE RETAIL 2.0%
May Department Stores 500,000 $ 11,130
Nordstrom 775,000 15,128
26,258
SPECIALTY RETAIL 1.9%
Radio Shack 550,000 14,470
Toys "R" Us * 900,000 10,908
25,378
Total Consumer Discretionary 290,271
CONSUMER STAPLES 4.9%
BEVERAGES 0.7%
Coca-Cola Enterprises 500,000 9,075
9,075
FOOD & STAPLES RETAILING 1.8%
CVS 500,000 14,015
Safeway * 500,000 10,230
24,245
FOOD PRODUCTS 1.0%
Campbell Soup 525,000 12,862
12,862
HOUSEHOLD PRODUCTS 0.7%
Clorox 200,000 8,530
8,530
TOBACCO 0.7%
Altria Group 198,300 9,011
9,011
Total Consumer Staples 63,723
ENERGY 6.9%
ENERGY EQUIPMENT & SERVICES 0.7%
Schlumberger 185,000 8,800
8,800
OIL & GAS 6.2%
Amerada Hess 275,000 $ 13,524
ChevronTexaco 164,750 11,895
ConocoPhillips 198,772 10,893
Exxon Mobil 470,000 16,878
Marathon Oil 200,000 5,270
Royal Dutch Petroleum ADS 240,000 11,189
Unocal 400,000 11,476
81,125
Total Energy 89,925
FINANCIALS 21.1%
CAPITAL MARKETS 4.4%
Franklin Resources 360,000 14,065
J.P. Morgan Chase 450,000 15,381
Mellon Financial 300,000 8,325
Morgan Stanley 450,000 19,238
57,009
COMMERCIAL BANKS 7.0%
AmSouth 250,000 5,460
Bank of America 200,000 15,806
Bank One 469,000 17,437
Comerica 295,000 13,717
FleetBoston Financial 560,000 16,638
U.S. Bancorp 900,000 22,050
91,108
CONSUMER FINANCE 1.5%
American Express 475,000 19,860
19,860
DIVERSIFIED FINANCIAL SERVICES 1.8%
Citigroup 225,000 9,630
Principal Financial Group 450,000 14,512
24,142
INSURANCE 5.9%
Berkshire Hathaway, Class A * 175 12,687
Chubb 200,000 12,000
Hartford Financial Services Group 306,600 15,440
Prudential Financial 250,000 $ 8,413
SAFECO 350,000 12,348
Travelers Property Casualty, Class B 375,000 5,914
UnumProvident 829,800 11,128
77,930
THRIFTS & MORTGAGE FINANCE 0.5%
Freddie Mac 130,000 6,600
6,600
Total Financials 276,649
HEALTH CARE 7.9%
HEALTH CARE EQUIPMENT & SUPPLIES 1.2%
Becton, Dickinson 400,000 15,540
15,540
HEALTH CARE PROVIDERS & SERVICES 1.3%
CIGNA 240,000 11,265
IMS Health 300,000 5,397
16,662
PHARMACEUTICALS 5.4%
Bristol-Myers Squibb 600,000 16,290
Merck 550,000 33,303
Schering-Plough 750,000 13,950
Wyeth 175,000 7,971
71,514
Total Health Care 103,716
INDUSTRIALS & BUSINESS SERVICES 15.4%
AEROSPACE & DEFENSE 4.7%
Boeing 171,100 5,872
Honeywell International 700,000 18,795
Lockheed Martin 125,000 5,946
Raytheon 408,800 13,425
Rockwell Collins 704,700 17,357
61,395
AIR FREIGHT & LOGISTICS 1.0%
CNF 525,000 $ 13,324
13,324
AIRLINES 0.6%
Delta 500,000 7,340
7,340
COMMERCIAL SERVICES & SUPPLIES 1.0%
Waste Management 550,000 13,250
13,250
ELECTRICAL EQUIPMENT 2.7%
Cooper Industries 650,000 26,845
Rockwell Automation 365,000 8,702
35,547
INDUSTRIAL CONGLOMERATES 1.4%
Tyco International 1,000,000 18,980
18,980
MACHINERY 2.4%
Dover 225,000 6,741
Eaton 165,000 12,971
Pall 525,000 11,812
31,524
ROAD & RAIL 1.6%
Norfolk Southern 475,000 9,120
Union Pacific 200,000 11,604
20,724
Total Industrials & Business Services 202,084
INFORMATION TECHNOLOGY 7.0%
COMMUNICATIONS EQUIPMENT 1.6%
Lucent Technologies * 2,700,000 5,481
Motorola 1,600,000 15,088
20,569
COMPUTER & PERIPHERALS 1.6%
Hewlett-Packard 975,250 20,773
20,773
ELECTRONIC EQUIPMENT & INSTRUMENTS 1.1%
Agilent Technologies * 700,000 $ 13,685
13,685
IT SERVICES 0.5%
Electronic Data Systems 325,000 6,971
6,971
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1.2%
Agere Systems, Class A * 794,448 1,851
Agere Systems, Class B * 661,407 1,522
Applied Materials * 350,000 5,551
Texas Instruments 400,000 7,040
15,964
SOFTWARE 1.0%
Microsoft 515,000 13,189
13,189
Total Information Technology 91,151
MATERIALS 5.8%
CHEMICALS 3.0%
DuPont 400,000 16,656
Great Lakes Chemical 625,000 12,750
Hercules * 500,000 4,950
Monsanto 250,000 5,410
39,766
METALS & MINING 0.8%
Alcoa 415,000 10,583
10,583
PAPER & FOREST PRODUCTS 2.0%
Bowater 400,000 14,980
MeadWestvaco 425,000 10,497
25,477
Total Materials 75,826
TELECOMMUNICATION SERVICES 2.7%
DIVERSIFIED TELECOMMUNICATION SERVICES 2.7%
AT&T 340,000 $ 6,545
Qwest Communications International * 2,700,000 12,906
Sprint 1,100,000 15,840
Total Telecommunication Services 35,291
UTILITIES 2.8%
ELECTRIC UTILITIES 1.7%
Constellation Energy Group 145,000 4,974
Pinnacle West Capital 250,000 9,362
TXU 333,000 7,476
21,812
GAS UTILITIES 0.9%
NiSource 660,000 12,540
12,540
MULTI-UTILITIES & UNREGULATED POWER 0.2%
El Paso Energy 350,000 2,828
2,828
Total Utilities 37,180
Total Common Stocks (Cost $1,387,497) 1,265,816
CONVERTIBLE PREFERRED STOCKS 0.0%
Chubb, 7.00% 17,900 457
Total Convertible Preferred Stocks (Cost $447) 457
SHORT-TERM INVESTMENTS 3.1%
MONEY MARKET FUNDS 3.1%
T. Rowe Price Reserve Investment Fund, 1.16% # 39,822,536 39,823
Total Short-Term Investments (Cost $39,823) 39,823
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
99.7% of Net Assets (Cost $1,427,767) $1,306,096
Other Assets Less Liabilities 4,115
NET ASSETS $1,310,211
----------
Net Assets Consist of:
Undistributed net investment income (loss) $ 8,541
Undistributed net realized gain (loss) (28,062)
Net unrealized gain (loss) (121,671)
Paid-in-capital applicable to 77,046,092
shares of $0.0001 par value capital
stock outstanding; 1,000,000,000
shares authorized 1,451,403
NET ASSETS $1,310,211
----------
NET ASSET VALUE PER SHARE
Value shares
($1,258,628,707/74,002,365 shares outstanding) $ 17.01
----------
Value-Advisor Class shares
($51,582,170/3,043,727 shares outstanding) $ 16.95
----------
# Seven-day yield
* Non-income producing
ADR American Depository Receipts
ADS American Depository Shares
GBP British pound
REIT Real Estate Investment Trust
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/03
Investment Income (Loss)
Income
Dividend $ 11,978
Income distributions from mutual funds 259
Securities lending 115
Total income 12,352
Expenses
Investment management 3,987
Shareholder servicing
Value shares 1,678
Value-Advisor Class shares 24
Prospectus and shareholder reports
Value shares 72
Value-Advisor Class shares 2
Custody and accounting 72
Distribution - Value-Advisor Class shares 58
Registration 37
Legal and audit 10
Directors 5
Total expenses 5,945
Expenses paid indirectly (42)
Net expenses 5,903
Net investment income (loss) 6,449
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (28,714)
Foreign currency transactions (4)
Net realized gain (loss) (28,718)
Change in net unrealized gain (loss) on securities 134,257
Net realized and unrealized gain (loss) 105,539
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 111,988
------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/03 12/31/02
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 6,449 $ 13,407
Net realized gain (loss) (28,718) 5,586
Change in net unrealized gain (loss) 134,257 (270,671)
Increase (decrease) in net assets
from operations 111,988 (251,678)
Distributions to shareholders
Net investment income
Value shares - (10,866)
Value-Advisor Class shares - (449)
Net realized gain
Value shares - (2,896)
Value-Advisor Class shares - (120)
Decrease in net assets from distributions - (14,331)
Capital share transactions *
Shares sold
Value shares 167,561 552,078
Value-Advisor Class shares 5,890 57,645
Distributions reinvested
Value shares - 13,154
Value-Advisor Class shares - 568
Shares redeemed
Value shares (157,062) (484,036)
Value-Advisor Class shares (5,635) (16,285)
Increase (decrease) in net assets from
capital share transactions 10,754 123,124
Net Assets
Increase (decrease) during period 122,742 (142,885)
Beginning of period 1,187,469 1,330,354
End of period $ 1,310,211 $ 1,187,469
---------------------------------
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/03 12/31/02
*Share information
Shares sold
Value shares 10,761 30,755
Value-Advisor Class shares 378 3,600
Distributions reinvested
Value shares - 840
Value-Advisor Class shares - 37
Shares redeemed
Value shares (10,053) (28,307)
Value-Advisor Class shares (373) (1,058)
Increase (decrease) in shares outstanding 713 5,867
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Value Fund
- --------------------------------------------------------------------------------
Certified Financials (Unaudited) June 30, 2003
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Value Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 (the 1940 Act) as a diversified, open-end
management investment company. The fund seeks to provide long-term capital
appreciation by investing in common stocks believed to be undervalued.
Income is a secondary objective. The fund has two classes of shares: Value
Fund (Value class), offered since September 30, 1994, and Value
Fund-Advisor Class (Advisor Class), which was first offered on March 31,
2000. Advisor Class shares are sold only through brokers and other
financial intermediaries that are compensated by the class for distribution
and 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
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.
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.
Class Accounting
The Advisor Class pays distribution and administrative expenses in the form
of Rule 12b-1 fees, in an amount not exceeding 0.25% of the class's average
net assets. Shareholder servicing, prospectus, and shareholder report
expenses incurred by each class are charged directly to the class to which
they relate. Expenses common to both classes, investment income, and
realized and unrealized gains and losses are allocated to the classes based
upon the relative daily net assets of each class. Income distributions are
declared and paid by each class on an annual basis. Capital gain
distributions, if any, are declared and paid by the fund, typically on an
annual basis.
Expenses Paid Indirectly
Certain security trades are directed to brokers who have agreed to rebate a
portion of the related commission to the fund to pay fund expenses.
Additionally, credits earned on temporarily uninvested cash balances at the
custodian are used to reduce the fund's custody charges. Total expenses in
the accompanying statement of operations are presented before reduction for
rebates and credits, which totaled $42,000 and $0, respectively, for the
six months ended June 30, 2003.
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
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 trust managed by the fund's
lending agent in accordance with investment guidelines approved by fund
management. Collateral is maintained over the life of the loan in an amount
not less than the value of loaned securities, as determined at the close of
fund business each day; any additional collateral required due to changes
in security values is delivered to the fund the next business day. Although
risk is mitigated by the collateral, the fund could experience a delay in
recovering its securities and a possible loss of income or value if the
borrower fails to return the securities. Securities lending revenue
recognized by the fund consists of earnings on invested collateral and
borrowing fees, net of any rebates to the borrower and compensation to the
lending agent. At June 30, 2003, there were no securities on loan.
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $143,977,000 and $132,978,000, 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.
At June 30, 2003, the cost of investments for federal income tax purposes
was $1,427,767,000. Net unrealized loss aggregated $121,671,000 at
period-end, of which $101,882,000 related to appreciated investments and
$223,553,000 related to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The fund is managed by T. Rowe Price Associates, Inc. (the manager or Price
Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. The
investment management agreement between the fund and the manager provides
for an annual investment management fee, which is computed daily and paid
monthly. The fee consists of an individual fund fee, equal to 0.35% of the
fund's average daily net assets, and the fund's pro-rata share of a group
fee. The group fee is calculated based on the combined net assets of
certain mutual funds sponsored by Price Associates (the group) applied to a
graduated fee schedule, with rates ranging from 0.48% for the first $1
billion of assets to 0.295% for assets in excess of $120 billion. The
fund's portion of the group fee is determined by the ratio of its net
assets to those of the group. At June 30, 2003, the effective annual group
fee rate was 0.32%, and investment management fee payable totaled $729,000.
Through December 31, 2003, the manager is required to bear any expenses,
excluding interest, taxes, brokerage commissions, and extraordinary
expenses, for the Advisor Class that would cause the class's ratio of total
expenses to average net assets (expense ratio) to exceed 1.10%. Thereafter,
through December 31, 2005, the Advisor is required to reimburse the manager
for these expenses, provided that its average net assets have grown or
expenses have declined sufficiently to allow reimbursement without causing
its expense ratio to exceed 1.10% for the Advisor Class. This agreement had
no impact on the fund's total expenses during the six months ended June 30,
2003 and, at that date, no amounts were subject to future reimbursement by
the fund.
In addition, the fund has entered into service agreements with Price
Associates and two wholly owned subsidiaries of Price Associates
(collectively, Price). Price Associates computes the daily share prices and
maintains the financial records of the fund. T. Rowe Price Services, Inc.
provides shareholder and administrative services in its capacity as the
fund's transfer and dividend disbursing agent. T. Rowe Price Retirement
Plan Services, Inc. provides subaccounting and recordkeeping services for
certain retirement accounts invested in the Value class. Expenses incurred
pursuant to these service agreements totaled $1,120,000 for the six months
ended June 30, 2003, of which $194,000 was payable at period-end.
Additionally, the fund is one of several mutual funds in which certain
college savings plans managed by Price Associates may invest. As approved
by the fund's Board of Directors, shareholder servicing costs associated
with each college savings plan are borne by the fund in proportion to the
average daily value of its shares owned by the college savings plan. For
the six months ended June 30, 2003, the Value class was charged $223,000
for shareholder servicing costs related to the college savings plans, of
which $178,000 was for services provided by Price and $50,000 was payable
at period-end. At June 30, 2003, approximately 8.3% of the outstanding
shares of the Value class were held by college savings plans.
The fund is also one of several mutual funds sponsored by Price Associates
(underlying Price funds) in which the T. Rowe Price Retirement Funds
(Retirement Funds) may invest. The Retirement Funds do not invest in the
underlying Price funds for the purpose of exercising management or control.
Pursuant to special servicing agreements, expenses associated with the
operation of the Retirement Funds are borne by each underlying Price fund
to the extent of estimated savings to it and in proportion to the average
daily value of its shares owned by the Retirement Funds. Expenses allocated
under these agreements are reflected as shareholder servicing expense in
the accompanying financial statements. For the six months ended June 30,
2003, the Value class was allocated $44,000 of Retirement Funds' expenses,
of which $24,000 related to services provided by Price and $1,000 was
payable at period-end. At June 30, 2003, approximately 2.7% of the
outstanding shares of the Value class were held by the Retirement Funds.
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 $259,000.
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 Value Fund, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date August 13, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date August 13, 2003
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date August 12, 2003