ITEM 1. Report for Shareholders
T. Rowe Price Corporate Income Fund
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Certified Shareholder Report and Financials
T. Rowe Price Corporate Income Fund
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Certified Shareholder Report and Financials
Performance Comparison
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This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with benchmarks, which may include
a broad-based market index and a peer group average or index. Market
indexes do not include expenses, which are deducted from fund returns as
well as mutual fund averages and indexes.
CORPORATE INCOME FUND
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As of 5/31/03
Lehman Lipper
Brothers Corporate
Baa U.S. Debt BBB Corporate
Credit Funds Income
Index Average Fund
$17,976 $16,625 $16,910
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10/31/95 10,000 10,000 10,000
5/96 10,016 10,079 10,009
5/97 10,989 11,090 11,045
5/98 12,346 12,378 12,587
5/99 12,702 12,578 12,435
5/00 12,577 12,471 12,357
5/01 14,344 13,956 14,070
5/02 15,360 14,715 14,983
5/03 17,976 16,625 16,910
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Average Annual Compound Total Return
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Since
Periods Ended Inception
5/31/03 1 Year 3 Years 5 Years 10/31/95
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Corporate
Income Fund 12.86% 11.02% 6.08% 7.17%
Lehman Brothers
Baa U.S.
Credit Index 17.03 12.64 7.80 8.04
Lipper Corporate
Debt BBB
Funds Average 12.35 10.01 6.11 6.89
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Returns do not reflect taxes that the shareholder may pay on fund distributions
or the redemption of fund shares.
Past performance cannot guarantee future results.
T. Rowe Price Corporate Income Fund
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Certified Shareholder Report and Financials
Dear Shareholder,
We are pleased that your fund had a strong return of 12.86% during the 12
months ended May 31, 2003, as it benefited from declining long-term
interest rates. It outperformed the Lipper Corporate Debt BBB Funds Average
of similarly managed funds during the period but trailed the unmanaged
Lehman Brothers Baa U.S. Credit Index, as shown in the table on the
preceding page. The fund's fiscal year was divided into two distinct halves
as higher-quality bonds outperformed lower-quality securities during the
first six months, while the pattern was reversed for the latter six-month
period.
Major Index Returns
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12-Month
Year Ended 5/31/03 Return
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Lehman Brothers U.S. Treasury
Securities Index 14.22%
Lehman Brothers U.S. Aggregate Index 11.58
Lehman Brothers U.S. Credit Index 16.06
Lehman Brothers Mortgage-Backed
Securities Index 6.42
CS First Boston High Yield Index 13.25
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Source: Lehman Brothers and CS First Boston.
As you know, the fund seeks to provide high income and some capital growth
by investing primarily in corporate bonds with at least 65% of net assets
in securities rated AAA, AA, A, and BBB by at least one rating agency. This
strategy provides us with some flexibility in pursuing the fund's objective
by allowing a portion of fund assets to be invested in lower-quality
investment-grade bonds.
Quality Diversification
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A Rated and Above 23
BBB Rated 71
BB Rated 5
B Rated 1
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Based on net assets as of 5/31/03.
The Major Index Returns table shows how varying-quality bonds performed
over the fund's fiscal year. Higher-quality bonds such as Treasuries and
higher-rated corporate securities did slightly better than their
lower-rated counterparts over the 12-month period, although high yield
bonds rallied in recent months.
Ninety-four percent of portfolio assets were rated BBB or above, and the
balance was diversified among BB and B securities, as shown in the Quality
Diversification chart.
The Interest Rate Levels chart reflects the pattern of bond yields during
the same period. Yields declined in general as the economy remained
sluggish, an environment that benefits higher-quality bonds with longer
maturities.
Interest Rate Levels
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Lehman Bros. 10-Year
Baa U.S. Treasury
Credit Index Note
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5/31/02 7.16 5.04
7.35 4.8
7.59 4.46
8/02 7.09 4.14
6.88 3.59
6.98 3.89
11/02 6.56 4.21
6.04 3.81
6.02 3.96
2/03 5.68 3.69
5.62 3.8
5.28 3.84
5/31/03 4.77 3.37
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Portfolio Characteristics
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Periods Ended 5/31/02 5/31/03
Price Per Share $ 9.25 $ 9.80
30-Day Standardized Yield
to Maturity 6.76% 4.51%
Weighted Average Maturity (years) 11.3 9.8
Weighted Average Quality * BBB+ A-
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* Based on T. Rowe Price research.
The Portfolio Characteristics table shows various portfolio details as of
May 31, 2003, compared with one year ago. The weighted average maturity of
the portfolio shortened over the course of the year, while quality of the
portfolio's holdings rose slightly from BBB+ to A- within the
investment-grade spectrum. Our positioning in weaker sectors hindered fund
results during the first six months of the fiscal year, but relative
performance was stronger during the past six months when many of those
bonds rebounded.
We thank you for your continued support.
Respectfully,
James S. Riepe
Chairman
June 20, 2003
T. Rowe Price Corporate Income Fund
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Certified Shareholder Report and Financials
Financial Highlights For a share outstanding throughout each period
- --------------------------------------------------------------------------------
Year
Ended
5/31/03 5/31/02 5/31/01 5/31/00 5/31/99
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NET ASSET VALUE
Beginning
of period $ 9.25 $ 9.31 $ 8.80 $ 9.54 $ 10.39
Investment
activities
Net investment
income (loss) 0.57* 0.65* 0.67* 0.68* 0.70*
Net realized
and unrealized
gain (loss) 0.56 (0.06) 0.51 (0.74) (0.83)
Total from
investment
activities 1.13 0.59 1.18 (0.06) (0.13)
Distributions
Net investment
income (0.58) (0.65) (0.67) (0.68) (0.70)
Net realized
gain -- -- -- -- (0.02)
Total
distributions (0.58) (0.65) (0.67) (0.68) (0.72)
NET ASSET VALUE
End of period $ 9.80 $ 9.25 $ 9.31 $ 8.80 $ 9.54
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Ratios/Supplemental Data
Total return ^ 12.86%* 6.49%* 13.86%* (0.63%)* (1.21%)*
Ratio of total
expenses to
average net
assets 0.80%* 0.80%* 0.80%* 0.80%* 0.80%*
Ratio of net
investment
income (loss)
to average
net assets 6.21%* 7.00%* 7.40%* 7.44%* 7.12%*
Portfolio
turnover
rate 92.9% 91.1% 98.1% 90.9% 140.8%
Net assets,
end of period
(in thousands) $ 111,480 $ 78,341 $ 61,721 $ 43,725 $ 50,822
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^ 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 4. Excludes expenses in excess of a 0.80% contractual expense
limitation in effect through 9/30/05, and expenses permanently waived
(0.00% of average net assets) related to investments in T. Rowe Price
mutual funds.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
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Certified Shareholder Report and Financials May 31, 2003
Statement of Net Assets Par/Shares Value
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In thousands
CORPORATE BONDS AND NOTES 80.0%
Aerospace & Defense 0.9%
Boeing, 5.125%, 2/15/13 $ 275 $ 287
Northrop Grumman, 7.125%, 2/15/11 600 727
1,014
Airlines 0.4%
Southwest Airlines, 6.50%, 3/1/12 350 397
397
Automobiles and Related 1.2%
DaimlerChrysler
5.625%, 1/16/07 (EUR) 375 474
7.30%, 1/15/12 145 171
Ford Motor Credit, 7.375%, 2/1/11 300 312
General Motors Acceptance Corp.
6.875%, 9/15/11 250 257
8.00%, 11/1/31 125 129
1,343
Banking 3.9%
Bank Hawaii, 6.875%, 3/1/09 350 383
Banknorth Capital Trust I,
Series B, 10.52%, 5/1/27 350 397
Capital One Bank, 6.50%, 7/30/04 380 391
Fleet Financial Group, 6.70%, 7/15/28 250 280
Frost National Bank, 6.875%, 8/1/11 375 429
Hudson United Bancorp
7.00%, 5/15/12 250 292
7.75%, 1/15/04 500 512
8.20%, 9/15/06 285 316
MBNA America Bank, 144A, 6.75%, 3/15/08 500 556
Popular North America, 4.25%, 4/1/08 225 234
Sovereign Bank, 5.125%, 3/15/13 175 181
Wachovia Capital Trust I, 144A,
7.64%, 1/15/27 300 353
4,324
Beverages 0.9%
Coca-Cola Femsa, 8.95%, 11/1/06 385 447
Panamerican Beverages, 7.25%, 7/1/09 500 534
981
Broadcasting 3.2%
AOL Time Warner, 7.625%, 4/15/31 $ 1,840 $ 2,141
Chancellor Media, 8.00%, 11/1/08 275 320
Time Warner, 6.875%, 6/15/18 750 848
Univision Communications, 7.85%, 7/15/11 200 239
3,548
Building and Real Estate 0.2%
Lennar, Series B, 9.95%, 5/1/10 225 263
263
Cable Operators 4.1%
Clear Channel Communications,
7.65%, 9/15/10 625 754
Comcast
5.50%, 3/15/11 1,350 1,442
5.85%, 1/15/10 300 330
Comcast Cable Communications,
6.75%, 1/30/11 725 828
Cox Communications
6.95%, 1/15/28 375 422
7.75%, 11/1/10 450 549
Lenfest Communications, 10.50%, 6/15/06 250 290
4,615
Canadian Governments and Municipalities 1.0%
Government of Canada, 6.00%, 9/1/05 (CAD) 1,425 1,101
1,101
Conglomerates 0.6%
Tyco International
4.375%, 11/19/04 (EUR) 100 116
5.80%, 8/1/06 300 303
6.375%, 10/15/11 225 224
643
Container 0.5%
Sealed Air, 144A, 5.375%, 4/15/08 515 542
542
Diversified Chemicals 0.6%
Dow Chemical, 5.25%, 5/14/04 450 464
Potash Corp./Saskatchewan, 4.875%, 3/1/13 225 232
696
Electric Utilities 13.6%
AEP Texas Central Company,
Series B, 144A, 6.65%, 2/15/33 $ 210 $ 236
American Electric Power,
Series C, 5.375%, 3/15/10 225 241
Arizona Public Service
4.65%, 5/15/15 260 266
6.375%, 10/15/11 500 571
Black Hills, 6.50%, 5/15/13 375 379
Centerpoint Energy Houston
144A, 5.60%, 7/1/23 180 182
144A, 6.95%, 3/15/33 675 799
Centerpoint Energy Resources, 144A,
7.875%, 4/1/13 530 618
Cincinnati Gas & Electric,
5.70%, 9/15/12 275 304
Cleco
7.00%, 5/1/08 375 385
8.75%, 6/1/05 625 671
Columbus Southern Power Company,
Series B, 144A, 6.60%, 3/1/33 150 169
ComEd Financing III, 6.35%, 3/15/33 225 232
Consumers Energy, 144A, 4.25%, 4/15/08 500 521
DPL, 6.875%, 9/1/11 275 300
Duke Energy, 6.25%, 1/15/12 325 366
El Paso Natural Gas, 6.75%, 11/15/03 300 300
Energy East, 5.75%, 11/15/06 400 433
Entergy Mississippi, 4.35%, 4/1/08 225 233
Exelon Generation, 6.95%, 6/15/11 510 596
FirstEnergy, 7.375%, 11/15/31 1,050 1,189
Mirant Americas Generation, 8.30%, 5/1/11 195 124
Monongahela Power, 5.00%, 10/1/06 325 326
Ohio Power, Series D, 144A, 5.50%, 2/15/13 135 147
Oncor Electric Delivery, 7.00%, 9/1/22 850 976
PG&E National Energy, 10.375%, 5/16/11 * 70 34
Potomac Electric Power, 4.00%, 5/15/10 225 225
PPL Energy, 6.40%, 11/1/11 475 534
Progress Energy, 7.10%, 3/1/11 425 501
PSEG Energy, 8.50%, 6/15/11 415 444
PSEG Power, 8.625%, 4/15/31 325 436
Sempra Energy, 6.00%, 2/1/13 335 373
Southern California Edison, 144A,
8.00%, 2/15/07 150 163
Tampa Electric, 6.375%, 8/15/12 375 430
Teco Energy, 6.125%, 5/1/07 $ 100 $ 99
TXU Energy Company, 144A, 6.125%, 3/15/08 225 242
Western Resources, 7.875%, 5/1/07 470 523
XCEL Energy, 7.00%, 12/1/10 490 560
15,128
Electronic Components 0.5%
Arrow Electronics, 8.20%, 10/1/03 300 304
Emerson Electric, 4.50%, 5/1/13 55 57
Motorola, 7.50%, 5/15/25 185 203
564
Energy 1.6%
Noram Energy, 6.50%, 2/1/08 225 243
PDVSA Finance, 6.80%, 11/15/08 405 354
Pioneer Natural Resources, 7.50%, 4/15/12 140 157
XTO Energy, 144A, 6.25%, 4/15/13 125 130
YPF Sociedad Anonima
8.00%, 2/15/04 175 179
10.00%, 11/2/28 625 694
1,757
Entertainment and Leisure 0.6%
Carnival, 7.05%, 5/15/05 325 349
Royal Caribbean Cruises, 7.25%, 8/15/06 310 310
659
Exploration and Production 1.7%
Anadarko Petroleum, 5.00%, 10/1/12 375 400
Canadian Natural Resources, 6.45%, 6/30/33 500 581
Devon Energy, 7.95%, 4/15/32 700 925
1,906
Finance and Credit 3.9%
CIT Group, 5.50%, 5/16/05 (EUR) 300 367
Colonial Bank, 9.375%, 6/1/11 425 495
Countrywide Home Loans, 5.50%, 2/1/07 450 496
Dime Capital Trust I, 9.33%, 5/6/27 400 524
FBOP Capital Trust II, 144A,
10.00%, 1/15/09 800 856
General Electric Capital, 5.00%, 6/15/07 500 546
Household Finance, 7.00%, 5/15/12 250 297
International Lease Finance,
6.375%, 3/15/09 700 783
4,364
Food Processing 1.1%
General Mills, 5.125%, 2/15/07 $ 800 $ 870
Kraft Foods, 6.50%, 11/1/31 275 311
1,181
Food/Tobacco 2.4%
Gallaher Group, 4.875%, 1/28/05 (EUR) 700 848
Imperial Tobacco Finance,
5.375%, 3/15/04 (EUR) 700 839
Philip Morris
6.375%, 2/1/06 90 94
7.75%, 1/15/27 200 215
UST, 6.625%, 7/15/12 625 731
2,727
Foreign Government and Municipalities 3.6%
National Republic of Bulgaria,
8.25%, 1/15/15 150 179
Petroleos Mexicanos
VR, 6.50%, 2/1/05 750 799
9.25%, 3/30/18 300 363
Republic of Chile, 5.50%, 1/15/13 200 214
Russian Federation, STEP, 144A,
5.00%, 3/31/30 500 490
United Mexican States
8.125%, 12/30/19 1,000 1,167
9.875%, 2/1/10 600 780
3,992
Gaming 0.7%
International Game Technology,
8.375%, 5/15/09 650 777
777
Gas & Gas Transmission 1.0%
Kern River Funding, 144A,
4.893%, 4/30/18 375 390
Kinder Morgan, 6.50%, 9/1/12 375 433
Southwest Gas, 8.375%, 2/15/11 225 266
1,089
Healthcare Services 0.1%
Tenet Healthcare, 6.875%, 11/15/31 150 141
141
Insurance 4.6%
Ace Capital Trust II, 9.70%, 4/1/30 260 350
AFLAC, 6.50%, 4/15/09 400 466
CIGNA
6.375%, 10/15/11 200 222
7.875%, 5/15/27 265 325
Fund American Companies,
5.875%, 5/15/13 $ 50 $ 52
Jackson National Life Insurance, 144A,
8.15%, 3/15/27 475 600
MIC Financing Trust I, 8.375%, 2/1/27 830 987
Ohio National Financial Services, 144A,
6.35%, 4/1/13 225 241
Principal Life Global Funding I, 144A,
5.05%, 3/15/15 250 262
Principal Mutual Life, 144A,
8.00%, 3/1/44 200 237
Sun Life of Canada U.S. Capital Trust,
144A, 8.526%, 5/29/49 1,000 1,236
Travelers Property Casualty,
3.75%, 3/15/08 100 103
5,081
Investment Dealers 1.0%
Franklin Resources, 3.70%, 4/15/08 85 87
Goldman Sachs Group, 6.60%, 1/15/12 400 464
Morgan Stanley, 6.60%, 4/1/12 500 583
1,134
Long Distance 1.8%
AT&T, VR, 7.80%, 11/15/11 250 287
Sprint Capital
6.00%, 1/15/07 225 237
6.875%, 11/15/28 750 742
7.625%, 1/30/11 650 720
1,986
Manufacturing 0.3%
Deere, 6.55%, 10/1/28 275 314
314
Media and Communications 1.3%
Belo
7.125%, 6/1/07 110 125
8.00%, 11/1/08 350 422
News America
6.75%, 1/9/10 600 681
7.625%, 11/30/28 225 272
1,500
Metals and Mining 1.3%
Falconbridge, 5.375%, 6/1/15 250 250
Inco
7.20%, 9/15/32 300 344
7.75%, 5/15/12 150 181
Phelps Dodge, 8.75%, 6/1/11 150 176
Placer Dome, 144A, 6.375%, 3/1/33 $ 225 $ 243
WMC Finance USA, 144A, 5.125%, 5/15/13 250 260
1,454
Miscellaneous Consumer Products 0.6%
Bunge Limited Finance, 144A,
5.875%, 5/15/13 210 216
Masco, 5.875%, 7/15/12 225 250
Newell Rubbermaid, 4.625%, 12/15/09 175 186
652
Paper and Paper Products 2.4%
Abitibi Consolidated, 6.95%, 12/15/06 160 171
Bowater, 9.375%, 12/15/21 250 286
Celulosa Arauco Y Constitucion,
7.50%, 9/15/17 465 534
Domtar, 7.875%, 10/15/11 225 275
International Paper, VR,
5.85%, 10/30/12 450 497
Weyerhaeuser, 5.95%, 11/1/08 820 914
2,677
Petroleum 2.5%
Amerada Hess, 6.65%, 8/15/11 575 666
ConocoPhillips, 5.90%, 10/15/32 290 319
Devon Financing, 6.875%, 9/30/11 450 533
Pemex Project Funding Master Trust
144A, 6.125%, 8/15/08 850 918
7.875%, 2/1/09 150 172
PF Export Receivables Master Trust,
Series A, 144A, 6.436%, 6/1/15 210 212
2,820
Railroads 1.8%
Canadian National Railway,
4.40%, 3/15/13 340 348
CSX, 7.95%, 5/1/27 465 611
Norfolk Southern, 6.00%, 4/30/08 500 567
Union Pacific, 6.625%, 2/1/29 400 467
1,993
Real Estate 1.5%
Regency Centers, REIT, 7.40%, 4/1/04 500 522
Rouse, REIT, 8.43%, 4/27/05 350 383
Shurgard Storage Centers, 5.875%, 3/15/13 140 150
Simon Property, REIT, 7.375%, 1/20/06 525 578
1,633
Retail 0.1%
JC Penney, 7.375%, 8/15/08 $ 150 $ 152
152
Savings and Loan 1.7%
Golden West Financial, 5.50%, 8/8/06 300 326
Greenpoint Capital Trust I,
9.10%, 6/1/27 375 453
Webster Capital Trust I, 144A,
9.36%, 1/29/27 455 525
Wester Capital Trust II, Series B,
10.00%, 4/1/27 550 633
1,937
Services 0.8%
Waste Management
6.50%, 11/15/08 700 804
7.65%, 3/15/11 125 150
954
Specialty Chemicals 0.3%
Chevron Phillips Chemical,
5.375%, 6/15/07 225 242
Monsanto, 4.00%, 5/15/08 100 104
346
Specialty Retailers 0.4%
AutoZone, 4.375%, 6/1/13 105 104
Lowes, 6.50%, 3/15/29 275 321
425
Supermarkets 0.8%
Delhaize America, 8.125%, 4/15/11 225 248
Kroger, 8.05%, 2/1/10 500 610
858
Telephones 5.9%
British Telecommunications, VR,
8.375%, 12/15/10 625 785
Centurytel, 7.875%, 8/15/12 200 251
Deutsche Telekom
VR, 8.25%, 6/15/05 325 361
VR, 8.50%, 6/15/10 1,150 1,419
France Telecom
VR, 10.00%, 3/1/31 600 811
VR, 9.25%, 3/1/11 1,225 1,528
Royal KPN, 8.00%, 10/1/10 250 309
Telus, 7.50%, 6/1/07 210 231
Verizon Global Funding, 7.75%, 6/15/32 500 642
Verizon North, Series D, 144A,
5.604%, 1/1/22 $ 250 $ 262
6,599
Transportation (excluding Rail Road) 0.2%
Continental Airlines Pass Through Trust,
Series 2000-1, Class A 1
8.048%, 11/1/20 221 203
US Airways, Series CL-C, ETC,
8.93%, 4/15/08 * 348 24
227
Wireless Communications 2.1%
AT&T Wireless Group, 7.875%, 3/1/11 900 1,070
Telecorp PCS, 10.625%, 7/15/10 500 595
Tritel PCS, 10.375%, 1/15/11 150 181
Vodafone Airtouch, 7.75%, 2/15/10 400 495
2,341
Wireline Communications 0.3%
Telefonica Europe, 7.75%, 9/15/10 250 310
310
Total Corporate Bonds
and Notes (Cost $80,817) 89,145
ASSET-BACKED SECURITIES 4.3%
Auto-Backed 0.3%
SSB Auto Loan Trust, Series 2002-1, Class C,
4.13%, 2/15/09 348 350
350
Motorcycles 0.2%
Harley Davidson Motorcycle Trust,
Series 2002-2, Class B
2.84%, 6/15/10 232 234
234
Stranded Asset 3.8%
Illinois Power Special Purpose Trust,
Series 1998-1, Class A7
5.65%, 12/25/10 400 453
TRAINS BBB-5-2002, 144A,
6.539%, 8/15/08 3,465 3,786
4,239
Total Asset-Backed Securities (Cost $4,636) 4,823
EQUITY AND CONVERTIBLE SECURITIES 2.3%
Aerospace & Defense 0.1%
Raytheon, Pfd. Conv. Stock,
8.25%, 5/15/06 $ 2 $ 85
85
Building and Real Estate 0.7%
Crescent Real Estate Equities,
REIT, Pfd. Conv. Stock
6.75%, 12/31/49 6 122
Equity Office Properties Trust,
Pfd. Conv. Stock
5.25%, 2/15/08 5 222
Equity Residential Properties Trust,
REIT, Pfd. Conv. Stock
7.25%, 12/31/49 11 286
Reckson Associates Realty, Series A,
Pfd. Conv. Stock
7.625%, 12/31/49 8 194
824
Computer Service & Software 0.1%
Juniper Networks, Conv. Notes,
4.75%, 3/15/07 135 126
126
Electric Utilities 0.3%
Centerpoint Energy, Conv. Notes,
144A, 3.75%, 5/15/08 150 172
Potomac Electric Power, Common Stock 5 94
PPL Energy, Conv. Notes, 2.625%, 5/15/08 110 114
380
Energy Services 0.1%
El Paso Energy Capital Trust I, Pfd.
Conv. Stock, 4.75%, 3/31/28 !! 2 60
60
Financial Services 0.3%
Capital One Financial, Pfd. Conv. Stock,
6.25%, 5/17/05 8 302
302
Insurance 0.2%
Hartford Financial Services Group,
Pfd. Conv. Stock, 7.00%, 8/16/06 5 260
260
Media and Communications 0.1%
Liberty Media/Sprint PCS, Conv. Notes,
4.00%, 11/15/29 100 67
67
Miscellaneous Materials 0.0%
Williams Companies, Pfd. Conv. Stock,
9.00%, 2/16/05 5 55
55
Specialty Chemicals 0.2%
Corning, Conv. Notes, Zero Coupon, 11/8/05 $ 255 $ 188
188
Telecommunications 0.1%
Lucent Technologies, 8.00%, 8/2/04 0 134
Qwest Trends Trust, Pfd. Conv. Stock, 144A,
5.75%, 11/17/03 2 16
150
Wireless Communications 0.1%
CIENA, Conv. Notes, 3.75%, 2/1/08 145 120
120
Total Equity and Convertible
Securities (Cost $2,322) 2,617
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES 1.8%
U.S. Government Agency Obligations 0.8%
Federal Home Loan Mortgage, CMO,
4.105%, 10/27/31 850 881
881
U.S. Government Guaranteed Obligations 1.0%
Federal National Mortgage Assn.,
TBA, 5.00%, 1/1/18 500 516
Government National Mortgage Assn.,
6.00%, 7/15/16 !! 573 601
1,117
Total U.S. Government Mortgage-Backed
Securities (Cost $1,952) 1,998
OPTIONS PURCHASED 0.1%
Capital One Financial
25 Contracts (for 100 shares each),
Put, 1/17/04 @ $30.00 * 3 4
25 Contracts (for 100 shares each),
Put, 1/22/05 @ $35.00 * 3 13
El Paso
10 Contracts (for 100 shares each),
Put, 1/17/04 @ $10.00 * 1 3
35 Contracts (for 100 shares each),
Put, 1/17/04 @ $7.50 * 4 5
Qwest Communications International
5 Contracts (for 100 shares each),
Put, 1/17/04 @ $10.00 * 1 3
Raytheon
12 Contracts (for 100 shares each),
Put, 11/22/03 @ $30.00 * 1 2
Williams Companies
20 Contracts (for 100 shares each),
Put, 1/17/04 @ $20.00 * $ 2 $ 24
Total Options Purchased (Cost $87) 54
OPTIONS WRITTEN 0.0%
Capital One Financial
20 Contracts (for 100 shares each),
Call, 1/22/05 @ $35.00 * (2) (38)
Raytheon
12 Contracts (for 100 shares each),
Call, 11/22/03 @ $30.00 * (1) (4)
Total Options Written (Cost $(29)) (42)
DOMESTIC BOND MUTUAL FUNDS 8.7%
T. Rowe Price Institutional
High Yield Fund, 8.01% p 929 9,729
Total Domestic Bond
Mutual Funds (Cost $9,742) 9,729
MONEY MARKET FUNDS 2.1%
T. Rowe Price Reserve
Investment Fund, 1.28% # 2,324 2,324
Total Money Market Funds (Cost $2,324) 2,324
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
99.3% of Net Assets (Cost $101,851) $ 110,648
Other Assets Less Liabilities 832
NET ASSETS $ 111,480
----------
Net Assets Consist of:
Undistributed net investment income (loss) $ 40
Undistributed net realized gain (loss) (7,639)
Net unrealized gain (loss) 8,800
Paid-in-capital applicable to
11,370,741 shares of $0.0001 par
value capital stock outstanding;
1,000,000,000 shares authorized 110,279
NET ASSETS $ 111,480
----------
NET ASSET VALUE PER SHARE $ 9.80
----------
# Seven-day yield
* Non-income producing
p SEC yield
!! All or a portion of this security is pledged to cover written call
options at May 31, 2003
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 $15,580,000 and represents 14.0% of net assets
CAD Canadian dollar
CMO Collateralized Mortgage Obligation
ETC Equipment Trust Certificate
EUR Euro
REIT Real Estate Investment Trust
STEP Stepped coupon bond for which the coupon rate of interest will adjust on
specified future date(s)
TBA To Be Announced security was purchased on a forward commitment basis
VR Variable Rate
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
Year
Ended
5/31/03
- --------------------------------------------------------------------------------
Investment Income (Loss)
Income
Interest $ 5,667
Dividend 331
Income distributions from mutual funds 56
Other 1
Total income 6,055
Expenses
Investment management 297
Shareholder servicing 177
Custody and accounting 145
Registration 38
Legal and audit 15
Prospectus and shareholder reports 8
Directors 5
Miscellaneous 4
Total expenses 689
Net investment income (loss) 5,366
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (2,868)
Futures 114
Written options 184
Foreign currency transactions 9
Net realized gain (loss) (2,561)
Change in net unrealized gain (loss)
Securities 9,028
Futures (1)
Written options (84)
Other assets and liabilities
denominated in foreign currencies 3
Change in net unrealized gain (loss) 8,946
Net realized and unrealized gain (loss) 6,385
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 11,751
----------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
Year
Ended
5/31/03 5/31/02
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 5,366 $ 5,015
Net realized gain (loss) (2,561) (64)
Change in net unrealized
gain (loss) 8,946 (722)
Increase (decrease) in net
assets from operations 11,751 4,229
Distributions to shareholders
Net investment income (5,460) (4,960)
Capital share transactions *
Shares sold 54,659 43,965
Distributions reinvested 3,980 3,508
Shares redeemed (31,791) (30,122)
Increase (decrease) in net
assets from capital
share transactions 26,848 17,351
Net Assets
Increase (decrease) during period 33,139 16,620
Beginning of period 78,341 61,721
End of period $ 111,480 $ 78,341
--------------- ---------------
*Share information
Shares sold 5,959 4,708
Distributions reinvested 435 375
Shares redeemed (3,496) (3,237)
Increase (decrease) in
shares outstanding 2,898 1,846
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials May 31, 2003
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Corporate Income Fund, Inc. (the fund) is registered under
the Investment Company Act of 1940 (the 1940 Act) as a diversified,
open-end management investment company and commenced operations on October
31, 1995. The fund seeks to provide high income and some capital growth.
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. 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 stated at fair value, which is determined by using a matrix
system that establishes a value for each security based on bid-side money
market yields.
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. Purchased and written
options are valued at the mean of the closing bid and ask prices. 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.
Expenses Paid Indirectly
Credits earned on temporarily uninvested cash balances at the custodian are
used to reduce the fund's custody charges.
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.
Futures Contracts
During the year ended May 31, 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.
Options
Call and put options give the holder the right to purchase or sell,
respectively, a security at a specified price on a certain date. Risks
arise from possible illiquidity of the options market and from movements in
security values. Options are reflected in the accompanying Statement of Net
Assets at market value. Transactions in options written and related
premiums received during the year ended May 31, 2003, were as follows:
Number of
Contracts Premiums
Outstanding at beginning of period 535 $ 192,000
Written 512 180,000
Closed (1,015) (343,000)
Outstanding at end of period 32,000 $ 29,000
------ ---------------
Other
Purchases and sales of portfolio securities, other than short-term and U.S.
government securities, aggregated $79,777,000 and $57,800,000,
respectively, for the year ended May 31, 2003. Purchases and sales of U.S.
government securities aggregated $21,892,000 and $20,669,000, respectively,
for the year ended May 31, 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 significantly 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.
Distributions during the year ended May 31, 2003 totaled $5,460,000 and
were characterized as ordinary income. At May 31, 2003, the tax-basis
components of net assets were as follows:
Unrealized appreciation $10,709,000
Unrealized depreciation (2,000,000)
Net unrealized appreciation (depreciation) 8,709,000
Undistributed ordinary income 856,000
Capital loss carryforwards (8,364,000)
Paid-in capital 110,279,000
Net assets $111,480,000
------------
Pursuant to federal income tax regulations applicable to investment
companies, the fund has elected to treat net capital losses realized
between November 1 and May 31 of each year as occurring on the first day of
the following tax year. Consequently, $38,000 of realized losses reflected
in the accompanying financial statements will not be recognized for tax
purposes until 2004. Federal income tax regulations require the fund to
defer recognition of capital losses realized on certain covered option
transactions; accordingly, $45,000 of realized losses reflected in the
accompanying financial statements have not been recognized for tax purposes
as of May 31, 2003. The fund intends to retain realized gains to the extent
of available capital loss carryforwards for federal income tax purposes. As
of May 31, 2003, the fund had $752,000 of capital loss carryforwards that
expire in 2007, $2,984,000 that expire in 2008, and $4,628,000 that expire
thereafter through 2011.
For the year ended May 31, 2003, the fund recorded the following permanent
reclassifications to reflect tax character. Reclassifications between
income and gain relate primarily to the character of paydown gains and
losses on asset-backed securities. Results of operations and net assets
were not affected by these reclassifications.
Undistributed net investment income $ 5,000
Undistributed net realized gain (5,000)
At May 31, 2003, the cost of investments for federal income tax purposes was
$101,942,000.
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 0.15% 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 May 31, 2003, the effective annual group
fee rate was 0.32%, and investment management fee payable totaled $34,000.
Under the terms of the investment management agreement, the manager is
required to bear any expenses, excluding interest, taxes, brokerage
commissions, and extraordinary expenses, through September 30, 2005, which
would cause the fund's ratio of total expenses to average net assets
(expense ratio) to exceed 0.80%. Thereafter, through September 30, 2007,
the fund is required to reimburse the manager for these expenses, provided
that average net assets have grown or expenses have declined sufficiently
to allow reimbursement without causing the fund's expense ratio to exceed
0.80%. Pursuant to this agreement, $109,000 of management fees were not
accrued by the fund for the year ended May 31, 2003. Unaccrued fees in the
amount of $213,000 remain subject to reimbursement by the fund through May
31, 2005.
In addition, the fund has entered into service agreements with Price
Associates and two wholly owned subsidiaries of Price Associates
(collectively, Price). Price Associates computes the daily share price and
maintains the financial records of the fund. T. Rowe Price Services, Inc.
provides shareholder and administrative services in its capacity as the
fund's transfer and dividend disbursing agent. T. Rowe Price Retirement
Plan Services, Inc. provides subaccounting and recordkeeping services for
certain retirement accounts invested in the fund. Expenses incurred
pursuant to these service agreements totaled $210,000 for the year ended
May 31, 2003, of which $20,000 was payable at period-end.
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 year ended May 31, 2003, totaled $35,000.
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 19, 2003, the fund
purchased 738,046 shares of High Yield Fund, at the net asset value per
share on that date, by transferring portfolio securities valued at
$7,742,000 to High Yield Fund. For financial reporting and tax purposes,
the fund realized a net gain of $348,000 on the transfer, reflecting the
amount that fair value of the transferred securities on the date of
transfer exceeded cost. At May 31, 2003, the fund held approximately 1.7%
of High Yield Fund's outstanding shares and, during the year then ended,
the fund received distributions from High Yield Fund in the amount of
$21,000.
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 $1,000 during the year
ended May 31, 2003.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials
Report of Independent Auditors
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
T. Rowe Price Corporate Income Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position
of T. Rowe Price Corporate Income Fund, Inc. (the "Fund") at May 31, 2003,
the results of its operations, the changes in its net assets and the
financial highlights for each of the fiscal periods presented, in
conformity with accounting principles generally accepted in the United
States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at May 31, 2003 by correspondence with
the custodians and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 18, 2003
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials
Tax Information (Unaudited) for the Tax Year Ended 5/31/03
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
For taxable non-corporate shareholders, $71,000 of the fund's distributed
income and short-term capital gains represents qualified dividend income
subject to the 15% rate category.
For corporate shareholders, $254,000 of the fund's distributed income and
short-term capital gains qualified for the dividends-received deduction.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials
About the Fund's Directors and Officers
- --------------------------------------------------------------------------------
Your fund is governed by a Board of Directors that meets regularly to review
investments, performance, expenses, and other business matters, and is
responsible for protecting the interests of shareholders. The majority of the
fund's directors are independent of T. Rowe Price Associates, Inc. (T. Rowe
Price); "inside" directors are officers of T. Rowe Price. The Board of Directors
elects the fund's officers, who are listed in the final table. The business
address of each director and officer is 100 East Pratt Street, Baltimore, MD
21202.
The Statement of Additional Information includes additional information about
the fund directors and is available without charge by calling a T. Rowe Price
representative at 1-800-225-5132.
Independent Directors
Name
(Date of Birth) Principal Occupation(s) During Past 5 Years
Year Elected* and Directorships of Other Public Companies
- --------------------------------------------------------------------------------
Anthony W. Deering Director, Chairman of the Board, President,
(1/28/45) and Chief Executive Officer, The Rouse
1995 Company, real estate developers; Director,
Mercantile Bank (4/03 to present)
Donald W. Dick, Jr. Principal, EuroCapital Advisors, LLC, an
(1/27/43) acquisition and management advisory firm
2001
David K. Fagin Director, Golden Star Resources Ltd., Canyon
(4/9/38) Resources Corp. (5/00 to present), and
2001 Pacific Rim Mining Corp. (2/02 to present);
Chairman and President, Nye Corp.
F. Pierce Linaweaver President, F. Pierce Linaweaver &
(8/22/34) Associates, Inc., consulting environmental
1995 and civil engineers
Hanne M. Merriman Retail Business Consultant; Director, Ann
(11/16/41) Taylor Stores Corp., Ameren Corp., Finlay
2001 Enterprises, Inc., The Rouse Company, and
US Airways Group, Inc.
John G. Schreiber Owner/President, Centaur Capital Partners,
(10/21/46) Inc., a real estate investment company;
1995 Senior Advisor and Partner, Blackstone Real
Estate Advisors, L.P.; Director, AMLI
Residential Properties Trust, Host Marriott
Corp., and The Rouse Company
Hubert D. Vos Owner/President, Stonington Capital Corp., a
(8/2/33) private investment company
2001
Paul M. Wythes Founding Partner, Sutter Hill Ventures, a
(6/23/33) venture capital limited partnership,
2001 providing equity capital to young
high-technology companies throughout the
United States; Director, Teltone Corp.
*Each independent director oversees 105 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Shareholder Report and Financials
Inside Directors
Name
(Date of Birth)
Year Elected*
[Number of T. Rowe Price Principal Occupation(s) During Past 5 Years
Portfolios Overseen] and Directorships of Other Public Companies
- --------------------------------------------------------------------------------
William T. Reynolds Director and Vice President, T. Rowe Price
(5/26/48) and T.Rowe Price Group, Inc.; Director,
1995 T. Rowe Price Global Management Limited
[37]
James S. Riepe Director and Vice President, T. Rowe
(6/25/43) Price; Vice Chairman of the Board,
1995 Director, and Vice President, T. Rowe
[105] Price Group, Inc.; Chairman of the Board
and Director, T. Rowe Price Global Asset
Management Limited, T. Rowe Price Global
Investment Services Limited, T. Rowe Price
Investment Services, Inc., T. Rowe Price
Retirement Plan Services, Inc., and T. Rowe
Price Services, Inc.; Chairman of the
Board, Director, President, and Trust
Officer, T. Rowe Price Trust Company;
Director, T. Rowe Price International,
Inc.; Chairman of the Board, Corporate
Income Fund
M. David Testa Chief Investment Officer, Director, and
(4/22/44) Vice President, T. Rowe Price; Vice
1997 Chairman of the Board, Chief Investment
[105] Officer, Director, and Vice President,
T. Rowe Price Group, Inc.; Director,
T. Rowe Price Global Asset Management
Limited and T. Rowe Price Global
Investment Services Limited; Chairman of
the Board and Director, T. Rowe Price
International, Inc.; Director and Vice
President, T. Rowe Price Trust Company
*Each inside director serves until retirement, resignation, or election of a
successor.
Officers
Name (Date of Birth)
Title and Fund(s) Served Principal Occupation(s)
- --------------------------------------------------------------------------------
Stephen V. Booth (6/21/61) Vice President, T. Rowe Price, T. Rowe
Vice President, Corporate Price Group, Inc., and T. Rowe Price
Income Fund Trust Company
Steven G. Brooks, CFA (8/5/54) Vice President, T. Rowe Price and
Vice President, Corporate Income T. Rowe Price Group, Inc.
Fund
Jennifer A. Callaghan (5/6/69) Assistant Vice President, T. Rowe Price
Assistant Vice President,
Corporate Income Fund
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Officers (continued)
Name (Date of Birth)
Title and Fund(s) Served Principal Occupation(s)
- --------------------------------------------------------------------------------
Joseph A. Carrier (12/30/60) Vice President, T. Rowe Price, T. Rowe
Treasurer, Corporate Income Fund Price Group, Inc., and T. Rowe Price
Investment Services, Inc.
Patrick S. Cassidy (8/27/64) Vice President, T. Rowe Price and
Vice President, Corporate Income T. Rowe Price Group, Inc.
Fund
Roger L. Fiery III (2/10/59) Vice President, T. Rowe Price, T. Rowe
Vice President, Corporate Income Price Group, Inc., T. Rowe Price
Fund International, Inc., and T. Rowe Price
Trust Company
Mark S. Finn (1/14/63) Vice President, T. Rowe Price
Vice President, Corporate Income
Fund
Gregory S. Golczewski (1/15/66) Vice President, T. Rowe Price and
Vice President, Corporate Income T. Rowe Price Trust Company
Fund
Henry H. Hopkins (12/23/42) Director and Vice President, T. Rowe
Vice President, Corporate Income Price Group, Inc., T. Rowe Price
Fund Investment Services, Inc., T. Rowe Price
Services, Inc., and T. Rowe Price Trust
Company; Vice President, T. Rowe Price,
T. Rowe Price International, Inc., and
T. Rowe Price Retirement Plan Services,
Inc.
Patricia B. Lippert (1/12/53) Assistant Vice President, T. Rowe Price
Secretary, Corporate Income and T. Rowe Price Investment Services,
Fund Inc.
Mary J. Miller (7/19/55) Vice President, T. Rowe Price and
President, Corporate Income Fund T. Rowe Price Group, Inc.
Vernon A. Reid, Jr. (5/14/54) Vice President, T. Rowe Price and
Vice President, Corporate Income T. Rowe Price Group, Inc.
Fund
Robert M. Rubino (8/2/53) Vice President, T. Rowe Price and
Vice President, Corporate Income T. Rowe Price Group, Inc.
Fund
Mark J. Vaselkiv (7/22/58) Vice President, T. Rowe Price and
Executive Vice President, Corporate T. Rowe Price Group, Inc.
Income Fund
Thea N. Williams (12/20/61) Vice President, T. Rowe Price and
Vice President, Corporate Income T. Rowe Price Group, Inc.
Fund
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
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) At the date of filing this Form N-CSR, the registrant's Principal Executive
Officer and Principal Financial Officer are aware of no significant changes in
the registrant's internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Item 10. Exhibits.
(a) Not required at this time.
(b) 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 under the Investment Company Act of 1940, are
attached.
A certification by the registrant's principal executive officer and principal
financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 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 Corporate Income Fund, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date July 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 July 13, 2003
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date July 09, 2003