Item 1. Report to Shareholders
T. Rowe Price Corporate Income Fund
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May 31, 2004
Certified Annual 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.
T. Rowe Price Corporate Income Fund
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Certified Annual Report
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.
[Graphic Omitted]
CORPORATE INCOME FUND
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As of 5/31/04
Corporate Income Fund $17,278
Lehman Brothers Baa U.S. Credit Index $18,103
Lipper Corporate Debt BBB Funds Average $16,970
Lehman Brothers Lipper Corporate Corporate
Baa U.S. Debt BBB Income
Credit Index Funds Average Fund
10/31/95 $ 10,000 $ 10,000 $ 10,000
5/96 10,016 10,081 10,009
5/97 10,989 11,097 11,045
5/98 12,346 12,394 12,587
5/99 12,702 12,612 12,435
5/00 12,577 12,511 12,357
5/01 14,344 14,016 14,070
5/02 15,360 14,770 14,983
5/03 17,976 16,683 16,910
5/04 18,103 16,970 17,278
Average Annual Compound Total Return
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Since
Inception
Periods Ended 5/31/04 1 Year 5 Years 10/31/95
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Corporate Income Fund 2.18% 6.80% 6.58%
Lehman Brothers Baa U.S.
Credit Index 0.71 7.34 7.16
Lipper Corporate Debt
BBB Funds Average 0.53 6.17 6.30
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 Annual Report
Dear Shareholder,
Your fund generated a positive return of 2.18% during the 12 months ended May
31, 2004, in a difficult environment for higher-quality bonds. It handily
out-performed the Lipper Corporate Debt BBB Funds Average of similarly managed
funds and the unmanaged Lehman Brothers Baa U.S. Credit Index, as shown in the
table on the preceding page. As the economy gathered strength over the past
year, inflation fears began to mount, putting pressure on fixed-income
securities; the portfolio's relatively short duration aided performance versus
its benchmarks.
Major Index Returns
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12-Month
Period Ended 5/31/04 Return
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Lehman Brothers U.S. Treasury Index -2.64%
Lehman Brothers U.S. Aggregate Index - 0.44
Lehman Brothers Baa U.S. Credit Index -0.58
Lehman Brothers Mortgage-Backed
Securities Index 1.5
CS First Boston High Yield Index 13.25
Sources: Lehman Brothers and First Boston.
As you know, the fund seeks to provide high income and some capital growth by
investing primarily in corporate bonds and at least 65% of net assets in
securities rated AAA, AA, A, or 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.
The Major Index Returns table shows how various quality bonds performed over the
fund's fiscal year. High-yield bonds, which tend to act more like equities than
bonds in an improving economy, far outpaced higher-quality bonds such as
Treasuries and higher-rated corporate securities over the 12-month period.
Quality Diversification
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A Rated and Above 10%
BBB Rated 71%
BB Rated 9%
B Rated 10%
Based on net assets as of 5/31/04.
In fact, all fixed-income classes except for mortgage-backed bonds posted
negative returns during the fund's fiscal year. Eighty-one 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 pie chart.
Yields rose in general before declining earlier this year, only to spike sharply
higher in April as the economy continued to grow and investors focused their
attention on the threat of higher inflation in the months ahead.
Portfolio Characteristics
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Periods Ended 5/31/03 5/31/04
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Price Per Share $ 9.80 $ 9.49
30-Day Standardized
Yield to Maturity 4.51% 5.38%
Weighted Average Maturity (years) 9.8 10.3
Weighted Average Quality * A- BBB
* Based on T. Rowe Price research.
The Portfolio Characteristics table shows various portfolio details as of May
31, 2004, compared with one year ago. The weighted average maturity of the
portfolio lengthened over the course of the year, while quality of the
portfolio's holdings declined slightly from A- to BBB, still within the
investment-grade spectrum. Our positioning in lower-quality bonds benefited fund
results during the past 12 months as that sector of the market outperformed.
We thank you for your continued support.
Respectfully,
James S. Riepe
Chairman
June 18, 2004
T. Rowe Price Corporate Income Fund
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Certified Annual Report
Financial Highlights For a share outstanding throughout each period
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Year
Ended
5/31/04 5/31/03 5/31/02 5/31/01 5/31/00
NET ASSET VALUE
Beginning of period $ 9.80 $ 9.25 $ 9.31 $ 8.80 $ 9.54
Investment activities
Net investment
income (loss) 0.52*!! 0.57*!! 0.65* 0.67* 0.68*
Net realized and
unrealized
gain (loss) (0.31) 0.56 (0.06) 0.51 (0.74)
Total from
investment
activities 0.21 1.13 0.59 1.18 (0.06)
Distributions
Net investment
income (0.52) (0.58) (0.65) (0.67) (0.68)
NET ASSET VALUE
End of period $ 9.49 $ 9.80 $ 9.25 $ 9.31 $ 8.80
---------------------------------------------------------
Ratios/Supplemental Data
Total return ^ 2.18%*!! 12.86%*!! 6.49%* 13.86%* (0.63%)*
Ratio of total
expenses to
average net assets 0.75%*!! 0.80%*!! 0.80%* 0.80%* 0.80%*
Ratio of net
investment
income (loss)
to average
net assets 5.39%*!! 6.21%*!! 7.00%* 7.40%* 7.44%*
Portfolio
turnover rate 82.9% 92.9% 91.1% 98.1% 90.9%
Net assets,
end of period
(in thousands) $ 102,023 $ 111,480 $ 78,341 $ 61,721 $ 43,725
^ 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.
!! See Note 4. Excludes expenses permanently waived of 0.05% and 0.00% of
average net assets for the years ended 5/31/04 and 5/31/03, respectively,
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 Annual Report May 31, 2004
PORTFOLIO OF INVESTMENTS (1) $ Par/Shares Value
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(Amounts in 000s)
CORPORATE BONDS AND NOTES 79.7%
Aerospace & Defense 1.2%
Boeing, 8.75%, 8/15/21 360 448
Bombardier, 144A, 6.30%, 5/1/14 525 480
Raytheon, 6.00%, 12/15/10 270 282
Airlines 0.6%
Qantas Airways, 144A, 5.125%, 6/20/13 300 277
Southwest Airlines, 6.50%, 3/1/12 350 370
647
Automobiles and Related 9.6%
DaimlerChrysler, 7.30%, 1/15/12 145 157
Ford Motor, 7.45%, 7/16/31 800 760
Ford Motor Credit
7.00%, 10/1/13 700 703
7.375%, 2/1/11 3,245 3,414
General Motors Acceptance Corp.
6.125%, 8/28/07 2,250 2,350
6.875%, 9/15/11 250 256
GM, 8.375%, 7/15/33 1,450 1,507
Hertz, 4.70%, 10/2/06 100 100
Lear, 8.11%, 5/15/09 475 543
9,790
Banking 3.9%
Banknorth Capital Trust I,
Series B, 10.52%, 5/1/27 350 422
Capital One Bank
4.875%, 5/15/08 300 304
5.75%, 9/15/10 380 389
6.50%, 6/13/13 250 254
First Tennesse Capital II,
Series B, 6.30%, 4/15/34 515 478
Frost National Bank
San Antonio, 6.875%, 8/1/11 375 397
Hudson United Bancorp,
8.20%, 9/15/06 285 310
Independence Community Bank,
VR, 3.75%, 4/1/14 235 223
MBNA America Bank, 144A,
6.75%, 3/15/08 495 539
Popular North America,
4.25%, 4/1/08 225 226
Suncorp-Metway, 144A,
4.625%, 6/15/13 475 447
3,989
Beverages 0.7%
Miller Brewing, 144A,
5.50%, 8/15/13 170 170
Panamerican Beverages,
7.25%, 7/1/09 500 545
715
Broadcasting 3.8%
AOL Time Warner,
7.625%, 4/15/31 2,090 2,251
British Sky Broadcasting Group,
7.30%, 10/15/06 200 218
Chancellor Media, 8.00%, 11/1/08 415 471
Time Warner, 6.875%, 6/15/18 750 783
Univision Communications,
2.875%, 10/15/06 155 153
3,876
Building Products 0.5%
CRH America, 6.40%, 10/15/33 500 498
498
Cable Operators 3.8%
Clear Channel Communications,
7.65%, 9/15/10 630 712
Comcast Corp., 5.85%, 1/15/10 300 312
Comcast Cable Communications
6.75%, 1/30/11 725 782
7.125%, 6/15/13 425 464
Cox Communications, 7.75%, 11/1/10 450 508
Lenfest Communications, 10.50%, 6/15/06 250 284
Rogers Cable, 5.50%, 3/15/14 360 316
Shaw Communications, 144A,
7.40%, 10/17/07 (CAD) 700 536
3,914
Conglomerates 1.1%
Loews, 5.25%, 3/15/16 465 428
Tyco International Group
5.80%, 8/1/06 300 314
6.375%, 10/15/11 400 420
1,162
Diversified Chemicals 0.7%
Dow Chemical, 6.125%, 2/1/11 725 763
763
Electric Utilities 12.4%
Arizona Public Service, 4.65%,
5/15/15 260 237
Black Hills, 6.50%, 5/15/13 525 525
Centerpoint Energy, 5.875%, 6/1/08 785 800
Cleco
7.00%, 5/1/08 375 387
8.75%, 6/1/05 625 651
Cleveland Electric Illuminating,
144A, 5.65%, 12/15/13 200 194
Constellation Energy Group,
4.55%, 6/15/15 250 222
Dominion Resources, Series B, VR,
1.55%, 5/15/06 150 150
Entergy Mississippi, 4.35%, 4/1/08 225 224
Exelon Generation, 144A, 5.35%, 1/15/14 500 484
FirstEnergy, 7.375%, 11/15/31 850 889
Monongahela Power, 5.00%, 10/1/06 490 497
Nevada Power, Series I, 144A,
6.50%, 4/15/12 305 287
PEPCO Holdings, 4.00%, 5/15/10 255 238
PG&E
6.05%, 3/1/34 200 187
VR, 1.81%, 4/3/06 415 416
Progress Energy, 7.10%, 3/1/11 425 467
PSEG Energy Holdings, 8.625%, 2/15/08 955 1,027
PSEG Power, 8.625%, 4/15/31 325 396
Public Service of New Mexico,
4.40%, 9/15/08 490 487
Sempra Energy
6.00%, 2/1/13 335 346
VR, 1.74%, 5/21/08 470 470
Southern California Edison,
4.65%, 4/1/15 700 648
Texas-New Mexico Power,
6.125%, 6/1/08 250 259
TXU Energy, 6.125%, 3/15/08 755 796
Westar Energy, 7.875%, 5/1/07 745 821
XCEL Energy, 7.00%, 12/1/10 490 543
12,648
Electronic Components 0.4%
Motorola
7.50%, 5/15/25 185 197
8.00%, 11/1/11 185 211
408
Energy 2.7%
El Paso Natural Gas,
7.625%, 8/1/10 250 253
Evergreen Resources,
144A, 5.875%, 3/15/12 200 203
Petroleos de Venezuela (PDVSA)
Finance, 6.80%, 11/15/08 405 408
Pioneer Natural Resources,
7.50%, 4/15/12 480 542
Plains All American Pipeline,
7.75%, 10/15/12 290 319
XTO Energy, 6.25%, 4/15/13 290 302
YPF Sociedad Anonima,
10.00%, 11/2/28 625 675
2,702
Entertainment and Leisure 0.3%
Royal Caribbean Cruises,
7.25%, 8/15/06 310 327
327
Exploration and Production 2.0%
Encana Holdings Finance,
5.80%, 5/1/14 1,080 1,100
Kaneb Pipeline Operations
5.875%, 6/1/13 700 683
7.75%, 2/15/12 250 274
2,057
Finance and Credit 1.3%
Colonial Bank, 9.375%, 6/1/11 425 495
FBOP Capital Trust II,
144A, 10.00%, 1/15/09 800 860
1,355
Food Processing 0.3%
Kraft Foods, 5.625%, 11/1/11 275 277
277
Food/Tobacco 0.3%
Philip Morris
6.375%, 2/1/06 90 92
7.75%, 1/15/27 200 198
290
Gaming 0.7%
International Game Technology,
8.375%, 5/15/09 650 747
747
Gas & Gas Transmission 3.6%
Buckeye Partners, 6.75%, 8/15/33 500 516
Duke Capital
6.25%, 2/15/13 280 284
6.75%, 7/15/18 - 2/15/32 845 837
Kinder Morgan, 6.50%, 9/1/12 375 397
Panhandle Eastern Pipeline, 4.80%, 8/15/08 235 236
Piedmont Natural Gas, 6.00%, 12/19/33 200 193
Southwest Gas, 8.375%, 2/15/11 225 260
Valero Energy, 4.75%, 4/1/14 1,000 932
3,655
Healthcare Services 0.3%
Highmark, 144A, 6.80%, 8/15/13 265 278
278
Insurance 4.0%
Ace Capital Trust II, 9.70%, 4/1/30 260 337
Commerce Group, 5.95%, 12/9/13 400 397
Fund American Companies,
5.875%, 5/15/13 50 49
Mangrove Bay Trust, 144A, VR,
6.102%, 7/15/33 400 393
MIC Financing Trust I, 144A,
8.375%, 2/1/27 830 890
Nationwide Mutual Insurance, 144A,
6.60%, 4/15/34 375 356
NLV Financial, 144A, 7.50%, 8/15/33 500 501
Ohio National Financial Services,
144A, 6.35%, 4/1/13 225 228
Principal Mutual Life Insurance,
144A, 8.00%, 3/1/44 200 203
RLI Corporation, 5.95%, 1/15/14 535 520
Security Benefit Life Insurance,
144A, 7.45%, 10/1/33 200 206
4,080
Investment Dealers 0.1%
Franklin Resources, 3.70%, 4/15/08 85 83
83
Long Distance 2.7%
Sprint Capital
6.875%, 11/15/28 1,255 1,216
7.625%, 1/30/11 1,360 1,510
2,726
Media and Communications 2.1%
Belo
7.125%, 6/1/07 110 120
8.00%, 11/1/08 350 400
Liberty Media, VR, 2.61%, 9/17/06 660 672
News America
6.75%, 1/9/38 600 665
7.625%, 11/30/28 225 253
2,110
Metals and Mining 2.1%
Falconbridge, 7.35%, 6/5/12 250 275
Massey Energy, 6.625%, 11/15/10 800 800
Phelps Dodge, 8.75%, 6/1/11 150 178
Placer Dome
6.375%, 3/1/33 225 220
6.45%, 10/15/35 400 396
WMC Finance, 5.125%, 5/15/13 250 243
2,112
Miscellaneous Consumer Products 0.6%
Bunge Limited Finance, 4.375%, 12/15/08 400 395
Masco, 5.875%, 7/15/12 225 234
629
Oil Field Services 0.6%
Halliburton, 144A, VR, 1.92%, 1/26/07 570 570
570
Paper and Paper Products 1.8%
Abitibi Consolidated Company of Canada,
6.95%, 12/15/06 160 165
Celulosa Arauco Y Constitucion,
5.125%, 7/9/13 600 560
Domtar, 5.375%, 12/1/13 450 428
SCA Coordination Center, 144A,
4.50%, 7/15/15 300 273
Weyerhaeuser, 7.375%, 3/15/32 400 433
1,859
Petroleum 2.7%
Amerada Hess, 7.875%, 10/1/29 1,000 1,072
Devon Financing
6.875%, 9/30/11 500 545
7.875%, 9/30/31 135 155
Kern River Funding, 144A,
4.893%, 4/30/18 359 347
Pemex Finance, 8.02%, 5/15/07 400 431
PF Export Receivables Master Trust,
144A, 6.436%, 6/1/15 194 190
2,740
Real Estate 1.3%
Developers Diversified Realty,
3.875%, 1/30/09 280 270
IStar Financial, 144A, 4.875%, 1/15/09 175 166
Reckson Operating Partnership,
5.15%, 1/15/11 300 292
Rouse, 8.43%, 4/27/05 350 368
Simon Property Group, 144A,
3.75%, 1/30/09 200 191
1,287
Retail 0.2%
JC Penney, 7.375%, 8/15/08 150 162
162
Satellites 0.2%
Echostar DBS, 144A, 5.75%, 10/1/08 250 243
243
Savings and Loan 1.0%
Greenpoint Capital Trust I, 9.10%, 6/1/27 375 425
Webster Capital Trust II, Series B,
10.00%, 4/1/27 550 631
1,056
Services 0.8%
Oakmont Asset Trust, 144A, 4.514%, 12/22/08 335 328
Waste Management
5.00%, 3/15/14 200 190
7.375%, 5/15/29 250 271
789
Specialty Chemicals 0.2%
Chevron Phillips Chemical,
5.375%, 6/15/07 225 235
235
Specialty Retailers 0.8%
AutoZone
4.375%, 6/1/13 105 95
4.75%, 11/15/10 205 200
Lowes, 6.50%, 3/15/29 275 287
Office Depot, 6.25%, 8/15/13 205 212
794
Supermarkets 0.2%
Kroger, 8.05%, 2/1/10 200 229
229
Telecommunications 1.7%
AT&T Corporation, STEP,
8.05%, 11/15/11 280 302
British Telecommunications, VR,
8.375%, 12/15/10 625 732
Telus, 7.50%, 6/1/07 660 722
1,756
Telephones 3.6%
Citizens Communications, 9.00%, 8/15/31 540 507
Deutsche Telekom International Finance
STEP, 8.25%, 6/15/05 325 344
STEP, 8.50%, 6/15/10 850 1,005
France Telecom, STEP, 8.75%, 3/1/11 1,225 1,421
Telecom Italia Capital, 144A,
5.25%, 11/15/13 405 391
3,668
Transportation (excluding Rail Road) 0.4%
Continental Airlines, Series 1999-1,
Class A, 6.545%, 2/2/19 464 443
443
Wireless Communications 2.4%
America Movil, 144A, 4.125%, 3/1/09 540 510
Rogers Cantel, 9.75%, 6/1/16 1,000 1,150
U.S. Cellular, 6.70%, 12/15/33 295 280
Vodafone Airtouch, 7.75%, 2/15/10 400 458
2,398
Total Corporate Bonds and Notes
(Cost $80,593) 81,277
ASSET-BACKED SECURITIES 0.2%
Auto-Backed 0.2%
SSB Auto Loan Trust, Series 2002-1,
Class C, 4.13%, 2/15/09 165 167
Total Asset-Backed Securities (Cost $165) 167
FOREIGN GOVERNMENTS and MUNICIPALITIES
(EXCLUDING CANADIAN) 4.8%
National Republic of Bulgaria,
8.25%, 1/15/15 150 169
Petroleos Mexicanos, STEP, 6.50%, 2/1/05 750 770
Republic of Chile, 5.50%, 1/15/13 200 201
Russian Federation, STEP, 5.00%, 3/31/30 500 455
United Mexican States
4.625%, 10/8/08 1,000 993
7.50%, 4/8/33 500 488
8.125%, 12/30/19 1,000 1,072
9.875%, 2/1/10 600 729
Total Foreign Governments and Municipalities
(Excluding Canadian) (Cost $4,653) 4,877
EQUITY AND CONVERTIBLE SECURITIES 4.3%
Bank and Trust 2.3%
AmSouth Bancorporation, Common Stock 7 165
Bank of America, Common Stock 3 251
BB&T, Common Stock 5 188
Citizens Banking, Common Stock 5 150
Comerica, Common Stock 3 170
J.P. Morgan Chase, Common Stock 6 202
KeyCorp, Common Stock 6 173
National City, Common Stock 5 160
PNC Financial Services Group,
Common Stock 3 166
Regions Financial, Common Stock 4 152
U.S. Bancorp, Common Stock 7 190
Union Planters, Common Stock 6 181
Washington Mutual, Common Stock 4 175
2,323
Building and Real Estate 0.8%
CarrAmerica Realty, REIT 5 147
Equity Residential, REIT 5 147
Reckson Associates Realty, Conv.
Pfd. Stock, 7.625% 6 153
Vornado Realty Trust, REIT 4 191
Weingarten Realty, REIT 5 163
801
Electric Utilities 0.1%
PPL Energy Supply, Conv. Bonds,
2.625%, 5/15/23 110 111
111
Financial Services 0.2%
Citigroup, Common Stock 4 186
186
Integrated Petroleum - International 0.4%
BP ADR 3 132
ChevronTexaco, Common Stock 2 136
Royal Dutch Petroleum ADS 4 200
468
Media and Communications 0.1%
Liberty Media, Conv. Bonds,
4.00%, 11/15/29 100 70
70
Miscellaneous Consumer Products 0.1%
UST, Common Stock 2 75
75
Miscellaneous Materials 0.0%
Williams Companies, Conv.
Pfd. Stock, 9.00% 5 63
63
Real Estate 0.3%
Roslyn Real Estate Asset,
Preferred Stock, 4.812% 0 307
307
Total Equity and Convertible Securities
(Cost $4,109) 4,404
DOMESTIC BOND MUTUAL FUNDS 9.0%
T. Rowe Price Institutional
High Yield Fund, 8.08% p 866 9,201
Total Domestic Bond Mutual Funds
(Cost $9,083) 9,201
MONEY MARKET FUNDS 0.4%
T. Rowe Price Reserve
Investment Fund, 1.09% # 470 470
Total Money Market Funds (Cost $470) 470
Total Investments in Securities
98.4% of Net Assets (Cost $99,073) $ 100,396
--------------------
(1) Denominated in U.S. dollars unless otherwise noted
# Seven-day yield
p SEC yield
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 value of such securities at
period-end amounts to $10,741 and represents 10.5% of net assets
ADR American Depository Receipts
ADS American Depository Shares
CAD Canadian dollar
REIT Real Estate Investment Trust
STEP Stepped coupon bond for which the coupon rate of interest will adjust on
specified future date(s)
VR Variable Rate
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Annual Report May 31, 2004
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
(In thousands except shares and per share amounts)
Assets
Investments in securities, at value
(cost $99,073) $ 100,396
Other assets 2,393
Total assets 102,789
Liabilities
Total liabilities 766
NET ASSETS $ 102,023
--------------------
Net Assets Consist of:
Undistributed net investment income (loss) $ 45
Undistributed net realized gain (loss) (4,987)
Net unrealized gain (loss) 1,323
Paid-in-capital applicable to 10,755,872
shares of $0.0001 par value capital stock
outstanding; 1,000,000,000 shares authorized 105,642
NET ASSETS $ 102,023
--------------------
NET ASSET VALUE PER SHARE $ 9.49
--------------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Statement of Operations
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
5/31/04
Investment Income (Loss)
Income
Interest $ 5,348
Dividend 971
Total income 6,319
Expenses
Investment management 430
Shareholder servicing 181
Custody and accounting 147
Registration 50
Prospectus and shareholder reports 35
Legal and audit 16
Directors 5
Miscellaneous 5
Reductions/repayments pursuant
to expense limitation
Investment management
fees (waived) repaid (97)
Total expenses 772
Net investment income (loss) 5,547
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 3,472
Capital gain distributions
from mutual funds 19
Written options (24)
Foreign currency transactions 18
Net realized gain (loss) 3,485
Change in net unrealized gain (loss)
Securities (7,487)
Written options 13
Other assets and liabilities
denominated in foreign currencies (3)
Change in net unrealized gain (loss) (7,477)
Net realized and unrealized gain (loss) (3,992)
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 1,555
--------------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
5/31/04 5/31/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 5,547 $ 5,366
Net realized gain (loss) 3,485 (2,561)
Change in net unrealized gain (loss) (7,477) 8,946
Increase (decrease) in net assets
from operations 1,555 11,751
Distributions to shareholders
Net investment income (5,545) (5,460)
Capital share transactions *
Shares sold 51,827 54,659
Distributions reinvested 4,250 3,980
Shares redeemed (61,544) (31,791)
Increase (decrease) in net assets
from capital share transactions (5,467) 26,848
Net Assets
Increase (decrease) during period (9,457) 33,139
Beginning of period 111,480 78,341
End of period $ 102,023 $ 111,480
------------------------------------
(Including undistributed net investment
income of $45 at 5/31/04 and $40 at 5/31/03)
*Share information
Shares sold 5,345 5,959
Distributions reinvested 441 435
Shares redeemed (6,401) (3,496)
Increase (decrease) in
shares outstanding (615) 2,898
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Corporate Income Fund
- --------------------------------------------------------------------------------
Certified Annual Report May 31, 2004
Notes to Financial Statements
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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
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. 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 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, 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 sale price for international securities.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Purchased and written options are
valued at the mean of the closing bid and asked 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 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.
Credits
The fund earns credits on temporarily uninvested cash balances at the custodian
that reduce the fund's custody charges. Custody expense in the accompanying
financial statements is presented before reduction for credits.
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 on a daily basis and paid
monthly. 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.
Noninvestment-Grade Debt Securities
At May 31, 2004, approximately 17% of the fund's net assets were invested,
directly and through its investment in the T. Rowe Price Institutional High
Yield Fund, in noninvestment-grade debt securities, commonly referred to as
"high-yield" or "junk" bonds. A real or perceived economic downturn or higher
interest rates could adversely affect the liquidity or value, or both, of such
securities because such events could lessen the ability of issuers to make
principal and interest payments.
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. Transactions in options written and related premiums received during the
year ended May 31, 2004, were as follows:
Number of
Contracts Premiums
Outstanding at beginning of period 32 $ 29,000
Closed (32) (29,000)
Outstanding at end of period -- $ --
------------------------
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $83,920,000 and $89,164,000, respectively, for the year ended May 31,
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 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. Financial records are not adjusted for temporary differences.
Distributions during the year ended May 31, 2004 totaled $5,545,000 and were
characterized as ordinary income. At May 31, 2004, the tax-basis components of
net assets were as follows:
Unrealized appreciation $ 2,721,000
Unrealized depreciation (1,398,000)
Net unrealized appreciation (depreciation) 1,323,000
Undistributed ordinary income 590,000
Capital loss carryforwards (5,532,000)
Paid-in capital 105,642,000
Net assets $ 102,023,000
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The fund intends to retain realized gains to the extent of available capital
loss carryforwards for federal income tax purposes. During the fiscal year ended
May 31, 2004, the fund utilized $2,832,000 of capital loss carryforwards. As of
May 31, 2004, the fund had $904,000 of capital loss carryforwards that expire in
fiscal 2008, $1,962,000 that expire in fiscal 2009, and $2,666,000 that expire
in fiscal 2011.
For the year ended May 31, 2004, the fund recorded the following permanent
reclassifications to reflect tax character. Reclassifications to paid-in capital
relate primarily to a tax practice that treats a portion of the proceeds from
each redemption of capital shares as a distribution of taxable net investment
income and/or realized capital gain. Results of operations and net assets were
not affected by these reclassifications.
Undistributed net investment income $ 3,000
Undistributed net realized gain (833,000)
Paid-in capital 830,000
At May 31, 2004, the cost of investments for federal income tax purposes was
$99,073,000.
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 average daily net assets to those of the group. At May 31, 2004,
the effective annual group fee rate was 0.32%, and investment management fee
payable totaled $32,000.
The fund is also subject to a contractual expense limitation through September
30, 2005. During the limitation period, the manager is required to waive its
management fee and reimburse the fund for any expenses, excluding interest,
taxes, brokerage commissions, and extraordinary expenses, that would otherwise
cause the fund's ratio of total expenses to average net assets (expense ratio)
to exceed its expense limitation of 0.80%. Through September 30, 2007, the fund
is required to repay the manager for expenses previously reimbursed and
management fees waived to the extent its net assets have grown or
expenses have declined sufficiently to allow repayment without causing the
fund's expense ratio to exceed its expense limitation. Pursuant to this
agreement, at May 31, 2004, management fees waived remain subject to repayment
by the fund in the following amounts: $213,000 through May 31, 2005 and $97,000
through September 30, 2007.
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 $234,000 for the year ended May 31, 2004, of which $22,000 was payable
at period-end.
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 year ended May 31, 2004, dividend
income from the Reserve Funds totaled $13,000.
The fund may invest in the 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. 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 Corporate Income Fund pays an investment
management fee to Price Associates and also indirectly bears its proportionate
share of the fee paid by High Yield Fund, Price Associates has agreed to
permanently reduce its management fee charged to the Corporate Income Fund in
the amount of the fund's pro rata share of the High Yield Fund's fee. Pursuant
to this agreement, the fund's management fee was reduced by $51,000 during the
year ended May 31, 2004. At May 31, 2004, the fund held approximately 1.28% of
the High Yield Fund's outstanding shares and, during the year then ended,
recorded dividend income from the High Yield Fund in the amount of $838,000 and
capital gain distributions of $19,000.
T. Rowe Price Corporate Income Fund
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Certified Annual Report
Report of Independent Registered Public Accounting Firm
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To the Board of Directors and Shareholders of
T. Rowe Price Corporate Income Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, 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
(the "Fund") at May 31, 2004, 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 the standards of the Public Company
Accounting Oversight Board (United States), 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,
2004 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 22, 2004
T. Rowe Price Corporate Income Fund
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Tax Information (Unaudited) for the Tax Year Ended 5/31/04
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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.
The fund's distributions to shareholders included $830,000 from short-term
capital gains.
For taxable non-corporate shareholders, $69,000 of the fund's income represents
qualified dividend income subject to the 15% rate category.
For corporate shareholders, $66,000 of the fund's income qualifies for the
dividends-received deduction.
Information on Proxy Voting
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A description of the policies and procedures that the T. Rowe Price Corporate
Income Fund 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.
T. Rowe Price Corporate Income Fund
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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
(Year of Birth)
Year Elected*
Principal Occupation(s) During Past 5 Years and Directorships of Other Public
Companies
Anthony W. Deering
(1945)
1995
Director, Chairman of the Board, and Chief Executive Officer, The Rouse Company,
real estate developers; Director, Mercantile Bank (4/03 to present)
Donald W. Dick, Jr.
(1943)
2001
Principal, EuroCapital Advisors, LLC, an acquisition and management advisory
firm
David K. Fagin
(1938)
2001
Director, Golden Star Resources Ltd., Canyon Resources Corp. (5/00 to present),
and Pacific Rim Mining Corp. (2/02 to present); Chairman and President, Nye
Corp.
Karen N. Horn
(1943)
2003
Managing Director and President, Global Private Client Services, Marsh Inc.
(1999-2003); Managing Director and Head of International Private Banking,
Bankers Trust (1996-1999); Director, Eli Lilly and Company and Georgia Pacific
F. Pierce Linaweaver
(1934)
1995
President, F. Pierce Linaweaver & Associates, Inc., consulting environmental and
civil engineers
John G. Schreiber
(1946)
1995
Owner/President, Centaur Capital Partners, Inc., a real estate investment
company; Partner, Blackstone Real Estate Advisors, L.P.; Director, AMLI
Residential Properties Trust and The Rouse Company, real estate developers
* Each independent director oversees 111 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
Inside Directors
Name
(Year of Birth)
Year Elected*
[Number of T. Rowe Price Portfolios Overseen]
Principal Occupation(s) During Past 5 Years and Directorships of Other Public
Companies
Mary J. Miller, CFA
(1955)
2004
[37]
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
James S. Riepe
(1943)
1995
[111]
Director and Vice President, T. Rowe Price; Vice Chairman of the Board,
Director, and Vice President, T. Rowe 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.; Director, The Nasdaq
Stock Market, Inc.
* Each inside director serves until retirement, resignation, or election of a
successor.
Officers
Name (Year of Birth)
Title and Fund(s) Served
Principal Occupation(s)
Stephen V. Booth, CPA (1961)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Trust Company
Steven G. Brooks, CFA (1954)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Jennifer A. Callaghan (1969)
Vice President, Corporate Income Fund
Assistant Vice President, T. Rowe Price
Joseph A. Carrier (1960)
Treasurer, Corporate Income Fund
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price
Investment Services, Inc., and T. Rowe Price Trust Company
Patrick S. Cassidy, CFA (1964)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Roger L. Fiery III, CPA (1959)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price
International, Inc., and T. Rowe Price Trust Company
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Officers (continued)
Name (Year of Birth)
Title and Fund(s) Served
Principal Occupation(s)
Mark S. Finn, CPA, CFA (1963)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Gregory S. Golczewski (1966)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Trust Company
Henry H. Hopkins (1942)
Vice President, Corporate Income Fund
Director and Vice President, T. Rowe Price Investment Services, Inc., T. Rowe
Price Services, Inc., and T. Rowe Price Trust Company; Vice President, T. Rowe
Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., and T. Rowe
Price Retirement Plan Services, Inc.
Patricia B. Lippert (1953)
Secretary, Corporate Income Fund
Assistant Vice President, T. Rowe Price and T. Rowe Price Investment Services,
Inc.
Vernon A. Reid, Jr. (1954)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Robert M. Rubino, CPA (1953)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
David A. Tiberii, CFA (1965)
President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Mark J. Vaselkiv (1958)
Executive Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Thea N. Williams (1961)
Vice President, Corporate Income Fund
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
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.
As of the end of the period covered by this report, the registrant has adopted 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. A copy of this code of
ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were
approved or waivers were granted to this code of ethics during the period
covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors/Trustees has determined that Mr. David K.
Fagin qualifies as an audit committee financial expert, as defined in Item 3 of
Form N-CSR. Mr. Fagin is considered independent for purposes of Item 3 of Form
N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) - (d) Aggregate fees billed to the registrant for the last two fiscal years
for professional services rendered by the registrant's principal accountant were
as follows:
2004 2003
Audit Fees $7,523 $8,017
Audit-Related Fees 685 --
Tax Fees 2,079 2,159
All Other Fees 124 --
Audit fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the accountant in
connection with statutory and regulatory filings. Audit-related fees include
amounts reasonably related to the performance of the audit of the registrant's
financial statements, specifically the issuance of a report on internal
controls. Tax fees include amounts related to tax compliance, tax planning, and
tax advice. Other fees include the registrant's pro-rata share of amounts for
agreed-upon procedures in conjunction with service contract approvals by the
registrant's Board of Directors/Trustees.
(e)(1) The registrant's audit committee has adopted a policy whereby audit and
non-audit services performed by the registrant's principal accountant for the
registrant, its investment adviser, and any entity controlling, controlled by,
or under common control with the investment adviser that provides ongoing
services to the registrant require pre-approval in advance at regularly
scheduled audit committee meetings. If such a service is required between
regularly scheduled audit committee meetings, pre-approval may be authorized by
one audit committee member with ratification at the next scheduled audit
committee meeting. Waiver of pre-approval for audit or non-audit services
requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50 percent of the hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
(g) The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by the registrant's principal accountant for non-audit services
rendered to the registrant, its investment adviser, and any entity controlling,
controlled by, or under common control with the investment adviser that provides
ongoing services to the registrant were $819,000 and $671,000 respectively, and
were less than the aggregate fees billed for those same periods by the
registrant's principal accountant for audit services rendered to the T. Rowe
Price Funds.
(h) All non-audit services rendered in (g) above were pre-approved by the
registrant's audit committee. Accordingly, these services were considered by the
registrant's audit committee in maintaining the principal accountant's
independence.
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
attached.
(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 Corporate Income Fund, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date July 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 July 16, 2004
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date July 16, 2004