Item 1. Report to Shareholders
T. Rowe Price Mid-Cap Value Fund
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Certified
Financials
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited)
Financial Highlights For a share outstanding throughout each period
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Mid-Cap Value shares
6 Months Year
Ended Ended
6/30/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98
NET ASSET
VALUE
Beginning
of period $ 15.00 $ 16.40 $ 15.64 $ 13.37 $ 13.66 $ 14.47
Investment
activities
Net investment
income (loss) 0.08 0.13 0.13 0.18 0.23 0.19
Net realized and
unrealized
gain (loss) 1.89 (1.34) 2.07 2.82 0.22 (0.05)
Total from
investment
activities 1.97 (1.21) 2.20 3.00 0.45 0.14
Distributions
Net
investment
income -- (0.12) (0.13) (0.17) (0.23) (0.19)
Net
realized
gain -- (0.07) (1.31) (0.56) (0.51) (0.76)
Total
distributions -- (0.19) (1.44) (0.73) (0.74) (0.95)
NET ASSET VALUE
End of
period $ 16.97 $ 15.00 $ 16.40 $ 15.64 $ 13.37 $ 13.66
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Ratios/Supplemental Data
Total return^ 13.13% (7.38)% 14.36% 22.75% 3.52% 1.39%
Ratio of total
expenses to
average net
assets 0.95%! 0.96% 0.98% 0.99% 1.04% 1.08%
Ratio of net
investment
income (loss)
to average
net assets 1.07%! 0.98% 0.95% 1.33% 1.60% 1.24%
Portfolio
turnover
rate 46.7%! 51.1% 57.5% 31.9% 26.8% 32.0%
Net assets,
end of
period
(in millions) $ 1,189 $ 991 $ 503 $ 282 $ 212 $ 221
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited)
Financial Highlights For a share outstanding throughout each period
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Mid-Cap Value-Advisor Class shares
6 Months 9/30/02
Ended Through
6/30/03 12/31/02
NET ASSET VALUE
Beginning of period $ 14.99 $ 13.97
Investment activities
Net investment income (loss) 0.10* 0.04*
Net realized and unrealized gain (loss) 1.86 1.17**
Total from investment activities 1.96 1.21
Distributions
Net investment income -- (0.12)
Net realized gain -- (0.07)
Total distributions -- (0.19)
NET ASSET VALUE
End of period $ 16.95 $ 14.99
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Ratios/Supplemental Data
Total return^ 13.08%* 8.66%*
Ratio of total expenses to
average net assets 1.10%*! 1.10%*!
Ratio of net investment
income (loss) to average
net assets 0.91%*! 1.29%*!
Portfolio turnover rate 46.7%! 51.1%
Net assets, end of period
(in thousands) $ 8,445 $ 1,528
* Excludes expenses in excess of a 1.10% contractual expense limitation in
effect through 4/30/04.
** The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout
the period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund shares in
relation to fluctuating market values for the investment portfolio.
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited)
Financial Highlights For a share outstanding throughout each period
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Mid-Cap Value-R Class shares
6 Months 9/30/02
Ended Through
6/30/03 12/30/02
NET ASSET VALUE
Beginning of period $ 15.00 $ 13.97
Investment activities
Net investment income (loss) 0.09* 0.03*
Net realized and unrealized gain (loss) 1.83 1.18**
Total from investment activities 1.92 1.21
Distributions
Net investment income -- (0.11)
Net realized gain -- (0.07)
Total distributions -- (0.18)
NET ASSET VALUE
End of period $ 16.92 $ 15.00
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Ratios/Supplemental Data
Total return^ 12.80%* 8.66%*
Ratio of total expenses to
average net assets 1.40%*! 1.40%*!
Ratio of net investment
income (loss) to average
net assets 0.56%*! 0.84%*!
Portfolio turnover rate 46.7%! 51.1%
Net assets, end of period
(in thousands) $ 990 $ 109
* Excludes expenses in excess of a 1.40% contractual expense limitation in
effect through 4/30/04.
** The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout
the period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund shares in
relation to fluctuating market values for the investment portfolio.
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited) June 30, 2003
Statement of Net Assets Shares/Par Value
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In thousands
Common Stocks 95.3%
CONSUMER DISCRETIONARY 13.5%
Household Durables 1.1%
Stanley Works 465,000 $ 12,834
12,834
Leisure Equipment & Products 2.7%
Brunswick 630,000 15,762
Hasbro 946,600 16,556
32,318
Media 5.7%
Dow Jones 306,000 13,167
Meredith 271,000 11,924
New York Times, Class A 75,000 3,413
Pearson (GBP) 699,000 6,539
Reader's Digest, Class A 56,531 762
Reuters (GBP) 5,025,000 14,598
Scholastic * 181,000 5,390
Washington Post, Class B 18,000 13,192
68,985
Multiline Retail 2.8%
Kmart * 440,000 11,902
Neiman Marcus, Class A * 179,700 6,577
Nordstrom 769,000 15,011
33,490
Specialty Retail 0.7%
GAP 421,000 7,898
7,898
Textiles, Apparel, & Luxury Goods 0.5%
Unifi * 965,000 5,983
5,983
Total Consumer Discretionary 161,508
CONSUMER STAPLES 3.4%
Food Products 3.4%
Archer-Daniels-Midland 1,289,000 16,589
Campbell Soup 510,000 12,495
Heinz 356,000 11,741
Total Consumer Staples 40,825
ENERGY 6.7%
Energy Equipment & Services 3.1%
Baker Hughes 363,000 $ 12,186
Diamond Offshore Drilling 1,180,000 24,768
36,954
Oil & Gas 3.6%
Amerada Hess 352,000 17,311
BG Group (GBP) 1,340,000 5,947
Marathon Oil 773,000 20,369
43,627
Total Energy 80,581
FINANCIALS 16.8%
Capital Markets 2.7%
Janus Capital Group 970,000 15,908
Northern Trust 399,000 16,674
32,582
Commercial Banks 5.4%
Citizens Banking 250,000 6,692
Commerce Bancshares 335,975 13,086
Cullen/Frost Bankers 175,000 5,618
Huntington Bancshares 580,000 11,322
Mercantile Bankshares 175,000 6,891
National Commerce Financial 320,000 7,101
Synovus Financial 600,000 12,900
Wachovia 35,000 1,399
65,009
Diversified Financial Services 0.5%
Groupe Bruxelles Lambert (EUR) 120,000 5,438
5,438
Insurance 7.9%
21st Century Insurance Group 79,000 1,130
Cincinnati Financial 248,000 9,198
Hartford Financial Services Group 251,800 12,681
Loews 280,000 13,241
Mercury General 49,000 2,237
Ohio Casualty * 853,000 11,242
Protective Life 425,000 $ 11,369
SAFECO 403,700 14,242
St. Paul Companies 414,400 15,130
UnumProvident 337,700 4,529
94,999
Thrifts & Mortgage Finance 0.3%
PMI Group 128,600 3,452
3,452
Total Financials 201,480
HEALTH CARE 4.7%
Biotechnology 1.0%
Millennium Pharmaceuticals * 220,000 3,460
Protein Design Labs * 610,000 8,528
11,988
Health Care Equipment & Supplies 1.3%
Apogent Technologies * 299,800 5,996
Guidant 210,000 9,322
15,318
Health Care Providers & Services 1.8%
Aetna 108,000 6,502
Davita * 350,000 9,373
Omnicare 185,000 6,251
22,126
Pharmaceuticals 0.6%
Andrx * 347,000 6,905
6,905
Total Health Care 56,337
INDUSTRIALS & BUSINESS SERVICES 11.1%
Aerospace & Defense 2.2%
Raytheon 434,000 14,252
Rockwell Collins 517,200 12,739
26,991
Air Freight & Logistics 2.0%
CNF 524,000 13,299
Ryder System 395,000 10,120
23,419
Commercial Services & Supplies 4.2%
Herman Miller 738,000 $ 14,915
Manpower 300,000 11,127
ServiceMaster 1,126,500 12,053
Viad 540,000 12,091
50,186
Electrical Equipment 0.4%
Hubbell, Class A 25,000 804
Hubbell, Class B 136,000 4,502
5,306
Machinery 1.9%
Dover 358,000 10,726
Harsco 89,000 3,208
Joy Global * 595,600 8,797
22,731
Marine 0.4%
Overseas Shipholding Group 212,400 4,675
4,675
Total Industrials & Business Services 133,308
INFORMATION TECHNOLOGY 11.2%
Communications Equipment 1.5%
Harris 275,000 8,264
Tellabs * 1,460,000 9,592
17,856
Electronic Equipment & Instruments 5.0%
Agilent Technologies * 890,000 17,400
AVX 1,181,200 12,981
Littelfuse * 163,000 3,645
Molex, Class A 1,081,200 25,061
Technitrol * 89,900 1,353
60,440
IT Services 1.7%
BearingPoint * 897,400 8,660
Ceridian * 693,000 11,760
20,420
Software 3.0%
BMC Software * 1,022,000 $ 16,689
Cadence Design Systems * 890,000 10,734
PeopleSoft * 470,000 8,267
35,690
Total Information Technology 134,406
MATERIALS 10.5%
Chemicals 2.5%
Agrium 488,000 5,348
Great Lakes Chemical 579,600 11,824
Potash Corp./Saskatchewan 204,000 13,056
30,228
Metals & Mining 5.5%
Newmont Mining 789,500 25,627
Nucor 264,500 12,921
Phelps Dodge * 382,200 14,654
Teck (CAD) 1,564,500 12,751
65,953
Paper & Forest Products 2.5%
Bowater 111,500 4,176
MeadWestvaco 302,200 7,464
Potlatch 682,000 17,562
29,202
Total Materials 125,383
TELECOMMUNICATION SERVICES 3.9%
Diversified Telecommunication Services 2.1%
AT&T 465,000 8,951
Cable & Wireless (GBP) 7,435,000 13,887
Cable & Wireless ADR 392,400 2,147
24,985
Wireless Telecommunication Services 1.8%
Crown Castle International * 400,000 3,108
Telephone and Data Systems 379,000 18,836
21,944
Total Telecommunication Services 46,929
UTILITIES 9.8%
Electric Utilities 8.5%
CMS Energy 327,000 $ 2,649
El Paso Electric * 990,000 12,207
FirstEnergy 607,300 23,351
PG&E * 150,000 3,172
Pinnacle West Capital 364,500 13,651
Puget Energy 100,000 2,387
Teco Energy 550,000 6,594
TXU 791,500 17,769
Unisource Energy 604,000 11,355
XCEL Energy 572,300 8,607
101,742
Gas Utilities 1.1%
NiSource 667,000 12,673
12,673
Multi-Utilities & Unregulated Power 0.2%
Duke Energy 130,000 2,594
2,594
Total Utilities 117,009
Total Miscellaneous Common Stocks 3.7% 44,839
Total Common Stocks (Cost $1,084,825) 1,142,605
Convertible Bonds 0.8%
U.S. Cellular, LYONs, 6/15/15 14,850,000 7,080
XCEL Energy, 144A, 7.50%, 11/21/07 1,365,000 2,000
Total Convertible Bonds (Cost $7,124) 9,080
Short-Term Investments 4.0%
Money Market Funds 4.0%
T. Rowe Price Reserve Investment
Fund, 1.16% # 47,795,419 47,795
Total Short-Term Investments (Cost $47,795) 47,795
Value
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In thousands
Total Investments in Securities
100.1% of Net Assets (Cost $1,139,744) $1,199,480
Other Assets Less Liabilities (774)
NET ASSETS $ 1,198,706
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Net Assets Consist of:
Undistributed net investment income (loss) $ 5,504
Undistributed net realized gain (loss) (6,750)
Net unrealized gain (loss) 59,720
Paid-in-capital applicable to 70,651,938 shares
of $0.0001 par value capital stock outstanding;
1,000,000,000 shares authorized 1,140,232
NET ASSETS $ 1,198,706
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NET ASSET VALUE PER SHARE
Mid-Cap Value shares
($1,189,271,407/70,095,216 shares outstanding) $ 16.97
--------------------
Mid-Cap Value-Advisor Class shares
($8,444,869/498,202 shares outstanding) $ 16.95
--------------------
Mid-Cap Value-R Class shares
($990,212/58,520 shares outstanding) $ 16.92
--------------------
# Seven-day yield
* Non-income producing
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 $2,000,000 and represents 0.2% of net assets
ADR American Depository Receipts
CAD Canadian dollar
EUR Euro
GBP British pound
LYONs Liquid Yield Option Notes
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited)
Statement of Operations
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In thousands
6 Months
Ended
6/30/03
Investment Income (Loss)
Income
Dividend $ 9,494
Interest 505
Income distributions from mutual funds 325
Total income 10,324
Expenses
Investment management 3,453
Shareholder servicing
Mid-Cap Value shares 1,180
Mid-Cap Value-Advisor Class shares 2
Mid-Cap Value-R Class shares 1
Prospectus and shareholder reports
Mid-Cap Value shares 85
Mid-Cap Value-Advisor Class shares 8
Custody and accounting 87
Registration 72
Legal and audit 12
Distribution
Mid-Cap Value-Advisor Class shares 5
Mid-Cap Value-R Class shares 1
Directors 5
Reimbursed by manager to Mid-Cap Value-Advisor
Class shares (7)
Total expenses 4,904
Expenses paid indirectly (84)
Net expenses 4,820
Net investment income (loss) 5,504
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited)
Statement of Operations
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In thousands
6 Months
Ended
6/30/03
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (4,796)
Foreign currency transactions (49)
Net realized gain (loss) (4,845)
Change in net unrealized gain (loss)
Securities 134,390
Other assets and liabilities
denominated in foreign currencies (14)
Change in net unrealized gain (loss) 134,376
Net realized and unrealized gain (loss) 129,531
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 135,035
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The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited)
Statement of Changes in Net Assets
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In thousands
6 Months Year
Ended Ended
6/30/03 12/31/02
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 5,504 $ 8,525
Net realized gain (loss) (4,845) 413
Change in net unrealized gain (loss) 134,376 (124,567)
Increase (decrease) in net assets
from operations 135,035 (115,629)
Distributions to shareholders
Net investment income
Mid-Cap Value shares -- (7,850)
Mid-Cap Value-Advisor Class shares -- (10)
Mid-Cap Value-R Class shares -- (1)
Net realized gain
Mid-Cap Value shares -- (4,569)
Mid-Cap Value-Advisor Class shares -- (6)
Mid-Cap Value-R Class shares -- (1)
Decrease in net assets from distributions -- (12,437)
Capital share transactions *
Shares sold
Mid-Cap Value shares 219,036 943,789
Mid-Cap Value-Advisor Class shares 6,398 1,518
Mid-Cap Value-R Class shares 886 100
Distributions reinvested
Mid-Cap Value shares -- 11,503
Mid-Cap Value-Advisor Class shares -- 17
Mid-Cap Value-R Class shares -- 1
Shares redeemed
Mid-Cap Value shares (155,046) (338,595)
Mid-Cap Value-Advisor Class shares (325) (9)
Mid-Cap Value-R Class shares (78) --
Increase (decrease) in net assets from
capital share transactions 70,871 618,324
Net Assets
Increase (decrease) during period 205,906 490,258
Beginning of period 992,800 502,542
End of period $ 1,198,706 $ 992,800
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T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited)
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/03 12/31/02
*Share information
Shares sold
Mid-Cap Value shares 14,417 56,581
Mid-Cap Value-Advisor Class shares 418 102
Mid-Cap Value-R Class shares 57 7
Distributions reinvested
Mid-Cap Value shares -- 768
Mid-Cap Value-Advisor Class shares -- --
Mid-Cap Value-R Class shares -- --
Shares redeemed
Mid-Cap Value shares (10,396) (21,922)
Mid-Cap Value-Advisor Class shares (22) (1)
Mid-Cap Value-R Class shares (5) --
Increase (decrease) in shares outstanding 4,469 35,535
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Value Fund
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Certified Financials (Unaudited) June 30, 2003
Notes to Financial Statements
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Note 1 - Significant Accounting Policies
T. Rowe Price Mid-Cap Value Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 (the 1940 Act) as a diversified, open-end
management investment company. The fund seeks to provide long-term capital
appreciation by investing primarily in mid-size companies that appear to be
undervalued. The fund has three classes of shares: Mid-Cap Value Fund (Mid-Cap
Value Class), offered since June 28, 1996, Mid-Cap Value Fund-Advisor Class
(Advisor Class), offered since September 30, 2002, and Mid-Cap Value Fund-R
Class (R Class), offered since September 30, 2002. Advisor Class shares are
offered only through brokers and other financial intermediaries, and R Class
shares are only available to small retirement plans serviced by intermediaries.
The Advisor Class and R Class each operate under separate Board-approved Rule
12b-1 plans, pursuant to which each class compensates financial intermediaries
for distribution and certain administrative services. Each class has exclusive
voting rights on matters related solely to that class, separate voting rights on
matters that relate to all classes, and, in all other respects, the same rights
and obligations as the other classes.
The accompanying financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America, which
require the use of estimates made by fund management.
Valuation
Investments are valued at the close of the New York Stock Exchange (NYSE),
normally 4 p.m. ET, each day that the NYSE is open for business. Equity
securities listed or regularly traded on a securities exchange or in the
over-the-counter market are valued at the last quoted sale price, or official
closing price for certain markets, at the time the valuations are made. A
security that is listed or traded on more than one exchange is valued at the
quotation on the exchange determined to be the primary market for such security.
Listed securities not traded on a particular day are valued at the mean of the
latest bid and ask prices for domestic securities and the last quoted sale price
for international securities.
Debt securities are generally traded in the over-the-counter market. Securities
with original maturities of one year or more are valued at prices furnished by
dealers who make markets in such securities or by an independent pricing
service, which considers yield or price of bonds of comparable quality, coupon,
maturity, and type, as well as prices quoted by dealers who make markets in such
securities. Securities with original maturities less than one year are valued at
amortized cost in local currency, which approximates fair value when combined
with accrued interest.
Investments in mutual funds are valued at the closing net asset value per share
of the mutual fund on the day of valuation.
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.
Class Accounting
The Advisor Class and R Class each pay distribution and administrative expenses
in the form of Rule 12b-1 fees, in an amount not exceeding 0.25% and 0.50%,
respectively, of the class's average net assets. Shareholder servicing,
prospectus, and shareholder report expenses incurred by each class are charged
directly to the class to which they relate. Expenses common to all classes,
investment income, and realized and unrealized gains and losses are allocated to
the classes based upon the relative daily net assets of each class. Income
distributions are declared and paid by each class on an annual basis. Capital
gain distributions, if any, are declared and paid by the fund, typically on an
annual basis.
Expenses Paid Indirectly
Certain security trades are directed to brokers who have agreed to rebate a
portion of the related commission to the fund to pay fund expenses.
Additionally, credits earned on temporarily uninvested cash balances at the
custodian are used to reduce the fund's custody charges. Total expenses in the
accompanying statement of operations are presented before reduction for rebates
and credits, which totaled $82,000 and $2,000, respectively, for the six months
ended June 30, 2003.
Other
Income and expenses are recorded on the accrual basis. Investment transactions
are accounted for on the trade date. Realized gains and losses are reported on
the identified cost basis. Dividend income and distributions to shareholders are
recorded by the fund on the ex-dividend date.
Note 2 - Investment Transactions
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $307,524,000 and $231,993,000, respectively, for the six months ended
June 30, 2003.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute to
shareholders all of its taxable income and gains. Federal income tax regulations
differ from generally accepted accounting principles; therefore, distributions
determined in accordance with tax regulations may differ in amount or character
from net investment income and realized gains for financial reporting purposes.
Financial reporting records are adjusted for permanent book/tax differences to
reflect tax character. Temporary differences are not adjusted. The amount and
character of tax-basis distributions and composition of net assets are finalized
at fiscal year-end; accordingly, tax-basis balances have not been determined as
of June 30, 2003.
For tax purposes, the fund has elected to treat net capital losses realized
between November 1 and December 31 of each year as occurring on the first day of
the following tax year; consequently, $1,905,000 of realized losses recognized
for financial reporting purposes in the year ended December 31, 2002 were
recognized for tax purposes on January 1, 2003.
At June 30, 2003, the cost of investments for federal income tax purposes was
$1,139,744,000. Net unrealized gain aggregated $59,720,000 at period-end, of
which $128,438,000 related to appreciated investments and $68,718,000 related to
depreciated investments.
Note 4 - Related Party Transactions
The fund is managed by T. Rowe Price Associates, Inc. (the manager or Price
Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. The
investment management agreement between the fund and the manager provides for an
annual investment management fee, which is computed daily and paid monthly. The
fee consists of an individual fund fee, equal to 0.35 % of the fund's average
daily net assets, and the fund's pro-rata share of a group fee. The group fee is
calculated based on the combined net assets of certain mutual funds sponsored by
Price Associates (the group) applied to a graduated fee schedule, with rates
ranging from 0.48% for the first $1 billion of assets to 0.295% for assets in
excess of $120 billion. The fund's portion of the group fee is determined by the
ratio of its net assets to those of the group. At June 30, 2003, the effective
annual group fee rate was 0.32%, and investment management fee payable totaled
$658,000.
Through April 30, 2004, the manager is required to bear any expenses, excluding
interest, taxes, brokerage commissions, and extraordinary expenses, for the
Advisor Class and R Class that would cause the class's ratio of total expenses
to average net assets (expense ratio) to exceed 1.10% and 1.40%, respectively.
Thereafter, through April 30, 2006, each class is required to reimburse the
manager for these expenses, provided that its average net assets have grown or
expenses have declined sufficiently to allow reimbursement without causing its
expense ratio to exceed 1.10% for the Advisor Class and 1.40% for the R Class.
Pursuant to this agreement, $6,000 of Advisor Class expenses and $1,000 of R
Class expenses were borne by the manager during the six months ended June 30,
2003. At June 30, 2003, Advisor Class expenses in the amount of $6,000 and R
Class expenses in the amount of $1,000 remain subject to reimbursement through
April 30, 2006.
In addition, the fund has entered into service agreements with Price Associates
and two wholly owned subsidiaries of Price Associates (collectively, Price).
Price Associates computes the daily share prices and maintains the financial
records of the fund. T. Rowe Price Services, Inc. provides shareholder and
administrative services in its capacity as the fund's transfer and dividend
disbursing agent. T. Rowe Price Retirement Plan Services, Inc. provides
subaccounting and recordkeeping services for certain retirement accounts
invested in the Mid-Cap Value Fund class and R Class. Expenses incurred pursuant
to these service agreements totaled $682,000 for the six months ended June 30,
2003, of which $142,000 was payable at period-end.
Additionally, the fund is one of several mutual funds in which certain college
savings plans managed by Price Associates may invest. As approved by the fund's
Board of Directors, shareholder servicing costs associated with each college
savings plan are borne by the fund in proportion to the average daily value of
its shares owned by the college savings plan. For the six months ended June 30,
2003, the Mid-Cap Value class was charged $59,000 for shareholder servicing
costs related to the college savings plans, of which $47,000 was for services
provided by Price and $15,000 was payable at period-end. At June 30, 2003,
approximately 2.7% of the outstanding shares of the Mid-Cap Value class were
held by college savings plans.
The fund is also one of several mutual funds sponsored by Price Associates
(underlying Price funds) in which the T. Rowe Price Spectrum Funds (Spectrum
Funds) may invest. The Spectrum Funds do not invest in the underlying Price
funds for the purpose of exercising management or control. Pursuant to special
servicing agreements, expenses associated with the operation of the Spectrum
Funds are borne by each underlying Price fund to the extent of estimated savings
to it and in proportion to the average daily value of its shares owned by the
Spectrum Funds. Expenses allocated under these agreements are reflected as
shareholder servicing expense in the accompanying financial statements. For the
six months ended June 30, 2003, the Mid-Cap Value class was allocated $185,000
of Spectrum Funds' expenses, of which $134,000 related to services provided by
Price and $70,000 was payable at period-end. At June 30, 2003, approximately
13.1% of the outstanding shares of the Mid-Cap Value class were held by the
Spectrum Funds.
The fund may invest in the T. Rowe Price Reserve Investment Fund and T. Rowe
Price Government Reserve Investment Fund (collectively, the Reserve Funds),
open-end management investment companies managed by Price Associates. The
Reserve Funds are offered as cash management options only to mutual funds,
trusts, and other accounts managed by Price Associates and/or its affiliates,
and are not available to the public. The Reserve Funds pay no investment
management fees. Distributions from the Reserve Funds to the fund for the six
months ended June 30, 2003, totaled $325,000.
Item 2. Code of Ethics.
Not required at this time.
Item 3. Audit Committee Financial Expert.
Not required at this time.
Item 4. Principal Accountant Fees and Services.
Not required at this time.
Item 5. Audit Committee of Listed Registrants.
Not required at this time.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved]
Item 9. Controls and Procedures
(a) The registrant's principal executive officer and principal financial officer
have evaluated the registrant's disclosure controls and procedures within 90
days of this filing and have concluded that the registrant's disclosure controls
and procedures were effective, as of that date, in ensuring that information
required to be disclosed by the registrant in this Form N-CSR was recorded,
processed, summarized, and reported timely.
(b) The registrant's principal executive officer and principal financial officer
are aware of no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) Not required at this time.
(a)(2) Separate certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(b) A certification by the registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940,
is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
T. Rowe Price Mid-Cap Value Fund, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date August 22, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date August 22, 2003
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date August 22, 2003