Item 1. Report to Shareholders
T. Rowe Price Global Technology Fund
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June 30, 2004
Certified Semiannual Report
This report is certified under the Sarbanes-Oxley Act of 2002, which requires
that public companies, including mutual funds, affirm that the information
provided in their annual and semiannual shareholder reports fully and fairly
represents their financial position.
T. Rowe Price Global Technology Fund
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Certified Semiannual Report (Unaudited)
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
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6 Months Year 9/29/00
Ended Ended Through
6/30/04 12/31/03 12/31/02 12/31/01 12/31/00
NET ASSET VALUE
Beginning of
period $ 4.99 $ 3.33 $ 4.75 $ 7.43 $ 10.00
Investment activities
Net investment
income (loss) (0.03)* (0.05)* (0.05)* (0.06)* (0.01)
Net realized
and unrealized
gain (loss) 0.39 1.71 (1.37) (2.62) (2.56)
Total from
investment
activities 0.36 1.66 (1.42) (2.68) (2.57)
NET ASSET VALUE
End of period $ 5.35 $ 4.99 $ 3.33 $ 4.75 $ 7.43
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Ratios/
Supplemental Data
Total return^ 7.21%* 49.85%* (29.89)%* (36.07)%* (25.70)%
Ratio of total
expenses to
average net
assets 1.50%!* 1.50%* 1.50%* 1.50%* 1.37%!
Ratio of net
investment
income (loss)
to average
net assets (1.13)%!* (1.17)%* (1.15)%* (1.08)%* (0.25)%!
Portfolio turnover
rate 124.6%! 151.4% 211.4% 189.2% 123.6%!
Net assets,
end of period
(in thousands) $ 89,541 $ 84,764 $ 55,145 $ 84,120 $ 131,168
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 1.50% contractual expense limitation in
effect through April 30, 2005.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Technology Fund
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Certified Semiannual Report (Unaudited) June 30, 2004
PORTFOLIO OF INVESTMENTS (1) Shares Value
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(Cost and value in $ 000s)
COMMON STOCKS 95.7%
HARDWARE 10.2%
Enterprise Hardware 10.2%
Dell * 216,000 7,737
Lexmark International, Class A * 15,000 1,448
Total Hardware 9,185
IT SERVICES 8.5%
IT Services 2.2%
Infosys Technologies (INR) 16,000 1,921
1,921
Processors 6.3%
Certegy 45,000 1,746
ChoicePoint * 39,000 1,781
Digital Insight * 60,000 1,244
Jack Henry & Associates 45,000 904
5,675
Total IT Services 7,596
MEDIA 15.8%
Gaming 7.9%
International Game Technology 103,000 3,976
Multimedia Games * 108,000 2,897
WMS Industries * 8,000 238
7,111
Internet 7.9%
eBay * 25,000 2,299
InterActiveCorp * 55,000 1,658
Monster Worldwide * 24,000 617
The Knot * 24,000 97
Yahoo! * 65,000 2,361
7,032
Total Media 14,143
SEMICONDUCTORS 13.2%
Analog Semiconductors 4.4%
AMIS Holdings ADS * 90,000 1,523
Intersil Holding, Class A 75,000 1,625
STMicroelectronics (EUR) 17,000 373
STMicroelectronics ADS 17,000 374
3,895
Digital Semiconductors 7.7%
Integrated Circuit Systems * 50,000 1,358
Intel 130,000 3,588
Powerdsine * 3,000 37
Semiconductor Manufacturing (HKD) * 4,000,000 872
Sirf Technology Holdings * 30,000 392
Xilinx 20,000 666
6,913
Semiconductor Capital Equipment 1.1%
ASML Holding ADS * 23,000 393
Novellus Systems * 20,000 629
1,022
Total Semiconductors 11,830
SOFTWARE 30.7%
Applications Software 5.0%
Adobe Systems 40,000 1,860
Cognos * 40,000 1,446
I-Flex Solutions (INR) 80,600 1,026
Salesforce.com * 9,000 145
4,477
Consumer Software 1.6%
Electronic Arts * 17,000 928
Intuit * 12,000 464
1,392
Infrastructure Software 17.6%
Citrix Systems * 45,000 916
Microsoft 275,000 7,854
Oracle * 125,000 1,491
Red Hat * 240,000 5,513
15,774
Systems Software 5.4%
Mercury Interactive * 38,000 1,893
Motive * 17,800 184
Network Associates * 20,000 363
VERITAS Software * 85,000 2,354
4,794
Technical Software 1.1%
Cadence Design Systems * 70,000 1,024
1,024
Total Software 27,461
TELECOM EQUIPMENT 14.1%
Wireless Equipment 6.1%
LM Ericsson, Series B (SEK) * 900,000 2,655
QUALCOMM 38,000 2,773
5,428
Wireline Equipment 8.0%
Cisco Systems * 170,000 4,029
Corning * 75,000 979
Juniper Networks * 45,000 1,106
Tekelec * 60,000 1,090
7,204
Total Telecom Equipment 12,632
TELECOM SERVICES 3.2%
Wireless-International 3.2%
Vodafone ADR 100,000 2,210
Vodafone Group (GBP) 300,000 657
Total Telecom Services 2,867
Total Common Stocks (Cost $73,815) 85,714
PREFERRED STOCKS 3.8%
Samsung Electronics (KRW) 13,000 3,409
Total Preferred Stocks (Cost $3,114) 3,409
SHORT-TERM INVESTMENTS 0.2%
Money Market Fund 0.2%
T. Rowe Price Government Reserve Investment
Fund, 1.04% # 157,686 158
Total Short-Term Investments (Cost $158) 158
Total Investments in Securities
99.7% of Net Assets (Cost $77,087) $89,281
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(1) Denominated in U.S. dollars unless otherwise noted
# Seven-day yield
* Non-income producing
ADR American Depository Receipts
ADS American Depository Shares
EUR Euro
GBP British pound
HKD Hong Kong dollar
INR Indian rupee
KRW South Korean won
SEK Swedish krona
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Technology Fund
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Certified Semiannual Report (Unaudited) June 30, 2004
STATEMENT OF ASSETS AND LIABILITIES
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(In thousands except shares and per share amounts)
Assets
Investments in securities, at value (cost $77,087) $89,281
Other assets 1,723
Total assets 91,004
Liabilities
Total liabilities 1,463
NET ASSETS $ 89,541
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Net Assets Consist of:
Undistributed net investment income (loss) $ (488)
Undistributed net realized gain (loss) (92,545)
Net unrealized gain (loss) 12,194
Paid-in-capital applicable to 16,726,673 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares authorized 170,380
NET ASSETS $ 89,541
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NET ASSET VALUE PER SHARE $ 5.35
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The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Technology Fund
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Certified Semiannual Report (Unaudited)
STATEMENT OF OPERATIONS
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($ 000s)
6 Months
Ended
6/30/04
Investment Income (Loss)
Dividend income (net of foreign taxes of $13) $162
Expenses
Investment management 332
Shareholder servicing 210
Custody and accounting 59
Prospectus and shareholder reports 19
Registration 18
Legal and audit 7
Directors 2
Miscellaneous 4
Reductions/repayments pursuant to expense limitations
Investment management fees (waived) repaid (1)
Total expenses 650
Net investment income (loss) (488)
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 7,230
Foreign currency transactions (13)
Net realized gain (loss) 7,217
Change in net unrealized gain (loss) on securities (705)
Net realized and unrealized gain (loss) 6,512
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 6,024
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The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Technology Fund
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Certified Semiannual Report (Unaudited)
STATEMENT OF CHANGES IN NET ASSETS
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($ 000s)
6 Months Year
Ended Ended
6/30/04 12/31/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ (488) $ (780)
Net realized gain (loss) 7,217 10,133
Change in net unrealized gain (loss) (705) 18,203
Increase (decrease) in net assets
from operations 6,024 27,556
Capital share transactions *
Shares sold 10,059 15,805
Shares redeemed (11,306) (13,742)
Increase (decrease) in net assets from
capital share transactions (1,247) 2,063
Net Assets
Increase (decrease) during period 4,777 29,619
Beginning of period 84,764 55,145
End of period $ 89,541 $ 84,764
--------------- ---------------
Including undistributed net
investment income (loss)
of $(488) at 6/30/04 and $0
at 12/31/03)
*Share information
Shares sold 1,937 3,786
Shares redeemed (2,200) (3,375)
Increase (decrease) in shares outstanding (263) 411
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Technology Fund
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Certified Semiannual Report (Unaudited) June 30, 2004
NOTES TO FINANCIAL STATEMENTS
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NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Global Technology 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 September 29, 2000.
The fund seeks to provide long-term 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. 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.
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.
Rebates and Credits
Subject to best execution, the fund may direct certain security trades to
brokers who have agreed to rebate a portion of the related brokerage commission
to the fund in cash. Commission rebates are included in realized gain on
securities in the accompanying financial statements and totaled $12,000 for the
six months ended June 30, 2004. Additionally, 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. Dividends received from
mutual fund investments are reflected as dividend income; capital gain
distributions are reflected as realized gain/loss. Dividend income and capital
gain distributions are recorded on the ex-dividend date. Investment transactions
are accounted for on the trade date. Realized gains and losses are reported on
the identified cost basis. Distributions to shareholders are recorded on the
ex-dividend date. Income distributions are declared and paid on an annual basis.
Capital gain distributions, if any, are declared and paid by the fund, typically
on an annual basis.
Other
In the normal course of business, the fund enters into contracts that provide
general indemnifications. The fund's maximum exposure under these arrangements
is dependent on claims that may be made against the fund in the future and,
therefore, cannot be estimated; however, based on experience, the risk of
material loss from such claims is considered remote.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $53,776,000 and $55,959,000, respectively, for the six months ended
June 30, 2004.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and distribute to shareholders all of its taxable income
and gains. Federal income tax regulations differ from generally accepted
accounting principles; therefore, distributions determined in accordance with
tax regulations may differ in amount or character from net investment income and
realized gains for financial reporting purposes. Financial reporting records are
adjusted for permanent book/tax differences to reflect tax character. Financial
records are not adjusted for temporary differences. The amount and character of
tax-basis distributions and composition of net assets are finalized at fiscal
year-end; accordingly, tax-basis balances have not been determined as of June
30, 2004.
The fund intends to retain realized gains to the extent of available capital
loss carryforwards. As of December 31, 2003, the fund had $99,760,000 of unused
capital loss carryforwards, of which $66,178,000 expire in 2009 and $33,582,000
expire in 2010.
At June 30, 2004, the cost of investments for federal income tax purposes was
$77,087,000. Net unrealized gain aggregated $12,194,000 at period-end, of which
$13,866,000 related to appreciated investments and $1,672,000 related to
depreciated investments.
NOTE 4 - FOREIGN TAXES
The fund is subject to foreign income taxes imposed by certain countries in
which it invests. Foreign income taxes are accrued by the fund as a reduction of
income.
NOTE 5 - 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 0.45% 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 June 30, 2004,
the effective annual group fee rate was 0.31%, and investment management fee
payable totaled $56,000.
The fund is also subject to a contractual expense limitation through April 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 1.50%. Through April 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 June 30, 2004,
management fees waived remain subject to repayment by the fund in the following
amounts: $370,000 through December 31, 2004, and $131,000 through April 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 $197,000 for
the six months ended June 30, 2004, of which $38,000 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 six months ended June 30, 2004,
dividend income from the Reserve Funds totaled $1,000.
T. Rowe Price Global Technology Fund
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Certified Semiannual Report
INFORMATION ON PROXY VOTING
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A description of the policies and procedures that the T. Rowe Price Global
Technology 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.
Item 2. Code of Ethics.
A code of ethics, as defined in Item 2 of Form N-CSR, applicable to its
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions is filed as an
exhibit to the registrant's annual Form N-CSR. No substantive amendments were
approved or waivers were granted to this code of ethics during the registrant's
most recent fiscal half-year.
Item 3. Audit Committee Financial Expert.
Disclosure required in registrant's annual Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Disclosure required in registrant's annual Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable. The complete schedule of investments is included in Item 1 of
this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 10. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial officer
have evaluated the registrant's disclosure controls and procedures within 90
days of this filing and have concluded that the registrant's disclosure controls
and procedures were effective, as of that date, in ensuring that information
required to be disclosed by the registrant in this Form N-CSR was recorded,
processed, summarized, and reported timely.
(b) The registrant's principal executive officer and principal financial officer
are aware of no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 11. Exhibits.
(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is filed
with the registrant's annual Form N-CSR.
(2) Separate certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(3) Written solicitation to repurchase securities issued by closed-end
companies: not applicable.
(b) A certification by the registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940,
is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
T. Rowe Price Global Technology Fund, Inc.
By: /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date: August 16, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date: August 16, 2004
By: /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date: August 16, 2004