N-CSR 1 exf.txt T. ROWE PRICE EQUITY INDEX 500 FUND Item 1. Report to Shareholders T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- December 31, 2003 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 Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report Performance Comparison -------------------------------------------------------------------------------- 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. EQUITY INDEX 500 FUND -------------------------------------------------------------------------------- As of 12/31/03 Equity Index 500 Fund $27,789 S&P 500 Stock Index $28,563 S&P 500 Equity Index Stock Index 500 Fund -------------------------------------------------------------------------------- 12/93 $ 10,000 $ 10,000 12/94 10,132 10,101 12/95 13,940 13,855 12/96 17,140 16,994 12/97 22,859 22,580 12/98 29,392 28,973 12/99 35,576 34,952 12/00 32,337 31,701 12/01 28,493 27,843 12/02 22,196 21,658 12/03 28,563 27,789 Average Annual Compound Total Return -------------------------------------------------------------------------------- Periods Ended 12/31/03 1 Year 5 Years 10 Years -------------------------------------------------------------------------------- Equity Index 500 Fund 28.31% -0.83% 10.76% S&P 500 Stock Index 28.68 -0.57 11.07 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 Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report We are pleased to report that your fund returned 28.31% in 2003. The fund closely tracked but slightly lagged its benchmark, the S&P 500 Stock Index, as shown in the Performance Comparison table on the preceding page. The shortfall was due to expenses. As you know, the fund seeks to match the performance of the Standard & Poor's 500 Stock Index by investing substantially all of its assets in all of the stocks in the index. We attempt to maintain holdings of each stock in proportion to its weight in the index. This is known as a full replication strategy. Standard & Poor's constructs the index by first identifying major industry categories and then allocating a representative sample of the larger and more liquid stocks in those industries to the index. S&P weights each stock according to its total market value. The Major Index Returns chart shows how various domestic market indexes performed over the fund's fiscal year. As you can see, the Russell 2000 Index and the Nasdaq Composite Index, which is heavily weighted with technology stocks, produced very strong returns in 2003. Large-cap stocks, as measured by the S&P 500 Index, were less robust. Major Index Returns -------------------------------------------------------------------------------- S&P 500 Stock Index 29% S&P MidCap 400 Index 36% Russell 2000 Index 47% Nasdaq Composite Index 50% The Top 5 Sectors table shows how the fund's largest sector allocations changed in 2003. As you can see, exposure to financial, information technology, and consumer discretionary companies increased over the last year, while allocations to health care and consumer staples stocks decreased. Top 5 Sectors -------------------------------------------------------------------------------- Percent of Equities 12/31/02 12/31/03 -------------------------------------------------------------------------------- Financials 20.5% 20.6% Information Technology 15.3 17.7 Health Care 15.0 13.4 Consumer Discretionary 10.5 11.3 Consumer Staples 12.4 11.0 For comparison purposes, we have restated the historical weightings to incorporate changes to the sector and industry classification system. Finally, I'm sure you are aware that mutual fund companies have recently come under scrutiny for their trading policies. The investigations have led to allegations that executives of several mutual fund companies permitted or engaged in improper mutual fund trading. In addition, certain intermediaries that process fund transactions are alleged to have assisted some investors in executing improper mutual fund trades. I want T. Rowe Price shareholders to know that we emphatically condemn the abuses that have been revealed or alleged against other firms in our industry. Our firm has not entered and will not enter into any agreements with any investors or intermediaries that authorize after-hours trading or excessive short-term trading in any of our funds. T. Rowe Price investors can be assured that our firm unequivocally opposes illegal or inappropriate trading of any nature and has policies and procedures in place designed to protect the best interests of our long-term shareholders. No T. Rowe Price executives or portfolio managers or investment personnel of the T. Rowe Price mutual funds have engaged in any inappropriate trading of T. Rowe Price mutual funds. You may find out more about our trading policies and the steps we take to protect your interests by visiting our Web site (troweprice.com). These policies are also spelled out in your fund's prospectus. Thank you for your continued support. Respectfully submitted, James S. Riepe Chairman January 20, 2004 T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report Financial Highlights For a share outstanding throughout each period -------------------------------------------------------------------------------- Year Ended 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 -------------------------------------------------------------------------------- NET ASSET VALUE Beginning of period $ 23.67 $ 30.84 $ 35.50 $ 39.56 $ 33.38 Investment activities Net investment income (loss) 0.37* 0.34* 0.32* 0.33* 0.34* Net realized and unrealized gain (loss) 6.28 (7.17) (4.65) (3.98) 6.49 Total from investment activities 6.65 (6.83) (4.33) (3.65) 6.83 Distributions Net investment income (0.37) (0.34) (0.33) (0.33) (0.34) Net realized gain -- -- -- (0.08) (0.31) Total distributions (0.37) (0.34) (0.33) (0.41) (0.65) NET ASSET VALUE End of period $ 29.95 $ 23.67 $ 30.84 $ 35.50 $ 39.56 ----------------------------------------------------------- Ratios/Supplemental Data Total return^ 28.31%* (22.21)%* (12.17)%* (9.30)%* 20.64%* Ratio of total expenses to average net assets 0.35%* 0.35%* 0.35%* 0.35%* 0.40%* Ratio of net investment income (loss) to average net assets 1.44%* 1.27%* 1.00%* 0.85%* 0.98%* Portfolio turnover rate 1.2% 6.6% 4.0% 9.1% 5.2% Net assets, end of period (in millions) $ 3,885 $ 2,708 $ 3,473 $ 4,045 $ 5 ,049 ^ 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 and payment of no redemption or account fees. * Excludes expenses in excess of a 0.40% contractual expense limitation in effect through 12/31/99 and a 0.35% contractual expense limitation in effect through 12/31/03. The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report December 31, 2003 Portfolio of Investments ss. Shares/Par Value -------------------------------------------------------------------------------- ($ 000s) COMMON STOCKS 97.5% CONSUMER DISCRETIONARY 11.0% Auto Components 0.2% Johnson Controls 32,897 3,820 Delphi 207,758 2,121 Dana 56,403 1,035 Cooper Tire 26,973 577 Visteon 50,650 527 Goodyear Tire & Rubber * 65,670 516 8,596 Automobiles 0.7% GM 206,185 11,010 Ford Motor 674,167 10,787 Harley-Davidson 111,086 5,280 27,077 Distributors 0.1% Genuine Parts 64,420 2,139 2,139 Hotels, Restaurants & Leisure 1.2% McDonald's 465,879 11,568 Carnival 230,993 9,177 Starbucks * 142,271 4,703 International Game Technology 125,924 4,496 Marriott, Class A 85,972 3,972 Yum! Brands * 109,167 3,755 Starwood Hotels & Resorts Worldwide, REIT 74,007 2,662 Hilton 136,646 2,341 Harrah's Entertainment 40,371 2,009 Wendy's 41,585 1,632 Darden Restaurants 60,797 1,279 47,594 Household Durables 0.5% Fortune Brands 53,244 3,806 Centex 22,518 2,424 Newell Rubbermaid 102,878 2,343 Pulte 22,689 2,124 Whirlpool 24,853 1,806 Leggett & Platt 71,946 1,556 Black & Decker 29,164 1,438 Stanley Works 34,187 1,295 KB Home 17,334 1,257 Maytag 27,779 774 Snap-On 20,550 663 American Greetings. Class A * 27,492 601 Tupperware 21,902 380 Cavco Industries * 1,090 26 20,493 Internet & Catalog Retail 0.4% eBay * 237,452 15,337 15,337 Leisure Equipment & Products 0.2% Mattel 162,359 3,129 Eastman Kodak 106,872 2,743 Hasbro 64,449 1,372 Brunswick 32,217 1,025 8,269 Media 4.0% Time Warner * 1,663,474 29,926 Viacom, Class B 643,431 28,556 Comcast, Class A * 827,782 27,209 Disney 750,463 17,508 Clear Channel Communications 226,202 10,593 Gannett 98,652 8,796 Omnicom 70,537 6,160 Tribune 115,127 5,941 McGraw-Hill 71,200 4,978 Univision Communications, Class A * 118,243 4,693 New York Times, Class A 55,768 2,665 Interpublic Group * 156,355 2,439 Knight-Ridder 29,475 2,281 Dow Jones 29,613 1,476 Meredith 19,714 962 154,183 Multiline Retail 1.0% Target 336,241 12,912 Kohl's * 123,800 5,563 Sears 92,422 4,204 Federated Department Stores 67,473 3,180 May Department Stores 105,631 3,071 J.C. Penney 100,871 2,651 Dollar General 125,233 2,629 Family Dollar Stores 65,857 2,363 Nordstrom 51,614 1,770 Big Lots * 41,720 593 Dillards, Class A 30,467 501 39,437 Specialty Retail 2.4% Home Depot 839,723 29,802 Lowe's 289,701 16,047 GAP 329,719 7,653 Best Buy 117,923 6,160 Staples * 182,162 4,973 Bed Bath & Beyond * 108,257 4,693 TJX 188,589 4,158 The Limited 194,191 3,501 AutoZone * 33,295 2,837 Tiffany 53,709 2,428 Office Depot * 113,407 1,895 Autonation * 102,900 1,890 Sherwin-Williams 53,549 1,860 RadioShack 60,477 1,855 Toys "R" Us * 82,378 1,041 Boise Cascade 31,208 1,026 Circuit City Stores 74,187 752 92,571 Textiles, Apparel, & Luxury Goods 0.3% Nike, Class B 96,735 6,622 V.F. 39,447 1,706 Jones Apparel Group 48,212 1,699 Liz Claiborne 39,227 1,391 Reebok 20,930 823 12,241 Total Consumer Discretionary 427,937 CONSUMER STAPLES 10.7% Beverages 2.6% Coca-Cola 899,391 45,644 PepsiCo 634,377 29,575 Anheuser-Busch 299,375 15,771 Coca-Cola Enterprises 171,065 3,741 Pepsi Bottling Group 99,261 2,400 Brown-Forman, Class B 22,611 2,113 Coors, Class B 13,759 772 100,016 Food & Staples Retailing 3.4% Wal-Mart 1,590,159 84,358 Walgreen 376,669 13,703 Sysco 237,392 8,838 Costco Wholesale * 168,668 6,271 CVS 144,601 5,223 Kroger * 274,887 5,088 Safeway * 160,144 3,509 Albertson's 136,625 3,095 Supervalu 51,973 1,486 Winn-Dixie 55,686 554 132,125 Food Products 1.2% General Mills 138,394 6,269 Sara Lee 285,150 6,191 Kellogg 149,399 5,689 ConAgra 198,734 5,245 Heinz 128,598 4,685 Wrigley 83,204 4,677 Campbell Soup 150,118 4,023 Hershey Foods 48,877 3,763 Archer-Daniels-Midland 235,235 3,580 McCormick 52,900 1,592 45,714 Household Products 1.9% Procter & Gamble 476,170 47,560 Kimberly-Clark 185,500 10,961 Colgate-Palmolive 197,905 9,905 Clorox 81,023 3,934 72,360 Personal Products 0.5% Gillette 373,404 13,715 Avon Products 85,703 5,784 Alberto Culver 21,694 1,369 20,868 Tobacco 1.1% Altria Group 746,471 40,623 UST 62,643 2,236 R.J. Reynolds Tobacco 31,700 1,843 44,702 Total Consumer Staples 415,785 ENERGY 5.6% Energy Equipment & Services 0.7% Schlumberger 214,056 11,713 Halliburton 159,644 4,151 Baker Hughes 124,498 4,004 Transocean * 119,943 2,880 Nabors Industries * 53,076 2,203 BJ Services * 59,567 2,138 Noble Drilling * 48,700 1,742 Rowan * 36,460 845 29,676 Oil & Gas 4.9% Exxon Mobil 2,428,607 99,573 ChevronTexaco 393,268 33,975 ConocoPhillips 250,502 16,425 Occidental Petroleum 139,972 5,912 Devon Energy 85,951 4,922 Apache 59,288 4,808 Anadarko Petroleum 93,044 4,746 Burlington Resources 75,041 4,156 Marathon Oil 114,098 3,776 Unocal 93,836 3,456 EOG Resources 43,626 2,014 Kerr-McGee 37,543 1,745 Amerada Hess 32,405 1,723 Sunoco 29,018 1,484 Ashland 24,786 1,092 189,807 Total Energy 219,483 FINANCIALS 20.1% Capital Markets 3.6% J.P. Morgan Chase 747,169 27,444 Morgan Stanley 399,991 23,147 Merrill Lynch 348,265 20,426 Goldman Sachs Group 174,225 17,201 Bank of New York 284,698 9,429 Lehman Brothers 101,261 7,819 State Street 121,386 6,322 Charles Schwab 497,346 5,889 Mellon Financial 157,537 5,059 Franklin Resources 91,632 4,770 Northern Trust 82,183 3,815 Bear Stearns 37,552 3,002 T. Rowe Price Group 46,713 2,215 Janus Capital Group 93,297 1,531 Federated Investors, Class B 39,200 1,151 139,220 Commercial Banks 6.2% Bank of America 547,098 44,003 Wells Fargo 621,657 36,609 Wachovia 489,366 22,800 U.S. Bancorp 709,922 21,141 Bank One 412,193 18,792 FleetBoston Financial 385,969 16,848 Fifth Third Bancorp 207,746 12,278 National City 227,968 7,737 BB&T 196,736 7,602 SunTrust 103,686 7,414 PNC Financial Services Group 102,719 5,622 KeyCorp 154,755 4,537 SouthTrust 123,909 4,056 Comerica 63,956 3,585 Synovus Financial 112,845 3,263 Marshall & Ilsley 84,702 3,240 AmSouth Bancorporation 129,117 3,163 Regions Financial 82,750 3,078 Charter One Financial 84,606 2,923 North Fork Bancorporation 58,130 2,353 Union Planters 72,728 2,290 First Tennessee National 48,011 2,117 Zions Bancorp 32,965 2,022 Huntington Bancshares 86,608 1,949 239,422 Consumer Finance 1.2% American Express 471,437 22,738 MBNA 467,922 11,628 SLM Corporation 166,065 6,257 Capital One Financial 83,209 5,100 Providian Financial * 106,381 1,238 46,961 Diversified Financial Services 2.5% Citigroup 1,893,863 91,928 Principal Financial Group 118,071 3,905 Moody's 54,406 3,294 99,127 Insurance 4.4% American International Group 960,771 63,680 Allstate 257,312 11,070 MetLife 278,444 9,375 Marsh & McLennan 195,009 9,339 Prudential 199,830 8,347 AFLAC 190,473 6,891 Progressive Corporation 79,243 6,624 Travelers Property Casualty, Class B 366,978 6,228 Hartford Financial Services 103,464 6,107 Chubb 68,080 4,636 ACE Limited 101,109 4,188 John Hancock Financial Services 105,411 3,953 XL Capital, Class A 49,590 3,846 Loews 68,227 3,374 St. Paul Companies 82,652 3,277 MBIA 54,464 3,226 Ambac 39,904 2,769 Aon 114,178 2,733 Lincoln National 66,659 2,691 Jefferson Pilot 52,377 2,653 Cincinnati Financial 60,684 2,541 SAFECO 50,879 1,981 Torchmark 41,241 1,878 UnumProvident 109,714 1,730 173,137 Real Estate 0.4% Equity Office Properties, REIT 145,433 4,167 Simon Property Group, REIT 70,137 3,250 Equity Residential, REIT 99,485 2,936 ProLogis Trust, REIT 66,700 2,140 Plum Creek Timber 66,704 2,031 Apartment Investment & Management, REIT 34,400 1,187 15,711 Thrifts & Mortgage Finance 1.8% Fannie Mae 356,947 26,792 Freddie Mac 256,393 14,953 Washington Mutual 334,405 13,416 Golden West Financial 57,055 5,888 Countrywide Financial 68,578 5,202 MGIC Investment 35,694 2,032 68,283 Total Financials 781,861 HEALTH CARE 13.0% Biotechnology 1.1% Amgen * 475,356 29,377 Biogen Idec * 120,227 4,422 Genzyme * 81,695 4,031 Chiron * 69,358 3,953 MedImmune * 92,647 2,353 44,136 Health Care Equipment & Supplies 2.0% Medtronic 446,348 21,697 Boston Scientific * 300,930 11,062 Guidant 114,524 6,894 Baxter International 223,499 6,821 Zimmer Holdings * 88,834 6,254 Stryker 73,137 6,217 St. Jude Medical * 64,696 3,969 Becton, Dickinson 92,701 3,814 Biomet 94,137 3,428 Applied Biosystems Group - Applera 78,965 1,635 C. R. Bard 18,938 1,539 Waters Corporation * 46,199 1,532 Bausch & Lomb 19,048 989 Millipore * 18,623 802 76,653 Health Care Providers & Services 1.8% UnitedHealth Group 217,794 12,671 Cardinal Health 161,337 9,867 HCA 181,589 7,801 WellPoint Health Networks * 54,107 5,248 Anthem * 50,700 3,803 Aetna 55,960 3,782 McKesson HBOC 108,514 3,490 Medco * 99,325 3,376 CIGNA 51,100 2,938 Quest Diagnostics * 39,600 2,895 Tenet Healthcare * 169,628 2,723 AmerisourceBergen 40,785 2,290 IMS Health 86,665 2,154 Health Management 88,793 2,131 Express Scripts * 29,900 1,986 Humana * 63,488 1,451 Manor Care 33,671 1,164 HealthSouth * 136,887 628 70,398 Pharmaceuticals 8.1% Pfizer 2,804,275 99,075 Johnson & Johnson 1,091,864 56,406 Merck 819,740 37,872 Eli Lilly 412,102 28,983 Abbott Laboratories 575,547 26,820 Wyeth 489,869 20,795 Bristol-Myers Squibb 714,370 20,431 Schering-Plough 541,904 9,424 Forest Laboratories * 134,836 8,333 Allergan 48,788 3,747 Watson Pharmaceuticals * 39,930 1,837 King Pharmaceuticals * 90,074 1,374 315,097 Total Health Care 506,284 INDUSTRIALS & BUSINESS SERVICES 10.6% Aerospace & Defense 1.8% United Technologies 173,124 16,407 Boeing 307,782 12,970 Honeywell International 315,457 10,546 Lockheed Martin 165,696 8,517 General Dynamics 73,757 6,667 Northrop Grumman 67,447 6,448 Raytheon 152,999 4,596 Rockwell Collins 68,051 2,043 Goodrich 42,239 1,254 69,448 Air Freight & Logistics 1.0% UPS, Class B 413,779 30,847 Fedex 109,512 7,392 Ryder System 22,318 762 39,001 Airlines 0.1% Southwest Airlines 291,634 4,707 Delta 48,923 578 5,285 Building Products 0.2% Masco 171,955 4,713 American Standard * 26,220 2,640 7,353 Commercial Services & Supplies 1.0% Cendant * 374,634 8,343 Waste Management 218,700 6,474 Apollo Group, Class A * 65,944 4,484 H&R Block 65,888 3,648 Pitney Bowes 85,003 3,453 Cintas 61,902 3,103 Avery Dennison 40,370 2,262 Allied Waste Industries * 117,671 1,633 Robert Half International * 64,961 1,516 Equifax 51,195 1,254 R.R. Donnelley 41,071 1,238 Deluxe Corporation 21,793 901 Hudson Highland Group * 2,925 70 38,379 Construction & Engineering 0.0% Fluor 30,610 1,213 McDermott International * 10,411 125 1,338 Electrical Equipment 0.5% Emerson Electric 155,444 10,065 Rockwell Automation 69,587 2,477 Cooper Industries 36,353 2,106 American Power Conversion 72,766 1,779 Thomas & Betts 22,490 515 Power-One * 30,900 335 17,277 Industrial Conglomerates 4.2% GE 3,692,299 114,387 3M 288,390 24,522 Tyco International 735,173 19,482 Textron 50,002 2,853 161,244 Machinery 1.4% Caterpillar 127,886 10,617 Illinois Tool Works 112,788 9,464 Deere 87,199 5,672 Danaher 56,451 5,179 Ingersoll-Rand 63,872 4,336 PACCAR 42,874 3,649 Dover 74,430 2,959 Eaton 27,139 2,931 Parker Hannifin 43,592 2,594 ITT Industries 34,376 2,551 Navistar * 25,270 1,210 Pall 45,093 1,210 Cummins Engine 15,961 781 Crane 22,441 690 53,843 Road & Rail 0.4% Union Pacific 94,279 6,550 Burlington Northern Santa Fe 136,248 4,408 Norfolk Southern 142,805 3,377 CSX 77,534 2,787 17,122 Trading Companies & Distributors 0.0% W. W. Grainger 34,562 1,638 1,638 Total Industrials & Business Services 411,928 INFORMATION TECHNOLOGY 17.3% Communications Equipment 2.9% Cisco Systems * 2,543,474 61,781 QUALCOMM 293,946 15,853 Motorola 856,166 12,046 Corning * 491,137 5,123 Lucent Technologies * 1,535,165 4,360 Avaya * 153,033 1,980 JDS Uniphase * 529,811 1,934 QLogic * 34,661 1,789 Scientific-Atlanta 55,824 1,524 Tellabs * 153,822 1,297 Comverse Technology * 71,592 1,259 CIENA * 173,395 1,151 ADC Telecommunications * 286,029 849 Andrew * 57,800 665 111,611 Computer & Peripherals 3.7% IBM 633,876 58,748 Dell * 944,048 32,060 Hewlett-Packard 1,121,706 25,765 EMC * 882,956 11,408 Sun Microsystems * 1,193,326 5,358 Lexmark International * 47,167 3,709 Apple Computer * 133,222 2,847 Network Appliance * 126,815 2,603 NCR * 36,988 1,435 Gateway * 117,522 541 Silicon Graphics * 683 1 144,475 Electronic Equipment & Instruments 0.5% Agilent Technologies * 177,164 5,180 Molex 70,932 2,475 Sanmina-SCI * 190,197 2,398 Jabil Circuit * 72,954 2,065 Solectron * 307,514 1,817 Thermo Electron * 62,572 1,577 Symbol Technologies 87,549 1,479 Tektronix 30,539 965 PerkinElmer 50,176 856 18,812 Internet Software & Services 0.3% Yahoo! * 241,748 10,920 Monster Worldwide * 40,907 898 11,818 IT Services 1.2% First Data 270,350 11,109 Automatic Data Processing 219,480 8,693 Paychex 140,071 5,211 Electronic Data Systems 178,412 4,378 Computer Sciences * 70,545 3,120 SunGard Data Systems * 103,426 2,866 Fiserv * 72,323 2,857 Concord EFS * 182,386 2,707 Unisys * 122,884 1,825 Sabre Holdings 55,214 1,192 Convergys * 54,564 953 44,911 Office Electronics 0.1% Xerox * 293,374 4,049 4,049 Semiconductor & Semiconductor Equipment 4.1% Intel 2,400,416 77,293 Texas Instruments 637,458 18,728 Applied Materials * 608,359 13,658 Analog Devices 135,394 6,181 Maxim Integrated Products 120,445 5,998 Xilinx * 127,049 4,922 Linear Technology 114,470 4,816 KLA-Tencor * 72,839 4,273 Broadcom, Class A * 110,605 3,770 Altera * 142,946 3,245 Micron Technology * 230,823 3,109 National Semiconductor * 68,297 2,692 Novellus Systems * 56,391 2,371 Advanced Micro Devices* 128,765 1,919 Teradyne * 69,306 1,764 NVIDIA * 60,779 1,413 PMC-Sierra * 64,210 1,294 LSI Logic * 139,765 1,240 Applied Micro Circuits * 112,378 672 159,358 Software 4.5% Microsoft 3,970,194 109,339 Oracle * 1,923,887 25,395 Computer Associates 213,085 5,826 VERITAS Software * 155,071 5,762 Electronic Arts * 109,278 5,221 Intuit * 75,388 3,989 Symantec * 113,600 3,936 Adobe Systems 87,614 3,443 PeopleSoft * 138,018 3,147 Siebel Systems * 179,415 2,489 BMC Software * 88,314 1,647 Mercury Interactive * 33,126 1,611 Novell * 136,089 1,432 Citrix Systems * 63,930 1,356 Autodesk 41,519 1,021 Compuware * 153,487 927 Parametric Technology * 95,904 378 176,919 Total Information Technology 671,953 MATERIALS 3.0% Chemicals 1.5% DuPont 364,132 16,710 Dow Chemical 337,424 14,027 Praxair 119,980 4,583 Air Products and Chemicals 83,663 4,420 PPG Industries 62,328 3,990 Rohm & Haas 80,725 3,448 Monsanto 95,214 2,740 Ecolab 95,834 2,623 Sigma Aldrich 25,712 1,470 Engelhard 46,759 1,401 International Flavors & Fragrances 35,130 1,227 Eastman Chemical 29,317 1,159 Hercules * 45,886 560 Great Lakes Chemical 19,692 535 58,893 Construction Materials 0.0% Vulcan Materials 39,167 1,863 1,863 Containers & Packaging 0.2% Sealed Air * 31,573 1,709 Pactiv * 57,404 1,372 Ball 21,766 1,297 Temple-Inland 19,544 1,225 Bemis 19,399 970 6,573 Metals & Mining 0.8% Alcoa 318,798 12,114 Newmont Mining 158,976 7,728 Freeport McMoRan Copper Gold 67,060 2,825 Phelps Dodge * 32,908 2,504 Nucor 29,717 1,664 USX-U.S. Steel Group 40,451 1,417 Worthington Industries 32,392 584 Allegheny Technologies 35,576 470 29,306 Paper & Forest Products 0.5% International Paper 175,309 7,558 Weyerhaeuser 81,418 5,211 Georgia-Pacific 95,727 2,936 MeadWestvaco 76,513 2,276 Louisiana Pacific * 38,818 694 18,675 Total Materials 115,310 TELECOMMUNICATION SERVICES 3.4% Diversified Telecommunication Services 2.8% Verizon Communications 1,015,126 35,611 SBC Communications 1,216,947 31,726 BellSouth 680,787 19,266 AT&T 287,797 5,842 Sprint 328,975 5,402 Alltel 115,789 5,393 Qwest Communications International * 650,416 2,810 Centurytel 52,328 1,707 Citizens Communications * 111,070 1,379 109,136 Wireless Telecommunication Services 0.6% Nextel Communications, Class A * 402,220 11,286 AT&T Wireless Group * 996,563 7,963 Sprint PCS * 382,853 2,152 21,401 Total Telecommunication Services 130,537 UTILITIES 2.8% Electric Utilities 2.0% Southern Company 265,403 8,028 Exelon 118,968 7,895 Dominion Resources 118,637 7,573 Entergy 83,554 4,773 FPL Group 68,265 4,466 American Electric Power 144,133 4,397 FirstEnergy 123,093 4,333 PG&E * 150,117 4,169 Progress Energy 91,042 4,121 Consolidated Edison 82,253 3,538 PPL 65,976 2,886 TXU 121,173 2,874 Ameren 61,509 2,829 CINergy 68,026 2,640 Edison International * 119,853 2,628 XCEL Energy 147,677 2,508 DTE Energy 61,923 2,440 Pinnacle West Capital 33,697 1,348 CenterPoint Energy 117,746 1,141 Teco Energy 67,704 976 Allegheny Energy * 51,015 651 CMS Energy * 59,820 510 Texas Genco Holdings 5,052 164 76,888 Gas Utilities 0.3% Kinder Morgan 46,262 2,734 Sempra Energy 82,395 2,477 KeySpan 59,549 2,191 NiSource 98,565 2,163 Peoples Energy 13,726 577 NICOR 15,926 542 10,684 Multi-Utilities & Unregulated Power 0.5% Duke Energy 335,460 6,860 Public Service Enterprise 86,549 3,791 Constellation Energy Group 62,388 2,443 AES * 227,933 2,152 Williams Companies 193,198 1,897 El Paso Energy 224,125 1,836 Calpine * 167,129 804 Dynegy, Class A * 141,085 604 20,387 Total Utilities 107,959 Total Common Stocks (Cost $3,083,469) 3,789,037 SHORT-TERM INVESTMENTS 2.6% U.S. Treasury Obligations 0.2% U.S. Treasury Bills, 1.025%, 2/12/04 ++ 6,000,000 5,993 U.S. Treasury Bills, 0.83%, 2/12/04 1,000,000 999 6,992 Money Market Fund 2.4% T. Rowe Price Reserve Investment Fund, 1.13% # 92,420,800 92,421 92,421 Total Short-Term Investments (Cost $99,413) 99,413 SECURITIES LENDING COLLATERAL 2.7% Money Market Trust 2.7% State Street Bank and Trust Company of New Hampshire N.A. Securities Lending Quality Trust units, 1.12% # 106,869,592 106,870 Total Securities Lending Collateral (Cost $106,870) 106,870 Total Investments in Securities 102.8% of Net Assets (Cost $3,289,752) $ 3,995,320 ---------------- Futures Contracts ($ 000s) Contract Unrealized Expiration Value Gain (Loss) -------------------------------------------------------------------------------- Long, 337 March S&P 500 contracts, $5,730 par of 1.025% U.S. Treasury Bill pledged as initial margin 3/04 $ 93,568 $ 3,673 Net payments (receipts) of variation margin to date (3,426) Variation margin receivable (payable) on open futures contracts $ 247 ss. Denominated in U.S. dollars unless otherwise noted # Seven-day yield * Non-income producing ++ All or a portion of this security is pledged to cover margin requirements on futures contracts at December 31, 2003. REIT Real Estate Investment Trust The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report December 31, 2003 Statement of Assets and Liabilities -------------------------------------------------------------------------------- ($ 000s) Assets Investments in securities, at value (cost $3,289,752) $ 3,995,320 Other assets 14,835 Total assets 4,010,155 Liabilities Total liabilities 124,718 NET ASSETS $ 3,885,437 -------------------- Net Assets Consist of: Undistributed net investment income (loss) $ 248 Undistributed net realized gain (loss) (174,612) Net unrealized gain (loss) 709,241 Paid-in-capital applicable to 129,750,903 shares of $0.01 par value capital stock outstanding; 1,000,000,000 shares of the Corporation authorized 3,350,560 NET ASSETS $ 3,885,437 -------------------- NET ASSET VALUE PER SHARE $ 29.95 -------------------- The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report Statement of Operations -------------------------------------------------------------------------------- ($ 000s) Year Ended 12/31/03 Investment Income (Loss) Income Dividend $ 56,704 Interest 63 Securities lending 180 Total income 56,947 Expenses Shareholder servicing 6,618 Investment management 4,775 Prospectus and shareholder reports 400 Custody and accounting 285 Registration 88 Legal and audit 22 Directors 20 Miscellaneous 247 Reductions/repayments pursuant to expense limitation Management fees (waived) repaid (1,304) Total expenses 11,151 Expenses paid indirectly (1) Net expenses 11,150 Net investment income (loss) 45,797 Realized and Unrealized Gain (Loss) Net realized gain (loss) Securities 1,750 Futures 13,751 Net realized gain (loss) 15,501 Change in net unrealized gain (loss) Securities 758,602 Futures 5,273 Change in net unrealized gain (loss) 763,875 Net realized and unrealized gain (loss) 779,376 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 825,173 -------------------- The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report Statement of Changes in Net Assets -------------------------------------------------------------------------------- ($ 000s) Year Ended 12/31/03 12/31/02 Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 45,797 $ 38,847 Net realized gain (loss) 15,501 (67,280) Change in net unrealized gain (loss) 763,875 (750,059) Increase (decrease) in net assets from operations 825,173 (778,492) Distributions to shareholders Net investment income (45,987) (38,667) Capital share transactions * Shares sold 927,373 832,702 Distributions reinvested 45,115 37,875 Shares redeemed (574,733) (817,712) Redemption Fee 79 9 Increase (decrease) in net assets from capital share transactions 397,834 52,874 Net Assets Increase (decrease) during period 1,177,020 (764,285) Beginning of period 2,708,417 3,472,702 End of period $ 3,885,437 $ 2,708,417 ------------------------------------ *Share information Shares sold 35,870 30,831 Distributions reinvested 1,698 1,495 Shares redeemed (22,258) (30,477) Increase (decrease) in shares outstanding 15,310 1,849 The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report December 31, 2003 Notes to Financial Statements -------------------------------------------------------------------------------- NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES T. Rowe Price Index Trust, Inc. (the trust) is registered under the Investment Company Act of 1940 (the 1940 Act). The Equity Index 500 Fund (the fund), a diversified, open-end management investment company, is one portfolio established by the trust and commenced operations on March 30, 1990. The fund seeks to match the performance of the Standard & Poor's 500 Stock Index(RT). 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 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. Short-term debt securities 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 mutual fund's closing net asset value per share on the day of valuation. Financial futures contracts are valued at closing settlement prices. Other investments and those for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by the T. Rowe Price Valuation Committee, established by the fund's Board of Directors. 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 $8,000 for the year ended December 31, 2003. 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, which are reflected as expenses paid indirectly. Redemption Fees A 0.5% fee is assessed on redemptions of fund shares held less than 6 months. Such fees are withheld from redemption proceeds and retained by the fund, and have the primary effect of increasing paid-in capital. In-Kind Redemptions In certain circumstances, the fund may distribute portfolio securities rather than cash as payment for a redemption of fund shares (in-kind redemption). For financial reporting purposes, the fund recognizes a gain on in-kind redemptions to the extent the value of the distributed securities on the date of redemption exceeds the cost of those securities; the fund recognizes a loss if cost exceeds value. Gains and losses realized on in-kind redemptions are not recognized for tax purposes, and are reclassified from undistributed realized gain (loss) to paid-in capital. During the year ended December 31, 2003, the fund realized $8,463,000 of net gain on $16,732,000 of in-kind redemptions. 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. Payments ("variation margin") made or received to settle the daily fluctuations in the value of futures contracts are recorded as unrealized gains or losses until the contracts are closed. Unrealized gains and losses on futures contracts are included in other assets and other liabilities, respectively, and in the change in net unrealized gain or loss in the accompanying financial statements. Distributions to shareholders are recorded on the ex-dividend date. Income distributions are declared and paid on a quarterly basis. Capital gain distributions, if any, are typically declared and paid 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. Futures Contracts During the year ended December 31, 2003, the fund was a party to futures contracts, which provide for the future sale by one party and purchase by another of a specified amount of a specific financial instrument at an agreed upon price, date, time, and place. Risks arise from possible illiquidity of the futures market and from movements in security values. Securities Lending The fund lends its securities to approved brokers to earn additional income. It receives as collateral cash and U.S. government securities valued at 102% to 105% of the value of the securities on loan. Cash collateral is invested in a money market pooled trust managed by the fund's lending agent in accordance with investment guidelines approved by fund management. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the fund the next business day. Although risk is mitigated by the collateral, the fund could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. Securities lending revenue recognized by the fund consists of earnings on invested collateral and borrowing fees, net of any rebates to the borrower and compensation to the lending agent. At December 31, 2003, the value of loaned securities was $104,283,000; aggregate collateral consisted of $106,869,000 in the money market pooled trust. Other Purchases and sales of portfolio securities, other than short-term securities, aggregated $420,225,000 and $38,119,000, respectively, for the year ended December 31, 2003. Note 3 - FEDERAL INCOME TAXES No provision for federal income taxes is required since the fund intends to continue to qualify as a regulated investment company 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 December 31, 2003 totaled $45,987,000 and were characterized as ordinary income for tax purposes. At December 31, 2003, the tax-basis components of net assets were as follows: Unrealized appreciation $ 1,075,255,000 Unrealized depreciation (369,994,000) Net unrealized appreciation (depreciation) 705,261,000 Undistributed ordinary income 248,000 Capital loss carryforwards (170,632,000) Paid-in capital 3,350,560,000 Net assets $ 3,885,437,000 -------------------- Federal income tax regulations require the fund to treat the gain/loss on certain open futures contracts as realized on the last day of the tax year; accordingly, $3,673,000 of unrealized gains reflected in the accompanying financial statements were realized for tax purposes as of December 31, 2003. The fund intends to retain realized gains to the extent of available capital loss carryforwards for federal income tax purposes. In 2003, the fund utilized $11,525,000 of capital loss carryforwards. As of December 31, 2003, the fund had $55,895,000 of capital loss carryforwards that expire in 2009 and $114,737,000 that expire in 2010. For the year ended December 31, 2003, the fund recorded the following permanent reclassifications to reflect tax character. Reclassifications to paid-in capital relate primarily to redemptions in kind. Results of operations and net assets were not affected by these reclassifications. Undistributed net investment income $ 258,000 Undistributed net realized gain (8,721,000) Paid-in-capital 8,463,000 At December 31, 2003, the cost of investments for federal income tax purposes was $3,293,732,000. 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 equal to 0.15% of the fund's average daily net assets. The fee is computed daily and paid monthly. At December 31, 2003, investment management fee payable totaled $533,000. 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 0.35%. 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. At December 31, 2003, management fees waived remain subject to repayment by the fund in the amount in the following amounts: $2,689,000 through December 31, 2004, and $1,304,000 through December 31, 2005. In addition, the fund has entered into service agreements with Price Associates and two wholly owned subsidiaries of Price Associates (collectively, Price). Price Associates computes the daily share price and maintains the financial records of the fund. T. Rowe Price Services, Inc., provides shareholder and administrative services in its capacity as the fund's transfer and dividend disbursing agent. T. Rowe Price Retirement Plan Services, Inc., provides subaccounting and recordkeeping services for certain retirement accounts invested in the fund. Expenses incurred pursuant to these service agreements totaled $4,219,000 for the year ended December 31, 2003, of which $417,000 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 year ended December 31, 2003, the fund was charged $827,000 for shareholder servicing costs related to the college savings plans, of which $622,000 was for services provided by Price and $93,000 was payable at period-end. At December 31, 2003, approximately 5.9% of the outstanding shares of the fund were held by college savings plans. The fund is also one of several mutual funds sponsored by Price Associates (underlying Price funds) in which the T. Rowe Price Retirement Funds (Retirement Funds) may invest. The Retirement Funds do not invest in the underlying Price funds for the purpose of exercising management or control. Pursuant to a special servicing agreement, expenses associated with the operation of the Retirement Funds are borne by each underlying Price fund to the extent of estimated savings to it and in proportion to the average daily value of its shares owned by the Retirement Funds. Expenses allocated under this agreement are reflected as shareholder servicing expense in the accompanying financial statements. For the year ended December 31, 2003, the fund was allocated $183,000 of Retirement Funds' expenses, of which $87,000 related to services provided by Price and $23,000 was payable at period-end. At December 31, 2003, approximately 2.1% of the outstanding shares of the fund were held by the Retirement Funds. Consistent with its investment objective, the fund may invest in T. Rowe Price Group, Inc. Additionally, 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 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. During the year ended December 31, 2003, dividend income from the Reserve Funds totaled $882,000. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report Report of Independent Auditors -------------------------------------------------------------------------------- To the Board of Directors of T. Rowe Price Index Trust, Inc. and Shareholders of T. Rowe Price Equity Index 500 Fund 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 Equity Index 500 Fund (one of the portfolios comprising T. Rowe Price Index Trust, Inc., hereafter referred to as the "Fund") at December 31, 2003, and the results of its operations, the changes in its net assets and the financial highlights for each of the fiscal periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Baltimore, Maryland January 26, 2004 T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report Tax Information (Unaudited) for the Tax Year Ended 12/31/03 -------------------------------------------------------------------------------- We are providing this information as required by the Internal Revenue Code. The amounts shown may differ from those elsewhere in this report because of differences between tax and financial reporting requirements. The fund's distributions to shareholders included $258,000 from short-term capital gains. For taxable non-corporate shareholders, $45,797,000 of the fund's income and short-term capital gains represents qualified dividend income subject to the 15% rate category. For corporate shareholders, $45,797,000 of the fund's income and short-term capital gains qualified for the dividends-received deduction. Information on Proxy Voting -------------------------------------------------------------------------------- A description of the policies and procedures that the T. Rowe Price Equity Index 500 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 Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report About the Fund's Trustees and Officers -------------------------------------------------------------------------------- Your fund is governed by a Board of Trustees 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 trustees are independent of T. Rowe Price Associates, Inc. (T. Rowe Price); "inside" trustees are officers of T. Rowe Price. The Board of Trustees elects the fund's officers, who are listed in the final table. The business address of each trustee and officer is 100 East Pratt Street, Baltimore, MD 21202. The Statement of Additional Information includes additional information about the fund trustees and is available without charge by calling a T. Rowe Price representative at 1-800-225-5132. -------------------------------------------------------------------------------- Independent Trustees Name (Date of Birth) Year Elected* Principal Occupation(s) During Past 5 Years and Directorships of Other Public Companies ------------------------------------------------------------------------------ Anthony W. Deering (1/28/45) 2001 Director, Chairman of the Board, President, and Chief Executive Officer, The Rouse Company, real estate developers; Director, Mercantile Bank (4/03 to present) -------------------------------------------------------------------------------- Donald W. Dick, Jr. (1/27/43) 1994 Principal, EuroCapital Advisors, LLC, an acquisition and management advisory firm -------------------------------------------------------------------------------- David K. Fagin (4/9/38) 1994 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 (9/21/43) 2003 Managing Director and President, Global Private Client Services, Marsh Inc.; Managing Director and Head of International Private Banking, Bankers Trust; Director, Eli Lilly and Company -------------------------------------------------------------------------------- F. Pierce Linaweaver (8/22/34) 2001 President, F. Pierce Linaweaver & Associates, Inc., consulting environmental and civil engineers -------------------------------------------------------------------------------- John G. Schreiber (10/21/46) 2001 Owner/President, Centaur Capital Partners, Inc., a real estate investment company; Senior Advisor and Partner, Blackstone Real Estate Advisors, L.P.; Director, AMLI Residential Properties Trust, Host Marriott Corp., and The Rouse Company -------------------------------------------------------------------------------- Hubert D. Vos** (8/2/33) 1994 Owner/President, Stonington Capital Corp., a private investment company -------------------------------------------------------------------------------- Paul M. Wythes** (6/23/33) 1990 Founding Partner, Sutter Hill Ventures, a venture capital limited partnership, providing equity capital to young high-technology companies throughout the United States; Director, Teltone Corp. -------------------------------------------------------------------------------- * Each independent trustee oversees 107 T. Rowe Price portfolios and serves until retirement, resignation, or election of a successor. ** Retired from Board of Trustees effective December 31, 2003. -------------------------------------------------------------------------------- T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report -------------------------------------------------------------------------------- Inside Trustees Name (Date of Birth) Year Elected* [Number of T. Rowe Price Portfolios Overseen] Principal Occupation(s) During Past 5 Years and Directorships of Other Public Companies -------------------------------------------------------------------------------- James A.C. Kennedy, CFA (8/15/53) 1997 [39] Director and Vice President, T. Rowe Price and T. Rowe Price Group, Inc. -------------------------------------------------------------------------------- James S. Riepe (6/25/43) 1990 [107] 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.; Chairman of the Board, Index Trust -------------------------------------------------------------------------------- M. David Testa, CFA, CIC (4/22/44) 1994 [107] Chief Investment Officer, Director, and Vice President, T. Rowe Price; Vice Chairman of the Board, Chief Investment Officer, Director, and Vice President, T. Rowe Price Group, Inc.; Chairman of the Board and Director, T. Rowe Price International, Inc; Director, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited; Director and Vice President, T. Rowe Price Trust Company -------------------------------------------------------------------------------- * Each inside trustee serves until retirement, resignation, or election of a successor. -------------------------------------------------------------------------------- T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Annual Report Officers Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) -------------------------------------------------------------------------------- E. Frederick Bair, CFA, CPA (12/11/69) Executive Vice President, Index Trust Vice President, T. Rowe Price and T. Rowe Price Trust Company -------------------------------------------------------------------------------- Stephen V. Booth (6/21/61) Vice President, Index Trust Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company -------------------------------------------------------------------------------- Joseph A. Carrier 12/30/60 Treasurer, Index Trust Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Investment Services, Inc. -------------------------------------------------------------------------------- Wendy R. Diffenbaugh (10/2/53) Vice President, Index Trust Assistant Vice President, T. Rowe Price -------------------------------------------------------------------------------- Roger L. Fiery III, CPA (2/10/59) Vice President, Index Trust Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., and T. Rowe Price Trust Company -------------------------------------------------------------------------------- Ann M. Holcomb, CFA (1/16/72) Executive Vice President, Index Trust Vice President, T. Rowe Price -------------------------------------------------------------------------------- Henry H. Hopkins (12/23/42) Vice President, Index Trust Director and Vice President, T. Rowe Price Group, Inc., 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 International, Inc., and T. Rowe Price Retirement Plan Services, Inc. -------------------------------------------------------------------------------- Patricia B. Lippert (1/12/53) Secretary, Index Trust Assistant Vice President, T. Rowe Price and T. Rowe Price Investment Services, Inc. -------------------------------------------------------------------------------- Raymond A. Mills, PhD, CFA (12/3/60) Vice President, Index Trust Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Sudhir Nanda, PhD, CFA (12/7/59) Vice President, Index Trust Vice President, T. Rowe Price and T. Rowe Price Group, Inc. -------------------------------------------------------------------------------- Julie L. Waples (5/12/70) Vice President, Index Trust Vice President, T. Rowe Price -------------------------------------------------------------------------------- Richard T. Whitney, CFA (5/7/58) President, Index Trust Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Trust Company, and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Mary C. Wojciechowski, CFA (12/2/62) Vice President, Index Trust Vice President, T. Rowe Price -------------------------------------------------------------------------------- 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: 2003 2002 Audit Fees $13,495 $12,302 Audit-Related Fees 830 -- Tax Fees 3,505 2,979 All Other Fees 124 225 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) Not applicable. (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 $719,000 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. [Reserved] 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. 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) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is attached. (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 Index Trust, Inc. By /s/ James S. Riepe James S. Riepe Principal Executive Officer Date February 13, 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 February 13, 2004 By /s/ Joseph A. Carrier Joseph A. Carrier Principal Financial Officer Date February 13, 2004