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<DESCRIPTION>T. ROWE PRICE EQUITY INDEX 500 FUND
<TEXT>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
----------------
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
--------------------------------------------------------------------------------
<PAGE>
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.
--------------------------------------------------------------------------------
<PAGE>
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
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