N-CSRS 1 exf.txt T. ROWE PRICE EQUITY INDEX 500 FUND Item 1. Report to Shareholders T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- June 30, 2004 Certified Semiannual Report This report is certified under the Sarbanes-Oxley Act of 2002, which requires that public companies, including mutual funds, affirm that the information provided in their annual and semiannual shareholder reports fully and fairly represents their financial position. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Semiannual Report (Unaudited) FINANCIAL HIGHLIGHTS For a share outstanding throughout each period -------------------------------------------------------------------------------- 6 Months Year Ended Ended 6/30/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 NET ASSET VALUE Beginning of period $ 29.95 $ 23.67 $ 30.84 $ 35.50 $ 39.56 $ 33.38 Investment activities Net investment income (loss) 0.19* 0.37* 0.34* 0.32* 0.33* 0.34* Net realized and unrealized gain (loss) 0.78 6.28 (7.17) (4.65) (3.98) 6.49 Total from investment activities 0.97 6.65 (6.83) (4.33) (3.65) 6.83 Distributions Net investment income (0.19) (0.37) (0.34) (0.33) (0.33) (0.34) Net realized gain - - - - (0.08) (0.31) Total distributions (0.19) (0.37) (0.34) (0.33) (0.41) (0.65) NET ASSET VALUE End of period $ 30.73 $ 29.95 $ 23.67 $ 30.84 $ 35.50 $ 39.56 ----------------------------------------------------------- Ratios/ Supplemental Data Total return^ 3.25%* 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%* 0.35%* 0.40%* Ratio of net investment income (loss) to average net assets 1.27%*+ 1.44%* 1.27%* 1.00%* 0.85%* 0.98%* Portfolio turnover rate 7.4%+ 1.2% 6.6% 4.0% 9.1% 5.2% Net assets, end of period (in millions) $ 4,287 $ 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 4/30/05. + Annualized The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Semiannual Report (Unaudited) June 30, 2004 PORTFOLIO OF INVESTMENTS (1) Shares/$ Par Value -------------------------------------------------------------------------------- (Cost and value in $ 000s) COMMON STOCKS 97.7% CONSUMER DISCRETIONARY 10.7% Auto Components 0.2% Johnson Controls 74,894 3,998 Delphi 229,158 2,447 Dana 58,903 1,155 Cooper Tire 29,973 689 Goodyear Tire & Rubber *ss. 71,470 650 Visteon 50,150 585 9,524 Automobiles 0.7% Ford Motor ss. 717,767 11,233 GM 221,985 10,343 Harley-Davidson 118,086 7,314 28,890 Distributors 0.1% Genuine Parts ss. 69,120 2,743 2,743 Hotels, Restaurants & Leisure 1.3% McDonald's 495,879 12,893 Carnival 249,093 11,707 Starbucks * 157,471 6,847 International Game Technology 136,024 5,251 Marriott, Class A 89,372 4,458 Yum! Brands * 114,967 4,279 Starwood Hotels & Resorts Worldwide, Class B 81,407 3,651 Hilton ss. 150,846 2,815 Harrah's Entertainment ss. 44,771 2,422 Wendy's 44,185 1,539 Darden Restaurants ss. 65,997 1,356 57,218 Household Durables 0.5% Fortune Brands 57,444 4,333 Pulte 50,278 2,616 Newell Rubbermaid 106,978 2,514 Centex 48,036 2,198 Leggett & Platt ss. 78,946 2,109 Black & Decker 31,264 1,942 Whirlpool 27,553 1,890 Stanley Works ss. 33,887 1,545 KB Home 18,034 1,238 Maytag 32,279 791 Snap-On ss. 22,250 746 21,922 Internet & Catalog Retail 0.6% eBay * 258,852 23,801 23,801 Leisure Equipment & Products 0.2% Mattel 167,459 3,056 Eastman Kodak ss. 112,872 3,046 Brunswick ss. 36,917 1,506 Hasbro 69,949 1,329 8,937 Media 3.5% Time Warner * 1,803,374 31,703 Comcast, Class A * 884,782 24,800 Viacom, Class B 680,231 24,298 Disney 807,763 20,590 Gannett 106,552 9,041 Clear Channel Communications 240,502 8,887 Tribune 129,627 5,903 McGraw-Hill 75,000 5,743 Omnicom ss. 74,037 5,619 Univision Communications, Class A * 128,043 4,088 New York Times, Class A ss. 57,868 2,587 Interpublic Group * 162,455 2,231 Knight-Ridder ss. 30,975 2,230 Dow Jones ss. 31,813 1,435 Meredith 19,514 1,072 150,227 Multiline Retail 1.0% Target 354,441 15,053 Kohl's * 132,700 5,611 J.C. Penney 114,871 4,337 Federated Department Stores 70,773 3,475 Sears 87,322 3,297 May Department Stores 112,931 3,104 Dollar General 129,633 2,536 Nordstrom 54,214 2,310 Family Dollar Stores 66,957 2,037 Dillards, Class A 33,667 751 Big Lots * 49,720 719 43,230 Specialty Retail 2.3% Home Depot 876,423 30,850 Lowe's 308,901 16,233 GAP 356,019 8,634 Best Buy 127,723 6,481 Staples 196,662 5,764 TJX 194,589 4,697 Bed Bath & Beyond * 118,657 4,562 The Limited 185,991 3,478 AutoZone * 34,395 2,755 Sherwin-Williams 56,649 2,354 Office Depot * 123,207 2,207 Tiffany 57,809 2,130 RadioShack 63,577 1,820 Autonation * 105,200 1,799 Toys "R" Us * 85,578 1,363 Boise Cascade 34,508 1,299 Circuit City Stores ss. 80,187 1,038 97,464 Textiles, Apparel, & Luxury Goods 0.3% Nike, Class B 103,635 7,850 V. F. 43,147 2,101 Jones Apparel Group ss. 49,412 1,951 Liz Claiborne 45,727 1,645 Reebok ss. 24,030 865 14,412 Total Consumer Discretionary 458,368 CONSUMER STAPLES 10.9% Beverages 2.7% Coca-Cola 955,491 48,233 PepsiCo 671,777 36,196 Anheuser-Busch 317,575 17,149 Coca-Cola Enterprises 185,965 5,391 Pepsi Bottling Group 100,461 3,068 Brown-Forman, Class B ss. 47,522 2,294 Coors, Class B 14,559 1,053 113,384 Food & Staples Retailing 3.3% Wal-Mart 1,689,959 89,162 Walgreen 403,669 14,617 Sysco 251,092 9,007 Costco Wholesale 179,968 7,391 CVS 158,801 6,673 Kroger * 292,687 5,327 Safeway * 175,244 4,441 Albertson's ss. 148,125 3,931 Supervalu 53,473 1,637 Winn-Dixie ss. 55,086 396 142,582 Food Products 1.2% Sara Lee 310,050 7,128 General Mills 149,094 7,086 Kellogg 160,799 6,730 ConAgra 208,234 5,639 Wrigley 87,904 5,542 Heinz 138,298 5,421 Hershey Foods 101,554 4,699 Campbell Soup 160,918 4,326 Archer-Daniels-Midland 254,235 4,266 McCormick 54,100 1,839 52,676 Household Products 2.0% Procter & Gamble 1,011,440 55,063 Kimberly-Clark 197,600 13,018 Colgate-Palmolive 210,105 12,280 Clorox 83,223 4,476 84,837 Personal Products 0.6% Gillette 394,904 16,744 Avon Products 186,706 8,615 Alberto Culver, Class B 35,141 1,762 27,121 Tobacco 1.1% Altria Group 804,671 40,274 UST 65,443 2,356 R.J. Reynolds Tobacco ss. 33,500 2,264 44,894 Total Consumer Staples 465,494 ENERGY 6.4% Energy Equipment & Services 0.9% Schlumberger 231,356 14,693 Halliburton 172,544 5,221 Baker Hughes 130,398 4,910 Transocean, Class C *ss. 125,543 3,633 BJ Services * 63,467 2,909 Nabors Industries * 58,376 2,640 Noble Drilling * 53,100 2,012 Rowan * 41,860 1,019 37,037 Oil & Gas 5.5% Exxon Mobil 2,573,307 114,281 ChevronTexaco 424,968 39,994 ConocoPhillips 269,102 20,530 Occidental Petroleum 154,372 7,473 Devon Energy 94,351 6,227 Anadarko Petroleum 100,544 5,892 Burlington Resources 156,782 5,672 Apache 128,576 5,600 Marathon Oil 135,498 5,127 Unocal 103,136 3,919 Valero Energy 49,900 3,681 Kerr-McGee 59,443 3,196 Kinder Morgan 50,262 2,980 Amerada Hess ss. 35,305 2,796 EOG Resources 45,826 2,736 Williams Companies 203,198 2,418 El Paso Energy ss. 255,025 2,010 Sunoco 31,018 1,973 Ashland 27,386 1,446 237,951 Total Energy 274,988 FINANCIALS 19.8% Capital Markets 3.4% J.P. Morgan Chase 816,869 31,670 Morgan Stanley 432,591 22,828 Merrill Lynch 377,665 20,386 Goldman Sachs Group 190,125 17,902 Bank of New York 306,298 9,030 Lehman Brothers 108,861 8,192 State Street 131,986 6,473 Charles Schwab 544,646 5,234 Franklin Resources 100,032 5,010 Mellon Financial 168,137 4,931 Northern Trust 86,783 3,669 Bear Stearns 41,352 3,486 T. Rowe Price Group ss. 50,013 2,521 E*TRADE Group * 146,500 1,633 Janus Capital Group ss. 92,297 1,522 Federated Investors, Class B ss. 42,800 1,299 145,786 Commercial Banks 6.0% Bank of America 802,306 67,891 Wells Fargo 659,557 37,746 Wachovia 517,366 23,023 Bank One 440,093 22,445 U.S. Bancorp 745,922 20,558 Fifth Third Bancorp 221,446 11,909 National City ss. 242,768 8,499 BB&T 220,136 8,138 SunTrust 110,786 7,200 PNC Financial Services Group 110,319 5,856 SouthTrust 130,309 5,057 KeyCorp 163,355 4,883 M & T Bank 46,900 4,094 Charter One Financial 88,506 3,911 Comerica 67,956 3,729 AmSouth Bancorporation 138,617 3,531 Marshall & Ilsley 88,802 3,471 Regions Financial 86,950 3,178 Synovus Financial 121,045 3,065 North Fork Bancorporation ss. 67,930 2,585 First Horizon National 48,911 2,224 Union Planters 73,928 2,204 Zions Bancorp 35,765 2,198 Huntington Bancshares 91,308 2,091 259,486 Consumer Finance 1.3% American Express 502,837 25,836 MBNA 501,722 12,940 SLM Corporation 174,865 7,073 Capital One Financial 94,009 6,428 Providian Financial * 114,781 1,684 53,961 Diversified Financial Services 2.4% Citigroup 2,035,263 94,640 Principal Financial Group 124,371 4,326 Moody's 58,806 3,802 102,768 Insurance 4.5% American International Group 1,031,571 73,530 Allstate 275,112 12,806 MetLife 297,444 10,663 Saint Paul Companies 262,081 10,625 Prudential 210,130 9,765 Marsh & McLennan 205,909 9,344 AFLAC 200,073 8,165 Hartford Financial Services 114,364 7,861 Progressive Corporation 86,143 7,348 Chubb 74,380 5,071 ACE 110,609 4,677 Loews 73,527 4,409 XL Capital ss. 54,190 4,089 Aon 122,878 3,498 Lincoln National 70,259 3,320 MBIA 57,164 3,265 Ambac 42,404 3,114 Cincinnati Financial ss. 66,058 2,875 Jefferson Pilot 54,277 2,757 SAFECO ss. 55,079 2,424 Torchmark ss. 43,341 2,332 UnumProvident ss. 116,914 1,859 193,797 Real Estate 0.4% Equity Office Properties, REIT 158,233 4,304 Simon Property Group, REIT 82,337 4,234 Equity Residential, REIT 108,485 3,225 ProLogis Trust, REIT 71,900 2,367 Plum Creek Timber ss. 72,504 2,362 Apartment Investment & Management, REIT, Class A 35,800 1,114 17,606 Thrifts & Mortgage Finance 1.8% Fannie Mae 381,447 27,220 Freddie Mac 270,493 17,122 Washington Mutual 339,305 13,111 Countrywide Financial 109,717 7,708 Golden West Financial 60,955 6,482 MGIC Investment ss. 39,294 2,981 Sovereign Bancorp 120,200 2,636 77,260 Total Financials 850,664 HEALTH CARE 13.1% Biotechnology 1.2% Amgen * 494,756 26,999 Biogen Idec * 133,727 8,458 Gilead Sciences * 84,000 5,628 Genzyme * 87,695 4,151 Chiron * 73,658 3,288 MedImmune * 96,747 2,264 50,788 Health Care Equipment & Supplies 2.2% Medtronic 477,148 23,247 Boston Scientific * 324,530 13,890 Stryker 154,774 8,512 Zimmer Holdings * 95,934 8,461 Baxter International 242,399 8,365 Guidant 123,924 6,925 St. Jude Medical * 69,096 5,227 Becton, Dickinson 100,101 5,185 Biomet 99,937 4,441 Waters Corporation * 49,199 2,351 C. R. Bard 41,476 2,350 Applied Biosystems Group - Applera 81,065 1,763 Hospira * 60,444 1,668 Bausch & Lomb 21,048 1,370 Millipore * 19,623 1,106 94,861 Health Care Providers & Services 2.0% UnitedHealth Group 243,094 15,133 Cardinal Health 169,337 11,862 HCA 193,289 8,039 WellPoint Health Networks * 60,507 6,777 Caremark RX * 179,400 5,909 Aetna 59,860 5,088 Anthem * 54,500 4,881 Medco * 105,925 3,972 McKesson 115,514 3,966 CIGNA 56,100 3,860 Quest Diagnostics 40,800 3,466 AmerisourceBergen 43,785 2,617 Tenet Healthcare * 183,128 2,456 Express Scripts * 30,500 2,417 IMS Health 93,165 2,184 Health Management ss. 93,693 2,101 Manor Care 35,171 1,149 Humana * 62,888 1,063 86,940 Pharmaceuticals 7.7% Pfizer 2,993,075 102,603 Johnson & Johnson 1,171,064 65,228 Merck 874,340 41,531 Eli Lilly 441,402 30,859 Abbott Laboratories 608,147 24,788 Wyeth 518,869 18,762 Bristol-Myers Squibb 759,770 18,614 Schering-Plough 577,304 10,669 Forest Laboratories * 145,036 8,213 Allergan 51,388 4,600 Mylan Laboratories 103,300 2,092 Watson Pharmaceuticals * 42,030 1,131 King Pharmaceuticals * 92,774 1,062 330,152 Total Health Care 562,741 INDUSTRIALS & BUSINESS SERVICES 11.2% Aerospace & Defense 1.9% United Technologies 201,024 18,390 Boeing 333,382 17,032 Honeywell International 339,757 12,445 Lockheed Martin 175,796 9,155 General Dynamics 78,657 7,811 Northrop Grumman 141,594 7,604 Raytheon 176,899 6,328 Rockwell Collins 69,451 2,314 Goodrich 46,039 1,488 82,567 Air Freight & Logistics 1.0% UPS, Class B 443,479 33,336 Fedex 117,712 9,616 Ryder System ss. 25,518 1,023 43,975 Airlines 0.1% Southwest Airlines 309,734 5,194 Delta *ss. 48,523 346 5,540 Building Products 0.2% Masco 177,655 5,539 American Standard * 84,360 3,401 8,940 Commercial Services & Supplies 1.1% Cendant 400,134 9,795 Waste Management 228,900 7,016 Apollo Group, Class A * 69,444 6,131 Pitney Bowes 91,003 4,027 H&R Block ss. 69,988 3,337 Cintas 67,402 3,213 R.R. Donnelley 85,571 2,826 Avery Dennison 43,070 2,757 Robert Half International ss. 66,761 1,987 Allied Waste Industries * 125,571 1,655 Equifax 53,295 1,319 Deluxe Corporation 21,593 939 45,002 Construction & Engineering 0.0% Fluor 33,310 1,588 1,588 Electrical Equipment 0.4% Emerson Electric 165,344 10,508 Rockwell Automation 72,687 2,726 Cooper Industries, Class A 35,953 2,136 American Power Conversion 77,166 1,516 Thomas & Betts 22,290 607 Power-One *ss. 30,600 336 17,829 Industrial Conglomerates 4.5% General Electric Capital 4,158,899 134,749 3M 306,990 27,632 Tyco International 789,173 26,153 Textron 54,202 3,217 191,751 Machinery 1.5% Illinois Tool Works 121,888 11,688 Caterpillar 134,686 10,700 Deere 97,999 6,874 Danaher 122,902 6,373 Ingersoll-Rand, Class A 68,472 4,677 PACCAR 69,361 4,022 Eaton 59,578 3,857 Dover 80,030 3,369 ITT Industries 36,476 3,028 Parker Hannifin 48,592 2,889 Pall 49,493 1,296 Navistar *ss. 27,870 1,080 Cummins Engine ss. 17,061 1,066 Crane 24,341 764 61,683 Road & Rail 0.4% Union Pacific 101,879 6,056 Burlington Northern Santa Fe 146,648 5,143 Norfolk Southern 152,405 4,042 CSX 85,234 2,793 18,034 Trading Companies & Distributors 0.1% W. W. Grainger 35,562 2,045 2,045 Total Industrials & Business Services 478,954 INFORMATION TECHNOLOGY 16.8% Communications Equipment 3.0% Cisco Systems * 2,660,474 63,053 QUALCOMM 318,146 23,218 Motorola 923,366 16,851 Corning * 539,437 7,045 Lucent Technologies *ss. 1,690,065 6,389 Avaya *ss. 173,533 2,740 JDS Uniphase *ss. 568,511 2,155 Scientific-Atlanta 61,124 2,109 Comverse Technology * 77,592 1,547 Tellabs *ss. 165,722 1,448 Andrew *ss. 64,200 1,285 QLogic * 36,961 983 ADC Telecommunications *ss. 317,529 902 CIENA * 222,895 829 130,554 Computer & Peripherals 3.5% IBM 661,076 58,274 Dell * 994,748 35,632 Hewlett-Packard 1,211,606 25,565 EMC * 961,656 10,963 Sun Microsystems * 1,299,826 5,641 Lexmark International, Class A * 51,067 4,930 Apple Computer * 148,622 4,836 Network Appliance *ss. 136,915 2,948 NCR * 36,588 1,814 Gateway * 159,322 717 151,320 Electronic Equipment & Instruments 0.5% Agilent Technologies * 190,364 5,574 Solectron * 382,014 2,472 Molex ss. 74,032 2,375 Jabil Circuit *ss. 78,654 1,981 Thermo Electron * 64,072 1,970 Sanmina-SCI *ss. 204,097 1,857 Symbol Technologies 91,349 1,346 Tektronix 32,039 1,090 PerkinElmer ss. 49,676 995 19,660 Internet Software & Services 0.5% Yahoo! * 530,096 19,258 Monster Worldwide * 45,607 1,173 20,431 IT Services 1.2% First Data 343,277 15,283 Automatic Data Processing 231,880 9,711 Paychex 147,671 5,003 Electronic Data Systems ss. 190,612 3,650 Computer Sciences * 74,145 3,443 Fiserv * 76,923 2,992 SunGard Data Systems * 112,426 2,923 Affiliated Computer Services, Class A * 53,200 2,816 Unisys * 130,884 1,817 Sabre Holdings 54,614 1,513 Convergys * 58,264 897 50,048 Office Electronics 0.1% Xerox *ss. 316,974 4,596 4,596 Semiconductor & Semiconductor Equipment 3.6% Intel 2,544,916 70,240 Texas Instruments 681,858 16,487 Applied Materials * 662,359 12,995 Analog Devices 148,294 6,982 Maxim Integrated Products 127,045 6,660 Broadcom, Class A * 122,205 5,715 Linear Technology 121,670 4,802 Xilinx 135,849 4,525 KLA-Tencor * 76,939 3,799 Micron Technology * 240,923 3,689 Altera * 147,146 3,270 National Semiconductor * 141,294 3,107 Advanced Micro Devices *ss. 143,965 2,289 Novellus Systems * 59,391 1,867 Teradyne * 75,906 1,723 NVIDIA * 63,079 1,293 LSI Logic *ss. 152,065 1,159 PMC-Sierra * 70,910 1,018 Applied Micro Circuits *ss. 118,078 628 152,248 Software 4.4% Microsoft 4,252,994 121,465 Oracle * 2,050,587 24,463 Electronic Arts * 120,378 6,567 Computer Associates 229,385 6,437 Symantec * 123,000 5,385 VERITAS Software * 169,471 4,694 Adobe Systems 93,314 4,339 Intuit * 77,388 2,986 PeopleSoft * 145,118 2,685 Siebel Systems * 199,415 2,130 Autodesk 45,119 1,932 Mercury Interactive *ss. 36,626 1,825 BMC Software * 87,514 1,619 Citrix Systems * 66,730 1,359 Novell * 152,689 1,281 Compuware * 151,987 1,003 Parametric Technology * 108,704 543 190,713 Total Information Technology 719,570 MATERIALS 2.9% Chemicals 1.5% DuPont 392,832 17,450 Dow Chemical 367,524 14,958 Praxair 127,780 5,100 Air Products and Chemicals 91,163 4,781 PPG Industries 67,128 4,195 Monsanto 104,914 4,039 Rohm & Haas 87,425 3,635 Ecolab ss. 101,634 3,222 Sigma Aldrich 27,612 1,646 Engelhard 48,559 1,569 Eastman Chemical 30,517 1,411 International Flavors & Fragrances 36,430 1,362 Hercules * 45,386 553 Great Lakes Chemical 19,292 522 64,443 Construction Materials 0.0% Vulcan Materials 40,167 1,910 1,910 Containers & Packaging 0.2% Sealed Air * 32,473 1,730 Ball 22,466 1,619 Pactiv * 62,204 1,551 Temple-Inland 21,344 1,478 Bemis 40,998 1,158 7,536 Metals & Mining 0.7% Alcoa 342,298 11,306 Newmont Mining 176,076 6,825 Phelps Dodge * 36,908 2,861 Freeport McMoRan Copper Gold ss. 75,460 2,502 Nucor ss. 31,317 2,404 USX-U.S. Steel Group 47,251 1,659 Worthington Industries ss. 35,092 720 Allegheny Technologies ss. 35,276 637 28,914 Paper & Forest Products 0.5% International Paper 191,409 8,556 Weyerhaeuser 94,218 5,947 Georgia-Pacific 100,527 3,717 MeadWestvaco 82,413 2,422 Louisiana Pacific 43,918 1,039 21,681 Total Materials 124,484 TELECOMMUNICATION SERVICES 3.3% Diversified Telecommunication Services 2.7% Verizon Communications 1,082,526 39,176 SBC Communications 1,305,947 31,669 BellSouth 725,287 19,017 Sprint ss. 561,351 9,880 Alltel 121,389 6,145 AT&T 311,397 4,556 Qwest Communications International * 704,816 2,530 Centurytel 55,828 1,677 Citizens Communications *ss. 114,970 1,391 116,041 Wireless Telecommunication Services 0.6% AT&T Wireless * 1,058,263 15,155 Nextel Communications, Class A * 437,820 11,672 26,827 Total Telecommunication Services 142,868 UTILITIES 2.6% Electric Utilities 1.8% Exelon 258,336 8,600 Southern Company ss. 289,503 8,439 TXU 127,973 5,184 Entergy 90,054 5,044 American Electric Power 155,933 4,990 FirstEnergy 130,593 4,886 FPL Group 72,665 4,647 PG&E * 163,917 4,580 Progress Energy 97,242 4,284 Consolidated Edison ss. 96,553 3,839 Edison International 129,353 3,308 PPL 69,676 3,198 Ameren ss. 71,509 3,072 DTE Energy 67,623 2,741 CINergy 70,726 2,688 XCEL Energy 157,177 2,626 Pinnacle West Capital ss. 36,497 1,474 CenterPoint Energy ss. 122,146 1,405 Teco Energy ss. 76,304 915 Allegheny Energy *ss. 50,515 778 CMS Energy *ss. 66,420 606 77,304 Gas Utilities 0.1% KeySpan 62,549 2,296 NiSource 103,565 2,136 NICOR ss. 19,326 656 Peoples Energy ss. 15,026 633 5,721 Multi-Utilities & Unregulated Power 0.7% Dominion Resources 128,837 8,127 Duke Energy 360,360 7,312 Public Service Enterprise 93,249 3,733 Sempra Energy 89,795 3,091 Constellation Energy Group 66,588 2,524 AES * 251,033 2,493 Calpine *ss. 165,429 714 Dynegy, Class A *ss. 151,885 647 28,641 Total Utilities 111,666 Total Common Stocks (Cost $3,461,132) 4,189,797 SHORT-TERM INVESTMENTS 3.2% Money Market Fund 3.0% T. Rowe Price Reserve Investment Fund, 1.16% # 126,720,580 126,721 U.S. Treasury Obligations 0.2% U.S. Treasury Bills, 1.037%, 8/12/04 ++ 7,000,000 6,992 Total Short-Term Investments (Cost $133,713) 133,713 SECURITIES LENDING COLLATERAL 1.9% Money Market Trust 1.9% State Street Bank and Trust Company of New Hampshire N.A. Securities Lending Quality Trust units, 1.22% # 81,705,101 81,705 Total Securities Lending Collateral (Cost $81,705) 81,705 Total Investments in Securities 102.8% of Net Assets (Cost $3,676,550) $4,405,215 ---------- Futures Contracts ($ 000s) Contract Unrealized Expiration Value Gain (Loss) ---------- ---------- ----------- Long, 353 September S&P 500 contracts, $5,950 par of 1.037% U.S. Treasury Bills pledged as initial margin 9/04 $ 100,640 $ 790 Net payments (receipts) of variation margin to date (384) Variation margin receivable (payable)on open futures contracts $ 406 ---------- (1) Denominated in U.S. dollars unless otherwise noted # Seven-day yield * Non-income producing ss. All or a portion of this security is on loan at June 30, 2004 - See Note 2 ++ All or a portion of this security is pledged to cover margin requirements on futures contracts at June 30, 2004. REIT Real Estate Investment Trust The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Semiannual Report (Unaudited) June 30, 2004 STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------------------------------------------- (In thousands except shares and per share amounts) Assets Investments in securities, at value (cost $3,676,550) $ 4,405,215 Other assets 26,248 Total assets 4,431,463 Liabilities Total liabilities 144,791 NET ASSETS $ 4,286,672 ---------------- Net Assets Consist of: Undistributed net investment income (loss) $ 400 Undistributed net realized gain (loss) (91,751) Net unrealized gain (loss) 729,455 Paid-in-capital applicable to 139,497,235 shares of $0.01 par value capital stock outstanding; 1,000,000,000 shares of the Corporation authorized 3,648,568 NET ASSETS $ 4,286,672 ---------------- NET ASSET VALUE PER SHARE $ 30.73 ---------------- The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Semiannual Report (Unaudited) STATEMENT OF OPERATIONS -------------------------------------------------------------------------------- ($ 000s) 6 Months Ended 6/30/04 Investment Income (Loss) Income Dividend $ 33,502 Securities lending 99 Interest 34 Total income 33,635 Expenses Shareholder servicing 4,021 Investment management 3,109 Custody and accounting 163 Prospectus and shareholder reports 131 Registration 52 Legal and audit 10 Directors 6 Miscellaneous 157 Reductions/repayments pursuant to expense limitation Investment management fees (waived) repaid (393) Total expenses 7,256 Net investment income (loss) 26,379 Realized and Unrealized Gain (Loss) Net realized gain (loss) Securities 76,584 Futures 6,277 Net realized gain (loss) 82,861 Change in net unrealized gain (loss) Securities 23,097 Futures (2,883) Change in net unrealized gain (loss) 20,214 Net realized and unrealized gain (loss) 103,075 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 129,454 ---------------- The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Semiannual Report (Unaudited) STATEMENT OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- ($ 000s) 6 Months Year Ended Ended 6/30/04 12/31/03 Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 26,379 $ 45,797 Net realized gain (loss) 82,861 15,501 Change in net unrealized gain (loss) 20,214 763,875 Increase (decrease) in net assets from operations 129,454 825,173 Distributions to shareholders Net investment income (26,227) (45,987) Capital share transactions * Shares sold 769,590 927,373 Distributions reinvested 25,720 45,115 Shares redeemed (497,346) (574,733) Redemption Fee 44 79 Increase (decrease) in net assets from capital share transactions 298,008 397,834 Net Assets Increase (decrease) during period 401,235 1,177,020 Beginning of period 3,885,437 2,708,417 End of period $ 4,286,672 $ 3,885,437 -------------- --------------- (Including undistributed net investment income of $400 at 6/30/04 and $248 at 12/31/03) *Share information Shares sold 25,280 35,870 Distributions reinvested 847 1,698 Shares redeemed (16,381) (22,258) Increase (decrease) in shares outstanding 9,746 15,310 The accompanying notes are an integral part of these financial statements. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Semiannual Report (Unaudited) June 30, 2004 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(R). 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, except for OTC Bulletin Board securities, which are valued at the mean of the latest bid and asked prices. A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. Listed securities not traded on a particular day are valued at the mean of the latest bid and asked prices. Debt securities with original maturities of less than one year are valued at amortized cost in local currency, which approximates fair value when combined with accrued interest. Investments in mutual funds are valued at the 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 Trustees. 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 $2,000 for the six months ended June 30, 2004. Additionally, the fund earns credits on temporarily uninvested cash balances at the custodian that reduce the fund's custody charges. Custody expense in the accompanying financial statements is presented before reduction for credits. Redemption Fees A 0.5% fee is assessed on redemptions of fund shares held less than 90 days to deter short-term trading and protect the interests of long-term shareholders. Redemption fees are withheld from proceeds that shareholders receive from the sale or exchange of fund shares. The fees are paid to 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. 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 six months ended June 30, 2004, the fund realized $81,301,000 of net gain on $130,887,000 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/lo ss. 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 declared and paid by the fund, typically on an annual basis. Other In the normal course of business, the fund enters into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is dependent on claims that may be made against the fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote. NOTE 2 - INVESTMENT TRANSACTIONS Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks or enhance performance. The investment objective, policies, program, and risk factors of the fund are described more fully in the fund's prospectus and Statement of Additional Information. Futures Contracts During the six months ended June 30, 2004, 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 June 30, 2004, the value of loaned securities was $80,047,000; aggregate collateral consisted of $81,705,000 in the money market pooled trust. Other Purchases and sales of portfolio securities, other than short-term securities, aggregated $451,446,000 and $149,737,000, respectively, for the six months ended June 30, 2004. NOTE 3 - FEDERAL INCOME TAXES No provision for federal income taxes is required since the fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and distribute to shareholders all of its taxable income and gains. Federal income tax regulations differ from generally accepted accounting principles; therefore, distributions determined in accordance with tax regulations may differ in amount or character from net investment income and realized gains for financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The amount and character of tax-basis distributions and composition of net assets are finalized at fiscal year-end; accordingly, tax-basis balances have not been determined as of June 30, 2004. The fund intends to retain realized gains to the extent of available capital loss carryforwards. As of December 31, 2003, the fund had $170,632,000 of unused capital loss carryforwards, of which $55,895,000 expire in 2009, and $114,737,000 expire in 2010. At June 30, 2004, the cost of investments for federal income tax purposes was $3,676,550,000. Net unrealized gain aggregated $729,455,000 at period-end, of which $1,092,498,000 related to appreciated investments and $363,043,000 related to depreciated investments. NOTE 4 - RELATED PARTY TRANSACTIONS The fund is managed by T. Rowe Price Associates, Inc. (the manager or Price Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. The investment management agreement between the fund and the manager provides for an annual investment management fee equal to 0.15% of the fund's average daily net assets. The fee is computed daily and paid monthly. At June 30, 2004, investment management fee payable totaled $484,000. 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. Pursuant to this agreement, at June 30, 2004, management fees waived remain subject to repayment by the fund in the following amounts: $2,689,000 through December 31, 2004, $1,304,000 through December 31, 2005, and $393,000 through April 30, 2007. In addition, the fund has entered into service agreements with Price Associates and two wholly owned subsidiaries of Price Associates (collectively, Price). Price Associates computes the daily share price and maintains the financial records of the fund. T. Rowe Price Services, Inc., provides shareholder and administrative services in its capacity as the fund's transfer and dividend disbursing agent. T. Rowe Price Retirement Plan Services, Inc., provides subaccounting and recordkeeping services for certain retirement accounts invested in the fund. Expenses incurred pursuant to these service agreements totaled $2,436,000 for the six months ended June 30, 2004, of which $476,000 was payable at period-end. Additionally, the fund is one of several mutual funds in which certain college savings plans managed by Price Associates may invest. As approved by the fund's Board of Directors, shareholder servicing costs associated with each college savings plan are borne by the fund in proportion to the average daily value of its shares owned by the college savings plan. For the six months ended June 30, 2004, the fund was charged $461,000 for shareholder servicing costs related to the college savings plans, of which $326,000 was for services provided by Price and $92,000 was payable at period-end. At June 30, 2004, approximately 6.5% 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 six months ended June 30, 2004, the fund was allocated $375,000 of Retirement Funds' expenses, of which $241,000 related to services provided by Price and $64,000 was payable at period-end. At June 30, 2004, approximately 7.8% 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 to mutual funds, trusts, and other accounts managed by Price Associates and/or its affiliates, and are not available for direct purchase by members of the public. The Reserve Funds pay no investment management fees. During the six months ended June 30, 2004, dividend income from the Reserve Funds totaled $495,000. T. Rowe Price Equity Index 500 Fund -------------------------------------------------------------------------------- Certified Semiannual Report 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. Item 2. Code of Ethics. A code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions is filed as an exhibit to the registrant's annual Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the registrant's most recent fiscal half-year. Item 3. Audit Committee Financial Expert. Disclosure required in registrant's annual Form N-CSR. Item 4. Principal Accountant Fees and Services. Disclosure required in registrant's annual Form N-CSR. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. Schedule of Investments. Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 9. Submission of Matters to a Vote of Security Holders. Not applicable. Item 10. Controls and Procedures. (a) The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely. (b) The registrant's principal executive officer and principal financial officer are aware of no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11. Exhibits. (a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is filed with the registrant's annual Form N-CSR. (2) Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached. (3) Written solicitation to repurchase securities issued by closed-end companies: not applicable. (b) A certification by the registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. T. Rowe Price Index Trust, Inc. By: /s/ James S. Riepe James S. Riepe Principal Executive Officer Date: August 16, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ James S. Riepe James S. Riepe Principal Executive Officer Date: August 16, 2004 By: /s/ Joseph A. Carrier Joseph A. Carrier Principal Financial Officer Date: August 16, 2004