-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SDdrommJ6oahsGR4Y6T7pjhKyK0zeA3vrpJZLRgV6FHLurCtIAofNFtPphpj7Bky 08JzOySa0+emIHzERjkZIA== 0000950133-96-000076.txt : 19960202 0000950133-96-000076.hdr.sgml : 19960202 ACCESSION NUMBER: 0000950133-96-000076 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960201 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICE T ROWE INDEX TRUST INC CENTRAL INDEX KEY: 0000858581 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05986 FILM NUMBER: 96509853 BUSINESS ADDRESS: STREET 1: 100 EAST PRATT ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 3015472000 FORMER COMPANY: FORMER CONFORMED NAME: PRICE T ROWE INSTITUTIONAL EQUITY FUNDS INC DATE OF NAME CHANGE: 19900227 N-30D 1 T. ROWE PRICE EQUITY INDEX FUND ANNUAL REPORT 1995 1 - -------------------------------------------------------------------------------- ANNUAL REPORT - -------------------------------------------------------------------------------- FOR YIELD, PRICE, LAST TRANSACTION, AND CURRENT BALANCE, 24 HOURS, 7 DAYS A WEEK, CALL: 1-800-638-2587 toll free 625-7676 Baltimore area FOR ASSISTANCE WITH YOUR EXISTING FUND ACCOUNT, CALL: Shareholder Service Center 1-800-225-5132 toll free 625-6500 Baltimore area T. ROWE PRICE 100 East Pratt Street Baltimore, Maryland 21202 This report is authorized for distribution only to shareholders and to others who have received a copy of the prospectus of the T. Rowe Price Equity Index Fund. [T. ROWE PRICE INVEST WITH CONFIDENCE(R) LOGO] EXF [T. ROWE PRICE LOGO] -------------------- EQUITY INDEX FUND DECEMBER 31, 1995 2 - -------------------------------------------------------------------------------- Fellow Shareholders The stock market could do no wrong in 1995, making equity index funds a great place to invest. In particular, the unmanaged Standard & Poor's 500 Stock Index, which your fund seeks to replicate, had a stellar year, outperforming most other indices and equity mutual funds with a gain of 37.6%. The index is dominated by the large, multinational companies that paced the stock market's rally for most of the year. Your fund's performance closely tracked the S&P 500 for both reporting periods, with the small difference attributable to the expenses of portfolio management. One reason for our close proximity to the index's performance was the fund's policy of maintaining a fully invested portfolio: any cash held for purposes of meeting redemptions is used as collateral against futures contracts, which allows the fund to maintain an effective 100% equity position. In a year like 1995, where the gap between equity and cash returns was large, the penalty for holding cash was high. - ------------------------------------------------------ Performance Comparison
Periods Ended 12/31/95 6 Months 12 Months -------- --------- Equity Index Fund 14.3% 37.2% S&P 500 14.5 37.6
- ------------------------------------------------------ YEAR-END DISTRIBUTIONS Your Board of Directors declared a fourth quarter dividend of $0.12 per share, a short-term capital gain of $0.10, and a long-term capital gain of $0.19. All distributions were paid on December 28 to shareholders of record on December 26. You should have already received a check or statement reflecting these distributions as well as your Form 1099-DIV reporting them for tax purposes. MARKET REVIEW The 1995 rally in stocks was broad and powerful: every sector of the S&P 500 showed double-digit gains (as shown in the chart on the next page). Technology stocks led the way for most of the year, but faltered in the fourth quarter after valuations reached extraordinary levels. The top-performing sector was health care, as these stocks continued to rebound from the depressed levels of 1993 caused by the Clinton administration's ill-fated plan to provide health insurance to all Americans. Financial stocks were a close second, benefiting from sharply lower interest rates, which have the double effect of boosting these companies' profits and enhancing the attractiveness of their relatively higher dividend yields. Mergers and restructurings, compelled by the need to cut costs while maintaining superior service, also lifted the financial arena. CHASE MANHATTAN agreed to merge with CHEMICAL BANKING, and FIRST INTERSTATE was pursued by both WELLS FARGO and FIRST BANK SYSTEMS. The laggards in 1995 included most stocks related to consumer spending, as retailers, autos, and makers of consumer nondurables struggled to meet expectations. Now that the economic expansion is into its fifth year and beginning to mature, deeply cyclical industries -- such as paper, forest products, and steel manufacturers -- significantly trailed the overall market. The size of a company's stock was integral to performance too, as large companies generally outpaced their smaller brethren. Since the fund consists mainly of large companies and the weight of a stock in the fund is determined by its market capitalization, it benefited from the dominance of large caps. On a relative basis, growth stocks nosed out value stocks: for the year, the Barra/S&P Growth index returned 38%, versus 37% for the Barra/S&P Value Index. The best gains were found among medium-sized companies with rapidly-growing earnings. 3 - ------------------------------------------------------ Returns by Market Sector
Periods Ended 12/31/95 6 Months 12 Months -------- --------- Health Care 28.2% 54.7% - --------------------------------------------------- Financial 21.1 51.1 Technology 3.9 38.4 - --------------------------------------------------- Utilities 22.5 37.4 Consumer Nondurables 15.5 36.6 - --------------------------------------------------- Capital Equipment 15.6 33.9 Energy 14.7 31.1 - --------------------------------------------------- Business Services and Transportation 11.8 28.0 Process Industries 4.3 24.9 - --------------------------------------------------- Miscellaneous -- 21.6 Consumer Cyclicals 9.4 20.7 - --------------------------------------------------- Consumer Services 2.7 18.7 Basic Materials 1.2 11.4
- ------------------------------------------------------ PORTFOLIO REVIEW Your fund's top performers included two banks, First Interstate and SHAWMUT, each of which more than doubled after announcing mergers, and AMERICAN INTERNATIONAL GROUP, a diversified insurance powerhouse which is one of our largest holdings. In the health care area, the best-performing major drug stock was MERCK, up 75%, making it the fifth-largest stock in the index, while the biotech firm AMGEN doubled. Among the best performers in the index was SUN MICROSYSTEMS, a manufacturer of workstations -- small computers that are more powerful than personal computers and serve as individual or departmental systems. Sun's workstations have been very popular choices for firms establishing a presence on the Internet, and the stock rode the Internet euphoria to rise over 150%. Although energy stocks in general lagged the market, the major international oils posted good returns, with EXXON, MOBIL, TEXACO, and ROYAL DUTCH basically matching the overall market. As shown in the table on the next page, there were 33 changes in the S&P 500 Index during the year, mostly due to corporate mergers or restructurings. The total would have been larger were it not for the fact that several big mergers were not completed by year-end. The biggest deals -- DISNEY'S acquisition of CAPITAL CITIES/ABC and the merger of Chemical Banking and Chase Manhattan -- are still awaiting consummation. The additions made up almost 4% of the value of the index at year-end; about 1.6% of the holdings at the beginning of the year were deleted. In addition to mergers, a number of small issues were removed from the index to make way for larger companies. The index committee at Standard & Poor's makes these changes to keep the S&P 500 reflective of the overall U.S. stock market. As a result of this policy, and in yet another indication of the increasingly pervasive influence of technology, a number of the additions came from the computer, telecommunications, and semiconductor fields, 3COM, APPLIED MATERIALS, CABLETRON SYSTEMS, SILICON GRAPHICS, and LSI LOGIC. Some of the more significant changes included the breakup of the conglomerate ITT into three smaller companies, all of which were added to the S&P 500; Upjohn's merger with Pharmacia AB, a Swedish pharmaceutical company; KIMBERLY CLARK'S acquisition of Scott Paper; and the merger of two aerospace giants, Martin Marietta and Lockheed, into the new LOCKHEED MARTIN. Several banks were dropped from the index as mergers took a toll -- First Chicago, First Fidelity, and Shawmut National. The list of stocks entering the S&P included PHARMACIA & UPJOHN, the insurance company ALLSTATE, BANK OF NEW YORK, the insurance and tobacco company LOEWS, and U.S. WEST MEDIA GROUP, a spin - off from the regional telephone company U.S. West. OUTLOOK The past year was an ideal environment for stocks -- declining interest rates, low inflation, and apparently sustainable economic growth. Political news during the year was mainly favorable for financial markets, as 2 4 prospects for both tax cuts and restraint in the growth of government spending improved. Today's valuations, particularly the price/ earnings ratio, are high by historical standards, although comparisons with the past should take into account the relatively low level of inflation and long-term interest rates. High valuations mean the market is vulnerable to any deterioration in outlook, and we wouldn't be surprised to see some pullback over the next few months. Nevertheless, timing the market is an exercise few can pull off successfully. The Equity Index Fund remains, in our view, an excellent vehicle for long-term equity investors. Respectfully submitted, /s/ RICHARD T. WHITNEY Richard T. Whitney President and Chairman of the Investment Advisory Committee January 18, 1996 - ------------------------------------------------------ The Evolving S&P 500 Stock Index Changes in the index in 1995
Additions Deletions - -------------------------- ----------------------- 3Com Bassett Furniture Allstate Bruno's Applied Materials CBS Bank of New York Clark Equipment Boston Scientific Continental Corp. Cabletron Systems E-Systems Comerica First Chicago CUC International First Fidelity Bancorp Darden Restaurants First Mississippi Federated Dept. Stores Hartmarx First Bank Systems ITT Corp. First Chicago NBD Lockheed Freeport McMoran Copper Lotus Development Fruit of the Loom M/A - Com General Public Utilities Martin Marietta Harrah's Maxus Energy Humana Morrison-Knudsen ITT New National Education ITT Hartford NBD Bancorp ITT Industries Oshkosh B'Gosh Laidlaw Pet Lockheed Martin Rollins Environmental Loews Santa Fe Pacific LSI Logic Scott Paper Morgan Stanley Shawmut National Pharmacia & Upjohn Skyline PP&L Resources SPX Republic New York Promus Cos. Silicon Graphics Transco Energy Tellabs U.S. West U.S. WEST Upjohn U.S. West Media Zenith Electronics Willamette Industries Zurn Industries - ---------------------------------------------------
3 5 - ------------------------------------------------------ A Word on Market Corrections After the stock market's spectacular run in 1995, concerns about a "correction" have intensified. Most market observers consider a correction to be a short and sometimes steep decline following a period of rising prices. Moderate corrections of around 10% have been quite common, occurring on average about once every two years over the last half-century, according to Ned Davis Research. The market as measured by the Dow Jones Industrial Average has not experienced a moderate correction since early 1994. Furthermore, the Dow last hit a bear market bottom -- defined as a drop of at least 20% -- in October 1990. Therefore, it would not be surprising to see a modest pullback in 1996, on the order of 5% to 10%. In fact, as we write, the market has gotten off to a rocky start. Corrections are not only common, but can be beneficial for long-term investors, especially those who invest in regular amounts through dollar cost averaging. In a correction, overall stock prices decline, often leading to more attractive valuations and good buying opportunities. History has shown that investors who continue to buy through a downturn fare quite well. In fact, the Dow has proven resilient in the aftermath of past corrections of around 10%, taking an average of just six months to recover its losses, according to Ned Davis. (To realize the benefits of dollar cost averaging, you should be prepared to continuously purchase securities over a period of time, in up and down markets. This approach does not assure a gain nor protect you from a loss in declining markets.) We raise the issue of a market correction not as a prediction, but as a reminder that stock prices do not move in only one direction. If you are satisfied that your investments are appropriate for your various objectives, we recommend that you stay the course when a correction eventually occurs. - ------------------------------------------------------ Twenty-Five Largest Holdings December 31, 1995
Percent of Company Net Assets - --------------------------------------- ---------- GE 2.5% - -------------------------------------------------- AT&T 2.1 Exxon 2.1 - -------------------------------------------------- Coca-Cola 1.9 Merck 1.7 - -------------------------------------------------- Philip Morris 1.6 Royal Dutch Petroleum 1.6 - -------------------------------------------------- P&G 1.2 Johnson & Johnson 1.2 - -------------------------------------------------- IBM 1.1 Microsoft 1.1 - -------------------------------------------------- Wal-Mart 1.1 Intel 1.0 - -------------------------------------------------- Mobil 0.9 PepsiCo 0.9 - -------------------------------------------------- American International Group 0.9 Bristol-Myers Squibb 0.9 - -------------------------------------------------- BellSouth 0.9 Hewlett-Packard 0.9 - -------------------------------------------------- GTE 0.9 Pfizer 0.8 - -------------------------------------------------- GM 0.8 DuPont 0.8 - -------------------------------------------------- Amoco 0.7 SBC Communications 0.7 - -------------------------------------------------- Total 30.3% - --------------------------------------------------
4 6 - -------------------------------------------------------------------------------- Contributions to the Change in Net Asset Value Per Share Six Months Ended December 31, 1995 - ------------------------------------------------------ - ------------------------------------------------------ TEN BEST CONTRIBUTORS GE 8 cent - ------------------------------------------------------ Merck 7 AT&T 6 - ------------------------------------------------------ Philip Morris 4 Coca-Cola 4 - ------------------------------------------------------ BellSouth 4 Exxon 4 - ------------------------------------------------------ Johnson & Johnson 4 Royal Dutch Petroleum 3 - ------------------------------------------------------ Pfizer 3 - ------------------------------------------------------ Total 47 cent - ------------------------------------------------------
- ------------------------------------------------------ TEN WORST CONTRIBUTORS Wal-Mart -3 cent - ------------------------------------------------------ Sears 3 Motorola 2 - ------------------------------------------------------ Intel 2 Micron Technology 1 - ------------------------------------------------------ K mart 1 Texas Instruments 1 - ------------------------------------------------------ Novell 1 Toys "R" Us 1 - ------------------------------------------------------ Advanced Micro Devices 0 - ------------------------------------------------------ Total -15 cent - ------------------------------------------------------
Twelve Months Ended December 31, 1995 - ------------------------------------------------------ - ------------------------------------------------------ TEN BEST CONTRIBUTORS GE 12 cent - ------------------------------------------------------ Merck 11 Coca-Cola 9 - ------------------------------------------------------ Philip Morris 9 Exxon 8 - ------------------------------------------------------ AT&T 8 Intel 7 - ------------------------------------------------------ Johnson & Johnson 7 Royal Dutch Petroleum 6 - ------------------------------------------------------ Hewlett-Packard 6 - ------------------------------------------------------ Total 83 cent - ------------------------------------------------------
- ------------------------------------------------------ TEN WORST CONTRIBUTORS Sears -1 cent - ------------------------------------------------------ K mart 1 Toys "R" Us 1 - ------------------------------------------------------ Morgan Stanley* 1 Novell 1 - ------------------------------------------------------ Archer Daniels Midland 0 Advanced Micro Devices 0 - ------------------------------------------------------ Silicon Graphics* 0 Apple Computer 0 - ------------------------------------------------------ Reebok 0 - ------------------------------------------------------ Total -5 cent - ------------------------------------------------------
* Position added 5 7 Performance Comparison as of 12/31/95
Equity Index Fund S&P 500 Index 3/31/90 $ 10,000 $ 10,000 12/90 10,031 9,990 12/91 12,962 13,034 12/92 13,894 14,027 12/93 15,202 15,440 12/94 15,356 15,645 12/95 21,063 21,523
Note: The Index return does not reflect expenses, which have been deducted from the fund's return. - ------------------------------------------------------ Average Annual Compound Total Return Periods Ended December 31, 1995
Since Inception 1 Year 5 Years 3/30/90 - --------- ----------- ------------------ 37.16% 15.99% 13.81%
- ------------------------------------------------------ Investment return and principal value represent past performance and will vary. Shares may be worth more or less at redemption than at original purchase. Total returns do not reflect the deduction of a $10 annual account maintenance fee. 6 8 - -------------------------------------------------------------------------------- Investment Record T. Rowe Price Equity Index Fund The table below shows the investment record of one share of the T. Rowe Price Equity Index Fund, purchased at the initial offering price of $10.00, for the period 3/30/90 through 12/31/95. Over this time, stock prices in general have risen. The results shown should not be considered a representation of the dividend income or capital gain or loss which may be realized from an investment made in the fund today. - -------------------------------------------------------------------------------- Per Share Data
With Capital Gains and Income Dividends Annual Total Taken in Cash Reinvested in Additional Shares Return ----------------------------------- ---------------------------------------- on Investment Year Net Capital Capital % Change Ended Asset Gain Income Gain Income Value of --------------- 12/31 Value Distributions(1) Dividends Distributions Dividends Investment Fund S&P 500 - ------- ------ ------------- --------- ------------- --------- ---------- ----- ------- 1990(2) $ 9.72 -- $ 0.31 -- $ 0.31 $ 10.03 0.3% 0.2% - ---------------------------------------------------------------------------------------------------------------- 1991 12.10 $0.08 0.34 $0.08 0.35 12.96 29.2 30.3 1992 12.63 0.01 0.31 0.01 0.34 13.89 7.2 7.6 - ---------------------------------------------------------------------------------------------------------------- 1993 13.48 0.01 0.32 0.01 0.36 15.20 9.4 10.1 1994 13.09 0.16 0.36 0.19 0.41 15.36 1.0 1.3 - ---------------------------------------------------------------------------------------------------------------- 1995 17.21 0.30 0.40 0.36 0.48 21.06 37.2 37.6 - ---------------------------------------------------------------------------------------------------------------- Total $0.56 $ 2.04 $0.65 $ 2.25 - ----------------------------------------------------------------------------------------------------------------
(1) Includes short-term capital gains of $0.05 in 1994 and $0.10 in 1995. (2) From inception 3/30/90 to 12/31/90. 7 9 - -------------------------------------------------------------------------------- Statement of Net Assets T. Rowe Price Equity Index Fund / December 31, 1995 (values in thousands)
Value ---------- - ------------------------------------------------------ Common & Preferred Stocks -- 95.6% - ------------------------------------------------------ INDUSTRIAL -- 72.1% 158,932 shs GE.......................... $ 11,443 150,969 AT&T........................ 9,775 118,297 Exxon....................... 9,479 120,022 Coca-Cola................... 8,912 117,704 Merck....................... 7,739 79,974 Philip Morris............... 7,238 51,015 Royal Dutch Petroleum ADR... 7,199 65,419 P&G......................... 5,430 61,418 Johnson & Johnson........... 5,259 54,162 IBM......................... 4,969 55,900 * Microsoft................... 4,909 218,722 Wal-Mart.................... 4,894 78,508 Intel....................... 4,460 37,644 Mobil....................... 4,216 74,931 PepsiCo..................... 4,187 48,249 Bristol-Myers Squibb........ 4,143 48,652 Hewlett-Packard............. 4,075 60,156 Pfizer...................... 3,790 71,111 GM.......................... 3,760 52,824 DuPont...................... 3,691 47,213 Amoco....................... 3,393 62,080 Chevron..................... 3,259 56,248 Motorola.................... 3,206 75,523 Abbott Laboratories......... 3,153 66,112 McDonald's.................. 2,983 102,214 Ford Motor.................. 2,964 52,420 Eli Lilly................... 2,949 49,605 Disney...................... 2,927 29,525 American Home Products...... 2,864 40,046 3M.......................... 2,653 32,564 Boeing...................... 2,552 26,696 Kimberly-Clark.............. 2,209 42,360 Gillette.................... 2,208 32,519 Eastman Kodak............... 2,179 45,312 Home Depot.................. 2,169 42,210 Columbia/HCA Healthcare..... 2,142 15,187 Unilever N.V. ADR........... 2,138 36,492 Chrysler.................... 2,021 24,794 Texaco...................... 1,946 35,412 Schering-Plough............. 1,939 25,800 * Cisco Systems............... 1,927 47,969 Pharmacia & Upjohn.......... 1,859 14,660 Capital Cities/ABC.......... 1,809 25,582 Dow Chemical................ 1,800 41,381 * Oracle Systems.............. 1,754 21,432 Emerson Electric............ 1,752 15,272 Atlantic Richfield.......... 1,691 64,530 MCI......................... 1,690 Value ---------- 24,356 shs Anheuser-Busch.............. $ 1,629 34,344 * Viacom (Class B)............ 1,627 20,875 Kellogg..................... 1,613 22,992 Schlumberger................ 1,592 19,060 Lockheed Martin............. 1,506 25,242 * Amgen....................... 1,497 45,624 Sara Lee.................... 1,454 37,030 Sears....................... 1,444 23,794 Campbell.................... 1,428 10,259 Xerox....................... 1,405 21,000 First Data.................. 1,404 36,793 Time Warner................. 1,394 46,129 WMX Technologies............ 1,378 11,017 Monsanto.................... 1,350 47,089 * AirTouch Communications..... 1,330 33,175 Sprint...................... 1,323 22,897 Computer Associates......... 1,302 26,914 AlliedSignal................ 1,278 12,844 Warner-Lambert.............. 1,247 62,197 Tele-Communications (Class A)....................... 1,240 22,096 Medtronic................... 1,235 35,453 Seagram..................... 1,228 25,120 * COMPAQ Computer............. 1,206 34,798 Heinz....................... 1,153 18,958 Caterpillar................. 1,114 11,713 United Technologies......... 1,111 26,369 Baxter International........ 1,104 23,238 Raytheon.................... 1,098 20,703 RockWell.................... 1,095 16,600 United HealthCare........... 1,087 16,165 Dun & Bradstreet............ 1,047 24,155 Northern Telecom............ 1,039 21,614 J.C. Penney................. 1,029 13,678 Automatic Data Processing... 1,016 23,642 May Department Stores....... 999 10,752 McDonnell Douglas........... 989 13,885 Colgate-Palmolive........... 975 23,589 ConAgra..................... 973 13,935 CPC International........... 956 13,638 NIKE........................ 950 51,625 Archer Daniels Midland...... 929 17,902 Texas Instruments........... 926 24,202 International Paper......... 917 14,047 * Digital Equipment........... 901 16,962 Alcoa....................... 897 33,700 Barrick Gold................ 889 19,296 PPG Industries.............. 883 24,874 Deere....................... 877 15,042 General Mills............... 869 17,200 Tenneco..................... 854 25,002 Phillips Petroleum.......... 853
8 10 - --------------------------------------------------------------------------------
Value ---------- 44,786 shs U. S. West Media Group...... $ 851 19,302 Weyerhaeuser................ 835 18,182 * Sun Microsystems............ 831 13,332 Gannett..................... 818 16,600 * Boston Scientific........... 813 18,036 American Brands............. 805 20,706 AMP......................... 795 24,144 Albertson's................. 794 19,700 Micron Technology........... 781 21,902 Corning..................... 701 23,432 Walgreen.................... 700 14,700 U. S. Healthcare............ 683 23,429 Unocal...................... 682 14,466 Pitney Bowes................ 680 21,403 Alcan Aluminum.............. 666 16,800 * Applied Materials........... 660 11,146 Illinois Tool Works......... 658 14,452 Goodyear Tire & Rubber...... 656 21,146 Mattel...................... 650 30,321 Occidental Petroleum........ 648 18,598 UST......................... 621 9,951 Ralston Purina.............. 621 37,357 Westinghouse................ 616 6,912 Marsh & McLennan............ 613 8,769 Georgia-Pacific............. 602 10,607 Hercules.................... 598 20,262 Browning-Ferris............. 598 12,206 Honeywell................... 593 34,033 The Limited................. 591 11,041 ITT Corporation............. 585 11,058 Wrigley..................... 581 16,320 Loral....................... 577 13,735 The Gap..................... 577 26,416 * Toys "R" Us................. 575 14,581 R. R. Donnelly.............. 574 16,700 * CUC International........... 570 17,373 Sysco....................... 565 10,619 Air Products and Chemicals.. 560 28,281 USX-Marathon................ 551 6,800 * Cabletron Systems........... 551 8,148 Textron..................... 550 10,855 Halliburton................. 550 22,714 Placer Dome................. 548 19,400 Freeport McMoRan Copper and Gold (Class B)........... 546 14,516 Winn-Dixie.................. 535 19,400 * Federated Department Stores................... 533 8,999 W. R. Grace................. 532 14,644 Tyco Laboratories........... 522 7,897 Fluor....................... 521 6,831 Dayton Hudson............... 512 10,643 International Flavors & Fragrances............... 511 14,216 Morton International........ 510 Value ---------- 15,200 shs Lowes....................... $ 509 35,140 * Novell...................... 499 13,108 Union Carbide............... 492 6,511 Avon........................ 491 10,660 Alco Standard............... 486 7,729 Eastman Chemical............ 484 6,227 TRW......................... 483 7,386 Hershey Foods............... 480 11,699 Genuine Parts............... 480 8,372 Nucor....................... 478 15,095 Masco....................... 474 8,894 Amerada Hess................ 471 12,000 Burlington Resources........ 471 6,250 Becton, Dickinson........... 469 11,960 Marriott International...... 457 6,298 Great Lakes Chemical........ 453 8,000 Pioneer Hi-Bred............. 445 12,866 Quaker Oats................. 444 13,140 Praxair..................... 442 11,642 * Kroger...................... 437 9,894 Service Corp. .............. 435 17,355 Dresser Industries.......... 423 15,400 * Humana...................... 422 4,798 McGraw-Hill................. 418 15,100 * Silicon Graphics............ 415 22,800 Comcast (Class A Special)... 415 6,383 Rohm & Haas................. 411 6,592 Phelps Dodge................ 410 10,085 H&R Block................... 408 10,952 * DSC Communications.......... 405 10,860 Dover....................... 400 12,200 * LSI Logic................... 400 7,388 Eaton....................... 396 19,006 * Tenet Healthcare............ 394 15,052 Newell...................... 389 9,198 Champion International...... 386 15,006 Rubbermaid.................. 383 6,227 Tribune..................... 381 14,154 American Stores............. 379 11,334 Inco........................ 377 10,207 Cooper Industries........... 375 5,316 * Computer Sciences........... 373 6,993 Whirlpool................... 372 8,198 Newmont Mining.............. 371 11,588 Apple Computer.............. 369 5,129 Clorox...................... 367 9,199 Dow Jones................... 367 10,667 Times Mirror (Class A)...... 361 10,213 Ingersoll-Rand.............. 359 8,567 * Crown Cork & Seal........... 358 5,956 General Dynamics............ 352 7,700 * 3Com........................ 339 5,991 Reynolds Metals............. 339 8,158 Sherwin-Williams............ 332
9 11 - --------------------------------------------------------------------------------
Value ---------- 13,579 shs Baker Hughes................ $ 331 7,434 Interpublic Group........... 322 6,081 V. F. ...................... 321 4,822 W. W. Grainger.............. 319 6,689 Union Camp.................. 319 43,698 K mart...................... 317 7,798 Nordstrom................... 315 8,400 * Tellabs..................... 312 4,885 Kerr-McGee.................. 310 10,025 Melville.................... 308 10,797 Dillard Department Stores (Class A)................ 308 6,044 Premark International....... 306 4,687 Northrop.................... 300 5,300 Willamette Industries....... 298 13,660 Engelhard................... 297 4,722 Knight-Ridder............... 295 7,000 Harcourt General............ 293 10,853 Pall........................ 292 8,195 Black & Decker.............. 289 28,100 Laidlaw (Class B)........... 288 4,676 Hilton...................... 288 18,527 * PriceCostco................. 285 6,636 * St. Jude Medical............ 284 9,638 Dana........................ 282 9,351 New York Times (Class A).... 277 3,993 Johnson Controls............ 275 7,980 Rite Aid.................... 273 9,711 Westvaco.................... 269 8,974 Dial........................ 266 5,081 Mead........................ 265 11,041 ITT Industries.............. 265 7,249 Mallinckrodt Group.......... 264 11,773 * National Semiconductor...... 262 8,400 Hasbro...................... 260 6,269 * Ceridian.................... 259 5,087 * Western Atlas............... 257 6,160 Tandy....................... 256 5,092 Avery Dennison.............. 255 9,212 Circuit City Stores......... 254 10,296 Louisiana Pacific........... 250 7,927 USX-U.S. Steel.............. 244 7,068 Parker Hannifin............. 242 6,601 Brown-Forman (Class B)...... 241 3,558 * FMC......................... 241 9,799 * Harrah's Entertainment...... 238 4,157 Raychem..................... 236 5,347 Temple-Inland............... 236 4,700 Sigma Aldrich............... 233 10,001 Whitman..................... 233 8,796 Cyprus Amax Minerals........ 230 7,821 Deluxe Corp................. 227 4,333 Federal Paper Board......... 225 3,560 Armstrong World............. 221 Value ---------- 9,139 shs Brunswick................... $ 219 4,248 Stanley Works............... 219 5,480 Bausch & Lomb............... 217 4,820 * Owens-Corning............... 216 6,084 Ashland..................... 214 7,500 Reebok...................... 212 6,624 Supervalu................... 209 5,945 Manor Care.................. 208 10,255 Maytag...................... 208 5,685 Echlin...................... 207 9,746 Wendys...................... 207 13,110 Homestake Mining............ 205 4,295 Polaroid.................... 203 3,704 Harris...................... 202 6,149 Allergan.................... 200 7,190 American Greetings (Class A)....................... 199 7,149 Liz Claiborne............... 198 8,029 Cooper Tire................. 198 10,920 * Biomet...................... 194 7,830 * ALZA (Class A).............. 194 6,384 Nalco Chemical.............. 192 7,795 James River................. 188 4,411 Pennzoil.................... 186 6,148 Ecolab...................... 184 6,633 Sun Company................. 182 8,633 Worthington Industries...... 180 15,042 Darden Restaurants.......... 179 4,316 Millipore................... 177 5,618 Giant Food.................. 177 9,458 Moore....................... 176 7,200 * Fruit of the Loom (Class A)....................... 175 3,833 Snap-On..................... 173 5,243 C. R. Bard.................. 169 2,477 B. F. Goodrich.............. 169 3,927 Foster Wheeler.............. 167 3,575 Merchantile Stores.......... 165 12,631 WoolWorth................... 164 9,907 Advanced Micro Devices...... 163 4,563 Boise Cascade............... 158 3,172 Tektronix................... 156 3,657 PACCAR...................... 154 4,472 Autodesk.................... 153 4,051 Perkin-Elmer................ 153 4,593 Harnischfeger............... 153 4,612 National Service Industries............... 149 3,988 * Varity...................... 148 10,504 * Bethlehem Steel............. 147 3,719 * Andrew...................... 144 3,818 Cummins Engine.............. 141 1,877 Thomas & Betts.............. 138 3,209 Louisiana Land & Exploration.............. 138 3,016 Briggs & Stratton........... 131 9,080 Stone Container............. 131 10,758 Santa Fe Pacific Gold....... 130
10 12 - --------------------------------------------------------------------------------
Value ---------- 5,077 shs Pep Boys.................... $ 130 6,874 TJX......................... 130 4,985 Bemis....................... 128 3,896 General Signal.............. 126 3,180 * King World Productions...... 124 4,780 Teledyne.................... 122 11,560 Echo Bay Mines.............. 120 2,207 Shared Medical Systems...... 120 11,226 * Tandem Computers............ 119 4,747 Inland Steel Industries..... 119 5,428 United States Surgical...... 116 3,608 ASARCO...................... 115 2,996 Timken...................... 115 4,410 Fleetwood................... 114 8,382 * Oryx Energy................. 112 7,342 Scientific-Atlanta.......... 110 2,903 Crane....................... 107 2,591 Potlatch.................... 104 4,709 McDermott International..... 104 3,685 Russell..................... 102 17,752 * Unisys...................... 100 2,382 Meredith.................... 100 4,659 Ogden....................... 100 11,380 * Amdahl...................... 97 3,851 EG&G........................ 93 2,661 Alberto Culver.............. 91 5,508 Safety-Kleen................ 86 8,621 * Santa Fe Energy Resources... 83 8,401 * Rowan....................... 83 7,730 * Beverly Enterprises......... 82 1,969 Springs Industries.......... 81 4,225 Alexander & Alexander....... 80 3,046 Cincinnati Milacron......... 80 2,778 TRINOVA..................... 80 3,149 Jostens..................... 76 7,129 * Navistar.................... 75 2,102 Centex...................... 73 2,639 Ball........................ 73 1,497 Longs Drug Stores........... 72 4,285 * Intergraph.................. 68 3,267 Fleming Companies........... 67 1,956 Pulte....................... 66 2,696 A & P....................... 62 4,888 Community Psychiatric Centers.................. 60 2,657 Coors (Class B)............. 59 3,729 Kaufman & Broad............. 55 1,723 Helmerich & Payne........... 51 4,704 * Shoney's.................... 48 3,243 * Bally Entertainment......... 45 2,152 John H. Harland............. 45 7,243 * Armco....................... 43 1,662 * Cray Research............... 41 1,814 Luby's Cafeterias........... 40 Value ---------- 2,426 shs Giddings & Lewis............ $ 40 2,523 * Data General................ 35 581 NACCO Industries (Class A).. 32 3,763 * Ryan's Family Steak Houses.. 26 3,502 Stride Rite................. 26 1,207 Outboard Marine............. 25 7,176 Charming Shoppes............ 21 1,272 Brown Group................. 18 2,216 Handleman................... 12 47 Teledyne, $15 Cum. Preferred................ 1 TOTAL INDUSTRIAL 329,746 - ------------------------------------------------------ UTILITIES -- 9.5% 94,556 BellSouth................... 4,113 92,361 GTE......................... 4,064 58,008 SBC Communications.......... 3,335 52,710 Ameritech................... 3,110 41,564 Bell Atlantic............... 2,780 40,660 NYNEX....................... 2,196 44,786 U. S. WEST.................. 1,601 63,364 Southern Company............ 1,560 40,789 Pacific Telesis............. 1,372 40,382 Pacific Gas and Electric.... 1,146 19,520 Duke Power.................. 925 23,948 Enron....................... 913 21,525 Texas Utilities............. 885 17,693 FPL Group................... 821 42,516 SCEcorp..................... 755 17,721 American Electric Power..... 718 22,321 Consolidated Edison......... 714 23,283 Public Service Enterprise... 713 16,488 Dominion Resources.......... 680 20,427 Unicom...................... 669 21,165 PECO Energy................. 638 21,667 Entergy..................... 634 24,956 Houston Industries.......... 605 27,029 PacifiCorp.................. 574 18,000 ALLTEL...................... 531 14,782 Carolina Power & Light...... 510 18,261 Central and South West...... 509 13,956 DTE Energy.................. 481 14,839 CINergy..................... 454 9,730 Williams Companies.......... 427 9,076 Consolidated Natural Gas.... 412 9,724 Union Electric.............. 406 14,070 BGE......................... 401 14,259 Panhandle Eastern........... 397 15,100 PP&L Resources.............. 378 11,100 General Public Utilities.... 377 10,015 Coastal..................... 373 14,491 Ohio Edison................. 341 6,411 Northern States Power....... 315
11 13 - --------------------------------------------------------------------------------
Value ---------- 8,174 shs Sonat....................... $ 291 8,177 Pacific Enterprises......... 231 4,790 * Columbia Gas System......... 210 4,778 NICOR....................... 131 11,709 Niagara Mohawk.............. 113 12,067 Noram Energy................ 107 6,517 ENSERCH..................... 106 3,330 Peoples Energy.............. 106 1,445 Eastern Enterprises......... 51 1,896 ONEOK....................... 43 TOTAL UTILITIES 43,222 - ------------------------------------------------------ FINANCIAL -- 12.5% 45,138 American International Group.................... 4,175 25,933 Fannie Mae.................. 3,219 40,480 Citicorp.................... 2,722 35,676 BankAmerica................. 2,310 46,442 American Express............ 1,922 30,423 Travelers Group............. 1,913 25,788 NationsBank................. 1,795 42,650 Allstate.................... 1,754 26,671 First Union................. 1,484 17,918 J. P. Morgan................ 1,438 17,194 Freddie Mac................. 1,436 37,583 BANC ONE.................... 1,419 24,043 Chemical Banking............ 1,413 7,851 General Re.................. 1,217 30,220 First Chicago NBD........... 1,194 33,652 Norwest..................... 1,110 32,534 PNC Bank.................... 1,049 16,699 Chase Manhattan............. 1,012 4,629 Wells Fargo................. 1,000 24,437 Fleet Financial Group....... 996 7,196 First Interstate............ 982 18,300 Bank of New York............ 892 11,200 Loews....................... 878 16,862 Merrill Lynch............... 860 8,252 Chubb....................... 798 21,727 KeyCorp..................... 788 16,122 Dean Witter, Discover....... 758 13,987 Mellon Bank................. 752 10,790 Aetna....................... 747 10,900 SunTrust.................... 747 16,300 Wachovia.................... 746 7,013 CIGNA....................... 724 19,482 American General............ 679 12,900 First Bank Systems.......... 640 7,400 Morgan Stanley Group........ 597 Value ---------- 9,280 Household International..... $ 549 9,238 shs Barnett Banks............... 545 11,041 ITT Hartford Group.......... 534 14,099 MBNA........................ 520 13,420 CoreStates Financial........ 508 7,419 Bankers Trust New York...... 493 12,046 Boatmen's Bancshares........ 493 10,644 Bank of Boston.............. 492 9,026 Lincoln National............ 485 14,305 U. S. Bancorp............... 480 6,484 Transamerica................ 473 14,000 National City............... 464 8,044 St. Paul Companies.......... 447 10,900 Comerica.................... 437 12,026 SAFECO...................... 416 6,900 UNUM........................ 379 9,118 Providian................... 372 10,113 Salomon..................... 359 5,300 Republic New York........... 329 12,897 Great Western Financial..... 329 5,718 Golden West Financial....... 316 6,747 Jefferson Pilot............. 314 6,883 Torchmark................... 311 11,148 H. F. Ahmanson.............. 295 4,996 Beneficial.................. 233 10,628 USF&G....................... 179 3,382 USLIFE...................... 101 TOTAL FINANCIAL 57,019 - ------------------------------------------------------ TRANSPORTATION -- 1.5% 19,629 Union Pacific............... 1,296 13,552 Burlington Northern Santa Fe....................... 1,057 12,504 Norfolk Southern............ 992 20,026 CSX......................... 914 7,270 * AMR......................... 540 7,424 Conrail..................... 520 5,352 * Federal Express............. 395 4,791 Delta....................... 354 13,700 Southwest Airlines.......... 319 7,633 Ryder System................ 189 3,682 Caliber Systems............. 180 3,992 Pittston Services........... 125 3,490 Consolidated Freightways.... 92 5,076 * USAir....................... 67 1,996 Yellow Corp................. 25 TOTAL TRANSPORTATION 7,065 TOTAL COMMON & PREFERRED STOCKS (COST $342,338) 437,052
12 14 - --------------------------------------------------------------------------------
Value ---------- - ------------------------------------------------------ Short-Term Investments -- 4.1% CERTIFICATES OF DEPOSIT -- 1.0% $5,000,000 Mellon Bank, 5.70%, 3/7/96................... $ 5,000 COMMERCIAL PAPER -- 2.2% 4,977,000 BMW U.S. Capital, 5.93%, 1/2/96................... 4,974 5,000,000 Chemical Banking, 5.58%, 3/15/96.................. 4,922 9,896 Value ---------- U.S. GOVERNMENT OBLIGATIONS -- 0.9% $4,000,000 United States Treasury Bills, 5.335-5.415%, 1/18/96.................. $ 3,901 TOTAL SHORT-TERM INVESTMENTS (COST $18,797) 18,797 - ---------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 99.7% OF NET ASSETS (COST $361,135) 455,849 - ---------------------------------------------------------------- FUTURES CONTRACTS
Contract Unrealized Expiration Value Gain (Loss) ----------- --------- ----------- Long, 61 Standard & Poor's 500 Stock Index contracts, $3,500,000 of U.S. Treasury Bills pledged as initial margin....................... 3/96 $18,863 $(146) Net payments (receipts) of variation margin to date.................................. 169 Variation margin receivable (payable) on open futures contracts...................... 23 OTHER ASSETS LESS LIABILITIES........................................................ 1,384 ---------- Value ----------- NET ASSETS CONSIST OF: Accumulated net realized gain/loss -- net of distributions........................... $ 4,569 Net unrealized gain (loss)........................................................... 94,568 Paid-in-capital applicable to 26,576,467 shares of $0.01 par value capital stock outstanding; 1,000,000,000 shares authorized....................................... 358,119 ----------- NET ASSETS........................................................................... $ 457,256 ========== NET ASSET VALUE PER SHARE............................................................ $17.21 ====== - -------------------------------------------------------------------------------------------------------------------------
* Non-income producing The accompanying notes are an integral part of these financial statements. 13 15 - -------------------------------------------------------------------------------- Statement of Operations T. Rowe Price Equity Index Fund / Year Ended December 31, 1995 (in thousands) INVESTMENT INCOME Income Dividend....................................................................... $ 7,413 Interest....................................................................... 2,758 -------- Total income................................................................... 10,171 -------- Expenses Shareholder servicing.......................................................... 702 Investment management.......................................................... 498 Custody and accounting......................................................... 143 Prospectus and shareholder reports............................................. 58 Registration................................................................... 58 Legal and audit................................................................ 24 Directors...................................................................... 13 Miscellaneous.................................................................. 22 -------- Total expenses................................................................. 1,518 -------- Net investment income............................................................ 8,653 -------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Securities..................................................................... 858 Futures........................................................................ 13,287 -------- Net realized gain (loss)....................................................... 14,145 -------- Change in net unrealized gain or loss on: Securities..................................................................... 82,028 Futures........................................................................ (650) -------- Change in net unrealized gain or loss.......................................... 81,378 -------- Net realized and unrealized gain (loss).......................................... 95,523 -------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................................ $104,176 ========= - -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 14 16 - -------------------------------------------------------------------------------- Statement of Changes in Net Assets T. Rowe Price Equity Index Fund (in thousands)
Year Ended December 31, 1995 1994 -------------- -------------- INCREASE (DECREASE) IN NET ASSETS FROM Operations Net investment income............................................. $ 8,653 $ 5,740 Net realized gain (loss).......................................... 14,145 1,232 Change in net unrealized gain or loss............................. 81,378 (3,724) -------------- -------------- Increase (decrease) in net assets from operations................. 104,176 3,248 -------------- -------------- Distributions to shareholders Net investment income............................................. (9,122) (5,776) Net realized gain................................................. (7,691) (1,677) In excess of net realized gain.................................... -- (1,356) -------------- -------------- Decrease in net assets from distributions......................... (16,813) (8,809) -------------- -------------- Capital share transactions* Shares sold....................................................... 159,642 142,421 Distributions reinvested.......................................... 16,390 8,570 Shares redeemed................................................... (76,638) (42,357) Redemption fees received.......................................... 12 -- -------------- -------------- Increase (decrease) in net assets from capital share transactions.................................................... 99,406 108,634 -------------- -------------- Net equalization.................................................... 322 98 -------------- -------------- Increase (decrease) in net assets................................... 187,091 103,171 NET ASSETS Beginning of period................................................. 270,165 166,994 -------------- -------------- End of period....................................................... $457,256 $270,165 =============== =============== - --------------------------------------------------------------------------------------------------------- * Share information Shares sold..................................................... 10,147 10,780 Distributions reinvested........................................ 993 653 Shares redeemed................................................. (5,197) (3,187) -------------- -------------- Increase (decrease) in shares outstanding....................... 5,943 8,246 =============== ===============
The accompanying notes are an integral part of these financial statements. 15 17 - -------------------------------------------------------------------------------- Notes to Financial Statements T. Rowe Price Equity Index Fund / December 31, 1995 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES T. Rowe Price Equity Index Fund (the fund) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. A) Valuation - Equity securities listed or regularly traded on a securities exchange are valued at the last quoted sales price at the time the valuations are made. A security which 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 that are not traded on a particular day and securities that are regularly traded in the over-the-counter market are valued at the mean of the latest bid and asked prices. Short-term debt securities are valued at their cost which, when combined with accrued interest, approximates fair value. Financial futures contracts are valued at closing settlement prices. Assets and liabilities for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by or under the supervision of the officers of the fund, as authorized by the Board of Directors. B) Other - Income and expenses are recorded on the accrual basis. Investment transactions are accounted for on the trade date. Realized gains and losses are reported on the identified cost basis. Dividend income and distributions to shareholders are recorded by the fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with federal income tax regulations and may differ from those determined in accordance with generally accepted accounting principles. The fund follows the practice of equalization under which undistributed net investment income per share is unaffected by fund shares sold or redeemed. Payments ("variation margin") made or received by the fund to settle the daily fluctuations in the value of futures contracts are recorded as unrealized gain or loss until the contracts are closed. Unrealized gains and losses on futures contracts are included in Change in net unrealized gain or loss in the accompanying financial statements. NOTE 2 - INVESTMENT TRANSACTIONS Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks and 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. A) Futures Contracts - At December 31, 1995, 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. B) Securities Lending - To earn additional income, the fund lends its securities to approved brokers. At December 31, 1995, the market value of securities on loan was $12,796,000, which was fully collateralized with cash. Although the 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 them. C) Other - Purchases and sales of portfolio securities, other than short-term securities, aggregated $124,079,000 and $3,864,000, respectively, for the year ended December 31, 1995. NOTE 3 - FEDERAL INCOME TAXES No provision for federal income taxes is required since the fund intends to continue to 16 18 - -------------------------------------------------------------------------------- qualify as a regulated investment company and distribute all of its taxable income. In order for the fund's capital accounts and distributions to shareholders to reflect the tax character of certain transactions, $467,000 of undistributed net realized gains was reclassified as a $320,000 increase to paid-in-capital and a $147,000 increase to undistributed net investment income during the year ended December 31, 1995. The results of operations and net assets were not affected by the reclassifications. At December 31, 1995, the aggregate cost of investments for federal income tax and financial reporting purposes was $361,135,000 and net unrealized gain aggregated $94,714,000, of which $99,274,000 related to appreciated investments and $4,560,000 to depreciated investments. NOTE 4 - RELATED PARTY TRANSACTIONS The investment management agreement between the fund and T. Rowe Price Associates, Inc. (the Manager) provides for an annual investment management fee, of which $78,000 was payable at December 31, 1995. The fee, computed daily and paid monthly, is equal to 0.20% of average daily net assets. Under the terms of the investment management agreement, the Manager is required to bear any expenses through December 31, 1995, which would cause the fund's ratio of expenses to average net assets to exceed 0.45%. Thereafter through December 31, 1997, the fund is required to reimburse the Manager for these expenses, provided that average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing the fund's ratio of expenses to average net assets to exceed 0.45%. Pursuant to this agreement, $181,000 of management fees for the year ended December 31, 1995 and $264,000 of management fees for the year ended December 31, 1994 were not accrued by the fund. Additionally, $651,000 of unaccrued fees and expenses related to a previous agreement have been permanently waived. In addition, the fund has entered into agreements with the Manager and two wholly owned subsidiaries of the Manager, pursuant to which the fund receives certain other services. The Manager computes the daily share price and maintains the financial records of the fund. T. Rowe Price Services, Inc., is the fund's transfer and dividend disbursing agent and provides shareholder and administrative services to the fund. T. Rowe Price Retirement Plan Services, Inc., provides subaccounting and recordkeeping services for certain retirement accounts invested in the fund. The fund incurred expenses pursuant to these related party agreements totaling approximately $671,000 for the year ended December 31, 1995, of which $54,000 was payable at period-end. 17 19 - -------------------------------------------------------------------------------- Financial Highlights T. Rowe Price Equity Index Fund
For a share outstanding throughout each period --------------------------------------------------- Year Ended December 31, --------------------------------------------------- 1995 1994 1993 1992 1991 --------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD................ $13.09 $13.48 $12.63 $12.10 $9.72 ------ ------ ------ ------ ------ Investment activities Net investment income............................. 0.39* 0.36* 0.32* 0.32* 0.34* Net realized and unrealized gain (loss)........... 4.43 (0.23) 0.86 0.53 2.46 ------ ------ ------ ------ ------ Total from investment activities.................. 4.82 0.13 1.18 0.85 2.80 ------ ------ ------ ------ ------ Distributions Net investment income............................. (0.40) (0.36) (0.32) (0.31) (0.34) Net realized gain................................. (0.30) (0.09) (0.01) (0.01) (0.08) Distributions in excess of net realized gain...... -- (0.07) -- -- -- ------ ------ ------ ------ ------ Total distributions............................... (0.70) (0.52) (0.33) (0.32) (0.42) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD...................... $17.21 $13.09 $13.48 $12.63 $12.10 ====== ====== ====== ====== ====== - --------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Total return........................................ 37.2%* 1.0%* 9.4%* 7.2%* 29.2%* Ratio of expenses to average net assets............. 0.45%* 0.45%* 0.45%* 0.45%* 0.45%* Ratio of net investment income to average net assets................................ 2.54%* 2.73%* 2.40%* 2.57%* 3.07%* Portfolio turnover rate............................. 1.3% 1.3% 0.8% 0.1% 5.8% Net assets, end of period (in thousands)............ $457,256 $270,165 $166,994 $128,242 $22,069 - ---------------------------------------------------------------------------------------------------------
* Excludes expenses in excess of a 0.45% voluntary expense limitation in effect through December 31, 1995. 18 20 - -------------------------------------------------------------------------------- Report of Independent Accountants To the Shareholders and Board of Directors of T. Rowe Price Equity Index Fund, Inc. We have audited the accompanying statement of net assets of T. Rowe Price Equity Index Fund, Inc. as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 1995, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights, referred to above, present fairly, in all material respects, the financial position of T. Rowe Price Equity Index Fund, Inc. as of December 31, 1995, the results of its operations, the changes in its net assets and financial highlights for each of the respective periods stated in the first paragraph in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Baltimore, Maryland January 18, 1996 19 -----END PRIVACY-ENHANCED MESSAGE-----