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Previous: DAUPHIN DEPOSIT CORP, 8-K, 1994-02-04 |
Next: DREYFUS INSTITUTIONAL MONEY MARKET FUND INC, 24F-2NT, 1994-02-04 |
<PAGE>
FELLOW SHAREHOLDERS
The stock market provided positive returns for both the fourth quarter and all
of 1993. For both time periods, the New Era Fund substantially exceeded the
broad market as measured by
the unmanaged Standard & Poor's 500 Stock Index.
PERFORMANCE COMPARISON
Periods Ended 12/31/93
3 Months 12 Months
--------------------------------
New Era Fund 5.7% 15.3%
S&P 500 2.3 10.1
- -------------------------------------------------------------------------
Stock prices diverged substantially among industry groups during the
quarter and year. During the first three quarters, your Fund lagged the
natural resource groups, whose performance was driven by the strength of oil
stocks. During the final quarter, however, oil prices and many oil stocks
declined, and your Fund, benefiting from its wider diversification,
outstripped the more narrowly focused natural resource funds. For the full
year, however, New Era lagged the competitor average.
YEAR-END DISTRIBUTION
On December 21, your Board of Directors declared an income dividend of $0.38
per share, a long-term capital gain of $0.92 per share, and a short-term gain
of $0.11 per share, each payable to shareholders of record on that date. A
confirmation statement or check was mailed to you in early January, and Form
1099-DIV reporting these distributions and other 1993 tax information was
mailed to you later in the month.
ECONOMIC REVIEW
The economy compiled a respectable record for 1993, primarily due to the
Federal Reserve's aggressively easy monetary policy. Aided by low interest
rates, growth accelerated gradually over the course of the year.
The global scene was mixed. A number of foreign economies remained mired
in recession; in particular, several important European countries and Japan
continued to face difficult times. In contrast, many developing and newly
industralized countries, especially in the Pacific Rim, enjoyed strong growth.
Commodity prices were also mixed. Some industrial commodities related to
construction and housing improved, but others more sensitive to worldwide
economic trends, including metals such as aluminum, continued to decline. Oil
prices fell sharply during the fourth quarter when OPEC failed to reach a
production control agreement. Gold prices rose during the year, reflecting
stronger demand and a reduction in some sources of supply, such as gold sales
by central banks.
MARKET AND PERFORMANCE RECAP
The table on page 3 measures the cents-per-share contribution of each major
industry group to the change in the Fund's net asset value. Also shown is each
sector's percentage contribution to total performance and its proportion of
the Fund's net assets.
The best performing group by far last year was precious metals mining
stocks. Gold prices rose almost continuously, increasing 17% during the 12
months ended December 1993. The bear market in gold appears to have finally
ended, and gold shares reflected the improved outlook. Energy-related stocks
also outperformed the market last year, despite the fourth quarter drop in oil
prices, and natural gas prices remained stable at high levels throughout the
year. Investors are clearly anticipating a rebound in the oil market.
The worst performing securities included some of the stable growth
companies. WAL-MART stock declined for the first time in many years due to
investor fears about price wars in its Sam's Wholesale Club division.
Nevertheless, we believe investor perception of Wal-Mart will become more
favorable next year.
<PAGE>
We were net buyers of stocks during the fourth quarter, and several names
appear in the portfolio for the first time, including the aluminum producers
ALCOA and ALUMAX. Although the price of aluminum is depressed, we expect it to
rise as capacity is curtailed and dumping from the former Soviet Union is
reduced. We also purchased INCO on a similar premise, namely, that depressed
nickel prices would improve considerably along with the world economy. Other
new holdings include NORTHERN TELECOM and TVX GOLD. We were able to buy
Northern Telecom, a major producer of telecommunications equipment, at what we
believe was a favorable price due to its temporary earnings problems. The TVX
Gold purchase reflected a switch from some of the portfolio's slower-growing
gold mining companies into a more dynamic producer with the capacity to
increase production and reserves considerably over the next several years.
OUTLOOK
The overall economic environment is improving. Trade agreements affecting
North America (NAFTA) and broader world markets (GATT) will definitely
increase business opportunities over time and should boost investor
confidence. Rising confidence along with continued accommodative monetary
policy should result in stronger growth in the U.S.
The outlook is also encouraging for several foreign economies which have
been stalled in recession. An improving global environment should be good for
most natural resource producers. The more cyclical ones should benefit most
from rising volumes and prices because of their previous, successful efforts
to lower their cost structures.
As long as monetary policy remains expansive and there are no major
disruptions in the international economies, we are optimistic that 1994 will
be a rewarding year for investors in natural resource companies.
Respectfully submitted,
George A. Roche
President and Chairman of the
Investment Advisory Committee
January 24, 1994
OFFICERS AND DIRECTORS
George A. Roche, President/Director
Leo C. Bailey, Director
George J. Collins, Director
David K. Fagin, Director
Carter O. Hoffman, Director
John K. Major, Director
Hubert D. Vos, Director
Stephen W. Boesel, Vice President
Hugh M. Evans III, Vice President
Henry H. Hopkins, Vice President
Richard P. Howard, Vice President
James A. C. Kennedy III, Vice President
Charles M. Ober, Vice President
David L. Rea, Vice President
James S. Riepe, Vice President
Alan R. Stuart, Vice President
David J. Wallack, Vice President
Lenora V. Hornung, Secretary
Carmen F. Deyesu, Treasurer
David S. Middleton, Controller
<PAGE>
CONTRIBUTIONS TO THE NET ASSET VALUE PER SHARE
THREE MONTHS ENDED DECEMBER 31, 1993
- ------------------------------------------------------------------------------
TEN BEST CONTRIBUTORS
American Barrick Resources 17\ct\
Newmont Mining 16
IMC Fertilizer Group 12
Inco* 8
IBM 8
Freeport-McMoRan Copper & Gold 8
Scott Paper 6
Gannett 5
Northern Telecom* 5
Reuters 5
- ------------------------------------------------------------------------------
TOTAL 90\ct\
TEN WORST CONTRIBUTORS
Atlantic Richfield -7\ct\
Murphy Oil 7
Schlumberger 6
Rouse 6
Mobil 4
Pennzoil 4
Amerada Hess 3
Chevron 3
Halliburton 3
Corning 2
- ------------------------------------------------------------------------------
TOTAL -45\ct\
- ------------------------------------------------------------------------------
TWELVE MONTHS ENDED DECEMBER 31, 1993
- ------------------------------------------------------------------------------
TEN BEST CONTRIBUTORS
American Barrick Resources 36\ct\
Newmont Mining 25
Mobil 21
LAC Minerals 17
Echo Bay Mines** 14
Royal Dutch Petroleum 11
British Petroleum 11
Reuters 9
Inco 8
Deere** 8
- ------------------------------------------------------------------------------
TOTAL 160\ct\
TEN WORST CONTRIBUTORS
Wal-Mart -38\ct\
Cyprus Amax Minerals 9
Atlantic Richfield 8
Bristol-Myers Squibb 5
Kimberly-Clark 4
Bowater** 3
Corning 3
Sun** 1
Amdahl 1
Pall 1
- ------------------------------------------------------------------------------
TOTAL -73\ct\
- ------------------------------------------------------------------------------
*Position added
**Position eliminated
<PAGE>
TWENTY-FIVE LARGEST HOLDINGS
December 31, 1993
Percent of
Company Net Assets
- ------------------------------------------------------
Wal-Mart 6.8%
Mobil 4.6
Atlantic Richfield 4.3
Newmont Mining 4.2
DuPont 4.2
American Barrick Resources 3.8
Union Pacific 3.6
TVX Gold 2.6
Royal Dutch Petroleum 2.4
Rouse 2.2
Schlumberger 2.2
IMC Fertilizer Group 2.1
Reuters 1.9
Murphy Oil 1.8
Northern Telecom 1.8
Cyprus Amax Minerals 1.7
Placer Dome 1.7
Texaco 1.6
Kimberly-Clark 1.6
Bristol-Myers Squibb 1.5
Inco 1.5
Gannett 1.5
Scott Paper 1.5
IBM 1.4
GE 1.4
- ------------------------------------------------------
TOTAL 63.9%
- ------------------------------------------------------
PERFORMANCE CONTRIBUTIONS
Twelve Months Ended December 31, 1993
Percent of Cents-Per-Share
Sector Net Assets Contribution
- -------------------------------------------------------------------------
NATURAL RESOURCE-RELATED
Building & Real Estate 4% 4\ct\
Forest Products 5 5
Integrated Petroleum 15 44
Petroleum Exploration & Production 5 16
Miscellaneous Energy 0 3
Energy Services 3 7
Precious Metals 14 122
Diversified Metals 6 5
Chemicals 8 14
Diversified Resources 9 31
TOTAL 69 251
CONSUMER & SERVICES
Merchandising 8 -34
Consumer Durables 1 7
Miscellaneous 8 15
TOTAL 17 -12
SCIENCE & TECHNOLOGY 3 7
MISCELLANEOUS 3 4
SUBTOTAL 92 250
RESERVES & INCOME 8 38
- -------------------------------------------------------------------------
TOTAL PORTFOLIO 100% 288\ct\
- -------------------------------------------------------------------------
<PAGE>
New Era Fund Performance Comparison
A line graph compares the 12/31/93 value of a hypothetical $10,000 investment
made ten years earlier in the New Era Fund, the S&P 500 Index, and the Lipper
Natural Resource Index. At 12/31/93, the Fund investment would have been
worth $29460, the S&P Index investment would have been worth $40177, and the
Lipper Index investment would have been worth $21933.
TOTAL RETURN PERFORMANCE
Periods Ended December 31, 1993
1 Year 5 Years* 10 Years*
- ------------------------------------------------
15.33% 8.90% 11.41%
- ------------------------------------------------
*Average Annual Compound Total Return
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
<PAGE>
INVESTMENT RECORD
T. Rowe Price New Era Fund
The table below shows the investment record of one share of the T. Rowe Price
New Era Fund, purchased at the initial offering price of $10.00, for the
period 1/20/69 through 12/31/93. Over this time, stock prices in general have
risen. The results shown should not be considered a representation of the
income or capital gain or loss which may be realized from an investment made
in the Fund today.
PER-SHARE DATA
<TABLE>
<CAPTION>
With Capital Gains and Income Dividends Annual
Taken in Cash Reinvested in Additional Shares Total Return
----------------------------------- -------------------------------------- On Investment
Year Capital Capital % Change
Ended Net Asset Gain Income Gain Income Value of ---------------------------
12/31 Value Distributions2 Dividends Distributions Dividends Investment Fund S&P500
- --------- ---------- -------------- ---------- ------------- --------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
19691 $9.73 -- -- -- -- $9.73 -2.7% -6.6%
1970 9.49 -- $0.16 -- $0.16 9.65 -0.8 3.9
1971 10.33 -- 0.16 -- 0.16 10.68 10.6 14.3
1972 12.27 -- 0.16 -- 0.17 12.87 20.6 19.0
1973 11.79 $0.14 0.10 $0.15 0.11 12.62 -1.9 -14.7
1974 8.47 0.11 0.18 0.11 0.20 9.30 -26.3 -26.5
1975 9.94 -- 0.29 -- 0.31 11.28 21.3 37.2
1976 11.74 -- 0.28 -- 0.32 13.69 21.4 23.9
1977 11.00 0.03 0.24 0.03 0.28 13.14 -4.0 -7.1
1978 11.66 0.25 0.32 0.30 0.38 14.71 12.0 6.6
1979 17.45 0.38 0.39 0.48 0.49 23.53 59.9 18.6
1980 25.27 0.36 0.47 0.49 0.63 35.77 52.0 32.4
1981 19.34 1.48 0.68 2.10 0.96 30.11 -15.8 -5.0
1982 15.53 3.05 0.86 4.74 1.34 30.86 2.5 21.6
1983 18.44 0.07 0.81 0.14 1.61 38.71 25.5 22.6
1984 17.13 1.29 0.61 2.71 1.28 40.01 3.3 6.2
1985 18.67 1.41 0.68 3.29 1.59 49.38 23.4 31.7
1986 17.76 3.25 0.50 9.08 1.32 57.27 16.0 18.7
1987 18.08 1.77 0.98 5.90 3.26 67.49 17.8 5.3
1988 18.79 0.61 0.53 2.28 1.98 74.45 10.3 16.5
1989 21.73 1.05 0.56 4.16 2.22 92.54 24.3 31.6
1990 18.48 0.71 0.62 3.02 2.64 84.43 -8.8 -3.1
1991 19.86 0.73 0.55 3.34 2.51 96.88 14.7 30.3
1992 18.88 0.94 0.45 4.59 2.20 98.89 2.1 7.6
1993 20.35 1.03 0.38 5.39 1.99 104.05 15.3 10.1
TOTAL $18.66 $10.96 $52.30 $28.11
- --------------------------------------------------------------------------------------------------------------------------
<FN>
1. From inception 1/20/69 to 12/31/69.
2. Includes short-term capital gains of $0.01 in 1978; $0.02 in 1979; $0.03 in
1980; $0.03 in 1981; $0.05 in 1982; $0.45 in 1984; $0.67 in 1985; $0.21 in
1987; $0.26 in 1989; $0.02 in 1990; and $0.11 in 1993.
</TABLE>
<PAGE>
STATEMENT OF NET ASSETS (VALUE IN THOUSANDS)
T. Rowe Price New Era Fund/December 31, 1993
COMMON STOCKS --92.5%
NATURAL RESOURCE-RELATED --68.8%
Value
--------
BUILDING & REAL ESTATE --3.6%
200,000 shs. General Growth Properties........... $4,300
50,000 Hilton.............................. 3,037
940,000 *Rouse.............................. 16,685
243,000 Taubman Centers..................... 2,825
26,847
FOREST PRODUCTS--5.1%
120,000 Albany International................ 2,295
100,000 International Paper................. 6,775
230,000 Kimberly-Clark...................... 11,931
130,000 Mead................................ 5,850
270,000 Scott Paper......................... 11,104
37,955
INTEGRATED PETROLEUM--15.0%
308,300 Atlantic Richfield.................. 32,448
140,000 British Petroleum, ADR.............. 8,960
80,000 Chevron............................. 6,970
440,000 Mobil............................... 34,760
169,600 Royal Dutch Petroleum, ADR.......... 17,702
190,000 Texaco.............................. 12,279
113,119
PETROLEUM EXPLORATION &
PRODUCTION--4.6%
170,000 Amerada Hess........................ 7,671
32,700 Cross Timbers Oil................... 466
340,000 Murphy Oil.......................... 13,600
400,000 Santa Fe Energy Resources........... 3,600
350,000 Unocal.............................. 9,756
35,093
ENERGY SERVICES--3.2%
180,000 Halliburton......................... 5,738
280,000 Schlumberger........................ 16,555
200,000 *Smith International................ 1,750
24,043
PRECIOUS METALS--14.4%
130,115 Amax Gold........................... 895
1,000,000 American Barrick Resources.......... 28,500
101,200 *Golden Star Resources.............. 1,356
208,250 Homestake Mining.................... 4,582
1,121,200 LAC Minerals........................ 9,810
550,000 Newmont Mining...................... 31,694
500,000 Placer Dome......................... 12,437
3,000,000 *TVX Gold........................... 19,500
108,774
DIVERSIFIED METALS --5.8%
50,000 shs. Alcoa............................... $3,469
265,000 *Alumax............................. 5,698
60,100 Brush Wellman....................... 856
490,000 Cyprus Amax Minerals................ 12,679
370,000 Freeport-McMoRan Copper & Gold...... 9,250
430,000 Inco................................ 11,556
43,508
CHEMICALS --8.0%
160,000 Dow Chemical........................ 9,080
649,000 Du Pont............................. 31,314
350,000 Geon................................ 8,269
70,000 Monsanto............................ 5,136
320,000 Pall................................ 5,880
59,679
DIVERSIFIED RESOURCES--9.1%
255,000 *Dundee Bancorp..................... 1,756
130,000 GATX................................ 5,298
350,300 *IMC Fertilizer Group............... 15,895
140,000 Overseas Shipholding Group.......... 3,307
125,000 Pennzoil............................ 6,656
371,300 Pittston Minerals................... 8,865
430,000 Union Pacific....................... 26,929
68,706
TOTAL NATURAL RESOURCE-RELATED 517,724
CONSUMER & SERVICE --16.7%
MERCHANDISING--8.2%
360,000 Petrie Stores....................... 10,485
2,052,640 Wal-Mart............................ 51,316
61,801
CONSUMER DURABLES--0.3%
120,000 *Coltec Industries.................. 2,250
MISCELLANEOUS--8.2%
200,000 Bristol-Myers Squibb................ 11,625
150,000 Corning............................. 4,200
170,000 Eli Lilly........................... 10,094
195,000 Gannett............................. 11,164
100,000 GE.................................. 10,488
180,000 Reuters, ADR........................ 14,197
61,768
TOTAL CONSUMER & SERVICE 125,819
SCIENCE & TECHNOLOGY--3.5%
340,000 Amdahl.............................. 2,040
190,000 IBM................................. 10,735
430,000 Northern Telecom.................... 13,276
TOTAL SCIENCE & TECHNOLOGY 26,051
<PAGE>
T. ROWE PRICE NEW ERA FUND / STATEMENT OF NET ASSETS
MISCELLANEOUS--3.5% $26,387
TOTAL COMMON STOCKS (COST--$494,463) 695,981
SHORT-TERM INVESTMENTS--8.6%
CERTIFICATES OF DEPOSIT--0.7%
$5,000,000 Banque Nationale de Paris,
3.39%, 5/3/94..................... 4,999
COMMERCIAL PAPER--7.9%
5,000,000 Abbey National North America,
3.20%, 3/18/94.................... 4,919
639,000 BT Securities, 3.25%, 1/3/94........ 639
5,000,000 Citicorp, VRMTN, 3.55%, 12/7/94..... 4,997
4,000,000 Corporate Asset Fund, VRMTN,
3.40%, 12/12/94................... 3,999
5,000,000 Corporate Asset Funding,
3.20%, 3/7/94..................... 4,923
5,000,000 Elf Aquitaine Finance USA,
3.30%, 1/27/94.................... 4,958
5,000,000 General Electric Capital,
3.35%, 3/3/94..................... 4,944
5,000,000 Goldman Sachs Group, VRNTS,
3.47%, 6/3/94..................... 5,000
2,445,000 Kingdom of Denmark,
3.32%, 1/13/94.................... 2,411
5,000,000 MCA Funding, 3.23%, 4/8/94.......... 4,918
5,000,000 Merrill Lynch, VRMTN,
3.36%, 9/16/94.................... 5,000
5,000,000 Morgan Stanley Group, VRMTN,
3.475%, 3/15/95................... 5,000
4,000,000 PPG Holdings B.V., 3.35%, 2/2/94.... 3,972
4,000,000 Preferred Receivables Funding,
3.35%, 2/2/94..................... 3,966
59,646
TOTAL SHORT-TERM INVESTMENTS
(COST--$64,645) 64,645
- ----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES--101.1%
(COST $559,108) 760,626
- ----------------------------------------------------------------
Other Assets Less Liabilities--(1.1)%.................. $(8,094)
--------
NET ASSETS CONSISTING OF:
Accumulated net investment income--
net of distributions.................. $822
Accumulated realized gains/losses--
net of distributions.................. 7,497
Unrealized appreciation of investments.. 201,518
Paid-in-capital applicable to
36,972,169 shares of $1.00 par
value capital stock outstanding;
200,000,000 shares authorized......... 542,695
-----------
NET ASSETS--100.0% $752,532
-----------
-----------
NET ASSET VALUE PER SHARE $20.35
-----------
-----------
- --------------------------------------------------------------
* Non-income producing
VRMTN Variable Rate Medium Term Note
VRNTS Variable Rate Notes
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF OPERATIONS
T. Rowe Price New Era Fund/Year Ended December 31, 1993
Amounts in Thousands
----------------------
INVESTMENT INCOME
Income
Dividends ............................................ $17,164
Interest ............................................. 2,681
-----------
Total income ......................................... $19,845
Expenses
Investment management fees ........................... 4,366
Shareholder servicing fees & expenses ................ 1,102
Custodian and accounting fees & expenses ............. 157
Prospectus & shareholder reports ..................... 81
Registration fees & expenses ......................... 38
Legal & auditing fees ................................ 32
Directors' fees & expenses ........................... 23
Miscellaneous ........................................ 22
-----------
Total expenses ....................................... 5,821
-----------
Net Investment Income .................................. 14,024
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain ...................................... 43,284
Change in unrealized appreciation or depreciation ...... 46,387
-----------
Net gain on investments ................................ 89,671
-----------
INCREASE IN NET ASSETS FROM OPERATIONS $103,695
-----------
-----------
- ------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
T. Rowe Price New Era Fund
Year Ended December 31,
1993 1992
------------------------
Amounts in Thousands
------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income.............................. $14,024 $15,864
Net realized gain on investments................... 43,284 32,886
Change in unrealized appreciation or depreciation
of investments................................... 46,387 (35,094)
------------------------
Increase in net assets from operations............. 103,695 13,656
------------------------
Distributions to shareholders
Net investment income.............................. (13,203) (15,658)
Net realized gain on investments................... (35,786) (32,708)
------------------------
Decrease in net assets from distributions to
shareholders..................................... (48,989) (48,366)
------------------------
Capital share transactions
Sold 4,573 and 4,525 shares........................ 92,115 89,146
Distributions reinvested of 2,204 and 2,327 shares. 44,398 43,861
Redeemed 6,865 and 7,895 shares.................... (138,286) (155,515)
------------------------
Decrease in net assets from capital share
transactions..................................... (1,773) (22,508)
------------------------
Total increase (decrease)............................ 52,933 (57,218)
NET ASSETS
Beginning of year.................................. 699,599 756,817
------------------------
End of year........................................ $752,532 $699,599
------------------------
------------------------
- -----------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
T. Rowe Price New Era Fund / December 31, 1993
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price New Era 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 on the day 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
are valued at a price within the limits of the latest bid and asked prices
deemed by the Board of Directors or by persons delegated by the Board, best to
reflect fair value. Securities regularly traded in the over-the-counter market
are valued at the latest bid price. Short-term debt securities are valued at
their cost which, when combined with accrued interest, approximates fair
value.
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 an 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 which may differ from generally accepted accounting
principles.
C) Accounting Change - Effective as of the beginning of the year, the Fund
adopted a recently issued accounting standard related to shareholder
distributions. This change resulted in a reclassification to paid-in-capital
of permanent differences between tax and financial reporting of net investment
income and net realized gains/losses. The cumulative effect of this change as
of December 31, 1992 increased Accumulated net investment income - net of
distributions by $93,000, decreased Accumulated net realized gains/losses -
net of distributions by $586,000, and increased Paid-in-capital by $493,000.
The results of operations, shareholder distributions and net assets were not
affected by this change.
NOTE 2 - PORTFOLIO TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term and U.S.
Government securities, aggregated $160,243,000 and $208,051,000, respectively,
for the year ended December 31, 1993.
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 and distribute all of
its taxable income.
At December 31, 1993, the aggregate cost of investments for federal income
tax and financial reporting purposes was $559,108,000 and net unrealized
appreciation aggregated $201,518,000, of which $232,543,000 related to
appreciated investments and $31,025,000 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, computed daily and paid monthly, consisting of an Individual Fund Fee
equal to 0.25% of average daily net assets and a Group Fee. The Group Fee is
based on the combined assets of certain mutual funds sponsored by the Manager
or Rowe Price-Fleming International, Inc. (the Group). The Group Fee rate
ranges from 0.48% for the first $1 billion of assets to 0.31% for assets in
excess of $34 billion. The effective annual Group Fee rate at December 31,
1993, and for the year then ended was 0.35%. The Fund pays a pro rata portion
of the Group Fee based on the ratio of the Fund's net assets to those of the
Group.
<PAGE>
T. Rowe Price Services, Inc. (TRPS) and Retirement Plan Services, Inc.
(RPS) are wholly owned subsidiaries of the Manager. TRPS provides transfer and
dividend disbursing agent functions and shareholder services for all accounts.
RPS provides subaccounting and recordkeeping services for certain retirement
accounts invested in the Fund. The Manager, under a separate agreement,
calculates the daily share price and maintains the financial records of the
Fund. The Fund is one of several T. Rowe Price mutual funds (the Underlying
Funds) in which the T. Rowe Price Spectrum Growth Fund (Spectrum) invests. In
accordance with an Agreement between Spectrum, the Underlying Funds, the
Manager and TRPS, expenses from the operation of Spectrum are borne by the
Underlying Funds based on each Underlying Fund's proportionate share of assets
owned by Spectrum. For the year ended December 31, 1993, the Fund incurred
fees totalling approximately $985,000 for these services provided by related
parties. At December 31, 1993, these investment management and service fees
payable were $136,000.
<PAGE>
FINANCIAL HIGHLIGHTS
T. ROWE PRICE NEW ERA FUND
<TABLE>
<CAPTION>
For a share outstanding throughout each
-------------------------------------------------
Year Ended December 31,
-------------------------------------------------
1993 1992 1991 1990 1989
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR................. $18.88 $19.86 $18.48 $21.73 $18.79
--------- --------- --------- --------- ---------
Investment Activities
Net investment income............................ 0.40 0.45 0.54 0.60 0.56
Net realized and unrealized gain (loss).......... 2.48 (0.04) 2.12 (2.52) 3.99
--------- --------- --------- --------- ---------
Total from Investment Activities................... 2.88 0.41 2.66 (1.92) 4.55
--------- --------- --------- --------- ---------
Distributions
Net investment income............................ (0.38) (0.45) (0.55) (0.62) (0.56)
Net realized gain................................ (1.03) (0.94) (0.73) (0.71) (1.05)
--------- --------- --------- --------- ---------
Total Distributions.............................. (1.41) (1.39) (1.28) (1.33) (1.61)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR....................... $20.35 $18.88 $19.86 $18.48 $21.73
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
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RATIOS/SUPPLEMENTAL DATA
Total Return....................................... 15.3% 2.1% 14.7% (8.8)% 24.3%
Ratio of Expenses to Average Net Assets............ 0.80% 0.81% 0.85% 0.83% 0.83%
Ratio of Net Investment Income 1.92% 2.22% 2.56% 2.81% 2.52%
to Average Net Assets............................
Portfolio Turnover Rate............................ 24.7% 16.9% 9.0% 9.0% 18.6%
Net Assets, End of Year (in thousands)............. $752,532 $699,599 $756,817 $707,548 $826,582
Number of Shareholder Accounts, End of Year........ 36,000 41,000 47,000 52,000 55,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of T. Rowe Price New Era Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the selected per
share data and information (which appears under the heading "Financial
Highlights") present fairly, in all material respects, the financial position
of T. Rowe Price New Era Fund, Inc. at December 31, 1993, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the selected per share data and
information for each of the five years in the period then ended, in conformity
with generally accepted accounting principles. These financial statements and
selected per share data and information (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1993 by correspondence with
custodians and brokers and, where appropriate, the application of alternative
auditing procedures for unsettled security transactions, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE
Baltimore, Maryland
January 19, 1994
<PAGE>
SHAREHOLDER SERVICES
To help shareholders monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety
of information and services--at no extra cost.
TELEPHONE SERVICES
ACCESS YOUR ACCOUNT 24 HOURS A DAY BY CALLING 1-800-638-2587.
Tele*Access\rs\--Gives you your account balance, date and amount of your
last transaction, latest dividend payment, and fund prices and yields.
TransactionLine\rs\--Lets you purchase, exchange, or redeem shares
anytime.
SHAREHOLDER SERVICE REPRESENTATIVES ARE AVAILABLE FROM 8:00 A.M. TO 10:00
P.M., MONDAY\-FRIDAY, AND SATURDAY FROM 9:00 A.M. TO 5:00 P.M., E.T. CALL
1-800-225-5132.
Shareholder Service Center--Call to exchange shares or move money between
your bank and fund accounts.
ACCOUNT SERVICES
Checking--Write checks for $500 or more on any money market, bond, or
tax-free fund account.
Automatic Investing--Build your account over time by investing directly
from your bank account or paycheck. A low, $50 minimum makes it easy to get
started.
Automatic Withdrawal--If you need money from your fund account on a
regular basis,
you can establish scheduled, automatic redemptions.
Dividend and Capital Gains Payment Options--Reinvest all or some of your
distributions or take them in cash . We give you maximum flexibility and
convenience.
INVESTMENT INFORMATION
Combined Statement--A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax category, provides total
portfolio value, and lists your investments by type--stock, bond, and money
market. Detail pages itemize account transactions by fund.
Quarterly Shareholder Reports--Portfolio managers review the performance
of the funds
in plain language and discuss T. Rowe Price's economic outlook.
The T. Rowe Price Report--A quarterly newsletter with relevant articles on
market trends, personal financial planning, and
T. Rowe Price's economic perspective.
Insights--A library of information that includes reports on mutual fund
tax issues, investment strategies, and financial markets.
Detailed Investment Guides--Our widely acclaimed Asset Mix Worksheet,
College Planning Kit, Retirees Financial Guide, Retirement Planning Kit (also
available on disk for PC use) and Guide to Risk-Adjusted Performance can help
you determine and reach your investment goals.
DISCOUNT BROKERAGE
Trade stocks, bonds, options, and precious metals at substantial savings over
full-cost brokers.
Tele*Trade--Call this automated phone service after business hours to
place your orders.
Fax*Trade--Buy and sell by simply faxing your order.
Tele*Quote--Provides 24-hour access to stock and option quotes.
Money Fund Sweep Feature--Buy and sell securities and have your "sweep"
account automatically debited or credited. Dividend and interest payments are
credited daily.
If you have questions or would like to add a service to your account, please
call our Shareholder Service Center.
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