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Previous: NEW ENGLAND BUSINESS SERVICE INC, 10-Q, 1995-02-03 |
Next: MERRILL LYNCH CORPORATE BOND FUND INC/NY, 497, 1995-02-03 |
<PAGE>
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 distri-
bution only to shareholders and to
others who have received a copy of
the prospectus of the T. Rowe Price
New Era Fund[registered trademark].
[logo]
NEF
Annual Report
[logo]
New Era Fund
December 31, 1994
<PAGE>
Fellow Shareholders
Last year was difficult for most investors and for the stock market in
general. Although your Fund declined modestly during the fourth quarter, it
registered a respectable gain for the year and substantially outperformed the
unmanaged Standard & Poor's 500 Stock Index. The table below compares the
performance of the New Era Fund with the S&P 500.
Performance Comparison
Periods Ended
12/31/94
3 Months 12 Months
------------------
New Era Fund -2.5% 5.2%
S&P 500 0.0 1.3
- -----------------------------------
YEAR-END DISTRIBUTION
On December 27, your Board of Directors declared an income dividend of $0.38
per share, a long-term capital gain of $0.53 per share, and a short-term gain
of $0.34 per share, each payable to shareholders of record on that date. A
confirmation statement or check was mailed to you in early January. In
addition, Form l099-DIV summarizing this information for 1994 tax purposes was
mailed to you later in the month.
ECONOMIC ENVIRONMENT
The economy grew at a rate of about 4% last year, continuing the vigorous pace
of the last few years. Many foreign economies also strengthened, boding well
for Europe and Japan in particular.
Last February the Federal Reserve initiated a series of increases in the
federal funds rate to head off inflation, culminating in a hike of 75 basis
points in both the target for that rate and the discount rate in November. (A
basis point is one-hundredth of one percent.) The bond market declined
sharply, and rising interest rates restrained advances in the stock market as
well.
The overall inflation rate has so far remained low, largely because unit
labor costs have not accelerated. Many commodities, including agricultural
products, did not rise in value. The major surge in prices was in industrial
commodities such as paper, chemicals, and metals. The price of oil increased,
but natural gas prices declined due to weak demand caused by a mild winter so
far. Gold prices fell slightly last year despite the fear of rising inflation
and turmoil in the currency markets.
PORTFOLIO AND PERFORMANCE REVIEW
The best-performing groups in the portfolio over the year were the cyclical
commodity producers--the chemicals, forest products, and metals companies.
Science and technology stocks, also highly responsive to a rising economy,
likewise did well. Chemical stocks led by American Cyanamid, which was
acquired by American Home Products during the year, composed the best single
group. Other stocks in this sector that made major contributions to
performance were DuPont and Dow Chemical.
The portfolio's worst-performing groups were precious metals, diversified
resources, and merchandising. Gold producers suffered from falling gold
prices. Some diversified resource stocks declined in value despite their
relatively good fundamental outlook. Merchandising stocks performed poorly
because of slightly disappointing sales during the all-important Christmas
season. Energy stocks were mixed. Major oil companies posted respectable
results based upon their diversified operations. However, most small oil and
gas producers and energy service companies were hurt by a weak outlook for
natural gas prices.
<PAGE>
We were net buyers of stocks during the fourth quarter, selectively adding
to our holdings in a number of depressed gold and energy producers. Several
names appear in the portfolio for the first time. Among them is LONRHO, a
diversified mining company with interests in gold, platinum, real estate, and
agriculture. The company has a capable new chief executive with plans to
enhance shareholder value. Also included are Ashanti Goldfields, a major gold
producer in Ghana with plans to increase both reserves and production
capacity, and Autodesk, a technology company that designs, develops, and
markets computer-aided design (CAD) software for personal computers and work
stations.
The Performance Contributions table following this letter measures the
cents-per-share contributions major industry groups made to the change in your
Fund's net asset value. Also shown is each sector's percentage of net assets.
OUTLOOK
Our outlook for the world economy is generally positive. The United States and
other important economic engines, including Germany and Japan, should
experience continued economic growth in 1995. The adoption of major free trade
agreements last year should enhance growth prospects in many regions.
However, events in several areas cause us concern. The sharp devaluation
of the Mexican peso, as well as currency turmoil in general, could continue to
roil various markets. Continued conflict in Russia creates a negative
atmosphere for international financial markets, especially in Europe. Higher
interest rates, which may slow economic growth and attract investors to
fixed-income securities, are perhaps the major influence on equity markets as
we look toward the year ahead.
Nevertheless, we are cautiously optimistic about prospects for stocks
overall and for your Fund. U.S. economic expansion should continue, provided
the Federal Reserve does not push interest rates upward too drastically from
current levels. Most foreign economies should likewise experience moderate
growth, benefiting investors in natural resource stocks.
Respectfully submitted,
s/George A. Roche
George A. Roche
President and Chairman of the
Investment Advisory Committee
January 20, 1995
<PAGE>
Contributions to the Change in Net Asset Value Per Share
Three Months Ended December 31, 1994
- -------------------------------------------------------
Ten Best Contributors
Mobil 5[cents]
LONRHO 4
Stillwater Mining 4
Autodesk 4
Eli Lilly 3
Gannett 2
General Growth Properties 2
Halliburton 2
Pall 1
Union Texas Petroleum 1
- -------------------------------------------------------
Total 28[cents]
Ten Worst Contributors
Newmont Mining -13[cents]
American Barrick Resources 11
Wal-Mart 9
TVX Gold 7
Union Pacific 7
Pegasus Gold 5
Kimberly-Clark 4
Schlumberger 4
USX-Marathon 3
Placer Dome 3
- -------------------------------------------------------
Total -66[cents]
- -------------------------------------------------------
*Position eliminated
Twelve Months Ended December 31, 1994
- -------------------------------------------------------
Ten Best Contributors
American Cyanamid* 25[cents]
DuPont 15
Scott Paper 11
Rustenburg Platinum 7
Autodesk 6
Mobil 5
Impala Platinum* 5
Camco International 5
Dow Chemical 5
Reuters 5
- -------------------------------------------------------
Total 89[cents]
Ten Worst Contributors
Union Pacific -17[cents]
Wal-Mart 16
Newmont Mining 16
American Barrick Resources 16
Schlumberger 8
Petrie Stores 6
Pennzoil 4
Pegasus Gold 4
Placer Dome 3
USX-Marathon 3
- -------------------------------------------------------
Total -93[cents]
- -------------------------------------------------------
<PAGE>
Twenty-Five Largest Holdings
December 31, 1994
Percent of
Company Net Assets
- ------------------------------ ----------
Wal-Mart 4.5%
Mobil 3.8
Atlantic Richfield 3.7
DuPont 3.2
Newmont Mining 2.9
Royal Dutch Petroleum 2.8
Schlumberger 2.6
American Barrick Resources 2.5
LONRHO 2.4
TVX Gold 2.4
Ashanti Goldfields 2.0
Union Pacific 2.0
Rouse 1.8
USX-Marathon 1.7
Placer Dome 1.6
Amerada Hess 1.5
Murphy Oil 1.5
Northern Telecom 1.5
Kimberly-Clark 1.4
CSX 1.4
Halliburton 1.4
Bristol-Myers Squibb 1.2
Texaco 1.2
Camco International 1.2
Eli Lilly 1.1
- -----------------------------------------
Total 53.3%
- -----------------------------------------
Performance Contributions
Twelve Months Ended December 31, 1994
Cents-Per-Share Percent of
Sector Contribution Net Assets
- ------------------------ --------------- ----------
NATURAL RESOURCE-
RELATED
Building & Real Estate 4[cents] 4%
Forest Products 25 6
Integrated Petroleum 5 16
Petroleum Exploration &
Production -1 6
Miscellaneous Energy -1 1
Energy Services 3 7
Precious Metals -18 13
Diversified Metals 20 5
Chemicals 49 7
Diversified Resources -17 7
Total 69 72
CONSUMER & SERVICE
Merchandising -22 5
Consumer Durables 0 1
Miscellaneous 4 4
Total -18 10
SCIENCE & TECHNOLOGY 16 3
MISCELLANEOUS 0 3
Subtotal 67 88
RESERVES & INCOME 38 12
- ---------------------------------------------------
Total Portfolio 105[cents] 100%
- ---------------------------------------------------
<PAGE>
Fiscal-Year Performance Comparison
[line graph]
Shows $10,000 investments in New Era Fund, S&P 500 Index, and Lipper Natural
Resource Fund Average from 1984 to 1994 growing to $29,980, $38,199, and
$23,704, respectively.
Fiscal-Year Performance
Periods Ended December 31, 1994
1 Year 5 Years* 10 Years*
- ------ -------- ---------
5.17% 5.33% 11.60%
- -------------------------
* 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 price of $10.00, for the period 1/20/69
through 12/31/94. Over this time, stock prices in general have risen. The
results shown should not be considered as 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 Net Capital Capital % Change
Ended Asset Gain Income Gain Income Value of --------------
12/31 Value Distributions/2/ Dividends Distributions Dividends Investment Fund S&P500
- -------- ------ ---------------- --------- ------------- --------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1969/1/ $ 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 4.75 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 74.41 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 1.99 114.05 15.3 10.1
1994 20.15 0.87 0.38 4.88 2.13 119.95 5.2 1.3
Total $19.53 $11.34 $57.19 $30.24
- --------------------------------------------------------------------------------------------
<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; $0.11 in 1993; and $0.34 in 1994.
</TABLE>
<PAGE>
Statement of Net Assets (Value in thousands)
T. Rowe Price New Era Fund / December 31, 1994
Common Stocks--87.1%
NATURAL RESOURCE-RELATED--71.5%
Value
--------
BUILDING & REAL ESTATE--3.8%
605,000shs. DeBartolo Realty...................... $9,075
440,000 General Growth Properties............. 9,955
940,000 *Rouse................................. 17,860
36,890
FOREST PRODUCTS--5.2%
360,000 Albany International (Class A)........ 6,930
130,000 Georgia-Pacific....................... 9,295
100,000 International Paper................... 7,538
267,000 *Jefferson Smurfit..................... 4,472
280,000 Kimberly-Clark........................ 14,140
100,000 Mead.................................. 4,863
50,000 Scott Paper........................... 3,456
50,694
INTEGRATED PETROLEUM--16.2%
123,000 Amoco................................. 7,272
358,300 Atlantic Richfield.................... 36,457
120,000 British Petroleum ADR................. 9,585
160,000 Chevron............................... 7,140
440,000 Mobil................................. 37,070
259,600 Royal Dutch Petroleum ADR............. 27,907
187,600 Sun Company........................... 5,394
190,000 Texaco................................ 11,376
1,000,000 USX-Marathon.......................... 16,375
158,576
PETROLEUM EXPLORATION &
PRODUCTION--5.9%
320,000 Amerada Hess.......................... 14,600
1,500,000 *Gulf Canada Resources................. 4,687
59,400 Louisiana Land & Exploration.......... 2,161
340,000 Murphy Oil............................ 14,450
300,000 *Oryx Energy........................... 3,563
500,000 Union Texas Petroleum................. 10,375
200,000 *United Meridian....................... 2,900
181,000 Unocal................................ 4,932
57,668
MISCELLANEOUS ENERGY--0.8%
950,000 Centerior Energy...................... 8,431
ENERGY SERVICES--6.5%
80,000 *BJ Services........................... 1,350
600,000 Camco International................... 11,325
140,000 *Enterra............................... 2,660
400,000 Halliburton........................... 13,250
400,000 Helmerich & Payne..................... 10,250
500,000 Schlumberger.......................... 25,188
64,023
PRECIOUS METALS--13.2%
1,120,640shs. American Barrick Resources............ $24,934
920,000 *Ashanti Goldfields GDR, (144a)........ 19,780
101,200 *Golden Star Resources................. 848
130,250 Homestake Mining...................... 2,231
800,000 Newmont Mining........................ 28,800
500,000 Pegasus Gold.......................... 5,687
700,000 Placer Dome........................... 15,225
168,000 Rustenburg Platinum................... 4,632
375,938 *[double dagger]Stillwater Mining..................... 4,354
1,750,000 *TVX Gold.............................. 11,812
1,700,000 *[double dagger]TVX Gold.............................. 11,475
129,778
DIVERSIFIED METALS--5.3%
100,000 Alcoa................................. 8,662
175,000 *Alumax................................ 4,966
240,000 Cyprus Amax Minerals.................. 6,270
370,000 Freeport-McMoRan
Copper & Gold (Class A)............. 7,863
10,000,000 *LONRHO (GBP).......................... 23,780
51,541
CHEMICALS--7.3%
60,000 Dow Chemical.......................... 4,035
559,000 DuPont................................ 31,444
130,000 *FMC................................... 7,507
175,000 Geon.................................. 4,791
180,000 Great Lakes Chemical.................. 10,260
70,000 Monsanto.............................. 4,935
450,000 Pall.................................. 8,437
71,409
DIVERSIFIED RESOURCES--7.3%
200,000 CSX................................... 13,925
255,000 *Dundee Bancorp (Class A).............. 1,749
130,000 GATX.................................. 5,720
200,000 IMC Global............................ 8,650
200,000 Overseas Shipholding Group............ 4,600
175,000 Pennzoil.............................. 7,722
371,300 Pittston Minerals..................... 9,468
430,000 Union Pacific......................... 19,619
71,453
TOTAL NATURAL RESOURCE-RELATED 700,463
CONSUMER & SERVICE--9.9%
MERCHANDISING--5.4%
400,000 Petrie Stores......................... 8,950
2,052,640 Wal-Mart.............................. 43,618
52,568
CONSUMER DURABLES--0.2%
120,000 *Coltec Industries..................... 2,055
MISCELLANEOUS--4.3%
200,000shs. Bristol-Myers Squibb.................. $11,575
150,000 Corning............................... 4,481
170,000 Eli Lilly............................. 11,156
195,000 Gannett............................... 10,384
100,000 Reuters ADR........................... 4,388
41,984
TOTAL CONSUMER & SERVICE 96,607
SCIENCE & TECHNOLOGY--2.7%
160,000 *Amdahl................................ 1,760
148,000 Autodesk.............................. 5,809
60,000 IBM................................... 4,410
430,000 Northern Telecom...................... 14,351
TOTAL SCIENCE & TECHNOLOGY 26,330
MISCELLANEOUS STOCKS--3.0% 29,963
TOTAL COMMON STOCKS (COST $675,010) 853,363
Convertible Preferred Stock--0.8%
370,000 James River, Series P................. 7,493
TOTAL CONVERTIBLE PREFERRED STOCK (COST $6,382) 7,493
Short-Term Investments--12.8%
CERTIFICATES OF DEPOSIT--2.1%
$10,000,000 Fleet National Bank, 5.60%, 1/26/95... 10,000
10,000,000 Societe Generale, 5.80%, 3/1/95....... 10,002
20,002
COMMERCIAL PAPER--9.7%
10,000,000 Asset Securitization Cooperative,
4(2), 5.45%, 1/18/95................ 9,870
10,000,000 Banque Nationale de Paris, 5.81%,
1/9/95.............................. 10,000
10,000,000 Dresdner U.S. Finance, 5.71%, 1/17/95. 9,903
10,000,000 Electricite de France, 5.50%, 1/24/95. 9,863
10,000,000 Finnish Export Credit Ltd.,
6.02%, 2/28/95...................... 9,851
10,000,000 Ford Credit Europe, 5.78%, 1/30/95.... 9,900
5,000,000 General Electric Capital, 5.10%,
2/6/95.............................. 4,879
$6,000,000 Hanson Finance (U.K.), 5.40%, 1/25/95. $5,911
10,000,000 Miles, 5.50%, 2/7/95.................. 9,852
10,000,000 Preferred Receivables Funding,
6.00%, 2/2/95....................... 9,895
535,000 President & Fellows Harvard College,
6.00%, 1/3/95....................... 535
5,000,000 RTZ America, 4(2), 5.05%, 1/23/95..... 4,894
95,353
MEDIUM-TERM NOTES--1.0%
5,000,000 Morgan Stanley Group, VR,
6.475%, 3/15/95..................... 5,000
5,000,000 Wells Fargo & Company, VR,
6.775%, 2/24/95..................... 5,012
10,012
TOTAL SHORT-TERM INVESTMENTS
(COST $125,367) 125,367
- -------------------------------------------------------------------------------
Total Investments in Securities--100.7%
(COST $806,759) 986,223
- -------------------------------------------------------------------------------
Other Assets Less Liabilities ......................................... (6,728)
Net Assets Consisting of:
Accumulated realized gains/losses--net
of distributions........................................ $11,193
Net unrealized gain....................................... 179,464
Paid-in-capital applicable to
48,618,726 shares of $1.00 par value
capital stock outstanding;
200,000,000 shares authorized........................... 788,838
--------
NET ASSETS $979,495
--------
--------
NET ASSET VALUE PER SHARE $20.15
--------
--------
- -------------------------------------------------------------------------------
* Non-income producing
[double dagger] Securities contain some restrictions as
to public resale - total of such
securities at year-end amounts to 1.6% of
net assets.
4(2) Commercial Paper sold within terms of a
private placement memorandum, exempt from
registration under section 4.2 of the
Securities Act of 1933, as amended, and
may be sold only to dealers in that
program or other "accredited investors."
144a Security was purchased pursuant to Rule
144a under the Securities Act of 1933 and
may not be resold subject to that rule
except to qualified institutional
buyers-total of such securities at
year-end amounts to 2.0% of net assets.
VR Variable rate
GBP British sterling
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, 1994
(Amounts in
thousands)
INVESTMENT INCOME
Income
Dividends........................................ $17,754
Interest......................................... 6,012
-----------
Total income..................................... 23,766
-----------
Expenses
Investment management............................ 5,272
Shareholder servicing............................ 1,410
Custody and accounting........................... 173
Prospectus and shareholder reports............... 82
Proxy and annual meeting......................... 58
Registrations.................................... 47
Legal and auditing............................... 34
Directors........................................ 23
Miscellaneous.................................... 19
-----------
Total expenses................................... 7,118
-----------
Net investment income ............................. 16,648
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities....................................... 43,882
Foreign currency transactions.................... (40)
-----------
Net realized gain ............................... 43,842
-----------
Change in net unrealized gain or
loss on securities ............................... (22,054)
-----------
Net realized and unrealized gain .................. 21,788
-----------
INCREASE IN NET ASSETS FROM OPERATIONS $ 38,436
-----------
-----------
- ---------------------------------------------------------------
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,
-------------------------
1994 1993
------------ ------------
(Amounts in thousands)
Net investment income ................. $16,648 $14,024
Net realized gain ..................... 43,842 43,284
Change in net unrealized gain or loss.. (22,054) 46,387
------------ ------------
Increase in net assets from operations. 38,436 103,695
------------ ------------
Distributions to shareholders
Net investment income.................. (17,469) (13,203)
Net realized gain...................... (40,146) (35,786)
------------ ------------
Decrease in net assets from
distributions........................ (57,615) (48,989)
------------ ------------
Capital share transactions/1/
Shares sold ........................... 353,442 92,115
Distributions reinvested .............. 52,205 44,398
Shares redeemed........................ (159,505) (138,286)
------------ ------------
Increase (decrease) in net assets from
capital share transactions........... 246,142 (1,773)
------------ ------------
Increase in net assets................... 226,963 52,933
NET ASSETS
Beginning of year ....................... 752,532 699,599
------------ ------------
End of year ............................. $979,495 $752,532
------------ ------------
------------ ------------
- -------------------------------------------------------------------
/1/Capital share transactions (number of shares)
Shares sold............................ 16,659 4,573
Distributions reinvested............... 2,596 2,204
Shares redeemed........................ (7,608) (6,865)
------------ ------------
Increase (decrease) in capital shares
outstanding.......................... 11,647 (88)
------------ ------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Financial Statements
T. Rowe Price New Era Fund / December 31, 1994
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.
For purposes of determining the Fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
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) Currency translation - Assets and liabilities are converted into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes in foreign exchange rates on realized and
unrealized security gains or losses is reflected as a component of such gains
or losses.
C) 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 and may differ from those determined in accordance with
generally accepted accounting principles.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term and U.S.
Government securities, aggregated $332,581,000 and $187,951,000, respectively,
for the year ended December 31, 1994.
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, 1994, the aggregate cost of investments for federal income
tax and financial reporting purposes was $806,759,000 and net unrealized gain
aggregated $179,464,000, of which $208,576,000 related to appreciated
investments and $29,112,000 to depreciated investments.
<PAGE>
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 $493,000 was payable at December 31, 1994. The fee is computed
daily and paid monthly, and consists 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. At December 31, 1994, and for the year then ended, the effective
annual Group Fee rate was 0.34%. The Fund pays a pro rata share of the Group
Fee based on the ratio of its net assets to those of the Group.
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.
(TRPS) 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. Additionally, 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. The Fund incurred expenses pursuant to these related party
agreements totaling approximately $1,258,000 for the year ended December 31,
1994, of which $153,000 was payable at year end.
<PAGE>
Financial Highlights
T. Rowe Price New Era Fund
<TABLE>
<CAPTION>
For a share outstanding throughout each
--------------------------------------------
Year Ended December 31,
--------------------------------------------
1994 1993 1992 1991 1990
--------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR............. $20.35 $18.88 $19.86 $18.48 $21.73
Investment Activities
Net investment income........................ 0.36 0.40 0.45 0.54 0.60
Net realized and unrealized gain (loss)...... 0.69 2.48 (0.04) 2.12 (2.52)
-------- -------- -------- -------- --------
Total from Investment Activities............... 1.05 2.88 0.41 2.66 (1.92)
Distributions
Net investment income........................ (0.38) (0.38) (0.45) (0.55) (0.62)
Net realized gain............................ (0.87) (1.03) (0.94) (0.73) (0.71)
-------- -------- -------- -------- --------
Total Distributions............................ (1.25) (1.41) (1.39) (1.28) (1.33)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR................... $20.15 $20.35 $18.88 $19.86 $18.48
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- --------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Total Return................................... 5.2% 15.3% 2.1% 14.7% (8.8)%
Ratio of Expenses to Average Net Assets........ 0.80% 0.80% 0.81% 0.85% 0.83%
Ratio of Net Investment Income to Average Net
Assets....................................... 1.87% 1.92% 2.22% 2.56% 2.81%
Portfolio Turnover Rate........................ 24.7% 24.7% 16.9% 9.0% 9.0%
Net Assets, End of Year (in thousands)......... $979,495 $752,532 $699,599 $756,817 $707,548
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders 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 the T. Rowe Price New Era Fund, Inc. at December 31, 1994, and 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, 1994 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 LLP
Baltimore, Maryland
January 19, 1995
<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[registered trademark]--Gives you your account balance, date
and amount of your last transaction, latest dividend payment, and fund prices
and yields; lets you buy, sell, and exchange shares among identically
registered accounts and move assets between your bank and fund accounts.
SHAREHOLDER SERVICE REPRESENTATIVES ARE AVAILABLE FROM 8:00 A.M. TO 10:00
P.M., MONDAY-FRIDAY, AND SATURDAY AND SUNDAY FROM 9:00 A.M. TO 5:00 P.M. ET.
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 and most bond
fund accounts.
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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