<PAGE>
Annual Report
EQUITY
INDEX FUND
-----------------
DECEMBER 31, 1996
-----------------
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
. The stock market soared to another 20%-plus gain in 1996, fueled by a stable
economy, steadily rising corporate earnings, and strong cash flows into
equity mutual funds.
. The Equity Index Fund closely tracked the unmanaged S&P 500 during the six
and 12 months ended December 31, returning 11.57% and 22.65%, respectively.
Fund assets nearly doubled.
. The market was led by technology, financial, and capital equipment companies.
Utility stocks continued to be hampered by rising interest rates and
increased competition.
. Investors should expect more moderate returns this year. Corporate earnings
are slowing, and the market remains vulnerable to a correction due to its
high valuations.
<PAGE>
FELLOW SHAREHOLDERS
For the second consecutive year, the stock market returned better than 20%, its
first such back-to-back showing since the 1950s. The unmanaged Standard & Poor's
500 Stock Index soared nearly 23% in 1996, fueled by strong cash flows into
equity mutual funds, stable economic conditions, steadily rising corporate
earnings, and a benevolent political environment. That brought the market's
1995-1996 advance to an astounding 69%.
Your fund's performance closely tracked the S&P 500 over the last six
months and for the full year. The small difference is due to the
expenses of portfolio management. Fund assets nearly doubled last year
to more than $800 million, allowing us to spread operating expenses over
a larger base and narrow our deviation from the index even further.
Over the past few years, large-company index funds, which attempt to
equal the performance of various stock market indices, have outperformed
actively managed funds that generally seek to beat the market. There are
two main reasons. First, S&P 500 index funds have greater exposure to
large-capitalization companies, which have outpaced smaller issues.
Second, index funds are fully invested in equities, while most actively
managed funds hold at least some cash reserves. In a rising market, the
low return on cash instruments impedes the performance of managed funds.
However, investors should keep in mind that the tide could change. In a
declining market, the lack of a cash cushion may hamper index funds. In
addition, small companies could outperform their larger counterparts,
perhaps pushing some active managers ahead of the S&P 500. Nevertheless,
over the long term, index funds are a good vehicle for capturing the
potentially attractive returns of the stock market.
<TABLE>
<CAPTION>
PERFORMANCE COMPARISON
- ----------------------------------------------------------
Periods Ended 12/31/96 6 Months 12 Months
- ----------------------------------------------------------
<S> <C> <C>
Equity Index Fund 11.57% 22.65%
..........................................................
S&P 500 11.68 22.96%
..........................................................
</TABLE>
1
<PAGE>
YEAR-END DISTRIBUTIONS
Your fund's directors declared a fourth quarter dividend of $0.10 per
share, a short-term capital gain of $0.07, and a long-term capital gain
of $0.14. All distributions were paid on December 30 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
In contrast to 1995, stocks made a more circuitous ascent in 1996. They
advanced steadily in the first half despite rising interest rates,
peaking in early June. Over the ensuing six weeks, the S&P 500 fell
around 7%, the biggest drop in the overall market since Iraq's invasion
of Kuwait in 1990 and one of the few declines in this decade.
The correction was due largely to investor fears over the poisonous
combination of surging economic growth, higher inflation, and faltering
corporate earnings growth. High-profile announcements of earnings
shortfalls by Motorola and Hewlett-Packard triggered a sell-off in
technology stocks. However, the economy slowed to a 2.1% annualized
growth rate in the third quarter, calming investor fears about inflation
and allowing interest rates to fall. After rising by more than one
percentage point in the first half, long-term rates dropped back by half
a point in the fall, helping fuel a powerful recovery in stocks.
The recovery was also stoked by the reelections of President Clinton and
a Republican majority in Congress, as investors cheered the status quo
and a renewed focus on a balanced budget. After drying up during the
summer correction, equity mutual fund cash flows picked up significantly
following the election.
In general, bigger was decidedly better in 1996 as the performance of
stocks in the index increased with their market capitalization. Remember
that the index is constructed by weighting each issue by its market cap
(share price multiplied by number of shares outstanding), so larger
companies have larger weights. Market volatility continued in the second
half and, while higher than the past few years, is still normal by
longer-term measures. The difference in performance between growth- and
value-oriented stocks was not significant.
2
<PAGE>
PORTFOLIO REVIEW
The performance of stocks by economic sector diverged widely. Technology
stocks were the best performers for the year, closely followed by
financial and capital equipment issues. As with index stocks in general,
the real stars in technology were the giants. Microsoft and Intel each
rose sharply on the promise of new product rollouts. Other stocks with
exposure to the personal computer market, such as Dell Computer and
Seagate Technology, also performed well. Rising oil prices pushed the
energy sector higher. Financial stocks benefited from stable economic
growth, continuing industry consolidation, and good earnings growth.
Citicorp, one of our largest financial holdings, advanced sharply on
strong earnings prospects.
The utility sector was weak again. Rising interest rates were the main
culprit, although the nationwide push for more competition in the
consumer power market hurt electric utilities. AT&T, one of the largest
holdings, fell amid confusion and competition in the long-distance
market. Consumer cyclicals were poor performers in the second half,
including the big three automakers, Ford Motor, GM, and Chrysler.
Airline stocks fell after the mysterious crash of TWA Flight 800
reignited safety fears. Gold prices rallied early in the year, reaching
$410 per ounce, but then gradually declined, dragging down the stocks of
mining companies such as Echo Bay Mines and Battle Mountain Gold.
Continuing the pattern of the first half, relatively few changes were
made to the S&P 500 Index during the last six months. The table on page
six shows the 23 additions and deletions to the index in 1996. The
deletions represented about 1.7% of the fund's value. All the
significant changes resulted from acquisitions or mergers.
<TABLE>
<CAPTION>
BEST-PERFORMANCE S&P 500 SECTORS
- ---------------------------------------------------------
Periods Ended 12/31/96 6 Months 12 Months
- ---------------------------------------------------------
<S> <C> <C>
Technology 21.4% 39.2%
.........................................................
Financial 22.4 32.6
.........................................................
Capital Equipment 13.8 32.2
.........................................................
Consumer Nondurables 9.4 26.2
.........................................................
Energy 14.1 25.6
.........................................................
Health Care 11.5 20.3
.........................................................
Process Industries 11.9 20.3
.........................................................
Consumer Cyclicals 5.0 11.8
.........................................................
Consumer Services -2.1 10.3
.........................................................
Business Services 1.7 8.8
.........................................................
Basic Materials 1.4 2.6
.........................................................
Utilities 0.7 -0.7
.........................................................
</TABLE>
3
<PAGE>
The S&P 500 committee also cleaned up the index by replacing some
smaller companies with others that are more representative of the
overall U.S. economy. For example, late last year, three small
restaurant companies (Shoney's, Luby's Cafeterias, and Ryan's Family
Steak Houses) were replaced by larger companies -- Frontier, a long-
distance telephone carrier, AutoZone, an automotive parts retailer, and
Thermo Electron, which makes analytical instruments for various
applications.
Overall, additions to the index represented about 3% of the fund's
value. The biggest, Lucent Technologies, is really not new to the index,
but emerged from the split-up of AT&T. Lucent, which entered the index
with a reasonably large weight of 0.5%, is a leading manufacturer of
telecommunications equipment. MGIC Investment, a provider of private
mortgage insurance, was added after U.S. Healthcare was acquired by
Aetna.
Several changes were precipitated by restructurings of S&P 500
companies. Consumer products giant Dial broke into smaller companies,
Viad and Dial, which were switched to the S&P 400 MidCap Index. Promoted
from that index to the S&P 500 were HFS, a hotel franchiser and real
estate broker, and Seagate Technology, a computer disk drive
manufacturer. The diversified media company Dun & Bradstreet spun off
two subsidiaries. One of them, Cognizant, a market research firm
specializing in health care and television, was added to the index,
pushing out Yellow Corp, a trucking firm. Finally, energy exploration
and production company Union Pacific Resources, an offspring of the
railroad giant, bumped out Community Psychiatric Centers, now known as
Transitional Hospitals.
<TABLE>
<CAPTION>
SECTOR WEIGHTINGS OF THE S&P 500 INDEX
- ---------------------------------------------------------
12/31/95 12/31/96
- ---------------------------------------------------------
<S> <C> <C>
Financial 13.3% 15.0%
.........................................................
Technology 11.2 13.4
.........................................................
Consumer Nondurables 13.0 13.2
.........................................................
Health Care 10.7 10.3
.........................................................
Energy 10.0 10.1
.........................................................
Utilities 12.0 8.8
.........................................................
Consumer Services 8.6 8.1
.........................................................
Business Services 5.3 5.8
.........................................................
Process Industries 5.5 5.0
.........................................................
Capital Equipment 4.5 4.9
.........................................................
Consumer Cyclicals 4.0 3.7
.........................................................
Basic Materials 1.9 1.7
- ---------------------------------------------------------
Total 100% 100%
</TABLE>
4
<PAGE>
As a result of these changes and of the wide divergence in the market
performance of index stocks, the composition of the S&P 500 was altered
considerably during 1996. Accordingly, your assets are divided up
somewhat differently among various industry sectors. The table on page 4
shows the changes in sector weightings from 1995 to 1996. For instance,
the weightings in both technology and financial stocks are now about two
percentage points higher than at the end of 1995. Meanwhile, exposure to
utilities and consumer-oriented sectors declined.
OUTLOOK
Investors (and fund managers) should be delighted with the market's
performance over the past two years. However, don't look for a repeat in
1997. Corporate earnings are not expected to grow much in the near
future, and it will probably take a sizable drop in interest rates to
spark strong returns. While the overall environment for financial assets
remains favorable, stock valuations already reflect this rosy scenario
and perhaps even more good news down the road. Consequently, if any
clouds rain on the parade, the market will be vulnerable to profit
taking.
Nevertheless, our strategy, and our advice to shareholders, remains the
same. The Equity Index Fund is designed as a long-term investment, and
we think most investors are better off following a consistent strategy
than responding to every twist and turn in the market. Remember, even if
a market correction occurs in 1997, returns from the past two years have
been extraordinary. Over the long run, stock returns have averaged about
6% above the rate of inflation. Even in the highly unlikely event that
the S&P 500 finished 1997 with a decline of 20%, its three-year
annualized return from 1995 to 1997 would still exceed the historical
average of 10.6%.
Respectfully submitted,
/s/ Richard T. Whitney
Richard T. Whitney
President and Chairman of the Investment Advisory Committee
January 17, 1997
5
<PAGE>
THE EVOLVING S&P 500 INDEX
- --------------------------------------------------------------------------------
Changes in the index in 1996
Additions Deletions
- --------------------------------------------------------------------------------
Allegheny Teledyne Bally Entertainment
................................................................................
Aon Brown Group
................................................................................
AutoZone Capital Cities
................................................................................
Battle Mountain Gold Chase Manhattan
................................................................................
Bay Networks Consolidated Freight
................................................................................
Case Cray Research
................................................................................
Cognizant Federated Paper Board
................................................................................
Dell Computer First Interstate
................................................................................
EMC Handleman
................................................................................
Fifth Third Bancorp Loral
................................................................................
Frontier Luby's Cafeterias
................................................................................
General Instrument Ogden
................................................................................
Green Tree Financial Outboard Marine
................................................................................
Guidant Pittston
................................................................................
HFS Premark International
................................................................................
Lucent Technologies Ryan's Family Steak Houses
................................................................................
MBIA Shoney's
................................................................................
MGIC Investment Teledyne
................................................................................
Seagate Technology Transitional Hospitals
................................................................................
Thermo Electron U.S. Healthcare
................................................................................
Tupperware Varity
................................................................................
Union Pacific Resources Viad
................................................................................
World Com Yellow Corp
................................................................................
6
<PAGE>
STICKING TO YOUR GAME PLAN
- -------------------------------------------------------------------------------
TIME REDUCES VOLATILITY OF MARKET RETURNS
------------------------------------------------------
(Annualized Returns for Best and Worst Period: Rolling Period From 1950
to 1996*)
[BAR GRAPH APPEARS HERE]
* From 1950-1996 there were 47 one-year periods; 42 five-year periods;
37 ten-year periods; and 27 twenty-year periods.
Source: T. Rowe Price Associates; data from Ibbotson Associates.
Chart is for illustrative purposes only and is not intended to represent
the past performance or future results of any specific securities.
In our report to you one year ago, we mentioned the possibility of a modest
decline in stock prices. In fact, from May to July 1996, the broad market (as
measured by the Standard & Poor's 500 Stock Index) fell around 7%. However, the
bull market resumed its charge to post a robust 23% gain for the year.
Some believe the market is poised for a significant downturn. We do not expect a
major drop in stock prices in 1997, although another modest pullback is
possible. On balance, we expect stocks to advance at a much slower pace.
How should you prepare for a potential market pullback? As always, our advice is
to diversify your investments and focus on the long term. If you've implemented
a sound investment strategy, stay the course. Stocks have historically overcome
periods of volatility to provide better returns than most other investments.
Market corrections can even have a silver lining because they result in good
buying opportunities.
Furthermore, the volatility of stock market returns has diminished significantly
over longer time frames. The chart shows the best and worst annualized returns
on stocks over various rolling time periods between 1950 and 1996. (For
instance, there were 37 rolling 10-year periods: 1950-1960, 1951-1961, etc.)
Investors who held stocks for only one year could have had as much as a 52.6%
gain, or as little as a 26.5% loss -- a spread of 79 percentage points. However,
investors who held stocks for 10-year periods or longer always overcame interim
volatility to post gains for the entire period.
In addition, a well-diversified portfolio can weather volatility better than a
more concentrated portfolio over the long term and particularly during market
corrections. For example, during last summer's correction, small-company stocks
fell nearly 16% while large-company issues dropped 7.3%. However, a portfolio
diversified among large U.S. companies (30% of assets), small U.S. companies
(15%), foreign companies (15%), intermediate-term Treasury bonds (30%), and
Treasury bills (10%) would have lost a smaller 5.2% of its value./1/
Above all, remember that investing is a long-distance race, not a sprint.
/1/ Ned Davis Research.
7
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
CONTRIBUTIONS TO THE CHANGE IN NET ASSET VALUE PER SHARE
6 Months Ended December 31, 1996
Ten Best Contributors
- -----------------------------------------
Intel 16(c)
.........................................
IBM 10
.........................................
Microsoft 9
.........................................
GE 7
.........................................
Merck 6
.........................................
Exxon 4
.........................................
Procter & Gamble 4
.........................................
Citicorp 3
.........................................
Bristol-Myers Squibb 3
.........................................
Coca-Cola 3
- -----------------------------------------
Total 65(c)
Ten Worst Contributors
- -----------------------------------------
PepsiCo -3(c)
.........................................
Dun & Bradstreet 2
.........................................
Wal-Mart 2
.........................................
AT&T 2
.........................................
Tele-Communications 1
.........................................
ITT 1
.........................................
Pharmacia & Upjohn 1
.........................................
BellSouth 1
.........................................
Home Depot 1
.........................................
Baxter International -
- -----------------------------------------
Total -14(c)
12 Months Ended December 31, 1996
Ten Best Contributors
- -----------------------------------------
Intel 20(c)
.........................................
Microsoft 16
.........................................
GE 15
.........................................
Coca-Cola 13
.........................................
IBM 11
.........................................
Exxon 7
.........................................
Procter & Gamble 6
.........................................
Citicorp 6
.........................................
Philip Morris 6
.........................................
Merck 5
- -----------------------------------------
Total 105(c)
Ten Worst Contributors
- -----------------------------------------
AT&T -3(c)
.........................................
Dun & Bradstreet 2
.........................................
Bay Networks * 2
.........................................
Viacom 2
.........................................
Tele-Communications 2
.........................................
Digital Equipment 2
.........................................
United HealthCare 1
.........................................
SBC Communications 1
.........................................
Pacific Gas & Electric 1
.........................................
BellSouth 1
- -----------------------------------------
Total -17(c)
* Position added
8
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
12/31/96
- --------------------------------------------------------------------------------
<S> <C>
GE 2.8%
................................................................................
Coca-Cola 2.3
................................................................................
Exxon 2.1
................................................................................
Intel 1.9
................................................................................
Microsoft 1.7
- --------------------------------------------------------------------------------
Merck 1.7
................................................................................
Philip Morris 1.6
................................................................................
Royal Dutch Petroleum 1.6
................................................................................
IBM 1.4
................................................................................
Procter & Gamble 1.3
- --------------------------------------------------------------------------------
AT&T 1.2
................................................................................
Johnson & Johnson 1.2
................................................................................
Bristol-Myers Squibb 1.0
................................................................................
Pfizer 0.9
................................................................................
DuPont 0.9
- --------------------------------------------------------------------------------
Wal-Mart 0.9
................................................................................
Hewlett-Packard 0.9
................................................................................
American International Group 0.9
................................................................................
Citicorp 0.8
................................................................................
Mobil 0.8
- --------------------------------------------------------------------------------
Disney 0.8
................................................................................
PepsiCo 0.8
................................................................................
GTE 0.8
................................................................................
Chevron 0.7
................................................................................
GM 0.7
- --------------------------------------------------------------------------------
Total 31.7%
</TABLE>
9
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
- ------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the
fund over the past 10 fiscal year periods or since inception (for funds
lacking 10-year records). The result is compared with a broad-based
average or index. The index return does not reflect expenses, which have
been deducted from the fund's return.
EQUITY INDEX FUND
------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
S&P 500 EQUITY
STOCK INDEX INDEX FUND
<S> <C> <C>
3/30/90 10,000 10,000
12/90 9,990 10,031
12/91 13,034 12,962
12/92 14,027 13,894
12/93 15,440 15,202
12/94 15,645 15,356
12/95 21,523 21,063
12/96 26,465 25,834
</TABLE>
- --------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its
actual (or cumulative) returns for the periods shown had been earned at
a constant rate.
<TABLE>
<CAPTION>
Since Inception
Periods Ended 12/31/96 1 Year 3 Years 5 Years Inception Date
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Index Fund 22.65% 19.33% 14.79% 15.08% 3/30/90
.................................................................................................
</TABLE>
Investment return and principal value represent past performance and
will vary. Shares may be worth more or less at redemption than at
original purchase.
10
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Ended
12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 17.21 $ 13.09 $ 13.48 $ 12.63 $ 12.10
................................................................
Investment activities
Net investment income 0.38** 0.39* 0.36* 0.32* 0.32*
Net realized and
unrealized gain (loss) 3.47 4.43 (0.23) 0.86 0.53
................................................................
Total from
investment activities 3.85 4.82 0.13 1.18 0.85
................................................................
Distributions
Net investment income (0.38) (0.40) (0.36) (0.32) (0.31)
Net realized gain (0.34) (0.30) (0.09) (0.01) (0.01)
Distributions in excess
of net realized gain - - (0.07) - -
................................................................
Total distributions (0.72) (0.70) (0.52) (0.33) (0.32)
................................................................
NET ASSET VALUE
End of period $ 20.34 $ 17.21 $ 13.09 $ 13.48 $ 12.63
----------------------------------------------------------------
Ratios/Supplemental Data
Total return 22.65%** 37.16%* 1.01%* 9.42%* 7.19%*
......................................................................................................
Ratio of expenses to
average net assets 0.40%** 0.45%* 0.45%* 0.45%* 0.45%*
......................................................................................................
Ratio of net investment
income to average
net assets 2.05%** 2.54%* 2.73%* 2.40%* 2.57%*
......................................................................................................
Portfolio turnover rate 1.3% 1.3% 1.3% 0.8% 0.1%
......................................................................................................
Average commission
rate paid $ 0.0183 - - - -
......................................................................................................
Net assets, end of period
(in thousands) $ 807,655 $ 457,256 $ 270,165 $ 166,994 $ 128,242
......................................................................................................
</TABLE>
* Excludes expenses in excess of a 0.45% voluntary expense limitation in effect
through 12/31/95.
** Excludes expenses in excess of a 0.40% voluntary expense limitation in effect
through 12/31/97.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------
STATEMENT OF NET ASSETS Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
COMMON STOCKS 98.5%
INDUSTRIAL 74.7%
<S> <C> <C>
GE 232,432 $ 22,982
........................................................................
Coca-Cola 351,244 18,484
........................................................................
Exxon 175,397 17,189
........................................................................
Intel 116,008 15,190
........................................................................
Microsoft * 168,800 13,958
........................................................................
Merck 170,304 13,497
........................................................................
Philip Morris 115,074 12,960
........................................................................
Royal Dutch Petroleum ADR 75,715 12,928
........................................................................
IBM 73,062 11,032
........................................................................
Procter & Gamble 96,319 10,354
........................................................................
AT&T 228,769 9,951
........................................................................
Johnson & Johnson 188,036 9,355
........................................................................
Bristol-Myers Squibb 70,649 7,683
........................................................................
Pfizer 90,956 7,538
........................................................................
DuPont 79,424 7,496
........................................................................
Wal-Mart 323,622 7,403
........................................................................
Hewlett-Packard 143,504 7,211
........................................................................
Mobil 55,644 6,802
........................................................................
Disney 95,688 6,662
........................................................................
PepsiCo 219,162 6,410
........................................................................
Chevron 91,980 5,979
........................................................................
GM 106,611 5,944
........................................................................
Cisco Systems * 91,600 5,834
........................................................................
Eli Lilly 77,820 5,681
........................................................................
Amoco 70,113 5,644
........................................................................
Abbott Laboratories 109,623 5,563
........................................................................
Boeing 50,569 5,379
........................................................................
Ford Motor 167,314 5,333
........................................................................
American Home Products 90,150 5,285
........................................................................
Gillette 66,960 5,206
........................................................................
Motorola 83,648 5,134
........................................................................
3M 58,946 4,885
........................................................................
McDonald's 98,512 4,458
........................................................................
Lucent Technologies 89,845 4,155
........................................................................
</TABLE>
12
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Unilever N.V. ADR 22,587 $ 3,958
.........................................................................
Oracle * 92,721 3,865
.........................................................................
Columbia/HCA Healthcare 94,715 3,860
.........................................................................
Kimberly-Clark 39,896 3,800
.........................................................................
Eastman Kodak 47,019 3,773
.........................................................................
Texaco 37,294 3,659
.........................................................................
Schlumberger 34,792 3,475
.........................................................................
Home Depot 67,812 3,399
.........................................................................
Chrysler 102,784 3,392
.........................................................................
Schering-Plough 52,112 3,374
.........................................................................
Monsanto 83,085 3,230
.........................................................................
MCI 96,730 3,162
.........................................................................
Emerson Electric 31,632 3,060
.........................................................................
Time Warner 80,293 3,011
.........................................................................
Atlantic Richfield 22,672 3,004
.........................................................................
Warner-Lambert 38,288 2,872
.........................................................................
Pharmacia & Upjohn 71,669 2,840
.........................................................................
COMPAQ Computer * 38,220 2,838
.........................................................................
Anheuser-Busch 70,412 2,816
.........................................................................
Dow Chemical 34,282 2,687
.........................................................................
AlliedSignal 39,914 2,674
.........................................................................
Campbell 32,994 2,648
.........................................................................
Computer Associates 51,445 2,559
.........................................................................
Sears 55,330 2,552
.........................................................................
Sara Lee 68,324 2,545
.........................................................................
Lockheed Martin 27,160 2,485
.........................................................................
NIKE 40,576 2,424
.........................................................................
Sprint 60,775 2,423
.........................................................................
Xerox 45,877 2,414
.........................................................................
Medtronic 33,896 2,305
.........................................................................
First Data 62,800 2,292
.........................................................................
Northern Telecom 36,455 2,256
.........................................................................
United Technologies 33,926 2,239
.........................................................................
WMX Technologies 68,429 2,233
.........................................................................
World Com * 79,000 2,059
.........................................................................
Seagram 52,653 2,040
.........................................................................
Amgen * 37,342 2,033
.........................................................................
Caterpillar 26,958 2,029
.........................................................................
</TABLE>
13
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Kellogg 29,775 $ 1,954
........................................................................
Colgate-Palmolive 20,785 1,917
........................................................................
McDonnell Douglas 29,904 1,914
........................................................................
RockWell 30,803 1,875
........................................................................
Heinz 51,898 1,855
........................................................................
3Com * 24,500 1,796
........................................................................
AirTouch Communications * 70,789 1,787
........................................................................
Automatic Data Processing 41,056 1,760
........................................................................
Viacom (Class B) * 49,944 1,742
........................................................................
Texas Instruments 26,802 1,709
........................................................................
International Paper 42,302 1,708
........................................................................
ConAgra 33,989 1,691
........................................................................
Archer Daniels Midland 76,726 1,688
........................................................................
May Department Stores 35,542 1,662
........................................................................
Phillips Petroleum 37,102 1,642
........................................................................
U S WEST Media * 88,286 1,633
........................................................................
Raytheon 33,338 1,604
........................................................................
J.C. Penney 32,514 1,585
........................................................................
Baxter International 38,569 1,581
........................................................................
CPC International 20,335 1,576
........................................................................
Alcoa 24,462 1,559
........................................................................
Boston Scientific * 25,200 1,512
........................................................................
Corning 32,502 1,503
........................................................................
Gannett 19,932 1,492
........................................................................
Deere 36,474 1,482
........................................................................
PPG Industries 25,896 1,453
........................................................................
Barrick Gold 50,500 1,452
........................................................................
Unocal 35,429 1,439
........................................................................
General Mills 22,142 1,403
........................................................................
Illinois Tool Works 17,546 1,401
........................................................................
Seagate Technology * 35,400 1,398
........................................................................
Walgreen 34,832 1,393
........................................................................
Dell Computer * 25,400 1,351
........................................................................
Sun Microsystems * 51,864 1,332
........................................................................
Weyerhaeuser 28,102 1,331
........................................................................
CUC International * 55,500 1,318
........................................................................
Albertson's 35,644 1,270
........................................................................
Tele-Communications (Class A) * 93,697 1,224
........................................................................
</TABLE>
14
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
The Gap 39,970 $ 1,204
........................................................................
Dayton Hudson 30,593 1,201
........................................................................
American Brands 24,036 1,193
........................................................................
AMP 31,006 1,190
........................................................................
Westinghouse 59,557 1,184
........................................................................
Honeywell 17,906 1,177
........................................................................
Tyco International 22,144 1,171
........................................................................
United HealthCare 26,000 1,170
........................................................................
Toys "R" Us * 38,716 1,161
........................................................................
Pitney Bowes 20,966 1,143
........................................................................
Goodyear Tire & Rubber 21,952 1,128
........................................................................
Textron 11,648 1,098
........................................................................
Ralston Purina 14,951 1,097
........................................................................
Air Products and Chemicals 15,819 1,093
........................................................................
EMC * 32,900 1,090
........................................................................
Tenneco 24,100 1,088
........................................................................
Occidental Petroleum 46,421 1,085
........................................................................
HFS * 18,100 1,081
........................................................................
Alcan Aluminum 32,003 1,076
........................................................................
Avon 18,822 1,075
........................................................................
Mattel 38,357 1,064
........................................................................
Halliburton 17,655 1,064
........................................................................
Marsh & McLennan 10,112 1,052
........................................................................
Union Pacific Resources 35,333 1,033
........................................................................
Praxair 22,040 1,017
........................................................................
Federated Department Stores * 29,300 1,000
........................................................................
Marriott International 18,060 998
........................................................................
Crown Cork & Seal 18,067 982
........................................................................
USX-Marathon 40,581 969
........................................................................
Tellabs * 25,300 954
........................................................................
Hershey Foods 21,772 953
........................................................................
Aon 15,300 951
........................................................................
Alco Standard 18,360 948
........................................................................
Service Corp. 33,288 932
........................................................................
Georgia-Pacific 12,869 927
........................................................................
Wrigley 16,458 926
........................................................................
Applied Materials * 25,400 913
........................................................................
Hilton 34,347 897
........................................................................
</TABLE>
15
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
TRW 17,954 $ 889
..............................................................................................
Burlington Resources 17,600 887
..............................................................................................
Computer Sciences * 10,716 880
..............................................................................................
Lowes 24,400 866
..............................................................................................
Micron Technology 29,500 859
..............................................................................................
UST 26,298 851
..............................................................................................
American Stores 20,554 840
..............................................................................................
Kroger * 17,742 825
..............................................................................................
Sysco 25,273 825
..............................................................................................
Morton International 20,116 820
..............................................................................................
Comcast (Class A Special) 46,000 819
..............................................................................................
Pioneer Hi-Bred 11,700 819
..............................................................................................
Masco 22,695 817
..............................................................................................
Freeport McMoRan Copper and Gold (Class B) 27,300 816
..............................................................................................
Dover 15,960 802
..............................................................................................
Cognizant 24,165 797
..............................................................................................
Digital Equipment * 21,847 795
..............................................................................................
Browning-Ferris 30,062 789
..............................................................................................
Dresser Industries 24,855 771
..............................................................................................
Amerada Hess 13,194 764
..............................................................................................
Genuine Parts 17,099 761
..............................................................................................
Eaton 10,888 759
..............................................................................................
Inco 23,734 757
..............................................................................................
Fluor 11,797 740
..............................................................................................
Clorox 7,329 736
..............................................................................................
Placer Dome 33,814 735
..............................................................................................
Rohm & Haas 8,983 733
..............................................................................................
Becton, Dickinson 16,900 733
..............................................................................................
Cabletron Systems * 22,000 732
..............................................................................................
Quaker Oats 19,166 731
..............................................................................................
Union Carbide 17,608 720
..............................................................................................
Times Mirror (Class A) 14,367 715
..............................................................................................
ITT * 16,441 713
..............................................................................................
International Flavors & Fragrances 15,743 708
..............................................................................................
K mart * 68,198 708
..............................................................................................
Newell 22,452 707
..............................................................................................
Baker Hughes 20,479 707
..............................................................................................
The Limited 38,235 703
..............................................................................................
</TABLE>
16
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
PriceCostco * 27,727 $ 698
..............................................................................................
Rite Aid 17,380 691
..............................................................................................
Tribune 8,727 688
..............................................................................................
Ingersoll-Rand 15,413 686
..............................................................................................
Sherwin-Williams 12,158 681
..............................................................................................
Northrop 8,187 677
..............................................................................................
Winn-Dixie 21,316 674
..............................................................................................
Tenet Healthcare * 30,706 672
..............................................................................................
R. R. Donnelley 21,181 665
..............................................................................................
W.R. Grace 12,599 652
..............................................................................................
McGraw-Hill 13,996 646
..............................................................................................
Cooper Industries 15,207 641
..............................................................................................
Nucor 12,372 631
..............................................................................................
Newmont Mining 14,098 631
..............................................................................................
Silicon Graphics * 24,710 630
..............................................................................................
General Dynamics 8,856 624
..............................................................................................
Hercules 14,307 619
..............................................................................................
CVS 14,925 618
..............................................................................................
V. F. 9,081 613
..............................................................................................
Eastman Chemical 10,929 604
..............................................................................................
W. W. Grainger 7,522 604
..............................................................................................
Phelps Dodge 8,892 600
..............................................................................................
Champion International 13,598 588
..............................................................................................
Guidant 10,200 581
..............................................................................................
Bay Networks * 27,300 570
..............................................................................................
Dun & Bradstreet 23,965 569
..............................................................................................
Allegheny Teledyne 24,721 569
..............................................................................................
Case 10,400 567
..............................................................................................
Interpublic Group 11,534 548
..............................................................................................
Willamette Industries 7,800 543
..............................................................................................
Western Atlas * 7,587 538
..............................................................................................
TJX 11,074 525
..............................................................................................
Avery Dennison 14,784 523
..............................................................................................
New York Times (Class A) 13,651 519
..............................................................................................
Reynolds Metals 9,091 513
..............................................................................................
Laidlaw (Class B) 44,300 509
..............................................................................................
Raychem 6,357 509
..............................................................................................
Knight-Ridder 13,244 507
..............................................................................................
</TABLE>
17
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Advanced Micro Devices * 19,407 $ 500
..............................................................................................
Kerr-McGee 6,885 496
..............................................................................................
Dillard Department Stores (Class A) 15,997 494
..............................................................................................
Whirlpool 10,593 494
..............................................................................................
St. Jude Medical * 11,536 492
..............................................................................................
LSI Logic * 18,300 490
..............................................................................................
Johnson Controls 5,893 488
..............................................................................................
Rubbermaid 21,106 480
..............................................................................................
National Semiconductor * 19,673 480
..............................................................................................
Hasbro 12,300 478
..............................................................................................
Tupperware 8,844 474
..............................................................................................
Dana 14,338 468
..............................................................................................
Union Camp 9,789 467
..............................................................................................
Harcourt General 10,100 466
..............................................................................................
Mallinckrodt 10,549 465
..............................................................................................
Dow Jones 13,599 461
..............................................................................................
Novell * 47,740 452
..............................................................................................
Andrew * 8,478 450
..............................................................................................
Brown-Forman (Class B) 9,701 444
..............................................................................................
Sigma Aldrich 7,100 443
..............................................................................................
Humana * 22,900 438
..............................................................................................
Mead 7,381 429
..............................................................................................
H&R Block 14,685 426
..............................................................................................
Temple-Inland 7,847 425
..............................................................................................
Circuit City Stores 13,912 419
..............................................................................................
General Instrument * 19,300 417
..............................................................................................
Westvaco 14,511 417
..............................................................................................
Great Lakes Chemical 8,898 416
..............................................................................................
Pall 16,253 414
..............................................................................................
WoolWorth * 18,831 412
..............................................................................................
Fruit of the Loom (Class A) * 10,800 409
..............................................................................................
ITT Industries 16,641 408
..............................................................................................
Armstrong World 5,860 407
..............................................................................................
Parker Hannifin 10,468 406
..............................................................................................
James River 12,195 404
..............................................................................................
Nordstrom 11,398 404
..............................................................................................
Ashland 9,184 403
..............................................................................................
Ceridian * 9,769 396
..............................................................................................
</TABLE>
18
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Engelhard 20,360 $ 389
..............................................................................................
Liz Claiborne 10,049 388
..............................................................................................
Deluxe Corp. 11,621 381
..............................................................................................
Harris 5,504 378
..............................................................................................
Black & Decker 12,495 376
..............................................................................................
Wendys 18,346 376
..............................................................................................
USX-U.S. Steel 11,927 374
..............................................................................................
Pennzoil 6,611 374
..............................................................................................
Thermo Electron * 9,000 371
..............................................................................................
PACCAR 5,457 371
..............................................................................................
FMC * 5,258 369
..............................................................................................
Apple Computer * 17,688 368
..............................................................................................
Oryx Energy * 14,782 366
..............................................................................................
Tandy 8,160 359
..............................................................................................
United States Surgical 8,928 352
..............................................................................................
Ecolab 9,148 344
..............................................................................................
Nalco Chemical 9,484 343
..............................................................................................
Thomas & Betts 7,614 338
..............................................................................................
Stanley Works 12,496 337
..............................................................................................
Harnischfeger 6,993 337
..............................................................................................
Allergan 9,349 333
..............................................................................................
Brunswick 13,839 332
..............................................................................................
Reebok 7,900 332
..............................................................................................
Perkin-Elmer 5,551 327
..............................................................................................
Louisiana Pacific 15,396 325
..............................................................................................
AutoZone * 11,800 325
..............................................................................................
ALZA (Class A) * 12,030 311
..............................................................................................
Whitman 13,501 309
..............................................................................................
Cyprus Amax Minerals 13,196 308
..............................................................................................
Snap-On 8,649 308
..............................................................................................
Owens Corning 7,220 308
..............................................................................................
General Signal 7,096 303
..............................................................................................
American Greetings (Class A) 10,590 301
..............................................................................................
DSC Communications * 16,552 297
..............................................................................................
Homestake Mining 20,710 295
..............................................................................................
Harrah's Entertainment * 14,499 288
..............................................................................................
Santa Fe Pacific Gold 18,558 285
..............................................................................................
Polaroid 6,395 278
..............................................................................................
</TABLE>
19
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Echlin 8,785 $ 278
...............................................................................................
B. F. Goodrich 6,854 278
...............................................................................................
Maytag 13,955 276
...............................................................................................
Rowan * 12,101 274
...............................................................................................
Supervalu 9,524 270
...............................................................................................
Moore 12,958 264
...............................................................................................
Giant Food 7,618 263
...............................................................................................
Louisiana Land & Exploration 4,809 258
...............................................................................................
Bausch & Lomb 7,280 255
...............................................................................................
Bemis 6,885 254
...............................................................................................
Millipore 6,116 253
...............................................................................................
Sun Company 10,333 252
...............................................................................................
Biomet 16,520 251
...............................................................................................
Crane 8,579 249
...............................................................................................
Pep Boys 7,977 245
...............................................................................................
Manor Care 8,945 242
...............................................................................................
Merchantile Stores 4,775 236
...............................................................................................
Cummins Engine 5,118 235
...............................................................................................
Worthington Industries 12,833 233
...............................................................................................
National Service Industries 6,212 232
...............................................................................................
Tandem Computers * 16,626 229
...............................................................................................
C. R. Bard 8,043 225
...............................................................................................
Tektronix 4,372 224
...............................................................................................
Battle Mountain Gold (Class A) 31,700 218
...............................................................................................
Cooper Tire 11,029 218
...............................................................................................
Stone Container 13,980 208
...............................................................................................
Amdahl * 17,080 207
...............................................................................................
Timken 4,446 204
...............................................................................................
Meredith 3,822 202
...............................................................................................
King World Productions * 5,380 198
...............................................................................................
Foster Wheeler 5,327 198
...............................................................................................
Boise Cascade 6,163 196
...............................................................................................
Beverly Enterprises * 14,030 179
...............................................................................................
Potlatch 4,141 178
...............................................................................................
Darden Restaurants 20,342 178
...............................................................................................
Santa Fe Energy Resources * 12,821 178
...............................................................................................
Alberto Culver 3,611 173
...............................................................................................
A & P 5,396 172
...............................................................................................
</TABLE>
20
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Helmerich & Payne 3,263 $ 170
..............................................................................................
Unisys * 24,652 166
..............................................................................................
Autodesk 5,900 166
..............................................................................................
Shared Medical Systems 3,347 165
..............................................................................................
Scientific-Atlanta 10,942 164
..............................................................................................
Fleetwood 5,910 163
..............................................................................................
Briggs & Stratton 3,666 161
..............................................................................................
Centex 4,152 156
..............................................................................................
Russell 4,985 148
..............................................................................................
TRINOVA 4,018 146
..............................................................................................
John H. Harland 4,402 145
..............................................................................................
Bethlehem Steel * 15,704 141
..............................................................................................
EG&G 6,751 136
..............................................................................................
Safety-Kleen 8,208 134
..............................................................................................
McDermott International 7,709 128
..............................................................................................
ASARCO 5,108 127
..............................................................................................
Inland Steel Industries 6,247 125
..............................................................................................
Longs Drug Stores 2,527 124
..............................................................................................
Cincinnati Milacron 5,646 124
..............................................................................................
Echo Bay Mines 16,360 108
..............................................................................................
Springs Industries 2,499 107
..............................................................................................
Jostens 5,049 107
..............................................................................................
Coors (Class B) 5,457 104
..............................................................................................
Alexander & Alexander 5,725 99
..............................................................................................
Ball 3,789 99
..............................................................................................
Navistar * 10,729 98
..............................................................................................
Pulte 3,006 92
..............................................................................................
Fleming Companies 4,867 84
..............................................................................................
Data General * 5,523 80
..............................................................................................
Intergraph * 7,085 74
..............................................................................................
Giddings & Lewis 4,626 60
..............................................................................................
Kaufman & Broad 4,479 58
..............................................................................................
Armco * 13,643 56
..............................................................................................
Charming Shoppes * 10,776 54
..............................................................................................
Stride Rite 5,302 53
..............................................................................................
NACCO Industries (Class A) 60 3
..............................................................................................
Total Industrial 603,275
...............
</TABLE>
21
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
UTILITIES 7.9%
GTE 135,761 $ 6,177
..............................................................................................
BellSouth 140,156 5,659
..............................................................................................
Ameritech 77,510 4,699
..............................................................................................
SBC Communications 85,108 4,404
..............................................................................................
Bell Atlantic 61,764 3,999
..............................................................................................
NYNEX 62,060 2,987
..............................................................................................
Pacific Telesis 60,389 2,219
..............................................................................................
U S WEST Communications 67,486 2,176
..............................................................................................
Southern Company 94,964 2,149
..............................................................................................
Enron 35,848 1,546
..............................................................................................
Duke Power 28,420 1,314
..............................................................................................
Texas Utilities 31,725 1,293
..............................................................................................
Pacific Gas and Electric 58,282 1,224
..............................................................................................
Edison International 61,116 1,215
..............................................................................................
FPL Group 25,793 1,186
..............................................................................................
American Electric Power 26,521 1,091
..............................................................................................
Dominion Resources 25,488 981
..............................................................................................
Consolidated Edison 33,221 972
..............................................................................................
Panenergy 21,359 961
..............................................................................................
Public Service Enterprise 33,683 918
..............................................................................................
Entergy 32,567 904
..............................................................................................
PacifiCorp 41,529 851
..............................................................................................
ALLTEL 26,700 838
..............................................................................................
Williams Companies 22,095 829
..............................................................................................
Unicom 30,427 825
..............................................................................................
PECO Energy 31,465 795
..............................................................................................
Carolina Power & Light 21,382 780
..............................................................................................
Central and South West 29,861 765
..............................................................................................
Houston Industries 33,756 764
..............................................................................................
CINergy 22,239 742
..............................................................................................
Consolidated Natural Gas 13,376 739
..............................................................................................
Coastal 14,815 724
..............................................................................................
DTE Energy 20,456 662
..............................................................................................
Sonat 12,274 632
..............................................................................................
GPU 17,000 572
..............................................................................................
Union Electric 14,524 559
..............................................................................................
</TABLE>
22
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
BGE 20,770 $ 556
................................................................................
PP&L Resources 22,900 527
................................................................................
Columbia Gas System 7,790 496
................................................................................
Ohio Edison 21,591 491
................................................................................
Northern States Power 9,711 446
................................................................................
Frontier 16,500 373
................................................................................
Pacific Enterprises 11,977 364
................................................................................
Noram Energy 19,367 298
................................................................................
NICOR 6,578 235
................................................................................
ENSERCH 8,817 203
................................................................................
Niagara Mohawk * 18,609 184
................................................................................
Peoples Energy 4,530 153
................................................................................
ONEOK 3,446 103
................................................................................
Eastern Enterprises 2,575 91
................................................................................
Total Utilities 63,671
...................
FINANCIAL 14.5%
American International Group 66,238 7,170
................................................................................
Citicorp 66,380 6,837
................................................................................
Fannie Mae 154,032 5,738
................................................................................
Chase Manhattan 61,893 5,524
................................................................................
BankAmerica 50,676 5,055
................................................................................
Travelers Group 90,345 4,099
................................................................................
NationsBank 40,588 3,968
................................................................................
American Express 66,942 3,782
................................................................................
Allstate 62,750 3,632
................................................................................
Wells Fargo 13,059 3,523
................................................................................
First Union 39,971 2,958
................................................................................
Freddie Mac 25,194 2,775
................................................................................
BANC ONE 60,411 2,598
................................................................................
J. P. Morgan 26,318 2,569
................................................................................
First Chicago NBD 45,020 2,420
................................................................................
Norwest 52,252 2,273
................................................................................
Merrill Lynch 23,262 1,896
................................................................................
Bank of New York 55,300 1,866
................................................................................
Fleet Financial Group 37,037 1,847
................................................................................
General Re 11,651 1,838
................................................................................
23
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------
In thousands
<S> <C> <C>
PNC Bank 48,034 $ 1,807
.........................................................
Aetna 21,314 1,705
.........................................................
CoreStates Financial 31,420 1,630
.........................................................
KeyCorp 31,827 1,607
.........................................................
SunTrust 31,500 1,551
.........................................................
Loews 16,200 1,527
.........................................................
Dean Witter, Discover 22,722 1,505
.........................................................
CIGNA 10,613 1,450
.........................................................
Boatmen's Bancshares 21,846 1,408
.........................................................
National City 31,300 1,405
.........................................................
Bank of Boston 21,544 1,384
.........................................................
Chubb 24,604 1,322
.........................................................
Wachovia 23,300 1,316
.........................................................
MBNA 31,448 1,305
.........................................................
Mellon Bank 18,087 1,284
.........................................................
First Bank Systems 18,800 1,283
.........................................................
Household International 13,680 1,262
.........................................................
Morgan Stanley Group 21,600 1,234
.........................................................
American General 28,782 1,176
.........................................................
Barnett Banks 27,476 1,130
.........................................................
ITT Hartford Group 16,541 1,117
.........................................................
Bankers Trust New York 11,619 1,002
.........................................................
U. S. Bancorp 21,405 962
.........................................................
Fifth Third Bancorp 14,900 936
.........................................................
Comerica 14,800 775
.........................................................
Lincoln National 14,726 773
.........................................................
Green Tree Financial 19,400 749
.........................................................
UNUM 10,300 744
.........................................................
Transamerica 9,384 741
.........................................................
Salomon 15,413 726
.........................................................
SAFECO 17,826 703
.........................................................
St. Paul Companies 11,744 689
.........................................................
Providian 13,218 679
.........................................................
Republic New York 7,800 637
.........................................................
MGIC Investment 8,300 631
.........................................................
MBIA 6,100 618
.........................................................
Jefferson Pilot 10,147 575
.........................................................
Great Western Financial 19,397 563
.........................................................
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE EQUITY INDEX FUND
- ---------------------------------------------------------------------------------------------------
Shares/Par Value
- ---------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Golden West Financial 8,118 $ 512
............................................................................................
Torchmark 9,883 499
............................................................................................
H. F. Ahmanson 15,148 492
............................................................................................
Beneficial 7,596 481
............................................................................................
USF&G 16,328 341
............................................................................................
USLIFE 4,982 166
............................................................................................
Total Financial 116,770
.............
TRANSPORTATION 1.4%
Union Pacific 34,629 2,082
............................................................................................
Burlington Northern Santa Fe 21,552 1,862
............................................................................................
Norfolk Southern 17,704 1,549
............................................................................................
CSX 30,626 1,294
............................................................................................
AMR * 12,870 1,134
............................................................................................
Conrail 11,373 1,133
............................................................................................
Delta 10,491 744
............................................................................................
Federal Express * 16,204 721
............................................................................................
Southwest Airlines 20,500 454
............................................................................................
Ryder System 11,533 324
............................................................................................
USAir * 9,276 217
............................................................................................
Caliber Systems 5,582 107
............................................................................................
Total Transportation 11,621
.............
Total Common Stocks (Cost $590,847) 795,337
.............
SHORT-TERM INVESTMENTS 1.5%
Commercial Paper 1.2%
Caterpillar Financial Services, 5.42%, 2/20/97 $5,000,000 4,962
............................................................................................
Ford Credit Europe, 5.35%, 2/5/97 3,000,000 2,984
............................................................................................
Corporate Asset Funding, 4(2), 6.50%, 1/2/97 2,088,000 2,088
............................................................................................
10,034
.............
U.S. Government Obligations 0.3%
U. S. Treasury Bills, 5.01-5.055%, 1/30-4/24/97 2,100,000 2,085
............................................................................................
2,085
.............
Total Short-Term Investments (Cost $12,119) 12,119
.............
</TABLE>
25
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
- --------------------------------------------------------------------------------------------------
In thousands
<S> <C>
Total Investments in Securities
100.0% of Net Assets (Cost $602,966) $ 807,456
</TABLE>
<TABLE>
<CAPTION>
Futures Contracts
In thousands
Contract Unrealized
Expiration Value Gain (Loss)
---------- -------- -----------
<S> <C> <C> <C>
Long, 33 Standard & Poor's 500 Stock Index
contracts, $470,000 of U.S. Treasury Bills
pledged as initial margin 3/97 $ 12,284 $ (90)
Net payments (receipts) of variation
margin to date (144)
............
Variation margin receivable
(payable) on open futures contracts (234)
Other Assets Less Liabilities 433
..............
NET ASSETS $ 807,655
--------------
Net Assets Consist of:
Accumulated net realized gain/loss - net of distributions $ 4,024
Net unrealized gain (loss) 204,400
Paid-in-capital applicable to 39,713,538 shares of $0.01 par
value capital stock outstanding; 1,000,000,000 shares authorized 599,231
..............
NET ASSETS $ 807,655
--------------
NET ASSET VALUE PER SHARE $ 20.34
--------------
</TABLE>
* Non-income producing
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."
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
In thousands
Year
Ended
12/31/96
<S> <C>
Investment Income
Income
Dividend $ 13,331
Interest 2,566
...................
Total income 15,897
...................
Expenses
Shareholder servicing 1,244
Investment management 925
Custody and accounting 177
Registration 124
Prospectus and shareholder report 79
Legal and audit 18
Directors 13
Miscellaneous 15
...................
Total expenses 2,595
...................
Net investment income 13,302
...................
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on
Securities 1,902
Futures 9,756
...................
Net realized gain (loss) 11,658
...................
Change in net unrealized gain or loss on
Securities 109,776
Futures 56
...................
Change in net unrealized gain or loss 109,832
...................
Net realized and unrealized gain (loss) 121,490
...................
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 134,792
-------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
Year
Ended
12/31/96 12/31/95
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 13,302 $ 8,653
Net realized gain (loss) 11,658 14,145
Change in net unrealized gain or loss 109,832 81,378
...............................
Increase (decrease) in net assets from operations 134,792 104,176
...............................
Distributions to shareholders
Net investment income (13,495) (9,122)
Net realized gain (12,009) (7,691)
...............................
Decrease in net assets from distributions (25,504) (16,813)
...............................
Capital share transactions *
Shares sold 357,516 159,642
Distributions reinvested 24,913 16,390
Shares redeemed (141,657) (76,638)
Redemption fees received 28 12
...............................
Increase (decrease) in net assets from capital
share transactions 240,800 99,406
...............................
Net equalization 311 322
...............................
Net Assets
Increase (decrease) during period 350,399 187,091
Beginning of period 457,256 270,165
...............................
End of period $ 807,655 $ 457,256
-------------------------------
* Share information
Shares sold 19,435 10,147
Distributions reinvested 1,282 993
Shares redeemed (7,579) (5,197)
...............................
Increase (decrease) in shares outstanding 13,138 5,943
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- -------------------------------------------------------------------------------
December 31, 1996
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Equity Index Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company and commenced operations on March 30, 1990.
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 not traded on a
particular day and securities regularly traded in the over-the-counter
market are valued at the mean of the latest bid and asked prices. Other
equity securities 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.
Short-term debt securities are valued at their amortized 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.
Premiums and Discounts Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
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 gains or losses 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.
29
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- -------------------------------------------------------------------------------
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the
following practices to manage exposure to certain risks or enhance
performance. The investment objective, policies, program, and risk
factors of the fund are described more fully in the fund's prospectus and
Statement of Additional Information.
Futures Contracts At December 31, 1996, the fund was a party to futures
contracts, which provide for the future sale by one party and purchase by
another of a specified amount of a specific financial instrument at an
agreed upon price, date, time, and place. Risks arise from possible
illiquidity of the futures market and from movements in security values.
Securities Lending To earn additional income, the fund lends its
securities to approved brokers. At December 31, 1996, the market value of
securities on loan was $10,213,000, 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.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $254,882,000 and $7,920,000, respectively, for the
year ended December 31, 1996.
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.
In order for the fund's capital accounts and distributions to
shareholders to reflect the tax character of certain transactions, the
following reclassifications were made during the year ended December 31,
1996. The results of operations and net assets were not affected by the
reclassifications.
-------------------------------------------------------------------------
Undistributed net investment income $ (118,000)
Undistributed net realized gain (194,000)
Paid-in-capital 312,000
30
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
At December 31, 1996, the aggregate cost of investments for federal
income tax and financial reporting purposes was $602,966,000, and net
unrealized gain aggregated $204,490,000, of which $211,446,000 related to
appreciated investments and $6,956,000 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 $143,000 was payable at December 31, 1996. The
fee is computed daily and paid monthly, and 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, 1997, which would
cause the fund's ratio of expenses to average net assets to exceed 0.40%.
Thereafter, through December 31, 1999, 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 0.40%. Pursuant to this agreement, $370,000 of management fees
were not accrued by the fund for the year ended December 31, 1996.
Additionally, $445,000 of unaccrued management fees related to a previous
expense limitation are subject to reimbursement through December 31,
1997.
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 $1,163,000 for the year ended December
31, 1996, of which $118,000 was payable at period-end.
31
<PAGE>
T. ROWE PRICE EQUITY INDEX FUND
- --------------------------------------------------------------------------------
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, 1996, 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, 1996, by
correspondence with the custodian. 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,
1996, 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 20, 1997
32
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds.
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R) and
T. Rowe Price OnLine.
DISCOUNT BROKERAGE*
Individual Investments Stocks, bonds, options, precious
metals, and other securities at a savings over regular
commission rates.
INVESTMENT INFORMATION
Combined Statement Overview of your T. Rowe Price accounts.
Shareholder Reports Fund managers' reviews of their strategies
and results.
T. Rowe Price Report Quarterly investment newsletter
discussing markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund
results.
Insights Educational reports on investment strategies and
financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Personal Strategy Planner, Retirees Financial Guide, and
Retirement Planning Kit.
*A division of T. Rowe Price Investment Services, Inc. Member
NASD/SIPC.
33
<PAGE>
For yield, price, last transaction,
current balance or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(R):
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
http://www.troweprice.com
T. Rowe Price Associates
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.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor
