<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q QUARTERLY REPORT Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended: MARCH 31, 1995.
Commission file number: 000-14282.
Exact name of registrant as specified in its charter:
T. ROWE PRICE ASSOCIATES, INC.
State of Incorporation: MARYLAND.
I.R.S. Employer Identification No.: 52-0556948.
Address and zip code of principal executive offices: 100 EAST PRATT
STREET, BALTIMORE, MARYLAND 21202.
Registrant's telephone number, including area code: (410) 547-2000.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. YES [X]. No [ ].
Indicate the number of shares outstanding of the issuer's common stock ($.20
par value), as of the latest practicable date: 28,452,552 SHARES AT
APRIL 24, 1995.
Exhibit index is at Item 6(a) on page 10.
<PAGE> 2
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
T. ROWE PRICE ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
03/31/95
12/31/94 Unaudited
________ _________
ASSETS
Cash and cash equivalents $ 60,016 $ 60,838
Accounts receivable 46,722 47,038
Investments in sponsored mutual funds
held as available-for-sale securities 93,010 98,733
Partnership and other investments 28,657 28,902
Property and equipment 49,341 48,864
Goodwill and deferred expenses 7,811 7,427
Other assets 11,725 7,643
________ ________
$297,282 $299,445
________ ________
________ ________
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued expenses $ 17,741 $ 16,309
Accrued compensation and retirement costs 27,413 21,795
Income taxes payable 1,573 9,500
Dividends payable 4,575 4,554
Debt 13,410 13,333
Minority interests in consolidated subsidiaries 16,331 11,483
________ ________
Total liabilities 81,043 76,974
________ ________
Commitments and contingent liabilities
Stockholders' equity
Common stock, $.20 par value - authorized
48,000,000 shares; issued and outstanding
28,569,419 shares in 1994 and 28,421,780 in 1995 5,714 5,684
Capital in excess of par value 1,935 1,946
Unrealized security holding gains 2,554 4,730
Retained earnings 206,036 210,111
________ ________
Total stockholders' equity 216,239 222,471
________ ________
$297,282 $299,445
________ ________
________ ________
See the accompanying notes to the condensed consolidated financial
statements.
<PAGE> 3
T. ROWE PRICE ASSOCIATES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per-share amounts)
Three months ended
___________________
03/31/94 03/31/95
________ ________
Revenues
Investment advisory fees $ 69,015 $ 73,133
Administrative fees 21,771 22,613
Investment and other income 1,141 2,100
________ ________
91,927 97,846
________ ________
Expenses
Compensation and related costs 31,395 33,090
Advertising and promotion 10,370 7,901
Depreciation, amortization and operating
rentals of property and equipment 5,923 7,357
International investment research fees 5,909 6,782
Administrative and general 11,016 13,595
________ ________
64,613 68,725
________ ________
Income before income taxes and minority interests 27,314 29,121
Provision for income taxes 10,676 11,302
________ ________
Income from consolidated companies 16,638 17,819
Minority interests in consolidated subsidiaries 2,885 2,828
________ ________
Net income $ 13,753 $ 14,991
________ ________
________ ________
Earnings per share $ .44 $ .50
________ ________
________ ________
Dividends declared per share $ .13 $ .16
________ ________
________ ________
Weighted average shares outstanding, including
share equivalents arising from unexercised
stock options 30,983 30,013
________ ________
________ ________
See the accompanying notes to the condensed consolidated financial
statements.
<PAGE> 4
T. ROWE PRICE ASSOCIATES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three months ended
__________________
03/31/94 03/31/95
________ ________
Cash flows from operating activities
Net income $ 13,753 $ 14,991
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization of property
and equipment 2,261 3,090
Minority interests in consolidated subsidiaries 2,885 2,828
Increase in accounts receivable (1,152) (316)
Increase in accounts payable and accrued
liabilities 6,508 2,469
Other changes in assets and liabilities 1,300 2,441
________ ________
Net cash provided by operating activities 25,555 25,503
________ ________
Cash flows from investing activities
Investments in sponsored mutual funds (8,030) (2,474)
Partnership and other investments (1,082) (1,063)
Return of partnership investments 170 1,010
Additions to property and equipment (4,993) (3,456)
________ ________
Net cash used in investing activities (13,935) (5,983)
________ ________
Cash flows from financing activities
Purchases of stock (1,352) (7,637)
Receipts relating to stock issuances 1,255 1,108
Dividends paid to stockholders (3,784) (4,575)
Distributions to minority interests -- (7,594)
________ ________
Net cash used in financing activities (3,881) (18,698)
________ ________
Cash and cash equivalents
Net increase during period 7,739 822
At beginning of period 46,218 60,016
________ ________
At end of period $ 53,957 $ 60,838
________ ________
________ ________
See the accompanying notes to the condensed consolidated financial
statements.
<PAGE> 5
T. ROWE PRICE ASSOCIATES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY AND BASIS OF PREPARATION.
T. Rowe Price Associates, Inc. and its consolidated subsidiaries (the
Company) serve as investment adviser to the T. Rowe Price Mutual Funds (the
Price funds), other sponsored investment products, and private accounts of
other institutional and individual investors, including defined benefit and
defined contribution retirement plans, endowments, foundations, trusts, and
other mutual funds. The Company also provides various administrative
services to its clients, including mutual fund transfer agent, accounting and
shareholder services; participant recordkeeping and transfer agent services
for defined contribution retirement plans; discount brokerage; and trust
services. At March 31, 1995, the Company's assets under management totaled
$61.6 billion, including $39.5 billion in the Price funds.
The unaudited condensed consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented. All such
adjustments are of a normal recurring nature.
The unaudited interim financial information contained in the condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements contained in the 1994 Annual Report to
Stockholders.
NOTE 2 - STOCKHOLDERS' EQUITY.
The following table details the changes in stockholders' equity (dollars in
thousands) during the first quarter of 1995.
<PAGE> 6
Capital Unreal-
Common in ized Total
Common stock excess security stock-
stock - par of par Retained holding holders'
- shares value value earnings gains equity
__________ ______ _______ ________ ________ ________
Balance at
December 31,
1994 28,569,419 $5,714 $ 1,935 $206,036 $2,554 $216,239
Stock options
exercised 101,861 20 1,055 (2) 1,073
Purchases of
common stock (249,500) (50) (1,079) (6,360) (7,489)
Cash received
from holders of
Executive Stock 35 35
Net income 14,991 14,991
Dividends
declared (4,554) (4,554)
Unrealized hold-
ing loss on
available-for-
sale mutual fund
investments 2,176 2,176
__________ ______ _______ ________ ______ ________
Balance at
March 31,
1995 28,421,780 $5,684 $ 1,946 $210,111 $4,730 $222,471
__________ ______ _______ ________ ______ ________
__________ ______ _______ ________ ______ ________
<PAGE> 7
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
T. Rowe Price Associates, Inc.
We have reviewed the condensed consolidated balance sheet of T. Rowe Price
Associates, Inc. and its subsidiaries as of March 31, 1995, and the related
condensed consolidated statements of income and cash flows for the three-
month periods ended March 31, 1994 and 1995. These financial statements are
the responsibility of the company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1994, and the
related consolidated statements of income, cash flows, and stockholders'
equity for the year then ended (not presented herein), and in our report
dated January 25, 1995 we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of December 31,
1994, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
/s/ PRICE WATERHOUSE LLP
Baltimore, Maryland
April 24, 1995
THE ABOVE REPORT IS NOT A "REPORT" WITHIN THE MEANING OF SECTIONS 7 AND 11 OF
THE SECURITIES ACT OF 1933 AND THE INDEPENDENT ACCOUNTANTS' LIABILITY
PROVISIONS OF SECTION 11 OF THE ACT DO NOT APPLY.
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL.
T. Rowe Price Associates, Inc. (the Company) derives its revenue primarily
from investment advisory and administrative services provided to the Price
Mutual Funds (the Funds), private accounts, and other sponsored investment
products. Investment advisory fees are generally based on the net assets of
the portfolios managed. The majority of administrative revenues are earned
from contracted services provided to the Funds.
The Company believes its base of assets under management is well diversified
and relatively stable and that its broad range of investment products meets
the varied needs and objectives of most individual and institutional
investors. Company revenues are largely dependent on the total value and
composition of assets under management; accordingly, fluctuations in
financial markets and in the composition of assets under management impact
revenues and results of operations.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1995 VERSUS 1994.
Net income increased $1.2 million or 9% from $13.8 million to $15.0 million.
Aided by a decrease in weighted average shares outstanding, earnings per
share grew more than 13% from $.44 to $.50. The Company has reacquired
1,142,000 shares under its repurchase program since January 1, 1994.
Investment advisory revenues from the Funds increased $3.4 million as average
assets under management rose $2.2 billion to $37.9 billion. Fund assets
closed the 1995 first quarter at $39.5 billion, up $2.2 billion from December
31, 1994, with stock funds accounting for $1.6 billion of the increase. Net
cash inflows to the Funds during the first quarter totaled nearly $.8 billion
as net subscriptions to the stock funds were more than $.7 billion. Private
accounts and other sponsored products contributed $.7 million of the revenue
gains. Private account assets under management rose to $22.1 billion at
March 31, 1995, up $1.6 billion from December 31, 1994. Total assets under
management at quarter end increased to $61.6 billion from $57.8 billion at
year-end 1994. Comparable assets under management at March 31, 1994 were
$53.5 billion, including almost $35.0 billion in the Funds.
Administrative fees from services to the Price Funds and their shareholders
grew 4% to $22.6 million; however, increases in related operating expenses
more than offset these revenue gains.
Investment and other income rose almost $1.0 million due to incremental
dividends received on larger money market fund balances, which earned higher
rates of interest in 1995, and greater stock fund investments.
Operating expenses increased 6% or $4.1 million to $68.7 million from $64.6
million. Greater compensation and related costs, which were up $1.7 million,
were attributable to increases in overall compensation rates and a 9%
<PAGE> 9
increase in the average number of employees, primarily to support the growing
administrative services operations. Advertising and promotion expenditures
were cut back significantly from the 1994 first quarter when net cash flows
to the Funds reached a quarterly record of almost $1.7 billion. Such
expenditures vary over time as market conditions and cash inflows to the
Funds warrant. Depreciation, amortization, and operating rentals of property
and equipment increased $1.4 million as a result of the Company's recent
investments in computer and communications equipment, office facilities and
furnishings. International investment research fees increased $.9 million as
quarter-end international assets under management rose to nearly $18.7
billion, up from $16.1 billion at March 31, 1994. Administrative and general
expenses increased $2.6 million due largely to greater operating costs
associated with the Company's growing data processing operations.
PART II. OTHER INFORMATION.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The 1995 annual meeting of the Company's stockholders was held on April 6,
1995. The Company's proxy statement and solicitation pertaining to this
meeting were previously filed with the Commission. Shares eligible to vote
were 28,620,239 as of the record date of February 6, 1995.
Management's eleven nominees for the Board of Directors were re-elected to
hold office until the next annual meeting of stockholders and until their
respective successors are elected and have qualified. A tabulation of the
votes cast is as follows:
Nominee For Withheld
________________ __________ _________
T.H. Broadus, Jr. 24,764,295 990,820
G.J. Collins 24,888,423 866,692
J.E. Halbkat, Jr. 24,925,879 829,236
C.O. Hoffman 24,886,694 868,421
H.H. Hopkins 24,887,742 867,373
J.S. Riepe 24,889,585 865,530
G.A. Roche 24,889,670 865,445
J.W. Rosenblum 24,921,746 833,369
R.L. Strickland 24,925,709 829,406
M.D. Testa 24,292,848 1,462,267
P.C. Walsh 24,919,789 835,326
The charter amendment to increase the authorized common stock of the Company
from 48,000,000 to 100,000,000 shares was approved by a vote of: 21,736,318
for; 3,624,931 against; and 393,866 abstentions.
The charter amendment to authorize a new class of 20,000,000 shares of
undesignated preferred stock was approved by a vote of: 15,200,037 for;
8,574,592 against; and 441,147 abstentions. Broker non-votes were 1,539,339.
<PAGE> 10
The performance-linked Executive Incentive Compensation Plan was approved by
a vote of: 22,071,130 for; 2,273,511 against; and 253,185 abstentions.
Broker non-votes were 1,157,289.
The 1995 Director Stock Option Plan was approved by a vote of: 21,745,373
for; 3,503,477 against; and 373,807 abstentions. Broker non-votes were
132,458.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits required to be filed by Item 601 of Regulation S-K
are filed herewith and incorporated by reference herein:
3.(i)- Amended and Restated Charter of T. Rowe Price Associates, Inc. as
of April 6, 1995 (Incorporated by reference from Form 8-A12G/A:
Accession No. 933259-95-16; CIK 80255).
10 - 1995 Director Stock Option Plan (Incorporated by reference from
Form DEF 14A: Accession No. 933259-95-9; CIK 80255).
15 - Letter from Price Waterhouse LLP, independent accountants, re
unaudited interim financial information.
27 - Financial Data Schedule.
All other items are omitted because they are not applicable or the answers
are none.
SIGNATURES.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on April 26, 1995.
T. Rowe Price Associates, Inc.
/s/ George A. Roche, Chief Financial Officer
/s/ Alvin M. Younger, Jr., Principal Accounting Officer
EXHIBIT 15
April 24, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that our report dated April 24, 1995 (issued pursuant to the
provisions of Statement on Auditing Standards No. 71) is incorporated by
reference in the Prospectuses constituting parts of T. Rowe Price Associates,
Inc.'s Registration Statements on Form S-8 (No. 33-7012, No. 33-8672, No. 33-
37573, No. 33-72568 and No. 33-58749). We are also aware of our
responsibilities under the Securities Act of 1933.
Yours very truly,
/s/ Price Waterhouse LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited condensed consolidated financial statements of T. Rowe Price
Associates, Inc. included in Part I., Item 1. of the accompanying Form 10-Q
Quarterly Report for the Period Ended March 31, 1995 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000080255
<NAME> T. ROWE PRICE ASSOCIATES, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 60,838,000
<SECURITIES> 98,733,000
<RECEIVABLES> 47,038,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 48,864,000<F1>
<DEPRECIATION> 0<F3>
<TOTAL-ASSETS> 299,445,000
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 13,333,000
<COMMON> 5,684,000
0
0
<OTHER-SE> 216,787,000
<TOTAL-LIABILITY-AND-EQUITY> 299,445,000
<SALES> 0
<TOTAL-REVENUES> 97,846,000
<CGS> 0
<TOTAL-COSTS> 68,725,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0<F3>
<INCOME-PRETAX> 29,121,000
<INCOME-TAX> 11,302,000
<INCOME-CONTINUING> 14,991,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,991,000
<EPS-PRIMARY> .50
<EPS-DILUTED> 0
<FN>
<F1>Represents net amount reported at interim.
<F2>Not contained in registrant's unclassified balance sheet.
<F3>Not reported at interim.
</FN>
</TABLE>
