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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended: DECEMBER 31, 1995.
Commission file number: 0-14282.
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.
Securities registered pursuant to Section 12(b) of the Act: NONE.
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.20 PAR VALUE.
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock (based on last reported
NNM price) held by non-affiliates of the registrant (excludes executive
officers and directors). $1,234,000,000 AT FEBRUARY 12, 1996.
Indicate the number of shares outstanding of the registrant's common stock,
as of the latest practicable date. 28,549,388 SHARES AT MARCH 21, 1996.
DOCUMENTS INCORPORATED BY REFERENCE: In Part III of this Form 10-K, the
Definitive Proxy Statement for the 1996 Annual Meeting of Stockholders (Form
DEF 14A; Accession No. 1006199-96-31; CIK 80255).
Exhibit index is at Item 14(a)3 on pages 38-39.
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PART I.
ITEM 1. BUSINESS.
T. Rowe Price Associates, Inc. and its 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.
Total assets under management at December 31, 1995 were $75.4 billion, up
$17.6 billion since December 31, 1994. The Company also provides various
administrative services to the Price Funds and other 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. The Company was incorporated
in Maryland in January 1947 as successor to the investment counseling
business formed by the late Mr. T. Rowe Price in 1937.
The Company offers its Price Funds' shareholders and private accounts a broad
range of investment products designed to attract and retain investors with
varying investment objectives. Shareholders are allowed to exchange funds
among mutual fund products as economic and market conditions and investor
needs change. The Company frequently introduces new mutual funds designed to
complement and expand its investment product offerings, respond to
competitive developments in the financial marketplace, and meet the changing
needs of its funds' shareholders. New mutual funds and other investment
products are introduced when the Company has personnel with sufficient
investment expertise to manage the product successfully for a substantial
group of investors over a long period of time. The Company's base of assets
under management consists of a broad range of domestic and international
stock, bond and money market mutual funds and other investment products which
meet the varied needs and objectives of its individual and institutional
investors. In recent years, there have been significant net cash inflows to
the stock mutual funds, particularly the international funds in 1993 and 1994
and the domestic funds in 1995. 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. Investment advisory
fees earned on assets under management and related expenses incurred to
generate such fees are generally higher for stock and international
investment products which have become a substantially larger portion of the
Company's assets under management than in the past.
The investment strategies employed by the Company accommodate a variety of
private account client investment objectives encompassing both domestic and
international securities. Management of investments in stocks include active
approaches emphasizing established growth, mid-cap growth, New America growth
(companies that participate in the growth of the service sector of the U.S.
economy), small cap, equity income, capital appreciation, and natural
resources as well as systematic and balanced portfolio strategies.
Approaches for investing in fixed income securities portfolios include active
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and systematic (index) management strategies and management of high yield
securities and cash reserves. The Company has also developed several
specialized investment management services including private company
investing, investing in debt securities and creditor claims of
financially-troubled companies, the efficient disposition of equity
distributions from venture capital investments, and stable value investment
contract management.
Average assets under management (in millions) during the past five years and
total assets under management at December 31, 1995 are:
1991 1992 1993 1994 1995 12/31/95
________ ________ ________ ________ ________ ________
Price Funds
Stock $ 7,599 $ 10,280 $ 14,713 $ 21,495 $ 27,211 $ 32,311
Taxable bond 3,304 5,150 6,025 5,412 5,392 5,763
Tax-free bond 2,530 3,187 4,169 4,225 4,211 4,487
Money market 6,177 5,428 4,903 5,333 5,865 6,008
________ ________ ________ ________ ________ ________
Total 19,610 24,045 29,810 36,465 42,679 48,569
Other sponsored in-
vestment products
and private
accounts 13,066 14,510 17,136 19,490 23,866 26,868
________ ________ ________ ________ ________ ________
Total assets under
management $ 32,676 $ 38,555 $ 46,946 $ 55,955 $ 65,545 $ 75,437
________ ________ ________ ________ ________ ________
________ ________ ________ ________ ________ ________
The Company's revenues (in thousands) from investment advisory and
administrative services provided under agreements with the Price Funds and
other clients during the past five years are:
1991 1992 1993 1994 1995
________ ________ ________ ________ ________
Investment advisory fees
Price Funds
Stock $ 47,712 $ 65,202 $ 96,136 $145,020 $180,574
Taxable bond 17,730 25,149 31,869 28,561 28,404
Tax-free bond 12,960 15,869 19,873 19,744 20,018
Money market 25,416 21,780 19,137 20,132 22,113
________ ________ ________ ________ ________
Total 103,818 128,000 167,015 213,457 251,109
Other sponsored investment
products and private
accounts 41,576 46,590 57,794 76,614 80,978
________ ________ ________ ________ ________
Total 145,394 174,590 224,809 290,071 332,087
________ ________ ________ ________ ________
Administrative fees
Price Funds 37,623 45,153 54,184 61,057 67,166
Price Funds' shareholders
and others 13,197 18,405 23,024 24,615 27,211
________ ________ ________ ________ ________
Total 50,820 63,558 77,208 85,672 94,377
________ ________ ________ ________ ________
Total investment advisory
and administrative fees $196,214 $238,148 $302,017 $375,743 $426,464
________ ________ ________ ________ ________
________ ________ ________ ________ ________
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MUTUAL FUND MANAGEMENT.
OVERVIEW. Each of the Price Funds has a distinct investment objective that
has been developed as part of the Company's strategy to provide a broad and
balanced selection of investment products. All Funds are sold exclusively by
the Company on a no-load basis (without a sales commission). No-load mutual
funds offer investors a low-cost and relatively easy method of investing in a
variety of stock and bond products. The Company's marketing effort is
focused on advertising in the print media and direct mail communications.
During 1996, the Company will expand its promotional activities to the
television market including cable channels. In addition, considerable direct
marketing efforts are targeted at large participant-directed defined
contribution plans that invest, in whole or in part, in mutual funds. The
Company believes that its distribution methods and fund shareholder and
administrative services promote stability of assets in the Price Funds
through market cycles in addition to reducing costs to fund shareholders.
At December 31, 1995, assets under management in the Price Funds aggregated
$48.6 billion, an increase of $11.3 billion during 1995. The following
information includes the net assets (in millions) at December 31, 1995 of
each fund available to the investing public, the year the fund was added to
the Price family of funds, and the fund's primary investment objective.
STOCK FUNDS:
$ 2,762 GROWTH STOCK (1950) - Long-term growth of capital and, secondarily,
increasing dividend income by investing primarily in common stocks
of well-established growth companies.
$ 2,855 NEW HORIZONS (1960) - Long-term growth of capital by investing
primarily in common stocks of small, rapidly growing companies.
$ 1,090 NEW ERA (1969) - Long-term capital appreciation by investing
primarily in common stocks of companies that own or develop natural
resources and other basic commodities, and selected nonresource
growth companies.
$ 6,703 INTERNATIONAL STOCK (1980) - Long-term growth of capital through
investments primarily in common stocks of established, non-U.S.
companies.
$ 1,748 GROWTH & INCOME (1982) - Long-term capital growth, a reasonable
level of current income, and increasing future income through
investments primarily in dividend-paying stocks.
$ 1,028 NEW AMERICA GROWTH (1985) - Long-term growth of capital by
investing primarily in common stocks of U.S. growth companies
operating in service industries.
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$ 5,215 EQUITY INCOME (1985) - Substantial dividend income as well as long-
term capital appreciation through investments in common stocks of
established companies.
$ 864 CAPITAL APPRECIATION (1986) - Maximum capital appreciation by
investing primarily in common stocks.
$ 2,285 SCIENCE & TECHNOLOGY (1987) - Long-term growth of capital by
investing primarily in common stocks of companies expected to
benefit from the development, advancement, and use of science and
technology.
$ 936 SMALL-CAP VALUE (1988) - Long-term capital growth by investing
primarily in common stocks of small companies that are believed to
be undervalued.
$ 303 INTERNATIONAL DISCOVERY (1988) - Long-term growth of capital
through investments primarily in common stocks of rapidly growing,
small- to medium-sized non-U.S. companies.
$ 532 EUROPEAN STOCK (1990) - Long-term growth of capital through
investments primarily in common stocks of both large and small
European companies.
$ 457 EQUITY INDEX (1990) - To match the total return performance of the
U.S. equity market as represented by the Standard & Poor's 500
Composite Stock Index by investing in the stocks that compose the
S&P 500 Index.
$ 1,358 SPECTRUM GROWTH (1990) - Long-term growth of capital and growth of
income by investing primarily in a diversified group of T. Rowe
Price mutual funds which, in turn, invest principally in equity
securities.
$ 1,880 NEW ASIA (1990) - Long-term growth of capital through investments
in large and small companies domiciled or with primary operations
in Asia, excluding Japan, and in Pacific Rim countries such as
Australia and New Zealand.
$ 608 BALANCED (1991) - Capital appreciation, current income, and
preservation of capital through investments in a diversified
portfolio consisting of approximately 60% in common stocks and the
balance in fixed-income securities.
$ 208 JAPAN (1991) - Long-term growth of capital through investments in
common stocks of large and small companies domiciled or with
primary operations in Japan.
$ 264 MID-CAP GROWTH (1992) - Long-term capital appreciation by investing
primarily in common stocks of medium-sized (mid-cap) companies
offering the potential for above-average earnings growth.
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$ 279 OTC (1992) - Long-term growth of capital by investing in securities
traded in the U.S. over-the-counter (OTC) market, primarily the
stocks of small- to medium-sized companies.
$ 84 DIVIDEND GROWTH (1992) - Increasing dividend income over time,
long-term capital appreciation, and reasonable current income
through investments primarily in dividend-paying stocks.
$ 146 BLUE CHIP GROWTH (1993) - Long-term growth of capital by investing
in common stocks of large- and medium-sized blue chip companies.
$ 150 LATIN AMERICA (1993) - Long-term growth of capital through
investments primarily in common stocks of companies domiciled, or
with primary operations, in Latin America.
$ 19 PERSONAL STRATEGY - BALANCED (1994) - Highest total return over
time consistent with an emphasis on both capital appreciation and
income by investing in a diversified portfolio consisting of 50-70%
stocks and the balance in bonds and money market securities.
$ 16 PERSONAL STRATEGY - GROWTH (1994) - Highest total return over time
consistent with a primary emphasis on capital appreciation by
investing in a diversified portfolio consisting of 70-90% stocks
and the balance in bonds and money market securities.
$ 26 PERSONAL STRATEGY - INCOME (1994) - Highest total return over time
consistent with a primary emphasis on income and secondary emphasis
on capital appreciation by investing in a diversified portfolio
consisting of 30-50% stocks and the balance in bonds and money
market securities.
$ 47 VALUE FUND (1994) - Long-term capital appreciation by investing
primarily in common stocks believed to be undervalued.
$ 62 CAPITAL OPPORTUNITY (1994) - Superior capital appreciation over
time by investing primarily in U.S. common stocks of small, medium
and large companies.
$ 17 EMERGING MARKETS STOCK (1995) - Long-term growth of capital through
investments primarily in common stocks of large and small companies
domiciled, or with primary operations, in emerging markets in Latin
America, Asia, Europe, Africa and the Middle East.
$ 2 GLOBAL STOCK (1995) - Long-term growth of capital through
investments primarily in common stocks of established companies
throughout the world, including the U.S.
$ 2 HEALTH SCIENCES (1995) - Long-term growth of capital by investing
primarily in common stocks of companies engaged in the research,
development, production, or distribution of products or services
related to health care, medicine, or the life sciences.
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TAXABLE BOND FUNDS:
$ 1,668 NEW INCOME (1973) - Highest level of income consistent with
preservation of capital over time through investment primarily in
marketable debt securities.
$ 1,227 HIGH YIELD (1984) - High current income and, secondarily, capital
appreciation by investing in a widely diversified portfolio of
lower-quality, long-term corporate bonds, often called high yield
or junk bonds.
$ 464 SHORT-TERM BOND (1984) - High level of liquidity and income
consistent with minimum fluctuation in principal value by investing
in a diversified portfolio of short- and intermediate-term
corporate, government, and debt securities.
$ 896 GNMA (1985) - High level of current income consistent with maximum
credit protection and moderate price fluctuation by investing
exclusively in securities backed by the full faith and credit of
the U.S. Government, primarily mortgage-backed securities issued by
the Government National Mortgage Association (GNMA), and
instruments involving these securities.
$ 1,016 INTERNATIONAL BOND (1986) - High current income and capital
appreciation by investing in high-quality, nondollar-denominated
government and corporate bonds outside the U.S.
$ 183 U.S. TREASURY INTERMEDIATE (1989) - High level of income consistent
with maximum credit protection and moderate fluctuation in
principal value by investing primarily in U.S. Treasury securities
and repurchase agreements.
$ 71 U.S. TREASURY LONG-TERM (1989) - Highest level of current income
consistent with maximum credit protection by investing primarily in
U.S. Treasury securities and repurchase agreements.
$ 987 SPECTRUM INCOME (1990) - High level of current income consistent
with moderate price fluctuation by investing primarily in a
diversified group of T. Rowe Price Mutual Funds which, in turn,
invest principally in fixed-income securities.
$ 28 GLOBAL GOVERNMENT BOND (1990) - High current income and,
secondarily, capital appreciation and protection of principal by
investing primarily in high-quality foreign and U.S. government
bonds.
$ 105 SHORT-TERM U.S. GOVERNMENT (1991) - Highest level of current income
consistent with minimal share price fluctuation by investing in a
diversified portfolio of short-term U.S. government-backed
securities.
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$ 40 SHORT-TERM GLOBAL INCOME (1992) - High level of current income
consistent with modest share price fluctuation by investing
primarily in high-quality fixed-income securities.
$ 24 SUMMIT GNMA (1993) - High level of income and maximum credit
protection by investing in mortgage-backed certificates issued by
GNMA.
$ 28 SUMMIT LIMITED-TERM BOND (1993) - High level of income consistent
with moderate fluctuation in principal value by investing in short-
and intermediate-term, investment-grade bonds.
$ 10 EMERGING MARKETS BOND (1994) - High income and capital appreciation
by investing in the government and corporate debt securities of
emerging nations.
$ 3 CORPORATE INCOME (1995) - High income and some capital appreciation
by investing in investment-grade corporate debt securities.
TAX-FREE BOND FUNDS:
$ 1,397 TAX-FREE INCOME (1976) - High level of income exempt from federal
income taxes by investing primarily in long-term, investment-grade
municipal securities.
$ 451 TAX-FREE SHORT-INTERMEDIATE (1983) - High level of income exempt
from federal income taxes consistent with modest price fluctuation
by investing primarily in municipal securities in the four highest
credit categories.
$ 983 TAX-FREE HIGH YIELD (1985) - High level of income exempt from
federal income taxes by investing primarily in long-term, low- to
upper-medium quality municipal securities.
$ 135 NEW YORK TAX-FREE BOND (1986) - Highest level of income exempt from
federal, New York state and city income taxes by investing
primarily in investment-grade New York municipal bonds.
$ 147 CALIFORNIA TAX-FREE BOND (1986) - Highest level of income exempt
from federal and California state income taxes by investing
primarily in investment-grade California municipal bonds.
$ 800 MARYLAND TAX-FREE BOND (1987) - Highest level of income exempt from
federal and Maryland state and local income taxes by investing
primarily in investment-grade Maryland municipal bonds.
$ 70 NEW JERSEY TAX-FREE BOND (1991) - Highest level of income exempt
from federal and New Jersey state income taxes by investing
primarily in investment-grade New Jersey municipal bonds.
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$ 178 VIRGINIA TAX-FREE BOND (1991) - Highest level of income exempt from
federal and Virginia state income taxes by investing primarily in
investment-grade Virginia municipal bonds.
$ 91 TAX-FREE INSURED INTERMEDIATE BOND (1992) - High level of income
exempt from federal income taxes and moderate price fluctuation
while minimizing credit risk by investing primarily in insured
municipal securities.
$ 84 MARYLAND SHORT-TERM TAX-FREE BOND (1993) - Highest level of income
exempt from federal and Maryland state and local income taxes
consistent with modest fluctuation in principal value by investing
primarily in investment-grade Maryland municipal bonds.
$ 72 FLORIDA INSURED INTERMEDIATE TAX-FREE BOND (1993) - High level of
income exempt from federal income taxes while minimizing credit
risk by investing primarily in insured Florida municipal bonds.
$ 32 GEORGIA TAX-FREE BOND (1993) - Highest level of income exempt from
federal and Georgia state income taxes by investing primarily in
investment-grade Georgia municipal bonds.
$ 12 SUMMIT MUNICIPAL INCOME (1993) - High level of income exempt from
federal income taxes by investing primarily in long-term,
investment-grade municipal bonds.
$ 23 SUMMIT MUNICIPAL INTERMEDIATE (1993) - Highest possible income
exempt from federal income taxes consistent with moderate price
fluctuation by investing primarily in investment-grade municipal
bonds.
$ 12 VIRGINIA SHORT-TERM TAX-FREE BOND (1994) - Highest level of income
exempt from federal and Virginia state income taxes consistent with
modest fluctuation in principal value by investing primarily in
investment-grade Virginia municipal bonds.
MONEY MARKET FUNDS:
$ 3,988 PRIME RESERVE (1976) - Preservation of capital, liquidity and,
consistent with these, the highest possible current income through
investments primarily in high-quality, money market securities.
$ 660 TAX-EXEMPT MONEY (1981) - Preservation of capital, liquidity and,
consistent with these, the highest current income exempt from
federal income taxes by investing in high-quality, short-term
municipal securities.
$ 717 U.S. TREASURY MONEY (1982) - Maximum safety of capital, liquidity
and, consistent with these, the highest possible current income by
investing primarily in a portfolio of U.S. Treasury securities.
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$ 70 NEW YORK TAX-FREE MONEY (1986) - Highest possible current income
exempt from federal, New York state and city income taxes
consistent with preservation of principal and liquidity by
investing in municipal securities.
$ 73 CALIFORNIA TAX-FREE MONEY (1986) - Highest possible current income
exempt from federal and California state income taxes consistent
with preservation of principal and liquidity by investing in
municipal securities.
$ 427 SUMMIT CASH RESERVES (1993) - Preservation of capital, liquidity
and, consistent with these, the highest possible current income by
investing in a diversified portfolio of U.S. dollar-denominated
money market securities.
$ 73 SUMMIT MUNICIPAL MONEY MARKET (1993) - Preservation of capital,
liquidity and, consistent with these, the highest possible current
income exempt from federal income taxes by investing in high-
quality municipal securities.
The Company also sponsors the Foreign Equity Fund, an international stock
fund begun in 1989 for institutional investors, which seeks to provide long-
term growth of capital through investments primarily in common stocks of
established, non-U.S. companies. Assets under management in this fund were
$1,723 million at December 31, 1995.
AGREEMENTS WITH PRICE FUNDS. The Company provides investment advisory,
distribution and administrative services to the Price Funds under investment
management, underwriting, transfer agency and service agreements. Pursuant
to investment management agreements with each of the Price Funds, the Company
provides investment advisory services to each fund, subject to the authority
of each fund's board of directors and to each fund's fundamental investment
objective. The investment management agreements with the Price Funds are
approved annually by the directors of the respective funds, including a
majority of the directors who are not "interested persons" of the funds or
the Company as defined under the Investment Company Act of 1940, as amended
(the Investment Company Act). Amendments to such agreements must be approved
by the Price Funds' shareholders. Each agreement automatically terminates in
the event of its assignment (as defined in the Investment Company Act) and
either party may terminate the agreement without penalty after notice
(generally 60 days). Each fund has the right to use the "T. Rowe Price" name
for so long as its investment management agreement with the Company remains
in effect.
The Company is paid an investment advisory fee based upon the average daily
net assets of the funds and separate administrative fees for the support
services rendered by the Company. Management of the Company and the
independent directors of the Price Funds regularly review the fund fee
structures in light of fund performance, the level and range of services
provided, industry conditions, and other factors. The current advisory fee
paid by each of the Price Funds (excluding the Price Spectrum and Summit
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Funds, the Price Equity Index Fund and the Foreign Equity Fund) is computed
by multiplying the individual fund's average daily net assets by a composite
fee determined by adding a group fee based on the combined net assets of the
Price Funds and an individual fund fee applicable to each fund.
Each fund (excluding the Price Summit Funds) bears all expenses associated
with the operation of the fund and the issuance and redemption of its
securities. In particular, each fund pays investment advisory fees;
shareholder servicing fees and expenses; fund accounting fees and expenses;
transfer agent fees; custodian fees and expenses; legal and auditing fees;
expenses of preparing, printing and mailing prospectuses and shareholder
reports to existing shareholders; registration fees and expenses; proxy and
annual meeting expenses; and independent directors' fees and expenses. All
advertising, promotion and selling expenses are borne by the Company.
The Company does, however, absorb expenses of funds that are in excess of
limitations established under state securities laws. The Company does not
expect that state expense limits, at current fee and expense levels, will
have any significant effect on the results of its operations. The Company
generally guarantees that a newly-organized fund's expenses will not exceed a
specified ratio during its initial operations. Allowances made for reduced
advisory fees and other mutual fund expenses in excess of limitations may be
recovered in future periods if and when fund performance and related expense
limitation provisions permit.
Pursuant to underwriting agreements with each fund, T. Rowe Price Investment
Services, Inc. (TRP Investment Services) is the exclusive distributor of the
Price Funds. The agreements provide that TRP Investment Services shall
always offer the funds' shares at a public offering price equal to the net
asset value per share and shall use its best efforts to obtain investors for
the funds. The underwriting agreements with the Price Funds are approved
annually by the directors of the respective funds, including a majority of
the directors who are not "interested persons" of the funds or the Company as
defined under the Investment Company Act. Each agreement automatically
terminates in the event of its assignment (as defined in the Investment
Company Act), and either party may terminate the agreement without penalty
after notice (generally 60 days). TRP Investment Services does not receive a
separate fee for its services to the Price Funds. The Company expends
substantial resources in advertising and direct mail communications to
existing and potential Price Funds' shareholders and in providing the staff
and communications capabilities to respond to inquiries. The level of
advertising and promotion expenditures varies over time as market conditions
and cash inflows to the Price Funds warrant.
ADMINISTRATIVE SERVICES. T. Rowe Price Services, Inc. (TRP Services)
provides transfer agent and shareholder services under contracts with the
Price Funds. Shareholder servicing activities include maintenance of staff
and equipment to respond to all telephone inquiries from existing Fund
shareholders and to provide the mutual fund transfer agent function. In
addition, the Company provides mutual fund accounting services including
maintenance of financial records, preparation of financial statements and
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reports, daily valuation of portfolio securities and computation of daily net
asset values per share.
T. Rowe Price Retirement Plan Services, Inc. (TRP Retirement Plan Services)
provides participant accounting, plan administration and transfer agent
services for defined contribution retirement plans that invest, at least in
part, in the Price Funds. Plan sponsors compensate TRP Retirement Plan
Services for certain administrative services while the Price Funds compensate
it for maintaining and administering the individual participant accounts for
those plans that invest in the Price Funds.
The Company provides certain trust services through its Maryland-chartered
limited service trust company, T. Rowe Price Trust Company, Inc. (TRP Trust
Company). TRP Trust Company serves as custodian or trustee for the Price
Funds' prototype retirement plans, IRAs, and certain other retirement plans.
TRP Trust Company also sponsors common trust funds principally for investment
by qualified employee retirement plans. Under its charter, TRP Trust Company
may not be in the business of accepting deposits and cannot make personal or
commercial loans.
The Company also provides discount brokerage services through TRP Investment
Services. Such services are provided primarily to shareholders of the Price
Funds and are intended to complement the other investment services offered to
them. All discount brokerage transactions are cleared through and accounts
maintained by BHC Securities, Inc., an independent clearing broker.
OTHER SPONSORED PRODUCTS AND PRIVATE ACCOUNT MANAGEMENT.
The Company serves as investment adviser to pension, profit sharing and other
employee benefit plans, endowments, foundations, trusts, individuals,
corporations, other mutual funds and other investors who are principally
domiciled in the United States. No private account client accounted for more
than 5% of the Company's 1995 private account investment advisory revenues.
Investment management services are provided to client accounts on an
individual basis and through sponsored investment partnerships and trusts.
Sponsored investment products have generally been issued through private
placements.
Fees for separately managed private account clients are generally computed
based on the value of assets under management. The standard form of
investment advisory agreement with private account clients provides that the
agreement may be terminated at any time and that any unearned fees paid in
advance will be refunded. The minimum account size is generally $20 million
for institutional private account services, although the minimum account size
for certain specialized investment services may be higher. Fees for
sponsored product management are based on individual product advisory
agreements, which result from consideration of, among other things, the type
of investments to be made and the unique investment management services to be
provided.
Many specialized investment advisory services are provided to private
<PAGE> 13
accounts by subsidiaries of the Company. International equity and fixed
income securities management is provided by Rowe Price-Fleming International,
Inc. (RPFI). Management of stable value investment contracts, aggregating
$5.3 billion at December 31, 1995, is provided by T. Rowe Price Stable Asset
Management, Inc. (TRP Stable Asset Management).
INVESTMENT RESEARCH.
In the performance of its investment advisory functions, the Company uses
fundamental, technical and cyclical security analysis methods. The Company
maintains a substantial internal equity and fixed income investment research
effort, undertaken by analysts, economists, statisticians and support
personnel, which includes original industry and company research, utilizing
such sources as inspection of corporate activities, management interviews,
company-prepared information, financial information published by companies
and/or filed with the SEC, financial newspapers and magazines, corporate
rating services, and field checks with participants in the industry such as
suppliers or competitors. In addition, the Company utilizes research
provided by brokerage firms in a supportive capacity; information is received
from private economists, political observers, foreign commentators,
government experts, and market and security analysts. In certain instances,
computerized data is the basis of the stock selection process rather than
security analysis.
ROWE PRICE-FLEMING INTERNATIONAL, INC.
TRP Finance, Inc., an investment holding company subsidiary, owns 50% of the
common stock of RPFI which, by virtue of the Company's controlling interest,
is consolidated into the Company's financial statements. The balance of the
common stock of RPFI is owned equally by Copthall Overseas Limited (United
Kingdom), a subsidiary of the London-based merchant banking group Robert
Fleming Holdings Limited, and Jardine Fleming International Holdings Limited
(Cayman Islands), a subsidiary of the Jardine Fleming Group Limited, an
investment bank in the Asia-Pacific Region. RPFI serves as investment
adviser to the Price International Funds and to other mutual funds, sponsored
investment products and private accounts of institutional investors. During
1995, international assets under management by RPFI increased $3.9 billion to
$22.2 billion at year end, including $12.6 billion in the T. Rowe Price
International Funds. RPFI's financial information and assets under
management are included in the Company's consolidated financial data and
statistical information presented elsewhere in this Form 10-K.
International investment research is provided to RPFI by affiliates of its
minority stockholders. Fees are paid for these services based on RPFI's
assets under management.
REGULATION.
The Company, RPFI, TRP Stable Asset Management, and T. Rowe Price (Canada),
Inc. (TRP Canada) are registered with the Securities and Exchange Commission
under the Investment Advisers Act of 1940 and all applicable state securities
<PAGE> 14
agencies. Each of the Price Funds is registered with the Securities and
Exchange Commission under the Investment Company Act and, except for the
specific state tax-free funds, is qualified for sale throughout the United
States and Puerto Rico. TRP Investment Services is registered as a broker-
dealer under the Securities Exchange Act of 1934 (Exchange Act) and all
applicable state securities laws and is a member of the National Association
of Securities Dealers, Inc. and the Securities Investor Protection
Corporation. TRP Services is registered under the Exchange Act as a transfer
agent, and TRP Trust Company is regulated by the State of Maryland Bank
Commissioner. TRP Canada is also registered as an investment adviser with
the Ontario Securities Commission.
All aspects of the Company's business are subject to extensive federal and
state laws and regulations. These laws and regulations are primarily
intended to benefit or protect the Company's clients and the Price Funds'
shareholders and generally grant supervisory agencies and bodies broad
administrative powers, including the power to limit or restrict the Company
from carrying on its business in the event that it fails to comply with such
laws and regulations. In such event, the possible sanctions that may be
imposed include the suspension of individual employees, limitations on
engaging in certain lines of business for specified periods of time,
revocation of the investment adviser and other registrations, censures and
fines.
The Company and certain of its subsidiaries are subject to net capital
requirements including those of various federal and state regulatory
agencies. The Company's net capital, as defined, has consistently met or
exceeded all minimum requirements.
COMPETITION.
As a member of the financial services industry, the Company is subject to
substantial competition in all aspects of its business. A significant number
of mutual funds are sold to the public by investment management firms,
broker-dealers and insurance companies. In addition to other investment
advisory and mutual fund management companies, the Company competes with
brokerage and investment banking firms, insurance companies, banks, and other
financial institutions in all aspects of its business. Many of these
financial institutions have substantially greater resources than the Company.
The Company competes with other providers of investment products and services
primarily on the basis of the range of investment products offered, the
investment performance of such products, the manner in which such products
are distributed, and the scope and quality of the services provided.
The Company believes that competition among the mutual funds industry will
increase as a result of consolidation and acquisition activity within the
industry. In order to maintain and enhance its competitive position as an
independent, no-load, direct marketer of mutual funds, the Company frequently
reviews acquisition prospects and may, from time to time, engage in
discussions or negotiations that could lead to acquisitions by the Company.
Currently, the Company is not party to any agreements or understandings
<PAGE> 15
regarding any acquisitions; however, as a result of the Company's process of
reviewing possible acquisition prospects, negotiations may occur from time to
time if appropriate opportunities arise.
EMPLOYEES.
At December 31, 1995, the Company and its subsidiaries had 1,910 active,
full-time employees. The Company employs additional temporary and part-time
personnel to meet seasonal and other periodic demands for mutual fund
shareholder and investor services.
ITEM 2. PROPERTIES.
The Company's primary corporate offices consist of approximately 270,000
square feet of space located at 100 East Pratt Street in Baltimore, Maryland.
The Company also leases facilities in Los Angeles and San Francisco,
California; Owings Mills, Maryland; Glen Allen, Virginia; Washington, D.C.;
and Tampa, Florida. Future minimum rental payments under noncancelable
operating leases at December 31, 1995 are set forth in Note 9 to the
consolidated financial statements included in Item 8. of this Form 10-K.
TRP Suburban, Inc. owns a $19.8 million financial operations center in Owings
Mills, Maryland consisting of approximately 110,000 square feet of operating
space. The facility houses a portion of the Company's administrative
services operations. The land has been leased until 2089.
TRP Suburban Second, Inc. acquired 32.5 acres of land in Owings Mills,
Maryland in December 1995 and has begun development of two buildings with a
combined 219,000 square feet of space in early 1996. Construction is
expected to be completed in the second half of 1997. The acreage will
accommodate additional development of approximately 300,000 square feet of
space. TRP Suburban Second also has an option to acquire an adjacent 37.4
acres to meet further development needs.
Information concerning anticipated 1996 capital expenditures is set forth in
the last paragraph of Item 7. of this Form 10-K.
ITEM 3. LEGAL PROCEEDINGS.
From time to time, the Company is a party to various claims arising in the
ordinary course of business. The Company is not currently the subject of any
claim that, if adversely determined, is likely to have a material adverse
effect on the Company's financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Company's stockholders during the
fourth quarter of 1995.
<PAGE> 16
ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
The following information includes the names, ages, and positions of the
executive officers and certain significant employees of the Company. There
are no arrangements or understandings pursuant to which any person serves the
Company. The first seven individuals listed are presently members of the
Board of Directors; however, Messrs. Broadus and Hoffman will retire from the
Board in April 1996.
George J. Collins (55), President and Chief Executive Officer (1984) and
Managing Director (1989)
George A. Roche (54), Managing Director (1989) and Chief Financial
Officer (1984)
Thomas H. Broadus, Jr. (58), Managing Director (1989)
Carter O. Hoffman (68), Managing Director (1989)
Henry H. Hopkins (53), Managing Director (1989)
James S. Riepe (52), Managing Director (1989)
M. David Testa (51), Managing Director (1989)
Edward C. Bernard (40), Managing Director (1995) and Vice President
(1989-1995)
Stephen W. Boesel (51), Managing Director (1993) and Vice President
(1977-1993)
James A.C. Kennedy (42), Managing Director (1990)
John H. LaPorte (50), Managing Director (1989)
Mary J. Miller (40), Managing Director (1993) and Vice President (1986-1993)
Charles A. Morris (33), Managing Director (1995) and Vice President
(1990-1995)
Mark E. Rayford (44), Managing Director (1993) and Vice President (1984-1993)
William T. Reynolds (47), Managing Director (1990)
Brian C. Rogers (40), Managing Director (1991)
Charles P. Smith (52), Managing Director (1990)
Peter Van Dyke (57), Managing Director (1990)
Charles E. Vieth (39), Managing Director (1993) and Vice President
(1985-1993)
Richard T. Whitney, (37), Managing Director (1995) and Vice President
(1988-1995)
Alvin M. Younger, Jr. (46), Managing Director (1990), Treasurer (1985) and
Secretary (1987)
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock ($.20 par value) trades on The Nasdaq Stock Market
under the symbol "TROW". The high and low trade price information and
dividends per share during the past two years were:
<PAGE> 17
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
________ ________ ________ ________
1994 - High price $ 38.25 $ 31.75 $ 34.75 $ 34.50
Low price $ 26.25 $ 26.25 $ 24.625 $ 27.75
Cash dividends declared $ .13 $ .13 $ .13 $ .16
1995 - High price $ 37.25 $ 41.00 $ 51.75 $ 56.75
Low price $ 27.00 $ 35.25 $ 33.75 $ 45.00
Cash dividends declared $ .16 $ .16 $ .16 $ .21
At February 12, 1996, there were approximately 2,400 holders of record of the
Company's outstanding common stock.
ITEM 6. SELECTED FINANCIAL DATA.
Year ended December 31,
___________________________________________________
1991 1992 1993 1994 1995
________ ________ ________ ________ ________
(in thousands, except per-share amounts)
Revenues $205,206 $245,112 $310,041 $382,378 $439,299
Net income $ 30,437 $ 35,784 $ 48,539 (1) $ 61,151 $ 75,409 (3)
Earnings per
share (2) $ 1.02 $ 1.19 $ 1.59 (1) $ 2.00 $ 2.47 (3)
Cash dividends
declared per
share (2) $ .33 $ .375 $ .445 $ .55 $ .69
Weighted average
shares
outstanding (2) 29,823 30,158 30,615 30,571 30,525
(1) Net income and earnings per share before the cumulative effects of
changes in accounting principles were $48,869 and $1.60, respectively.
(2) Retroactively adjusted to give effect to the 2-for-1 stock split in
November 1993.
(3) Net income and earnings per share before an extraordinary charge were
$76,458 and $2.50, respectively.
December 31,
________________________________________________
1991 1992 1993 1994 1995
________ ________ ________ ________ ________
(in thousands, except as noted)
Balance sheet data
Total assets $179,571 $206,072 $263,400 $297,282 $365,343
Debt $ 15,969 $ 13,190 $ 12,915 $ 12,613 $ --
Stockholders'
equity $132,525 $154,198 $195,953 $216,239 $274,232
Assets under manage-
ment (in millions) $ 35,623 $ 41,415 $ 54,396 $ 57,835 $ 75,437
<PAGE> 18
ITEM 7. 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), other sponsored investment products, and private
accounts of other institutional and individual investors. Investment
advisory fees are generally based on the net assets of the portfolios
managed. The majority of administrative revenues are derived from services
provided to the Funds.
The Company's base of assets under management consists of a broad range of
domestic and international stock, bond and money market mutual funds and
other investment products which meet the varied needs and objectives of its
individual and institutional investors. In recent years, there have been
significant net cash inflows to the stock mutual funds, particularly the
international funds in 1993 and 1994 and the domestic funds in 1995. 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.
1995 versus 1994. Net income increased almost $14.3 million or 23% to $75.4
million. Earnings per share grew more than 23%, or $.47 per share, to an
annual record of $2.47. The 1995 results include an extraordinary charge of
$1.0 million or $.03 per share from the early extinguishment of the Company's
9.77% fixed rate, $12.4 million promissory note due in 2001. The Company's
common stock repurchases during 1994 and 1995 resulted in a decrease in
weighted average shares outstanding and account for $.03 of the increase in
earnings per share. Total revenues increased 15% from $382.4 million to an
annual record of $439.3 million, led by an increase of $42.0 million in
investment advisory revenues.
Investment advisory revenues from the Funds increased more than $37.6 million
as average assets under management rose $6.2 billion to $42.7 billion. Fund
assets totaled $48.6 billion at December 31, 1995, up $11.3 billion from
December 31, 1994, with stock funds accounting for $9.5 billion of the
increase. Net cash inflows to the Funds during 1995 of $3.8 billion,
including $3.6 billion to the stock funds, surpassed the 1994 total of $3.4
billion and nearly equaled the record of $3.9 billion in 1993. Private
accounts and other sponsored products contributed the balance of the
investment advisory revenue gains as these assets under management rose $6.3
billion to more than $26.8 billion at December 31, 1995. Total assets under
management at year end increased to $75.4 billion from $57.8 billion.
Administrative fees from services to the Funds and their shareholders rose
10% during 1995 to $94.4 million, primarily as a result of growth in the
<PAGE> 19
activities of the Company's mutual fund transfer agent and defined
contribution retirement plan recordkeeping services; however, increases in
related operating expenses more than offset these revenue gains.
Investment and other income rose $6.2 million primarily due to greater
earnings on the Company's larger mutual fund holdings and capital gains
realized on stock mutual fund investments.
Operating expenses increased 13% or $34.4 million to $295.6 million from
$261.2 million. Greater compensation and related costs, which were up $14.0
million, were attributable to increases in overall compensation rates,
including higher bonuses, and an 8% increase in the average number of
employees primarily to support the Company's growing administrative
operations. Advertising and promotion expenditures increased 12% to $34.8
million as fourth quarter 1995 spending was boosted significantly in response
to investor demand for stock mutual funds. Early 1996 cash inflows to the
mutual funds have been strong. Advertising and promotion expenditures in
1996 are expected to remain high relative to 1995 expenditures as long as
market conditions and cash inflows warrant. Depreciation, amortization, and
operating rentals of property and equipment increased $5.2 million as a
result of the Company's recent investments in computer and communications
equipment and office facilities. International investment research fees
increased $4.3 million as international assets under management rose to $22.2
billion at December 31, 1995, including $12.6 billion in the mutual funds.
Administrative and general expenses increased $7.2 million due to greater
costs associated with the Company's growing operations and data processing
capabilities.
The provision for income taxes decreased as a percentage of income before
income taxes and minority interests primarily due to the recognition of
federal research expenditure credits. Tax laws allowing such credits expired
June 30, 1995.
Lower net income reported on a separate company basis by the Company's 50%-
owned subsidiary, Rowe Price-Fleming International, Inc. (RPFI), was the
primary reason for the decrease in income attributable to the minority
interests in the Company's consolidated subsidiaries.
1994 versus 1993. Net income increased $12.6 million or 26% from $48.5
million and $1.59 per share to $61.2 million and $2.00 per share. Revenues
increased 23% to $382.4 million from $310.0 million. Results for 1993
included a net charge of $.3 million or $.01 per share reflecting the
cumulative effects of changes in accounting principles.
Investment advisory revenues from the Funds increased $46.4 million as
average assets under management rose $6.7 billion to $36.5 billion. Assets
in the Funds closed 1994 at $37.3 billion, up $2.6 billion during the year,
with stock funds accounting for $22.8 billion of the year-end total. Net
cash inflows to the Funds during 1994 totaled nearly $3.4 billion as net
subscriptions of $4.1 billion into the stock funds and $.8 billion into the
money market funds were partially offset by net redemptions of $1.5 billion
<PAGE> 20
from the bond funds. Private accounts and other sponsored products primarily
in the international asset area and performance management fees earned from
sponsored partnerships contributed $18.8 million of the revenue gains.
Private account assets under management rose to $20.5 billion at December 31,
1994, up $.8 billion during the year. Total assets under management at year
end increased to $57.8 billion from $54.4 billion.
Administrative fees from services to the Price Funds and their shareholders
rose 11% during 1994 to $85.7 million as a result of growth in the activities
of the Company's mutual fund transfer agent and defined contribution plan
recordkeeping services; however, increases in related operating expenses more
than offset these revenue gains. Investment and other income decreased $1.4
million from 1993 due to losses from dispositions and write-downs of the
Company's bond fund holdings in the higher interest rate environment that
existed throughout 1994.
Operating expenses increased 19% or $42.1 million to $261.2 million from
$219.1 million. Greater compensation and related costs, which were up $19.7
million, were attributable to increases in overall compensation rates,
including higher bonuses, and a 6% increase in the average number of
employees, primarily to support the growing administrative services
operations. The Company increased spending on advertising and promotion by
$1.8 million primarily to attract additional investments into the
international funds during early 1994. 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 $3.5
million as a result of the Company's recent investments in computer and
communications equipment, office facilities and furnishings. International
investment research fees, which are based on international assets under
management, increased $9.2 million. Administrative and general expenses
increased $7.9 million as a result of greater operating costs associated with
the Company's growing operations, including those related to data processing
and communications.
Increased earnings by RPFI was the primary reason for the increase in income
attributable to the minority interests in consolidated subsidiaries. The
Company's international assets, which are managed by RPFI, increased $2.9
billion to $18.3 billion at December 31, 1994, including $10.8 billion in the
Price Funds.
CAPITAL RESOURCES AND LIQUIDITY.
During the three years ended December 31, 1995, stockholders' equity
increased 78% or $120.0 million to $274.2 million. Stockholders' equity at
December 31, 1995 includes $12.7 million of net unrealized security holding
gains on the Company's investments in sponsored mutual funds and $43.2
million which is restricted as to use under various regulations and
agreements to which the Company and its subsidiaries are subject in the
ordinary course of business.
Operating activities provided net cash inflows of $101.8 million in 1995 when
net income increased $14.3 million. Comparatively, 1994 provided net
operating cash inflows of $111.9 million, including $27.3 million from the
<PAGE> 21
liquidation of sponsored mutual fund investments which had been held as
trading securities. Net cash expended in investing activities during 1995
aggregated $35.5 million, down from the $53.4 million expended in 1994 when
the proceeds of the liquidation of the trading securities portfolio were
reinvested in the Company's longer-term investment portfolios. Property and
equipment expenditures reached $23.9 million in 1995, including $7.8 million
for the acquisition of 32.5 acres of land in suburban Owings Mills, Maryland
on which the Company will develop additional office facilities for its
expanding operations. Financing activities consumed $44.9 million in 1995,
including common stock repurchases, dividends and distributions to minority
interests as well as $13.6 million for the early extinguishment of the
Company's long-term debt. The Company realized a substantial savings by
retiring the debt at market rates versus the terms of the original borrowing.
At December 31, 1995, the Company held net liquid assets of more than $170
million, including $81.4 million of cash and cash equivalents, to meet
business demands and opportunities. In addition, a maximum of $20 million is
available to the Company under unused bank lines of credit.
The Company anticipates 1996 property and equipment acquisitions of
approximately $50 million, including $20 million for development of two
office buildings on the land acquired in 1995. Additional construction and
furnishing costs of approximately $30 million for these new facilities are
expected in 1997 before occupancy occurs in the latter half of the year.
These capital expenditures are expected to be funded from liquid assets
currently available and from operating cash inflows. The future need for
additional facilities can be met on the substantial acreage remaining
undeveloped and on an adjacent 37.4 acres presently under purchase option.
Commitments for additional investments in partnerships and other ventures
aggregate $7.5 million at December 31, 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Index to Financial Statements:
Report of Independent Accountants 22
Consolidated Balance Sheets at December 31, 1994 and 1995 23
Consolidated Statements of Income for each of the
three years in the period ended December 31, 1995 24
Consolidated Statements of Cash Flows for each of the
three years in the period ended December 31, 1995 25
Consolidated Statements of Stockholders' Equity for
each of the three years in the period ended December 31, 1995 26
Summary of Significant Accounting Policies 28
Notes to Consolidated Financial Statements 30
Supplementary Data - Selected Quarterly Data. 37
<PAGE> 22
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors
of T. Rowe Price Associates, Inc.
In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of T. Rowe Price Associates, Inc. and its subsidiaries at
December 31, 1994 and 1995, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1995,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
During 1993, the Company changed its methods of accounting for postretirement
benefits other than pensions and income taxes by adopting new standards of
the Financial Accounting Standards Board. These changes are more fully
described in Notes 8 and 4 accompanying the consolidated financial
statements.
/s/ PRICE WATERHOUSE LLP
Baltimore, Maryland
January 25, 1996
<PAGE> 23
T. ROWE PRICE ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
__________________
1994 1995
________ ________
(in thousands)
ASSETS
Cash and cash equivalents (Note 1) $ 60,016 $ 81,431
Accounts receivable (Note 1) 46,722 55,841
Investments in sponsored mutual funds held as
available-for-sale securities (Note 1) 93,010 121,606
Partnership and other investments (Note 9) 28,657 28,049
Property and equipment (Note 2) 49,341 60,222
Goodwill and other assets (Notes 3 and 4) 19,536 18,194
________ ________
$297,282 $365,343
________ ________
________ ________
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued expenses (Note 6) $ 18,538 $ 27,287
Accrued compensation and retirement costs (Note 8) 27,413 28,803
Income taxes payable (Note 4) 1,573 7,376
Dividends payable 4,575 6,036
Debt (Note 5) 12,613 --
Minority interests in consolidated subsidiaries 16,331 21,609
________ ________
Total liabilities 81,043 91,111
________ ________
Commitments and contingent liabilities (Note 9)
Stockholders' equity (Notes 6 and 9)
Preferred stock, undesignated, $.20 par value -
authorized and unissued 20,000,000 shares in 1995 -- --
Common stock, $.20 par value - authorized
48,000,000 shares in 1994 and 100,000,000 shares
in 1995; issued 28,569,419 shares in 1994
and 28,665,472 shares in 1995 5,714 5,733
Capital in excess of par value 1,935 2,912
Retained earnings 206,036 252,934
Unrealized security holding gains (Note 1) 2,554 12,653
________ ________
Total stockholders' equity 216,239 274,232
________ ________
$297,282 $365,343
________ ________
________ ________
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 24
T. ROWE PRICE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Year ended December 31,
__________________________
1993 1994 1995
________ ________ ________
(in thousands, except
per-share amounts)
Revenues
Investment advisory fees (Note 1) $224,809 $290,071 $332,087
Administrative fees (Note 1) 77,208 85,672 94,377
Investment and other income (Notes 1 and 7) 8,024 6,635 12,835
________ ________ ________
310,041 382,378 439,299
________ ________ ________
Expenses
Compensation and related costs (Notes 6 and 8) 109,637 129,373 143,369
Advertising and promotion 29,448 31,201 34,843
Depreciation, amortization and operating
rentals of property and equipment (Note 9) 21,528 24,993 30,247
International investment research fees 16,469 25,719 30,023
Administrative and general (Note 5) 41,975 49,899 57,124
________ ________ ________
219,057 261,185 295,606
________ ________ ________
Income before income taxes and minority
interests 90,984 121,193 143,693
Provision for income taxes (Note 4) 35,320 46,587 54,335
________ ________ ________
Income from consolidated companies 55,664 74,606 89,358
Minority interests in consolidated subsidiaries 6,795 13,455 12,900
________ ________ ________
Income before extraordinary charge and
cumulative effects of changes in accounting
principles 48,869 61,151 76,458
Extraordinary charge from early extinguishment
of debt, net of income tax benefit (Note 5) -- -- (1,049 )
Cumulative effects of changes in accounting
principles for
Postretirement benefits other than
pensions (Note 8) (621) -- --
Income taxes (Note 4) 291 -- --
________ ________ ________
Net income $ 48,539 $ 61,151 $ 75,409
________ ________ ________
________ ________ ________
Earnings per share, including a net charge of
$.01 per share in 1993 for the cumulative
effects of changes in accounting principles
and an extraordinary charge of $.03 per share
in 1995 $ 1.59 $ 2.00 $ 2.47
________ ________ ________
________ ________ ________
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 25
T. ROWE PRICE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
____________________________
1993 1994 1995
________ ________ ________
(in thousands)
Cash flows from operating activities
Net income $ 48,539 $ 61,151 $ 75,409
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization of
property and equipment 7,974 10,134 13,278
Amortization of goodwill and deferred
expenses 1,845 1,761 1,281
Deferred income taxes (tax benefits) 3,139 (2,232) 711
Minority interests in consolidated
subsidiaries 6,795 13,455 12,900
Increase in accounts receivable (13,036) (3,620) (9,119)
Liquidation of (investment in) sponsored
mutual funds held as trading securities (27,657) 27,292 --
Increase in accounts payable and accrued
liabilities 8,648 6,505 6,055
Other changes in assets and liabilities 2,591 (2,587) 1,237
________ ________ ________
Net cash provided by operating activities 38,838 111,859 101,752
________ ________ ________
Cash flows from investing activities
Investments in sponsored mutual funds (30,710) (33,962) (19,101)
Proceeds from dispositions of sponsored
mutual funds 1,034 5,192 6,846
Proceeds from disposition of MRT holdings 34,636 -- --
Partnership and other investments (3,214) (8,812) (1,387)
Return of partnership investments 905 1,563 2,076
Additions to property and equipment (12,240) (17,431) (23,906)
________ ________ ________
Net cash used in investing activities (9,589) (53,450) (35,472)
________ ________ ________
Cash flows from financing activities
Purchases of stock (2,251) (26,401) (9,679)
Receipts relating to stock issuances 2,457 3,497 4,455
Dividends paid to stockholders (12,138) (15,085) (18,259)
Distributions to minority interests (4,775) (6,320) (7,720)
Debt payments (275) (302) (12,613)
Extraordinary charge from early
extinguishment of debt -- -- (1,049)
________ ________ ________
Net cash used in financing activities (16,982) (44,611) (44,865)
________ ________ ________
Cash and cash equivalents
Net increase during year 12,267 13,798 21,415
At beginning of year 33,951 46,218 60,016
________ ________ ________
At end of year $ 46,218 $ 60,016 $ 81,431
________ ________ ________
________ ________ ________
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 26
T. ROWE PRICE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(dollars in thousands)
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,
1992 14,429,315 $2,886 $ 1,171 $150,141 $154,198
Common stock
issued under
stock-based
compensation
plans 254,629 51 2,963 3,014
2-for-1 stock
split 14,491,095 2,898 (1,997) (901) --
Purchases of
common stock (80,000) (16) (940) (1,295) (2,251)
Net income 48,539 48,539
Dividends
declared (12,892) (12,892)
Unrealized
security
holding gains $5,345 5,345
__________ ______ _______ ________ ______ ________
Balance at
December 31,
1993 29,095,039 5,819 1,197 183,592 5,345 195,953
Common stock
issued under
stock-based
compensation
plans 366,880 74 4,277 4,351
Purchases of
common stock (892,500) (179) (3,539) (22,831) (26,549)
Net income 61,151 61,151
Dividends
declared (15,876) (15,876)
Decrease in
unrealized
security
holding gains (2,791) (2,791)
__________ ______ _______ ________ ______ ________
Balance at
December 31,
1994 28,569,419 5,714 1,935 206,036 2,554 216,239
Continued on next page.
<PAGE> 27
T. ROWE PRICE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(dollars in thousands)
Capital Unreal-
Common in ized Total
Common stock excess security stock-
stock - par of par Retained holding holders'
- shares value value earnings gains equity
__________ ______ _______ ________ ________ ________
Continued from prior page.
Common stock
issued under
stock-based
compensation
plans 465,553 93 5,555 (2) 5,646
Purchases of
common stock (369,500) (74) (4,578) (8,789) (13,441)
Net income 75,409 75,409
Dividends
declared (19,720) (19,720)
Increase in
unrealized
security
holding gains 10,099 10,099
__________ ______ _______ ________ _______ ________
Balance at
December 31,
1995 28,665,472 $5,733 $ 2,912 $252,934 $12,653 $274,232
__________ ______ _______ ________ _______ ________
__________ ______ _______ ________ _______ ________
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 28
T. ROWE PRICE ASSOCIATES, INC.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Associates, Inc. and its consolidated subsidiaries (the
Company) derives its revenue primarily from investment advisory and
administrative services provided to sponsored mutual funds and investment
products and to private accounts of other institutional and individual
investors. Company revenues are largely dependent on the total value and
composition of assets under management, which include domestic and
international equity and debt securities; accordingly, fluctuations in
financial markets and in the composition of assets under management impact
revenues and results of operations.
BASIS OF PREPARATION.
The consolidated financial statements are prepared in accordance with
generally accepted accounting principles which requires the use of estimates
made by the Company's management. Certain 1993 and 1994 amounts have been
reclassified to conform to the 1995 presentation.
PRINCIPLES OF CONSOLIDATION.
The consolidated financial statements include the accounts of all majority
owned subsidiaries and, by virtue of the Company's controlling interest, its
50%-owned subsidiary, Rowe Price-Fleming International, Inc. (RPFI). All
material intercompany accounts and transactions are eliminated in
consolidation.
International investment research is provided by affiliates of the minority
stockholders of RPFI. Fees paid for these services are based on
international assets under management by RPFI.
CASH EQUIVALENTS.
For purposes of financial statement disclosure, cash equivalents consist of
all short-term, highly liquid investments including certain money market
mutual funds and all overnight commercial paper investments. The cost of
these investments is equivalent to fair value.
INVESTMENTS IN SPONSORED MUTUAL FUNDS.
On December 31, 1993, the Company began accounting for its investments in
sponsored stock and bond mutual funds at fair value and, accordingly,
classifies these holdings as either trading securities (held for only a short
period of time) or available-for-sale securities. Unrealized holding gains
on securities classified as available-for-sale are reported, net of income
taxes, as a separate component of stockholders' equity.
CONCENTRATION OF CREDIT RISK.
Financial instruments which potentially expose the Company to concentrations
of credit risk as defined by Statement of Financial Accounting Standards
(SFAS) No. 105 consist primarily of investments in sponsored money market and
bond mutual funds and accounts receivable. Credit risk is believed to be
minimal in that counterparties to these financial instruments have
<PAGE> 29
substantial assets, including the diversified investment portfolios under
management by the Company which aggregate $75.4 billion at December 31, 1995.
PARTNERSHIP AND OTHER INVESTMENTS.
The Company invests in various partnerships and ventures, including those
sponsored by the Company. These entities, which hold equity securities,
venture capital investments and debt securities, are generally accounted for
using the equity method which adjusts the Company's cost for its share of
subsequent earnings or losses. These investments do not have a readily
determinable fair value. Minor limited partnership investments are accounted
for using the cost method.
PROPERTY AND EQUIPMENT.
Property and equipment is stated at cost net of accumulated depreciation and
amortization computed using the straight-line method. Provisions for
depreciation and amortization are based on the following estimated useful
lives: computer and communications equipment, furniture and other equipment,
2 to 7 years; building, 40 years; leasehold improvements, the shorter of
their estimated useful lives or the remainder of the lease term; and leased
land, the term of the lease.
REVENUE RECOGNITION.
Investment advisory and administrative services fees are recognized during
the period in which such services are performed, except when advisory fees
from mutual funds are adjusted in accordance with the expense limitation
provisions of the investment advisory agreements between the Company and the
funds. Allowances made for reduced advisory fees and other mutual fund
expenses in excess of limitations may be recovered in future periods if and
when fund performance and related expense limitation provisions permit.
ADVERTISING.
Costs of advertising are expensed the first time that the advertising takes
place.
EARNINGS PER SHARE.
Earnings per share is computed based on the weighted average number of common
shares outstanding, including share equivalents arising from unexercised
stock options. The aggregate weighted average shares outstanding used in
computing earnings per share were 30,615,114 in 1993, 30,571,496 in 1994, and
30,524,853 in 1995.
<PAGE> 30
T. ROWE PRICE ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - INVESTMENTS IN AND TRANSACTIONS WITH SPONSORED MUTUAL FUNDS.
Investments in sponsored money market mutual funds, which are classified as
cash equivalents in the accompanying consolidated financial statements,
aggregate $59,355,000 at December 31, 1994 and $78,947,000 at December 31,
1995.
The Company's investments in sponsored mutual funds held as available-for-
sale at December 31 include:
Gross
unrealized Aggregate
Aggregate holding gains fair
cost (losses) value
_________ ______________ _________
(in thousands)
1994
___________
Stock funds $ 58,540 $ 4,346 $ 62,886
Bond funds 30,460 (336) 30,124
________ _______ ________
Total $ 89,000 $ 4,010 $ 93,010
________ _______ ________
________ _______ ________
1995
___________
Stock funds $ 70,872 $17,345 $ 88,217
Bond funds 30,856 2,533 33,389
________ _______ ________
Total $101,728 $19,878 $121,606
________ _______ ________
________ _______ ________
Dividends earned on the Company's investments in sponsored mutual funds
aggregated $4,439,000 in 1993, $5,644,000 in 1994, and $9,845,000 in 1995.
The Company recognized net losses of $34,000 and $1,306,000 in 1993 and 1994,
respectively, and a net gain of $473,000 in 1995 from dispositions and write-
downs of fund investments.
The Company provides investment advisory and administrative services to the
T. Rowe Price family of mutual funds which had aggregate net assets under
management at December 31, 1995 of $48.6 billion. All services rendered by
the Company are provided under contracts that set forth the services to be
provided and the fees to be charged. These contracts are subject to periodic
review and approval by each of the funds' boards of directors and, with
respect to investment advisory contracts, also by the funds' shareholders.
Revenues derived from services rendered to the sponsored mutual funds were
$221,199,000 in 1993, $274,618,000 in 1994, and $318,276,000 in 1995.
Accounts receivable from the sponsored mutual funds aggregate $23,666,000 and
$30,029,000 at December 31, 1994 and 1995, respectively.
<PAGE> 31
NOTE 2 - PROPERTY AND EQUIPMENT.
Property and equipment at December 31 consists of:
1994 1995
________ ________
(in thousands)
Computer and communications equipment $ 42,316 $ 52,265
Building and leasehold improvements 23,991 25,277
Furniture and other equipment 17,053 18,207
Land owned and leased 2,736 10,518
________ ________
86,096 106,267
Accumulated depreciation and amortization (36,755) (46,045)
________ ________
$ 49,341 $ 60,222
________ ________
________ ________
NOTE 3 - GOODWILL.
Goodwill of $7,937,000 arising from the 1992 acquisition of an investment
management subsidiary of USF&G Corporation and the combination of six USF&G
mutual funds into the T. Rowe Price family of funds is being amortized over
11 years using the straight-line method. Accumulated amortization at
December 31, 1994 and 1995 aggregates $1,738,000 and $2,483,000,
respectively.
Goodwill of $1,980,000 arising from an earlier corporate acquisition is being
amortized over 40 years using the straight-line method. Accumulated
amortization was $1,089,000 at December 31, 1994 and $1,138,000 at December
31, 1995.
NOTE 4 - INCOME TAXES.
The provision for income taxes consists of:
1993 1994 1995
________ ________ ________
(in thousands)
Current income taxes
Federal and foreign $ 27,254 $ 42,635 $ 46,350
State and local 4,927 6,184 7,274
Deferred income taxes (tax benefits) 3,139 (2,232) 711
________ ________ ________
$ 35,320 $ 46,587 $ 54,335
________ ________ ________
________ ________ ________
Deferred income taxes arise from temporary differences between taxable income
for financial statement and income tax return purposes. Significant
temporary differences resulted in deferred income taxes of $2,713,000 in 1993
related to income from the MRT holdings and $944,000 in 1995 related to
accrued compensation and retirement costs. Deferred tax benefits arising
from significant temporary differences include $1,712,000 related to accrued
compensation and $704,000 related to net unrealized investment income in
1994.
On January 1, 1993, the Company adopted SFAS No. 109, "Accounting for Income
<PAGE> 32
Taxes," which requires the use of the liability method for computing deferred
income taxes instead of the deferred method previously used in the Company's
financial statements. The cumulative effect of adopting the new accounting
principle was a credit to earnings of $291,000 or $.01 per share.
The net deferred tax asset of $1,125,000 included in other assets at December
31, 1994 consists of total deferred tax liabilities of $3,660,000 and total
deferred tax assets of $4,785,000. Deferred tax liabilities include
$1,100,000 arising from RPFI's undistributed earnings, $1,901,000 arising
from net unrealized investment income, and $659,000 from depreciation
expense. Deferred tax assets include $3,646,000 arising from deferred
compensation and retirement costs and $1,139,000 from other accrued expenses.
The net deferred tax liability of $5,189,000 included in income taxes payable
at December 31, 1995 consists of total deferred tax liabilities of $8,991,000
and total deferred tax assets of $3,802,000. Deferred tax liabilities
include $1,475,000 arising from RPFI's undistributed earnings, $7,037,000
arising from net unrealized investment income, and $479,000 from depreciation
expense. Deferred tax assets include $2,702,000 arising from deferred
compensation and retirement costs and $1,100,000 from other accrued expenses.
Cash outflows from operating activities include income taxes paid of
$31,355,000 in 1993, $49,686,000 in 1994, and $52,956,000 in 1995.
The following table reconciles the statutory federal income tax rate to the
Company's effective income tax rate.
1993 1994 1995
______ ______ ______
Statutory federal income tax rate 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefits 3.6 3.1 3.3
Other items .2 .3 (.5)
______ ______ ______
Effective income tax rate 38.8% 38.4% 37.8%
______ ______ ______
______ ______ ______
NOTE 5 - DEBT.
In September 1995, the Company extinguished the $12,375,000 balance of its
9.77% promissory note due in 2001 and recognized an extraordinary charge
equal to the $1,500,000 prepayment premium and the unamortized debt issuance
cost of $235,000, net of an income tax benefit of $686,000. The estimated
fair value of this note at December 31, 1994 exceeded the outstanding
principal balance at that time by $1,392,000.
A maximum of $20,000,000 is available to the Company under unused bank lines
of credit at December 31, 1995.
Cash outflows from operating activities include interest paid of $1,481,000
in 1993, $1,643,000 in 1994, and $1,000,000 in 1995. Interest expense was
$1,754,000 in 1993, $1,330,000 in 1994, and $1,023,000 in 1995.
<PAGE> 33
NOTE 6 - COMMON STOCK AND STOCK-BASED COMPENSATION PLANS.
SHARES AUTHORIZED AND ISSUED.
A 2-for-1 split of the Company's common stock was effected on November 30,
1993. Earnings per-share data in the accompanying consolidated financial
statements and all per-share and share data in these notes have been adjusted
to give retroactive effect to the stock split.
At December 31, 1995, the Company had reserved 7,318,402 shares of its
unissued common stock for issuance upon the exercise of stock options and
420,000 shares for issuance under a plan whereby substantially all employees
may acquire shares of Company stock through payroll deductions at prevailing
market prices.
The Company's board of directors has authorized the future repurchase of up
to 1,670,000 common shares at December 31, 1995. Accounts payable and
accrued expenses includes $148,000 at December 31, 1994 and $3,910,000 at
December 31, 1995 for pending settlements of common stock repurchases.
Subsequent to year end, the Company's board of directors adopted resolutions
to effect a two-for-one split of common shares and a proportional increase in
authorized common shares from 100,000,000 to 200,000,000. These changes
require amendment of the Company's charter and have been recommended by the
board to the Company's stockholders for approval at their annual meeting on
April 12, 1996.
DIVIDENDS.
The Company declared cash dividends per share of $.445 in 1993, $.55 in 1994
and $.69 in 1995.
FIXED STOCK OPTION PLANS.
At December 31, 1995, the Company has four stock-based compensation plans
(the 1986, 1990 and 1993 Stock Incentive Plans and the 1995 Director Stock
Option Plan) under which it has granted fixed stock options with a maximum
term of 10 years to its employees and directors. Vesting of employee options
is based solely on the individual continuing to render service to the Company
and generally occurs over a 5-year graded schedule. The exercise price of
each option granted is equivalent to the market price of the Company's stock
at the date of grant. The Company applies the intrinsic value based method
of accounting prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," in accounting for its stock
option awards. Accordingly, the Company has not recognized any related
compensation expense. Beginning with financial statements for 1996, the
Company will be required to make certain additional disclosures as if the
fair value based method of accounting defined in SFAS No. 123, "Accounting
for Stock-Based Compensation," had been applied to the Company's stock option
grants made subsequent to 1994.
The following table summarizes the status of and changes in the Company's
stock option plans during the past three years.
<PAGE> 34
Weighted- Weighted-
average average
exercise Options exercise
Options price exercisable price
_________ __________ ___________ _________
Outstanding at
beginning of 1993 3,772,640 $12.95
Granted 1,154,000 28.13
Exercised (343,525) 8.95
Forfeited (58,800) 15.31
_________ ______
Outstanding at
end of 1993 4,524,315 17.09 1,461,927 $11.63
_________ ______
_________ ______
Granted 1,231,500 32.25
Exercised (387,392) 10.16
Forfeited (173,000) 18.24
_________ ______
Outstanding at
end of 1994 5,195,423 21.16 1,989,913 $14.49
_________ ______
_________ ______
Granted 1,241,500 52.05
Exercised (515,521) 12.02
Forfeited (96,110) 25.52
_________ ______
Outstanding at
end of 1995 5,825,292 $28.48 2,462,192 $17.07
_________ ______ _________ ______
_________ ______ _________ ______
Additional information regarding stock options outstanding at December 31,
1995 follows.
Weighted-
average
Weighted- remaining Weighted-
average contractual average
Range of exercise life (in exercise
exercise prices Outstanding price years) Exercisable price
________________ ___________ __________ ___________ ___________ _________
$5.375 to 7.9375 474,720 $ 7.37 4.0 474,720 $ 7.37
8.50 to 11.375 514,645 10.74 3.2 514,645 10.74
17.00 to 18.75 1,352,910 17.98 6.3 889,310 17.85
28.125 to 38.375 2,257,517 30.37 8.4 583,517 29.35
45.75 to 52.25 1,225,500 52.23 9.8 0 --
_________ ______ ____ _________ ______
$5.375 to 52.25 5,825,292 $28.48 7.4 2,462,192 $17.07
_________ ______ ____ _________ ______
_________ ______ ____ _________ ______
NOTE 7 - OTHER INCOME.
In 1993, the Company received interest income of $2,046,000 and recognized a
capital loss of $112,000 on its holdings of the defaulted indebtedness of
Mortgage and Realty Trust (MRT).
NOTE 8 - EMPLOYEE RETIREMENT PLANS.
The Company sponsors two defined contribution retirement plans: a profit
sharing plan based on participant compensation and a 401(k) plan. Costs
recognized for these plans were $7,601,000 in 1993, $7,881,000 in 1994, and
$8,676,000 in 1995.
<PAGE> 35
The Company also has a defined benefit plan covering those employees whose
annual base salaries do not exceed a plan-specified salary limit.
Participant benefits are based on the final month's base pay and years of
service subsequent to January 1, 1987. The Company's funding policy is to
contribute annually the maximum amount that can be deducted for federal
income tax purposes. The following table sets forth the plan's funded status
and the amounts recognized in the Company's consolidated balance sheets.
1994 1995
________ ________
(in thousands)
Actuarial present value of
Accumulated benefit obligation for service rendered
Vested $ 1,430 $ 3,207
Non-vested 343 890
________ ________
Total 1,773 4,097
Obligation attributable to estimated future
compensation increases 685 1,725
________ ________
Projected benefit obligation 2,458 5,822
Plan assets held in sponsored mutual funds, at
fair value 2,747 3,956
________ ________
Projected benefit obligation in excess of (less than)
plan assets (289) 1,866
Unrecognized net gain from changes in discount rate and
past experience different from that assumed 2,501 24
________ ________
Accrued retirement costs $ 2,212 $ 1,890
________ ________
________ ________
Discount rate used in determining actuarial
present values 8.25% 6.10%
________ ________
________ ________
Net periodic retirement plan expense includes:
1993 1994 1995
______ ______ ______
(in thousands)
Service cost for benefits earned during the year $1,077 $867 $531
Interest cost on projected benefit obligation 252 230 202
Actual return on plan assets (94) (5 (754)
Net amortization and deferral 489 (271 330)
______ _____ _____
$1,724 $821 $309
______ _____ _____
______ _____ _____
On January 1, 1993, the Company adopted SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," which changed the Company's
practice of accounting for postretirement health and life insurance benefits
from the cash basis to the accrual basis. The effect of adopting the new
accounting principle was an aftertax charge to earnings of $621,000 or $.02
per share. Postretirement benefits plan participants include only those
retirees and their dependents who were receiving benefits on January 1, 1993.
NOTE 9 - COMMITMENTS AND CONTINGENT LIABILITIES.
The Company leases office facilities and equipment under noncancelable
operating leases. Related rent expense was $13,554,000 in 1993, $14,859,000
<PAGE> 36
in 1994, and $16,969,000 in 1995. Future minimum rental payments under these
leases aggregate $9,516,000 in 1996, $7,062,000 in 1997, $5,937,000 in 1998,
$5,203,000 in 1999, $5,203,000 in 2000, and $31,094,000 in later years.
At December 31, 1995, the Company had outstanding commitments to invest an
additional $7,472,000 in various investment partnerships and ventures.
The Company has contingent obligations at December 31, 1995 under a $500,000
direct pay letter of credit expiring not later than 1999 and a $780,000
standby letter of credit which is renewable annually.
Consolidated stockholders' equity at December 31, 1995 includes $43,195,000
which is restricted as to use under various regulations and agreements to
which the Company and its subsidiaries are subject in the ordinary course of
business.
From time to time, the Company is a party to various claims arising in the
ordinary course of business. In the opinion of management, after
consultation with counsel, it is unlikely that any adverse determination in
one or more pending claims would have a material adverse effect on the
Company's financial position or results of operations.
<PAGE> 37
Supplementary Data - Selected Quarterly Financial Data:
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
________ ________ ________ ________
(in thousands, except per-share amounts)
1994
Revenues $ 91,927 $ 92,468 $ 96,943 $101,040
Net income $ 13,753 $ 15,049 $ 16,262 $ 16,087
Earnings per share (1) $ .44 $ .49 $ .53 $ .53
1995
Revenues $ 97,846 $104,789 $113,226 $123,438
Net income $ 14,991 $ 18,222 $ 20,502 (2) $ 21,694
Earnings per share $ .50 $ .60 $ .67 (2) $ .70
(1) The sum of the 1994 quarterly earnings per share does not equal the
full-year amount because the quarterly computations are done
independently based on average shares outstanding during each quarter.
(2) Net income and earnings per share before an extraordinary charge were
$21,551 and $.70, respectively.
<PAGE> 38
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information required by this item as to the identification of the Company's
executive officers and other significant employees is contained as a separate
item at the end of Part I of this Form 10-K Annual Report. The balance of
the information required by this item as to the Company's directors and
executive officers appears in the definitive proxy statement for the
Company's 1996 Annual Meeting of Stockholders and is incorporated by
reference in this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by Items 11. through 13. appears in the definitive proxy
statement for the Company's 1996 Annual Meeting of Stockholders and is
incorporated by reference in this Form 10-K.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report.
1. Financial Statements: See index at Item 8 of Part II.
2. Financial Statement Schedules: Not applicable.
3. The following exhibits required by Item 601 of Regulation S-K are
filed as part of this Form 10-K. Exhibits 10.09 through 10.13 are
compensatory plan arrangements.
3.(i) Composite 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)
3.(ii) Amended and Restated By-Laws of T. Rowe Price Associates,
Inc. as of April 7, 1993. (Incorporated by reference from
Form 10-Q Report for the quarterly period ended September 30,
1995; Accession No. 80255-95-83)
10.01 Form of Investment Management Agreement with each of the T.
Rowe Price Funds. (Incorporated by reference from Form N-1A;
Accession No. 313212-96-5)
10.02 Transfer Agency and Service Agreement dated as of January 1,
1996 between each of the T. Rowe Price Funds and T. Rowe
Price Services, Inc. (Incorporated by reference from Form N-
1A; Accession No. 313212-96-5)
<PAGE> 39
10.03 Agreement dated January 1, 1996 between T. Rowe Price
Retirement Plan Services, Inc. and each of the T. Rowe Price
Taxable Funds. (Incorporated by reference from Form N-1A;
Accession No. 313212-96-5)
10.04 Form of Underwriting Agreement between each of the T. Rowe
Price Funds and T. Rowe Price Investment Services, Inc.
(Incorporated by reference from Form N-1A; Accession No.
313212-96-5)
10.05 Contract of Sale and Option dated September 29, 1995 between
McDonogh School, Incorporated and TRP Suburban Second, Inc.
10.06 Office Lease dated as of July 27, 1989 between 100 East Pratt
Street Limited Partnership and T. Rowe Price Associates, Inc.
(Incorporated by reference from the 1989 Annual Report on
Form 10-K [File No. 0-14282])
10.07 Lease agreement dated April 17, 1990 between McDonogh School,
Incorporated and TRP Suburban, Inc. (Incorporated by
reference from the 1990 Annual Report on Form 10-K [File No.
0-14282])
10.08 Amendment dated December 22, 1995 to Lease Agreement between
McDonogh School, Incorporated and TRP Suburban, Inc.
10.09 1986 Employee Stock Purchase Plan of T. Rowe Price
Associates, Inc. as Amended to April 5, 1990. (Incorporated
by reference from Exhibit A to the Definitive Proxy Statement
for the 1990 Annual Meeting of Stockholders which is included
in the 1989 Annual Report on Form 10-K [File No. 0-14282])
10.10 T. Rowe Price Associates, Inc. 1986 Stock Incentive Plan.
(Incorporated by reference from Form S-1 Registration
Statement [File No. 33-3398])
10.11 T. Rowe Price Associates, Inc. 1990 Stock Incentive Plan.
(Incorporated by reference from Form S-8 Registration
Statement [File No. 33-37573])
10.12 T. Rowe Price Associates, Inc. 1993 Stock Incentive Plan.
(Incorporated by reference from Form S-8 Registration
Statement [File No. 33-72568])
10.13 T. Rowe Price Associates, Inc. 1995 Director Stock Option
Plan. (Incorporated by reference from Form DEF 14A;
Accession No. 933259-95-9; CIK 80255)
21 Subsidiaries of T. Rowe Price Associates, Inc.
23 Consent of Independent Accountants, Price Waterhouse LLP.
27 Financial Data Schedule.
<PAGE> 40
(b) Reports on Form 8-K.
None were filed during the three months ended December 31, 1995.
SIGNATURES.
Pursuant to the requirements of Section 13 or 15(d) 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 March 22,
1996.
T. Rowe Price Associates, Inc.
By: /s/ George J. Collins, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 22, 1996.
/s/ George J. Collins, Chief Executive Officer and Director
/s/ George A. Roche, Chief Financial Officer and Director
/s/ Thomas H. Broadus, Jr., Director
/s/ James E. Halbkat, Jr., Director
/s/ Carter O. Hoffman, Director
/s/ Henry H. Hopkins, Director
/s/ Richard L. Menschel, Director
/s/ James S. Riepe, Director
/s/ John W. Rosenblum, Director
/s/ Robert L. Strickland, Director
/s/ M. David Testa, Director
/s/ Philip C. Walsh, Director
/s/ Anne Marie Whittemore, Director
/s/ Alvin M. Younger, Jr., Principal Accounting Officer
<PAGE> 1
EXHIBIT 10.05
CONTRACT OF SALE AND OPTION
THIS CONTRACT OF SALE AND OPTION ("Contract") is made this 29TH day of
SEPTEMBER, 1995 by and between MCDONOGH SCHOOL, INCORPORATED, a Maryland
Corporation, (the "Seller") and TRP SUBURBAN SECOND, INC. a Maryland
Corporation, (the "Buyer").
RECITALS
A. Seller is the owner of certain real property located in Baltimore
County, Maryland known as Parcel 3 A of the Owings Mills Corporate Campus
containing thirty-two (32) acres, more or less, which is more particularly
described in EXHIBIT A attached as part of this Contract (the "Property").
B. Seller has granted to Buyer an option to purchase the Property from
the Seller, pursuant to an Option Agreement dated June 30, 1995 (the "Option
Agreement") which option Buyer desires to exercise through the execution and
delivery of this Contract.
C. Seller has agreed, if Buyer exercises its option to purchase the
Property, to provide road access and utilities to the Property.
D. Buyer desires to purchase the Property for the purpose of
constructing office buildings and related improvements thereon.
E. Seller has the option to purchase certain additional property
containing thirty-eight (38) acres, more or less, known as Parcel 3 B in the
Owings Mills Corporate Campus and has agreed, at the election of the Buyer
and for the consideration hereinafter set forth, to exercise its option in
such manner as to cause Parcel 3 B to be conveyed to Buyer.
NOW, THEREFORE, in consideration of a mutual covenants and promises of
the parties, the parties hereto agree as follows:
1. PURCHASE AND SALE. Seller agrees to sell the Property to Buyer and
Buyer agrees to purchase the Property from Seller upon the terms and subject
to the covenants and conditions hereinafter set forth.
2. PURCHASE PRICE. The purchase price for the Property is a sum of
Seven Million Six Hundred Thousand Dollars ($7,600,000) subject to the credit
hereinafter set forth.
2.1 CREDIT AGAINST PURCHASE PRICE. In connection with the sale
and future development of the Property, Seller may be required by Baltimore
County to make, or pay for, certain off-site improvements to Painters Mill
Road including the construction of acceleration/deceleration lanes and the
installation of a traffic light at the intersection of Painters Mill and
Lyons Mill Roads. At such time as the cost of these improvements (which
shall not include any items specified in Section 9 hereof except the Painters
Mill Road improvements) are finally determined, Seller shall submit to Buyer
<PAGE> 2
documentation of the required improvements and the cost thereof. To the
extent that the cost is less than Two Hundred Thousand Dollars ($200,000),
Seller shall credit the amount by which Two Hundred Thousand Dollars
($200,000) exceeds the actual cost against the purchase price at settlement,
or if the cost is not determined until after settlement, shall deliver a
check in that amount to Buyer within fifteen (15) days after the actual costs
have been determined. The provisions of this Section 2.1 shall survive
settlement and the conveyance of the Property.
3. TERMS OF PAYMENT. The purchase price shall be paid by Buyer to
Seller as follows:
3.1. The sum of Fifty Thousand Dollars ($50,000) shall be paid by
Buyer to Seller concurrently with Buyer's execution of this Contract.
Additional sums of Seventy-five Thousand Dollars ($75,000.00) each shall be
paid thirty (30) and sixty (60) days, respectively, from the date of this
Contract. These sums, together with all amounts paid by Buyer to Seller
under the Option Agreement, shall constitute the Deposit. The Deposit,
unless otherwise specified herein, shall be applied toward the purchase price
due at settlement. Any interest earned on the Deposit shall be the property
of Seller and shall not be applied to the purchase price.
3.2. BALANCE OF PURCHASE PRICE. The entire unpaid balance of the
purchase price shall be paid by Buyer to Seller at settlement by certified or
cashier's check or by wire transfer.
4. ENTRY ONTO PROPERTY.
4.1. RIGHT TO ENTER. Buyer shall have the right, so long as this
Contract remains in effect, to enter upon the Property to make all
inspections and investigations of the condition of the Property which Buyer
may deem necessary, including, but not limited to, soil borings, percolation
tests, engineering, environmental and topographical studies and investigation
of zoning and availability of utilities, all of which inspections and
investigations shall be undertaken at Buyer's sole cost and expense. Such
entry shall be upon twenty-four (24) hours prior oral or written notice or
such lesser notice (but not less than eight (8) hours) as Buyer is able to
give based upon the scheduling request of parties performing the work. Buyer
shall at its sole cost and expense promptly fill any holes or test pits and
repair any damage it has caused to the Property.
4.2. LIABILITY INSURANCE. Prior to any entry upon the Property for
the purpose of conducting the inspections and tests described in this Section
4.1., Buyer shall furnish to Seller a certificate of insurance for the
liability insurance policy carried by Buyer or parties engaged by Buyer to
perform such inspections and tests. Such policy shall evidence liability
insurance in an amount reasonably satisfactory to Seller and shall name
Seller as an additional insured.
<PAGE> 3
4.3. INDEMNIFICATION. Buyer hereby agrees to indemnify and hold
Seller harmless against any claims, demands and liability, including
attorney's fees, for non-payment for services rendered to Buyer, for
construction liens, or for damage to property or for injury or death to
persons arising out of Buyer's investigation of or entries onto the Property.
The provisions of this Section 4.3 shall survive settlement.
5. TITLE.
5.1. CONDITION OF TITLE. Good and merchantable fee simple title to
the Property shall be conveyed by Seller to Buyer at settlement subject to no
liens, encumbrances or restrictions except those shown on the title report
submitted by Buyer to Seller upon exercise of its option to purchase the
Property (and such other liens, encumbrances and restrictions as are
consented to by Buyer) but subject to the Declaration of Covenants and
Restrictions referred to in Section 5.2 hereof.
5.2. DECLARATION OF COVENANTS AND RESTRICTIONS. A Declaration of
Covenants and Restrictions in the form attached hereto as EXHIBIT B (the
"Declaration"), shall be recorded among the Land Records of Baltimore County
prior to the recording of a deed to Buyer.
6. SETTLEMENT.
6.1. TIME AND PLACE OF SETTLEMENT. Settlement pursuant to this
Contract shall be held in Baltimore, Maryland, at such time, in such place
and on such date as the parties may establish to their mutual convenience,
but in any event no later than December 29, 1995. In the event the parties
fail to agree mutually upon a date, time and/or place, as aforesaid,
settlement shall be held on said December 29, 1995 at the offices of Ober,
Kaler, Grimes & Shriver, 120 E. Baltimore Street, Baltimore, Maryland 21202.
In connection herewith, Buyer undertakes and agrees to provide Seller, or
cause Seller to be provided, at least three (3) days prior to closing, with a
pro forma settlement statement prepared by Buyer's settlement agent,
indicating all charges to be paid, and all sums to be received, by Seller in
connection with the closing.
6.2. PRORATIONS. All taxes, general and special, and all other
public or governmental charges or assessments against the Property which are
payable or may be paid in annual installments (including metropolitan
district, sanitary commission or other benefit charges, assessments, liens or
encumbrances for sewer, water, drainage or public improvements completed or
commenced on, prior to, or subsequent to the date of this Contract) shall be
prorated between Seller and Buyer as of the date of settlement and paid
thereafter by Buyer, whether or not such assessments or charges have been
levied as of the date of settlement. Said prorations shall be effected on
the basis of the latest available tax bills and other applicable statements
and on the basis of thirty (30) day months.
<PAGE> 4
6.3. EXPENSES OF SETTLEMENT. Other than as provided in Section
6.4, all closing or settlement costs, other than fees of Seller's attorneys,
shall be paid by Buyer, including but not limited to:
6.3.1. The full cost of securing the title insurance policy
referred to herein together with any endorsements thereto or other title
insurance required by Buyer.
6.3.2. The cost of preparing and recording the deed or other
instrument required to convey title to the Property to Buyer.
6.3.3 All costs, fees and expenses incident to Buyer's
financing of the Property, including, but not limited to, the preparation and
recording of loan documents, any loan origination fees, credit reports, fire
and casualty insurance premiums, mortgage service and loan inspection fees.
6.4. All State and County recordation and transfer taxes payable
upon recordation of the deed shall be borne one-half by Seller and one-half
by Buyer. Any agricultural transfer tax shall be paid by Seller.
7. DELIVERY OF DEED. At settlement, upon payment of the purchase
price in the manner set forth in Section 3, Seller, at Buyer's expense, shall
execute and deliver to Buyer a deed containing covenants of special warranty
and further assurances, by which fee simple title to the Property shall be
conveyed to Buyer, subject to the Declaration referred to in Section 5.2
hereof and any exceptions in Buyer's title report. If so requested by
Seller, Buyer hereby undertakes and agrees to join in the execution of said
deed for the purpose of incorporating therein the covenants, conditions,
restrictions and provisions set forth in the Declaration, and Buyer's
assumption thereof and agreement to be bound thereby.
8. AMENDMENT OF LEASE BETWEEN SELLER AND TRP SUBURBAN, INC.. TRP
Suburban, Inc. is an affiliate of Buyer and is the Tenant under a land lease
dated April 17, 1990 from Seller, as Landlord, of Lot 7 in the Owings Mills
Corporate Campus (the "Lease"). The undertakings set forth herein as to the
Lease are a material part of the consideration for this Contract.
8.1. AMENDMENT OF LEASE. At settlement under this Contract, Seller
agrees to execute and Buyer agrees to cause TRP Suburban, Inc. to execute a
Second Amendment to Lease in the form attached hereto as EXHIBIT C.
8.2. CONTINGENT PAYMENT FOR LEASE EXTENSION. In the event that
Buyer is deemed to have "exited" the Property on or before ten (10) years
from the date of settlement under this Contract, Buyer shall pay to Seller,
within fifteen (15) days of exiting the Property, the sum of Two Hundred
Thousand Dollars ($200,000) in consideration for the extension of the term of
the Lease contained in the Second Amendment to Lease. For all purposes of
this Contract, Buyer shall have been deemed to have exited the Property upon
the occurrence of the following event:
<PAGE> 5
Buyer or its permitted assigns shall not be occupying (which
term shall not include occupancy by an unrelated sub-lessee) the entire
building leased from Seller on Lot 7 in the Owings Mills Corporate Campus
unless it is occupying all of a building owned by it and containing at least
One Hundred Fourteen Thousand (114,000) gross square feet of floor area on
the Property.
9. SELLER'S DEVELOPMENT OBLIGATIONS. Seller shall undertake the
following actions in connection with the conveyance of the Property in the
preparation of the Property for Buyer's development:
9.1. MAIN ENTRANCE. Seller shall construct a formal main entrance
with associated signage at the intersection of Painters Mill and Lyons Mill
Roads together with an entrance road constructed to Baltimore County
specification of approximately 500 feet dividing the Property from Parcel 3 B
and providing access to Painters Mill Road from the Property and Parcel 3 B.
9.2. PUBLIC WATER. Seller shall extend public water to the
Property at the entrance road set forth in Section 9.1 hereof. Seller shall
be entitled to any rebates from Baltimore County in connection with the
extension of the water line.
9.3. SANITARY SEWER. Seller shall extend sanitary sewer to the
rear of the Property from the Horsehead Branch interceptor.
Seller shall be entitled to any rebates from Baltimore County in connection
with the extension of the sanitary sewer.
9.4. PAINTERS MILL ROAD IMPROVEMENTS. If required by Baltimore
County, Seller shall provide or pay for acceleration and deceleration lanes
on Painters Mill Road in connection with the main entrance and the secondary
entrance to the Property and a traffic light at the intersection of Painters
Mill and Lyons Mill Roads. Such work shall be completed in conformance with
Baltimore County requirements.
9.5. TIME FOR COMPLETION. Seller's responsibilities under Sections
9.1., 9.2., 9.3. and 9.4. shall be completed by Seller within ten (10) months
of the date of settlement on the Property. If Seller, acting diligently, is
unable to complete such items to the reasonable satisfaction of Buyer within
such ten (10) month period, Seller shall have an additional two (2) months to
complete any such item. If any of such items are not completed by one year
from the date of settlement on the Property, Buyer may complete any such
item, and the reasonable cost thereof shall be the responsibility of Seller.
9.6. SUBDIVISION PLAT. Prior to settlement, Seller shall cause to
be prepared, in cooperation with Buyer, and shall file a subdivision plat
constituting the property as a separate conveyable lot pursuant to Baltimore
County requirements.
9.7. STORM WATER. Seller shall permit Buyer to discharge storm
water into the existing pond lying to the east of the Property and shall
<PAGE> 6
grant Buyer a storm water easement leading from the Property to the pond at a
location satisfactory to Seller and Buyer. Seller shall have no other
obligations to Buyer in connection with storm water management.
9.8. NO OTHER OBLIGATIONS. Except as specifically set forth above
and except for Seller's obligation to cooperate with Buyer as set forth in
Section 10 hereof, Seller shall have no other obligations in connection with
the development of the Property.
10. BUYER'S DEVELOPMENT OBLIGATIONS.
10.1. DEVELOPMENT EXPENSES. Except as expressly set forth in
Section 9 hereof, Buyer shall be responsible for all costs and expenses in
connection with its proposed development of the Property. Without limiting
the generality of the foregoing, Buyer shall obtain all necessary state and
county approvals and permits at its own cost and expense. Seller agrees, at
the sole risk and expense of Buyer, to cooperate in executing applications
and other documents necessary in connection with such approvals.
10.2. UTILITY HOOK-UP AND METER CHARGES. All costs of connecting
any improvements constructed by Buyer on the Property to utility service
mains, conduits or lines located within or contiguous to the boundaries of
the Property, or on beds of streets, rights of way and/or easement areas
bordering the Property shall be at the sole cost and expense of and shall be
paid by Buyer.
11. CONDEMNATION. If at any time prior to settlement, any proceeding
shall be commenced for the taking of all of the Property or any material
portion thereof, for public or quasi public use pursuant to the power of
eminent domain, Seller shall furnish Buyer written notice of any proposed
condemnation within fifteen (15) days after Seller's receipt of written
notification thereof but in no event later than the date of settlement. In
such event, (a) the Buyer may terminate this Contract in writing within
fifteen (15) days following receipt of such notice and the Deposit shall be
promptly returned to Buyer, or (b) the transaction as contemplated hereby and
settlement shall progress as herein provided without reduction of the
purchase price, Buyer shall have the right to participate in the negotiation
of any condemnation awards or other compensation for taking, and Seller shall
assign to Buyer any and all awards and other compensation for such taking to
which it would be otherwise entitled as owner of the Property and Seller
shall convey the portion of the Property, if any, which remained after the
taking.
12. DEFAULT.
12.1. BUYER'S DEFAULT. In the event that this transaction fails to
close due to a default on the part of Buyer, Seller shall have the right to
terminate the Contract and retain the Deposit as liquidated damages, in which
event the parties shall be released from any and all liability under this
Contract and under the Option Agreement, except as otherwise expressly
provided herein or therein. The foregoing shall be Seller's sole remedy in
<PAGE> 7
the event of Buyer's default hereunder, Seller hereby waiving and
relinquishing any other rights or remedies, including but not limited to, any
right to seek or receive any other monetary damages, except to the right of
indemnification under Section 4.3.
12.2. SELLER'S DEFAULT. In the event that this transaction fails
to close due to a default on the part of Seller, Buyer shall have the right
to either (i) terminate the Contract and receive back the Deposit and all
amounts paid to Seller under the Option Agreement, in which event the parties
shall be released from any and all liability under this Contract and under
the Option Agreement, except as otherwise expressly provided herein or
therein, or (ii) seek specific performance of Seller's obligations hereunder,
plus Buyer's reasonable expenses and Attorneys' Fees arising from such
action. The foregoing shall be Buyer's sole remedies in the event of
Seller's default hereunder, Buyer hereby waiving and relinquishing any other
rights or remedies, including but not limited to, any right to seek or
receive any other monetary damages.
13. BUYER'S RIGHT TO PURCHASE PARCEL 3 B. Parcel 3 B in the Owings
Mills Corporate Campus as shown on EXHIBIT A consists of thirty-eight (38)
acres of land more or less of which Twenty-five and 7/10 (25.7) acres more or
less (the "Prochazka Portion") are owned by Frances D. H. Prochazka and
Alexander M. Prochazka (together with the survivor and the personal
representative of the survivor, the "Prochazkas") and the balance (the
"McDonogh Portion") is owned by Seller. Seller is Optionee under an Option
Agreement dated December 10, 1986 from the Prochazkas, as optionors (the
"Prochazka Option"), a copy of which is attached hereto as EXHIBIT D, by
which Seller is given the option to purchase Thirty-one and 33/100 (31.33)
acres of land more or less owned by the Prochazkas (the "Prochazka
Property"), which includes the Prochazka Portion, subject to all of the
provisions of the Prochazka Option including the right of the Prochazkas to
lease back three (3) acres of land containing the residence, gardens and
cemetery as long as either of them occupy the residence on the Prochazka
Portion. The Prochazka Option is exercisable by Seller within thirty (30)
days after receiving notice from the Prochazkas that the option must be
exercised or thirty (30) days after Seller receives notice of the death of
the survivor of the Prochazkas. As a material part of the consideration for
this Contract, Seller agrees, at the election of the Buyer, made at a time
that Buyer has not "exited" the Property as that term is defined in Section
8.2 hereof, to convey all of Parcel 3 B to Buyer on the following terms and
conditions:
13.1. EXERCISE OF RIGHT TO PURCHASE PARCEL 3 B. Within three (3)
business days after Seller receives notice that the Prochazka Option is
exercisable, Seller shall give Buyer written notice of the date by which the
Prochazka Option must be exercised and the latest date on which settlement on
the Prochazka Property must be held, and Buyer shall exercise its right to
acquire all of Parcel 3 B by notice in writing to Seller given not later than
sixty (60) days following the date that Buyer receives notice from Seller
that the Prochazka Option is exercisable. Such notice shall be accompanied
<PAGE> 8
by a copy of a title report on Parcel 3 B obtained by Buyer which indicates a
state of title which Buyer is willing to accept. Seller will not impose on
Parcel 3 B any title encumbrances during such time as Buyer has the option to
purchase Parcel 3 B as provided in this Agreement and continuing until
closing if Buyer exercises such option.
13.2. PURCHASE PRICE. For a period of eighteen (18) months from
the date of settlement on the Property, the purchase price for Parcel 3 B
shall be an amount per acre equal to the amount per acre actually paid by
Buyer for the Property as set forth in Section 2 hereof.
13.3. ADJUSTMENTS TO PURCHASE PRICE.
13.3.1 SETTLEMENT ON PARCEL 3 B WITHIN TEN YEARS OF DATE OF
SETTLEMENT ON THE PROPERTY. Commencing on the date which is eighteen (18)
months from the date of settlement on the Property, and continuing on each
anniversary of that date which occurs within ten (10) years from the date of
settlement on the Property, the purchase price shall be increased by four
percent (4%) per annum, compounded annually, provided that settlement on
Parcel 3 B is held not later than ten (10) years from the date of settlement
on the Property.
13.3.2. SETTLEMENT ON PARCEL 3 B MORE THAT TEN YEARS AFTER
DATE OF SETTLEMENT ON THE PROPERTY. If settlement on Parcel 3 B occurs more
than ten (10) years after the date of settlement on the Property, the
adjusted purchase price shall be the higher of the two figures obtained by
adjusting the purchase price as hereinafter set forth in subsections (i) and
(ii) hereof, respectively.
(i) The purchase price shall continue to be
increased by four percent (4%) per annum, compounded annually, beginning on
the date which is eighteen (18) months from the date of settlement on the
Property as set forth in Section 13.3.1. hereof and on each anniversary of
that date occurring prior to settlement on Parcel 3 B.
(ii) The purchase price shall be adjusted to the
fair market value of Parcel 3 B, determined as set forth in Section 13.3.3.
hereof, on the date that Buyer exercises its right to purchase Parcel 3 B.
13.3.3. DETERMINATION OF FAIR MARKET VALUE. Buyer and Seller
shall attempt to agree on the fair market value of Parcel 3 B within ten (10)
days after Buyer exercises its right to purchase Parcel 3 B. If Seller and
Buyer are unable to agree on the fair market value of Parcel 3 B within such
ten (10) day period, each shall nominate one person, who shall have a current
proficiency in land value appraisals in Baltimore County, Maryland and shall
be a member of the American Institute of Real Estate Appraisers having an
M.A.I. designation and having an office in the Baltimore Metropolitan area,
to appraise and determine the Fair Market Value of Parcel 3 B. The
nomination must be in writing and must be given by each party to the other
within thirty (30) days from the date that Buyer exercised its right to
purchase Parcel 3 B. If the two persons nominated and appointed as
<PAGE> 9
appraisers by the parties shall differ in judgment by more than 10% as to the
Fair Market Value shown on the higher appraisal, then they shall appoint an
appraiser having an M.A.I. designation and having a current proficiency in
land value appraisals in Baltimore County, Maryland to be the third
appraiser, if they can agree upon such person. However, if they cannot
agree, then the Chief Judge of the Circuit Court for Baltimore County shall
appoint an appraiser having an M.A.I. designation and having a current
proficiency in land value appraisals in Baltimore County, Maryland as the
third appraiser, but if such Chief Judge shall fail or refuse to act, then
either party may apply to any court having jurisdiction for the appointment
of such third appraiser. If the two appraisers so chosen shall agree in
writing upon the fair market value, then such value shall be binding upon
Seller and Buyer; if the fair market value established by the two appraisers
differs by 10% or less of the value shown on the higher appraisal, then the
average of the two appraisals shall be binding on Seller and Buyer; but if
the fair market value established by the two appraisers, which shall be
submitted within thirty (30) days after the second of the two appraisers
shall have been nominated, differs by more than 10% of the value shown on the
higher appraisal, then the selection of the third appraiser shall be made as
above provided within ten (10) days thereafter. The decision of the third
appraiser so selected as to the fair market value shall be rendered in
writing to the parties within thirty (30) days after the selection of such
third appraiser. In the event the third appraiser is used, the Fair Market
Value of Parcel 3 B shall be determined as follows: (i) if the fair market
value established by the third appraiser is lower than both of the fair
market values established by the two appraisals, then the lower of the fair
market values established by the two appraisals shall be conclusive and
binding upon Seller and Buyer, (ii) if the fair market value established by
the third appraiser is equal to or between the fair market values established
by the two appraisals, then the fair market value established by the third
appraiser shall be conclusive and binding upon Seller and Buyer, or (iii) if
the fair market value established by the third appraiser is higher than both
of the fair market values established by the two appraisals, then the higher
of the fair market values established by the two appraisals shall be
conclusive and binding upon Seller and Buyer. Each party shall bear the
expense of its own appraiser, but the fees and expenses of the third
appraiser shall be shared equally.
13.4. SETTLEMENT. Settlement on Parcel 3 B will be held on, or by
mutual consent before, the date specified as the latest date on which
settlement under the Prochazka Option must be held in the notice from Seller
given pursuant to Section 13.1.
13.5. MANNER OF CONVEYANCE. At the election of Seller, Parcel 3 B
shall be conveyed to Buyer pursuant to the provisions of either sub-section A
or sub-section B hereof. Seller shall give Buyer notice in writing of which
provisions it elects not less than thirty (30) days prior to settlement.
<PAGE> 10
A. SELLER ACQUIRES PROCHAZKA PROPERTY.
(i) Seller shall acquire the Prochazka Property
pursuant to the provisions of the Prochazka Option.
(ii) Upon payment of the purchase price by Buyer,
Seller shall convey Parcel 3 B to Buyer.
B. SELLER PARTIALLY ASSIGNS PROCHAZKA OPTION.
(i) Seller shall assign the Prochazka Option as it
relates to the Prochazka Portion to Buyer. In consideration for such
assignment, Buyer shall pay Seller an amount equal to the part of the
purchase price allocable to the Prochazka Portion on an acreage basis less
the purchase price payable by Buyer to acquire the Prochazka Portion and such
part of the recordation, transfer and agricultural transfer taxes as are
attributable to such purchase price. At settlement under the Prochazka
Option, Seller shall reimburse Buyer for any agricultural transfer taxes paid
by Buyer.
(ii) Seller and Buyer shall acquire their respective
portions of the Prochazka Property pursuant to the provisions of the
Prochazka Option.
(iii) Upon payment of the balance of the purchase price
by Buyer, Seller shall convey the balance of Parcel 3 B to Buyer.
13.6. CONDITION OF TITLE. Acceptable fee simple title to Parcel 3
B shall be conveyed to Buyer at settlement subject to no liens, encumbrances
or restrictions except those shown on the title report submitted by Buyer to
Seller upon exercise of its right to purchase Parcel 3 B (and such other
liens, encumbrances and restrictions as are consented to by Buyer).
13.7. AGREEMENT IMPOSING RESTRICTIONS. Seller and Buyer shall
execute an agreement imposing certain covenants and restrictions on Parcel 3
B, in the form attached hereto as EXHIBIT E, which agreement shall be
recorded among the Land Records of Baltimore County immediately after the
deed conveying title to Parcel 3 B to Buyer and before any mortgage or other
lien is placed on Parcel 3 B.
13.8. RECORDATION AND TRANSFER TAXES. Any County or State
recordation or transfer taxes, including agricultural transfer taxes, based
on the consideration paid to the Prochazkas pursuant to the Prochazka Option,
shall be paid by Seller either directly or as a credit against the purchase
price as set forth in Section 13.4.B. All other State and County recordation
and transfer taxes except agricultural transfer taxes shall be borne one-half
by Seller and one-half by Buyer. Any agricultural transfer taxes shall be
paid by Seller.
13.9. PRORATIONS. Prorations shall be as set forth in Section 6.2.
hereof.
<PAGE> 11
13.10. DEFAULT BY PROCHAZKAS.
13.10.1. In the event that the Prochazkas default in their
obligation to convey the Prochazka Property pursuant to the terms of the
Prochazka Option, Seller shall in no event have any liability to Buyer for
its failure to cause the conveyance of Parcel 3 B to Buyer by reason of the
Prochazkas' default.
13.10.2. In the case of such default, unless Buyer notifies
Seller within thirty (30) days of the date provided for settlement under the
Prochazka Option that it wishes Seller to file a suit for specific
performance against the Prochazkas, at Buyer's expense, and is willing to
postpone settlement until the conclusion of the suit, neither party shall
have any further rights under this Section 13. If Buyer does so notify
Seller, Seller shall with reasonable promptness file a suit for specific
performance against the Prochazkas and shall diligently prosecute same at
Buyer's expense. If the suit results in a decree refusing specific
performance, Seller shall not be obligated to appeal, and neither party shall
have any further rights under this Section 13 unless Buyer directs Seller to
prosecute an appeal of the adverse decision at Buyer's expense, and further
agrees to defer settlement until after a favorable decision on appeal.
Settlement shall be held, if at all, within five (5) days after all appeal
rights have expired after entry of a decree for specific performance of the
Prochazka Option by a court of competent jurisdiction and performance of the
decree by the Prochazkas.
14. GENERAL PROVISIONS.
14.1. POSSESSION. Possession of the Property, free and clear of
all tenancies and rights of occupancy in third parties, shall be delivered
to, and all risk of loss and damage to the Property from whatever source
shall pass to Buyer at settlement. Prior to settlement, all such risk of
loss and damage, except as otherwise agreed herein, shall be the sole
responsibility of Seller.
14.2. NOTICES. All notices or other communications made pursuant
hereto shall be in writing and shall be deemed properly delivered, given or
served when (i) personally delivered against receipted copy; (ii) mailed by
certified or registered mail, return receipt requested, postage prepaid, or
(iii) sent by Federal Express or a comparable overnight courier service to
the parties at the following addresses:
Seller: McDonogh School, Incorporated
10075 Red Run Boulevard
Suite 505
Owings Mills, Maryland 21117-6128
Attention: Mr. D. Terrence MacHamer
<PAGE> 12
with a copy to: William L. Balfour, Esq.
Ober, Kaler, Grimes & Shriver
A Professional Corporation
120 E. Baltimore Street
Baltimore, Maryland 21202
Buyer: T. Rowe Price Associates, Inc.
100 E. Pratt Street
9th Floor
Baltimore, Maryland 21202
Attention: Andrew C. Goresh
with a copy to: Donald P. McPherson, III, Esquire
Piper & Marbury
36 South Charles Street
Baltimore, Maryland 21201-3019
All notices so mailed shall be effective when received. A signed return
receipt shall be sufficient evidence of receipt. Either party may change its
address for the purposes of this Section by giving five (5) days prior
written notice of such change to the other party in the manner provided in
this Section.
14.3. BROKER'S COMMISSION. Each of the parties hereto warrants and
represents to the other that no broker or agent has been instrumental in
procuring this Contract. Seller and Buyer agree to indemnify and hold each
other harmless from any and all claims for any brokerage fees or commissions
asserted by brokers claiming by, through or under the indemnifying party.
14.4. SUCCESSORS. Subject to Section 14.9 below, this Contract
shall be binding upon and inure to the benefit of the successors and assigns
of the parties hereto.
14.5. ENTIRE AGREEMENT. This Contract contains the entire
agreement of the parties hereto with respect to the matters covered hereby,
and supersedes all prior arrangements and understandings between the parties;
and no other agreement, statement or promise made by either party hereto
which is not contained herein shall be binding or valid.
14.6. AMENDMENTS. This Contract may only be amended by written
document signed by each of the parties hereto.
14.7. WARRANTIES. No person acting on behalf of Seller is
authorized to make, and by execution hereof Buyer acknowledges that no such
person has made, any representation, warranty, guaranty or promise except as
set forth herein; and no agreement, statement, representation or promise made
by any such person which is not contained herein shall be valid or binding on
Seller. The only representations or warranties outstanding with respect to
the subject matter of this transaction, either express or implied by law, are
set forth herein, and Buyer expressly waives the right to any warranty
implied by law. Buyer acknowledges that an authorized agent of Buyer has
<PAGE> 13
independently and personally inspected the Property and that Buyer has
entered into this Contract based upon such personal examination and
inspection of the Property, and except for the specific express warranties of
Seller contained in this Agreement, Buyer acknowledges that the Property is
purchased in "AS IS" condition.
14.8. FURTHER DOCUMENTS. Each party will, whenever and as often as
it shall be requested by the other party, execute, acknowledge and deliver,
or cause to be executed, acknowledges and delivered, such further instruments
and documents, including closing instructions, as may be necessary in order
to complete the sale, conveyance and transfer herein provided and to do any
and all other acts and to execute, acknowledge and deliver any and all
documents as may be requested in order to carry out the intent and purpose of
this Agreement.
14.9. ASSIGNMENT. This Contract may be assigned by Buyer to T.
Rowe Price Associates, Inc. or any entity of which T. Rowe Price Associates,
Inc. owns, directly or indirectly, in excess of fifty percent (50%) of the
voting control of such entity, without the consent of Seller. Except as set
forth above, this Contract may not be assigned by Buyer without the prior
written consent of Seller, which consent may be withheld by Seller in its
sole and absolute discretion. The transfer of voting control of Buyer or any
permitted assignee other than T. Rowe Price Associates, Inc. shall constitute
an assignment within the meaning of this Section 14.9.
14.10. SEVERABILITY. Should any part, term or provision of this
Contract or any document required herein to be executed or delivered at the
closing be declared invalid, void or unenforceable, all remaining parts,
terms and provisions hereof shall remain in full force an effect and shall in
no way be invalidated, impaired or affected thereby.
14.11. EXHIBITS. All exhibits attached to this Contract are
incorporated herein as though set forth herein in full.
14.12. APPLICABLE LAW. This Contract shall be construed and
interpreted under, and governed and enforced according to, the laws of the
State of Maryland.
14.13. REMEDIES NOT EXCLUSIVE AND WAIVERS. Unless specifically set
forth therein, no remedy conferred by any of the specific provisions in this
Contract is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute or otherwise. The election of any one or more remedies shall not
constitute a waiver of the right to pursue other available remedies.
14.14. COUNTERPARTS. This Contract may be executed by the parties
on the same copy or copies or in counterparts, each of which shall be deemed
an original, but all of which together containing the signatures of all
parties shall constitute one and the same agreement.
<PAGE> 14
14.15. INDEPENDENT INVESTIGATION AND INSPECTION. Buyer
acknowledges that authorized agents of Buyer have independently inspected the
Property, and Buyer has made and entered into this Contract based upon such
inspection and its own authorized examination of the condition of the
Property.
14.16. INTERPRETATIONS AND DEFINITIONS.
14.16.1. DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meaning respectively hereafter set forth: (i)
"closing" or "settlement" shall mean the consummation of the purchase and
sale transaction evidenced by the delivery by Seller of the deed to the
subject Property described above and the payment by Buyer of the full
purchase price therefor, and (ii) "date of this Contract" shall mean the date
set forth in the preamble paragraph of the first page hereof, which date
shall be the date upon which Seller executes this Contract and shall be
inserted by Seller upon Seller's execution of this Contract.
14.16.2. CONSTRUCTION. Any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall
not apply in the interpretation of this Agreement or any amendments or
exhibits thereto.
14.16.3. RECITALS AND CAPTIONS. The recitals and captions of
the Section and subsections of this Contract are for convenience and
reference only, and the words contained therein shall in no way be held to
explain, modify, amplify, or aid in the interpretation, construction or
meaning of the provisions of this Contract.
14.16.4. DATES. All references herein to the expiration of a
certain number of days refer to calendar days, rather than business days.
Therefore, if the expiration of a certain number of calendar days occurs on a
Saturday, Sunday or banking holiday, such calendar days shall be deemed to
occur on the next, succeeding calendar day, which is not a Saturday, Sunday
or banking holiday.
15. PROPER AUTHORITY. Each party agrees that at the request of the
other party it will provide such other party with evidence of proper
authority to enter into and consummate this Contract and with evidence that
the person or persons signing on behalf of such party are so authorized.
16. TIME OF ESSENCE. Time is and shall be of the essence of this
Contract.
17. ATTORNEYS' FEES. In the event either party hereto prevails against
the other in a legal action concerning any part of this Contract, such
successful party shall be entitled to its reasonable attorneys' fees and
costs connected with such action in addition to all other recovery or relief.
18. NO RECORDATION. Buyer undertakes and agrees not to record this
Contract, or any memorandum hereof, without Seller's prior written consent.
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have executed this Contract, or
caused it to be executed by their duly authorized representatives, the day
and year set forth below their respective signatures.
McDONOGH SCHOOL, INCORPORATED
By: /s/ Christine Alexander
Title: President
Date: 9/29/95
Seller
TRP SUBURBAN SECOND, INC.
By: /s/ Andrew C. Goresh
Title: Vice President
Date: 9/27/95
Buyer
<PAGE> 1
EXHIBIT 10.08
SECOND AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made this 22nd
day of December, 1995, by and between MCDONOGH SCHOOL, INCORPORATED, a Mary-
land Corporation with an office at McDonogh School, Owings Mills, Maryland
21117-0380 ("Landlord"), and TRP SUBURBAN, INC., a Maryland Corporation with
a office at 100 East Pratt Street, 9th Floor, Baltimore, Maryland 21202
("Tenant").
RECITALS
A. Landlord and Tenant are parties to a Lease Agreement dated April 17,
1990, an Addendum to Agreement of Lease dated April 17, 1990, a Short Form
Lease for recording dated April 17, 1990 and an Amendment to Lease Agreement
dated June 18, 1991 (collectively the "Lease"), concerning land located at
10090 Red Run Boulevard, Baltimore County, Maryland.
B. The Short Form Lease for recording was recorded among the Land Records of
Baltimore County, Maryland on April 22, 1990 in liber SM8465, folio 516.
C. Landlord and Tenant desire to amend the Lease as hereinafter set forth.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency which is hereby
acknowledged, Landlord and Tenant agree as follows:
1. EXTENSION OF TERM. Section 1.02 of the Lease is hereby amended to pro-
vide that the Term shall expire ninety-nine years after the Commencement
Date. All references in the Lease to Expiration Date shall mean the date
which is ninety-nine years after the Commencement Date.
2. PAYMENT FOR CONSTRUCTION OF ADDITIONAL IMPROVEMENTS. The Premises are
currently improved by a building containing One Hundred Fourteen Thousand
(114,000) gross square feet of floor area. The provisions of paragraph (a)
of Section 2.02 of the lease permitting the construction of up to One Hundred
Sixty-Five Thousand (165,000) gross square feet of floor area, exclusive of
parking facilities, in consideration of the payment of the Single Rent Pay-
ment, is hereby deleted and the following is inserted in lieu thereof.
(a) In addition to the Improvements currently located on the Demised
Premises containing One Hundred Fourteen Thousand (114,000) gross square feet
of floor area, Tenant may construct additional Improvements containing not
more than Fifty-One Thousand (51,000) gross square feet of floor area,
exclusive of parking facilities, on the following terms and conditions:
(i) For a period of eighteen (18) months from the date of this
Amendment, Tenant shall pay the Landlord the sum of Seventeen Dollars
($17.00) per square foot of additional Improvements exclusive of parking
space. Commencing on the date which is eighteen (18) months from the date of
this Amendment and continuing on each anniversary of that date, the cost per
<PAGE> 2
square foot of additional Improvements as set forth above shall increase by
four percent (4%) per annum, compounded annually.
(ii) The payments set forth above, as applicable, shall be made before
any construction activities, including site work, occur in connection with
additional Improvements.
3. CLARIFICATION OF TENANT'S REIMBURSEMENT OBLIGATIONS. Landlord's costs
specified in Section 8.02 of the Lease shall include reasonable overhead
directly related to the performance of Landlord's responsibilities under
Section 8.01 of the Lease. Reasonable overhead shall include the salary of a
property manager, administrative support and office space, which shall be
allocable in accordance with generally accepted accounting principles.
4. REVOCATION OF EXTENSION PRIVILEGES. Article 20 of the Lease relating to
Extension Privileges is hereby revoked in its entirety.
5. TERMS. Terms which are used but not defined herein shall have the same
meanings as set forth in the Lease.
6. NO OTHER MODIFICATIONS. Except as set forth herein the Lease is
unmodified and remains in full force and effect.
WITNESS the hands and seals of the parties hereto, under seal, as of the date
first above written.
McDONOGH SCHOOL, INCORPORATED
By: /s/ Christine Alexander
Title: President
TRP SUBURBAN, INC.
By: /s/ Andrew C. Goresh
Title: Vice President
EXHIBIT 21
SUBSIDIARIES OF T. ROWE PRICE ASSOCIATES, INC. (1)
DECEMBER 31, 1995
Subsidiary companies and state of incorporation Ownership percentage
_____________________________________________________________________________
T. Rowe Price (Canada), Inc. (Maryland) 100%
T. Rowe Price Investment Services, Inc. (Maryland) 100%
T. Rowe Price Retirement Plan Services, Inc. (Maryland) 100%
T. Rowe Price Services, Inc. (Maryland) 100%
T. Rowe Price Stable Asset Management, Inc. (Maryland) 100%
TRP Finance, Inc. (Delaware) 100%
Rowe Price-Fleming International, Inc. (Maryland) 50%
TRP Suburban, Inc. (Maryland) 100%
TRP Suburban Second, Inc. (Maryland) 100%
________________
(1) Omitted subsidiaries, when considered in the aggregate, do not
constitute a significant subsidiary.
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 33-7012, No. 33-8672, No. 33-37573, No. 33-72568,
and No. 95-530398) of T. Rowe Price Associates, Inc. of our report dated
January 25, 1996 appearing on page 22 of this Form 10-K.
/s/ PRICE WATERHOUSE LLP
Baltimore, Maryland
March 21, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF T. ROWE PRICE ASSOCIATES, INC. LISTED IN THE ITEM 8
INDEX ON PAGE 22 OF THE ACCOMPANYING FORM 10-K ANNUAL REPORT FOR THE YEAR ENDED
DECEMBER 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> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 81,431,000
<SECURITIES> 121,606,000
<RECEIVABLES> 55,841,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 106,267,000
<DEPRECIATION> 46,045,000
<TOTAL-ASSETS> 365,343,000
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 5,733,000
<OTHER-SE> 268,499,000
<TOTAL-LIABILITY-AND-EQUITY> 365,343,000
<SALES> 0
<TOTAL-REVENUES> 439,299,000
<CGS> 0
<TOTAL-COSTS> 294,583,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,023,000
<INCOME-PRETAX> 143,693,000
<INCOME-TAX> 54,335,000
<INCOME-CONTINUING> 76,458,000
<DISCONTINUED> 0
<EXTRAORDINARY> (1,049,000)
<CHANGES> 0
<NET-INCOME> 75,409,000
<EPS-PRIMARY> 2.47
<EPS-DILUTED> 0
<FN>
<F1>Item is not contained in registrant's unclassified balance sheet.
</FN>
</TABLE>
