Fellow Shareholders
The Fund's performance tracked the S&P 500 Index for the three and 12 months
ended December 31, 1993. Roughly two-thirds of the difference in the 12-month
return was a result of the Fund's operating expenses (the unmanaged S&P 500
Index, of course, incurs no expenses). Transaction costs and slight
differences in the portfolio weightings as opposed to the S&P 500 accounted
for the remainder of the variance.
In our management approach, we constantly search for improved and more
efficient methods of implementing the indexed portfolio. Because of the Fund's
significant asset growth, we have been able to establish positions in
companies very near the makeup of the S&P 500. Further-more, we also continue
to utilize innovative mechanisms, such as electronic trading networks, to
rebalance portfolio weightings as the composition of the S&P 500 changes. We
believe the tighter tracking exhibited in the last three quarters of 1993 will
continue into 1994, leading to future cost savings for the Fund and better
performance for you.
Performance Comparison
Periods Ended 12/31/93
3 Months 12 Months
_____________________
Equity Index Fund 2.3% 9.4%
S&P 500 2.3 10.1
With only 11 company additions and deletions, 1993 was a quiet year of
turnover (2%) for the S&P 500. This low turnover means we had fewer positions
to sell, hence the size of the Fund's capital gain distributions was lower
than it might otherwise have been.
Year-End Distributions
On December 21, 1993, the Fund's Board of Directors declared a dividend of
$.07 per share and a long-term capital gain of $.01 per share, payable January
3, 1994, to shareholders of record on December 21, 1993. In early January, we
mailed your check or statement reflecting the total payments of $.08 per
share. Form 1099-DIV, reporting the distributions for tax purposes, was mailed
to you in late January.
Market Review
U.S. stocks rose for the third consecutive year despite widespread concern
about the pace of economic recovery in the United States, generally depressed
economic conditions in Europe and Japan, the budget deficit, and higher
individual and corporate tax rates. However, these apparent obstacles were
overwhelmed by the lowest interest rates in a generation, which helped
corporations strengthen their financial positions and also prompted
individuals to flee low-yielding investments for the potentially more
rewarding (but also riskier) stocks and longer-term bonds. Also, other
statistical data (e.g., housing starts and auto sales) continued to confirm
that U.S. economic growth was, in fact, accelerating.
The fourth quarter economy departed from the trends exhibited earlier
in the year as evidence of economic acceleration mounted. Interest rates rose
slightly, depressing the prices of financial company stocks, and oil prices
fell, leading to weakness in the energy sector. However, consumer-related
stocks rallied, as did the long-suffering drug stocks.
As measured by the 10.1% gain in the S&P 500, the U.S. equity market
had a good but not spectacular year. Small-company stocks, as represented by
the Nasdaq Composite, performed better at 14.7%. While the S&P's return
doesn't seem high compared with the outstanding performance achieved during
the 1980s, an increase of this magnitude is quite robust considering
longer-term precedents as well as the low rate of inflation during 1993. In
fact, 1993's real return (that is, the nominal return less the inflation rate)
was 7.4%, which is higher than the average annual real return achieved over
the last 60 years.
Investors rotated from sector to sector during the year. Financial
stocks were favored early in the year but lagged when it appeared that
interest rates had bottomed. Health care stocks wilted in the spring when the
Clinton health plan was revealed, but many have at least partially recovered.
Resource-based groups such as energy and gold gyrated along with commodity
prices. Cyclicals, including technology and basic industrial companies, fared
reasonably well for most of the year and closed with a strong fourth quarter.
As discussed above, the major factors contributing to 1993's favorable
results were further interest rate declines and the gradually accumulating
evidence of economic acceleration. But within the market, these themes played
out quite differently.
Value-oriented stocks outperformed growth stocks decidedly. The
S&P/Barra Value and Growth Indices, formed by splitting the S&P 500 Index into
two categories based on each company's price-to-book-value ratio, increased by
18.7% and 1.7%, respectively. Since lower interest rates tend to make
higher-yielding stocks more valuable, such a disparity is not surprising. In
addition, improving economic conditions tend to benefit mature companies more
than those that grow independently of business cycles.
Portfolio Review
The prospect of an improving economy greatly benefited publicly traded
cyclical stocks in the portfolio. As a result, transportation, automo-
tive, and construction stocks, such as Santa Fe Pacific (73.6%), General
Motors (72.6%), and Caterpillar (67.1%), performed very well. Media/
telecommunications, such as Paramount (74.0%) and Time Warner (52.3%), also
soared as new opportunities arose in the management and delivery of
information. Mining, machinery and semiconductor stock prices were also strong
as investors anticipated that the strengthening economy would translate into
new sales.
Health care stocks, such as Merck, Johnson & Johnson, and Bristol
Myers-Squibb, showed the biggest 12-month decline. Increased competition and
the prospect of massive taxes hurt tobacco stocks such as Philip Morris, while
the threat of brand loyalty erosion among consumers dropped share prices for
many food, beverage, and other consumer product stocks. Among the hardest hit
holdings from those sectors included Sara Lee and Anheuser Busch.
Returns by Market Sector
Three Months Ended 12/31/93
Basic Materials 18.8%
Process Industries 9.0
Consumer Nondurables 7.6
Consumer Cyclicals 6.4
Business Services & Transportation 6.0
Capital Equipment 5.5
Technology 4.7
Consumer Services 3.2
Utilities - 6.0
Financial - 7.3
Energy -10.2
Outlook
Stocks remain valued near the top of their historical price/earnings ranges,
with relatively low inflation and interest rates as the principal supports.
Consequently, the potential for increased inflation and higher interest rates
(in response to accelerated economic growth) might cause a correction in the
equity markets. We accept that such corrections or declines are inevitable but
do not believe they negate the long-term growth potential inherent in the
stock market.
The prospect of liberalized world trade and renewed global economic
growth could lead to improved efficiency and sharp earnings growth at many
U.S. companies. Because the S&P 500 and the Fund consist mainly of
high-quality, well-managed companies with leading market positions and sound
financial fundamentals, we believe the Fund's investments should continue to
provide consistent and durable long-term results for you.
Respectfully submitted,
Richard T. Whitney
President
January 24, 1994
Twenty-Five Largest Holdings
December 31, 1993
Percent of
Net Assets
__________
GE 2.5%
Exxon 2.2
AT&T 2.0
Coke 1.6
Wal-Mart 1.6
Royal Dutch Petroleum 1.6
Philip Morris 1.4
Merck 1.3
General Motors 1.1
Procter & Gamble 1.1
GTE 0.9
DuPont 0.9
IBM 0.9
PepsiCo 0.9
Ford Motor 0.9
Mobil 0.9
Bristol-Myers Squibb 0.9
Johnson & Johnson 0.8
BellSouth 0.8
American International Group 0.8
Chevron 0.8
Amoco 0.7
Bell Atlantic 0.7
Intel 0.7
Motorola 0.7
___________________________________________________________________________
Total 28.7%
Chart 1-Performance Comparison
Total Return Performance
Periods ended December 31, 1993
1 Year Since Inception on 3/30/90*
________ ______________________
9.42% 11.79%
*Average Annual Compound Total Return
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Contributions to the Net Asset Value Per Share
T. Rowe Price Equity Index Fund
Three Months Ended December 31, 1993
______________________________________________________
TEN BEST CONTRIBUTORS
General Motors 4(cent)
Philip Morris 3
IBM 3
GE 3
Procter & Gamble 2
Ford Motor 2
Merck 2
Johnson & Johnson 2
Pfizer 1
Coke 1
______________________________________________________
Total 23(cent)
TEN WORST CONTRIBUTORS
AT&T - 3(cent)
Chevron 2
Intel 1
American International Group 1
Exxon 1
GTE 1
Amoco 1
Ameritech 1
NYNEX 1
American Express 1
______________________________________________________
Total -13(cent)
Twelve Months Ended December 31, 1993
______________________________________________________
TEN BEST CONTRIBUTORS
GE 6(cent)
General Motors 6
Royal Dutch Petroleum 5
Motorola 4
Ford Motor 4
Intel 3
Chrysler 3
Mobil 3
Chevron 3
Time Warner 2
______________________________________________________
Total 39(cent)
TEN WORST CONTRIBUTORS
Philip Morris - 8(cent)
Wal-Mart 6
Merck 4
WMX Technologies 3
Home Depot 2
Bristol-Myers Squibb 2
Apple Computer 1
Johnson & Johnson 1
The Limited 1
Northern Telecom 1
______________________________________________________
Total -29(cent)
Investment Record
T. Rowe Price Equity Index Fund
The table below shows the investment record of one share of the T. Rowe Price
Equity Index Fund, purchased at the initial offering price of $10.00, for the
period 3/30/90 through 12/31/93. Over this time stock prices in general have
risen. The results shown should not be considered a representation of the
dividend income or capital gain or loss which may be realized from an
investment made in the Fund today.
<TABLE>
Per- Share Data
<CAPTION>
With Capital Gains and Income Dividends
Taken in Cash Reinvested in Additional Shares
________________________________ _____________________________________ Annual
Periods Net Capital Capital Total Return
Ended Asset Gain Income Gain Income Value of On Investment
12/31 Value Distribution Dividend Distribution Dividend Investment % Change
_______ _______ ___________ _________ ____________ _________ __________ _____________
<S> <C> <C> <C> <C> <C> <C> <C>
1990! $ 9.72 $0.00 $0.31 $0.00 $0.31 $10.03 0.3%
1991 11.50 0.08 0.34 0.08 0.36 12.96 29.2
1992 12.63 0.01 0.31 0.01 0.34 13.89 7.2
1993 13.48 0.01 0.32 0.01 0.36 15.20 9.4
_________________________________________________________________________________________________________
Total $0.10 $1.28 $0.10 $1.37
<FN>
!From inception 3/30/90 to 12/31/90.
</TABLE>
Statement of Net Assets (Value in thousands)
T. Rowe Price Equity Index Fund / December 31, 1993
Common Stocks-93.9%
INDUSTRIAL-70.7%
Value
______
40,566 shs. GE . . . . . . . . . . . . . . . . . . . . $ 4,254
58,997 Exxon. . . . . . . . . . . . . . . . . . . 3,717
64,169 AT&T . . . . . . . . . . . . . . . . . . . 3,369
61,722 Coke . . . . . . . . . . . . . . . . . . . 2,754
109,32 Wal-Mart . . . . . . . . . . . . . . . . . 2,733
25,515 Royal Dutch Petroleum, ADR . . . . . . . . 2,663
41,574 Philip Morris. . . . . . . . . . . . . . . 2,318
61,004 Merck. . . . . . . . . . . . . . . . . . . 2,097
33,811 General Motors . . . . . . . . . . . . . . 1,855
32,319 Procter & Gamble . . . . . . . . . . . . . 1,842
32,224 Du Pont. . . . . . . . . . . . . . . . . . 1,555
27,462 IBM. . . . . . . . . . . . . . . . . . . . 1,552
37,731 PepsiCo. . . . . . . . . . . . . . . . . . 1,542
23,607 Ford Motor . . . . . . . . . . . . . . . . 1,523
18,944 Mobil. . . . . . . . . . . . . . . . . . . 1,497
24,649 Bristol-Myers Squibb . . . . . . . . . . . 1,433
31,118 Johnson & Johnson. . . . . . . . . . . . . 1,393
15,190 Chevron. . . . . . . . . . . . . . . . . . 1,324
23,513 Amoco. . . . . . . . . . . . . . . . . . . 1,243
19,704 Intel. . . . . . . . . . . . . . . . . . . 1,222
12,924 Motorola . . . . . . . . . . . . . . . . . 1,194
39,323 Abbott Laboratories. . . . . . . . . . . . 1,160
10,273 3M . . . . . . . . . . . . . . . . . . . . 1,117
25,405 Disney . . . . . . . . . . . . . . . . . . 1,083
15,178 Pfizer . . . . . . . . . . . . . . . . . . 1,047
16,856 McDonald's . . . . . . . . . . . . . . . . 961
12,126 Hewlett-Packard. . . . . . . . . . . . . . 958
14,725 American Home Products . . . . . . . . . . 954
16,740 Chrysler . . . . . . . . . . . . . . . . . 891
7,687 Unilever, N.V., ADR. . . . . . . . . . . . 888
15,719 Eastman Kodak. . . . . . . . . . . . . . . 880
16,630 Sears. . . . . . . . . . . . . . . . . . . 877
21,312 Home Depot . . . . . . . . . . . . . . . . 842
13,910 Eli Lilly. . . . . . . . . . . . . . . . . 826
7,572 Atlantic Richfield . . . . . . . . . . . . 797
12,294 Texaco . . . . . . . . . . . . . . . . . . 795
17,793 Time Warner. . . . . . . . . . . . . . . . 787
13,082 Dow Chemical . . . . . . . . . . . . . . . 742
25,430 MCI. . . . . . . . . . . . . . . . . . . . 718
16,164 Boeing . . . . . . . . . . . . . . . . . . 699
11,592 Schlumberger . . . . . . . . . . . . . . . 685
10,732 Emerson Electric . . . . . . . . . . . . . 647
21,297 * Tele-Communications. . . . . . . . . . . . 644
12,856 Anheuser-Busch . . . . . . . . . . . . . . 632
11,075 Kellogg. . . . . . . . . . . . . . . . . . 629
10,480 Gillette . . . . . . . . . . . . . . . . . 625
9,006 Schering-Plough. . . . . . . . . . . . . . 617
22,829 shs. WMX Technologies . . . . . . . . . . . . . $ 602
11,214 J.C. Penney. . . . . . . . . . . . . . . . 587
23,124 Sara Lee . . . . . . . . . . . . . . . . . 578
13,816 * Toys "R" Us. . . . . . . . . . . . . . . . 565
16,175 Sprint . . . . . . . . . . . . . . . . . . 562
8,465 Dun & Bradstreet . . . . . . . . . . . . . 522
6,407 Allied-Signal. . . . . . . . . . . . . . . 506
11,894 Campbell . . . . . . . . . . . . . . . . . 488
5,341 ITT. . . . . . . . . . . . . . . . . . . . 487
9,600 * McCaw Cellular
Communications (Class A). . . . . . . 485
766 Capital Cities/ABC . . . . . . . . . . . . 475
11,842 May Department Stores. . . . . . . . . . . 466
17,753 Seagram. . . . . . . . . . . . . . . . . . 464
7,185 Colgate-Palmolive. . . . . . . . . . . . . 448
7,342 General Mills. . . . . . . . . . . . . . . 446
4,959 Xerox. . . . . . . . . . . . . . . . . . . 443
9,702 Weyerhaeuser . . . . . . . . . . . . . . . 433
12,032 Heinz. . . . . . . . . . . . . . . . . . . 432
8,100 Tenneco. . . . . . . . . . . . . . . . . . 426
19,398 K mart . . . . . . . . . . . . . . . . . . 412
6,044 Warner Lambert . . . . . . . . . . . . . . 408
4,579 Caterpillar. . . . . . . . . . . . . . . . 408
6,001 International Paper. . . . . . . . . . . . 407
6,119 Raytheon . . . . . . . . . . . . . . . . . 404
7,032 Gannett. . . . . . . . . . . . . . . . . . 403
7,682 Kimberly-Clark . . . . . . . . . . . . . . 399
5,248 PPG Industries . . . . . . . . . . . . . . 398
5,417 Monsanto . . . . . . . . . . . . . . . . . 397
13,554 * Oracle Systems . . . . . . . . . . . . . . 390
10,403 RockWell . . . . . . . . . . . . . . . . . 386
13,500 American Barrick Resources . . . . . . . . 385
6,878 Automatic Data Processing. . . . . . . . . 380
5,800 Cisco Systems. . . . . . . . . . . . . . . 375
6,013 United Technologies. . . . . . . . . . . . 373
11,955 Northern Telecom . . . . . . . . . . . . . 369
15,920 Archer Daniels Midland . . . . . . . . . . 362
12,402 Phillips Petroleum . . . . . . . . . . . . 360
7,352 Goodyear Tire & Rubber . . . . . . . . . . 336
10,731 BLOCKBUSTER
Entertainment. . . . . . . . . . . . . . 329
6,521 * Amgen. . . . . . . . . . . . . . . . . . . 323
13,169 Baxter International . . . . . . . . . . . 321
6,735 CPC International. . . . . . . . . . . . . 321
9,636 American Brands. . . . . . . . . . . . . . 320
11,429 Unocal . . . . . . . . . . . . . . . . . . 319
11,844 Albertson's. . . . . . . . . . . . . . . . 317
11,889 ConAgra. . . . . . . . . . . . . . . . . . 314
7,566 Pitney Bowes . . . . . . . . . . . . . . . 313
14,840 * Novell . . . . . . . . . . . . . . . . . . 308
4,431 Alcoa. . . . . . . . . . . . . . . . . . . 307
7,665 Computer Associates. . . . . . . . . . . . 307
4,058 Deere. . . . . . . . . . . . . . . . . . . 300
4,753 shs. AMP. . . . . . . . . . . . . . . . . . . . $ 300
17,233 The Limited. . . . . . . . . . . . . . . . 295
3,940 COMPAQ Computer. . . . . . . . . . . . . . 292
11,314 Placer Dome. . . . . . . . . . . . . . . . 281
4,069 Georgia-Pacific. . . . . . . . . . . . . . 280
3,412 Marsh & McLennan . . . . . . . . . . . . . 277
7,035 The Gap. . . . . . . . . . . . . . . . . . 277
4,351 Texas Instruments. . . . . . . . . . . . . 276
9,798 UST. . . . . . . . . . . . . . . . . . . . 272
5,507 Cooper Industries. . . . . . . . . . . . . 271
7,295 Masco. . . . . . . . . . . . . . . . . . . 270
6,300 Burlington Resources . . . . . . . . . . . 267
9,502 Corning. . . . . . . . . . . . . . . . . . 266
7,606 Rubbermaid . . . . . . . . . . . . . . . . 264
8,973 Sysco. . . . . . . . . . . . . . . . . . . 262
5,758 Wrigley. . . . . . . . . . . . . . . . . . 254
7,000 * Comcast. . . . . . . . . . . . . . . . . . 252
14,521 Occidental Petroleum . . . . . . . . . . . 249
5,619 Air Products & Chemicals . . . . . . . . . 249
3,298 Great Lakes Chemical . . . . . . . . . . . 246
6,016 Walgreen . . . . . . . . . . . . . . . . . 246
3,433 Quaker Oats. . . . . . . . . . . . . . . . 244
8,358 Upjohn . . . . . . . . . . . . . . . . . . 243
7,058 * HCA Hospital Corp.
of America. . . . . . . . . . . . . . . 241
2,899 Medtronic. . . . . . . . . . . . . . . . . 238
16,657 Westinghouse . . . . . . . . . . . . . . . 235
2,472 Morton International . . . . . . . . . . . 231
3,948 Textron. . . . . . . . . . . . . . . . . . 230
6,099 Genuine Parts. . . . . . . . . . . . . . . 229
3,431 Dayton Hudson. . . . . . . . . . . . . . . 229
6,606 Honeywell. . . . . . . . . . . . . . . . . 226
4,899 * Promus Companies . . . . . . . . . . . . . 224
13,581 USX-Marathon . . . . . . . . . . . . . . . 224
7,181 R. R. Donnelly . . . . . . . . . . . . . . 224
2,084 McDonnell Douglas. . . . . . . . . . . . . 223
1,969 Hercules . . . . . . . . . . . . . . . . . 222
4,172 Nucor. . . . . . . . . . . . . . . . . . . 221
6,447 * Digital Equipment. . . . . . . . . . . . . 221
10,603 Alcan Aluminum . . . . . . . . . . . . . . 220
3,293 Whirlpool. . . . . . . . . . . . . . . . . 219
5,296 Louisiana Pacific. . . . . . . . . . . . . 218
5,546 Illinois Tool Works. . . . . . . . . . . . 216
736 CBS. . . . . . . . . . . . . . . . . . . . 212
4,206 American Cyanamid. . . . . . . . . . . . . 211
8,162 Browning-Ferris. . . . . . . . . . . . . . 210
3,027 TRW. . . . . . . . . . . . . . . . . . . . 210
5,125 Melville . . . . . . . . . . . . . . . . . 208
4,656 Marietta Marietta. . . . . . . . . . . . . 207
5,151 Ralston Purina . . . . . . . . . . . . . . 205
3,400 Lowes. . . . . . . . . . . . . . . . . . . 201
4,086 Hershey Foods. . . . . . . . . . . . . . . 200
5,213 Ingersoll-Rand . . . . . . . . . . . . . . 199
2,920 Lockheed . . . . . . . . . . . . . . . . . 199
10,327 * Price/Costco . . . . . . . . . . . . . . . 199
4,785 shs. H&R Block. . . . . . . . . . . . . . . . . $ 195
5,767 Times Mirror . . . . . . . . . . . . . . . 192
3,558 Winn-Dixie . . . . . . . . . . . . . . . . 191
4,997 Dillard Department Stores
(Class A). . . . . . . . . . . . . . . 190
4,194 Amerada Hess . . . . . . . . . . . . . . . 189
3,284 Newmont Mining . . . . . . . . . . . . . . 189
3,127 Tribune. . . . . . . . . . . . . . . . . . 188
4,599 W. R. Grace. . . . . . . . . . . . . . . . 187
3,083 Rohm & Haas. . . . . . . . . . . . . . . . 183
1,581 International Flavors &
Fragrances . . . . . . . . . . . . . . 180
6,510 Mattel . . . . . . . . . . . . . . . . . . 180
5,455 Halliburton. . . . . . . . . . . . . . . . 174
4,699 Dow Jones. . . . . . . . . . . . . . . . . 168
10,520 Syntex . . . . . . . . . . . . . . . . . . 167
3,967 * Crown Cork & Seal. . . . . . . . . . . . . 166
3,411 Avon . . . . . . . . . . . . . . . . . . . 166
3,569 NIKE . . . . . . . . . . . . . . . . . . . 166
2,676 * DSC Communications . . . . . . . . . . . . 165
7,208 Union Carbide. . . . . . . . . . . . . . . 161
5,560 Marriot International. . . . . . . . . . . 161
6,331 WoolWorth. . . . . . . . . . . . . . . . . 161
3,292 Phelps Dodge . . . . . . . . . . . . . . . 160
4,100 Pioneer Hi Bred. . . . . . . . . . . . . . 160
5,388 Apple Computer . . . . . . . . . . . . . . 159
4,160 Loral. . . . . . . . . . . . . . . . . . . 157
2,622 Knight-Ridder. . . . . . . . . . . . . . . 157
3,289 Union Camp . . . . . . . . . . . . . . . . 157
1,678 General Dynamics . . . . . . . . . . . . . 155
5,238 Sun Company. . . . . . . . . . . . . . . . 154
3,776 Newell . . . . . . . . . . . . . . . . . . 152
3,060 Tandy. . . . . . . . . . . . . . . . . . . 151
2,622 W. W. Grainger . . . . . . . . . . . . . . 151
2,476 Hilton . . . . . . . . . . . . . . . . . . 150
3,697 Fluor. . . . . . . . . . . . . . . . . . . 150
2,729 Clorox . . . . . . . . . . . . . . . . . . 148
2,880 Bausch & Lomb. . . . . . . . . . . . . . . 148
3,567 Scott Paper. . . . . . . . . . . . . . . . 147
2,888 Eaton. . . . . . . . . . . . . . . . . . . 146
6,610 Homestake Mining . . . . . . . . . . . . . 145
4,991 * Sun Microsystems . . . . . . . . . . . . . 145
4,058 Sherwin-Williams . . . . . . . . . . . . . 145
4,000 Hasbro . . . . . . . . . . . . . . . . . . 145
2,380 Dover. . . . . . . . . . . . . . . . . . . 145
3,327 USX-U.S. Steel . . . . . . . . . . . . . . 144
3,921 Deluxe . . . . . . . . . . . . . . . . . . 142
2,098 McGraw-Hill. . . . . . . . . . . . . . . . 142
3,277 American Stores. . . . . . . . . . . . . . 141
4,198 Champion International . . . . . . . . . . 140
2,747 Temple-Inland. . . . . . . . . . . . . . . 138
6,655 Dresser Industries . . . . . . . . . . . . 138
6,779 Baker Hughes . . . . . . . . . . . . . . . 136
2,881 V. F.. . . . . . . . . . . . . . . . . . . 133
T. Rowe Price Equity Index Fund / Statement of Net Assets
INDUSTRIAL (Cont'd)
4,934 shs. Inco . . . . . . . . . . . . . . . . . . . $ 133
5,051 New York Times . . . . . . . . . . . . . . 133
2,881 Mead . . . . . . . . . . . . . . . . . . . 130
2,411 Pennzoil . . . . . . . . . . . . . . . . . 128
3,538 Harcourt General . . . . . . . . . . . . . 128
1,987 * Litton Industries. . . . . . . . . . . . . 128
4,200 Reebok . . . . . . . . . . . . . . . . . . 126
3,798 Nordstrom. . . . . . . . . . . . . . . . . 125
3,424 Supervalu. . . . . . . . . . . . . . . . . 124
2,069 Dana . . . . . . . . . . . . . . . . . . . 124
3,450 Becton Dickinson . . . . . . . . . . . . . 124
3,284 Nalco Chemical . . . . . . . . . . . . . . 123
2,372 Tyco Laboratories. . . . . . . . . . . . . 122
3,590 American Greetings . . . . . . . . . . . . 122
3,549 IMCERA . . . . . . . . . . . . . . . . . . 119
4,807 Engelhard. . . . . . . . . . . . . . . . . 117
3,634 Interpublic Group. . . . . . . . . . . . . 116
1,422 Premark International. . . . . . . . . . . 114
6,672 Borden . . . . . . . . . . . . . . . . . . 113
8,006 National Medical Enterprises . . . . . . . 112
2,075 McKesson . . . . . . . . . . . . . . . . . 112
3,141 Westvaco . . . . . . . . . . . . . . . . . 112
4,194 Service Corp . . . . . . . . . . . . . . . 110
2,391 Reynolds Metals. . . . . . . . . . . . . . 108
1,964 Lotus Development. . . . . . . . . . . . . 108
4,096 Cyprus Amax Minerals . . . . . . . . . . . 106
5,242 * Kroger . . . . . . . . . . . . . . . . . . 105
2,348 Stanley Works. . . . . . . . . . . . . . . 104
3,730 * ALZA . . . . . . . . . . . . . . . . . . . 104
6,140 Praxair . . . . . . . . . . . . . . . . . 102
1,830 Alco Standard. . . . . . . . . . . . . . . 100
2,884 Ashland Oil. . . . . . . . . . . . . . . . 98
7,752 * Unisys . . . . . . . . . . . . . . . . . . 98
3,430 Gerber . . . . . . . . . . . . . . . . . . 97
5,253 Pall . . . . . . . . . . . . . . . . . . . 97
2,104 Harris . . . . . . . . . . . . . . . . . . 96
3,829 Cooper Tire. . . . . . . . . . . . . . . . 96
3,274 TJX. . . . . . . . . . . . . . . . . . . . 95
1,793 Johnson Controls . . . . . . . . . . . . . 95
5,352 Ethyl. . . . . . . . . . . . . . . . . . . 94
1,528 PACCAR . . . . . . . . . . . . . . . . . . 94
2,479 Parker Hannifin. . . . . . . . . . . . . . 94
1,067 Brown-Forman (Class B) . . . . . . . . . . 93
2,785 Echlin . . . . . . . . . . . . . . . . . . 93
4,212 Circuit City Stores. . . . . . . . . . . . 92
1,718 Cummins Engine . . . . . . . . . . . . . . 92
4,758 Moore. . . . . . . . . . . . . . . . . . . 91
3,949 Liz Claiborne. . . . . . . . . . . . . . . 90
1,985 Kerr-McGee . . . . . . . . . . . . . . . . 90
2,387 Northrop . . . . . . . . . . . . . . . . . 89
1,660 Armstrong World. . . . . . . . . . . . . . 88
2,992 Avery Dennison . . . . . . . . . . . . . . 88
4,304 * Bethlehem Steel. . . . . . . . . . . . . . 88
4,233 shs. Worthington Industries . . . . . . . . . . $ 87
4,755 Maytag . . . . . . . . . . . . . . . . . . 86
5,273 * National Semiconductor . . . . . . . . . . 85
1,888 * Varity . . . . . . . . . . . . . . . . . . 84
2,087 Dial . . . . . . . . . . . . . . . . . . . 84
4,846 Wendys . . . . . . . . . . . . . . . . . . 84
4,763 Pet. . . . . . . . . . . . . . . . . . . . 83
1,820 * Owens-Corning. . . . . . . . . . . . . . . 81
4,439 Brunswick. . . . . . . . . . . . . . . . . 80
4,582 Oryx Energy. . . . . . . . . . . . . . . . 79
4,801 Whitman. . . . . . . . . . . . . . . . . . 78
2,057 Raychem. . . . . . . . . . . . . . . . . . 77
4,307 * Advanced Micro Devices . . . . . . . . . . 76
3,229 * Navistar . . . . . . . . . . . . . . . . . 76
2,877 Pep Boys . . . . . . . . . . . . . . . . . 76
2,918 Giant Food . . . . . . . . . . . . . . . . 75
1,951 Perkin-Elmer . . . . . . . . . . . . . . . 75
3,895 James River. . . . . . . . . . . . . . . . 75
3,795 Black & Decker . . . . . . . . . . . . . . 75
1,933 Snap-on Tools. . . . . . . . . . . . . . . 73
2,780 Teledyne . . . . . . . . . . . . . . . . . 72
1,975 Merchantile Stores . . . . . . . . . . . . 72
3,149 Allergan . . . . . . . . . . . . . . . . . 71
858 Briggs & Stratton. . . . . . . . . . . . . 71
2,609 McDermott International. . . . . . . . . . 69
1,458 * FMC. . . . . . . . . . . . . . . . . . . . 69
1,524 Ecolab . . . . . . . . . . . . . . . . . . 69
1,709 Louisiana Land & Exploration . . . . . . . 69
5,260 Echo Bay Mines . . . . . . . . . . . . . . 68
1,995 Polaroid . . . . . . . . . . . . . . . . . 67
2,745 Manor Care . . . . . . . . . . . . . . . . 67
2,643 C. R. Bard . . . . . . . . . . . . . . . . 67
4,180 Rite Aid . . . . . . . . . . . . . . . . . 66
1,391 Potlatch . . . . . . . . . . . . . . . . . 66
1,927 Foster Wheeler . . . . . . . . . . . . . . 65
1,947 * Inland Steel Industries. . . . . . . . . . 64
2,512 National Services Industries . . . . . . . 64
1,796 General Signal . . . . . . . . . . . . . . 62
1,336 Autodesk . . . . . . . . . . . . . . . . . 60
5,526 * Tandem Computers . . . . . . . . . . . . . 60
2,628 United States Surgical . . . . . . . . . . 59
2,485 Bemis. . . . . . . . . . . . . . . . . . . 59
4,876 Charming Shoppes . . . . . . . . . . . . . 58
5,620 * Biomet . . . . . . . . . . . . . . . . . . 58
1,324 E-Systems. . . . . . . . . . . . . . . . . 57
572 * Computer Sciences. . . . . . . . . . . . . 57
1,480 * King World Productions . . . . . . . . . . 57
1,721 Scientific Atlanta . . . . . . . . . . . . 57
1,302 Centex . . . . . . . . . . . . . . . . . . 55
1,991 St. Jude Medical . . . . . . . . . . . . . 53
3,930 * Beverly Enterprises. . . . . . . . . . . . 52
994 * Clark Equipment. . . . . . . . . . . . . . 52
1,309 Grumman. . . . . . . . . . . . . . . . . . 52
877 Thomas & Betts . . . . . . . . . . . . . . 51
2,751 shs. EG&G . . . . . . . . . . . . . . . . . . . $ 51
2,208 ASARCO . . . . . . . . . . . . . . . . . . 51
1,785 Russell. . . . . . . . . . . . . . . . . . 50
1,496 Timken . . . . . . . . . . . . . . . . . . 50
1,967 Fleming Companies. . . . . . . . . . . . . 49
2,104 * Shoney's . . . . . . . . . . . . . . . . . 49
2,010 Fleetwood. . . . . . . . . . . . . . . . . 48
2,233 Federal Paper Board. . . . . . . . . . . . 47
1,539 Ball . . . . . . . . . . . . . . . . . . . 47
2,349 Jostens. . . . . . . . . . . . . . . . . . 46
1,478 TRINOVA. . . . . . . . . . . . . . . . . . 46
2,808 Safety-Kleen . . . . . . . . . . . . . . . 46
1,256 Pulte. . . . . . . . . . . . . . . . . . . 46
1,959 Ogden. . . . . . . . . . . . . . . . . . . 45
2,269 * Ceridian . . . . . . . . . . . . . . . . . 43
1,596 A & P. . . . . . . . . . . . . . . . . . . 43
1,077 B. F. Goodrich . . . . . . . . . . . . . . 43
1,729 Kaufman & Broad. . . . . . . . . . . . . . 41
958 Millipore. . . . . . . . . . . . . . . . . 38
4,221 Santa Fe Energy Resources. . . . . . . . . 38
2,302 Stride Rite. . . . . . . . . . . . . . . . 38
941 Meredith . . . . . . . . . . . . . . . . . 38
1,925 Alexander & Alexander. . . . . . . . . . . 38
1,503 Crane. . . . . . . . . . . . . . . . . . . 37
1,426 Giddings & Lewis . . . . . . . . . . . . . 37
4,001 * Rowan. . . . . . . . . . . . . . . . . . . 36
6,542 * Maxus Energy . . . . . . . . . . . . . . . 36
1,463 Boise Cascade. . . . . . . . . . . . . . . 34
1,362 Morrison-Knudsen . . . . . . . . . . . . . 34
1,461 Alberto Culver . . . . . . . . . . . . . . 34
972 Brown Group. . . . . . . . . . . . . . . . 34
3,771 Bruno's. . . . . . . . . . . . . . . . . . 33
5,480 Amdahl . . . . . . . . . . . . . . . . . . 33
3,380 Stone Container. . . . . . . . . . . . . . 33
1,414 Luby's Cafeterias. . . . . . . . . . . . . 32
1,452 John H. Harland. . . . . . . . . . . . . . 31
1,393 Harnischfeger. . . . . . . . . . . . . . . 31
5,143 * Armco. . . . . . . . . . . . . . . . . . . 31
1,272 Tektronix. . . . . . . . . . . . . . . . . 30
1,162 Cray Research. . . . . . . . . . . . . . . 30
1,346 Cincinnati Milacron. . . . . . . . . . . . 30
897 Longs Drug Stores. . . . . . . . . . . . . 29
764 * Andrew . . . . . . . . . . . . . . . . . . 29
1,888 Community Psychiatric
Centers . . . . . . . . . . . . . . . 26
923 Helmerich & Payne. . . . . . . . . . . . . 26
2,385 * Intergraph . . . . . . . . . . . . . . . . 25
1,557 Coors. . . . . . . . . . . . . . . . . . . 25
685 Bassett Furniture. . . . . . . . . . . . . 24
2,563 * Ryan's Family Steak Houses . . . . . . . . 23
907 Shared Medical Systems . . . . . . . . . . 23
381 Nacco Industries . . . . . . . . . . . . . 20
807 Outboard Marine. . . . . . . . . . . . . . 18
923 Oshkosh B'Gosh . . . . . . . . . . . . . . 18
469 shs. Springs Industries . . . . . . . . . . . . $ 18
1,316 Handleman. . . . . . . . . . . . . . . . . 17
2,043 Bally Manufacturing. . . . . . . . . . . . 17
1,823 * Data General . . . . . . . . . . . . . . . 17
2,866 Rollins Environmental
Services. . . . . . . . . . . . . . . 16
431 Zurn Industries. . . . . . . . . . . . . . 12
1,677 * Hartmarx . . . . . . . . . . . . . . . . . 12
1,665 * Zenith Electronics . . . . . . . . . . . . 12
868 First Mississippi. . . . . . . . . . . . . 11
1,288 * M/A-COM. . . . . . . . . . . . . . . . . . 11
786 * National Intergroup. . . . . . . . . . . . 10
388 Skyline. . . . . . . . . . . . . . . . . . 8
418 SPX. . . . . . . . . . . . . . . . . . . . 7
1,257 * Genesco. . . . . . . . . . . . . . . . . . 7
956 Fedders. . . . . . . . . . . . . . . . . . 6
955 * National Education . . . . . . . . . . . . 6
Total Industrial 118,116
UTILITIES-10.9%
44,761 GTE. . . . . . . . . . . . . . . . . . . . 1,567
23,528 BellSouth. . . . . . . . . . . . . . . . . 1,362
20,764 Bell Atlantic. . . . . . . . . . . . . . . 1,225
28,508 Southwestern Bell. . . . . . . . . . . . . 1,183
19,789 Pacific Telesis. . . . . . . . . . . . . . 1,069
12,955 Ameritech. . . . . . . . . . . . . . . . . 994
20,886 U.S. West. . . . . . . . . . . . . . . . . 958
19,660 NYNEX. . . . . . . . . . . . . . . . . . . 789
20,582 Pacific Gas & Electric . . . . . . . . . . 723
15,132 Southern Company . . . . . . . . . . . . . 668
10,625 Texas Utilities. . . . . . . . . . . . . . 460
21,316 SCE. . . . . . . . . . . . . . . . . . . . 426
9,720 Duke Power . . . . . . . . . . . . . . . . 412
10,967 Entergy. . . . . . . . . . . . . . . . . . 395
11,483 Public Service Enterprise. . . . . . . . . 367
7,888 Dominion Resources . . . . . . . . . . . . 358
11,121 Consolidated Edison. . . . . . . . . . . . 357
8,893 FPL Group. . . . . . . . . . . . . . . . . 348
11,348 Enron. . . . . . . . . . . . . . . . . . . 329
8,821 American Electric Power. . . . . . . . . . 327
10,565 Philadelphia Electric. . . . . . . . . . . 320
6,378 Houston Industries . . . . . . . . . . . . 304
10,127 Commonwealth Edison. . . . . . . . . . . . 286
8,961 Central & South West . . . . . . . . . . . 271
13,229 PacifiCorp . . . . . . . . . . . . . . . . 255
7,182 Carolina Power & Light . . . . . . . . . . 216
7,056 Detroit Edison . . . . . . . . . . . . . . 212
4,376 Consolidated Natural Gas . . . . . . . . . 206
4,824 Union Electric . . . . . . . . . . . . . . 189
6,870 BG&E . . . . . . . . . . . . . . . . . . . 174
7,291 Ohio Edison. . . . . . . . . . . . . . . . 166
5,115 Coastal. . . . . . . . . . . . . . . . . . 144
3,211 Northern States Power. . . . . . . . . . . 138
T. Rowe Price Equity Index Fund / Statement of Net Assets
UTILITIES (Cont'd)
6,709 shs. Niagara Mohawk . . . . . . . . . . . . . . $ 136
5,659 Panhandle Eastern. . . . . . . . . . . . . 134
4,830 Williams Companies . . . . . . . . . . . . 118
3,874 Sonat. . . . . . . . . . . . . . . . . . . 112
3,977 Pacific Enterprise . . . . . . . . . . . . 94
2,777 PSI Resources. . . . . . . . . . . . . . . 74
2,378 NICOR. . . . . . . . . . . . . . . . . . . 67
3,117 ENSERCH. . . . . . . . . . . . . . . . . . 51
1,630 Peoples Energy . . . . . . . . . . . . . . 50
5,967 Arkla. . . . . . . . . . . . . . . . . . . 47
1,990 * Columbia Gas System. . . . . . . . . . . . 45
1,768 Transco Energy . . . . . . . . . . . . . . 25
1,296 ONEOK. . . . . . . . . . . . . . . . . . . 24
645 Eastern Enterprises. . . . . . . . . . . . 16
Total Utilities 18,191
FINANCIAL-10.3%
15,092 American International Group . . . . . . . 1,324
12,933 Fannie Mae . . . . . . . . . . . . . . . . 1,015
16,976 BankAmerica. . . . . . . . . . . . . . . . 787
23,042 American Express . . . . . . . . . . . . . 711
17,780 * Citicorp . . . . . . . . . . . . . . . . . 653
16,258 BANC ONE . . . . . . . . . . . . . . . . . 636
9,118 J. P. Morgan . . . . . . . . . . . . . . . 633
12,788 NationsBank. . . . . . . . . . . . . . . . 627
11,943 Chemical Banking . . . . . . . . . . . . . 479
4,251 General Re . . . . . . . . . . . . . . . . 455
8,494 Freddie Mac. . . . . . . . . . . . . . . . 424
9,962 Merrill Lynch. . . . . . . . . . . . . . . 418
9,693 Primerica. . . . . . . . . . . . . . . . . 377
13,752 Norwest. . . . . . . . . . . . . . . . . . 335
7,990 First Union. . . . . . . . . . . . . . . . 330
11,134 PNC Financial. . . . . . . . . . . . . . . 323
2,429 Wells Fargo. . . . . . . . . . . . . . . . 314
3,952 Chubb. . . . . . . . . . . . . . . . . . . 308
3,819 Bankers Trust New York . . . . . . . . . . 302
4,890 Aetna. . . . . . . . . . . . . . . . . . . 295
8,699 Chase Manhattan. . . . . . . . . . . . . . 295
10,282 American General . . . . . . . . . . . . . 294
8,122 Dean Witter, Discover. . . . . . . . . . . 281
8,200 Wachovia . . . . . . . . . . . . . . . . . 275
5,600 SunTrust . . . . . . . . . . . . . . . . . 252
3,896 First Interstate . . . . . . . . . . . . . 250
5,213 Salomon. . . . . . . . . . . . . . . . . . 248
3,008 * CNA Financial. . . . . . . . . . . . . . . 233
7,737 NBD Bancorp. . . . . . . . . . . . . . . . 228
6,475 Fleet Financial Group. . . . . . . . . . . 216
3,413 CIGNA. . . . . . . . . . . . . . . . . . . 214
6,877 Travelers. . . . . . . . . . . . . . . . . 214
3,584 Transamerica . . . . . . . . . . . . . . . 203
2,222 St. Paul Companies . . . . . . . . . . . . 200
4,538 shs. Barnett Banks. . . . . . . . . . . . . . . $ 188
4,226 Lincoln National . . . . . . . . . . . . . 184
4,173 First Chicago. . . . . . . . . . . . . . . 180
4,818 Capital Holding. . . . . . . . . . . . . . 179
3,916 First Fidelity . . . . . . . . . . . . . . 178
3,013 SAFECO . . . . . . . . . . . . . . . . . . 166
3,125 Mellon Bank. . . . . . . . . . . . . . . . 166
3,483 Torchmark. . . . . . . . . . . . . . . . . 157
4,680 Household International. . . . . . . . . . 153
4,466 MBNA . . . . . . . . . . . . . . . . . . . 149
4,946 Boatmen's Bancshares . . . . . . . . . . . 148
5,520 CoreStates Financial . . . . . . . . . . . 144
6,397 Great Western Financial. . . . . . . . . . 128
4,905 U.S. Bancorp . . . . . . . . . . . . . . . 123
3,018 Golden West Financial. . . . . . . . . . . 118
2,498 Jefferson Pilot. . . . . . . . . . . . . . 117
5,044 Bank of Boston . . . . . . . . . . . . . . 116
5,748 H. F. Ahmanson . . . . . . . . . . . . . . 113
4,458 Shawmut National . . . . . . . . . . . . . 97
2,096 Beneficial . . . . . . . . . . . . . . . . 80
2,643 Continental. . . . . . . . . . . . . . . . 73
4,028 USF&G. . . . . . . . . . . . . . . . . . . 59
1,288 USLIFE . . . . . . . . . . . . . . . . . . 49
Total Financial 17,214
TRANSPORTATION-2.0%
9,729 Union Pacific. . . . . . . . . . . . . . . 609
6,804 Norfolk Southern . . . . . . . . . . . . . 480
4,613 CSX. . . . . . . . . . . . . . . . . . . . 374
3,824 Conrail. . . . . . . . . . . . . . . . . . 256
3,570 AMR. . . . . . . . . . . . . . . . . . . . 239
4,085 Burlington Northern. . . . . . . . . . . . 236
8,630 Santa Fe Pacific . . . . . . . . . . . . . 192
2,652 * Federal Express. . . . . . . . . . . . . . 188
1,152 * UAL. . . . . . . . . . . . . . . . . . . . 168
2,491 Delta. . . . . . . . . . . . . . . . . . . 136
1,782 Roadway Services . . . . . . . . . . . . . 107
3,633 Ryder System . . . . . . . . . . . . . . . 96
1,792 Pittston Services. . . . . . . . . . . . . 52
1,790 * Consolidated Freightways . . . . . . . . . 42
2,876 * USAir. . . . . . . . . . . . . . . . . . . 37
1,196 Yellow Corp. . . . . . . . . . . . . . . . 30
Total Transportation 3,242
Total Common Stocks (Cost-$139,850) 156,763
Short-Term Investments-3.1%
CERTIFICATES OF DEPOSIT-0.6%
$1,000,000 Commerzbank, AG,
3.43%, 3/25/94. . . . . . . . . 1,000
COMMERCIAL PAPER-1.9%
2,000,000 PPG Holdings B.V.,
3.35%, 2/2/94 . . . . . . . . . 1,986
$1,186,000 BT Securities, 3.25%, 1/3/94 . . . . . $ 1,186
3,172
U.S. GOVERNMENT OBLIGATIONS-0.6%
1,000,000 United States Treasury
Bills, 3.205%, 2/3/94 . . . . . 983
Total Short-Term Investments (Cost-$5,155) 5,155
Total Investments in Securities -
97.0% (Cost-$145,005) $161,918
Other Assets Less Liabilities-3.0% $ 5,076
Net Assets Consisting of:
Accumulated realized gains/losses
-net of distributions . . . . . . . . . . . . . . . . $ 383
Unrealized appreciation of
investments . . . . . . . . . . . . . . . . . . . . . 16,914
Paid-in-capital applicable to
12,387,013 shares of $0.01 par
value capital stock outstanding;
1,000,000,000 shares authorized . . . . . . . . . . . 149,697
_________
Net Assets-100.0% $166,994
_________
_________
Net Asset Value Per Share $13.48
______
______
*Non-income producing
Statement of Operations
T. Rowe Price Equity Index Fund / Year Ended December 31, 1993
Amounts in Thousands
_______________________
INVESTMENT INCOME
Income
Dividends. . . . . . . . . . . . . . . . . . . . $ 3,857
Interest . . . . . . . . . . . . . . . . . . . . 317
________
Total income $ 4,174
Expenses
Shareholder servicing fees & expenses. . . . . . 390
Custodian and accounting fees & expenses . . . . 150
Registration fees & expenses . . . . . . . . . . 40
Prospectus & shareholder reports . . . . . . . . 29
Legal & auditing fees. . . . . . . . . . . . . . 28
Directors' fees & expenses . . . . . . . . . . . 9
Miscellaneous. . . . . . . . . . . . . . . . . . 34
Less: Expenses reimbursed by Manager . . . . . . (20)
________
Total expenses 660
_______
Net investment income 3,514
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain
Securities . . . . . . . . . . . . . . . . . . . 406
Futures. . . . . . . . . . . . . . . . . . . . . 222
________
Net realized gain 628
Change in unrealized
appreciation or depreciation . . . . . . . . 8,882
________
Net gain on investments. . . . . . . . . . . . . . 9,510
_______
INCREASE IN NET ASSETS FROM OPERATIONS . . . . . . $13,024
_______
_______
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Equity Index Fund
Year Ended December 31,
1993 1992
___________ ___________
Amounts in Thousands
________________________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income . . . . . . . . . . . . $ 3,514 $ 1,406
Net realized gain on investments. . . . . . . 628 101
Change in unrealized
appreciation or depreciation
of investments . . . . . . . . . . . . . . 8,882 5,376
_________ ________
Increase in net
assets from operations. . . . . . . . . . . . 13,024 6,883
_________ ________
Distributions to shareholders
Net investment income . . . . . . . . . . . . (3,571) (1,496)
Net realized gain on investments. . . . . . . (163) (21)
_________ ________
Decrease in net assets from
distributions to shareholders . . . . . . . . (3,734) (1,517)
_________ ________
Capital share transactions
Sold 5,497 and 9,132 shares . . . . . . . . . 71,701 110,353
Distributions reinvested of
272 and 117 shares. . . . . . . . . . . . . 3,592 1,445
Redeemed 3,538 and 918 shares . . . . . . . . (45,888) (11,193)
_________ ________
Increase in net assets from capital
share transactions. . . . . . . . . . . . . . 29,405 100,605
_________ ________
Net equalization . . . . . . . . . . . . . . . 57 202
_________ ________
Total increase . . . . . . . . . . . . . . . . 38,752 106,173
NET ASSETS
Beginning of year . . . . . . . . . . . . . . 128,242 22,069
________ ________
End of year . . . . . . . . . . . . . . . . . $166,994 $128,242
________ ________
________ ________
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T.Rowe Price Equity Index Fund / December 31, 1993
Note 1 - Significant Accounting Policies
T. Rowe Price Equity Index Fund is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange (including NASDAQ) are valued at the last quoted sales price on the
day the valuations are made. A security which is listed or traded on more than
one exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Other equity securities and those listed
securities that are not traded on a particular day are valued at a price
within the limits of the latest bid and asked prices deemed by the Board of
Directors, or by persons delegated by the Board, best to reflect fair value.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value. Financial futures contracts are
valued at closing settlement prices.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by, or under the supervision of, the officers of
the Fund, as authorized by the Board of Directors.
B) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on an identified cost basis. Payments ("variation margin") made
or received by the Fund, dependent on the daily fluctuations in the value of
futures contracts, are recorded as unrealized gains or losses until the
contracts are closed. Dividend income and distributions to shareholders are
recorded by the Fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles.
The Fund follows the practice of equalization under which undistributed
net investment income per share is unaffected by Fund shares sold or redeemed.
C) Accounting Change - Effective as of the beginning of the year, the Fund
adopted a recently issued accounting standard related to shareholder
distributions. This change resulted in a reclassification to paid-in-capital
of permanent differences between tax and financial reporting of net investment
income and net realized gains/losses. The cumulative effect of this change as
of December 31, 1992 decreased Accumulated net investment income-net of
distributions by $123,000, decreased Accumulated realized gains/losses-net of
distributions by $82,000, and increased Paid-in-capital by $205,000. The
results of operations and net assets were not affected by this change.
Note 2 - Financial Instruments
As a part of its investment program, the Fund utilizes futures contracts. The
nature and risk of these contracts and the reasons for using them are set
forth more fully in the Fund's Prospectus and Statement of Additional
Information.
A futures contract provides for the future sale by one party and
purchase by another party of a specified amount of a specific financial
instrument at a specified price, date, time and place designated at the time
the contract is made. Risks arise from the possible illiquidity of the futures
market and from movements in security values. At December 31, 1993, the Fund
had a long position in 43 Standard & Poor's 500 Stock Index Futures which
expire in March, 1994 and which have a contract value of $10,038,000. Net
unrealized appreciation of $2,000 on these contracts at December 31, 1993, is
included in the accompanying financial statements. U.S. Treasury securities
having a market value of $531,000 were pledged as initial margin on these
contracts.
Purchases and sales of portfolio securities, other than short-term and
U.S. Government securities, aggregated $27,978,000 and $1,159,000,
respectively, for the year ended December 31, 1993.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the Fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
At December 31, 1993, the aggregate cost of investments for federal
income tax and financial reporting purposes was $145,005,000 and net
unrealized appreciation aggregated $16,913,000, of which $22,400,000 related
to appreciated investments and $5,487,000 to depreciated investments.
Note 4 - Related Party Transactions
The investment management agreement between the Fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management
fee, computed daily and paid monthly, equal to 0.20% of average daily net
assets.
Under the terms of the investment management agreement, the Manager is
required to bear any expenses through December 31, 1993, which would cause the
Fund's ratio of expenses to average net assets to exceed .45%. Thereafter, the
Fund is required to reimburse the Manager for these expenses, provided average
net assets have grown or expenses have declined sufficiently so as not to
cause the Fund's ratio of expenses to average net assets to exceed .45% in any
month, and that no such reimbursement shall be made to the Manager after
December 31, 1995. Pursuant to this agreement, $293,000 of management fees
were not accrued by the Fund for the year ended December 31, 1993, and $20,000
of other expenses were borne by the Manager. Additionally, $338,000 of
unaccrued fees and expenses remain subject to future reimbursement. Pursuant
to a previous agreement, $421,000 of unaccrued fees and expenses from
1990-1991 have been permanently waived.
T. Rowe Price Services, Inc. (TRPS) and Retirement Plan Services, Inc.
(RPS) are wholly owned subsidiaries of the Manager. TRPS provides transfer and
dividend disbursing agent functions and shareholder services for all accounts.
RPS provides subaccounting and recordkeeping services for certain retirement
accounts invested in the Fund. The Manager, under a separate agreement,
calculates the daily share price and maintains the financial records of the
Fund. For the year ended December 31, 1993, the Fund incurred fees totalling
approximately $374,000 for these services provided by related parties. At
December 31, 1993, these service fees payable were $33,000.
Financial Highlights
T. Rowe Price Equity Index Fund
For a share outstanding through each period
______________________________________________
March 30, 1990
(Commencement of
Year Ended December 31, Operations) to
___________________________ December 31,
1993 1992 1991 1990
______________________________________________
NET ASSET VALUE,
BEGINNING OF PERIOD . . . . $12.63 $12.10 $ 9.72 $10.00
______ ______ ______ ______
Investment Activities
Net investment income . . . 0.32* 0.32* 0.34* 0.31*
Net realized and
unrealized gain
(loss) . . . . . . . . . . 0.86 0.53 2.46 (0.28)
______ ______ ______ ______
Total from
Investment Activities . . . 1.18 0.85 2.80 0.03
Distributions
Net investment income . . . (0.32) (0.31) (0.34) (0.31)
Net realized gain . . . . . (0.01) (0.01) (0.08) 0.00
______ ______ ______ ______
Total Distributions. . . . . (0.33) (0.32) (0.42) (0.31)
______ ______ ______ ______
NET ASSET VALUE,
END OF PERIOD . . . . . . . $13.48 $12.63 $12.10 $ 9.72
______ ______ ______ ______
______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . 9.4% 7.2% 29.2% 0.4%#
Ratio of Expenses to
Average Net Assets. . . . . 0.45%* 0.45%* 0.45%* 0.45%*
Ratio of Net Investment
Income to Average
Net Assets. . . . . . . . . 2.40% 2.57% 3.07% 4.28%
Portfolio Turnover
Rate. . . . . . . . . . . . 0.8% 0.1% 5.8% 7.0%
Net Assets, End of Period
(in thousands) . . . . . . $166,994 $128,242 $22,069 $7,285
# Annualized
* Excludes expenses in excess of a 0.45% voluntary expense limitation in
effect through December 31, 1993.
Report of Independent Accountants
To the Shareholders and Board of Directors of
T. Rowe Price Equity Index Fund
We have audited the accompanying statement of net assets of T. Rowe
Price Equity Index Fund, Inc. as of December 31, 1993, and the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the three years in the period then ended and
for the period March 30, 1990 (commencement of operations) to December 31,
1990. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of December 31, 1993 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of T. Rowe Price Equity Index Fund, Inc. as of December 31, 1993, the
results of its operations, the changes in its net assets and financial
highlights for each of the respective periods stated in the first paragraph in
conformity with generally accepted accounting principles.
Coopers & Lybrand
Baltimore, Maryland
January 19, 1994
Officers and Directors
Richard T. Whitney, President
Leo C. Bailey, Director
James S. Riepe, Vice President/Director
Paul M. Wythes, Director
Kristen D. Farrow, Vice President
Jonathan M. Greene, Vice President
Henry H. Hopkins, Vice President
Alan R. Stuart, Vice President
Lenora V. Hornung, Secretary
Carmen F. Deyesu, Treasurer
David S. Middleton, Controller
Chart 1-Performance Comparison
A line graph compares the 12/31/93 value of a hypothetical $10,000 investment
made in the Equity Index Fund at its inception (3/31/90) and a similar
investment made concurrently in the S&P 500. At 12/31/93, the Fund investment
would have been worth $15,202, the Index investment would have been worth
$15,483.