Annual Report
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and current balance, 24 hours,
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T. Rowe Price
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price Equity Index
Fund.
T. Rowe Price
Equity Index Fund
December 31, 1994
Fellow Shareholders
The Equity Index Fund eked out a gain for 1994. Like the unmanaged Standard &
Poor's 500 Stock Index, which your Fund closely tracks, the 12-month return
was positive only because dividend income more than offset the decline in
price.
The Fund tracked the S&P 500 closer than usual this year because of two
related factors: increased assets and opportune trading. Fund assets grew
significantly in 1994, and larger size allows an index fund to more accurately
match S&P 500 portfolio weightings. We were also able to capitalize on several
inflows of cash that coincided with attractive investment opportunities.
Performance Comparison
Periods Ended 12/31/94
3 Months 12 Months
_____________________
Equity Index Fund -0.1% 1.0%
S&P 500 0.0 1.3
Year-End Distributions
Your Board of Directors declared a fourth quarter dividend of $0.10 per share,
a short-term capital gain of $0.04, and a long-term capital gain of $0.08. All
three distributions were paid on December 29 to shareholders of record on
December 27. You should already have received a check or statement reflecting
these distributions as well as your Form 1099-DIV reporting them for tax
purposes.
Market Review
The Federal Reserve's ongoing battle to keep inflation from accelerating
dominated the 1994 financial markets. A sharp November hike in the target for
the federal funds rate (three-quarters of a percentage point) capped a year of
rising interest rates.
The economy was surprisingly strong in 1994: gross domestic product
growth exceeded expectations and inflation remained subdued. Corporate
earnings grew more than 20%, and productivity gains were impressive. Such
positive factors would normally have been a recipe for strong stock returns,
but a sharp rise in interest rates neutralized their effect.
In one of the year's more interesting themes, larger companies performed
better than their smaller counterparts for the first time in several years.
Furthermore, the largest of the large-cap issues were the best performers. By
mirroring the S&P 500, your Fund was well positioned to benefit from this
trend because of the large-cap orientation of the Index. Actively managed
portfolios, which make up the majority of the stock mutual fund universe, tend
to weight small companies more heavily than does the S&P 500, so this was also
the first year since 1990 that the average Lipper equity fund lagged the S&P
500.
In general, growth stocks outperformed value stocks in 1994. The
S&P/Barra Growth Index returned 3.1% for the year, while the S&P/Barra Value
Index declined by 0.6%.
Technology was by far the best performing sector in 1994, followed by
certain natural resource industries such as aluminum, chemicals, and oil.
Technology stocks rode a powerful wave of product upgrades, increased
penetration of new products into everyday life, and positive investor
sentiment. Trailing the broader market were the utility, transportation, and
certain consumer-oriented industries. Electric utilities were especially weak,
as these companies wilted in the face of higher interest rates and a more
hostile regulatory environment. Airline stocks were punished when the industry
plunged into an expensive effort to meet Southwest Air's low prices. Retailers
and restaurants were weak as sales failed to meet expectations.
Returns by Market Sector
Three Months Ended
12/31/94
________________
Technology 6.3%
Consumer Nondurables 2.6
Health Care 2.3
Energy 0.7
Capital Equipment 0.3
Consumer Services - 2.1
Consumer Cyclicals - 2.2
Miscellaneous - 3.0
Financial - 4.0
Utilities - 4.2
Business Services & Transportation - 5.8
Process Industries - 6.4
Basic Materials -11.5
Sizable foreign exposure benefited many S&P 500 companies this year. The
U.S. dollar was weak versus several major foreign currencies, declining by
more than 10% against the yen, mark, and Swiss franc. A decline in the dollar
versus the yen, for example, means that income earned in yen converts to more
dollars, boosting corporate profits. A weak dollar also makes U.S. exports
more competitive, and investors reacted favorably toward the companies likely
to benefit.
Portfolio Review
Despite a relatively active year in the merger and acquisition business,
turnover in the S&P Index remained low. Low turnover benefits Fund
shareholders because capital gain distributions are minimized. We sold only
1.3% of the Fund's portfolio during the year as a result of deletions from the
S&P 500 Index. The largest of the 17 companies removed was McCaw Cellular
(acquired by AT&T); other well-known companies that were merged or acquired
included BLOCKBUSTER Entertainment, American Cyanamid, and UAL (the parent of
United Airlines).
The most important change was the addition of Microsoft to the S&P
Index. Microsoft, which entered as the tenth largest company, was previously
excluded because too much of its stock was privately held. Other large
additions included Viacom, Airtouch Communications (a spin-off from PacTel),
and United HealthCare.
Derivatives drew major attention in 1994, as well-publicized losses at a
number of major corporations (and in Orange County, California) were blamed on
derivative investments gone awry. Unfortunately, derivatives became a
convenient scapegoat whose vilification obscured the true problem: underlying
investment strategies that were inappropriate for a particular client or
situation. In our previous reports, we have discussed how your Fund uses index
futures to help manage cash flow and thereby reduce costs. Our straightforward
approach uses S&P 500 Index futures as a temporary substitute for actual stock
purchase, and it is an indispensable feature of index fund management.
Outlook
As widely predicted, the 1990s have thus far differed from the previous
decade, at least in terms of stock market performance. From 1980 to 1989, the
S&P 500 Index returned an average of 15% per year, while, in the past five
years, it delivered only a 8.7% annualized return.
We expect stock market returns to remain modest at least through early
1995. The strong economic momentum seen last year is not likely to slow
immediately, and we expect further fed funds rate increases until the economy
slows noticeably. Stocks could languish until such a scenario plays out, but
we believe the subpar performance of the past few years may set the stage for
better performance ahead.
Respectfully submitted,
Richard T. Whitney
President
January 20, 1995
Twenty-Five Largest Holdings
December 31, 1994
Percent of
Net Assets
__________
GE 2.3%
AT&T 2.0
Exxon 2.0
Coca-Cola 1.7
Royal Dutch Petroleum 1.5
Philip Morris 1.3
Wal-Mart 1.3
Merck 1.2
IBM 1.1
Procter & Gamble 1.1
DuPont 1.0
Microsoft 0.9
Johnson & Johnson 0.9
Motorola 0.9
Mobil 0.9
GM 0.8
American International Group 0.8
Bristol-Myers Squibb 0.8
Amoco 0.8
Chevron 0.8
GTE 0.8
PepsiCo 0.7
Ford Motor 0.7
BellSouth 0.7
Intel 0.7
Total 27.7%
Chart 1 - Equity Index Fund Performance Comparison
Fiscal-Year Performance
Periods ended December 31, 1994
1 Year Since Inception on 3/30/90*
________ ____________________________
1.01% 9.44%
*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.
Total returns do not reflect the deduction of a $10 annual account maintenance
fee.
Contributions to the Change in Net Asset Value Per Share
Three Months Ended December 31, 1994
____________________________________________________________________________
TEN BEST CONTRIBUTORS
GE 2(cents)
Exxon 2
Disney 1
Coca-Cola 1
Microsoft 1
Hewlett-Packard 1
Motorola 1
Merck 1
American International Group 1
Pfizer 1
Total 12(cents)
_________________________________________________________________
TEN WORST CONTRIBUTORS
AT&T - 2(cents)
Wal-Mart 2
MCI 2
GM 1
Sprint 1
Philip Morris 1
Dow Chemical 1
Columbia/HCA Healthcare 1
K mart 1
BANC ONE 0
_________________________________________________________________
Total -12(cents)
Twelve Months Ended December 31, 1994
_________________________________________________________________
TEN BEST CONTRIBUTORS
IBM 3(cents)
Coca-Cola 2
Motorola 2
DuPont 2
Johnson & Johnson 2
Hewlett-Packard 2
Microsoft 2
Oracle Systems 2
COMPAQ Computer 1
American Cyanamid 1
_________________________________________________________________
Total 19(cents)
TEN WORST CONTRIBUTORS
Pacific Telesis - 4(cents)
GM 3
Wal-Mart 3
MCI 2
U.S. WEST 2
Tele-Communications 2
Pacific Gas and Electric 2
GTE 2
Ford Motor 1
AT&T 1
_________________________________________________________________
Total - 22(cents)
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 12/31/94. 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 Annual
Taken in Cash Reinvested in Additional Shares Total Return
___________________________ ________________________________ On Investment
% Change
Periods Net Capital Capital _____________
Ended Asset Gain Income Gain Income Value of
12/31 Value Distribution2Dividend Distribution Dividend Investment Fund S&P 500
_______ ______ _____________________ ____________ ________ __________ ____ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
19901 $ 9.72 - $0.31 - $0.31 $10.03 0.3% 0.2%
1991 12.10 $0.08 0.34 $0.08 0.35 12.96 29.2 30.3
1992 12.63 0.01 0.31 0.01 0.34 13.89 7.2 7.6
1993 13.48 0.01 0.32 0.01 0.36 15.20 9.4 10.1
1994 13.09 0.16 0.36 0.19 0.41 15.36 1.0 1.3
Total $0.26 $1.64 $0.29 $1.77
<FN>
1From inception 3/30/90 to 12/31/90.
2Includes short-term capital gains of $0.05 in 1994.
</FN>
</TABLE>
Statement of Net Assets (Value in thousands)
T. Rowe Price Equity Index Fund / December 31, 1994
Common Stocks - 86.6%
INDUSTRIAL - 67.2%
Value
______
119,732 shs. GE . . . . . . . . . . . . . . . . $ 6,106
109,669 AT&T . . . . . . . . . . . . . . . 5,511
86,797 Exxon . . . . . . . . . . . . . . 5,273
90,122 Coke . . . . . . . . . . . . . . . 4,641
37,515 Royal Dutch Petroleum ADR. . . . . 4,033
60,074 Philip Morris. . . . . . . . . . . 3,454
160,622 Wal-Mart . . . . . . . . . . . . . 3,413
88,104 Merck. . . . . . . . . . . . . . . 3,359
40,762 IBM . . . . . . . . . . . . . . . 2,996
47,819 P&G . . . . . . . . . . . . . . . 2,965
47,524 DuPont . . . . . . . . . . . . . . 2,673
40,300 * Microsoft . . . . . . . . . . . . 2,463
44,918 Johnson & Johnson. . . . . . . . . 2,459
40,948 Motorola . . . . . . . . . . . . . 2,370
27,844 Mobil. . . . . . . . . . . . . . . 2,346
52,411 GM . . . . . . . . . . . . . . . . 2,214
35,549 Bristol-Myers Squibb . . . . . . . 2,057
34,713 Amoco. . . . . . . . . . . . . . . 2,052
45,580 Chevron. . . . . . . . . . . . . . 2,034
55,331 PepsiCo. . . . . . . . . . . . . . 2,006
70,514 Ford Motor . . . . . . . . . . . . 1,974
29,304 Intel . . . . . . . . . . . . . . 1,872
57,023 Abbott Laboratories . . . . . . . 1,860
17,826 Hewlett-Packard . . . . . . . . . 1,780
37,505 Disney . . . . . . . . . . . . . . 1,730
21,978 Pfizer . . . . . . . . . . . . . . 1,698
29,546 3M . . . . . . . . . . . . . . . . 1,577
31,512 Home Depot . . . . . . . . . . . . 1,450
49,112 McDonald's . . . . . . . . . . . . 1,437
20,410 Eli Lilly. . . . . . . . . . . . . 1,339
21,325 American Home Products . . . . . . 1,338
11,187 Unilever N.V. ADR . . . . . . . . 1,303
19,282 Dow Chemical . . . . . . . . . . . 1,297
24,740 Chrysler . . . . . . . . . . . . . 1,212
15,480 Gillette . . . . . . . . . . . . . 1,157
11,272 Atlantic Richfield . . . . . . . . 1,147
24,530 Sears. . . . . . . . . . . . . . . 1,128
23,864 Boeing . . . . . . . . . . . . . . 1,116
23,219 Eastman Kodak. . . . . . . . . . . 1,109
18,094 Texaco . . . . . . . . . . . . . . 1,083
34,389 * AirTouch Communications. . . . . . 1,002
13,406 Schering-Plough . . . . . . . . . 992
15,632 Emerson Electric . . . . . . . . . 977
18,456 Anheuser-Busch . . . . . . . . . . 939
26,493 Time Warner. . . . . . . . . . . . 931
22,644 * Viacom (Class B) . . . . . . . . . 920
10,760 Capital Cities/ABC . . . . . . . . 917
25,110 shs. Columbia/HCA Healthcare. . . . . . $ 917
15,675 Kellogg. . . . . . . . . . . . . . 911
33,829 WMX Technologies . . . . . . . . . 888
20,054 * Oracle Systems . . . . . . . . . . 885
40,397 * Tele-Communications
(Class A) . . . . . . . . . . . 879
47,530 MCI . . . . . . . . . . . . . . . 873
16,992 Schlumberger . . . . . . . . . . . 856
33,424 Sara Lee . . . . . . . . . . . . . 844
14,158 Caterpillar. . . . . . . . . . . . 780
17,494 Campbell . . . . . . . . . . . . . 772
26,053 Seagram. . . . . . . . . . . . . . 769
36,024 Archer Daniels Midland . . . . . . 743
16,414 J.C. Penney. . . . . . . . . . . . 732
7,359 Xerox. . . . . . . . . . . . . . . 729
9,344 Warner-Lambert . . . . . . . . . . 719
18,020 * COMPAQ Computer. . . . . . . . . . 712
19,814 AlliedSignal . . . . . . . . . . . 674
24,175 Sprint . . . . . . . . . . . . . . 668
7,441 ITT. . . . . . . . . . . . . . . . 659
8,701 International Paper. . . . . . . . 656
11,865 Dun & Bradstreet . . . . . . . . . 653
10,285 Colgate-Palmolive. . . . . . . . . 652
18,300 * cisco Systems. . . . . . . . . . . 643
17,432 Heinz . . . . . . . . . . . . . . 641
11,042 General Mills. . . . . . . . . . . 629
20,116 * Toys "R" Us . . . . . . . . . . . 614
9,419 Raytheon . . . . . . . . . . . . . 602
18,302 Phillips Petroleum . . . . . . . . 599
17,655 Northern Telecom . . . . . . . . . 589
17,342 May Department Stores. . . . . . . 585
8,217 Monsanto . . . . . . . . . . . . . 579
9,878 Automatic Data Processing. . . . . 578
11,282 Kimberly-Clark . . . . . . . . . . 570
19,769 Baxter International . . . . . . . 558
8,813 United Technologies. . . . . . . . 554
14,896 PPG Industries . . . . . . . . . . 553
10,335 CPC International . . . . . . . . 550
10,332 Gannett . . . . . . . . . . . . . 550
9,321 * Amgen. . . . . . . . . . . . . . . 550
15,303 RockWell . . . . . . . . . . . . . 547
11,265 Computer Associates. . . . . . . . 546
24,500 American Barrick Resources . . . . 545
17,389 ConAgra. . . . . . . . . . . . . . 543
12,000 United HealthCare. . . . . . . . . 542
14,402 Weyerhaeuser . . . . . . . . . . . 540
6,231 Alcoa . . . . . . . . . . . . . . 540
7,353 AMP. . . . . . . . . . . . . . . . 535
14,036 American Brands. . . . . . . . . . 526
17,744 Albertson's. . . . . . . . . . . . 515
11,900 Tenneco. . . . . . . . . . . . . . 506
6,451 Texas Instruments. . . . . . . . . 483
11,200 U. S. Healthcare . . . . . . . . . 462
16,929 shs. Unocal . . . . . . . . . . . . . . $ 461
15,402 Corning . . . . . . . . . . . . . 460
25,033 The Limited. . . . . . . . . . . . 454
8,098 Medtronic. . . . . . . . . . . . . 450
6,269 Georgia-Pacific. . . . . . . . . . 448
25,840 * Novell . . . . . . . . . . . . . . 443
21,821 Occidental Petroleum . . . . . . . 420
31,898 Kmart . . . . . . . . . . . . . . 415
5,112 Marsh & McLennan . . . . . . . . . 405
8,158 Wrigley. . . . . . . . . . . . . . 403
6,058 Deere. . . . . . . . . . . . . . . 401
15,703 Alcan Aluminum . . . . . . . . . . 398
2,784 McDonnell Douglas . . . . . . . . 395
14,198 UST. . . . . . . . . . . . . . . . 394
13,662 Browning-Ferris. . . . . . . . . . 388
5,169 NIKE . . . . . . . . . . . . . . . 386
11,000 Lowes. . . . . . . . . . . . . . . 382
8,616 Walgreen . . . . . . . . . . . . . 377
12,058 Upjohn . . . . . . . . . . . . . . 371
7,700 First Data . . . . . . . . . . . . 365
16,614 Placer Dome. . . . . . . . . . . . 361
7,743 International Flavors &
Fragrances. . . . . . . . . . 358
5,167 Scott Paper. . . . . . . . . . . . 357
5,031 Dayton Hudson. . . . . . . . . . . 356
10,552 Goodyear Tire & Rubber . . . . . . 355
7,919 Air Products and Chemicals . . . . 353
10,966 Pitney Bowes . . . . . . . . . . . 348
7,946 Illinois Tool Works. . . . . . . . 348
6,072 Nucor. . . . . . . . . . . . . . . 337
12,873 Sysco. . . . . . . . . . . . . . . 331
20,081 USX-Marathon . . . . . . . . . . . 329
11,406 Rubbermaid . . . . . . . . . . . . 328
8,288 Apple Computer . . . . . . . . . . 323
4,420 Lockheed . . . . . . . . . . . . . 321
9,647 * Digital Equipment. . . . . . . . . 321
2,769 Hercules . . . . . . . . . . . . . 319
10,781 R. R. Donnelly . . . . . . . . . . 318
9,000 Burlington Resources . . . . . . . 315
7,051 Ralston Purina . . . . . . . . . . 315
7,100 Micron Technology. . . . . . . . . 313
8,699 Genuine Parts. . . . . . . . . . . 313
12,437 Mattel . . . . . . . . . . . . . . 312
10,235 The Gap. . . . . . . . . . . . . . 312
10,608 Union Carbide. . . . . . . . . . . 312
6,148 Textron. . . . . . . . . . . . . . 310
24,757 Westinghouse . . . . . . . . . . . 303
4,892 Phelps Dodge . . . . . . . . . . . 303
5,011 Avon . . . . . . . . . . . . . . . 299
4,527 TRW. . . . . . . . . . . . . . . . 299
6,494 Amerada Hess . . . . . . . . . . . 296
6,656 Martin Marietta. . . . . . . . . . 295
6,086 Hershey Foods. . . . . . . . . . . 294
10,316 Morton International . . . . . . . 294
5,729 shs. Eastman Chemical . . . . . . . . . $ 289
9,106 Honeywell. . . . . . . . . . . . . 287
9,266 Quaker Oats. . . . . . . . . . . . 285
4,998 Great Lakes Chemical . . . . . . . 285
7,852 * DSC Communications . . . . . . . . 282
8,967 Times Mirror, Series A . . . . . . 281
8,107 Cooper Industries. . . . . . . . . 277
7,385 H&R Block . . . . . . . . . . . . 274
4,783 Rohm & Haas. . . . . . . . . . . . 273
9,954 American Stores. . . . . . . . . . 268
5,158 Winn-Dixie . . . . . . . . . . . . 265
5,193 Whirlpool. . . . . . . . . . . . . 264
7,955 Halliburton. . . . . . . . . . . . 264
16,700 * Comcast (Class A Special). . . . . 262
5,288 Eaton. . . . . . . . . . . . . . . 262
4,727 Tribune. . . . . . . . . . . . . . 259
6,599 W. R. Grace. . . . . . . . . . . . 255
5,272 Tyco Laboratories. . . . . . . . . 250
5,797 Fluor. . . . . . . . . . . . . . . 250
10,895 Masco. . . . . . . . . . . . . . . 247
8,660 Marriot International . . . . . . 244
12,855 Dresser Industries . . . . . . . . 243
5,050 Becton, Dickinson . . . . . . . . 242
3,830 Alco Standard . . . . . . . . . . 240
5,698 Nordstrom. . . . . . . . . . . . . 239
6,498 Champion International . . . . . . 237
6,267 * Crown Cork & Seal. . . . . . . . . 237
6,591 * Sun Microsystems . . . . . . . . . 234
3,498 McGraw-Hill. . . . . . . . . . . . 234
7,413 Ingersoll-Rand . . . . . . . . . . 234
8,134 Inco . . . . . . . . . . . . . . . 233
11,052 Newell . . . . . . . . . . . . . . 232
4,889 Union Camp . . . . . . . . . . . . 230
4,130 CBS. . . . . . . . . . . . . . . . 229
3,376 Hilton . . . . . . . . . . . . . . 227
7,325 Melville . . . . . . . . . . . . . 226
5,700 Reebok . . . . . . . . . . . . . . 225
4,460 Tandy. . . . . . . . . . . . . . . 224
7,199 * Promus Companies . . . . . . . . . 223
5,860 Loral. . . . . . . . . . . . . . . 222
3,729 Clorox . . . . . . . . . . . . . . 220
4,481 V. F. . . . . . . . . . . . . . . 218
6,999 Dow Jones . . . . . . . . . . . . 217
5,998 Newmont Mining . . . . . . . . . . 216
6,200 Pioneer Hi-Bred . . . . . . . . . 214
7,438 Sun Company. . . . . . . . . . . . 214
7,897 Dillard Department Stores
(Class A) . . . . . . . . . . 211
4,291 Reynolds Metals. . . . . . . . . . 210
7,696 Louisiana Pacific. . . . . . . . . 210
3,980 Dover. . . . . . . . . . . . . . . 205
3,522 W. W. Grainger . . . . . . . . . . 203
4,181 Mead . . . . . . . . . . . . . . . 203
4,444 Premark International. . . . . . . 199
T. Rowe Price Equity Index Fund / Statement of Net Assets
INDUSTRIAL (cont'd)
5,958 shs. Sherwin-Williams . . . . . . . . . $ 197
15,327 * Price Costco . . . . . . . . . . . 197
4,456 General Dynamics . . . . . . . . . 194
5,438 Harcourt General . . . . . . . . . 192
3,722 Knight-Ridder. . . . . . . . . . . 188
7,742 * Kroger . . . . . . . . . . . . . . 187
5,227 USX-U.S. Steel . . . . . . . . . . 186
4,641 Westvaco . . . . . . . . . . . . . 182
3,516 * Computer Sciences. . . . . . . . . 179
9,779 Baker Hughes . . . . . . . . . . . 178
6,100 Hasbro . . . . . . . . . . . . . . 178
3,847 Temple-Inland. . . . . . . . . . . 174
6,496 Cyprus Amax Minerals . . . . . . . 170
5,234 Interpublic Group. . . . . . . . . 168
8,573 * National Semiconductor . . . . . . 167
5,994 Service Corp.. . . . . . . . . . . 166
3,585 Kerr-McGee . . . . . . . . . . . . 165
9,610 Homestake Mining . . . . . . . . . 165
6,607 * Advanced Micro Devices . . . . . . 164
11,606 * National Medical Enterprises . . . 164
7,351 New York Times (Class A) . . . . . 163
6,938 Dana . . . . . . . . . . . . . . . 162
4,784 Nalco Chemical . . . . . . . . . . 160
5,349 Mallinckrodt Group . . . . . . . . 160
3,379 Parker Hannifin. . . . . . . . . . 154
5,721 Deluxe Corp. . . . . . . . . . . . 152
8,053 Pall . . . . . . . . . . . . . . . 151
6,712 Circuit City Stores. . . . . . . . 149
6,707 Engelhard . . . . . . . . . . . . 149
2,558 * FMC . . . . . . . . . . . . . . . 148
4,801 Brown-Forman (Class B) . . . . . . 146
4,184 Ashland Oil. . . . . . . . . . . . 144
3,387 Northrop . . . . . . . . . . . . . 142
3,211 Pennzoil . . . . . . . . . . . . . 142
4,180 Bausch & Lomb . . . . . . . . . . 142
5,190 American Greetings (Class A) . . . 140
5,895 Black & Decker . . . . . . . . . . 140
5,980 Rite Aid . . . . . . . . . . . . . 140
7,063 Pet . . . . . . . . . . . . . . . 139
9,231 WoolWorth. . . . . . . . . . . . . 138
3,892 Avery Dennison . . . . . . . . . . 138
5,829 Cooper Tire. . . . . . . . . . . . 138
6,474 Dial . . . . . . . . . . . . . . . 138
8,026 * Tandem Computers . . . . . . . . . 137
7,604 * Bethlehem Steel. . . . . . . . . . 137
2,793 Johnson Controls . . . . . . . . . 137
3,587 * Western Atlas . . . . . . . . . . 135
4,277 Pep Boys . . . . . . . . . . . . . 133
2,918 Cummins Engine . . . . . . . . . . 132
6,958 Moore. . . . . . . . . . . . . . . 131
3,291 St. Jude Medical . . . . . . . . . 131
3,164 * Lotus Development. . . . . . . . . 130
3,272 Autodesk . . . . . . . . . . . . . 130
7,401 shs. Whitman . . . . . . . . . . . . . $ 128
6,333 Worthington Industries . . . . . . 127
4,449 Allergan . . . . . . . . . . . . . 126
6,639 Brunswick . . . . . . . . . . . . 125
5,024 Supervalu . . . . . . . . . . . . 123
4,085 Echlin . . . . . . . . . . . . . . 123
2,757 PACCAR . . . . . . . . . . . . . . 122
2,804 Harris . . . . . . . . . . . . . . 119
4,345 Manor Care . . . . . . . . . . . . 119
9,158 * Santa Fe Pacific Gold . . . . . . 118
3,500 Sigma Aldrich. . . . . . . . . . . 116
5,695 James River. . . . . . . . . . . . 115
3,148 Stanley Works. . . . . . . . . . . 113
8,020 * Biomet . . . . . . . . . . . . . . 112
3,088 * Varity . . . . . . . . . . . . . . 112
7,455 Maytag . . . . . . . . . . . . . . 112
3,147 * Inland Steel Industries. . . . . . 111
5,242 Scientific Atlanta . . . . . . . . 110
6,280 * Stone Container. . . . . . . . . . 108
3,295 Polaroid . . . . . . . . . . . . . 107
2,957 Raychem. . . . . . . . . . . . . . 105
3,296 General Signal . . . . . . . . . . 105
5,730 * ALZA . . . . . . . . . . . . . . . 103
11,952 * Unisys . . . . . . . . . . . . . . 103
2,660 Armstrong World . . . . . . . . . 102
2,575 Merchantile Stores . . . . . . . . 102
7,046 Wendys . . . . . . . . . . . . . . 101
2,424 E-Systems . . . . . . . . . . . . 101
3,033 Snap-on Tools. . . . . . . . . . . 101
3,643 C. R. Bard . . . . . . . . . . . . 98
3,020 * Owens-Corning . . . . . . . . . . 97
5,549 Liz Claiborne. . . . . . . . . . . 94
4,448 Ecolab . . . . . . . . . . . . . . 93
1,377 Thomas & Betts . . . . . . . . . . 92
3,709 McDermott International. . . . . . 92
1,746 * Andrew . . . . . . . . . . . . . . 91
3,512 National Services Industries . . . 90
4,118 Giant Food (Class A) . . . . . . . 90
2,580 * King World Productions . . . . . . 89
8,080 * Amdahl . . . . . . . . . . . . . . 89
2,785 Russell. . . . . . . . . . . . . . 87
3,585 Bemis. . . . . . . . . . . . . . . 86
2,933 Federal Paper Board. . . . . . . . 85
1,758 Millipore . . . . . . . . . . . . 85
2,309 Louisiana Land & Exploration . . . 84
5,830 * Beverly Enterprises. . . . . . . . 84
7,860 Echo Bay Mines . . . . . . . . . . 84
2,908 ASARCO . . . . . . . . . . . . . . 83
3,069 * Ceridian . . . . . . . . . . . . . 82
5,174 TJX . . . . . . . . . . . . . . . 81
6,782 * Oryx Energy. . . . . . . . . . . . 81
5,229 * Navistar . . . . . . . . . . . . . 79
3,051 Perkin-Elmer . . . . . . . . . . . 78
3,880 * Teledyne . . . . . . . . . . . . . 78
2,091 shs. Potlatch . . . . . . . . . . . . . $ 78
2,196 Timken . . . . . . . . . . . . . . 77
1,777 B. F. Goodrich . . . . . . . . . . 77
2,527 Foster Wheeler . . . . . . . . . . 75
3,928 United States Surgical . . . . . . 75
2,663 Boise Cascade. . . . . . . . . . . 71
2,072 Tektronix. . . . . . . . . . . . . 71
2,116 Briggs & Stratton. . . . . . . . . 69
1,194 * Clark Equipment. . . . . . . . . . 65
2,039 Ball . . . . . . . . . . . . . . . 64
2,567 Fleming Companies. . . . . . . . . 60
4,008 Safety-Kleen . . . . . . . . . . . 59
3,149 Jostens. . . . . . . . . . . . . . 59
1,978 TRINOVA . . . . . . . . . . . . . 58
3,059 Ogden. . . . . . . . . . . . . . . 57
2,103 Crane. . . . . . . . . . . . . . . 57
3,025 Alexander & Alexander. . . . . . . 56
2,346 Cincinnati Milacron. . . . . . . . 55
3,851 EG&G . . . . . . . . . . . . . . . 54
1,961 Alberto Culver . . . . . . . . . . 53
1,607 Shared Medical Systems . . . . . . 53
6,321 * Santa Fe Energy Resources. . . . . 51
1,793 Harnischfeger. . . . . . . . . . . 50
2,696 A & P. . . . . . . . . . . . . . . 49
7,243 * Armco. . . . . . . . . . . . . . . 48
2,102 Centex . . . . . . . . . . . . . . 48
7,176 Charming Shoppes . . . . . . . . . 48
1,497 Longs Drug Stores. . . . . . . . . 48
1,269 Springs Industries . . . . . . . . 47
1,114 * Viacom (Class A) . . . . . . . . . 46
1,956 Pulte Corporation. . . . . . . . . 45
2,657 Coors (Class B). . . . . . . . . . 45
1,723 Helmerich & Payne . . . . . . . . 44
941 Meredith . . . . . . . . . . . . . 44
2,152 John H. Harland. . . . . . . . . . 43
4,871 Bruno's . . . . . . . . . . . . . 41
1,272 Brown Group. . . . . . . . . . . . 41
1,814 Luby's Cafeterias. . . . . . . . . 41
3,502 Stride Rite. . . . . . . . . . . . 39
2,904 * Shoney's . . . . . . . . . . . . . 37
5,901 * Rowan . . . . . . . . . . . . . . 36
2,426 Giddings & Lewis . . . . . . . . . 36
3,065 * Zenith Electronics . . . . . . . . 36
1,368 First Mississippi . . . . . . . . 34
3,088 * Community Psychiatric
Centers . . . . . . . . . . . 34
9,442 * Maxus Energy . . . . . . . . . . . 32
2,229 Kaufman & Broad. . . . . . . . . . 29
3,763 * Ryan's Family Steak Houses . . . . 28
581 Nacco Industries . . . . . . . . . 28
985 Bassett Furniture. . . . . . . . . 28
1,662 * Cray Research. . . . . . . . . . . 26
2,523 * Data General . . . . . . . . . . . 25
2,216 Handleman. . . . . . . . . . . . . 25
1,962 shs. Morrison-Knudsen . . . . . . . . . $ 25
1,207 Outboard Marine. . . . . . . . . . 24
4,266 * Rollins Environmental Services . . 21
3,243 * Bally Entertainment Group. . . . . 20
2,385 * Intergraph . . . . . . . . . . . . 19
13,931 rts. * Viacom, 9/29/95 . . . . . . . . . 16
918 shs. SPX. . . . . . . . . . . . . . . . 15
788 Skyline. . . . . . . . . . . . . . 15
831 Zurn Industries. . . . . . . . . . 15
923 Oshkosh B'Gosh (Class A) . . . . . 13
1,677 * Hartmarx . . . . . . . . . . . . . 10
955 * National Education . . . . . . . . 4
Total Industrial 181,595
UTILITIES - 8.7%
66,861 GTE. . . . . . . . . . . . . . . . 2,031
34,728 BellSouth. . . . . . . . . . . . . 1,880
42,108 Southwestern Bell. . . . . . . . . 1,700
38,410 Ameritech. . . . . . . . . . . . . 1,551
30,464 Bell Atlantic. . . . . . . . . . . 1,516
31,786 U. S. WEST . . . . . . . . . . . . 1,132
29,360 NYNEX . . . . . . . . . . . . . . 1,079
45,364 Southern Company . . . . . . . . . 907
29,689 Pacific Telesis. . . . . . . . . . 846
30,082 Pacific Gas and Electric . . . . . 733
14,320 Duke Power . . . . . . . . . . . . 546
17,548 Enron. . . . . . . . . . . . . . . 535
15,825 Texas Utilities. . . . . . . . . . 506
13,293 FPL Group. . . . . . . . . . . . . 467
31,316 SCEcorp . . . . . . . . . . . . . 458
17,083 Public Service Enterprise. . . . . 453
12,921 American Electric Power. . . . . . 425
16,421 Consolidated Edison. . . . . . . . 423
11,788 Dominion Resources . . . . . . . . 421
13,100 ALLTEL . . . . . . . . . . . . . . 395
15,465 Peco Energy . . . . . . . . . . . 379
14,927 Unicom . . . . . . . . . . . . . . 358
19,729 PacifiCorp . . . . . . . . . . . . 358
15,967 Entergy. . . . . . . . . . . . . . 349
9,178 Houston Industries . . . . . . . . 327
13,261 Central & South West . . . . . . . 300
11,182 Carolina Power & Light . . . . . . 298
10,256 Detroit Edison . . . . . . . . . . 268
7,124 Union Electric . . . . . . . . . . 252
10,339 CINergy. . . . . . . . . . . . . . 242
6,476 Consolidated Natural Gas . . . . . 230
10,270 BGE. . . . . . . . . . . . . . . . 227
4,711 Northern States Power. . . . . . . 207
10,691 Ohio Edison. . . . . . . . . . . . 198
7,315 Coastal. . . . . . . . . . . . . . 188
7,330 Williams Companies . . . . . . . . 184
6,074 Sonat . . . . . . . . . . . . . . 170
8,459 Panhandle Eastern . . . . . . . . 167
T. Rowe Price Equity Index Fund / Statement of Net Assets
UTILITIES (cont'd)
10,009 shs. Niagara Mohawk . . . . . . . . . . $ 143
5,777 Pacific Enterprise . . . . . . . . 123
3,678 NICOR. . . . . . . . . . . . . . . 84
3,490 * Columbia Gas System. . . . . . . . 82
2,430 Peoples Energy . . . . . . . . . . 63
4,617 ENSERCH. . . . . . . . . . . . . . 61
8,567 Noram Energy . . . . . . . . . . . 46
2,468 Transco Energy . . . . . . . . . . 41
1,896 ONEOK. . . . . . . . . . . . . . . 34
Total Utilities 23,383
FINANCIAL - 9.3%
22,092 American International Group . . . 2,165
19,133 Fannie Mae . . . . . . . . . . . . 1,394
27,180 Citicorp . . . . . . . . . . . . . 1,125
25,976 BankAmerica. . . . . . . . . . . . 1,026
34,642 American Express . . . . . . . . . 1,022
19,188 NationsBank. . . . . . . . . . . . 866
13,518 J. P. Morgan . . . . . . . . . . . 757
22,723 Travelers. . . . . . . . . . . . . 738
28,583 BANC ONE . . . . . . . . . . . . . 725
5,751 General Re . . . . . . . . . . . . 712
17,743 Chemical Banking . . . . . . . . . 637
12,594 Freddie Mac. . . . . . . . . . . . 636
3,729 Wells Fargo. . . . . . . . . . . . 541
22,252 Norwest. . . . . . . . . . . . . . 520
11,990 First Union. . . . . . . . . . . . 496
13,562 Merrill Lynch. . . . . . . . . . . 485
6,152 Chubb. . . . . . . . . . . . . . . 476
12,899 Chase Manhattan. . . . . . . . . . 443
17,027 KeyCorp. . . . . . . . . . . . . . 426
14,582 American General . . . . . . . . . 412
8,600 SunTrust . . . . . . . . . . . . . 411
11,922 Dean Witter, Discover. . . . . . . 404
12,000 Wachovia . . . . . . . . . . . . . 387
5,696 First Interstate . . . . . . . . . 385
7,890 Aetna. . . . . . . . . . . . . . . 372
16,434 PNC Bank . . . . . . . . . . . . . 347
9,875 Fleet Financial Group. . . . . . . 321
5,013 CIGNA. . . . . . . . . . . . . . . 317
6,473 First Chicago. . . . . . . . . . . 309
10,087 Mellon Bank. . . . . . . . . . . . 309
11,237 NBD Bancorp. . . . . . . . . . . . 308
5,519 Bankers Trust New York . . . . . . 306
7,413 Salomon. . . . . . . . . . . . . . 278
10,500 National City. . . . . . . . . . . 272
6,838 Barnett Banks. . . . . . . . . . . 262
5,844 St. Paul Companies . . . . . . . . 262
10,020 CoreStates Financial . . . . . . . 261
5,616 First Fidelity . . . . . . . . . . 252
6,580 Household International. . . . . . 244
10,399 shs. MBNA . . . . . . . . . . . . . . . $ 243
4,884 Transamerica . . . . . . . . . . . 243
6,626 Lincoln National . . . . . . . . . 232
4,413 SAFECO . . . . . . . . . . . . . . 229
6,918 Providian . . . . . . . . . . . . 214
5,300 UNUM . . . . . . . . . . . . . . . 200
7,346 Boatmen's Bancshares . . . . . . . 199
9,440 Praxair . . . . . . . . . . . . . 194
7,444 Bank of Boston . . . . . . . . . . 193
3,498 Jefferson Pilot. . . . . . . . . . 181
5,083 Torchmark. . . . . . . . . . . . . 177
7,005 U.S. Bancorp . . . . . . . . . . . 158
4,318 Golden West Financial. . . . . . . 152
9,297 Great Western Financial. . . . . . 149
3,696 Beneficial . . . . . . . . . . . . 144
8,258 Shawmut National . . . . . . . . . 135
8,148 H. F. Ahmanson . . . . . . . . . . 131
5,928 USF&G. . . . . . . . . . . . . . . 81
3,843 * Continental. . . . . . . . . . . . 73
3,210 Fleetwood. . . . . . . . . . . . . 60
1,588 USLIFE . . . . . . . . . . . . . . 55
1,445 Eastern Enterprises. . . . . . . . 38
Total Financial 25,090
TRANSPORTATION - 1.4%
14,329 Union Pacific. . . . . . . . . . . 654
9,504 Norfolk Southern . . . . . . . . . 576
7,313 CSX. . . . . . . . . . . . . . . . 509
6,285 Burlington Northern. . . . . . . . 302
5,270 * AMR. . . . . . . . . . . . . . . . 281
5,524 Conrail . . . . . . . . . . . . . 279
3,952 * Federal Express. . . . . . . . . . 238
13,030 Santa Fe Pacific . . . . . . . . . 228
3,491 Delta. . . . . . . . . . . . . . . 176
10,000 Southwest Airlines . . . . . . . . 167
2,682 Roadway Services . . . . . . . . . 152
5,433 Ryder System . . . . . . . . . . . 119
2,892 Pittston Services. . . . . . . . . 77
2,490 Consolidated Freightways . . . . . 56
1,996 Yellow Corporation . . . . . . . . 48
2,876 * USAir. . . . . . . . . . . . . . . 13
Total Transportation 3,875
Total Common Stocks (Cost $221,257) 233,943
Short-Term Investments - 13.3%
CERTIFICATES OF DEPOSIT - 1.9%
$5,000,000 Banque Nationale de Paris,
5.81%, 1/9/95 . . . . . . . . . 5,000
COMMERCIAL PAPER - 10.7%
4,830,000 Koch Industries,
6.25%, 1/3/95 . . . . . . . . . 4,827
$5,000,000 Dillard Investment Co.,
6.04%, 1/9/95 . . . . . . . . . $ 4,980
5,000,000 ITT Hartford Group,
5.45%, 1/13/95. . . . . . . . . 4,945
5,000,000 Northern States Power,
6.05%, 1/23/95. . . . . . . . . 4,968
4,500,000 U.S. West Communications,
5.45%, 1/26/95. . . . . . . . . 4,441
$5,000,000 General Electric Capital,
5.10%, 2/6/95 . . . . . . . . . $ 4,879
29,040
U.S. GOVERNMENT OBLIGATIONS - 0.7%
2,000,000 U.S. Treasury Bills,
5.20%, 2/9/95 . . . . . . . . . 1,985
Total Short-Term Investments
(Cost $36,025) 36,025
Total Investments in Securities - 99.9%
(Cost $257,282) 269,968
Futures Contracts
Contract Unrealized
Expiration Value Gain (Loss)
___________ ________ ___________
Long, 158 Standard &
Poor's 500 Stock
Index contracts,
$1,740,000 of U.S.
Treasury Bills
pledged as initial
margin . . . . . . . . . . 3/95 $ 36,447 $ 504
Less: receipts of
variation margin
to date. . . . . . . . . . 761
______
Variation margin
payable on open
futures contracts. . . . . . (257)
Other Assets Less
Liabilities. . . . . . . . . 454
Net Assets Consisting of:
Accumulated realized
gains/losses - net of
distributions. . . . . . . . $ (1,418)
Net unrealized gain . . . . 13,190
Paid-in-capital
applicable to 20,632,698
shares of $0.01 par value
capital stock outstanding;
1,000,000,000 shares
authorized . . . . . . . . 258,393
________
NET ASSETS . . . . . . . . . $ 270,165
__________
__________
NET ASSET VALUE
PER SHARE. . . . . . . . . $13.09
______
______
*Non-income producing
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Equity Index Fund / Year Ended December 31, 1994
(Amounts in thousands)
INVESTMENT INCOME
Income
Dividends. . . . . . . . . . . . . . . . $ 5,032
Interest . . . . . . . . . . . . . . . . 1,644
Other. . . . . . . . . . . . . . . . . . 11
_______
Total income . . . . . . . . . . . . . . 6,687
_______
Expenses
Shareholder servicing. . . . . . . . . . 433
Investment management. . . . . . . . . . 156
Custody and accounting . . . . . . . . . 152
Registrations. . . . . . . . . . . . . . 84
Prospectus and shareholder reports . . . 47
Legal and auditing . . . . . . . . . . . 34
Directors. . . . . . . . . . . . . . . . 11
Proxy and annual meeting . . . . . . . . 3
Miscellaneous. . . . . . . . . . . . . . 27
_______
Total expenses . . . . . . . . . . . . . 947
_______
Net investment income. . . . . . . . . . . 5,740
_______
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on:
Securities . . . . . . . . . . . . . . . 327
Futures. . . . . . . . . . . . . . . . . 905
_______
Net realized gain. . . . . . . . . . . . 1,232
_______
Change in net unrealized gain or loss on:
Securities . . . . . . . . . . . . . . . (4,228)
Futures. . . . . . . . . . . . . . . . . 504
_______
Change in net unrealized gain or loss. . (3,724)
_______
Net realized and unrealized loss . . . . . (2,492)
_______
INCREASE IN NET ASSETS FROM OPERATIONS . . $ 3,248
_______
_______
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,
_______________________
1994 1993
________ ________
(Amounts in thousands)
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income . . . . . . . . $ 5,740 $ 3,514
Net realized gain. . . . . . . . . . . 1,232 628
Change in net unrealized
gain or loss . . . . . . . . . . . . . (3,724) 8,882
________ ________
Increase in net assets
from operations. . . . . . . . . . . . 3,248 13,024
________ ________
Distributions to shareholders
Net investment income. . . . . . . . . (5,776) (3,571)
Net realized gain. . . . . . . . . . . (1,677) (163)
Distributions in excess of
net realized gain. . . . . . . . . . . (1,356) -
________ ________
Decrease in net assets from
distributions. . . . . . . . . . . . . (8,809) (3,734)
________ ________
Capital share transactions1
Shares sold. . . . . . . . . . . . . . 142,421 71,701
Distributions reinvested . . . . . . . 8,570 3,592
Shares redeemed. . . . . . . . . . . . (42,357) (45,888)
________ ________
Increase in net assets from
capital share transactions . . . . . . 108,634 29,405
________ ________
Net equalization . . . . . . . . . . . . 98 57
________ ________
Increase in net assets . . . . . . . . . 103,171 38,752
NET ASSETS
Beginning of year. . . . . . . . . . . . 166,994 128,242
________ ________
End of year . . . . . . . . . . . . . . $270,165 $166,994
________ ________
________ ________
1Capital share transactions
(number of shares)
Shares sold. . . . . . . . . . . . . . 10,780 5,497
Distributions reinvested . . . . . . . 653 272
Shares redeemed. . . . . . . . . . . . (3,187) (3,538)
________ ________
Increase in capital shares
outstanding. . . . . . . . . . . . . . 8,246 2,231
________ ________
________ ________
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Equity Index Fund / December 31, 1994
Note 1 - Significant Accounting Policies
T. Rowe Price Equity Index Fund (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange (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. Dividend income and distributions to
shareholders are recorded by the Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. The Fund follows the practice of
equalization under which undistributed net investment income per share is
unaffected by Fund shares sold or redeemed. Payments ("variation margin") made
or received by the Fund to settle the daily fluctuations in the value of
futures contracts are recorded as unrealized gains or losses until the
contracts are closed. Unrealized gains and losses on futures contracts are
included in change in net unrealized gain or loss in the accompanying
financial statements.
Note 2 - Investment Transactions
Consistent with its investment objective, the Fund engages in the following
practices to manage exposure to certain risks and enhance performance. The
investment objective, policies, program, risk factors and following practices
of the Fund are described more fully in the Fund's Prospectus and Statement of
Additional Information.
A) Futures Contracts - At December 31, 1994, the Fund was a party to futures
contracts, which provide for the future sale by one party and purchase by
another of a specified amount of a specific financial instrument at an agreed
upon price, date, time and place. Risks arise from possible illiquidity of the
futures market and from movements in security values.
B) Securities Lending - To earn additional income, the Fund lends its
securities to approved brokers. At December 31, 1994, the market value of
securities on loan was $10,818,000, for which the Fund has received collateral
of $11,086,000, consisting of cash. Although the risk is mitigated by the
collateral, the Fund could experience a delay in recovering its securities and
possibly incur a capital loss if the borrower fails to return them.
C) Other - Purchases and sales of portfolio securities, other than short-term
and U.S. Government securities, aggregated $83,419,000 and $2,324,000,
respectively, for the year ended December 31, 1994.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the Fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
In order for the Fund's capital accounts and distributions to
shareholders to reflect the tax character of certain transactions, $62,000 of
undistributed net investment income was reclassified as an increase to
paid-in-capital during the year ended December 31, 1994. The results of
operations and net assets were not affected by the reclassifications.
At December 31, 1994, the aggregate cost of investments for federal
income tax and financial reporting purposes was $257,282,000 and net
unrealized gain aggregated $12,686,000, of which $22,174,000 related to
appreciated investments and $9,488,000 to depreciated investments.
Note 4 - Related Party Transactions
The investment management agreement between the Fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management
fee, of which $15,000 was payable at December 31, 1994. The fee, computed
daily and paid monthly, is equal to 0.20% of average daily net assets.
Under the terms of the investment management agreement, the Manager is
required to bear any expenses through December 31, 1995, which would cause the
Fund's ratio of expenses to average net assets to exceed 0.45%. Thereafter
through December 31, 1997, the Fund is required to reimburse the Manager for
these expenses, provided that average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing the Fund's ratio
of expenses to average net assets to exceed 0.45%. Pursuant to this agreement,
$264,000 of management fees were not accrued by the Fund for the year ended
December, 31, 1994. Additionally, $651,000 of unaccrued fees and expenses
related to a previous expense limitation are subject to reimbursement through
December 31, 1995.
In addition, the Fund has entered into agreements with the Manager and
two wholly-owned subsidiaries of the Manager, pursuant to which the Fund
receives certain other services. The Manager computes the daily share price
and maintains the financial records of the Fund. T. Rowe Price Services, Inc.
(TRPS) is the Fund's transfer and dividend disbursing agent and provides
shareholder and administrative services to the Fund. T. Rowe Price Retirement
Plan Services, Inc. provides subaccounting and recordkeeping services for
certain retirement accounts invested in the Fund. The Fund incurred expenses
pursuant to these related party agreements totaling approximately $412,000 for
the year ended December 31, 1994, of which $33,000 was payable at year end.
<TABLE>
Financial Highlights
T. Rowe Price Equity Index Fund
<CAPTION>
For a share outstanding throughout each period
_____________________________________________________________
March 30, 1990
(Commencement
Year ended December 31, of Operations) to
_____________________________________________December 31,
1994 1993 1992 1991 1990
_____________________________________________________________
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD. . . . . . $13.48 $12.63 $12.10 $ 9.72 $10.00
______ ______ ______ ______ ______
Investment Activities
Net investment
income . . . . . . . . . . 0.36* 0.32* 0.32* 0.34* 0.31*
Net realized and
unrealized
gain (loss). . . . . . . . (0.23) 0.86 0.53 2.46 (0.28)
______ ______ ______ ______ ______
Total from
Investment
Activities . . . . . . . . 0.13 1.18 0.85 2.80 0.03
______ ______ ______ ______ ______
Distributions
Net investment
income . . . . . . . . . . (0.36) (0.32) (0.31) (0.34) (0.31)
Net realized
gain . . . . . . . . . . . (0.09) (0.01) (0.01) (0.08) -
Distributions in
excess of net
realized gain. . . . . . . (0.07) - - - -
______ ______ ______ ______ ______
Total
Distributions. . . . . . . (0.52) (0.33) (0.32) (0.42) (0.31)
______ ______ ______ ______ ______
NET ASSET VALUE,
END OF PERIOD. . . . . . . . . $13.09 $13.48 $12.63 $12.10 $ 9.72
______ ______ ______ ______ ______
______ ______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . . 1.0%* 9.4%* 7.2%* 29.2%* 0.4%!*
Ratio of Expenses to
Average Net Assets . . . . . 0.45%* 0.45%* 0.45%* 0.45%* 0.45%!*
Ratio of Net
Investment Income
to Average Net
Assets . . . . . . . . . . . 2.73%* 2.40%* 2.57%* 3.07%* 4.28%!*
Portfolio Turnover
Rate . . . . . . . . . . . . 1.3% 0.8% 0.1% 5.8% 7.0%!
Net Assets,
End of Period
(in thousands) . . . . . . . $270,165 $166,994 $128,242 $22,069$7,285
<FN>
! Annualized.
* Excludes expenses in excess of a 0.45% voluntary expense limitation in effect through December 31, 1995.
</FN>
</TABLE>
Report of Independent Accountants
To the Shareholders and Board of Directors
of T. Rowe Price Equity Index Fund, Inc.
We have audited the accompanying statement of net assets of T. Rowe
Price Equity Index Fund, Inc. as of December 31, 1994, 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, the financial
highlights for each of the four 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, 1994, 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, 1994, the
results of its operations, the changes in its net assets and financial
highlights for each of the respective periods stated in the first paragraph in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
January 23, 1995
Chart 1 - Equity Index Fund Performance Comparison
A line graph compares the 12/31/94 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 12/31/94, the Fund investment
would have been worth $15,356, the Index investment would have been worth
$15,645.
