1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended: SEPTEMBER 30, 1998.
Commission file number: 000-14282.
Exact name of registrant as specified in its charter:
T. ROWE PRICE ASSOCIATES, INC.
State of incorporation: MARYLAND.
I.R.S. Employer Identification No.: 52-0556948.
Address and Zip Code of principal executive offices: 100 EAST PRATT STREET,
BALTIMORE, MARYLAND 21202.
Registrant's telephone number, including area code: (410) 345-2000.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]. No [ ].
Indicate the number of shares outstanding of the issuer's common stock ($.20
par value), as of the latest practicable date. 119,281,143 SHARES AT
NOVEMBER 9, 1998.
Exhibit index is at Item 6(a) on page 13.
2
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
T. ROWE PRICE ASSOCIATES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
12/31/97 09/30/98
________ ________
ASSETS
Cash and cash equivalents $200,409 $287,780
Accounts receivable 86,795 91,943
Investments in sponsored mutual funds 173,729 164,202
Partnership and other investments 19,030 16,100
Property and equipment (Note 2) 142,497 157,645
Other assets 23,607 14,215
________ ________
$646,067 $731,885
________ ________
________ ________
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued expenses $ 30,722 $ 28,570
Accrued compensation and retirement costs 49,694 74,263
Income taxes payable 19,102 6,896
Dividends payable 10,039 10,121
Minority interests in consolidated subsidiaries 49,837 48,580
________ ________
Total liabilities 159,394 168,430
________ ________
Commitments and contingent liabilities (Note 2)
Stockholders' equity
Preferred stock, undesignated, $.20 par value -
authorized and unissued 20,000,000 shares -- --
Common stock, $.20 par value - authorized
200,000,000 shares in 1997 and 500,000,000 shares
in 1998; issued 59,097,705 shares in
1997 and 119,132,378 shares in 1998 (Note 3) 11,819 23,826
Capital in excess of par value 30,707 30,380
Retained earnings 415,279 487,173
Accumulated other comprehensive income 28,868 22,076
________ ________
Total stockholders' equity 486,673 563,455
________ ________
$646,067 $731,885
________ ________
________ ________
See the accompanying notes to the condensed consolidated financial
statements.
3
T. ROWE PRICE ASSOCIATES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per-share amounts)
Three months Nine months
ended ended
September 30, September 30,
________________ _________________
1997 1998 1997 1998
________ _______ ________ ________
Revenues
Investment advisory fees $158,233 $170,214 $429,079 $510,681
Administrative fees 37,533 42,919 107,362 128,444
Investment and other income 4,003 5,426 11,375 12,177
________ ________ ________ ________
199,769 218,559 547,816 651,302
________ ________ ________ ________
Expenses
Compensation and related costs 66,623 78,153 188,062 224,459
Advertising and promotion 13,419 13,764 44,618 50,819
Occupancy and equipment 18,934 22,293 47,679 61,249
International investment
research fees 13,145 10,657 35,884 35,770
Other operating expenses 13,029 15,223 39,531 43,186
________ ________ ________ ________
125,150 140,090 355,774 415,483
________ ________ ________ ________
Income before income taxes and
minority interests 74,619 78,469 192,042 235,819
Provision for income taxes 27,968 30,094 73,254 90,623
________ ________ ________ ________
Income from consolidated companies 46,651 48,375 118,788 145,196
Minority interests in consolidated
subsidiaries 5,314 5,401 15,122 16,063
________ ________ ________ ________
Net income $ 41,337 $ 42,974 $103,666 $129,133
________ ________ ________ ________
________ ________ ________ ________
Basic earnings per share $ .36 $ .36 $ .89 $ 1.08
________ ________ ________ ________
________ ________ ________ ________
Diluted earnings per share $ .32 $ .33 $ .81 $ .99
________ ________ ________ ________
________ ________ ________ ________
Dividends declared per share $ .065 $ .085 $ .195 .255
________ ________ ________ ________
________ ________ ________ ________
Weighted average shares outstanding 116,331 119,429 115,904 119,047
________ ________ ________ ________
________ ________ ________ ________
Weighted average shares outstanding-
assuming dilution 128,508 130,096 127,545 130,209
________ ________ ________ ________
________ ________ ________ ________
See the accompanying notes to the condensed consolidated financial
statements.
4
T. ROWE PRICE ASSOCIATES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine months ended
__________________
09/30/97 09/30/98
________ ________
Cash flows from operating activities
Net income $103,666 $129,133
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization of property
and equipment 19,371 24,286
Minority interests in consolidated subsidiaries 15,122 16,063
Increase in accounts receivable (14,649) (5,148)
Change in accounts payable and accrued liabilities 34,888 31,804
Other changes in assets and liabilities (2,333) 3,687
_________ ________
Net cash provided by operating activities 156,065 199,825
________ ________
Cash flows from investing activities
Investments in sponsored mutual funds (10,453) (13,690)
Proceeds from disposition of sponsored mutual funds -- 13,955
Partnership and other investments (1,789) (1,113)
Liquidation of partnership and other investments 6,348 2,686
Additions to property and equipment (53,070) (41,247)
________ ________
Net cash used in investing activities (58,964) (39,409)
________ ________
Cash flows from financing activities
Purchases of stock (9,655) (33,666)
Receipts relating to stock issuances 8,645 7,951
Dividends paid to stockholders (22,545) (30,285)
Distributions to minority interests (7,370) (17,045)
________ ________
Net cash used in financing activities (30,925) (73,045)
________ ________
Cash and cash equivalents
Net increase during period 66,176 87,371
At beginning of year 114,551 200,409
________ ________
At end of period $180,727 $287,780
________ ________
________ ________
See the accompanying notes to the condensed consolidated financial
statements.
5
T. ROWE PRICE ASSOCIATES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(dollars in thousands)
Accumu-
Capital lated
Common in other Total
stock excess compre- stock-
- par of par Retained hensive holders'
value value earnings income equity
_______ _______ ________ ________ ________
Balance at December 31, 1997,
59,097,705 common shares $11,819 $30,707 $415,279 $28,868 $486,673
Comprehensive income
Net income 129,133
Change in unrealized
security holding gains (6,792)
Total comprehensive income 122,341
1,560,385 common shares
issued under stock-based
compensation plans 312 18,162 18,474
1,120,000 common shares
repurchased (224) (6,570) (26,872) (33,666)
Dividends declared (30,367) (30,367)
59,594,288 shares issued in
2-for-1 split of common
stock at April 30, 1998 11,919 (11,919) --
_______ _______ ________ _______ ________
Balance at September 30,
1998, 119,132,378 common
shares $23,826 $30,380 $487,173 $22,076 $563,455
_______ _______ ________ _______ ________
_______ _______ ________ _______ ________
See the accompanying notes to the condensed consolidated financial
statements.
6
T. ROWE PRICE ASSOCIATES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY AND BASIS OF PREPARATION.
T. Rowe Price Associates, Inc. and its consolidated subsidiaries (the
Company) derives its revenue primarily from investment advisory and
administrative services provided to sponsored mutual funds and investment
portfolios and to private accounts of other institutional and individual
investors, primarily domiciled in the United States of America. Company
revenues are largely dependent on the total value and composition of assets
under management, which include domestic and international equity and debt
securities; accordingly, fluctuations in financial markets and in the
composition of assets under management impact revenues and results of
operations. Assets under management at September 30, 1998 total $129.5
billion, including more than $82.9 billion in the sponsored T. Rowe Price
mutual funds.
The unaudited condensed consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented. All such
adjustments are of a normal recurring nature.
The unaudited interim financial information contained in the condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements contained in the 1997 Annual Report to
Stockholders.
NOTE 2 - COMMITMENTS AND CONTINGENT LIABILITIES.
On February 11, 1998, the Company entered into an agreement to construct two
office buildings having a combined 360,000 square feet of floor space and two
parking garages. On June 17, 1998, the agreement was amended to include an
aggregate guaranteed maximum price of $70,840,000. The facilities will be
erected on land owned in Owings Mills, Maryland.
NOTE 3 - COMMON STOCK SPLIT.
On April 30, 1998, the Company's outstanding common shares split two-for-one.
All per share and share data in the accompanying unaudited condensed
consolidated statements of income have been adjusted to give retroactive
effect to the stock split.
7
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
T. Rowe Price Associates, Inc.
We have reviewed the condensed consolidated financial statements of T. Rowe
Price Associates, Inc. and its subsidiaries as of September 30, 1998, and for
the three- and nine-month periods ended September 30, 1997 and 1998,
appearing on pages two through six of this Form 10-Q Quarterly Report. These
financial statements are the responsibility of the company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial
statements for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1997, and the
related consolidated statements of income, of cash flows, and of stock-
holders' equity for the year then ended (not presented herein), and in our
report dated January 26, 1998 we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of December 31,
1997, is fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
/s/ PricewaterhouseCoopers LLP
Baltimore, Maryland
October 19, 1998
THE ABOVE REPORT IS NOT A "REPORT" WITHIN THE MEANING OF SECTIONS 7 AND 11 OF
THE SECURITIES ACT OF 1933 AND THE INDEPENDENT ACCOUNTANTS' LIABILITY
PROVISIONS OF SECTION 11 OF THE ACT DO NOT APPLY.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL.
T. Rowe Price Associates, Inc. and its consolidated subsidiaries (the
Company) derives its revenue primarily from investment advisory and
administrative services provided to the sponsored Price Mutual Funds (the
Funds), other sponsored investment portfolios, and private accounts of other
institutional and individual investors. Investment advisory fees are
generally based on the net assets of the portfolios managed. The majority of
administrative revenues are derived from services provided to the Funds.
The Company's base of assets under management consists of a broad range of
domestic and international stock, bond, and money market mutual funds and
other investment portfolios which meet the varied needs and objectives of its
individual and institutional investment advisory clients. At September 30,
1998, total assets under management are $129.5 billion, including more than
$82.9 billion in the Funds. Equity investments compose approximately 70% of
total assets under management.
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS 1997.
Net income increased $1.6 million or 4% to nearly $43 million or diluted
earnings per share of $0.33 from $41.3 million or diluted earnings per share
of $0.32. Earnings per share have been retroactively restated for the two-
for-one stock split effected at April 30, 1998. Total revenues increased 9%
from $199.8 million to $218.6 million, led by an increase of $12.0 million in
investment advisory fees.
Investment advisory fees from the Funds increased $8.8 million as the Funds'
average assets under management during the third quarter rose $8.4 billion to
$87.4 billion. Fund assets totaled more than $82.9 billion at September 30,
1998, up $1.8 billion from December 31, 1997. Net cash inflows to the Funds
during the third quarter of 1998 were $400 million. Lower end of period Fund
assets are the result of financial market declines during the 1998 quarter.
Advisory fees from private accounts and other sponsored investment portfolios
contributed the balance of the investment advisory revenue gains. These
assets under management rose to $46.6 billion at September 30, 1998, up $3.4
billion from December 31, 1997 and $3.5 billion over the past twelve months.
Total assets under management closed the third quarter at $129.5 billion, up
from $124.3 billion at December 31, 1997 and $124.7 billion at September 30,
1997. Because assets under management are the primary source of the
Company's revenues, future quarterly results could be adversely affected if
the financial markets do not remain at levels experienced earlier this year.
Administrative fees from services to the Funds and their shareholders grew
$5.4 million to $42.9 million. Revenue gains were primarily attributable to
the Company's defined contribution retirement plan recordkeeping services and
mutual fund transfer agent; however, increases in related operating expenses
offset these gains.
9
Investment and other income rose $1.4 million due primarily to greater income
on larger money market fund holdings.
Operating expenses increased 12% to $140.1 million. Compensation and related
costs were up $11.5 million due to higher rates of compensation and a 16%
increase in the number of associates, primarily in the Company's growing
technology support and administrative services operations. At the end of the
third quarter, the Company employed more than 3,380 associates.
Advertising and promotion expenditures increased about 3% to $13.8 million.
These expenditures will vary over time as market conditions and cash flows to
the Funds warrant. The Company expects to increase advertising expenditures
in the fourth quarter of 1998 to a level similar to that of the same period
in 1997. Occupancy and equipment expense was up 18% due to the recent
expansion of operating facilities and equipment acquisitions, primarily
investments in technology.
International investment research fees were down as international assets
under management decreased to $28.5 billion at September 30, 1998 from $33.0
billion at September 30, 1997. International assets are managed by the
Company's 50%-owned subsidiary, Rowe Price-Fleming International, Inc.
(RPFI).
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS 1997.
Net income increased $25.5 million or nearly 25% to $129.1 million or diluted
earnings per share of $0.99 versus $0.81 in 1997. Total revenues increased
19% from almost $548 million to $651 million, led by an increase of $81.6
million in investment advisory fees.
Investment advisory fees from the Funds increased $60.5 million as the Funds'
average assets under management during the first nine months rose more than
$15.4 billion to $87.9 billion. Net cash inflows to the Funds during the
first nine months of 1998 were $3.6 billion. Almost 80% of the net inflows
were to the domestic stock funds. Advisory fees from private accounts and
other sponsored investment portfolios contributed the balance of the
investment advisory revenue gains.
Administrative fees from services to the Funds and their shareholders grew
$21.1 million to $128.4 million. As with the three-month period, increases
in related operating expenses offset these gains.
Operating expenses increased 17% to $415.5 million. Compensation and related
costs, including performance-based bonus accruals and greater use of
temporary employees primarily in the technology support areas, were up $36.4
million. Occupancy and equipment costs rose $13.6 million or 29% due to
operating growth in the technology support and administrative services areas.
YEAR 2000 PROCESSING ISSUE.
Many existing computer programs employed throughout the world use two digits
10
rather than four to identify the year. These programs, if not adapted, will
not correctly handle the change from "99" to "00" on January 1, 2000, and
will no longer be able to perform necessary functions. The Year 2000 issue
affects all companies and organizations.
The Company has implemented steps intended to assure that its major or
mission critical computer systems and processes are capable of Year 2000
processing. Year 2000 readiness assessments have been made in the Company's
major application areas. Detailed plans for remediation efforts have been
developed and are underway. Because the Company's operations include daily
exchanges of data electronically with customers and vendors, the Company is
also working with these third parties to assess the adequacy of their
compliance efforts, and is developing contingency plans, including
alternative vendors, intended to assure that third-party noncompliance will
not materially affect the Company's operations. Additionally, a third-party
consultant is reviewing the Company's Year 2000 efforts at various intervals
throughout 1998 and 1999. The following chart summarizes the Company's
estimated timetable and current state of completion for its Year 2000 major
system efforts.
Stages Target Date Current state of Completion
_____________________________ ___________ ___________________________
Identification and assessment Complete Complete
Remediation 12/31/98 51 - 75%
Testing 03/31/99 51 - 75%
Implementation 06/30/99 Less than 25%
For other systems, the target dates are somewhat later than those shown above
for major systems, but in any event sufficiently in advance of December 31,
1999.
The Company presently estimates that it will incur expenses of more than $44
million on Year 2000 software remediation, replacement of existing systems
and development of contingency plans through the year 2000. Approximately
$26 million of these expenditures are anticipated after 1998 when the bulk of
testing and implementation is to be done. The Company cannot assure that the
costs of its Year 2000 compliance efforts will not be significantly more in
the event that presently unidentified complications arise; however, the
Company believes that it will be able to fund any additional costs from
available resources without materially affecting liquidity, financial
condition, or future prospects.
FORWARD-LOOKING INFORMATION.
Information or statements provided by or on behalf of the Company from time
to time, including those within this Form 10-Q Quarterly Report, may contain
certain "forward-looking information," including information relating to
anticipated growth in revenues or earnings per share, anticipated changes in
the amount and composition of assets under management, anticipated expense
levels, and expectations regarding financial market conditions. The Company
cautions readers that any forward-looking information provided by or on
behalf of the Company is not a guarantee of future performance. Actual
11
results may differ materially from those in forward-looking information as a
result of various factors, including but not limited to those discussed
below. Further, such forward-looking statements speak only as of the date on
which such statements are made, and the Company undertakes no obligation to
update any forward-looking statement to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events.
The Company's future revenues may fluctuate due to factors such as: the
total value and composition of assets under management and related cash
inflows or outflows in mutual funds and private accounts; fluctuations in the
worldwide financial markets, including those in emerging countries, resulting
in appreciation or depreciation of assets under management; the relative
investment performance of the Company's sponsored investment portfolios and
private accounts as compared to competing offerings and market indices; the
extent to which performance-based investment advisory fees are earned from
private accounts; the expense ratios of the Company's sponsored investment
portfolios; investor sentiment and investor confidence in mutual funds; the
ability of the Company to maintain investment management and administrative
fees at current levels; competitive conditions in the mutual funds industry;
the introduction of new mutual funds and investment portfolios; the ability
of the Company to contract with the Funds for payment for administrative
services offered to the Funds and their shareholders; the continuation of
trends in the retirement plan marketplace favoring defined contribution plans
and participant-directed investments; and the amount and timing of income
recognized on the Company's investment portfolio.
The investment portfolios from which the Company derives the majority of its
revenues could be subject to increased credit, market and liquidity risk
arising from the impact of Year 2000 issues on the issuers of individual
securities. Additionally, governments and financial markets could be
affected. The extent of such risk on the Company is, however, not
determinable. It is equally difficult to assess the impact of any widespread
business interruption. To the extent that the market prices of securities are
negatively impacted by Year 2000 issues, the Company's investment advisory
revenues could be materially adversely affected.
The Company's future operating results are also dependent upon the level of
operating expenses, which are subject to fluctuation for the following or
other reasons: changes in the level of advertising expenses in response to
market conditions or other factors; variations in the level of compensation
expense incurred by the Company, including performance-based compensation
based on the Company's financial results, as well as changes in response to
the size of the total employee population, competitive factors, or other
reasons; changes in the manner in which the Company provides international
investment services; expenses and capital costs, including depreciation,
amortization and other non-cash charges, incurred by the Company to maintain
its administrative and service infrastructure, including costs incurred with
respect to readiness for Year 2000 processing; unanticipated costs that may
be incurred by the Company from time to time to protect investor accounts and
client goodwill; and third-party noncompliance in Year 2000 processing.
12
The Company's revenues are substantially dependent on revenues from the
Funds, which could be adversely affected if the independent directors of one
or more of the Funds determined to terminate or significantly alter the terms
of one or more investment management agreements.
The Company's business is also subject to substantial governmental
regulation, and changes in legal, regulatory, accounting, tax, and compliance
requirements may have a substantial effect on the Company's business and
results of operations, including but not limited to effects on the level of
costs incurred by the Company and effects on investor interest in mutual
funds in general or in particular classes of mutual funds.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Because the Company's market capitalization on January 28, 1997 was less than
$2.5 billion, this item is not applicable until the filing of the 1998 Form
10-K Annual Report.
PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
On July 6, 1998, RPFI, the T. Rowe Price International Stock Fund (the
International Stock Fund) and its five directors were named as defendants in
an action, Migdal v. Rowe Price-Fleming International, Inc., et al., filed in
the United States District Court for the District of Maryland. The Complaint
seeks to invalidate the advisory agreement between RPFI and the International
Stock Fund, and seeks recovery of an unspecified amount of advisory fees paid
by the International Stock Fund to RPFI. This relief is sought based on an
allegation that the International Stock Fund does not have a sufficient
number of independent directors, as required by the Investment Company Act of
1940, as amended, because its independent directors serve on multiple boards
of directors within the T. Rowe Price mutual fund complex and receive
substantial compensation in the form of director fees.
On October 12, 1998, the plaintiffs filed an Amended Complaint adding as a
plaintiff Linda B. Rohrbaugh, a shareholder in the T. Rowe Price Growth Stock
Fund. The Amended Complaint also added as defendants T. Rowe Price Growth
Stock Fund, T. Rowe Price Associates, and three of the Company's wholly-owned
subsidiaries (T. Rowe Price Investment Services, T. Rowe Price Services and
T. Rowe Price Retirement Plan Services) which provide services to the Funds,
as well as five directors of the T. Rowe Price Growth Stock Fund. On October
28, 1998, the Company and the other defendants filed a Motion to Dismiss
Amended Complaint.
The Company continues to believe that the factual and legal basis on which
the complaint is based is wholly unfounded, and the Company and the other
defendants intend to defend the case vigorously. Among other things, the
Company has been advised that the structure of the board of the Fund complies
with all applicable federal and state legal and regulatory requirements and
13
practices, as well as with established industry norms. Accordingly, the
Company does not believe that the ultimate resolution of this matter will
have a material adverse effect on the financial condition or results of
operations of the Company.
From time to time, the Company is a party to various claims arising in the
ordinary course of business. In the opinion of management, after
consultation with counsel, it is unlikely that any adverse determination in
one or more pending claims would have a material adverse effect on the
Company's financial position or results of operations.
ITEM 5. OTHER INFORMATION.
On October 15, 1998, John W. Rosenblum resigned from the Company's Board of
Directors in order to become a board member of a private investment
management firm.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits required to be filed by Item 601 of Regulation S-K
are filed herewith and incorporated by reference herein. Exhibits 10.07
through 10.13 are compensatory plan arrangements.
3.(i) Composite Restated Charter of T. Rowe Price Associates, Inc.
as of April 16, 1998. (Incorporated by reference from Form
10-Q Report for the quarterly period ended March 31, 1998;
Accession No. 0000080255-98-000361.)
3.(ii) Amended and Restated By-Laws of T. Rowe Price Associates,
Inc. as of April 17, 1997. (Incorporated by reference from
Form 10-Q Report for the quarterly period ended June 30,
1997; Accession No. 0000080255-97-000369.)
10.01 Form of Investment Management Agreement with each of the T.
Rowe Price Funds. (Incorporated by reference from Form N-1A;
Accession No. 0000313212-98-000006.)
10.02 Transfer Agency and Service Agreement dated as of January 1,
1998 between each of the T. Rowe Price Funds and T. Rowe
Price Services, Inc. (Incorporated by reference from Form N-
1A; Accession No. 0000313212-98-000006.)
10.03 Agreement dated January 1, 1998 between T. Rowe Price
Retirement Plan Services, Inc. and each of the T. Rowe Price
Taxable Funds. (Incorporated by reference from Form N-1A;
Accession No. 0000313212-98-000006.)
10.04 Form of Underwriting Agreement between each of the T. Rowe
Price Funds and T. Rowe Price Investment Services, Inc.
(Incorporated by reference from Form N-1A; Accession No.
0000313212-98-000006.)
14
10.05 Agreement dated February 11, 1998 between TRP Suburban
Second, Inc. and Riparius Construction, Inc. as Construction
Manager and Constructor (Filed in paper on March 26, 1998,
pursuant to a continuing hardship exemption, on Form SE to
the Form 10-K for 1997; Accession No. 0000080255-98-00358.)
10.06 Amended, Restated, and Consolidated Office Lease dated as of
May 22, 1997 between 100 East Pratt Street Limited
Partnership and T. Rowe Price Associates, Inc. (Incorporated
by reference from Form 10-K; Accession No. 0000080255-98-
000358.)
10.07 1986 Employee Stock Purchase Plan of T. Rowe Price
Associates, Inc. as Amended to April 5, 1990. (Incorporated
by reference from Exhibit A to the Definitive Proxy Statement
for the 1990 Annual Meeting of Stockholders which is included
in the 1989 Annual Report on Form 10-K [File No. 0-14282].)
10.08 T. Rowe Price Associates, Inc. 1986 Stock Incentive Plan.
(Incorporated by reference from Form S-1 Registration
Statement [File No. 33-3398].)
10.09 T. Rowe Price Associates, Inc. 1990 Stock Incentive Plan.
(Incorporated by reference from Form S-8 Registration
Statement [File No. 33-37573].)
10.10 T. Rowe Price Associates, Inc. 1993 Stock Incentive Plan.
(Incorporated by reference from Form S-8 Registration
Statement [File No. 33-72568].)
10.11 T. Rowe Price Associates, Inc. 1995 Director Stock Option
Plan. (Incorporated by reference from Form DEF 14A;
Accession No. 000933259-95-000009; CIK 0000080255.)
10.12 T. Rowe Price Associates, Inc. 1996 Stock Incentive Plan
(Incorporated by reference from Form DEF 14A; Accession No.
0001006199-96-000031; CIK 0000080255.)
10.13 T. Rowe Price Associates, Inc. 1998 Director Stock Option
Plan. (Incorporated by reference from Form DEF 14A;
Accession No. 00080255-98-000355.)
15 Letter from PricewaterhouseCoopers LLP, independent
accountants, re unaudited interim financial information.
27 Financial Data Schedule.
All other items in Part II are omitted because they are not applicable or the
answers are none.
15
SIGNATURES.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on November 10, 1998.
T. Rowe Price Associates, Inc.
/s/ Alvin M. Younger, Jr., Chief Financial & Accounting Officer