-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KFsZDM05g8ZSmRsEkrlgLX8XyO3bnUNBCiC/qNpCmeCR56MAFoDgzykm9LZpG7oL ctKLST3d5ucntsA0FCYpzg== 0000080255-00-000390.txt : 20000427 0000080255-00-000390.hdr.sgml : 20000427 ACCESSION NUMBER: 0000080255-00-000390 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICE T ROWE ASSOCIATES INC /MD/ CENTRAL INDEX KEY: 0000080255 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES [6200] IRS NUMBER: 520556948 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14282 FILM NUMBER: 609612 BUSINESS ADDRESS: STREET 1: 100 EAST PRATT ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: (410)345- MAIL ADDRESS: STREET 1: P.O. BOX 89000 CITY: BALTIMORE STATE: MD ZIP: 21289 10-Q 1 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: MARCH 31, 2000. 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. 120,764,714 SHARES AT APRIL 25, 2000. Exhibit index is at Item 6(a) on pages 14 - 15. 2 PART I. FINANCIAL INFORMATION. ITEM 1. FINANCIAL STATEMENTS. T. ROWE PRICE ASSOCIATES, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) 12/31/99 03/31/00 ________ __________ ASSETS Cash and cash equivalents $358,472 $ 438,435 Accounts receivable 121,637 144,841 Investments in sponsored mutual funds 233,924 250,260 Other investments 44,986 54,639 Property and equipment 210,302 217,867 Other assets 28,718 19,217 ________ __________ $998,039 $1,125,259 ________ __________ ________ __________ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable and accrued expenses $ 37,712 $ 48,467 Accrued compensation and related costs 64,774 54,899 Income taxes payable 31,819 78,864 Dividends payable 15,614 15,688 Debt 17,716 17,632 Minority interests in consolidated subsidiaries 60,220 66,454 ________ __________ Total liabilities 227,855 282,004 ________ __________ Commitments and contingent liabilities Stockholders' equity Preferred stock, undesignated, $.20 par value - authorized and unissued 20,000,000 shares -- -- Common stock, $.20 par value - authorized 500,000,000 shares; issued 120,107,818 shares in 1999 and 120,708,284 shares in 2000 24,022 24,142 Capital in excess of par value 48,057 54,272 Retained earnings 649,378 708,724 Accumulated other comprehensive income 48,727 56,117 ________ __________ Total stockholders' equity 770,184 843,255 ________ __________ $998,039 $1,125,259 ________ __________ ________ __________ 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 ended ___________________ 03/31/99 03/31/00 ________ ________ Revenues Investment advisory fees $190,878 $234,161 Administrative fees 49,217 60,847 Investment and other income 5,731 21,323 ________ ________ 245,826 316,331 ________ ________ Expenses Compensation and related costs 81,463 92,967 Advertising and promotion 20,225 25,110 Occupancy and equipment 20,947 25,906 International investment research fees 12,144 16,014 Other operating expenses 15,810 25,543 ________ ________ 150,589 185,540 ________ ________ Income before income taxes and minority interests 95,237 130,791 Provision for income taxes 36,288 49,204 ________ ________ Income from consolidated companies 58,949 81,587 Minority interests in consolidated subsidiaries 5,536 6,553 ________ ________ Net income $ 53,413 $ 75,034 ________ ________ ________ ________ Basic earnings per share $ .44 $ .62 ________ ________ ________ ________ Diluted earnings per share $ .41 $ .58 ________ ________ ________ ________ Dividends declared per share $ .10 $ .13 ________ ________ ________ ________ Weighted average shares outstanding 120,512 120,419 ________ ________ ________ ________ Weighted average shares outstanding assuming dilution 129,589 128,399 ________ ________ ________ ________ 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) Three months ended __________________ 03/31/99 03/31/00 ________ ________ Cash flows from operating activities Net income $ 53,413 $ 75,034 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization of property and equipment 7,600 9,474 Minority interests in consolidated subsidiaries 5,536 6,553 Increase in accounts receivable (4,397) (22,783) Income taxes accrued but not paid 36,073 45,273 Other changes in assets and liabilities (6,561) (8,856) ________ ________ Net cash provided by operating activities 91,664 104,695 ________ ________ Cash flows from investing activities Investments in sponsored mutual funds (664) (4,654) Other investments (7,541) (380) Distributions from other investments 4,368 9,928 Additions to property and equipment (15,209) (18,040) ________ ________ Net cash used in investing activities (19,046) (13,146) ________ ________ Cash flows from financing activities Purchases of stock (1,007) -- Receipts relating to stock issuances 3,393 4,028 Dividends paid to stockholders (12,012) (15,614) ________ ________ Net cash used in financing activities (9,626) (11,586) ________ ________ Cash and cash equivalents Net increase during period 62,992 79,963 At beginning of year 283,838 358,472 ________ ________ At end of period $346,830 $438,435 ________ ________ ________ ________ 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, 1999, 120,107,818 common shares $24,022 $48,057 $649,378 $48,727 $770,184 Comprehensive income Net income 75,034 Change in unrealized security holding gains 7,390 Total comprehensive income 82,424 600,466 common shares issued under stock-based compensation plans 120 6,215 6,335 Dividends declared (15,688) (15,688) _______ _______ ________ _______ ________ Balance at March 31, 2000, 120,708,284 common shares $24,142 $54,272 $708,724 $56,117 $843,255 _______ _______ ________ _______ ________ _______ _______ ________ _______ ________ 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 derives its consolidated revenues and net income primarily from investment advisory services provided to individual and institutional investors in the sponsored T. Rowe Price mutual funds and other investment portfolios. We also provide our investment advisory clients with related administrative services, including mutual fund transfer agent, accounting and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; discount brokerage; and trust services. The investors that we serve are primarily domiciled in the United States. Investment advisory revenues depend largely on the total value and composition of assets under management. Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations. These unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of our results for the interim periods presented. All such adjustments are of a normal recurring nature. The unaudited interim financial information contained in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our 1999 Annual Report. NOTE 2 - INFORMATION ABOUT REVENUES AND SERVICES. Our first quarter revenues (in thousands) from advisory services provided under agreements with our sponsored mutual funds and other investment clients were: 1999 2000 ________ ________ Sponsored mutual funds Stock and blended Domestic $ 80,681 $104,373 International 27,940 38,999 Bond and money market 24,323 23,425 ________ ________ 132,944 166,797 Other portfolios 57,934 67,364 ________ ________ Total investment advisory fees $190,878 $234,161 ________ ________ ________ ________ 7 The following table summarizes the various investment portfolios and assets under management (in billions) on which we earn advisory fees. Average during first quarter _______________ 1999 2000 12/31/99 03/31/00 ______ ______ ________ ________ Sponsored mutual funds Stock and blended Domestic $ 56.2 $ 71.5 $ 71.2 $ 75.3 International 16.0 21.7 21.4 22.1 Bond and money market 22.2 21.7 21.9 22.0 ______ ______ ______ ______ 94.4 114.9 114.5 119.4 Other portfolios 53.4 65.5 65.4 65.8 ______ ______ ______ ______ $147.8 $180.4 $179.9 $185.2 ______ ______ ______ ______ ______ ______ ______ ______ Fees for advisory-related administrative services provided to the funds were $36,222,000 and $44,309,000 for the first quarter of 1999 and 2000, respectively. Accounts receivable from the funds totaled $74,427,000 at March 31, 2000. NOTE 3 - SUBSEQUENT EVENT. On April 11, 2000, we entered into an agreement with Robert Fleming Holdings Limited to purchase its 50% interest in Rowe Price-Fleming International for a fixed price of $780 million. Rowe Price-Fleming was formed in 1979 and is a 50% owned consolidated subsidiary of T. Rowe Price Associates. It primarily provides U.S. investors with international investment advisory services and, at March 31, 2000, managed $42.8 billion. Our acquisition of the remaining interest in Rowe Price-Fleming is subject to receipt of requisite regulatory approvals and is expected to close in the third quarter of 2000 after The Chase Manhattan Corporation completes its announced acquisition of Robert Fleming Holdings. In any event, closing of our transaction will occur no later than December 31, 2000. The acquisition will likely be modestly dilutive to earnings per share near-term and somewhat accretive to income before goodwill charges. We expect to finance this acquisition with available cash resources including the proceeds of a five-year, $600 million syndicated bank credit facility that we are currently negotiating. 8 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 March 31, 2000 and for the three-month periods ended March 31, 1999 and March 31, 2000, appearing on pages two through seven 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 auditing standards generally accepted in the United States, 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 accounting principles generally accepted in the United States. We previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet as of December 31, 1999, and the related consolidated statements of income, of cash flows, and of stockholders' equity for the year then ended (not presented herein), and in our report dated January 25, 2000, 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, 1999, 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 April 24, 2000 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. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. GENERAL. Our revenues and net income are derived primarily from investment advisory services provided to U.S. individual and institutional investors in our sponsored mutual funds and other investment portfolios. We manage 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 individual and institutional investors. Investment advisory revenues depend largely on the total value and composition of assets under management. Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations. Total assets under our management were $185.2 billion at March 31, 2000, including $144.8 billion in equity securities. RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2000 VERSUS 1999. Net income increased $21.6 million or 40% to $75.0 million and diluted earnings per share rose from $.41 to $.58. Total revenues increased 29% from $246 million to a quarterly record $316 million, led by increases of $43.3 million in investment advisory fees and $15.6 million in investment income. Investment advisory revenues earned from the T. Rowe Price mutual funds increased $33.9 million as average fund assets under management during the quarter were $114.9 billion, $20.5 billion more than in the first quarter of 1999. Fund assets increased $4.9 billion during the first three months of 2000 and totaled $119.4 billion at March 31, including $97.4 billion in stock and blended assets funds. The most significant increase in fund assets during the quarter was attributable to market appreciation and income reinvested in the stock and blended funds totaling $4.4 billion. Net cash inflows to the funds during the quarter totaled $173 million, including inflows of $378 million into stock and blended funds, offset in part by $205 million of outflows from bond and money market funds. Growth stock funds generally had net inflows while value funds had net outflows. Greater assets in other investment portfolios, including variable annuity and other subadvised funds, resulted in the balance of our advisory revenue gains totaling $9.4 million. Performance-related advisory fees were $6.4 million this quarter, still high compared to historical levels, but down $1.5 million from the 1999 first quarter. We earn these performance-related fees on venture capital investments that we manage and, though recurring, these fees will vary significantly as market conditions change. Assets under management in the other investment portfolios that we manage were $65.8 billion at March 31, 2000, up $12.1 billion from March 31, 1999. Administrative fees from advisory-related services that we provide to the funds and their shareholders rose $11.6 million from the first quarter of 10 1999 to $60.8 million. About $9.4 million of this increase is attributable to transfer agency and recordkeeping services that we provide to defined contribution retirement plans and the T. Rowe Price mutual funds. These revenues are largely offset by the costs that we incur in providing the services. Commissions that we earn on discount brokerage trading volume contributed $2.2 million of the revenue increase and now account for approximately one-eighth of administrative revenues. Investment and other income rose $15.6 million from the first quarter of 1999, including $2.6 million from our larger money market fund balances and $12.8 million from our venture capital investments. The strong IPO markets of late 1999 and early 2000 produced significant market gains and distributions from our venture investments this year. Operating expenses increased 23% to about $186 million. Greater compensation and related costs, which were up $11.5 million or 14%, were attributable to increases in our rates of compensation, including performance-related bonuses, and a 4% increase in our staff size primarily to support the growing investment-related administrative services and technology-based operations. As of March 31, 2000, we employed nearly 3,700 associates. Our advertising and promotion expenditures increased 24% to $25 million. We expect that our promotional spending will decline in the second and third quarters of 2000, though remain at levels higher than the comparable 1999 periods. Occupancy and equipment expense was nearly $5 million higher due to the expansion of our operating facilities in Owings Mills and Colorado Springs in 1999. International investment research fees were up $3.9 million as international assets under management increased $10.4 billion from March 31, 1999. Other operating expenses increased $9.7 million due largely to professional fees that we incurred in technology and services development activities. CAPITAL RESOURCES AND LIQUIDITY. We expect to finance the Rowe Price-Fleming International acquisition discussed in Note 3 on page 7 of this Form 10-Q from available cash resources including the proceeds of a five-year, $600 million syndicated bank credit facility that we are currently negotiating. FORWARD-LOOKING INFORMATION. From time-to-time, information or statements provided by or on behalf of T. Rowe Price, including those within this Form 10-Q Quarterly Report, may contain certain "forward-looking information," including information relating to anticipated growth in our revenues or earnings, anticipated changes in the amount and composition of assets under management, our anticipated expense levels, and our expectations regarding financial market and other conditions. Readers are cautioned that any forward-looking information provided by or on behalf of T. Rowe Price is not a guarantee of future performance. Actual results may differ materially from those in forward-looking information as a result of various factors, including but not limited to those discussed below. 11 Further, such forward-looking statements speak only as of the date on which such statements are made, and we undertake 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. Our future revenues will fluctuate due to many factors, such as the total value and composition of assets under our management and related cash inflows or outflows in the T. Rowe Price mutual funds and other investment portfolios; fluctuations in worldwide financial markets, including those in emerging countries, resulting in appreciation or depreciation of assets under our management; the relative investment performance of the Price mutual funds and other investment portfolios as compared to competing offerings and market indices; the extent to which we earn performance-based investment advisory fees; the expense ratios of the Price mutual funds; investor sentiment and investor confidence; the ability to maintain our investment management and administrative fees at appropriate levels; competitive conditions in the mutual fund, asset management, and broader financial services sectors; our introduction of new mutual funds and investment portfolios; our ability to contract with the Price mutual funds for payment for investment advisory-related administrative services provided 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 our venture capital and other investments. Our revenues are substantially dependent on fees earned under contracts with the Price funds and could be adversely affected if the independent directors of one or more of the Price funds determined to terminate or significantly alter the terms of the investment management or related administrative services agreements. Our future operating results are also dependent upon the level of our 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 due to, among other things, performance-based bonuses, changes in our employee count and mix, and competitive factors; changes in expense levels resulting from our pending Rowe Price-Fleming International acquisition, including goodwill charges arising therefrom; the manner in which we provide international investment advisory services; expenses and capital costs, such as technology assets, depreciation, amortization, research and development, and interest, incurred to maintain and enhance our administrative and operating services infrastructure including Internet capabilities; unanticipated costs that may be incurred to protect investor accounts and the goodwill of our clients; and disruptions of services, including those provided by third parties such as communications, power, and the mutual fund transfer agent system. Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on our operations and results, including but not limited to effects on costs we incur and effects on investor interest in 12 mutual funds and investing in general or in particular classes of mutual funds or other investments. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Since December 31, 1999, there has been no material change in the information provided in Item 7A of the 1999 Form 10-K Annual Report. PART II. OTHER INFORMATION. ITEM 1. LEGAL PROCEEDINGS. On July 6, 1998, Rowe Price-Fleming, the T. Rowe Price International Stock Fund and the fund's five directors were named as defendants in Migdal v. Rowe Price-Fleming International, Inc., et al., filed in the United States District Court for the District of Maryland. The Complaint sought to invalidate the advisory agreement between Rowe Price-Fleming and the International Stock Fund, and sought recovery of an unspecified amount of advisory fees paid by the International Stock Fund to Rowe Price-Fleming. Plaintiffs alleged 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 the T. Rowe Price Growth Stock Fund, T. Rowe Price Associates and certain of its subsidiaries which provide services to the funds, as well as five directors of the T. Rowe Price Growth Stock Fund. On January 21, 1999, the Amended Complaint was dismissed with leave for plaintiffs to re-file. On February 16, 1999, the plaintiffs filed a Second Amended Complaint, but the fund directors were excluded as defendants. The Second Amended Complaint alleged a claim under Section 36(b) of the Investment Company Act of 1940. The Complaint sought to invalidate the advisory and service agreements negotiated between the corporate defendants and certain T. Rowe Price funds based on a claim that (i) the fees paid to the corporate defendants were excessive and (ii) the advisory agreements were not negotiated at arm's length because each of the boards of directors of the Price funds is not independent as required under the Investment Company Act of 1940. On March 19, 1999, we and the other defendants filed a Motion to Dismiss the Second Amended Complaint. In an order dated March 20, 2000, our motion was granted and the case dismissed with prejudice. On April 6, 2000, the plaintiffs filed a Notice of Appeal of the Dismissal of the case. From time to time, claims arise in the ordinary course of our business, including employment-related claims. After consulting with counsel, we believe it unlikely that any adverse determination in one or more pending claims would have a material adverse effect on our financial condition or results of operations. 13 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The annual meeting of our stockholders was held on April 13, 2000. The proxy statement and solicitation pertaining to this meeting were previously filed with the Commission. Shares eligible to vote were 120,375,159 as of the record date of February 14, 2000. Management's 14 nominees for the Board of Directors were elected to hold office until the next annual meeting of stockholders and until their respective successors are elected and qualify. The tabulation of votes was: Nominee For Withheld _____________________ __________ __________ Edward C. Bernard 98,613,612 2,860,988 James E. Halbkat, Jr. 99,118,531 2,356,069 Donald B. Hebb, Jr. 99,099,187 2,375,414 Henry H. Hopkins 98,623,796 2,850,804 James A.C. Kennedy 98,627,045 2,847,555 John H. Laporte 98,631,393 2,843,207 Richard L. Menschel 99,081,815 2,392,785 William T. Reynolds 98,611,837 2,862,763 James S. Riepe 98,631,397 2,843,203 George A. Roche 89,417,926 12,056,675 Brian C. Rogers 98,637,493 2,837,107 Robert L. Strickland 99,070,600 2,404,000 M. David Testa 90,918,639 10,555,961 Anne Marie Whittemore 98,669,936 2,804,665 ITEM 5. OTHER INFORMATION. On April 11, 2000, we entered into an agreement with Robert Fleming Holdings Limited to purchase its 50% interest in Rowe Price-Fleming International for a fixed price of $780 million. Rowe Price-Fleming was formed in 1979 and is a 50% owned consolidated subsidiary of T. Rowe Price Associates. It primarily provides U.S. investors with international investment advisory services and, at March 31, 2000, managed $42.8 billion. Our acquisition of the remaining interest in Rowe Price-Fleming is subject to receipt of requisite regulatory approvals and is expected to close in the third quarter of 2000, after The Chase Manhattan Corporation completes its announced acquisition of Robert Fleming Holdings. In any event, closing of our transaction will occur no later than December 31, 2000. The acquisition will likely be modestly dilutive to earnings per share near-term and somewhat accretive to income before goodwill charges. We expect to finance this acquisition with available cash resources including the proceeds of a five-year, $600 million syndicated bank credit facility that we are currently negotiating. On April 13, 2000, the Board of Directors elected Martin G. Wade as the fifteenth member of the Board. Mr. Wade is the Vice Chairman and Chief Executive Officer of Rowe Price-Fleming International. 14 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 10.06 through 10.11 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 Representative Investment Management Agreement with each of the T. Rowe Price mutual funds. (Incorporated by reference from Form N-1A/A; Accession No. 0001046404-97-000008.) 10.02 Transfer Agency and Service Agreement dated as of January 1,2000 between each of the T. Rowe Price mutual funds and T. Rowe Price Services, Inc. (Incorporated by reference from Form 485BPOS; Accession No. 0001012968-00-000024.) 10.03 Agreement dated January 1, 2000, as amended February 9, 2000, between T. Rowe Price Retirement Plan Services, Inc. and each of the T. Rowe Price taxable mutual funds. (Incorporated by reference from Form 485BPOS; Accession No. 0001012968-00-000024.) 10.04 Representative Underwriting Agreement between each of the T. Rowe Price mutual funds and T. Rowe Price Investment Services, Inc. (Incorporated by reference from Form N-1A/A; Accession No. 0001046404-97-000008.) 10.05 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 for 1997; Accession No. 0000080255-98-000358.) 10.06 T. Rowe Price Associates, Inc. 1990 Stock Incentive Plan. (Incorporated by reference from Form S-8 Registration Statement [File No. 33-37573].) 10.07 T. Rowe Price Associates, Inc. 1993 Stock Incentive Plan. (Incorporated by reference from Form S-8 Registration Statement [File No. 33-72568].) 15 10.08 T. Rowe Price Associates, Inc. 1995 Director Stock Option Plan. (Incorporated by reference from Form DEF 14A; Accession No. 000933259-95-000009; CIK 0000080255.) 10.09 T. Rowe Price Associates, Inc. 1996 Stock Incentive Plan. (Incorporated by reference from Form DEF 14A; Accession No. 0001006199-96-000031; CIK 0000080255.) 10.10 T. Rowe Price Associates, Inc. 1998 Director Stock Option Plan. (Incorporated by reference from Form DEF 14A; Accession No. 00080255-98-000355.) 10.11 Executive Incentive Compensation Plan. (Incorporated by reference from Form DEF 14A; Accession No. 933259-95-000009; CIK 0000080255.) 15 Letter from PricewaterhouseCoopers LLP, independent accountants, re unaudited interim financial information. 27 Financial Data Schedule. (b) Reports on Form 8-K: None during the first quarter of 2000. SIGNATURES. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on April 26, 2000. T. Rowe Price Associates, Inc. /s/ George A. Roche Chairman, President & Principal Financial Officer /s/ Joseph P. Croteau, CPA Vice President, Treasurer & Controller (Principal Accounting Officer) EX-15 2 EXHIBIT 15 April 25, 2000 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Dear Sirs: We are aware that our report dated April 24, 2000 (issued pursuant to the provisions of Statement on Auditing Standards No. 71) is incorporated by reference in the Prospectuses constituting parts of T. Rowe Price Associates, Inc.'s Registration Statements on Form S-8 (No. 033-07012, No. 033-37573, No. 033-72568, No. 033-58749, No. 333-20333 and No. 333-90967). We are also aware of our responsibilities under the Securities Act of 1933. Yours very truly, /s/ PricewaterhouseCoopers LLP EX-27 3
5 This schedule contains summary financial information extracted from the unaudited condensed consolidated financial statements of T. Rowe Price Associates, Inc. included in Part I, Item 1 of the accompanying Form 10-Q Quarterly Report for the period ended March 31, 2000 and is qualified in its entirety by reference to such financial statements. 0000080255 T. ROWE PRICE ASSOCIATES, INC. 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 438,435,000 250,260,000 144,841,000 0 0 0 217,867,000 0 1,125,259,000 0 17,632,000 0 0 24,142,000 819,113,000 1,125,259,000 0 316,331,000 0 185,540,000 0 0 0 130,791,000 49,204,000 75,034,000 0 0 0 75,034,000 .62 .58 Item is not contained in registrant's unclassified balance sheet. Item is reported net of accumulated depreciation at interim. Not reported at interim.
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