-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, E+2eRDbm4Xz+PJj1MFSXt+HgpdyYjsTpsXTkkC9+x9JQb0FfhidICXvJyIaVV5CB r1pvWyyvj2+i5MkvL7W9ag== 0000080255-95-000066.txt : 19950427 0000080255-95-000066.hdr.sgml : 19950427 ACCESSION NUMBER: 0000080255-95-000066 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950426 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICE T ROWE ASSOCIATES INC /MD/ CENTRAL INDEX KEY: 0000080255 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 520556948 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14282 FILM NUMBER: 95531358 BUSINESS ADDRESS: STREET 1: 100 EAST PRATT ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 3015472000 MAIL ADDRESS: STREET 1: 100 EAST PRATT STREET CITY: BALTIMORE STATE: MD ZIP: 21202 10-Q 1 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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, 1995. 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) 547-2000. 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: 28,452,552 SHARES AT APRIL 24, 1995. Exhibit index is at Item 6(a) on page 10. 2 PART I. FINANCIAL INFORMATION. ITEM 1. FINANCIAL STATEMENTS. T. ROWE PRICE ASSOCIATES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) 03/31/95 12/31/94 Unaudited ________ _________ ASSETS Cash and cash equivalents $ 60,016 $ 60,838 Accounts receivable 46,722 47,038 Investments in sponsored mutual funds held as available-for-sale securities 93,010 98,733 Partnership and other investments 28,657 28,902 Property and equipment 49,341 48,864 Goodwill and deferred expenses 7,811 7,427 Other assets 11,725 7,643 ________ ________ $297,282 $299,445 ________ ________ ________ ________ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable and accrued expenses $ 17,741 $ 16,309 Accrued compensation and retirement costs 27,413 21,795 Income taxes payable 1,573 9,500 Dividends payable 4,575 4,554 Debt 13,410 13,333 Minority interests in consolidated subsidiaries 16,331 11,483 ________ ________ Total liabilities 81,043 76,974 ________ ________ Commitments and contingent liabilities Stockholders' equity Common stock, $.20 par value - authorized 48,000,000 shares; issued and outstanding 28,569,419 shares in 1994 and 28,421,780 in 1995 5,714 5,684 Capital in excess of par value 1,935 1,946 Unrealized security holding gains 2,554 4,730 Retained earnings 206,036 210,111 ________ ________ Total stockholders' equity 216,239 222,471 ________ ________ $297,282 $299,445 ________ ________ ________ ________ 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 ___________________ 03/31/94 03/31/95 ________ ________ Revenues Investment advisory fees $ 69,015 $ 73,133 Administrative fees 21,771 22,613 Investment and other income 1,141 2,100 ________ ________ 91,927 97,846 ________ ________ Expenses Compensation and related costs 31,395 33,090 Advertising and promotion 10,370 7,901 Depreciation, amortization and operating rentals of property and equipment 5,923 7,357 International investment research fees 5,909 6,782 Administrative and general 11,016 13,595 ________ ________ 64,613 68,725 ________ ________ Income before income taxes and minority interests 27,314 29,121 Provision for income taxes 10,676 11,302 ________ ________ Income from consolidated companies 16,638 17,819 Minority interests in consolidated subsidiaries 2,885 2,828 ________ ________ Net income $ 13,753 $ 14,991 ________ ________ ________ ________ Earnings per share $ .44 $ .50 ________ ________ ________ ________ Dividends declared per share $ .13 $ .16 ________ ________ ________ ________ Weighted average shares outstanding, including share equivalents arising from unexercised stock options 30,983 30,013 ________ ________ ________ ________ 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 __________________ 03/31/94 03/31/95 ________ ________ Cash flows from operating activities Net income $ 13,753 $ 14,991 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization of property and equipment 2,261 3,090 Minority interests in consolidated subsidiaries 2,885 2,828 Increase in accounts receivable (1,152) (316) Increase in accounts payable and accrued liabilities 6,508 2,469 Other changes in assets and liabilities 1,300 2,441 ________ ________ Net cash provided by operating activities 25,555 25,503 ________ ________ Cash flows from investing activities Investments in sponsored mutual funds (8,030) (2,474) Partnership and other investments (1,082) (1,063) Return of partnership investments 170 1,010 Additions to property and equipment (4,993) (3,456) ________ ________ Net cash used in investing activities (13,935) (5,983) ________ ________ Cash flows from financing activities Purchases of stock (1,352) (7,637) Receipts relating to stock issuances 1,255 1,108 Dividends paid to stockholders (3,784) (4,575) Distributions to minority interests -- (7,594) ________ ________ Net cash used in financing activities (3,881) (18,698) ________ ________ Cash and cash equivalents Net increase during period 7,739 822 At beginning of period 46,218 60,016 ________ ________ At end of period $ 53,957 $ 60,838 ________ ________ ________ ________ See the accompanying notes to the condensed consolidated financial statements. 5 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) serve as investment adviser to the T. Rowe Price Mutual Funds (the Price funds), other sponsored investment products, and private accounts of other institutional and individual investors, including defined benefit and defined contribution retirement plans, endowments, foundations, trusts, and other mutual funds. The Company also provides various administrative services to its clients, including mutual fund transfer agent, accounting and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; discount brokerage; and trust services. At March 31, 1995, the Company's assets under management totaled $61.6 billion, including $39.5 billion in the Price 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 1994 Annual Report to Stockholders. NOTE 2 - STOCKHOLDERS' EQUITY. The following table details the changes in stockholders' equity (dollars in thousands) during the first quarter of 1995. 6 Capital Unreal- Common in ized Total Common stock excess security stock- stock - par of par Retained holding holders' - shares value value earnings gains equity __________ ______ _______ ________ ________ ________ Balance at December 31, 1994 28,569,419 $5,714 $ 1,935 $206,036 $2,554 $216,239 Stock options exercised 101,861 20 1,055 (2) 1,073 Purchases of common stock (249,500) (50) (1,079) (6,360) (7,489) Cash received from holders of Executive Stock 35 35 Net income 14,991 14,991 Dividends declared (4,554) (4,554) Unrealized hold- ing loss on available-for- sale mutual fund investments 2,176 2,176 __________ ______ _______ ________ ______ ________ Balance at March 31, 1995 28,421,780 $5,684 $ 1,946 $210,111 $4,730 $222,471 __________ ______ _______ ________ ______ ________ __________ ______ _______ ________ ______ ________ 7 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of T. Rowe Price Associates, Inc. We have reviewed the condensed consolidated balance sheet of T. Rowe Price Associates, Inc. and its subsidiaries as of March 31, 1995, and the related condensed consolidated statements of income and cash flows for the three- month periods ended March 31, 1994 and 1995. 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 condensed consolidated financial statements referred to above 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, 1994, and the related consolidated statements of income, cash flows, and stockholders' equity for the year then ended (not presented herein), and in our report dated January 25, 1995 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, 1994, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ PRICE WATERHOUSE LLP Baltimore, Maryland April 24, 1995 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. (the Company) derives its revenue primarily from investment advisory and administrative services provided to the Price Mutual Funds (the Funds), private accounts, and other sponsored investment products. Investment advisory fees are generally based on the net assets of the portfolios managed. The majority of administrative revenues are earned from contracted services provided to the Funds. The Company believes its base of assets under management is well diversified and relatively stable and that its broad range of investment products meets the varied needs and objectives of most individual and institutional investors. Company revenues are largely dependent on the total value and composition of assets under management; accordingly, fluctuations in financial markets and in the composition of assets under management impact revenues and results of operations. RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1995 VERSUS 1994. Net income increased $1.2 million or 9% from $13.8 million to $15.0 million. Aided by a decrease in weighted average shares outstanding, earnings per share grew more than 13% from $.44 to $.50. The Company has reacquired 1,142,000 shares under its repurchase program since January 1, 1994. Investment advisory revenues from the Funds increased $3.4 million as average assets under management rose $2.2 billion to $37.9 billion. Fund assets closed the 1995 first quarter at $39.5 billion, up $2.2 billion from December 31, 1994, with stock funds accounting for $1.6 billion of the increase. Net cash inflows to the Funds during the first quarter totaled nearly $.8 billion as net subscriptions to the stock funds were more than $.7 billion. Private accounts and other sponsored products contributed $.7 million of the revenue gains. Private account assets under management rose to $22.1 billion at March 31, 1995, up $1.6 billion from December 31, 1994. Total assets under management at quarter end increased to $61.6 billion from $57.8 billion at year-end 1994. Comparable assets under management at March 31, 1994 were $53.5 billion, including almost $35.0 billion in the Funds. Administrative fees from services to the Price Funds and their shareholders grew 4% to $22.6 million; however, increases in related operating expenses more than offset these revenue gains. Investment and other income rose almost $1.0 million due to incremental dividends received on larger money market fund balances, which earned higher rates of interest in 1995, and greater stock fund investments. Operating expenses increased 6% or $4.1 million to $68.7 million from $64.6 million. Greater compensation and related costs, which were up $1.7 million, were attributable to increases in overall compensation rates and a 9% 9 increase in the average number of employees, primarily to support the growing administrative services operations. Advertising and promotion expenditures were cut back significantly from the 1994 first quarter when net cash flows to the Funds reached a quarterly record of almost $1.7 billion. Such expenditures vary over time as market conditions and cash inflows to the Funds warrant. Depreciation, amortization, and operating rentals of property and equipment increased $1.4 million as a result of the Company's recent investments in computer and communications equipment, office facilities and furnishings. International investment research fees increased $.9 million as quarter-end international assets under management rose to nearly $18.7 billion, up from $16.1 billion at March 31, 1994. Administrative and general expenses increased $2.6 million due largely to greater operating costs associated with the Company's growing data processing operations. PART II. OTHER INFORMATION. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The 1995 annual meeting of the Company's stockholders was held on April 6, 1995. The Company's proxy statement and solicitation pertaining to this meeting were previously filed with the Commission. Shares eligible to vote were 28,620,239 as of the record date of February 6, 1995. Management's eleven nominees for the Board of Directors were re-elected to hold office until the next annual meeting of stockholders and until their respective successors are elected and have qualified. A tabulation of the votes cast is as follows: Nominee For Withheld ________________ __________ _________ T.H. Broadus, Jr. 24,764,295 990,820 G.J. Collins 24,888,423 866,692 J.E. Halbkat, Jr. 24,925,879 829,236 C.O. Hoffman 24,886,694 868,421 H.H. Hopkins 24,887,742 867,373 J.S. Riepe 24,889,585 865,530 G.A. Roche 24,889,670 865,445 J.W. Rosenblum 24,921,746 833,369 R.L. Strickland 24,925,709 829,406 M.D. Testa 24,292,848 1,462,267 P.C. Walsh 24,919,789 835,326 The charter amendment to increase the authorized common stock of the Company from 48,000,000 to 100,000,000 shares was approved by a vote of: 21,736,318 for; 3,624,931 against; and 393,866 abstentions. The charter amendment to authorize a new class of 20,000,000 shares of undesignated preferred stock was approved by a vote of: 15,200,037 for; 8,574,592 against; and 441,147 abstentions. Broker non-votes were 1,539,339. 10 The performance-linked Executive Incentive Compensation Plan was approved by a vote of: 22,071,130 for; 2,273,511 against; and 253,185 abstentions. Broker non-votes were 1,157,289. The 1995 Director Stock Option Plan was approved by a vote of: 21,745,373 for; 3,503,477 against; and 373,807 abstentions. Broker non-votes were 132,458. 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: 3.(i)- Amended and Restated Charter of T. Rowe Price Associates, Inc. as of April 6, 1995 (Incorporated by reference from Form 8-A12G/A: Accession No. 933259-95-16; CIK 80255). 10 - 1995 Director Stock Option Plan (Incorporated by reference from Form DEF 14A: Accession No. 933259-95-9; CIK 80255). 15 - Letter from Price Waterhouse LLP, independent accountants, re unaudited interim financial information. 27 - Financial Data Schedule. All other items are omitted because they are not applicable or the answers are none. 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, 1995. T. Rowe Price Associates, Inc. /s/ George A. Roche, Chief Financial Officer /s/ Alvin M. Younger, Jr., Principal Accounting Officer EX-15 2 EXHIBIT 15 April 24, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Dear Sirs: We are aware that our report dated April 24, 1995 (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. 33-7012, No. 33-8672, No. 33- 37573, No. 33-72568 and No. 33-58749). We are also aware of our responsibilities under the Securities Act of 1933. Yours very truly, /s/ Price Waterhouse 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, 1995 and is qualified in its entirety by reference to such financial statements. 0000080255 T. ROWE PRICE ASSOCIATES, INC. 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 60,838,000 98,733,000 47,038,000 0 0 0 48,864,000 0 299,445,000 0 13,333,000 5,684,000 0 0 216,787,000 299,445,000 0 97,846,000 0 68,725,000 0 0 0 29,121,000 11,302,000 14,991,000 0 0 0 14,991,000 .50 0 Represents net amount reported at interim. Not contained in registrant's unclassified balance sheet. Not reported at interim.
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