<PAGE>
--------------------------------------------------------------------------------
Fellow Shareholders
--------------------------------------------------------------------------------
The December 1994 devaluation and subsequent collapse of the Mexican peso
triggered a plunge in Mexican stock prices and a sharp sell-off in Latin
American markets. With foreign capital flowing out of the region, inadequate
savings to fund various countries' current account deficits, and a flight of
domestic capital, we seemed to be facing a return to the grim years of the
1980s.
Fortunately, swift action by the U.S. government to corral a funding
package for Mexico and the resolve of the Argentine Finance Ministry not to
devalue ensured that by the end of February the worst of the crisis was over.
In early March, the Mexican government announced an economic reform program,
the Mexican peso bounced, and markets started to rally.
Your fund's return for the quarter was basically in line with the
benchmark index, shown below, and trailed slightly for the six-month period
due to our underexposure in the better-performing Chilean market.
--------------------------------------------------------------------------------
Performance Comparison
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 4/30/95
3 Months 6 Months
_____________________
<S> <C> <C>
Latin America Fund -6.3% -33.7%
MSCI EMF Latin America Index -6.1 -31.2
</TABLE>
--------------------------------------------------------------------------------
MARKET AND STRATEGY REVIEW
In MEXICO, the peso's collapse left both the government and private companies
struggling to meet debt repayments. The international financing package of
$50 billion will enable the government to repay the $29 billion of Tesobonos
(bonds) that fall due this year, but with one-month interest rates at 61% the
cost of regaining investor confidence has been high. These interest rate
levels have imposed a huge strain on the banking system and also on
companies, which only last summer had been leveraging themselves to exploit
the NAFTA market. Suddenly these companies faced ruinous financing costs and
mountainous levels of dollar debt.
The Mexican government has set ambitious targets for cutting government
spending and raising taxes and has introduced measures to support the banking
system. Turning the current account deficit around and keeping a lid on
inflation should help restore confidence and establish a sounder platform for
growth in 1996. The economy will take the brunt of the pain this year, and the
official forecast of a 2% GDP contraction and only 40% inflation still looks
optimistic. Given this grim short-term scenario, we feel it is appropriate to
remain slightly underweighted in Mexico with the focus on the most solid,
well-managed groups such as CIFRA, a food retailer, TELEFONOS DE MEXICO, a
utility, and the media concern GRUPO TELEVISA.
In ARGENTINA, where the Mexican crisis threatened to blow away all the
good work achieved by four years of the Cavallo plan, intense pressure was
put on the U.S. dollar-peso link, and Argentine bank deposits declined 18%
over the period. However, Finance Minister Cavallo's willingness to maintain
the dollar link rather than countenance a peso devaluation, and his
successful negotiation of an $11 billion
--------------------------------------------------------------------------------
Geographical Diversication
--------------------------------------------------------------------------------
[CHART APPEARS HERE]
Shows Brazil 38%; Mexico 22%; Argentina 14%; U.S. Short-Term 10%; Chile
9%; Peru 2%; and All Other 5%. Based on net assets as of April 30, 1995.
<PAGE>
financing package from international agencies and banks steadied confidence and
halted the slide in foreign exchange reserves. As with Mexico, the cost of
higher interest rates and taxes to maintain confidence will hit the Argentine
economy this year. We remain cautious about near-term prospects for economic
growth and are concentrating on companies with resilient earnings such as the
oil company YPF SOCIEDAD ANONIMA and the two telecommunications groups, TELECOM
ARGENTINA and TELEFONICA DE ARGENTINA.
In contrast, we remain optimistic about BRAZIL, a view unfortunately not
shared by many other investors for the first two months of this quarter.
President Cardoso's honeymoon period did not last long. The first quarter's
trade deficit, the slow progress of his reform package through Congress, and
fears of rising inflation pushed stocks down to levels last seen in April
1994, when Brazil seemed likely to elect a socialist president. While reform
will come slowly, we believe it is a mistake to be too gloomy, since the
economy is booming and the new government's commitment to reforming the
constitution and the tax and social security systems remains strong. Your
fund remains overweighted in Brazil with a balance between well-managed,
fast-growing companies in the private sector, such as USIMINAS (steel), and
predominantly government-owned companies that should benefit from
privatization moves, such as CIA ENERGETICA MINAS GERAIS and ELETROBRAS.
In PERU, the stock market was unable to resist the turbulence sweeping
the region despite strong economic fundamentals. Peru does have a current
account deficit, but it is easily financed by direct investment, primarily
from international mining companies pouring resources into the country. The
uncertainty of the April presidential election was an additional factor
holding back the market, but with President Fujimori reelected it has
revived.
Elsewhere in the region, restricted access to the markets of CHILE,
COLOMBIA, and VENEZUELA enabled them to perform defensively this quarter. The
Chilean market was relatively stable, with economic news continuing to be
positive. The economy is experiencing a trade boom and is moving toward a
healthy trade surplus for 1995. GDP growth remains over 4% with inflation
below 10%. We used market weakness to add to our Chilean weighting, buying
utility companies ENERSIS and CHILGENER, high-quality stocks that had been
hit by negative sentiment toward the whole region and offered excellent
value.
SUMMARY
LATIN AMERICAN markets have rallied strongly from the abyss of the March
lows, despite continuing worries about government financing in Argentina and
Mexico and the progress of constitutional reforms in Brazil. We believe the
worst of the storm has passed and that -- short-term volatility
notwithstanding -- Latin American markets will start to reflect the region's
excellent prospects for superior economic growth over the next few years.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
May 15, 1995
--------------------------------------------------------------------------------
Industry Diversification
--------------------------------------------------------------------------------
April 30, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Utilities 33.6%
Financial and Insurance 25.9
Consumer Goods 13.0
Basic Industry 8.4
Energy 6.3
Other Industries 0.2
Short-Term Investments 9.7
Other Assets Less Liabilities 2.9
--------------------------------------------------------------------------------
Total Net Assets 100.0%
--------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
--------------------------------------------------------------------------------
Twenty-Five Largest Holdings
--------------------------------------------------------------------------------
April 30, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Telefonos de Mexico 'L' ADS, Mexico 8.4%
Telecomunicacoes Brasilias, Brazil 8.0
Cifra 'B' ADR, Mexico 5.1
Telefonica de Argentina, Argentina 4.0
Banco Bradesco, Brazil 3.4
Usiminas, Brazil 3.1
YPF Sociedad Anonima 'D' ADR, Argentina 2.8
Eletrobras, Brazil 2.6
Cia Energetica Minas Gerais, Brazil 2.5
Naviera Perez 'B', Argentina 2.4
Tolmex 'B2', Mexico 2.3
Empresa Nacional de Electricidad ADS, Chile 2.2
Brahma, Brazil 1.8
Telecomunicacoes de Sao Paulo, Brazil 1.8
Compania de Telefonos de Chile 'A' ADR,
Chile 1.6
Buenos Aires Embotelladora 'B' ADR,
Argentina 1.4
Cemex 'B', Mexico 1.3
Companhia Siderurgica Nacional, Brazil 1.3
Lojas Americanas, Brazil 1.2
Grupo Televisa PC, GDS, Mexico 1.1
Enersis ADS, Chile 1.1
Panamerican Beverages 'A', Mexico 1.1
Petrol Brasileiros, Brazil 1.0
Compania Cervecerias Unidas ADS, Chile 1.0
Chilectra ADR, Chile 0.9
--------------------------------------------------------------------------------
Total 63.4%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Security Classification
--------------------------------------------------------------------------------
April 30, 1995
<TABLE>
<CAPTION>
Percent Market
of Net Cost Value
Assets (000) (000)
------- ----- ------
<S> <C> <C> <C>
Common Stocks 55.5% $139,823 $ 87,155
Preferred Stocks 31.6 54,242 49,694
Corporate Bonds 0.3 391 394
Short-Term
Investments 9.7 15,241 15,241
----- -------- --------
Total Investments 97.1 209,697 152,484
Other Assets Less
Liabilities 2.9 4,634 4,634
--------------------------------------------------------------------------------
Total Net Assets 100.0% $214,331 $157,118
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Average Annual Compound Total Returns
--------------------------------------------------------------------------------
Periods Ended April 30, 1995
<TABLE>
<CAPTION>
Since Inception
1 Year 12/29/93
---------- ------------
<S> <C>
-22.1% -24.8%
</TABLE>
--------------------------------------------------------------------------------
Note: For the calendar quarter ending 3/31/95, the fund's returns for the
above periods were -34.9% and -32.7%, respectively.
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
3
<PAGE>
--------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price Latin America Fund / April 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
(values in thousands except capital stock information)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
ARGENTINA -- 13.7%
--------------------------------------------------------------------------------
Value
-------
<S> <C> <C>
COMMON STOCKS
79,091 shs. Buenos Aires Embotelladora
`B' ADR (USD)................... $ 2,175
220,000 * Cadipsa `B'....................... 221
24,500 * Capex `A' GDR (USD)............... 368
30,000 Central Puerto `B'................ 117
18,000 Central Puerto `B' ADS (USD)...... 351
24,648 Enron Global Power &
Pipeline (USD).................. 595
62,400 Fiplasto `B'...................... 175
414,000 * Indupa............................ 184
105,366 Juan Minetti...................... 337
43,000 * Mirgor `C' ADS (USD).............. 89
918,342 Naviera Perez `B'................. 3,746
160,000 Polledo `B'....................... 152
33,000 Quilmes Industrial (USD).......... 627
13,350 Telecom Argentina Stet
`B' ADR (USD)................... 584
265,332 Telefonica de Argentina
`B' ADR (USD)................... 6,235
13,270 Telefonica de Argentina
`B' ADS (USD)................... 312
91,557 Transportadora de Gas
del Sur `B' ADS (USD)........... 904
216,582 YPF Sociedad Anonima `D'
ADR (USD)......................... 4,386
TOTAL ARGENTINA 21,558
--------------------------------------------------------------------------------
BELIZE -- 0.3%
--------------------------------------------------------------------------------
COMMON STOCK
28,333 Belize Holdings (USD)............. 428
--------------------------------------------------------------------------------
BRAZIL -- 38.4%
--------------------------------------------------------------------------------
COMMON STOCKS
79,000 Capco Automotive
Products (USD).................. 701
98,340 Cia Energetica Minas Gerais
ADR (USD)....................... 2,311
77,950,000 Companhia Siderurgica
Nacional........................ 1,982
15,005,863 Eletrobras........................ 4,144
49,844,000 Telecomunicacoes Brasilias........ 1,492
10,630
PREFERRED STOCKS
2,225,000 Alpargatas Santista Textiles...... 366
105,000,000 Artex............................. 541
292,000 shs. * Bahia Sul Celulose................ 236
687,215,396 Banco Bradesco.................... 5,279
2,555,000 Banco Itau........................ 686
53,568,000 Banco Nacional.................... 991
9,824,000 Brahma............................ 2,853
4,530,000 Brasmotor......................... 1,226
2,632,000 Casa Anglo Bras................... 332
36,100,000 Ceval Alimentos................... 471
89,046,621 Cia Acos Espec Itabira............ 761
3,700,000 Cia Cimento Portland Itau......... 1,176
59,309,580 Cia Energetica Minas Gerais....... 1,390
8,991 Cia Energetica Minas Gerais
ADR (USD)......................... 211
2,258 Cia Energetica Minas Gerais
Sponsored ADR (USD)............... 53
169,000 * Cia Siderurgiga Paulista
Cosipa `B'........................ 313
3,599,998 Cia Tecidos Norte de Minas........ 951
886,950 Dixie Lalekla..................... 680
12,000,000 Duratex........................... 552
4,969,940,000 Eberle............................ 381
750,000 Eucatex........................... 547
528,000 Frigobras Cia Bras de
Frigorificos...................... 414
324,438,000 Industia e Comercio
Chapeco......................... 160
33,850,000 Ipiranga Petroleo................. 631
18,801 * Kepler Weber...................... 183
87,901,000 Lojas Americanas.................. 1,927
19,380,000 Lojas Renner...................... 372
4,722,000 Mesbla............................ 492
382,500 * Moinho Santista................... 465
985,000 Multibras Eletrodomesticos........ 1,036
17,571,000 Petrol Brasileiros................ 1,637
7,360,000 Pettenati sa Malhas
Confeccoes...................... 296
407,932,163 Refrigeracao Parana............... 894
4,800,000 * Shulz............................. 189
2,318,000 * Sifco............................. 145
4,636,000 Sifco, pro-rata................... 290
1,136,294 Telecomunicacoes Brasilias........ 41
310,521 Telecomunicacoes Brasilias
ADR (USD)....................... 11,101
22,538,335 Telecomunicacoes de
Sao Paulo......................... 2,841
3,117,350,000 Usiminas.......................... 3,792
95,000 Usiminas ADR (USD)................ 1,140
2,048,500 Weg............................... 1,055
500,000 * Wentex Textile.................... 597
49,694
TOTAL BRAZIL 60,324
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
CHILE -- 8.6%
--------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
10,000shs. Banco Osorno y la Union `A'
ADS (USD)....................... $ 120
26,826 Chilectra ADR (USD)............... 1,361
42,400 Chilgener ADR (USD)............... 1,187
26,000 Chilquinta ADR (USD).............. 345
63,392 Compania Cervecerias Unidas
ADS (USD)....................... 1,506
36,670 * Compania de Telefonos.............
de Chile `A' ADR (USD).......... 2,535
138,000 Empresa Nacional de
Electricidad ADS (USD).......... 3,415
60,331 Enersis ADS (USD)................. 1,689
10,950 Genesis Chile Fund (USD).......... 367
26,800 Laboratorio Chile
ADR (USD)....................... 513
48,000 Telex Chile ADR (USD)............. 378
TOTAL CHILE 13,416
--------------------------------------------------------------------------------
COLOMBIA -- 1.0%
--------------------------------------------------------------------------------
COMMON STOCKS
18,000 Cementos Diamante `B'
GDS (USD)....................... 391
15,000 * Cementos Paz del Rio
GDS (USD)....................... 249
31,200 * Gran Cadena de Almacemes
`B' ADS (USD)................... 511
19,000 Maderas y Sinteticos
Sociedad Anoma ADR
(USD)........................... 333
1,484
CORPORATE BOND
140,000USD Bancol, Cv., 5.20%, 2/1/99........ 101
TOTAL COLOMBIA 1,585
--------------------------------------------------------------------------------
GUATEMALA -- 0.4%
--------------------------------------------------------------------------------
COMMON STOCK
37,500shs. * Basic Petroleum (USD)............. 525
--------------------------------------------------------------------------------
MEXICO -- 22.0%
--------------------------------------------------------------------------------
COMMON STOCKS
66,100shs. * Banca Quadrum ADR (USD)........... $ 413
628,746 Cemex `B'......................... 2,002
5,443,140 Cifra `B' ADR (USD)............... 8,056
259,200 Embotelladores del Valle
Anahuac `B'..................... 207
183,000 Empaques Ponderosa `B'............ 380
8,244 Grupo Industrial San Luis
Units........................... 121
315,000 * Grupo Fernandez Editores `B'...... 181
9,150 Grupo Financiero Bancomer
`C' ADS (USD)................... 55
2,555 Grupo Financiero Bancomer
`C' GDS (USD)................... 15
46,000 * Grupo Financiero Inbursa `C'...... 87
38,000 * Grupo Industrial Durango
`A' ADR (USD)................... 304
525,000 * Grupo Posadas `A'................. 193
24,600 Grupo Radio Centro
ADS (USD)....................... 255
223,510 * Grupo Sidek `B'................... 218
58,200 Grupo Sidek `B' ADR (USD)......... 240
36,447 * Grupo Sidek `L' ADR (USD)......... 196
34,400 * Grupo Simec `B' ADR (USD)......... 344
10,140 Grupo Situr `B'................... 4
85,957 Grupo Televisa PC
GDS (USD)....................... 1,719
164,925 International de Ceramica PC...... 293
75,000 * Jugos del Valle `B'............... 199
64,061 Panamerican Beverages
`A' (USD)....................... 1,674
59,000 * Sears Roebuck de Mexico
`B' ADS (USD)................... 431
945,000 * Seguros Comercial
Americana `B'................... 174
436,286 Telefonos de Mexico `L'
ADS (USD)....................... 13,198
1,098,883 Tolmex `B2'....................... 3,648
TOTAL MEXICO 34,607
--------------------------------------------------------------------------------
PERU -- 2.2%
--------------------------------------------------------------------------------
COMMON STOCKS
208,069 Backus y Johnston
Cerveceria `T'.................. 504
13,900 Cementos Lima..................... 299
27,500 * Cementos Yura `C' (USD)........... 241
14,000 Compania de Seguard
la Fenix Peru................... 261
450,000 * Compania Embotelladora
del Pacifico `B' (USD).......... 679
117,500 Enrique Ferreyros................. 184
77,535 Explosivos `T'.................... 311
728,333 * Peru Real Estate `B'.............. 607
27,354 Southern Peru Copper `T'.......... 122
3,208
CORPORATE BOND
290,000USD International Financial
Holdings, Cv., 6.50%,
8/1/99.......................... 293
TOTAL PERU 3,501
</TABLE>
5
<PAGE>
--------------------------------------------------------------------------------
T. Rowe Price Latin America Fund / Statement of Net Assets (Unaudited)
--------------------------------------------------------------------------------
(values in thousands except capital stock information)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
VENEZUELA -- 0.8%
--------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
12,000 shs. Corimon ADR (USD).................. $ 86
162,291 * Mavesa ADR (USD)................... 544
83,050 Sudamtex de Venezuela
`B' ADR (USD).................... 384
60,000 * Venezolana de Prerreducidos
Caroni GDS (USD)................. 285
TOTAL VENEZUELA 1,299
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 9.7%
--------------------------------------------------------------------------------
COMMERCIAL PAPER
$ 5,000,000 Eli Lilly & Company,
6.00%, 5/15/95................... 4,936
5,000,000 Hanson Finance (U.K.),
6.125%, 5/15/95.................. 4,923
85,000 President & Fellows Harvard
College, 5.93%, 5/1/95........... 85
5,300,000 UBS Finance (Delaware),
5.93%, 5/1/95.................... 5,297
TOTAL SHORT-TERM INVESTMENTS 15,241
--------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 97.1% OF NET
ASSETS (COST $209,697) $ 152,484
--------------------------------------------------------------------------------
Other Assets Less Liabilities -- 2.9% 4,634
</TABLE>
<TABLE>
<CAPTION>
NET ASSETS CONSIST OF: Value
-------
<S> <C>
Accumulated net investment
income - net of distributions.............. $ 380
Accumulated net realized gain/loss
- net of distributions..................... (13,326)
Net unrealized gain (loss)...................... (57,213)
Paid-in-capital applicable to
22,958,848 shares of $0.01 par
value capital stock outstanding;
2,000,000,000 shares of the
Corporation authorized..................... 227,277
--------
NET ASSETS...................................... $157,118
========
NET ASSET VALUE PER SHARE....................... $6.84
=====
</TABLE>
--------------------------------------------------------------------------------
* Non-income producing
(USD) U.S. dollar
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations
--------------------------------------------------------------------------------
T. Rowe Price Latin America Fund / Six Months Ended April 30, 1995 (Unaudited)
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend (net of foreign taxes of $95)........................... $ 1,383
Interest......................................................... 495
--------
Total income..................................................... 1,878
--------
Expenses
Investment management............................................ 845
Shareholder servicing............................................ 434
Custody and accounting........................................... 101
Registration..................................................... 66
Prospectus and shareholder reports............................... 20
Legal and audit.................................................. 13
Directors........................................................ 5
Proxy and annual meeting......................................... 5
Miscellaneous.................................................... 9
--------
Total expenses................................................... 1,498
--------
Net investment income.............................................. 380
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities....................................................... (10,933)
Foreign currency transactions.................................... (7)
--------
Net realized gain (loss)......................................... (10,940)
--------
Change in net unrealized gain or loss on:
Securities....................................................... (57,138)
Other assets and liabilities denominated in foreign currencies... 1
--------
Change in net unrealized gain or loss............................ (57,137)
--------
Net realized and unrealized gain (loss)............................ (68,077)
--------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS.................. $(67,697)
========
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
T. Rowe Price Latin America Fund (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
From December 29, 1993
(Commencement of
Six Months Ended Operations) to
April 30, 1995 October 31, 1994
---------------- ----------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income............................... $ 380 $ (389)
Net realized gain (loss)............................ (10,940) (2,398)
Change in net unrealized gain or loss............... (57,137) (76)
-------- --------
Increase (decrease) in net assets from operations... (67,697) (2,863)
-------- --------
Capital share transactions*
Shares sold......................................... 68,941 245,582
Shares redeemed..................................... (43,182) (45,043)
Redemption fees received............................ 621 759
-------- --------
Increase (decrease) in net assets from capital
share transactions................................ 26,380 201,298
-------- --------
Increase (decrease) in net assets........................ (41,317) 198,435
NET ASSETS
Beginning of period...................................... 198,435 --
-------- --------
End of period............................................ $157,118 $198,435
======== ========
---------------------------------------------------------------------------------------------------
*Share information
Shares sold......................................... 9,538 23,904
Shares redeemed..................................... (5,808) (4,675)
-------- --------
Increase (decrease) in shares outstanding........... 3,730 19,229
======== ========
---------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
T. Rowe Price Latin America Fund / April 30, 1995 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The Latin America Fund (the fund), a
non-diversified, open-end management investment company, is one of the
portfolios established by the Corporation.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange (including NASDAQ) are valued at the last quoted sales price at the
time 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.
Debt securities are generally traded in the over-the-counter market and
are valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the
U.S. dollar value of all assets and liabilities initially expressed in
foreign currencies is determined by using the mean of the bid and offer
prices of such currencies against U.S. dollars quoted by a major bank.
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) Currency Translation - Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes in foreign exchange rates on realized and
unrealized security gains and losses is reflected as a component of such
gains and losses.
C) 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.
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) Emerging Markets - At April 30, 1995, the fund held investments in
securities of companies located in emerging markets. Future economic or
political developments could adversely affect the liquidity or value, or
both, of such securities.
B) Other - Purchases and sales of portfolio securities, other than
short-term and U.S. government securities, aggregated $44,234,000 and
$22,307,000, respectively, for the six months ended April 30, 1995.
9
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (cont.)
--------------------------------------------------------------------------------
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. The fund has unused realized capital loss carryforwards
for federal income tax purposes of $2,386,000, which expire in 2002. The
fund intends to retain gains realized in future periods that may be offset by
available capital loss carryforwards.
At April 30, 1995, the aggregate cost of investments for federal income
tax and financial reporting purposes was $209,697,000 and net unrealized loss
aggregated $57,213,000, of which $3,915,000 related to appreciated
investments and $61,128,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The fund is managed by Rowe Price-Fleming International, Inc.
(Price-Fleming), which is owned by T. Rowe Price Associates, Inc. (Price
Associates), Robert Fleming Holdings Limited, and Jardine Fleming Holdings
Limited under a joint venture agreement.
The investment management agreement between the fund and Price-Fleming
(the Manager) provides for an annual investment management fee, of which
$133,000 was payable at April 30, 1995. The fee is computed daily and paid
monthly, and consists of an Individual Fund Fee equal to 0.75% of average
daily net assets and a Group Fee. The Group Fee is based on the combined
assets of certain mutual funds sponsored by the Manager or Price Associates
(the Group). The Group Fee rate ranges from 0.48% for the first $1 billion
of assets to 0.31% for assets in excess of $34 billion. At April 30, 1995,
and for the six months then ended, the effective annual Group Fee rate was
0.34%. The fund pays a pro rata share of the Group Fee based on the ratio of
its net assets to those of the Group.
In addition, the fund has entered into agreements with Price Associates
and two wholly owned subsidiaries of Price Associates, pursuant to which the
fund receives certain other services. Price Associates 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 $437,000 for the six months ended April 30, 1995, of which
$121,000 was payable at period-end.
During the six months ended April 30, 1995, the fund, in the ordinary
course of business, paid commissions of $6,000 to, and placed security
purchase and sale orders aggregating $2,328,000 with, certain affiliates of
the Manager in connection with the execution of various portfolio
transactions.
10
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
T. Rowe Price Latin America Fund (Unaudited)
<TABLE>
<CAPTION>
For a share outstanding throughout each period
----------------------------------------------
From
December 29, 1993
Six Months (Commencement of
Ended Operations) to
April 30, October 31,
1995 1994
---------- -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................... $10.32 $10.00
------ ------
Investment Activities
Net investment income............................. 0.02 (0.03)
Net realized and unrealized gain (loss)........... (3.53) 0.29*
------ ------
Total from Investment Activities....................... (3.51) 0.26
------ ------
Redemption fees added to paid-in-capital............... .03 0.06
------ ------
NET ASSET VALUE, END OF PERIOD......................... $ 6.84 $10.32
====== ======
RATIOS/SUPPLEMENTAL DATA
Total Return........................................... (33.7)% 3.2%
Ratio of Expenses to Average Net Assets................ 1.96%+ 1.99%+
Ratio of Net Investment Income to Average Net Assets... 0.50%+ (0.35)%+
Portfolio Turnover Rate................................ 31.1%+ 12.2%+
Net Assets, End of Period (in thousands)............... $157,118 $198,435
</TABLE>
+ Annualized.
* The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout the
period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund's shares in
relation to fluctuating market values for the investment portfolio.
11
<PAGE>
--------------------------------------------------------------------------------
SEMIANNUAL REPORT
--------------------------------------------------------------------------------
FOR YIELD, PRICE, LAST TRANSACTION, T. ROWE PRICE
AND CURRENT BALANCE, 24 HOURS, -------------
7 DAYS A WEEK, CALL: LATIN AMERICA FUND
1-800-638-2587 toll free
625-7676 Baltimore area
APRIL 30, 1995
FOR ASSISTANCE WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. ROWE PRICE
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distri-
bution only to shareholders and to
others who have received a copy of
the prospectus of the T. Rowe Price
Latin America Fund.
T. ROWE PRICE
Invest With Confidence(R)
LAF
