<PAGE>
Fellow Shareholders
The Latin American roller coaster plunged downhill again in the last weeks of
your fund's fiscal year. The rally fizzled in September as political progress
in Brazil lost momentum and economic recovery in Mexico failed to materialize.
The Latin America index fell 8.17% over the last quarter and 33% for the
fund's fiscal year ended October 31. Your fund's return for the quarter was
marginally better than the index, but trailed for the year. Growth stocks in
the region generally performed poorly. Nevertheless, these companies in your
portfolio have strong franchises and balance sheets, and, as economic growth
picks up in the region, their stock prices should recover.
Performance Comparison
<TABLE>
<CAPTION>
Periods Ended 10/31/95
3 Months 12 Months
-------- ---------
<S> <C> <C>
Latin America Fund -7.55% -37.11%
MSCI EMF Latin America
Index -8.17 -33.00
_______________________________________________________
</TABLE>
Market Review
In Brazil, the government moved swiftly early in the year to cool the
overheating economy by applying credit restrictions, import quotas, and high
interest rates. A definite slowdown was evident by summer: retail sales plunged,
car sales dried up, and unemployment rose sharply. By mid-July, several
retailers had filed for bankruptcy, and the government began to loosen its
restrictive policies by lowering interest rates. Until the foundations for
sustainable growth are in place, which will come from the government's program
of fiscal and social security reforms, economic policy is walking a tightrope.
Although inflation has been falling steadily, profit margins for private sector
companies are under pressure from lower selling prices and rising wage and raw
material costs.
As the country moves through this painful adjustment period into a new era of
low inflation, we believe that stocks of well-managed companies in the private
sector will start to revive. In the sector still part-owned and controlled by
the state, performance has been better as investors anticipate privatization.
Therefore, we are comfortable with our largest holding, Telecomunicacoes
Brasilias, and with the fund's substantial commitment to Brazil.
Elsewhere in the region, the Argentine market has been obsessed by the
relationship between Finance Minister Cavallo, the architect of the country's
economic transformation, and the rest of the political establishment. Despite
President Menem's assurances that Cavallo's position was secure, the sharp drop
in economic activity (industrial production fell 7.9% in August) and high
unemployment rate kept the Finance Minister under pressure. Stocks fell 10%
over the quarter amid political worries. The fundamentals for an upturn in the
Argentine economy are now in place, but we expect near-term growth to be
lackluster. Stock valuations are low, and prospects for the
Market Performance
<TABLE>
<CAPTION>
Periods Ended 10/31/95
(in U.S. Dollar Terms)
3 Months 12 Months
-------- ---------
<S> <C> <C>
Argentina -10.2% -26.3%
Brazil 0.4 -25.5
Chile -11.6 - 9.9
Mexico -16.2 -54.5
Peru - 8.0 1.3
Venezuela 33.0 4.0
_______________________________________________________
</TABLE>
<PAGE>
major banks and the telephone and energy sectors are favorable.
Mexican progress toward economic rehabilitation was fitful during the quarter.
While the trade balance was in surplus and monthly inflation fell to 1.7% in
September from an April peak of 8%, the currency has plunged to new lows and
interest rates spiked to over 50%. Investors fear that this recession, which
shows no signs of abating, will never end. Responding to the plight of highly
indebted consumers, the government has introduced a restructuring package that
enables individuals to reschedule bank credit card debts or overdrafts (up to
$35,000) at favorable interest rates. So far, about 45% of such debts have been
rescheduled. We remain underweighted in Mexico and have focused on companies
with solid earnings visibility, adding to stocks such as Kimberly- Clark Mexico,
a consumer products concern, and Sigma Alimentos, a food company.
Geographic Diversification
[CHART APPEARS HERE]
A pie chart showing asset diversification by country--(Brazil 45%, Mexico 26%,
Argentina 14%, Chile 9%, Peru 2%, Columbia 1%, Other and Reserves 3%).
________________________________________________________________________________
After a long period of outperformance, the Chilean stock market suffered a
decline during the quarter triggered by very high valuations and worries over
future energy prices, which depressed the important utility sector. We remain
underweighted in Chile (about 9% of assets), and used recent weakness as an
opportunity to increase exposure to the utility sector.
Among the smaller emerging markets, the Peruvian government continues to guide
the economy to a more sustainable rate of growth so as to ease strains on the
current account. In Colombia, President Samper is embroiled in a scandal
involving use of drug control funds for his 1994 election campaign. This
uncertainty sent both the currency and stock markets crashing, and we continue
to have a low exposure here. Meanwhile, Venezuela, for so long a macroeconomic
mess but with some well-managed, undervalued companies, has shown the first
signs of grappling with its problems.
Outlook
Despite Latin America's current difficulties, we believe many of the structural
problems of the region, exposed by the current crisis, are being addressed. The
foundations for stability and future growth -- already in place in Chile, nearly
complete in Argentina, and in the process of being established in Brazil and
Mexico -- should start to benefit the region's stock markets in 1996 and beyond.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
November 17, 1995
2
<PAGE>
Portfolio Highlights
Periods Ended October 31, 1995
<TABLE>
<CAPTION>
Change in Price Per Share
- --------------------------------
<S> <C>
3 Months (From $7.02 to $6.49) $ -0.53
12 Months (From $10.32 to $6.49) -3.83
- ---------------------------------------------------
Total Net Assets $148.6 Million
___________________________________________________
</TABLE>
Industry Diversification
October 31, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Services 45.4%
Energy 22.8
Consumer Goods 12.3
Materials 11.8
Finance 6.6
Multi-Industry 0.1
Short-Term Investments 0.8
Other Assets Less Liabilities 0.2
- ---------------------------------------------------
Total 100.0%
___________________________________________________
</TABLE>
Security Classification
October 31, 1995
<TABLE>
<CAPTION>
Percent Market
of Net Cost Value
Assets (000) (000)
-------- -------- --------
<S> <C> <C> <C>
Common Stocks 60.3% $150,318 $ 89,629
Preferred Stocks and
Rights 38.4 61,532 57,129
Bonds 0.3 290 394
Short-Term
Investments 0.8 1,179 1,179
-------- -------- --------
Total Investments 99.8 213,319 148,331
Other Assets Less
Liabilities 0.2 273 269
- --------------------------------------------------------------------
Total Net Assets 100.0% $213,592 $148,600
____________________________________________________________________
</TABLE>
Twenty-Five Largest Holdings
October 31, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Telecomunicacoes Brasilias, Brazil 11.1%
Telefonos de Mexico, Mexico 9.2
Banco Bradesco, Brazil 4.7
Cifra, Mexico 4.5
Telefonica de Argentina, Argentina 4.0
Tolmex, Mexico 3.3
Eletrobras, Brazil 3.2
Naviera Perez, Argentina 2.9
Brahma, Brazil 2.8
YPF Sociedad Anonima, Argentina 2.7
Usiminas, Brazil 2.7
Cia Energetica Minas Gerais, Brazil 2.6
Telecomunicacoes de Sao Paulo, Brazil 2.4
Empresa Nacional de Electric, Chile 2.0
Compania Telecomunicaciones, Chile 2.0
Kimberly-Clark Mexico, Mexico 1.6
Lojas Americanas, Brazil 1.6
Brasmotor, Brazil 1.5
Cemex, Mexico 1.5
Panamerican Beverages, Mexico 1.4
Buenos Aires Embotelladora, Argentina 1.4
Companhia Siderurgica Nacional, Brazil 1.3
Grupo Televisa, Mexico 1.2
Petrol Brasileiros, Brazil 1.1
Enersis, Chile 1.0
- ---------------------------------------------------
Total 73.7%
___________________________________________________
</TABLE>
3
<PAGE>
Performance Comparison
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
Label A B C
- ---------------------------------------------------------
<S> <C> <C> <C>
Label years Fund Index
- ---------------------------------------------------------
1 1993 10000 10000
- ---------------------------------------------------------
2 1994 10269 10020
- ---------------------------------------------------------
3 1995 6548 8054
- ---------------------------------------------------------
</TABLE>
Average Annual Compund Total Return
Periods Ended October 31, 1995
<TABLE>
<CAPTION>
Since Inception
1 Year 12/29/93
-------- ---------------
<S> <C>
-37.11% -20.95%
_____________________________________________________
</TABLE>
Note: For the above periods ended 9/30/95, the fund's
returns were -34.44% and -17.74%, respectively.
Investment return and principal value represent past
performance and will vary. Shares may be worth more
or less at redemption than at original purchase.
_____________________________________________________
4
<PAGE>
Statement of Net Assets
T. Rowe Price Latin America Fund/October 31, 1995
(values in thousands)
<TABLE>
<CAPTION>
Value
-------
ARGENTINA -- 14.2%
COMMON STOCKS
<C> <S> <C>
90,529 shs Buenos Aires Embotella-
dora `B' ADR (USD)........ $ 2,071
220,000 *Cadipsa `B'.................. 145
6,100 Capex GDR (USD).............. 78
24,500 Capex `A' GDR (USD).......... 312
30,000 Central Puerto `B'........... 92
11,000 Central Puerto ADR (USD)..... 168
24,648 Enron Global Power &
Pipeline (USD)............. 582
62,400 *Fiplasto `B'................. 140
414,000 *Indupa....................... 207
57,500 Ipako Industrias
Petroquimica............... 204
126,439 Juan Minetti................. 310
43,000 Mirgor `C' ADS (USD)......... 70
989,750 Naviera Perez `B'............ 4,364
260,000 *Polledo `B'.................. 140
21,000 Quilmes Industrial (USD)..... 370
124,800 *Sociedad Comercial
del Plata.................. 252
13,350 Telecom Argentina
ADS (USD).................. 512
274,013 Telefonica de Argentina `B'
ADR (USD).................. 5,686
13,270 Telefonica de Argentina `B'
ADS (USD).................. 275
102,015 Transportadora de Gas del
Sur (USD).................. 1,046
234,453 YPF Sociedad Anonima `D'
ADR (USD).................. 4,015
Total Argentina 21,039
BELIZE -- 0.3%
COMMON STOCK
28,333 BHI (USD).................... 443
BRAZIL -- 45.2%
COMMON STOCKS
79,000 Capco Automotive
Products (USD)............. 602
11,718 *Ceteco Holding (NLG)......... 383
88,250,000 Companhia Siderurgica
Nacional................... 1,889
16,525,863 shs Eletrobras................... 4,691
49,844,000 Telecomunicacoes Brasilias... 1,655
95,000 Usiminas ADR (USD)........... 879
10,099
PREFERRED STOCKS AND RIGHTS
30,100,000 *Arapua Import................ 291
105,000,000 Artex........................ 393
792,000 *Bahia Sul Celulose........... 412
762,744,737 Banco Bradesco............... 6,979
2,555,000 Banco Itau................... 757
53,568,000 Banco Nacional............... 1,058
10,954,555 Brahma....................... 4,180
9,556,000 Brasmotor.................... 2,236
2,632,000 Casa Anglo Bras.............. 164
36,100,000 Ceval Alimentos.............. 469
100,622,681 Cia Acos Espec Itabira....... 837
5,788,030 rts *Cia Acos Espec Itabira....... 0
3,700,000 shs Cia Cimento Portland Itau.... 976
59,309,580 Cia Energetica Minas
Gerais..................... 1,270
2,832,015 rts *Cia Energetica Minas
Gerais..................... 0
10,283 shs Cia Energetica Minas
Gerais ADR (USD)........... 222
2,258 Cia Energetica Minas
Gerais Cv. ADR (USD)....... 49
105,243 Cia Energetica Minas
Gerais Non-Voting
ADR (USD).................. 2,276
269,000 Cia Siderurgiga Paulista
Cosipa `B'................. 403
3,599,998 Cia Tecidos Norte de Minas... 1,123
886,950 Dixie Toga................... 830
12,000,000 Duratex...................... 586
4,969,940,000 *Eberle....................... 207
12,098,000 *Eluma........................ 440
750,000 Eucatex...................... 106
678,000 Frigobras Cia Bras
de Frigorificos............ 508
324,438,000 Industia e Comercio
Chapeco.................... 74
33,850,000 Ipiranga Petroleo............ 387
18,801 Kepler Weber................. 78
97,701,000 Lojas Americanas............. 2,336
29,380,000 Lojas Renner................. 672
4,722,000 *Mesbla....................... 89
4,800,000 Metalurgica Schulz........... 169
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Value
-------
<C> <S> <C>
382,500 shs *Moinho Santista.............. $ 255
416,356 rts *Moinho Santista.............. 0
485,000 shs Multibras Eletrodomesticos... 429
19,531,000 Petrol Brasileiros........... 1,686
7,360,000 Pettenati sa Malhas
Confeccoes................. 217
207,932,163 Refrigeracao Parana.......... 491
6,954,000 *Sifco........................ 325
1,136,294 Telecomunicacoes
Brasilias.................. 46
363,121 Telecomunicacoes
Brasilias ADR (USD)........ 14,752
24,588,335 Telecomunicacoes
de Sao Paulo............... 3,528
3,335,350,000 Usiminas..................... 3,121
2,048,500 Weg.......................... 1,022
500,000 *Wentex Textile............... 680
57,129
Total Brazil 67,228
CHILE -- 8.5%
COMMON STOCKS
29,852 Chilectra ADR (USD).......... 1,254
42,400 Chilgener ADR (USD).......... 1,017
34,000 Chilquinta ADR (USD)......... 591
63,392 Compania Cervecerias
Unidas ADS (USD)........... 1,466
40,876 Compania
Telecomunicaciones
ADR (USD).................. 2,943
138,000 Empresa Nacional de
Electric ADR (USD)......... 2,967
60,331 Enersis ADS (USD)............ 1,516
10,950 Genesis Chile Fund (USD)..... 424
9,425 Sociedad Quimica Minera
de Chile ADR (USD)......... 409
Total Chile 12,587
COLOMBIA -- 0.8%
COMMON STOCKS
18,000 Cementos Diamante `B'
GDS (USD).................. 315
31,200 Gran Cadena de
Almacemes
`B' ADS (USD).............. 429
29,000 Maderas y Sinteticos
Sociedad Anoma
ADR (USD).................. 518
Total Colombia 1,262
ECUADOR -- 0.2%
COMMON STOCKS
800 shs La Cemento Nacional
GDR (USD).................. $ 167
670 La Cemento Nacional
GDS (USD).................. 139
Total Ecuador 306
GUATEMALA -- 0.7%
COMMON STOCK
37,500 *Basic Petroleum (USD)........ 1,031
MEXICO -- 26.2%
COMMON STOCKS
45,500 *Altos Hornos Mexico.......... 243
115,620 Apasco....................... 424
713,673 Cemex `B'.................... 2,204
6,301,224 Cifra `B' ADR (USD).......... 6,711
382,050 *Embotelladores del Valle
Anahuac `B'................ 347
183,000 *Empaques Ponderosa `B'....... 385
75,000 Grupo Elektra................ 295
315,000 *Grupo Fernandez
Editores `B'............... 86
9,150 Grupo Financiero
Bancomer
`C' ADS (USD).............. 49
2,555 Grupo Financiero
Bancomer
`C' GDS (USD).............. 14
8,669 Grupo Financiero
Bancomer `L'............... 2
96,000 Grupo Financiero Inbursa `B'. 260
40,000 *Grupo Mexicano de
Desarrollo, Series L,
ADS (USD).................. 120
24,600 Grupo Radio Centro
ADS (USD).................. 175
223,510 *Grupo Sidek `B'.............. 106
58,200 *Grupo Sidek `B' ADR (USD).... 109
36,447 *Grupo Sidek `L' ADR (USD).... 91
17,400 *Grupo Simec `B' ADR (USD).... 113
10,140 *Grupo Situr `B'.............. 3
56,970 Grupo Situr Cv.
ADR (USD).................. 182
106,074 Grupo Televisa GDR (USD)..... 1,817
77,500 *Industrias CH `B'............ 116
214,925 International de Ceramica.... 247
225,000 *Jugos de Valle `B'........... 391
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Value
-------
<C> <S> <C>
185,711 shs Kimberly-Clark Mexico `A'.... $ 2,424
75,786 Panamerican Beverages
ADR (USD).................. 2,075
59,000 *Sears Roebuck de Mexico
`B' ADS (USD).............. 317
30,000 *Sears Roebuck de Mexico
`B' GDS (USD).............. 161
945,000 *Seguros Comercial
Americana `B'.............. 225
86,100 *Servicios Financieros
Quadram ADR (USD).......... 441
24,900 Sigma Alimentos `B'.......... 175
499,054 Telefonos de Mexico `L'
ADS (USD).................. 13,724
1,308,317 Tolmex `B'................... 4,912
Total Mexico 38,944
PERU -- 1.7%
COMMON STOCKS
183,545 Backus y Johnston
Cerveceria `T'............. 329
19,172 Cementos Lima................ 285
27,500 *Cementos Yura `C' (USD)...... 213
15,466 Compania de Seguard
la Fenix Peruana........... 175
450,000 *Compania Embotelladora
del Pacifico `B' (USD)..... 234
129,838 Enrique Ferreyros............ 149
127,700 *Explosivos `T'............... 190
30,104 Minsur....................... 209
728,333 *Peru Real Estate `B'......... 382
2,166
CORPORATE BOND
290,000 USD International Financial
Holdings, 6.50%,
8/1/99..................... 394
Total Peru 2,560
PUERTO RICO -- 0.4%
COMMON STOCK
40,000 shs *Pepsi Cola Puerto Rico
Bottling Company
(USD)...................... 545
VENEZUELA -- 0.8%
COMMON STOCKS
12,000 shs Corimon ADR (USD)............ $ 51
122,291 Mavesa ADS (USD)............. 489
83,050 *Sudamtex de Venezuela `B'
ADR (USD).................. 343
60,000 Venezolana de
Prerreducidos
Caroni GDS (USD)........... 324
Total Venezuela 1,207
SHORT-TERM INVESTMENTS--0.8%
$1,179,340 Investments in Commercial
Paper through a
joint account,
5.87 - 5.88%, 11/1/95...... 1,179
__________________________________________________________
Total Investments in Securities--99.8% of
Net Assets (Cost $213,319) $148,331
__________________________________________________________
Other Assets Less Liabilities.................... 269
--------
</TABLE>
<TABLE>
<CAPTION>
Net Assets Consist of: Value
-------
<S> <C> <C>
Accumulated net investment
income - net of distributions..... $ 1,226
Accumulated net realized
gain/loss - net of distributions.. (15,291)
Net unrealized gain (loss).......... (64,992)
Paid-in-capital applicable to
22,904,126 shares of $0.01 par
value capital stock outstanding;
2,000,000,000 shares of the
Corporation authorized............ 227,657
--------
NET ASSETS.......................... $148,600
========
NET ASSET VALUE PER SHARE........... $6.49
_________________________________________________________
</TABLE>
* Non-income producing
NLG Dutch guilder
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Statement of Operations
T. Rowe Price Latin America Fund / Year Ended October 31, 1995
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend (net of foreign taxes of $287).............. $ 3,289
Interest............................................. 858
--------
Total income......................................... 4,147
--------
Expenses
Investment management................................ 1,765
Shareholder servicing................................ 762
Custody and accounting............................... 205
Registration......................................... 89
Prospectus and shareholder reports................... 49
Legal and audit...................................... 27
Directors............................................ 8
Proxy and annual meeting............................. 5
Miscellaneous........................................ 17
--------
Total expenses....................................... 2,927
--------
Net investment income................................. 1,220
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities.......................................... (12,876)
Foreign currency transactions....................... (29)
--------
Net realized gain (loss)............................ (12,905)
--------
Change in net unrealized gain or loss on:
Securities.......................................... (64,913)
Other assets and liabilities denominated in
foreign currencies................................. (3)
--------
Change in net unrealized gain or loss............... (64,916)
--------
Net realized and unrealized gain (loss)............... (77,821)
--------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS..... $(76,601)
========
___________________________________________________________________
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
Statement of Changes in Net Assets
T. Rowe Price Latin America Fund
(in thousands)
<TABLE>
<CAPTION>
From Dec. 29, 1993*
Year Ended to
October 31, 1995 October 31, 1994
---------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income................................... $ 1,220 $ (389)
Net realized gain (loss)................................ (12,905) (2,398)
Change in net unrealized gain or loss................... (64,916) (76)
-------- --------
Increase (decrease) in net assets from operations....... (76,601) (2,863)
Capital share transactions*
Shares sold............................................. 100,910 245,582
Shares redeemed......................................... (75,007) (45,043)
Redemption fees received................................ 863 759
-------- --------
Increase (decrease) in net assets from capital
share transactions..................................... 26,766 201,298
-------- --------
Increase (decrease) in net assets........................ (49,835) 198,435
NET ASSETS
Beginning of period...................................... 198,435 --
-------- --------
End of period............................................ $148,600 $198,435
======== ========
______________________________________________________________________________________________________
*Share information
Shares sold............................................ 14,030 23,904
Shares redeemed........................................ (10,355) (4,675)
-------- --------
Increase (decrease) in shares outstanding.............. 3,675 19,229
======== ========
______________________________________________________________________________________________________
</TABLE>
*Commencement of operations
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Notes to Financial Statements
T. Rowe Price Latin America Fund / October 31, 1995
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 the 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 or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
A) Emerging Markets - At October 31, 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) Commercial Paper Joint Account - The fund, and other affiliated funds, may
transfer uninvested cash into a commercial paper joint account, the daily
aggregate balance of which is invested in high-grade commercial paper. All
securities purchased by the joint account satisfy the fund's criteria as to
quality, yield, and liquidity.
10
<PAGE>
C) Other - Purchases and sales of portfolio securities, other than short-term
securities, aggregated $69,496,000 and $27,945,000, respectively, for the year
ended October 31, 1995.
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 $15,262,000, of which $2,386,000 expire in 2002,
and $12,876,000 which expire in 2003. The fund intends to retain gains realized
in future periods that may be offset by available capital loss carryforwards.
In order for the fund's capital accounts and distributions to
shareholders to reflect the tax character of certain transactions, $6,000 of
undistributed net investment income was reclassified as a decrease to
paid-in-capital during the year ended October 31, 1995. The results of
operations and net assets were not affected by the reclassifications.
At October 31, 1995, the aggregate cost of investments for federal
income tax and financial reporting purposes was $213,319,000 and net unrealized
loss aggregated $64,988,000, of which $5,358,000 related to appreciated
investments and $70,346,000 to depreciated investments.
Note 4 - Related Party Transactions
The fund is managed by Rowe Price-Fleming International, Inc. (the Manager),
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 the Manager
provides for an annual investment management fee, of which $147,000 was payable
at October 31, 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 October 31, 1995, and for the year 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., 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 $744,000 for the year ended October 31, 1995, of which $76,000
was payable at period-end.
During the year ended October 31, 1995, the fund, in the ordinary
course of business, paid commissions of $10,000 to, and placed security
purchase and sale orders aggregating $3,304,000 with, certain affiliates of
the Manager in connection with the execution of various portfolio transactions.
11
<PAGE>
Financial Highlights
T. Rowe Price Latin America Fund
<TABLE>
<CAPTION>
For a share outstanding
throughout each period
--------------------------------------
Year Ended From December 29,
October 31, 1993* to
1995 October 31, 1994
----------- ------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................... $ 10.32 $ 10.00
-------- -------
Investment Activities
Net investment income................................. 0.05 (0.03)
Net realized and unrealized gain...................... (3.92) 0.29**
-------- -------
Total from investment activities...................... (3.87) 0.26
-------- -------
Redemption fees added to paid-in-capital............... 0.04 0.06
-------- -------
NET ASSET VALUE, END OF PERIOD......................... $ 6.49 $ 10.32
======== =======
_________________________________________________________________________________________________
RATIOS/SUPPLEMENTAL DATA
Total return........................................... (37.1)% 3.2%
Ratio of expenses to average net assets................ 1.82% 1.99%+
Ratio of net investment income to average net assets... 0.76% (0.35)%+
Portfolio turnover rate................................ 18.9% 12.2%+
Net assets, end of period (in thousands)............... $148,600 $198,435
_________________________________________________________________________________________________
</TABLE>
+ Annualized.
* Commencement of operations.
** 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 shares
in relation to fluctuating market values for the investment portfolio.
12
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
T. Rowe Price Latin America Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
T. Rowe Price Latin America Fund (one of the portfolios constituting T. Rowe
Price International Funds, Inc.) at October 31, 1995, and the results of its
operations, the changes in its net assets and the financial highlights for each
of the fiscal periods presented, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1995 by correspondence with custodians
and brokers and, where appropriate, the application of alternative auditing
procedures for unsettled security transactions, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
Baltimore, Maryland
November 17, 1995
13
<PAGE>
Shareholder Services
To help shareholders monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety
of information and services--at no extra cost.
Knowledgeable Service Representatives
By Phone--Shareholder service representatives are available from 8:00 a.m.
to 10:00 p.m. Monday-Friday, and weekends from 9:00 a.m. to 5:00 p.m. ET.
Call 1-800-225-5132 to speak directly with a representative who will be
able to assist you with your accounts.
In Person--Visit one of our investor center locations to meet with a
representative who will be able to assist you with your accounts. While
there, you can drop off applications or obtain prospectuses and other
literature.
Automated 24-Hour Services
Tele*Access(R) (1-800-638-2587) provides information such as account
balance, date and amount of your last transaction, latest dividend payment,
and fund prices and yields. Additionally, you have the ability to request
prospectuses, statements, account and tax forms; reorder checks; and initiate
purchase, redemption, and exchange orders for identically registered accounts.
PC*Access(R) provides the same information as Tele*Access, but on
a personal computer via dial-up modem.
Account Services
Checking--Write checks for $500 or more on any money market and
most bond fund accounts (except the High Yield Fund and Emerging Markets
Bond Fund).
Automatic Investing--Build your account over time by investing
directly from your bank account or paycheck with Automatic Asset Builder.
Additionally, Automatic Exchange enables you to set up systematic investments
from one fund account into another, such as from a money fund into a stock
fund. A low, $50 minimum makes it easy to get started.
Automatic Withdrawal--If you need money from your fund account
on a regular basis, you can establish scheduled, automatic redemptions.
Dividend and Capital Gains Payment Options--Reinvest all or some
of your distributions, or take them in cash. We give you maximum flexibility
and convenience.
Investment Information
Combined Statement--A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax category, provides
total portfolio value, and lists your investments by type - stock, bond,
and money market. Detail pages itemize account transactions by fund.
Shareholder Reports--Portfolio managers review the performance of
the funds in plain language and discuss T. Rowe Price's economic outlook.
The T. Rowe Price Report--A quarterly newsletter with relevant
articles on market trends, personal financial planning, and T. Rowe Price's
economic perspective.
Performance Update--A quarterly report reviewing recent market
developments and providing comprehensive performance information for every
T. Rowe Price fund.
Insights--A library of information that includes reports on mutual
fund tax issues, investment strategies, and financial markets.
Detailed Investment Guides--Our widely acclaimed Asset Mix Worksheet,
College Planning Kit, Retirees Financial Guide, Retirement Planning Kit
(also available on disk for PC use), and Guide to Risk-Adjusted Performance
can help you determine and reach your investment goals.
Discount Brokerage
You can trade stocks, bonds, options, precious metals, and other securities
at a substantial savings over regular commission rates. Call a shareholder
service representative for more information.
14
<PAGE>
T. Rowe Price No-Load Mutual Funds
STABILITY
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
CONSERVATIVE INCOME
Short-Term Bond
Short-Term Global Income
Short-Term U.S. Government
Summit Limited-Term Bond
U.S. Treasury Intermediate
Florida Insured Intermediate Tax-Free
Maryland Short-Term Tax-Free Bond
Summit Municipal Intermediate
Tax-Free Insured Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
INCOME
Global Government Bond
GNMA
New Income
Spectrum Income
Summit GNMA
U.S. Treasury Long-Term
California Tax-Free Bond
Georgia Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Tax-Free Income
Virginia Tax-Free Bond
AGGRESSIVE INCOME
Corporate Income
Emerging Markets Bond
High Yield
International Bond
Tax-Free High Yield
CONSERVATIVE GROWTH
Balanced
Capital Appreciation
Dividend Growth
Equity Income
Equity Index
Growth & Income
Spectrum Growth
Value
GROWTH
Blue Chip Growth
European Stock
Growth Stock
International Stock
Japan
Mid-Cap Growth
New Era
Small-Cap Value
AGGRESSIVE GROWTH
Capital Opportunity
Emerging Markets Stock
International Discovery
Latin America
New America Growth
New Asia
New Horizons
OTC
Science & Technology
PERSONAL STRATEGY FUNDS
Personal Strategy Income
Personal Strategy Balanced
Personal Strategy Growth
Call if you want to know about any T. Rowe Price fund. We'll send you a
prospectus with more complete information, including management fees and
other expenses. Read it carefully before you invest or send money.
T. Rowe Price Investment
Services, Inc., Distributor
15
<PAGE>
For yield, price, last transaction,
and current balance, 24 hours,
7 days a week, call:
1-800-638-2587 toll free
625-7676 Baltimore area
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.
[LOGO OF T. ROWE PRICE]
Annual Report
[LOGO OF T. ROWE PRICE]
Latin America Fund
October 31, 1995
