<PAGE>
- --------------------------------------------------------------------------------
Fellow Shareholders
- --------------------------------------------------------------------------------
Despite lackluster equity market performance in its first and final
quarters, your fund provided good results for the year. European equity
markets rallied in the intervening periods, and returns to U.S. investors were
further enhanced by the dollar's weakness against most European currencies. As
a result, Europe was the best performing international equity region outside
the U.S. for the 12 months ended October 31.
In the last quarter, European markets were mostly flat and the dollar
strengthened, resulting in slightly negative returns to U.S. investors. Your
fund also had a small loss, but stayed ahead of the Morgan Stanley Europe
index, due more to our advantageous stock selection than to country weightings.
- --------------------------------------------------------------------------------
Performance Comparison
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 10/31/95
3 Months 12 Months
-------------------------
<S> <C> <C>
European Stock Fund -0.28% 14.41%
MSCI Europe Index -1.33 13.68
- --------------------------------------------------------------------------------
</TABLE>
Market Review
The U.K. economy, one of the first in Europe to recover, was also one of the
first to slow to a more sustainable pace. The Bank of England exercised greater
independence than in the past, tightening monetary policy to bring the economy
back to earth and control inflation. With growth prospects still favorable and
valuations remaining reasonable, this market achieved one of the better
performances for the quarter. Returns were slightly diluted for U.S. investors
by the improving dollar.
We maintained our underweighting in the U.K. but focused on companies with
long-term growth potential. We added catering company Compass Group to the
portfolio to go along with our steadily growing pharmaceutical holdings, such
as Glaxo and SmithKline Beecham. Meanwhile, we pared holdings that are
sensitive to the slowing economy, such as the building products company Caradon.
The fund's underweighting in Germany helped its relative performance.
Europe's second-largest market lagged the MSCI Europe average during both the
quarter and the year due to the already high valuations of German stocks and
downgrading of earnings forecasts. The economic recovery has so far been led by
manufacturers and exporters, while consumers have been burdened by higher taxes
to pay for reunification. However, with the strength of the deutschemark
cutting into exports, and the effects of the tax bite diminishing, consumers
should drive the economic recovery in 1996. We moved away from the more
cyclical companies, selling our holding in BMW to focus on companies with more
stable earnings such as Gehe. While valuations remain somewhat high, they are
beginning to look more reasonable, and we will be watching for appealing
investment opportunities.
France also lagged the European index for the quarter and the year. The
economic
- --------------------------------------------------------------------------------
Market Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended 10/31/95
---------------------------------
Local Currency
Local vs. U.S. In U.S.
Currency Dollars Dollars
-------- ------- -------
<S> <C> <C> <C>
Austria -9.6% -2.0% -11.4%
Belgium 0.4 -2.0 -1.7
Denmark -1.6 -1.8 -3.4
Finland -10.9 -1.3 -12.1
France -4.0 -2.4 -6.3
Germany -3.1 -2.0 -5.0
Italy -7.3 -0.5 -7.8
Netherlands -0.7 -2.0 -2.7
Norway -5.4 -1.8 -7.0
Spain -3.2 -2.9 -6.0
Sweden 0.1 6.1 6.2
Switzerland 9.7 0.9 10.6
United Kingdom 2.1 -1.4 0.7
- --------------------------------------------------------------------------------
</TABLE>
Source: NatWest Securities "Quant" using MSCI indices
<PAGE>
recovery was hampered by President Jacques Chirac's efforts to support
the franc with higher interest rates, which made it difficult to reduce the
high level of unemployment, currently over 10%. As a result, the economy did
not receive the boost expected after Chirac's election earlier in the year.
Pressure has mounted to abandon support of the franc and shift to a less
restrictive monetary policy. Corporate earnings estimates were widely
downgraded, leading to the market's underperformance.
Nevertheless, we remained overweighted in France, encouraged by lower
valuations and improving prospects for the consumer sector next year. We added
retail and distribution company Pinault Printemps and the pharmaceutical
company Sanofi.
Switzerland, the best performing market in the last three months, was also
the top performer for the fund's fiscal year. Our heavy exposure to
pharmaceuticals and banks, such as Roche Holdings and Schweizerischer
Bankverein (Swiss Bank), boosted the fund's performance. Nevertheless, we
remained underweighted in Switzerland in favor of a large overweighting in the
Netherlands, spurred by our enthusiasm for the country's growth companies. While
the Dutch market lagged the European index in the last quarter, it outperformed
for the 12-month period. We trimmed exposure to two of our core holdings, the
publisher Elsevier and the record company Polygram, after strong runups raised
their valuations to higher levels. We redeployed the proceeds into the
integrated oil company Royal Dutch Petroleum, another core holding which is
taking steps to improve profitability.
Although the lira stabilized last quarter, Italy was among the worst
performing equity markets measured in dollars. The lira remained the weakest
European currency for the fiscal year. While we were encouraged by the
political and economic changes taking place in the country, progress was
fitful. Consequently, overall valuations remain high and finding attractive
investment opportunities was difficult. The Spanish market, on the other hand,
is trading at comparatively low valuations, but
- --------------------------------------------------------------------------------
Geographic Diversification
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
United Kingdom 28%
Netherlands 18%
France 13%
Switzerland 8%
Germany 7%
Sweden 5%
Reserves and Other 21%
</TABLE>
Based on net assets as of 10/31/95.
a new government is needed to implement the reforms necessary for economic
recovery. Even though the market has underperformed, we maintained a neutral
weighting because of the low valuations and the possible early election of a
new government in 1996.
The dramatic rise of the market in Finland hit a wall last quarter. The
pullback in some U.S. technology stocks crossed the pond to their European
counterparts, particularly the highflying mobile phone manufacturer Nokia Oy,
which represents nearly half the Finnish market. As a result, Finland was
Europe's worst performing market in the quarter. After a fourfold rise in the
price of Nokia Oy since 1993, we began taking profits around midyear, concerned
about its spectacular rise and lofty valuation.
Unlike Finland, Sweden maintained its strong performance throughout the
year helped by a late recovery in the krona. We maintained our overweighted
position, enjoying continued gains from our largest holding, the pharmaceutical
company Astra.
Outlook
The outlook remains favorable for European markets over the next 12 months.
Economic growth and stable interest rates should continue into 1997. In our
view, earnings will steadily improve, making for attractive
2
<PAGE>
valuations and investment opportunities in many countries. This is particularly
true of small companies, and we remain committed to our diversified exposure to
these stocks.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
November 20, 1995
- --------------------------------------------------------------------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
Periods Ended October 31, 1995
<TABLE>
<CAPTION>
Change in Price Per Share
- --------------------------------------
<S> <C>
3 Months (From $14.39 to $14.35) $-0.04
12 Months (From $12.72 to $14.35) 1.63
Total Net Assets $490.6 Million
</TABLE>
- --------------------------------------------------------------------------------
Industry Diversification
- --------------------------------------------------------------------------------
October 31, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Services 25.4%
Consumer Goods 21.4
Energy 16.9
Finance 15.4
Capital Equipment 7.3
Materials 5.9
Multi-Industry 3.0
Reserves 4.7
- --------------------------------------------------------------------------------
Total 100.0%
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Twenty-Five Largest Holdings
- --------------------------------------------------------------------------------
October 31, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Wolters Kluwer, Netherlands 3.8%
Elsevier, Netherlands 3.5
Royal Dutch Petroleum, Netherlands 3.1
National Westminster Bank,
United Kingdom 2.2
Reed International, United Kingdom 2.0
Smithkline Beecham, United Kingdom 1.9
BBC Brown Boveri & Cie, Switzerland 1.7
Roche Holdings, Switzerland 1.6
Eaux Cie Generale, France 1.6
Astra, Sweden 1.5
Polygram, Netherlands 1.4
Nestle, Switzerland 1.3
Gehe, Germany 1.3
Carrefour, France 1.3
Shell Transport & Trading,
United Kingdom 1.2
Glaxo, United Kingdom 1.2
Tomkins, United Kingdom 1.1
Internationale Nederlanden Groep,
Netherlands 1.1
Television Francaise, France 1.1
Abbey National, United Kingdom 1.0
LVMH, France 1.0
Rank Organisation, United Kingdom 1.0
Guinness, United Kingdom 1.0
Empresa Nacional de Electricidad, Spain 1.0
Mannesmann, Germany 1.0
- --------------------------------------------------------------------------------
Total 39.9%
================================================================================
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
Security Classification
- --------------------------------------------------------------------------------
October 31, 1995
<TABLE>
<CAPTION>
Percent Market
of Net Cost Value
Assets (000) (000)
------- ------- -------
<S> <C> <C> <C>
Common Stocks,
Rights, and Warrants 94.3% $374,544 $462,219
Preferred Stocks
and Warrants 0.9 4,579 4,404
Bonds 0.1 444 512
Short-Term Investments 3.8 18,822 18,822
------ -------- --------
Total Investments 99.1 398,389 485,956
Other Assets Less
Liabilities 0.9 4,604 4,617
- --------------------------------------------------------------------------------
Total Net Assets 100.0% $402,993 $490,573
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
Periods ended 10/31/95
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (2/28/90)
-------- ---------- ---------
<S> <C> <C>
14.41% 9.26% 7.81%
</TABLE>
- --------------------------------------------------------------------------------
Note: For the above periods ended 9/30/95, the fund's returns were 18.62%,
10.67%, and 7.92%, 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.
- --------------------------------------------------------------------------------
Performance Comparison
- --------------------------------------------------------------------------------
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
EUROPEAN STOCK FUND MSCI EUROPE INDEX
------------------- -----------------
<S> <C> <C>
02/28/90 10,000 10,000
10/90 9,840 9,956
10/91 10,060 10,700
10/92 9,638 10,550
10/93 11,920 13,314
10/94 13,391 14,864
10/95 15,320 16,898
</TABLE>
Note: The index return does not reflect expenses, which have been deducted from
the fund's return.
* Commencement of Operations
4
<PAGE>
- --------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price European Stock Fund / October 31, 1995
- --------------------------------------------------------------------------------
(values in thousands)
<TABLE>
<CAPTION>
Value
-----------
<S> <C> <C>
AUSTRIA -- 0.1%
PREFERRED STOCK
2,050 shs Creditanstalt - Bankverein.............. $ 102
BELGIUM -- 2.2%
COMMON STOCKS AND WARRANTS
7,669 Fortis.................................. 823
7,230 Generale Banque......................... 2,356
15,090 Kredietbank............................. 3,801
11,000 wts * National Portefeuille, 6/15/99.......... 31
3,150 shs UCB..................................... 3,616
10,627
CONVERTIBLE BOND
4,522,500 BEL Kredietbank,
5.75%, 11/30/03....................... 155
Total Belgium 10,782
CZECH REPUBLIC -- 0.2%
COMMON STOCKS
4,770 shs IPS Praha............................... 396
3,800 * SPT Telecom............................. 374
Total Czech Republic 770
DENMARK -- 0.6%
COMMON STOCKS
10,500 Bang & Olufsen Holdings 'B'............. 325
19,780 Den Danske Bank......................... 1,310
2,800 * Silcon 'B'.............................. 102
8,030 Tele Danmark 'B'........................ 419
16,740 Unidanmark 'A'.......................... 769
2,925
CONVERTIBLE BOND
900,000 DKK Danske Traelastkompagni,
5.25%, 1/1/02......................... 174
Total Denmark 3,099
FINLAND -- 0.6%
COMMON STOCKS
8,000 shs Huhtamaki Oy 'I'........................ 237
38,800 * Nokia Oy 'A'............................ 2,220
35,050 * Nokian Tyres............................ 355
Total Finland 2,812
FRANCE -- 12.7%
COMMON STOCKS, RIGHTS AND WARRANTS
28,260 shs Accor................................... 3,358
10,750 Assurances Generales
de France............................. 310
1,965 But..................................... 500
3,261 Cardif.................................. 303
10,550 Carrefour............................... 6,196
12,851 Castorama Dubois........................ 2,084
14,559 Chargeurs............................... 2,995
39,129 Cie de St. Gobain....................... 4,665
12,000 Cipe France............................. 704
3,600 * Club Mediterranee....................... 282
3,600 rts * Club Mediterranee....................... 4
1,527 shs * Concorde................................ 191
12,910 Credit Local de France.................. 1,022
2,700 Dauphin................................. 94
10,000 De Dietrich & Cie....................... 507
84,054 Eaux Cie Generale....................... 7,812
6,411 Ecco Travail Temporaire................. 447
42,740 Elf Aquitaine........................... 2,911
7,879 Groupe Zannier.......................... 101
4,611 Guilbert................................ 554
4,702 L'Oreal................................. 1,149
33,445 Lafarge-Coppee.......................... 2,217
25,718 LVMH.................................... 5,117
3,600 Manutan................................. 410
3,030 MGI Coutier............................. 180
12,000 * Moulinex................................ 239
6,235 Peugeot................................. 812
8,710 Pinault Printemps....................... 1,888
13,000 Poliet.................................. 1,021
1,485 Primagaz................................ 115
135 wts * Primagaz, 6/30/98....................... 1
2,000 shs Rexel................................... 323
8,600 Rochefortaise
Communication......................... 281
16,057 Sanofi.................................. 1,024
2,450 SITA.................................... 420
4,415 Societe des Immeubles
de France............................. 201
6,230 Societe Generale de France.............. 712
6,033 Spir Communication...................... 512
50,588 Television Francaise.................... 5,224
48,390 Total 'B'............................... 2,990
45,658 Valeo................................... 2,063
7,000 * Vallourec............................... 275
1,866 Virbac.................................. 248
62,462
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----------
<S> <C> <C>
CONVERTIBLE BOND
174,410 FRF Virbac, 5.00%, 1/1/01.................... $ 39
Total France 62,501
GERMANY -- 7.3%
COMMON STOCKS, RIGHTS AND WARRANTS
1,715 shs Allianz Holdings......................... 3,160
1,100 Altana................................... 640
1,300 Balcke Durr.............................. 319
12,000 Bayer.................................... 3,176
720 Buderus.................................. 309
52,220 Deutsche Bank............................ 2,365
20,000 * Dorries Scharmann........................ 114
600 Duerr Beteiligungs....................... 194
550 F.A. Gunther & Sohn...................... 39
10,494 Gehe..................................... 5,152
2,496 * Gehe, new................................ 1,186
3,127 Hoechst.................................. 817
4,571 Kampa Haus............................... 180
500 Klein, Schanzlin & Becker................ 107
687 Leffers.................................. 132
14,531 Mannesmann............................... 4,783
325 Pfleiderer Bau und
Verkehrssysteme........................ 109
4,800 * Pittler Maschinenfabrik.................. 283
1,402 Plettac.................................. 321
6,480 Rhon Klinikum............................ 622
6,480 rts * Rhon Klinikum............................ 138
45,430 shs Schering................................. 3,166
600 Sixt..................................... 165
100 wts * Sixt, 5/17/00............................ 78
60,530 shs Veba..................................... 2,485
1,200 Vereinigte Baubeschlag
Handel................................. 306
5,434 Volkswagen............................... 1,712
32,058
PREFERRED STOCKS AND WARRANTS
17,000 shs Berentzen Gruppe......................... 477
540 Edding................................... 174
600 Hach..................................... 308
650 Klein, Schanzlin & Becker................ 106
875 Leffers.................................. 154
450 Marschollek
Lautenschlaeger........................ 302
1,650 Signal Bau Huber......................... 175
1,000 Sixt..................................... 288
2,100 Spar Handells............................ 453
721 Sto...................................... 387
2,200 Villeroy & Boch.......................... 416
550 wts * Wella International Finance,
3/18/96................................ 36
1,828 shs Westag & Getalit......................... 409
3,685
Total Germany 35,743
HUNGARY -- 0.1%
COMMON STOCKS
610 * Chinoin.................................. 172
28,000 Fotex (ATS).............................. 26
12,200 Richter Gedeon........................... 186
Total Hungary 384
IRELAND -- 0.2%
COMMON STOCKS
350,000 Barlo Group.............................. 159
600,000 * Kenmare Resources (GBP).................. 213
181,900 Kingspan Group........................... 517
Total Ireland 889
ISRAEL -- 0.2%
COMMON STOCKS
188,000 Bank Hapoalim............................ 298
50,000 * Blue Square.............................. 327
4,835 Elco Holdings............................ 203
10,000 Teva Pharmaceutical
ADR (USD).............................. 395
Total Israel 1,223
ITALY -- 3.6%
COMMON STOCKS AND WARRANTS
525 Alleanza Assicurazioni,
savings shares......................... 4
145,155 Assicurazioni Generali................... 3,383
84,000 * Cementeria di Augusta.................... 132
180,000 Danieli & Company,
savings shares......................... 497
22,750 wts * Danieli & Company,
11/30/99............................... 12
300,000 shs * Editoriale la Republica.................. 258
16,000 Fila Holdings ADR (USD).................. 680
97,273 Imi...................................... 531
96,000 * Industria Macchine
Automatiche............................ 670
14,000 Industrie Natuzzi
ADR (USD).............................. 535
240,943 Italgas.................................. 641
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----------
<S> <C> <C>
342,624 shs Merloni Electrodomestici,
savings shares........................ 387
23,800 Saes Getters............................ 454
16,200 Saes Getters, savings shares............ 137
64,000 Safilo.................................. 678
866,300 * Stet.................................... 2,454
419,935 Stet, savings shares.................... 915
309,000 Tecnost................................. 640
20,000 Teleco Cavi, savings shares............. 48
1,375,173 Telecom Italia.......................... 2,088
654,195 Telecom Italia, savings
shares................................ 772
1,013,871 * Telecom Italia Mobile................... 1,701
120,000 Vianini Lavori.......................... 202
17,819
CORPORATE BOND
136,500,000 ITL Danieli & Company,
7.25%, 1/1/00......................... 68
Total Italy 17,887
NETHERLANDS -- 17.9%
COMMON STOCKS
8,500 shs Aalberts Industries..................... 498
59,618 ABN Amro Holdings....................... 2,505
16,525 Ahrend Groep............................ 584
12,652 Akzo Nobel.............................. 1,441
3,500 Atag.................................... 233
13,400 Content Beheer.......................... 364
1,910 Crown van Gelder........................ 185
96,778 CSM..................................... 4,036
1,342,760 Elsevier................................ 17,361
59,154 Fortis AMEV............................. 3,715
8,000 * Frans Maas Groep
Koninklijke........................... 256
9,000 Hagemeyer............................... 448
4,750 International - Muller.................. 340
87,880 Internationale Nederlanden
Groep................................. 5,241
74,611 Koninklijke PTT Nederland............... 2,625
9,000 Nedlloyd Groep.......................... 229
2,950 Otra.................................... 608
113,156 Polygram................................ 7,064
3,200 Polynorm................................ 337
21,000 Randstad Holdings....................... 948
122,189 Royal Dutch Petroleum................... 15,171
7,200 Sphinx Gustavsberg...................... 200
33,920 Unilever................................ 4,444
205,744 Wolters Kluwer.......................... 18,725
87,558
PREFERRED STOCK
10,947 shs Internationale Nederlanden
Groep................................. 57
Total Netherlands 87,615
NORWAY -- 3.0%
COMMON STOCKS
31,150 Bergesen `A'............................ 645
3,480 Det Norske
Luftfartselskap `B'................... 161
5,000 Elkjop Norge............................ 128
15,000 * Fokus Bank.............................. 79
34,150 Kvaerner `A'............................ 1,437
14,560 Kverneland Gruppen...................... 253
49,000 Merkantildata........................... 433
13,000 Multisoft............................... 313
8,000 Nera.................................... 287
98,695 Norsk Hydro............................. 3,931
11,000 Norske Skogsindustrier.................. 319
71,424 Orkla `A'............................... 3,693
20,000 Schibsted............................... 222
46,100 * Sensonor................................ 392
11,000 Smedvig................................. 191
35,000 * Sysdeco Group........................... 781
119,000 Tomra Systems........................... 751
28,875 Transocean.............................. 441
Total Norway 14,457
POLAND -- 0.1%
COMMON STOCKS
5,040 Bank Slaski............................. 273
40,000 Elektrim................................ 134
186,843 * International UNP
Holdings (CAD)........................ 67
49,500 Mostostal Export........................ 116
Total Poland 590
PORTUGAL -- 0.4%
COMMON STOCKS
23,952 Jeronimo Martins........................ 1,275
12,000 * Jornalgeste............................. 186
4,480 Salvador Caetano........................ 65
26,250 * Semapa.................................. 252
14,000 Sumolis Industria
de Frutas Bebidas..................... 132
1,910
</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----------
<S> <C> <C>
PREFERRED STOCK
28,470 shs * Filmes Lusomundo........................ $ 269
Total Portugal 2,179
RUSSIA -- 0.1%
COMMON STOCKS
52,200 * Petersburg Long
Distance (USD)........................ 320
1,540,000 * Star Mining (AUD)....................... 246
Total Russia 566
SPAIN -- 4.2%
COMMON STOCKS
26,000 * Algodonera de St. Antonia............... 194
7,000 Azkoyen................................. 436
9,614 Banco Popular Espanol................... 1,527
23,550 Banco Santander......................... 1,026
141,732 Centros Comerciales Pryca............... 3,019
90,000 Corporacion Financiaera
Reunida............................... 291
6,400 * Cristaleria Espanola.................... 399
96,664 Empresa Nacional
de Electricidad....................... 4,807
52,500 Filo.................................... 237
22,462 Gas Natural............................. 3,081
16,000 Grupo Anaya............................. 379
51,000 * Grupo Duro Felguera..................... 201
221,885 Iberdrola............................... 1,672
38,820 Marco Iberica
Distribucion de Edic.................. 404
17,500 Prosegur Compania Securidad............. 429
86,727 Repsol.................................. 2,590
32,500 * Sotogrande.............................. 64
20,756
CONVERTIBLE BOND
4,500,000 ESP Grupo Anaya,
7.00%, 3/18/98........................ 37
Total Spain 20,793
SWEDEN -- 5.2%
COMMON STOCKS
27,000 shs Angpanne Foreningen `B'................. 456
16,070 Asea `A'................................ 1,609
201,430 Astra `B'............................... 7,280
189,640 Atlas Copco `B'......................... 2,870
380,000 * BPA `A'................................. 778
46,000 Catena `A'.............................. 346
51,800 shs Electrolux `B'.......................... 2,215
23,810 Esselte `B'............................. 350
52,900 * Finnveden `B'........................... 538
12,104 Gambro `B'.............................. 212
10,550 Getinge Industrier `B'.................. 450
25,160 Hennes & Mauritz `B'.................... 1,644
26,000 Hoganas `B'............................. 701
46,700 ICB Shipping `B'........................ 387
34,000 Kalmar Industries....................... 553
21,000 Linjebuss `A'........................... 190
94,470 Sandvik `B'............................. 1,778
17,470 Scribona `B'............................ 172
19,000 Securitas `B'........................... 735
55,250 Stena Line `B'.......................... 281
101,450 * Stora Kopparbergs `B'................... 1,230
24,000 TV 4 `A'................................ 524
25,299
CONVERTIBLE BOND
281,250 SEK Stena Line,
7.00%, 4/30/01........................ 38
Total Sweden 25,337
SWITZERLAND -- 8.4%
COMMON STOCKS
7,390 shs BBC Brown Boveri & Cie.................. 8,573
1,035 Bil GT Gruppe, participating
certificates.......................... 638
220 Bobst................................... 333
200 Bossard Holdings........................ 357
600 Bucher Holding.......................... 378
2,866 Ciba Geigy.............................. 2,481
20,015 CS Holding.............................. 2,045
1,600 Generale D'Affichage.................... 688
165 Gurit Heberlien......................... 346
650 Hilti, participating
certificates.......................... 536
1,250 Lem Holding............................. 475
6,075 Nestle.................................. 6,368
1,101 Roche Holdings.......................... 8,001
5,039 Sandoz.................................. 4,159
475 * Saurer.................................. 171
1,915 Schweizerische
Bankgesellschaft...................... 2,075
7,730 Schweizerischer Bankverein.............. 3,173
150 Sig Schweiz............................. 325
1,000 * Von Moos................................ 97
Total Switzerland 41,219
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----------
<S> <C> <C>
UNITED KINGDOM -- 28.2%
COMMON STOCKS, RIGHTS AND WARRANTS
608,080 shs Abbey National.......................... $ 5,143
27,000 wts * Abtrust Lloyds Insurance................ 12
127,000 shs * Acorn Computer Group.................... 293
295,000 Argos................................... 2,379
510,000 Argyll Group............................ 2,580
1,806,430 Asda Group.............................. 2,927
91,666 Ashtead Group........................... 613
112,000 BAA..................................... 872
75,000 Baggeridge Brick........................ 111
1,000,000 * Bath Press Group........................ 198
1,850,000 BCE Holdings............................ 709
94,000 Berisford International................. 220
38,664 * British Biotechnology................... 545
5,500 wts * British Biotechnology................... 32
509,250 shs British Gas............................. 1,932
205,000 British Petroleum....................... 1,510
315,630 Britton Group........................... 783
243,000 Bruntcliffe Aggregates.................. 77
508,110 Cable & Wireless........................ 3,330
476,753 Cadbury Schweppes....................... 3,935
155,600 CALA.................................... 280
609,810 Caradon................................. 1,919
111,000 Carpetright............................. 611
427,829 Casket.................................. 54
165,000 Chamberlain Phipps...................... 219
25,000 * Chiroscience Group...................... 112
361,000 Coats Viyella........................... 1,062
231,000 Compass Group........................... 1,574
277,500 Corporate Services Group................ 377
197,777 CRT Group............................... 375
182,510 David S. Smith.......................... 1,668
87,500 Devro International..................... 336
13,500 Druck Holdings.......................... 467
106,128 East Midlands Electricity............... 1,451
171,042 Enviromed............................... 49
125,000 Ferraris Group.......................... 109
50,000 FII Group............................... 352
47,000 First Technology........................ 347
86,000 Frost Group............................. 299
427,540 Glaxo................................... 5,762
682,420 Grand Metropolitan...................... 4,704
3,008,683 Graystone............................... 618
619,040 Guinness................................ 4,943
140,580 Heath................................... 356
55,000 Helical Bar............................. 277
13,000 Henderson Administration
Group................................. 256
205,000 HTV Group............................... 836
150,000 Iceland Group........................... 394
90,000 shs Ingham.................................. 54
200,000 JBA Holdings............................ 1,221
75,000 * JKX Oil & Gas........................... 217
202,690 John Laing `A'.......................... 721
96,250 Kenwood Appliances...................... 350
90,000 Kewill Systems.......................... 470
359,731 Kingfisher.............................. 2,696
455,250 Ladbroke Group.......................... 1,195
167,000 London & Overseas
Freighters............................ 222
323,910 London Electricity...................... 4,635
44,000 Mackie International Group.............. 247
92,000 Matthew Clark........................... 937
595,000 Mayflower............................... 880
313,000 Mirror Group............................ 829
171,000 * Monument Oil & Gas...................... 159
1,066,410 National Westminster Bank............... 10,622
247,035 Northern Leisure........................ 348
230,000 NSM..................................... 320
205,000 Oliver Group............................ 118
25,000 Parity.................................. 64
358,333 * Pentos.................................. 0
57,000 Peter Black Holdings.................... 251
70,000 Pillar Property Investments............. 166
115,000 Pizza Express........................... 353
260,000 * Polly Peck International................ 0
72,000 Powerscreen International............... 443
148,000 Precoat International................... 370
674,225 Princedale Group........................ 298
119,701 Prowting................................ 178
104,561 Quadramatic............................. 322
50,000 Ramco Energy............................ 291
745,625 Rank Organisation....................... 4,951
645,940 Reed International...................... 9,804
822,421 * Regal Hotel Group....................... 494
64,000 RJB Mining.............................. 500
312,201 Rolls Royce............................. 755
125,000 Rosebys................................. 324
1,464,699 * Roxspur................................. 150
194,060 RTZ..................................... 2,682
82,500 Serco Group............................. 483
510,000 Shell Transport & Trading............... 5,967
904,100 Smithkline Beecham,
equity units.......................... 9,216
269,388 Spring Ram.............................. 115
250,750 Stakis.................................. 305
110,000 Sterling Publishing..................... 49
150,000 Stordata Solutions...................... 41
100,000 rts * Stordata Solutions...................... 9
66,000 shs * Stoves.................................. 219
604,000 T & N................................... 1,366
437,380 Taylor Nelson........................... 301
</TABLE>
9
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----------
<S> <C> <C>
339,500 shs Tesco................................... $ 1,616
91,000 TLG..................................... 247
1,426,770 Tomkins................................. 5,628
830,000 * Tomorrow's Leisure...................... 72
383,500 Transtec................................ 520
44,000 Trifast................................. 246
165,000 Ugland International.................... 203
332,390 United Newspapers....................... 2,725
2,153,892 * Verity Group............................ 426
120,000 Vibroplant.............................. 159
655,000 * Videologic Group........................ 342
151,111 Wickes.................................. 297
3,400,000 * Wiggins Group........................... 175
215,000 WPP Group............................... 523
137,895
PREFERRED STOCKS
206,800 Berisford International, 5.00%
Cv. Loan Stock, 2015.................. 219
35,000 Iceland Group, Cum. Cv.................. 72
291
Total United Kingdom 138,186
SHORT-TERM INVESTMENTS -- 3.8%
$5,000,000 Avco Financial Services,
Floating Rate Medium-
Term Note,
5.827%, 12/21/95...................... 5,000
2,850,000 Corporate Asset Funding,
Commercial Paper, 5.68%,
11/16/95.............................. 2,821
5,000,000 Preferred Receivables
Funding, Commercial
Paper, 5.73%, 12/6/95................. 4,968
6,033,216 Investments in Commercial
Paper through a joint
account, 5.87 - 5.88%,
11/1/95............................... 6,033
Total Short-Term Investments 18,822
Total Investments in Securities -- 99.1% of
Net Assets (Cost $398,389) $ 485,956
Other Assets Less Liabilities..................................... $ 4,617
---------
</TABLE>
<TABLE>
<CAPTION>
Net Assets Consist of: Value
-----
<S> <C> <C>
Accumulated net investment
income - net of distributions............... $ 7,440
Accumulated net realized
gain/loss - net of distributions............ 7,731
Net unrealized gain (loss).................... 87,580
Paid-in-capital applicable to
34,174,985 shares of $0.01 par
value capital stock outstanding;
2,000,000,000 shares of the
Corporation authorized...................... 387,822
--------
NET ASSETS.................................... $490,573
========
NET ASSET VALUE PER SHARE..................... $14.35
======
</TABLE>
* Non-income producing
ATS Austrian schilling
AUD Australian dollar
BEL Belgian franc
CAD Canadian dollar
DKK Danish krone
ESP Spanish peseta
FRF French franc
GBP British sterling
ITL Italian lira
SEK Swedish krona
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
T. Rowe Price European Stock Fund / Year Ended October 31, 1995
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend (net of foreign taxes of $1,882).......................... $ 11,066
Interest........................................................... 1,372
Other.............................................................. 40
--------
Total income....................................................... 12,478
--------
Expenses
Investment management.............................................. 3,547
Shareholder servicing.............................................. 957
Custody and accounting............................................. 267
Prospectus and shareholder reports................................. 105
Registration....................................................... 95
Legal and audit.................................................... 40
Proxy and annual meeting........................................... 16
Directors.......................................................... 12
Miscellaneous...................................................... 27
--------
Total expenses..................................................... 5,066
--------
Net investment income................................................ 7,412
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities......................................................... 8,885
Foreign currency transactions...................................... (315)
--------
Net realized gain (loss)........................................... 8,570
--------
Change in net unrealized gain or loss on:
Securities........................................................ 44,829
Other assets and liabilities denominated in foreign currencies.... (76)
--------
Change in net unrealized gain or loss............................. 44,753
--------
Net realized and unrealized gain (loss)............................. 53,323
--------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ 60,735
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
T. Rowe Price European Stock Fund
(in thousands)
<TABLE>
<CAPTION>
Year Ended October 31,
1995 1994
--------- ---------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income............................................... $ 7,412 $ 3,815
Net realized gain (loss)............................................ 8,570 13,484
Change in net unrealized gain or loss............................... 44,753 16,451
--------- ---------
Increase (decrease) in net assets from operations................... 60,735 33,750
--------- ---------
Distributions to shareholders
Net investment income............................................... (3,553) (936)
Net realized gain................................................... (1,481) (234)
--------- ---------
Decrease in net assets from distributions........................... (5,034) (1,170)
--------- ---------
Capital share transactions*
Shares sold......................................................... 242,056 207,976
Distributions reinvested............................................ 4,733 1,043
Shares redeemed..................................................... (149,415) (169,885)
--------- ---------
Increase (decrease) in net assets from capital share transactions... 97,374 39,134
--------- ---------
Increase (decrease) in net assets..................................... 153,075 71,714
NET ASSETS
Beginning of period................................................... 337,498 265,784
--------- ---------
End of period......................................................... $ 490,573 $ 337,498
========= =========
- -----------------------------------------------------------------------------------------------------
*Share information
Shares sold......................................................... 18,546 17,242
Distributions reinvested............................................ 393 88
Shares redeemed..................................................... (11,297) (14,183)
--------- ---------
Increase (decrease) in shares outstanding........................... 7,642 3,147
========= =========
- -----------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
T. Rowe Price European Stock 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 European Stock Fund (the fund),
a 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) 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.
B) Securities Lending - To earn additional income, the fund lends its
securities to approved brokers. At October 31, 1995, the market value of
securities on loan was $5,439,000, which was fully collateralized with
13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
cash. Although the risk is mitigated by the collateral, the fund could
experience a delay in recovering its securities and a possible loss of income or
value if the borrower fails to return them.
C) Other - Purchases and sales of portfolio securities, other than
short-term securities, aggregated $149,775,000 and $68,703,000, 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.
In order for the fund's capital accounts and distributions to shareholders
to reflect the tax character of certain transactions, $2,000 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 $398,389,000 and net unrealized gain
aggregated $87,567,000, of which $104,588,000 related to appreciated
investments and $17,021,000 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 $342,000 was payable
at October 31, 1995. The fee is computed daily and paid monthly, and consists of
an Individual Fund Fee equal to 0.50% 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 $835,000 for
the year ended October 31, 1995, of which $86,000 was payable at period-end.
During the year ended October 31, 1995, the fund, in the ordinary course of
business, paid commissions of $29,000 to, and placed security purchase and sale
orders aggregating $13,888,000 with, certain affiliates of the Manager in
connection with the execution of various portfolio transactions.
14
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
T. Rowe Price European Stock Fund
<TABLE>
<CAPTION>
For a share outstanding throughout each period
---------------------------------------------------------------------------
Year Ended Ten Months Year Ended From February 28,
October 31, Ended December 31, 1990* to
----------------- October 31, ------------------- December 31,
1995 1994 1993++ 1992 1991 1990
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD............................. $12.72 $11.37 $ 9.36 $10.09 $ 9.48 $10.00
------ ------ ------ ------ ------ ------
Investment activities
Net investment income................. 0.20 0.14 0.12 0.14 0.10 0.24**
Net realized and unrealized
gain (loss)......................... 1.60 1.26 1.89 (0.70) 0.59 (0.56)
------ ------ ------ ------ ------ ------
Total from investment activities...... 1.80 1.40 2.01 (0.56) 0.69 (0.32)
------ ------ ------ ------ ------ ------
Distributions
Net investment income................. (0.12) (0.04) -- (0.17) (0.08) (0.20)
Net realized gain..................... (0.05) (0.01) -- -- -- --
------ ------ ------ ------ ------ ------
Total distributions................... (0.17) (0.05) -- (0.17) (0.08) (0.20)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.......... $14.35 $12.72 $11.37 $ 9.36 $10.09 $ 9.48
====== ====== ====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA
Total return............................ 14.4% 12.4% 21.5% (5.6)% 7.3% (3.2)%**
Ratio of expenses to average
net assets............................ 1.20% 1.25% 1.35%+ 1.48% 1.71% 1.75%+**
Ratio of net investment income
to average net assets................. 1.75% 1.19% 1.79%+ 1.23% 1.04% 2.30%+**
Portfolio turnover rate................. 17.2% 24.5% 21.3%+ 52.0% 57.7% 34.9%+
Net assets, end of period
(in thousands)........................ $490,573 $337,498 $265,784 $173,798 $103,977 $99,447
</TABLE>
+ Annualized.
* Commencement of operations.
++ The fund's fiscal year-end was changed to October 31.
** Excludes expenses in excess of a 1.75% voluntary expense limitation in
effect through December 31, 1991.
15
<PAGE>
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
T. Rowe Price European Stock 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 European Stock 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
16
<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.
17
<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.
18
<PAGE>
- --------------------------------------------------------------------------------
Annual Report
- --------------------------------------------------------------------------------
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 distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price European Stock
Fund.
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price
- -------------
European Stock Fund
October 31, 1995
