- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
European Stock Fund
- --------------------------------------------------------------------------------
October 31, 1996
- --------------------------------------------------------------------------------
Report Highlights
================================================================================
o European markets kept up their strong pace in recent months, providing
double-digit gains for the year ended October 31. A strengthening of
European currencies against the dollar boosted returns to U.S. investors. o
The best-performing markets over the last six months were Finland, Sweden,
the Netherlands, and the U.K. o The European Stock Fund gained a robust
8.39% over the last six months, bringing its full-year return to 21.76%,
well ahead of the MSCI Europe Index and the average Europe fund as measured
by Lipper.
o While trimming the fund's overall small-company exposure, we increased our
holdings of these stocks in the emerging countries of Eastern Europe.
o Good economic conditions and a renewed emphasis by European companies on
profitability should help performance into 1997.
- --------------------------------------------------------------------------------
Fellow Shareholders
================================================================================
European stocks came out of the blocks strongly in the first half and kept
up the pace over the last six months, with some help from the modest rise in
European currencies against the dollar. The best-performing markets in the
second half were Finland, Sweden, the Netherlands, and the U.K. For the year
ended October 31, European markets produced robust, double-digit gains.
<PAGE>
- --------------------------------------------------------------------------------
Performance Comparison
================================================================================
Periods Ended 10/31/96 6 Months 12 Months
European Stock Fund 8.39% 21.76%
MSCI Europe Index 8.45 17.95
Lipper European Funds Average 6.86 17.03
================================================================================
Your fund had an excellent year, finishing with a gain of more than 21% and
outperforming both the unmanaged MSCI Europe Index and its Lipper peer group
average. Over the last six months, although slowing from its robust pace of the
first half, the fund produced another strong gain, essentially matching the
index and outperforming its Lipper peer group.
MARKET REVIEW
European markets drew strength from an almost ideal environment for stocks:
modest economic growth coupled with subdued inflation and low interest rates.
The steady earners that form the core of your fund performed especially well
under these conditions.
In the U.K., the longevity of the economic recovery continued to be
surprising, with the last recession in the early 1990s a distant memory.
However, a new commitment to more responsible economic management led to a
slight increase in short-term interest rates in October. This monetary
tightening should help sustain moderate growth with modest inflation into 1997,
regardless of the outcome of the general election which must be held by May. The
opinion polls suggest that the opposition Labour Party may unseat the ruling
Conservatives for the first time since 1979, although the implications for the
economy are minor since the parties now have similar economic policies.
Over the last six months, returns to U.S. investors received a significant
boost from the strengthening of the pound sterling against the dollar, lifting
the U.K. market ahead of most other European markets in dollar terms. We
continued to lighten the fund's exposure to utilities, which are vulnerable to
tighter regulation under a new government, by trimming our position in National
Grid Group. Improved consumer sentiment benefited our holdings in chain store
retailers Argos and Kingfisher. Meanwhile, reflecting the elevation of
shareholder interests by European companies, banks such as National Westminster
Bank abandoned the pursuit of market share to focus on profitability. They are
working toward improving returns on equity and using their capital more
efficiently by repurchasing stock.
<PAGE>
- --------------------------------------------------------------------------------
Market Performance
================================================================================
Six Months Local Local Currency U.S.
Ended 10/31/96 Currency vs. U.S. Dollars Dollars
- --------------------------------------------------------------------------------
Belgium 6.47% 1.04% 7.58%
Finland 15.12 7.07 23.27
France 2.15 1.35 3.53
Germany 6.65 1.35 8.09
Italy - 10.35 3.18 - 7.50
Netherlands 9.44 1.18 10.74
Norway 0.46 3.25 3.72
Spain 7.06 - 0.08 6.97
Sweden 13.97 3.55 18.01
Switzerland 2.31 - 1.11 1.17
United Kingdom 5.20 8.52 14.16
- --------------------------------------------------------------------------------
Source: FAME Information Services, Inc., using MSCI Indices.
================================================================================
Elsewhere in Europe, the move toward monetary union picked up speed when
some countries on the fringe of the process, such as Italy and Spain, exhibited
more support. The unionist countries are scrambling to meet the Maastricht
criteria for unification, imposing strict, often unpopular fiscal targets and
controls on spending to reduce budget deficits. To compensate for reduced
government spending, lower interest rates were employed across Europe to sustain
economic growth, while fiscal restraint spawned lower bond yields. However, high
unemployment kept consumer spending at bay and inflation very low in most
countries. In another sign that bodes well for performance, the renewed emphasis
on shareholder interests began to filter out of the U.K. to the rest of Europe,
where overall returns on investment are lower but have more room to improve. A
number of portfolio companies are adopting a greater focus on profitability,
including Royal Dutch Petroleum and Unilever, both dual-listed in the
Netherlands and the U.K., and Eaux Cie Generale in France.
The trend may even spread to Germany, where companies like Deutsche Bank
are hampered by unacceptably low, single-digit returns on equity. European
companies have a long way to go, however, with share buybacks still illegal in
many countries, impeding the efficient use of capital. Mergers are yet another
way to boost value for shareholders and have been instrumental in the
pharmaceutical industry. Two companies in our portfolio, Ciba-Geigy and Sandoz,
are merging to form Novartis, a marriage that should result in a new Swiss
pharmaceutical powerhouse. Glaxo Wellcome in the U.K. is another recently formed
pharmaceutical giant.
<PAGE>
The fund continued to benefit from a large overweighting (relative to the
MSCI Index) in the Netherlands, which is home to the three largest holdings in
the portfolio. Our Dutch stocks are multinational giants with very little
reliance on the domestic economy. Two publishing companies, Wolters Kluwer and
Elsevier (also owned in the U.K. through Reed International), have produced
steady growth and high returns over many years, and we continue to like their
prospects.
While the French market generally tracked the European averages over the
past year, we invested in a number of companies that significantly outperformed
the local index. During the last six months, we slightly raised our weighting
here to 15% of net assets by purchasing more shares in companies such as Eaux
Cie Generale and catering concern Sodexho. Generale's new management plans to
scale back the conglomerate's diverse interests, promising improved
profitability. Sodexho has already made a strong contribution to fund
performance and should continue to outperform in the future.
[Pie chart showing the following geographic diversification on 10/31/96.
United Kingdom 26%, Netherlands 18%, France 15%, Switzerland 8%, Germany 7%,
Sweden 5%, Spain 5%, Other and Reserves 16%]
In both Italy and Spain, bond yields fell dramatically. Spain was the
better-performing market, although Italy has taken more aggressive steps so far
to combat government debt levels. Despite its improving economic fundamentals,
we underweighted Italy because it was hard to find many attractive companies. An
exception is telecommunications concern Telecom Italia Mobile, which is
benefiting from the rapid growth of mobile phones and high revenue per
subscriber.
On the other hand, it is getting harder to keep a clear signal on mobile
telephone equipment manufacturer Nokia, the largest company on the stock market
in Finland. After a struggle in the first half, the problems the company had
experienced in the supply of components reversed, leading to better profits and
performance. Largely as a result of Nokia's ups and downs, the Finnish market
was among Europe's top performers over the last six months (up 23.27%) but the
worst performer for the year ended October 31, with an almost flat return. We
maintained a modest holding in the company but are keeping a close watch. While
resisting the drive toward monetary union, Sweden also performed strongly this
year, benefiting from its independent push for fiscal discipline. The Swedes
steadily cut interest rates, stimulating the domestic economy and many smaller
companies, including our holding in the industrial concern Finnveden.
<PAGE>
- --------------------------------------------------------------------------------
Industry Diversification
================================================================================
Percent of Percent of
Net Assets Net Assets
4/30/96 10/31/96
- --------------------------------------------------------------------------------
Services 28.2% 32.6%
Consumer Goods 20.7 20.3
Energy 16.1 13.8
Finance 14.1 13.5
Materials 6.2 6.2
Capital Equipment 6.9 6.0
Multi-Industry 1.8 2.3
Reserves 6.0 5.3
- --------------------------------------------------------------------------------
Total 100.0% 100.0%
================================================================================
In our report dated April 30, we mentioned our optimism regarding smaller
companies. In general, these companies ended the year by giving back some of
their outperformance over larger companies but maintained their lead for the
full year ended October 31. We slightly decreased the fund's overall
small-company exposure, particularly in the U.K., but increased holdings in the
emerging markets of Eastern Europe, which outpaced the established markets over
the past year. The fund now has holdings in the Czech Republic, Hungary, Poland,
and Russia. Russia's Gazprom, the world's largest gas company, is one example.
Outlook
Good economic conditions should help European markets continue to perform
well into 1997. The new emphasis on shareholder interests - as evidenced by
restructurings, mergers, and perhaps more share buy-backs - could also enhance
returns over the next few years. While slightly trimming our small-company
exposure, we expect our remaining holdings in this sector to do well.
Respectfully submitted,
[Signature]
Martin G. Wade
President
November 15, 1996
<PAGE>
================================================================================
About Your Investment Manager
- --------------------------------------------------------------------------------
Since many of you are new investors in the T. Rowe Price international
stock funds, we want to tell you briefly about the management team behind them.
The funds are managed by Rowe Price-Fleming International, Inc., a joint venture
between T. Rowe Price and Robert Fleming Holdings Ltd. of London.
Rowe Price-Fleming brings a wealth of experience to international
investing. T. Rowe Price was founded in 1937, and Robert Fleming, a British
merchant bank and investment firm, was founded in 1873. Since its birth in 1979,
Rowe Price-Fleming has grown into the largest U.S. manager of international
no-load funds,* with more than $27 billion under its stewardship, including 11
stock and bond mutual funds.
While Rowe Price-Fleming's investment team is based in London, portfolio
managers are also located in Tokyo, Hong Kong, Singapore, Baltimore, and soon in
South America. The company's equity managers are responsible for specific stock
selection, but they are supported by more than 100 analysts in 14 financial
centers worldwide.
Rowe Price-Fleming's investment philosophy is straightforward and
consistent: Each equity fund seeks broad diversification among companies that
offer above-average growth prospects at reasonable valuations. While
diversifying among many different companies and industries, each fund adheres
strictly to its prospectus.
Portfolio managers combine a macroeconomic view of each market with
extensive research on individual companies. Therefore, your portfolios can
potentially benefit from positive economic trends as well as from the selection
of individual stocks that may perform well regardless of economic conditions.
Rowe Price-Fleming believes that its emphasis on faster-growing foreign
economies, broad diversification, and strong commitment to fundamental research
helps it identify the best opportunities in international stocks.
*Strategic Insight Simfund
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
Portfolio Highlights
================================================================================
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
10/31/96
- --------------------------------------------------------------------------------
Wolters Kluwer, Netherlands ..................................... 4.1%
Elsevier, Netherlands ........................................... 3.4
Royal Dutch Petroleum, Netherlands .............................. 2.9
Eaux Cie Generale, France ....................................... 2.4
National Westminster Bank, United Kingdom ....................... 2.0
SmithKline Beecham, United Kingdom .............................. 1.9
Reed International, United Kingdom .............................. 1.8
Astra, Sweden ................................................... 1.7
Gehe, Germany ................................................... 1.5
Shell Transport & Trading, United Kingdom ....................... 1.4
Roche Holdings, Switzerland ..................................... 1.4
Carrefour, France ............................................... 1.4
Bayer, Germany .................................................. 1.3
ABB, Switzerland ................................................ 1.3
ING Groep, Netherlands .......................................... 1.3
Sandoz, Switzerland ............................................. 1.2
Glaxo Wellcome, United Kingdom .................................. 1.2
LVMH, France .................................................... 1.1
Nestle, Switzerland ............................................. 1.1
Tomkins, United Kingdom ......................................... 1.1
Abbey National, United Kingdom .................................. 1.1
Total, France ................................................... 1.0
Pinault Printemps, France ....................................... 1.0
Unilever, Netherlands ........................................... 1.0
Grand Metropolitan, United Kingdom .............................. 1.0
Total ........................................................... 40.6%
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
Performance Comparison
================================================================================
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
[SEC Chart showing European Stock Fund $18,654, MSCI European Index
$19,930, Lipper European Funds Average $16,257]
- --------------------------------------------------------------------------------
Average Annual Compound Total Return
================================================================================
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
================================================================================
Since Inception
Periods Ended 10/31/96 1 Year 3 Years 5 Years Inception Date
- --------------------------------------------------------------------------------
European Stock Fund 21.76% 16.10% 13.14% 9.80% 2/28/90
- --------------------------------------------------------------------------------
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period
====================================================================================================================================
Financial Highlights
<S> <C> <C> <C> <C> <C> <C>
Year 10 Months++ Year
Ended Ended Ended
10/31/96 10/31/95 10/31/94 10/31/93 12/31/92 12/31/91
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
Beginning of period ............... $ 14.35 $ 12.72 $ 11.37 $ 9.36 $ 10.09 $ 9.48
Investment activities
Net investment income ..... 0.25 0.20 0.14 0.12 0.14 0.10
Net realized and
unrealized gain (loss) .... 2.79 1.60 1.26 1.89 (0.70) 0.59
Total from
investment activities ..... 3.04 1.80 1.40 2.01 (0.56) 0.69
Distributions
Net investment income ..... (0.21) (0.12) (0.04) -- (0.17) (0.08)
Net realized gain ......... (0.25) (0.05) (0.01) -- -- --
Total distributions ....... (0.46) (0.17) (0.05) -- (0.17) (0.08)
NET ASSET VALUE
End of period ..................... $ 16.93 $ 14.35 $ 12.72 $ 11.37 $ 9.36 $ 10.09
Ratios/Supplemental Data
Total return ...................... 21.76% 14.41% 12.35% 21.47% (5.56)% 7.31%
Ratio of expenses to
average net assets ................ 1.12% 1.20% 1.25% 1.35%+ 1.48% 1.71%
Ratio of net investment
income to average
net assets ........................ 1.81% 1.75% 1.19% 1.79%+ 1.23% 1.04%
Portfolio turnover rate ........... 14.1% 17.2% 24.5% 21.3%+ 52.0% 57.7%
Average commission
rate paid ......................... $ 0.0248$- $- $- $- $-
Net assets, end of period
(in thousands) .................... $ 704,887 $ 490,573 $ 337,498 $ 265,784 $ 173,798 $ 103,977
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
+ Annualized.
++ The fund's fiscal year-end was changed to 10/31.
</FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Statement of Net Assets
================================================================================
Shares/Par Value
In thousands
- --------------------------------------------------------------------------------
AUSTRIA 0.0%
Preferred Stocks 0.0%
Creditanstalt Bankverein ............................ 2,050 $ 96
Total Austria (Cost $215) ........................... 96
BELGIUM 1.6%
Common Stocks and Warrants 1.6%
Barco ............................................... 3,500 576
Generale Banque ..................................... 9,293 3,248
Generale Banque, VVPR Strip ......................... 723 0
Kredietbank ......................................... 17,210 5,559
National Portefeuille, warrants, exp. 6/15/99 * ..... 6,200 10
UCB ................................................. 749 1,651
11,044
Convertible Bonds 0.0%
Kredietbank, 5.75%, 11/30/03 BEL .................... 4,522,500 190
190
Total Belgium (Cost $7,326) ......................... 11,234
CZECH REPUBLIC 0.1%
Common Stocks 0.1%
IPS Praha ........................................ 52,470 548
SPT Telecom ...................................... 3,800 406
Total Czech Republic (Cost $712) ................. 954
DENMARK 0.7%
Common Stocks 0.7%
Bang & Olufsen ................................... 21,930 815
Crisplant Industries ............................. 7,700 543
Den Danske Bank .................................. 19,780 1,419
ISS International (Class B) ...................... 21,000 596
Tele Danmark (Class B) ........................... 13,450 678
Unidanmark (Class A) ............................. 21,420 988
Total Denmark (Cost $4,448) ...................... 5,039
<PAGE>
FINLAND 0.6%
Common Stocks 0.6%
Huhtamaki ...................................... 8,000 $ 348
Konecranes International ....................... 9,000 248
Nokia (Class A) ................................ 46,300 2,139
Nokian Tyres ................................... 35,050 672
Orion (Class B) ................................ 6,000 203
Raision Tehtaat ................................ 9,180 567
Total Finland (Cost $2,632) .................... 4,177
FRANCE 14.8%
Common Stocks and Warrants 14.8%
AXA ............................................. 9,400 587
Accor ........................................... 18,310 2,299
Alcatel Alsthom ................................. 27,950 2,384
Altran Technologies ............................. 1,784 534
Assurances Generales de France .................. 17,710 522
But ............................................. 9,825 569
CET ............................................. 8,700 698
Canal Plus ...................................... 12,700 3,145
Carrefour ....................................... 17,555 9,741
Castorama Dubois ................................ 7,561 1,294
Chargeurs International ......................... 10,933 475
Cie de St. Gobain ............................... 43,239 5,836
Cipe France ..................................... 10,000 1,226
Credit Local de France, bearer .................. 10,510 904
Credit Local de France, registered .............. 12,910 1,111
Eaux Cie Generale ............................... 138,694 16,575
Elf Aquitaine ................................... 51,450 4,114
Guilbert ........................................ 21,671 3,446
Havas ........................................... 15,760 1,035
L'Oreal ......................................... 5,172 1,751
LVMH ............................................ 35,238 8,071
NRJ ............................................. 4,000 515
Pathe ........................................... 10,933 2,949
Pinault Printemps ............................... 18,860 7,112
Primagaz ........................................ 1,485 153
Primagaz, warrants, exp. 6/30/98 * .............. 135 3
Rexel ........................................... 2,000 $ 593
Rochefortaise Communication ..................... 8,600 456
Sanofi .......................................... 21,457 1,944
Schneider ....................................... 61,690 3,017
Societe des Immeubles de France ................. 115 7
Societe Generale ................................ 8,310 896
Sodexho ......................................... 12,650 6,114
Spir Communication .............................. 3,437 358
Television Francaise ............................ 61,508 6,545
Total (Class B) ................................. 92,438 7,230
Total France (Cost $83,510) ..................... 104,209
<PAGE>
GERMANY 6.9%
Common Stocks and Warrants 6.4%
Allianz Holdings ................................ 2,235 4,042
Altana .......................................... 1,100 879
Bayer ........................................... 250,781 9,472
Buderus ......................................... 720 326
Deutsche Bank ................................... 52,220 2,438
Eurobike ........................................ 35,500 785
Gehe ............................................ 152,120 10,246
Hoechst ......................................... 44,470 1,677
Kolbenschmidt ................................... 70,000 896
Mannesmann ...................................... 7,190 2,792
Pittler Maschinenfabrik * ....................... 4,800 101
Rhoen Klinikum .................................. 7,776 976
SAP ............................................. 10,810 1,463
Schering ........................................ 13,623 1,096
Siemens ......................................... 21,203 1,095
Sixt ............................................ 1,600 562
Sixt, warrants, exp. 5/17/00 * .................. 100 78
Veba ............................................ 81,590 4,352
Vereinigte Baubeschlag Handel ................... 10,000 172
Volkswagen ...................................... 3,421 1,370
44,818
Preferred Stocks and Rights 0.5%
Berentzen Gruppe ................................. 14,500 525
Edding ........................................... 470 140
Hach ............................................. 600 $ 242
Marschollek Lautenshaeger ........................ 4,500 636
Marschollek Lautenshaeger, rights * .............. 4,500 7
SAP .............................................. 9,740 1,311
Signalbau Huber .................................. 1,650 185
Sixt ............................................. 1,000 319
Sto .............................................. 721 351
Westag & Getalit ................................. 368 66
3,782
Total Germany (Cost $35,231) 48,600
HUNGARY 0.2%
Common Stocks 0.2%
Graboplast Textile .............................. 27,000 827
Richter Gedeon .................................. 12,200 656
Total Hungary (Cost $824) ....................... 1,483
<PAGE>
IRELAND 0.2%
Common Stocks 0.2%
Barlo Group .................................. 350,000 240
Kingspan Group ............................... 140,900 1,147
Total Ireland (Cost $685) .................... 1,387
ISRAEL 0.4%
Common Stocks 0.4%
Bank Hapoalim .................................. 152,314 206
Blue Square * .................................. 176,600 1,402
Elco Holdings .................................. 4,835 118
Elite Industries ............................... 40,999 168
Teva Pharmaceutical ADR (USD) .................. 15,000 608
Total Israel (Cost $2,214) ..................... 2,502
ITALY 3.7%
Common Stocks and Warrants 3.7%
Assicurazioni Generali .............................. 61,226 1,183
Danieli & Company, savings shares ................... 180,000 572
Danieli & Company, warrants, exp. 11/30/99 * ........ 22,750 13
ENI ................................................. 659,743 3,160
Fila Holdings ADR (USD) ............................. 7,800 571
IMI ................................................. 232,253 1,838
Industria Macchine Automatiche ...................... 130,000 516
Industrie Natuzzi ADR (USD) ......................... 24,000 1,086
Italgas ............................................. 415,943 1,535
La Doria ............................................ 240,000 884
Merloni Elettrodomestici, savings shares ............ 342,624 212
Pagnossin ........................................... 62,100 226
Saes Getters ........................................ 20,800 378
Safilo .............................................. 60,000 1,068
Stet ................................................ 1,027,300 3,548
Stet, savings shares ................................ 544,935 1,451
Tecnost ............................................. 277,000 615
Telecocavi, savings shares .......................... 16,000 34
Telecom Italia ...................................... 1,084,615 2,417
Telecom Italia Mobile ............................... 1,931,435 3,991
Telecom Italia Mobile, savings shares ............... 620,611 708
Vianini Lavori ...................................... 95,000 157
26,163
Corporate Bonds 0.0%
Danieli & Company, 7.25%, 1/01/00 ITL ............. 136,500,000 84
84
Total Italy (Cost $21,240) ........................ 26,247
<PAGE>
NETHERLANDS 17.5%
Common Stocks 17.5%
ABN Amro Holdings ......................... 108,498 6,133
Aalberts Industries ....................... 8,630 1,012
Ahold ..................................... 23,681 1,382
Ahrend Groep .............................. 25,190 1,339
Akzo Nobel ................................ 12,652 1,594
Atag ...................................... 12,216 752
CSM ....................................... 120,938 6,379
Content Beheer ............................ 13,400 566
Elsevier .................................. 1,422,270 23,639
Fortis Amev ............................... 147,885 4,419
Getronics ................................. 31,496 774
ING Groep ................................... 287,035 $ 8,949
Koninklijke PTT Nederland ................... 55,007 1,991
Otra ........................................ 73,500 1,378
Polygram .................................... 119,906 5,632
Randstad Holdings ........................... 14,000 1,132
Royal Dutch Petroleum ....................... 122,189 20,179
Toolex Alpha ................................ 11,900 114
Unilever .................................... 44,420 6,755
Wolters Kluwer .............................. 223,930 28,785
122,904
Preferred Stocks 0.0%
ING Groep ......................................... 10,947 58
58
Total Netherlands (Cost $72,428) .................. 122,962
NORWAY 2.4%
Common Stocks 2.4%
Bergesen (Class A) ............................. 31,150 681
Elkjop Norge ................................... 33,723 817
Kverneland Gruppen ............................. 14,560 340
Merkantildata .................................. 64,000 983
Norsk Hydro .................................... 127,725 5,885
Orkla (Class A) ................................ 86,574 5,536
Ringcom ........................................ 22,200 111
Schibsted ...................................... 33,400 510
Sensonor * ..................................... 53,100 387
Tomra Systems .................................. 99,000 1,404
Visma .......................................... 42,230 199
Total Norway (Cost $11,046) .................... 16,853
<PAGE>
POLAND 0.3%
Common Stocks 0.3%
Bank Rozwoju Eksportu .............................. 25,200 748
Bank Slaski ........................................ 6,540 605
Elektrim ........................................... 40,000 334
Gorazdze ........................................... 18,500 490
International UNP Holdings (CAD) * ................. 186,843 42
Total Poland (Cost $1,908) ......................... 2,219
PORTUGAL 0.5%
Common Stocks 0.4%
Jeronimo Martins .................................. 23,952 $2,180
Sempa ............................................. 26,250 390
Sumolis Industria de Frutas Bebidas ............... 14,000 107
2,677
Preferred Stocks 0.1%
Filmes Lusomundo .................................. 28,470 253
253
Total Portugal (Cost $1,420) ...................... 2,930
RUSSIA 0.3%
Common Stocks 0.3%
Gazprom ADR (USD) ............................ 40,500 760
Lukoil ADR (USD) ............................. 28,000 1,078
PLD Telekom (USD) * .......................... 52,200 346
Star Mining (AUD) * .......................... 1,540,000 195
Total Russia (Cost $2,069) ................... 2,379
SPAIN 5.1%
Common Stocks 5.1%
Aguas de Barcelona ............................... 20,908 855
Algodonera de St. Antonia * ...................... 41,000 325
Argentaria Banca de Espana ....................... 48,281 1,892
Azkoyen .......................................... 11,000 812
Banco Popular Espanol ............................ 21,859 4,178
Banco Santander .................................. 73,529 3,775
Centros Comerciales Pryca ........................ 66,268 1,522
Continente Central ............................... 32,280 655
Corporacion Financiaera Reunida .................. 118,000 305
Cristaleria Espanola ............................. 6,400 419
<PAGE>
Empresa Nacional de Electricidad ................. 95,180 5,826
Filo ............................................. 52,500 148
Gas Natural ...................................... 19,531 3,416
Grupo Anaya ...................................... 16,000 317
Iberdrola ........................................ 314,865 3,344
Prosegur Seguridad ............................... 162,500 1,312
Repsol ........................................... 162,829 5,315
Telefonica de Espana ............................. 67,340 $1,351
Total Spain (Cost $30,758) ....................... 35,767
SWEDEN 5.4%
Common Stocks and Warrants 5.4%
ABB (Class A) ....................................... 18,840 2,134
Angpanne Foreningen (Class B) ....................... 33,500 540
Astra (Class B) ..................................... 262,930 11,996
Atlas Copco (Class B) ............................... 227,230 4,682
BPA (Class A) * ..................................... 380,000 1,069
BPA (Class A), warrants, exp. 12/15/00 * ............ 152,000 190
Electrolux (Class B) ................................ 61,910 3,446
Esselte (Class B) ................................... 45,690 1,021
Finnveden (Class B) ................................. 52,900 764
Getinge Industrier (Class B) ........................ 40,650 742
Hennes & Mauritz (Class B) .......................... 32,410 4,194
Hoganas (Class B) ................................... 16,000 494
ICB Shipping (Class B) .............................. 71,200 845
Sandvik (Class B) ................................... 122,110 2,878
Scribona (Class B) .................................. 46,260 510
Securitas (Class B) ................................. 57,000 1,474
Stora Kopparbergs (Class B) ......................... 101,450 1,304
Total Sweden (Cost $23,530) ......................... 38,283
SWITZERLAND 7.6%
Common Stocks 7.6%
ABB .............................................. 7,365 9,101
Adecco ........................................... 4,500 1,264
Belimo Automation ................................ 3,000 634
Bossard Holdings ................................. 1,000 360
Bucher Holding ................................... 1,150 835
CS Holding ....................................... 20,015 1,999
Ciba-Geigy ....................................... 5,079 6,256
Edipresse ........................................ 2,600 537
<PAGE>
Generale d'Affichage ............................. 2,200 1,018
Gurit Heberlien .................................. 365 722
Hilti ............................................ 650 426
Lem Holdings ..................................... 1,250 284
Liechtenstein Global Trust ....................... 1,235 $ 586
Nestle ........................................... 7,425 8,065
Roche Holdings ................................... 1,311 9,916
Sandoz ........................................... 7,317 8,457
Schweizerischer Bankverein ....................... 17,840 3,437
Total Switzerland (Cost $39,770) ................. 53,897
UNITED KINGDOM 26.4%
Common Stocks and Warrants 26.3%
Abbey National ......................................... 740,080 7,685
Abtrust Lloyds Insurance, warrants, exp. 11/24/98 * .... 27,000 13
Argos .................................................. 304,266 3,813
Asda Group ............................................. 2,126,430 4,084
Ashtead Group .......................................... 357,497 1,353
BCE Holdings * ......................................... 1,850,000 354
British Gas ............................................ 563,250 1,751
British Petroleum ...................................... 205,000 2,195
Britton Group .......................................... 380,630 954
CRT Group .............................................. 400,777 1,709
Cable & Wireless ....................................... 652,110 5,180
Cadbury Schweppes ...................................... 587,753 4,879
Caradon ................................................ 922,810 3,635
Carpetright ............................................ 86,000 879
Chamberlain Phipps ..................................... 99,000 0
Coats Viyella .......................................... 361,000 893
Compass Group .......................................... 231,000 2,297
Cordiant ............................................... 195,000 321
Corporate Services Group ............................... 645,471 1,828
David S. Smith ......................................... 419,020 2,128
Devro International .................................... 251,250 1,084
Druck Holdings ......................................... 185,000 994
East Midlands Electricity .............................. 106,128 930
First Technology ....................................... 77,000 793
GKN .................................................... 77,000 1,450
Glaxo Wellcome ......................................... 533,540 8,293
Grand Metropolitan ..................................... 895,420 6,719
Greggs ................................................. 42,000 931
Guinness ............................................... 706,040 5,079
HTV Group .............................................. 205,000 $ 1,258
Harvey Nichols ......................................... 157,500 884
Helical Bar ............................................ 41,000 259
Henderson .............................................. 23,000 471
Hozelock Group ......................................... 99,461 704
JBA Holdings ........................................... 200,000 1,676
JKX Oil & Gas * ........................................ 110,000 240
John Laing (Class A) ................................... 369,690 1,607
Kingfisher ............................................. 447,731 4,766
Knox D'Arcy Trust ...................................... 562,222 311
<PAGE>
Ladbroke Group ......................................... 591,250 1,910
London Electricity ..................................... 250,208 2,476
Mackie International Group ............................. 44,000 158
Matthew Clark .......................................... 59,000 300
Mayflower .............................................. 595,000 1,254
Mirror Group ........................................... 313,000 1,177
N Brown Group .......................................... 81,420 559
National Grid Group .................................... 176,609 517
National Westminster Bank .............................. 1,252,410 14,330
Northern Leisure ....................................... 247,035 635
Pentos * ............................................... 358,333 0
Peter Black Holdings ................................... 57,000 278
Pizza Express .......................................... 75,000 630
Powerscreen International .............................. 147,000 1,459
RTZ .................................................... 217,060 3,462
Rank Group ............................................. 874,625 5,780
Reed International ..................................... 683,940 12,746
Regal Hotel Group ...................................... 761,389 632
Rolls Royce ............................................ 399,201 1,644
Safeway ................................................ 510,000 3,021
Sage Group ............................................. 138,000 1,094
Select Appointment ..................................... 159,000 1,027
Serco Group ............................................ 117,500 1,207
Shell Transport & Trading .............................. 611,000 10,024
SmithKline Beecham ..................................... 1,115,100 13,721
Stakis ................................................. 400,750 659
Stoves ................................................. 66,000 295
Superscape VR .......................................... 37,700 298
T & N .................................................. 698,000 $ 1,443
Taylor Nelson .......................................... 687,380 615
Tesco .................................................. 388,500 2,093
Tomkins ................................................ 1,858,770 7,775
Transtec ............................................... 713,222 1,312
Ugland International Holdings .......................... 264,000 296
United Newspapers ...................................... 437,390 4,791
Videologic Group * ..................................... 135,000 116
Visual Action Holdings ................................. 69,050 260
WPP Group .............................................. 245,000 913
Wickes ................................................. 151,111 44
185,351
Preferred Stocks 0.1%
Knox D'Arcy Trust, cv. loan stock, 9/30/07 ............ 472,222 258
Regal Hotel Group, cv. loan stock, 2001 ............... 131,587 256
514
Total United Kingdom (Cost $138,187) .................. 185,865
<PAGE>
SHORT-TERM INVESTMENTS 5.0%
Commercial Paper 4.3%
Abbey National North America, 5.32%, 11/29/96 ............ $3,000,000 2,988
American Express Credit, 5.26%, 12/05/96 ................. 3,000,000 2,985
Bank of America, 5.40%, 2/05/97 .......................... 2,000,000 1,971
Caterpillar Financial Services, 5.25%, 11/22/96 .......... 3,000,000 2,991
Countrywide Funding, 5.27%, 11/07/96 ..................... 3,000,000 2,997
Falcon Asset Securitization, 5.30%, 11/04/96 ............. 5,000,000 4,998
First Chicago Financial, 4(2), 5.25%, 11/14/96 ........... 3,000,000 2,994
Market Street Funding, 5.29%, 11/26/96 ................... 3,000,000 2,989
Sandoz, 5.33%, 12/03/96 .................................. 3,000,000 2,986
Yorkshire Building Society, 5.43%, 1/24/97 ............... 2,000,000 1,975
Investments in Commercial Paper through a joint account,
5.56 - 5.63%, 11/01/96 .................. 677,198 677
30,551
Certificates of Deposit 0.7%
Australia & New Zealand Banking, 5.57%, 2/06/97 ........ 2,000,000 2,000
Westdeutsche Landesbank New York, 5.28%, 11/22/96 ...... 3,000,000 3,000
5,000
Total Short-Term Investments (Cost $35,551) ............ 35,551
Total Investments in Securities
99.7% of Net Assets (Cost $515,704) ......................... $702,634
Other Assets Less Liabilities ............................. 2,253
NET ASSETS ................................................ $704,887
Net Assets Consist of:
Accumulated net investment income - net of distributions ......... $ 10,807
Accumulated net realized gain/loss - net of distributions ........ 6,268
Net unrealized gain (loss) ..................................... 186,954
Paid-in-capital applicable to 41,634,887 shares of $0.01
par value capital stock outstanding; 2,000,000,000 shares
of the corporation authorized ............................. 500,858
NET ASSETS ................................................. $704,887
NET ASSET VALUE PER SHARE .................................. $ 16.93
* Non-income producing
AUD Australian dollar
BEL Belgian franc
CAD Canadian dollar
ITL Italian lira
USD U.S. dollar
4(2) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under section 4.2 of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors."
The accompanying notes are an integral part of these financial statements.
<PAGE>
================================================================================
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
Year
Ended
10/31/96
- --------------------------------------------------------------------------------
Investment Income
Income
Dividend (net of foreign taxes of $ 2,462) ............ $ 15,600
Interest .............................................. 1,770
Other ................................................. 235
Total income .......................................... 17,605
Expenses
Investment management ................................. 5,007
Shareholder servicing ................................. 1,126
Custody and accounting ................................ 351
Registration .......................................... 93
Prospectus and shareholder reports .................... 90
Legal and audit ....................................... 30
Directors ............................................. 8
Miscellaneous ......................................... 5
Total expenses ........................................ 6,710
Net investment income ......................................... 10,895
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on
Securities ............................................ 7,920
Foreign currency transactions ......................... (489)
Net realized gain (loss) .............................. 7,431
Change in net unrealized gain or loss on
Securities ............................................ 99,362
Other assets and liabilities
denominated in foreign currencies ..................... 12
Change in net unrealized gain or loss ................. 99,374
Net realized and unrealized gain (loss) ....................... 106,805
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS ........................................ $ 117,700
<PAGE>
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
- --------------------------------------------------------------------------------
Year Year
Ended Ended
10/31/96 10/31/95
Increase (Decrease) in Net Assets
Operations
Net investment income ........................... $ 10,895 $ 7,412
Net realized gain (loss) ........................ 7,431 8,570
Change in net unrealized gain or loss ........... 99,374 44,753
Increase (decrease) in net assets from operations 117,700 60,735
Distributions to shareholders
Net investment income ........................... (7,528) (3,553)
Net realized gain ............................... (8,941) (1,481)
Decrease in net assets from distributions ....... (16,469) (5,034)
Capital share transactions *
Shares sold ..................................... 254,494 242,056
Distributions reinvested ........................ 15,698 4,733
Shares redeemed ................................. (157,109) (149,415)
Increase (decrease) in net assets from capital
share transactions .............................. 113,083 97,374
Net Assets
Increase (decrease) during period ................... 214,314 153,075
Beginning of period ................................. 490,573 337,498
End of period ....................................... $704,887 $490,573
*Share information
Shares sold ..................................... 16,561 18,546
Distributions reinvested ........................ 1,094 393
Shares redeemed ................................. (10,195) (11,297)
Increase (decrease) in shares outstanding ....... 7,460 7,642
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
Notes to Financial Statements
================================================================================
================================================================================
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 and commenced operations on February 28, 1990.
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 amortized cost which 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.
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.
<PAGE>
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.
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.
Securities Lending
To earn additional income, the fund lends its securities to approved
brokers. At October 31, 1996, the market value of securities on loan was
$63,199,000, which was fully collateralized with 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.
Other
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $173,119,000 and $80,133,000, respectively, for the year
ended October 31, 1996.
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.
<PAGE>
In order for the fund's capital accounts and distributions to shareholders
to reflect the tax character of certain transactions, the following
reclassifications were made during the year ended October 31, 1996. The results
of operations and net assets were not affected by the reclassifications.
================================================================================
Undistributed net realized gain 47,000
Paid-in-capital (47,000)
- --------------------------------------------------------------------------------
At October 31, 1996, the aggregate cost of investments for federal income
tax and financial reporting purposes was $515,704,000, and net unrealized gain
aggregated $186,930,000, of which $197,027,000 related to appreciated
investments and $10,097,000 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 $488,000 was payable
at October 31, 1996. 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 0.305% for assets in
excess of $50 billion. At October 31, 1996, and for the year then ended, the
effective annual group fee rate was 0.33%. 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 $944,000 for the year ended
October 31, 1996, of which $104,000 was payable at period-end.
During the year ended October 31, 1996, the fund, in the ordinary course of
business, paid commissions of $35,000 to, and placed security purchase and sale
orders aggregating $16,644,000 with, certain affiliates of the manager in
connection with the execution of various portfolio transactions.
<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., hereafter referred to as the "Fund") at October
31, 1996, 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, 1996 by
correspondence with custodians 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 19, 1996
<PAGE>
================================================================================
Investment Services And Information
- --------------------------------------------------------------------------------
KNOWLEDGABLE SERVICE REPRESENTATIVES
By Phone
Shareholder service representatives are available from 8 a.m. to 10 p.m. ET
Monday through Friday and from 8:30 a.m. to 5 p.m. ET on weekends. 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)
Call 1-800-638-2587 to obtain information such as account balance, date and
amount of your last transaction, latest dividend payment, fund prices, and
yields. Additionally, you have the ability to request prospectuses, statements,
and account and tax forms; to reorder checks; and to initiate purchase,
redemption, and exchange orders for identically registered accounts.
T. Rowe Price OnLine
Through a personal computer via dial-up modem, you can replicate all the
services available on Tele*Access plus conduct transactions in your Discount
Brokerage and Variable Annuity accounts.
ACCOUNT SERVICES
Checking
Write checks for $500 or more on any money market and most bond fund
accounts (except the High Yield and Emerging Markets Bond Funds).
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.
<PAGE>
DISCOUNT BROKERAGE*
Investments Available
You can trade stocks, bonds, options, precious metals, and other securities
at a savings over regular commission rates.
To Open an Account
Call a shareholder service representative for more information.
INVESTMENT INFORMATION
Combined Statement
A comprehensive overview of your T. Rowe Price accounts is provided. The
summary page gives you 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
This is a quarterly newsletter with relevant articles on market trends,
personal financial planning, and T. Rowe Price's economic perspective.
Performance Update
This quarterly report reviews recent market developments and provides
comprehensive performance information for every T. Rowe Price fund.
Insights
This library of information 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, and Retirement Planning Kit (also available on disk for PC use)
can help you determine and reach your investment goals.
*A division of T. Rowe Price Investment Services, Inc. Member NASD/SIPC.
<PAGE>
================================================================================
Mutual Funds
- --------------------------------------------------------------------------------
Stock Funds
================================================================================
Domestic
- --------------------------------------------------------------------------------
Balanced
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Dividend Growth
Equity Income
Equity Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons
OTC
Science & Technology
Small-Cap Value
Spectrum Growth
Value
International/Global
- --------------------------------------------------------------------------------
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Stock
Japan
Latin America
New Asia
<PAGE>
Bond Funds
================================================================================
Domestic Taxable
- --------------------------------------------------------------------------------
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-free
California Tax-Free Bond
Florida Insured Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Insured Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
Virginia Tax-Free Bond
International/Global
- --------------------------------------------------------------------------------
Global Government Bond
Emerging Markets Bond
International Bond
Money Market
================================================================================
Taxable
- --------------------------------------------------------------------------------
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
<PAGE>
Tax-Free
- --------------------------------------------------------------------------------
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
Blended Asset
================================================================================
Personal Strategy Income
Personal Strategy Balanced
Personal Strategy Growth
T. Rowe Price No-Load Variable Annuity
================================================================================
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
For yield, price, last transaction,
current balance or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(R):
1-800-638-2587 toll free
For assistance
with your existing fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
http://www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
<PAGE>
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.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
T. Rowe Price Investment Services, Inc., Distributor
RPRTESF
10/31/96
