<PAGE>
Annual Report
JAPAN FUND
- ----------------
OCTOBER 31, 1999
- ----------------
[LOGO OF T. ROWE PRICE]
T. Rowe Price
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
Japan Fund
. Japan's economy showed signs of turning the corner during 1999, and
corporate earnings improved sharply.
. The fund benefited from a strong market rally, posting outstanding 6- and
12-month gains of 44.28% and 102.68%.
. Mergers, acquisitions, and restructurings among Japan's largest companies
helped propel performance.
. Modest exposure to rapidly growing medium and small technology and services
companies helped the fund surpass its benchmark.
. Although the market may slow for the remainder of 1999, we are optimistic
about 2000.
UPDATES AVAILABLE
For updates on the fund following the end of every calendar quarter, please see
our Web site at www.troweprice.com.
<PAGE>
FELLOW SHAREHOLDERS
Japanese stock markets continued to rally during the six-month period and
finished the year ended October 31, 1999, with very strong gains. Japan's
economy showed signs of having bottomed and begun a recovery, while extensive
change in the corporate sector--especially restructuring in the financial
industry--attracted domestic and foreign investors and rewarded them with steady
profits.
The rally was also fed by the communications sector, which saw a high level of
merger and acquisition activity. Japanese telecommunications companies struck
compelling deals not only with each other but also with international
communications giants such as AT&T, Cable & Wireless, and British Telecom.
Still, the real stars of the Japanese markets were again growth-oriented medium
and smaller-sized companies, which rode an investor frenzy for undiscovered
growth stories. The yen rallied to a three-year high in October, which further
contributed to the strong positive performance of the fund.
Your fund advanced 44.28% for the six months, significantly greater than the TSE
First Section Index (which represents large Japanese stocks) but less than the
surging TSE Second Section Index. Your fund also performed marginally better
than the Lipper average of similar funds. Overweighted positions in the services
and electrical sectors contributed strongly to performance. Holdings in the bank
sector also enjoyed a strong rebound following a series of positive merger
announcements in the late summer, although our general underweighting in this
area somewhat restrained relative performance. Our modest holdings in medium and
smaller growth stocks, which included a basket of Internet-related companies,
provided an additional performance boost. Over the 12-month period, your fund
significantly outperformed the larger TSE First Section Index and the Lipper
average while lagging the TSE Second Section Index.
- ----------------------
PERFORMANCE COMPARISON
- -------------------------------------------------------------------------------
Periods Ended 10/31/99 6 Months 12 Months
- -------------------------------------------------------------------------------
Japan Fund 44.28% 102.68%
...............................................................................
TSE First Section Index 33.77 68.62
...............................................................................
TSE Second Section Index 62.59 163.05
...............................................................................
Lipper Japanese Funds Average 43.37 95.57
...............................................................................
1
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- --------------------------------------------
THE SECTOR FACTOR IN INTERNATIONAL INVESTING
- --------------------------------------------------------------------------------
Computer chips made in Ireland. Hollywood animation--from India. Internet
venture capitalists from Japan. Companies today have growth opportunities, labor
pools, competitive threats, acquisition targets, and potential suitors all over
the world.
International investing is no longer just a matter of having local expertise in
global markets. Today's investor needs to be aware of global industry trends in
addition to local realities. For the past 20 years, T. Rowe Price and its
international investing arm, Rowe Price-Fleming International, have participated
in the evolution of this new global marketplace and have evolved with it. Rowe
Price-Flemings international sector team works in concert with our regional
portfolio managers, looking at cross-border trends that can create opportunities
and risks in industries such as technology, pharmaceuticals, and financial
services.
Nowhere is this global sector imperative more evident than in
telecommunications. Telecom firms need global scale to compete, and their
fortunes are no longer exclusively tied to local or even regional factors. Hence
Deutsche Telekoms unsuccessful bid for Telecom Italia, and the bid by Germany's
Mannesmann for U.K. wireless phone company Orange.
The chart below shows that global sector factors are growing increasingly
important to the direction of stock prices. In the case of Telecom Italia, the
chart shows that the correlation of its stock price to the global telecom sector
(blue bar) rose significantly in 1997-98. (Data from the two years is averaged
together.) The gray bar shows that during this period the stocks correlation to
the Italian market declined. The examples of ING Groep and Societe Generale show
that while their stock prices became modestly more correlated to their local
markets, they became even more correlated to other global financial concerns.
"We have sharpened our understanding of global trends that drive stock prices in
the longer term, because we've got to be totally on top of the competitive
forces affecting returns at different companies," said John Ford, chief
investment officer at Rowe Price-Fleming. "For example, what is the relative
attractiveness of a Denso in Japan compared with another auto components company
such as Valeo in France? We've got to be aware of cross-border valuations and
industry trends."
Of course, local factors still dominate the outlook for some companies. The task
for the informed international investor is to appreciate both the global and the
local influences. Rowe Price-Fleming International, with its experienced team of
investment professionals worldwide, is as well positioned as ever to find the
best investment opportunities for you.
INFLUENCE OF GLOBALIZATION ON STOCKS
- --------------------------------------------------------------------------------
(Average Changes in Correlation 1997-1998)
[CHART]
Industry Effect Country Effect
--------------- --------------
Daimler Chrysler (Germany) 0.08 -0.16
Societe Generale (France) 0.28 0.1
ING Groep (Netherlands) 0.3 0.1
Telecom Italia (Italy) 0.28 -0.02
2
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While we are certainly enthusiastic about the fund's excellent results over the
past year, we feel it prudent to point out that gains of this magnitude are
unlikely to be sustained. Investor interest in Japan's changing corporate
landscape, sometimes dubbed the "new economy," has caused some stocks to become
overvalued. The effect has created a two-speed market where traditional stocks
languish but huge premiums are placed on firms with high growth potential, still
a rare commodity in Japan. While we are optimistic about the market's future
(see the Outlook section), some market volatility would not be unexpected.
MARKET REVIEW
GDP data for the first quarter of 1999 was stronger than anticipated, suggesting
to many observers that the Japanese economy had finally turned a corner. That
news, combined with positive corporate change and explosive earnings growth
among selected medium and smaller companies, created a very positive market
environment. The major Japanese market indices reached their highest levels
since the summer of 1997, while the TSE Second Section and OTC (over-the-
counter) indices touched highs not seen since 1992.
Merger and acquisition (M&A) activity was a prominent theme in the past six
months. Corporate actions of this type are not unusual in the Japanese market,
but their character has changed for the better. We saw far fewer of the
traditional-style mergers, whereby a financially viable and profitable company
graciously absorbs a weaker, otherwise bankrupt competitor, not so much for
financial reasons as to save face for the weaker company's management and,
ultimately, the government.
Data for the first nine months of 1999 show that both in volume and value terms,
M&As increased significantly over 1998. Already in 1999, 826 transactions have
been completed, worth in aggregate around five trillion yen ($47 billion). This
compares with 929 deals, valued at approximately 3.4 trillion yen, for all of
1998. While foreign buyers account for two trillion yen of the year-to-date
total, domestic firms have executed over 50% of deals. Unlike in previous years,
M&A activity is distributed across all major business sectors, including autos,
auto parts, services, chemicals, manufacturing, banks, and insurance.
Two recent merger announcements in the financial arena seized media interest. In
August, Dai-Ichi Kangyo Bank (DKB), Fuji Bank, and the Industrial Bank of Japan
(IBJ) announced plans for a three-way merger.
3
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CORPORATE ACTIONS... ARE NOT UNUSUAL IN THE JAPANESE MARKET, BUT THEIR CHARACTER
HAS CHANGED FOR THE BETTER.
This was the first-ever merger in Japan between a commercial bank and a long-
term credit bank, and it will result in a single megabank with 141 trillion yen
($1.35 trillion) in assets. The combined entity's annual information technology
(IT) investment budget alone stands at 150 billion yen, underscoring the
increasingly pivotal role played by IT in providing the competitive edge for
financial corporations. In October, Sumitomo Bank and Sakura Bank also announced
plans to merge. This will create another megabank with total assets of 99
trillion yen ($950 billion). Of particular significance, this merger is between
the main banks of rival keiretsu groups--the Sumitomo and Mitsui groups.
Keiretsu are large, conglomerated business networks; historically they have been
fiercely competitive, and open cooperation between groups is virtually
unprecedented. This move may signal realignment among the Fuyo, DKB, Sumitomo,
and Mitsui groups.
Also of significance during the period was the apparent momentum toward
significant corporate reform. In October, for example, Nissan announced long-
awaited restructuring plans that proved far more radical than previous auto
company reform efforts. The core elements of the plan include closing five
plants in Japan and dismissing 21,000 employees worldwide, an expected return to
profitability for the consolidated accounts by March 2001, an operating profit
margin of 4.5%, and the halving of total debt by March 2003. These events were
unthinkable two years ago and show that Japanese corporate restructuring is
starting to take on a shape and character more in line with Western business
practices.
The "new economy" companies, perceived to be the new growth areas, such as
mobile telephony, home PCs, and the Internet, remained in the limelight and were
market leaders. The trend particularly affected the small- and mid-cap areas of
the market, which have seen a significant expansion in attractive growth
opportunities. Companies directly involved with the Internet, such as
telecommunications and electronics companies with software, hardware, or
services capabilities, outperformed significantly. But the trend toward all
things "Internet" has affected companies in various industries. For example,
convenience chain store operator Seven-Eleven, a subsidiary of Ito-Yokado,
announced a tie-up with the giant among Japanese Internet companies, Softbank,
to provide a variety of Internet-related services through its
4
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6,600-plus store network. Also, Tokio Marine & Fire Insurance recently announced
a joint venture with Charles Schwab (of the U.S.) to set up an Internet-based
brokerage operation.
Movement in the yen had a heavy impact on the equity markets. The currency's
continued appreciation, to a new 1999 high of 103.7 yen to the dollar on
September 23, aroused fears of a yen/dollar foreign exchange rate below 100. At
that level, the export industries would likely suffer, and wholesale earnings
disappointments might grip the economy. Disagreement between the Bank of Japan
and the Ministry of Finance over monetary policy and the yen topped investors'
concerns in early fall. Consequently, stocks were sold across the board, and the
Nikkei 225 Index fell below 17,000. Supportive statements from the G7 and the
Bank of Japan Governor, Masaru Hayami, led the yen marginally lower and the TSE
higher, but with the currency hovering near 105 yen to the dollar, the exchange
rate remains a source of anxiety.
In the political arena, Prime Minister Keizo Obuchi easily won reelection as
Liberal Democratic Party (LDP) leader in September, winning 68% of the 514 votes
cast by the party's ministers and 1.43 million votes from the rank and file
members. However, his closest rival, ex-LDP Secretary-General Koichi Kato,
gained a better-than-forecast 113 votes and is now widely seen as the heir
apparent to the LDP throne. While Obuchi's victory was an endorsement for his
policy of coalition, tensions are rising between the LDP's partners--the Liberal
party and the New Komeito--over the vexing issue of political reform.
PORTFOLIO STRATEGY
Communications and service stocks drove fund gains during the past six months,
while strong rallies in selected medium and smaller company stocks also boosted
performance. We maintained a modest overweight position in communications stocks
relative to the overall market although we took some profits in top holding NTT
Mobile Communications Network (also known as NTT DoCoMo) in a rally that saw the
stock rise 32% in October alone. Service sector stocks, notably some medium and
smaller companies, such as electronic security specialist Secom and Internet
investment firm Softbank, significantly outperformed the market. The services
sector in Japan is very underdeveloped relative to the size of both the economy
and the stock market. We are watching earnings fundamentals closely, but
maintain an overweight position in this area.
5
<PAGE>
A significant number of mid-size and small companies saw impressive gains. Many
star performers were considered new economy stocks, such as Yahoo Japan, the
Japanese subsidiary of Yahoo! in the U.S., Fujitsu, an information services and
computer network systems company, call center operator Bellsystem24, and
Internet Initiative Japan, which provides comprehensive Internet-related
services. However, there were also several companies that have successfully
developed competitive business models and viable, profitable growth strategies
in nontechnology sectors. Some of these were represented in your fund such as
Round One, a bowling center operator, Sanix, a pest control services company,
and Watami Food Service, a pub-eatery chain operator in the Tokyo metropolitan
area.
- ------------------------
INDUSTRY DIVERSIFICATION
- --------------------------------------------------------------------------------
[CHART]
Capital Equipment 30%
Consumer Goods 25%
Services 21%
Financial 14%
Other and Reserves 7%
Energy 2%
Materials 1%
Based on net assets as of 10/31/99.
The key planks of our portfolio strategy remained unchanged. We remain
overweighted in technology manufacturers, Internet-related and IT software
stocks (classified as services), and telecommunications. We are also
overweighted in securities brokers and miscellaneous finance and trading
companies. While we maintain a market weighting in auto-related stocks, we have
gone light on consumption and asset stocks, as we expect consumer confidence and
the operating environment to remain difficult. We also underweighted the
utilities sector, and we hold no rail and air transport stocks because of their
high debt ratios (400% and above) and lackluster sales outlook.
A scandal over heavy-handed debt collection techniques by Nichiei and Shohkoh
Fund hit these small business lenders hard: the companies closed October down
34% and 20%, respectively. Public concern continued to grow, with the Financial
Supervisory Agency (FSA) forming a commission of investigation and the Diet's
Upper House Finance Committee summoning the presidents of both companies to
answer questions. We hold Shohkoh Fund, and while we are monitoring
6
<PAGE>
matters closely, we are keeping a stake in it. The company's business models and
medium-term growth prospects remain impressive. In addition, likely government
restrictions will raise the cost of funds but should not prevent future earnings
growth, and valuations are now extremely cheap, as the stock is trading at only
14.5X current-year earnings.
RISK IN THE JAPANESE FINANCIAL SYSTEM IS DECLINING ... HOWEVER, WE REMAIN
SKEPTICAL FOR THE IMMEDIATE FUTURE.
The fund enjoyed notable contributions from our modest financial holdings. In
the wake of the period's major bank mergers, including the deals among DKB-Fuji
Bank-IBJ, Sumitomo and Sakura Banks, and Asahi and Tokai Banks, industry
executives apparently reassured investors that risk in the Japanese financial
system is declining and progress is being made toward addressing structural
problems. However, we remain skeptical for the immediate future. The mergers
will take two to five years or more to implement fully and will necessitate
further bad debt write-offs and asset restructuring. Nonperforming loans remain
high, and the profit outlook appears difficult for the upcoming fiscal year:
quantifiable efficiency targets have yet to be comprehensively introduced in any
of these seven banks, and we think that they will have an uphill struggle to
raise core loan profitability. If these banks fail to attain their internal
profitability targets for fiscal year 1999-2000, a fresh wave of capital will be
needed to ensure compliance with international reserve requirements. For the
time being, we are not investing in these banks and are maintaining an
underweight position in the financial sector as a whole.
OUTLOOK
Especially in recent months, the stock rally has been driven by renewed optimism
about corporate earnings prospects. This optimism seems largely justified since
a preliminary survey shows that first-half 1999 results have been consistently
above forecasts. We remain positive on the outlook for earnings, notwithstanding
the potentially negative effects of a stronger yen, as it is clear that
corporate restructuring and cost-cutting efforts are producing positive results.
However, given the pace of market gains, particularly among technology stocks, a
breather seems likely. We expect the remainder of the fourth quarter to be
choppy while investors digest their concerns over
7
<PAGE>
yen movements and U.S. interest rate changes. Y2K is also on investors' minds
and could cause some volatility. Risk will, however, be on a stock by stock
basis, and we expect problems to be contained.
We are optimistic about the potential for gains in 2000. Growth is likely to
continue unabated in Japan's telecom, Internet, IT software, and services
sectors, and corporate restructuring themes should persist as Japan finally
embarks on the long journey that the U.S. and U.K. began in the early 1980s. We
anticipate that changes in corporate Japan will continue to be evolutionary
rather than revolutionary. However, recent months have shown us that evolution
is starting to move at "net" speed.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
November 24, 1999
8
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
10/31/99
- --------------------------------------------------------------------------------
NTT Mobile Communications Network 4.4%
................................................................................
Matsushita Communication Industrial 3.8
................................................................................
Softbank 3.2
................................................................................
Sony 3.0
................................................................................
Nippon Telegraph & Telephone 3.0
- --------------------------------------------------------------------------------
Bridgestone 2.7
................................................................................
Kyocera 2.7
................................................................................
Fujitsu 2.6
................................................................................
Rohm 2.4
................................................................................
Sanwa Bank 2.2
- --------------------------------------------------------------------------------
Mazda Motor 2.2
................................................................................
Murata Manufacturing 2.0
................................................................................
Sumitomo 1.9
................................................................................
Sankyo 1.9
................................................................................
Nomura Securities 1.8
- --------------------------------------------------------------------------------
NEC 1.8
................................................................................
Takeda Chemical 1.8
................................................................................
Secom (includes new shares) 1.7
................................................................................
Honda Motor 1.7
................................................................................
Tokyo Electronics 1.7
- --------------------------------------------------------------------------------
Hitachi 1.7
................................................................................
Suruga Bank 1.7
................................................................................
TDK 1.7
................................................................................
Tokyo Electric Power 1.6
................................................................................
Kao 1.6
- --------------------------------------------------------------------------------
Total 56.8%
Table excludes reserves.
9
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
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 benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
JAPAN FUND
- --------------------------------------------------------------------------------
[GRAPH]
TSE First Section Index Lipper Japan Funds Average Japan Fund
----------------------- -------------------------- ----------
12/30/91 10,000 10,000 10,000
10/92 7,560 7,886 8,580
10/93 10,944 10,974 11,580
10/94 11,901 12,338 12,652
10/95 10,049 10,533 11,024
10/96 9,925 10,428 10,589
10/97 7,731 8,512 9,357
10/98 6,471 7,304 7,889
10/99 10,911 13,020 15,990
- ------------------------------------
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 10/31/99 1 Year 3 Years 5 Years Inception Date
- --------------------------------------------------------------------------------
Japan Fund 102.68% 14.72% 4.79% 6.17% 12/30/91
................................................................................
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
10
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- ----------------------------------------------------------------------------------------------
Year
Ended
10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 6.72 $ 7.97 $ 9.02 $ 9.39 $ 11.64
..........................................................
Investment activities
Net investment income (0.02) (0.03) (0.03) (0.05) (0.04)
Net realized and
unrealized gain (loss) 6.92 (1.22) (1.02) (0.32) (1.40)
..........................................................
Total from
investment activities 6.90 (1.25) (1.05) (0.37) (1.44)
..........................................................
Distributions
Net realized gain -- -- -- -- (0.81)
..........................................................
NET ASSET VALUE
End of period $ 13.62 $ 6.72 $ 7.97 $ 9.02 $ 9.39
----------------------------------------------------------
Ratios/Supplemental Data
Total return* 102.68% (15.68)% (11.64)% (3.94)% (12.87)%
..............................................................................................
Ratio of total expenses to
average net assets 1.14% 1.32% 1.24% 1.32% 1.50%
..............................................................................................
Ratio of net investment
income to average
net assets (0.27)% (0.37)% (0.39)% (0.48)% (0.48)%
..............................................................................................
Portfolio turnover rate 58.8% 66.9% 32.3% 29.8% 62.4%
..............................................................................................
Net assets, end of period
(in thousands) $ 513,739 $ 150,949 $ 170,830 $ 167,118 $ 181,383
..............................................................................................
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
October 31, 1999
- ------------------------
PORTFOLIO OF INVESTMENTS Shares Value
- --------------------------------------------------------------------------------
In thousands
JAPAN 93.0%
COMMON STOCKS 93.0%
Capital Equipment 30.1%
Canon 295,000 $ 8,346
................................................................................
Daiwa House 293,000 2,681
................................................................................
Fujitsu 446,000 13,431
................................................................................
Hitachi 790,000 8,539
................................................................................
Komori 251,000 5,452
................................................................................
Koyo Seiko 389,000 4,156
................................................................................
Kyocera 146,600 14,060
................................................................................
Matsushita Communication Industrial 116,000 19,491
................................................................................
Mitsubishi Heavy Industries 439,000 1,722
................................................................................
Mitsumi Electric 93,000 2,488
................................................................................
Murata Manufacturing 79,000 10,152
................................................................................
NEC 465,000 9,410
................................................................................
Nemic-Lambda K.K. 69,100 3,314
................................................................................
Nidec 21,000 4,078
................................................................................
Nissho Electronics 134,000 3,855
................................................................................
Rohm 56,000 12,567
................................................................................
Sanden 950,000 7,289
................................................................................
Sumitomo Electric Industries 479,000 6,436
................................................................................
TDK 87,000 8,519
................................................................................
Tokyo Electronics 103,000 8,555
................................................................................
Total Capital Equipment 154,541
............
Consumer Goods 25.0%
Ajinomoto 483,000 5,415
................................................................................
Asahi Breweries 387,000 5,504
................................................................................
Asahi Softdrinks 89,500 1,262
................................................................................
Bridgestone 512,000 14,093
................................................................................
Honda Motor 206,000 8,693
................................................................................
Kao 274,000 8,356
................................................................................
Koha 15,000 921
................................................................................
Kuraray 509,000 6,834
................................................................................
Matsushita Electric Industrial 187,000 3,937
................................................................................
Mazda Motor 2,043,000 11,109
................................................................................
Sankyo 334,000 9,514
................................................................................
12
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Santen Pharmaceutical 104,000 $ 2,349
................................................................................
Sharp 108,000 1,719
................................................................................
Sony 99,900 15,579
................................................................................
Sony Chemicals 27,800 2,466
................................................................................
Takeda Chemical 157,000 9,019
................................................................................
Terumo 180,000 5,472
................................................................................
Watami Food Service 14,000 973
................................................................................
YAKULT HONSHA 388,000 3,967
................................................................................
Yamaha Motor 512,000 4,164
................................................................................
Yamanouchi Pharmaceutical 156,000 7,077
................................................................................
Total Consumer Goods 128,423
............
Energy 1.6%
Tokyo Electric Power 381,300 8,520
................................................................................
Total Energy 8,520
............
Financial 13.9%
Aeon Credit Service 33,900 4,942
................................................................................
Aiful 23,400 3,636
................................................................................
Cosmo Securities 2,994,000 8,327
................................................................................
Goldcrest 9,000 1,230
................................................................................
Mitsui Fudosan 631,000 4,714
................................................................................
Nomura Securities 573,000 9,457
................................................................................
Sanwa Bank 754,000 11,216
................................................................................
Shohkoh Fund 5,100 3,121
................................................................................
Sumitomo Bank 615,000 9,897
................................................................................
Suruga Bank 581,000 8,525
................................................................................
Tokio Marine & Fire Insurance 474,000 6,205
................................................................................
Total Financial 71,270
............
Materials 0.6%
Sekisui Chemical 602,000 2,962
................................................................................
Total Materials 2,962
............
Services 21.5%
Bellsystem24 2,300 2,206
................................................................................
Fuji Soft ABC 12,100 1,108
................................................................................
Internet Initiative Japan (USD) 92,804 4,988
................................................................................
13
<PAGE>
T. ROWE PRICE JAPAN FUND
- ---------------------------------------------------------------------------
Shares Value
...........................................................................
In thousands
Ito-Yokado 76,000 $ 6,079
...........................................................................
Japan Business 81,600 2,043
...........................................................................
Marui 305,000 5,762
...........................................................................
Megachips 20,000 1,496
...........................................................................
Mitsubishi 414,000 2,978
...........................................................................
Nippon Telegraph & Telephone 1,009 15,483
...........................................................................
NTT Mobile Communications Network 842 22,368
...........................................................................
Secom 42,000 4,471
...........................................................................
Secom, New 40,000 4,289
...........................................................................
Seiyu 496,000 2,069
...........................................................................
Softbank 39,900 16,569
...........................................................................
Sumisho Electronic 126,000 4,822
...........................................................................
Sumitomo 788,000 5,759
...........................................................................
Toppan Printing 227,000 2,784
...........................................................................
Toyo Information 56,000 2,830
...........................................................................
Uny 199,000 2,577
...........................................................................
Total Services 110,681
..............
Miscellaneous 0.3%
Combi 74,000 1,348
...........................................................................
Total Miscellaneous 1,348
..............
Total Common Stocks 477,745
..............
Total Japan (Cost $337,322) 477,745
..............
SHORT-TERM INVESTMENTS 6.3%
Money Market Funds 6.3%
Reserve Investment Fund, 5.51% # 32,611,746 32,612
...........................................................................
Total Short-Term Investments (Cost $32,612) 32,612
..............
14
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
99.3% of Net Assets (Cost $369,934) $ 510,357
Other Assets Less Liabilities 3,382
............
NET ASSETS $ 513,739
------------
# Seven-day yield
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
October 31, 1999
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $369,934) $ 510,357
Securities lending collateral 56,267
Other assets 14,229
.................
Total assets 580,853
.................
Liabilities
Obligation to return securities lending collateral 56,267
Other liabilities 10,847
.................
Total liabilities 67,114
.................
NET ASSETS $ 513,739
-----------------
Net Assets Consist of:
Accumulated net realized gain/loss - net of distributions (4,866)
Net unrealized gain (loss) 140,428
Paid-in-capital applicable to 37,712,376 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 378,177
.................
NET ASSETS $ 513,739
-----------------
NET ASSET VALUE PER SHARE $ 13.62
-----------------
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
- -----------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
10/31/99
Investment Income
Income
Dividend (net of foreign taxes of $244) $ 1,383
Interest 771
Securities lending 362
.............
Total income 2,516
.............
Expenses
Investment management 2,345
Shareholder servicing 579
Custody and accounting 189
Registration 77
Prospectus and shareholder reports 59
Legal and audit 20
Directors 6
Miscellaneous 4
.............
Total expenses 3,279
Expenses paid indirectly (1)
.............
Net expenses 3,278
.............
Net investment income (762)
.............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 44,671
Foreign currency transactions (828)
.............
Net realized gain (loss) 43,843
.............
Change in net unrealized gain or loss
Securities 161,450
Other assets and liabilities
denominated in foreign currencies (43)
.............
Change in net unrealized gain or loss 161,407
.............
Net realized and unrealized gain (loss) 205,250
.............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 204,488
-------------
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
10/31/99 10/31/98
Increase (Decrease) in Net Assets
Operations
Net investment income $ (762) $ (563)
Net realized gain (loss) 43,843 (37,293)
Change in net unrealized gain or loss 161,407 10,822
...........................
Increase (decrease) in net assets from operations 204,488 (27,034)
...........................
Capital share transactions *
Shares sold 439,514 208,297
Shares redeemed (281,212) (201,144)
...........................
Increase (decrease) in net assets from capital
share transactions 158,302 7,153
...........................
Net Assets
Increase (decrease) during period 362,790 (19,881)
Beginning of period 150,949 170,830
...........................
End of period $ 513,739 $ 150,949
---------------------------
*Share information
Shares sold 42,892 30,265
Shares redeemed (27,654) (29,231)
...........................
Increase (decrease) in shares outstanding 15,238 1,034
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
October 31,1999
- -----------------------------
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 Japan Fund (the fund), a diversified,
open-end management investment company, is one of the portfolios established by
the corporation and commenced operations on December 30, 1991.
The accompanying financial statements are prepared in accordance with generally
accepted accounting principles for the investment company industry; these
principles may require the use of estimates by fund management.
Valuation Equity securities 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.
Investments in mutual funds are valued at the closing net asset value per share
of the mutual fund on the day of valuation.
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.
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
19
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
accepted accounting principles. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian, which are used to reduce the
fund's custody charges.
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.
Securities Lending The fund lends its securities to approved brokers to earn
additional income and receives cash and U.S. government securities as collateral
against the loans. Cash collateral received is invested in a money market pooled
account by the fund's lending agent. Collateral is maintained over the life of
the loan in an amount not less than 100% of the value of loaned securities.
Although 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. At October 31, 1999, the value of loaned
securities was $53,796,000; aggregate collateral consisted of $56,267,000 in the
securities lending collateral pool.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $290,580,000 and $161,984,000, respectively, for the year
ended October 31, 1999.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
taxable income. The fund utilized capital loss carryforwards of $44,493,000 in
1999. As of October 31, 1999, the fund had capital loss carryforwards for
federal income tax purposes of $3,441,000, all of which expires in 2006. The
fund intends to retain gains realized in future periods that may be offset by
available capital loss carryforwards.
In order for the fund's capital accounts and distributions to shareholders to
reflect the tax character of certain transactions, the following
reclassifications
20
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
were made during the year ended October 31, 1999. The results of operations
and net assets were not affected by the increases/(decreases) to these
accounts.
- --------------------------------------------------------------------------------
Undistributed net investment income $ 762,000
Undistributed net realized gain (762,000)
At October 31, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$369,934,000. Net unrealized gain aggregated $140,423,000 at period-end, of
which $150,261,000 related to appreciated investments and $9,838,000 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 $337,000 was payable at
October 31, 1999. 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 0.295% for assets in excess of $120
billion. At October 31, 1999, and for the year then ended, the effective annual
group fee rate was 0.32%. 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
21
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
related party agreements totaling approximately $551,000 for the year ended
October 31, 1999, of which $63,000 was payable at period-end.
Additionally, the fund is one of several T. Rowe Price-sponsored mutual funds
(underlying funds) in which the T. Rowe Price Spectrum Funds (Spectrum) may
invest. Spectrum does not invest in the underlying funds for the purpose of
exercising management or control. Expenses associated with the operation of
Spectrum are borne by each underlying fund to the extent of estimated savings to
it and in proportion to the average daily value of its shares owned by Spectrum,
pursuant to special servicing agreements between and among Spectrum, the
underlying funds, T. Rowe Price, and, in the case of T. Rowe Price Spectrum
International, Rowe Price-Fleming International. Spectrum International Fund
held approximately 1.0% of the outstanding shares of the Japan Fund at
October 31, 1999. For the year then ended, the fund was allocated $26,000 of
Spectrum expenses, $5,000 of which was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the year ended October 31, 1999, totaled $770,000
and are reflected as interest income in the accompanying Statement of
Operations.
During the year ended October 31, 1999, the fund, in the ordinary course of
business, placed security purchase and sale orders aggregating $37,739,000 with
certain affiliates of the manager and paid commissions of $60,000 related
thereto.
- -----------------------------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 10/31/99
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Service.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund will pass through foreign source income of $1,023,000 and foreign taxes
paid of $145,000.
- --------------------------------------------------------------------------------
22
<PAGE>
T. ROWE PRICE JAPAN FUND
- --------------------------------------------------------------------------------
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of T. Rowe Price International Funds, Inc. and
Shareholders of Japan Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, 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 Japan Fund (one of the portfolios
comprising T. Rowe Price International Funds, Inc., hereafter referred to as the
"Fund") at October 31, 1999, 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, 1999 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
November 17, 1999
23
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE 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. You can also
drop off applications or obtain prospectuses and other literature at these
centers.
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.
Internet. T. Rowe Price Web site: www.troweprice.com All the information and
services available on Tele*Access are available on our Web site, including
transactions in your fund and brokerage accounts (with pre-authorized access).
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 $50 minimum makes it
easy to get started.
24
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
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.
BROKERAGE SERVICES*
Investments Available You can trade stocks, bonds, options, precious metals, and
other securities at a savings over full-service 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. Detail pages itemize
account transactions.
Shareholder Reports Portfolio managers review the performance of the funds in
plain language and discuss T. Rowe Price's economic outlook.
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 These are reports on mutual fund tax issues, investment strategies,
investment fundamentals, and financial markets.
Detailed Investment Guides Our Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Retirees Financial
Guide, and Retirement Planning Kit (also available on disk or CD-ROM for PC use)
can help you determine and reach your investment goals.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services,
Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of order.
25
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS
................................................................................
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
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 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 Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
................................................................................
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
................................................................................
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
................................................................................
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
26
<PAGE>
T. ROWE PRICE RETIREMENT PLANS AND RESOURCES
- --------------------------------------------------------------------------------
RETIREMENT PLANS AND RESOURCES
We recognize that saving for retirement is the number one investment goal for
most Americans. We can help you meet your retirement needs, whether you are
starting an IRA or designing a retirement program for your employees. T. Rowe
Price offers an assortment of retirement plans for individuals, the
self-employed, small businesses, corporations, and nonprofit organizations. We
provide recordkeeping, communications, and investment management services, as
well as a variety of educational materials, self-help planning guides, and
software tools to help you choose and implement a retirement plan appropriate
for you. For information or to request literature, call us at 1-800-638-5660.
IRAs AND QUALIFIED PLANS
......................................
Traditional IRA
Roth IRA
Rollover IRA
SEP-IRA
SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase Pension and Profit Sharing Plans)
401(k)
403(b)
457 Deferred Compensation
RETIREMENT RESOURCES AT T. ROWE PRICE
......................................
Planning and Informational Guides
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
Investment Kits
The IRA Investing Kit
Roth IRA Conversion Kit
Rollover IRA Kit
The T. Rowe Price SIMPLE IRA Plan Kit
The T. Rowe Price SEP-IRA Plan
The Simplified Keogh Plan(R) From T. Rowe Price
The T. Rowe Price 401(k) Century Plan(R) (for small businesses)
Money Purchase Pension/Profit Sharing Plan Kit
Investing for Retirement in Your 403(b) Account
The T. Rowe Price No-Load Variable Annuity Information Kit
Insights Reports
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
Software Packages
T. Rowe Price Retirement Planning Analyzer(TM) CD-ROM or diskette
$19.95. To order, please call 1-800-541-5760. Also available
on the Internet for $9.95.
T. Rowe Price Variable Analyzer(TM) CD-ROM or diskette, free.
To order, please call 1-800-469-5304.
Many of these resources are also available for viewing or ordering on the
Internet at www.troweprice.com.
27
<PAGE>
T. ROWE PRICE INSIGHTS REPORTS
- --------------------------------------------------------------------------------
THE FUNDAMENTALS OF INVESTING
Whether you are unsure how to get started or are saving for a specific goal,
such as retirement or college, the T. Rowe Price Insights series can help you
make informed investment decisions. These reports, written in plain English
about fundamental investment topics, can be useful at every stage of your
investment journey. They cover a range of topics, from the basic, such as
getting started with mutual funds, to the more advanced, such as managing risk
through diversification or buying individual securities through a broker. To
request one or more Insights, call us at 1-800-638-5660.
INSIGHTS REPORTS
- --------------------------------------------------------------------------------
General Information
The ABCs of Y2K
The ABCs of Giving
Back to Basics: The ABCs of Investing
The Challenge of Preparing for Retirement
Financial Planning After Retirement
Getting Started: Investing With Mutual Funds
The Roth IRA: A Review
Tax Information for Mutual Fund Investors
Investment Strategies
Conservative Stock Investing
Dollar Cost Averaging
Equity Index Investing
Growth Stock Investing
Investing for Higher Yield
Managing Risk Through Diversification
The Power of Compounding
Value Investing
Types of Securities
The Basics of International Stock Investing
The Basics of Tax-Free Investing
The Fundamentals of Fixed Income Investing
Global Bond Investing
Investing in Common Stocks
Investing in Emerging Growth Stocks
Investing in Financial Services Stocks
Investing in Health Care Stocks
Investing in High-Yield Municipal Bonds
Investing in Money Market Securities
Investing in Mortgage-Backed Securities
Investing in Natural Resource Stocks
Investing in Science and Technology Stocks
Investing in Small-Company Stocks
Understanding Derivatives
Understanding High-Yield "Junk" Bonds
Brokerage Insights
Combining Individual Securities With Mutual Funds
Getting Started: An Introduction to Individual Securities
What You Should Know About Bonds
What You Should Know About Margin and Short-Selling
What You Should Know About Options
What You Should Know About Stocks
T. Rowe Price Insights are also available for reading or downloading on the
Internet at www.troweprice.com.
28
<PAGE>
T. ROWE PRICE BROKERAGE
- --------------------------------------------------------------------------------
BROKERAGE SERVICES
T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services,
Inc., Member NASD/SIPC.
T. Rowe Price Brokerage provides high-quality services and financial tools you
can use to manage your investments effectively and conveniently. We also offer
significant commission savings over full-service brokerages on a wide range of
individual securities and other investments.*
Internet and Automated Services You can enter trades, access quotes, and review
account information 24 hours a day, seven days a week, by telephone or computer.
We offer a flat-rate commission of $24.95 on stock trades placed through our
Internet-Trader service.**
Research Services To help you make informed investment decisions, we offer
access to several sources of data. You can research your investments using our
Online Research & News Service, provided by Thomson Investors Network, which
includes company profiles, intra-day and 12-month interactive charting, and
analysts' ratings and earnings estimates. Using our Research On Call service,
you can request reports from Standard & Poor's, Vicker's, Lipper, and other
well-known research providers to be delivered by fax or by mail.
Dividend Reinvestment Service This service helps keep more of your money working
for you. Cash dividends (of $10 or greater) from your eligible securities will
be invested automatically in additional shares of the same company, free of
charge. Most stocks listed on national securities exchanges or Nasdaq are
eligible for this service.
* Based on a September 1999 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of order.
** $24.95 per trade for up to 1,000 shares plus an additional $.02 for each
share over 1,000 shares. Visit our Web site for a complete commission
schedule or call for rates on representative-assisted and other non-Internet
trades.
29
<PAGE>
For fund and account information
or to conduct transactions,
24 hours, 7 days a week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132
To open a brokerage account
or obtain information, call:
1-800-638-5660
Internet address:
www.troweprice.com
Plan Account Lines for retirement
plan participants:
The appropriate 800 number appears
on your retirement account statement.
T. Rowe Price Associates
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 appropriate to the fund or funds
covered in this report.
Walk-In Investor Centers:
For directions, call 1-800-225-5132
or visit our Web site
Baltimore Area
Downtown
101 East Lombard Street
Owings Mills
Three Financial Center
4515 Painters Mill Road
Boston Area
386 Washington Street
Wellesley
Colorado Springs
4410 ArrowsWest Drive
Los Angeles Area
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
Tampa
4200 West Cypress Street
10th Floor
Washington, D.C.
900 17th Street N.W.
Farragut Square
[LOGO OF T. ROWE PRICE]
T. Rowe Price Investment Services, Inc., Distributor. F62-050 10/31/99
