<PAGE>
Annual Report
INTERNATIONAL STOCK FUND
- ----------------
OCTOBER 31, 1999
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[LOGO OF T. ROWE PRICE]
T. Rowe Price
<PAGE>
REPORT HIGHLIGHTS
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International Stock Fund
. International stocks and the fund provided good results for the six months
ended October 31 and excellent returns for the fiscal year.
. The fund's returns of 5.96% and 20.67% for the 6- and 12-month periods,
respectively, were somewhat behind the benchmarks due to an underweighting in
Japan and our emphasis on growth over rebounding cyclical stocks in the first
half.
. Activity in overseas markets was driven by economic recovery, corporate
restructuring, and merger and acquisition activity.
. The appreciation of the yen versus the dollar boosted returns for U.S.
investors in Japanese stocks, while France and Sweden were stellar major
market performers in Europe.
. We are optimistic about prospects for Europe in particular and believe the
fund is well positioned for continuing long-term growth.
UPDATES AVAILABLE
For updates on each fund following the end of every calendar quarter, please see
our Web site at www.troweprice.com.
<PAGE>
FELLOW SHAREHOLDERS
International stocks and your fund made good progress during the six months
ended October 31, 1999. During the first half of the fund's fiscal year,
interest rate cuts by central banks, signs of international economic recovery,
and an increase in investment overseas following the crises of mid-1998 drove
markets sharply higher. More recently, however, prospects of stronger
international economic growth sparked concerns about rising inflation, and
returns moderated from their earlier pace.
Your fund provided good returns for the past six months, and strong results for
the fiscal year ended October 31. Performance trailed that of the MSCI EAFE
Index and the Lipper International Funds Average for both periods. The somewhat
weaker relative results were due to our comparatively underweighted position in
Japan and to lagging performance in the traditional growth sectors in which the
fund invests. During the first half of our fiscal year, an upswing in the
economic cycle favored more attractively valued cyclical and value stocks, which
are not our primary focus. However, as concerns about rising interest rates
emerged in recent months, the performance of growth stocks began to improve.
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Periods Ended 10/31/99 6 Months 12 Months
- --------------------------------------------------------------------------------
International Stock Fund 5.96% 20.67%
................................................................................
MSCI EAFE Index 6.87 23.37
................................................................................
Lipper International
Funds Average 8.96 25.53
................................................................................
The major factors stimulating international markets were more vigorous
international growth and demand, as well as high levels of mergers,
acquisitions, and corporate restructuring. Europe benefited from an impressive
volume of corporate activity and restructuring as industry consolidation
accelerated. Merger activity so far this year was over $1 trillion compared with
the previous record of $870 billion in 1998.
The long-awaited economic upturn in Japan helped propel the yen up 14% versus
the U.S. dollar during the past six months, enhancing returns for U.S. investors
in that market. Japan also enjoyed better-than-expected economic performance and
an unprecedented level of
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-Fleming's 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 Telekom's 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 stock's 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)
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
Source: Goldman Sachs
2
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company restructuring. However, the sharp rise of the yen led to concerns that
Japan's exports would be hurt, hindering the economic recovery. Elsewhere in
Asia, economies improved more vigorously and steps toward structural reform,
although tentative, were implemented. Weakness in Latin American markets
reflected concerns about the region's large fiscal deficits, rising U.S.
interest rates, and political uncertainties.
INVESTMENT REVIEW
At the end of October, the portfolio's allocation to Europe represented 64% of
net assets, down from 70% in April, while 22% was invested in Japan, up from
17% -- primarily a result of varying regional performance. Within Europe, the
U.K. was the largest country exposure at 17% of net assets. Despite these
changes, the fund is still underweighted in Japan relative to the MSCI EAFE
Index. Regarding individual purchases, we focused on companies and sectors that
we expect to benefit from the expansion and integration of the Internet and
telecommunications arenas.
Europe
Rising U.S. interest rates and the large number of initial public offerings
inhibited European equity market performance somewhat during the past six
months. However, economic recovery became clearly visible as exports, industrial
production, and business confidence picked up across the region, while consumer
confidence remained robust. The decline of the euro (the currency of the 11
Eurozone countries introduced in January) versus the dollar through the first
seven months of 1999 moderated recently
- ------------------
MARKET PERFORMANCE
- --------------------------------------------------------------------------------
Six Months Local Local Currency U.S.
Ended 10/31/99 Currency vs. U.S. Dollars Dollars
- --------------------------------------------------------------------------------
France 12.67% -0.65% 11.94%
................................................................................
Germany 4.10 -0.65 3.42
................................................................................
Hong Kong -0.30 -0.25 -0.54
................................................................................
Italy -8.74 -0.65 -9.34
................................................................................
Japan 9.18 14.38 24.88
................................................................................
Mexico -0.84 -3.05 -3.86
................................................................................
Netherlands 0.47 -0.65 -0.19
................................................................................
Norway -1.14 -0.74 -1.87
................................................................................
Sweden 20.80 2.10 23.33
................................................................................
Switzerland -1.21 -0.08 -1.28
................................................................................
United Kingdom -4.84 1.92 -3.02
................................................................................
Source: RIMES Online, using MSCI indices.
3
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as economies strengthened. Inflation in the Eurozone and the U.K. was
restrained.
European governments are working toward reforms that will improve labor market
flexibility and reduce social security and tax costs for companies; the
Netherlands and the U.K. have been leading the way. The euro has made cost
comparisons across Europe easier, introducing competitive pressure among
countries keen to attract business investment.
- --------------------------------------------------------------------------------
DEREGULATION AND THE NEED TO RAISE SHAREHOLDER VALUE CONTINUED TO DRIVE
COMPANIES TO RESTRUCTURE INTERNALLY, DIVEST NON-CORE BUSINESSES, AND MERGE WITH
OR ACQUIRE OTHER COMPANIES.
- --------------------------------------------------------------------------------
Deregulation and the need to raise shareholder value continued to drive
companies to restructure internally, divest noncore businesses, and merge with
or acquire other companies. European businesses are now taking bold
restructuring steps previously witnessed only in the U.S. A large proportion of
European mergers and acquisitions were part of the increase in industry
consolidation, which was greatest in banking but also affected the energy,
telecom, and retailing sectors. Telecommunications and electricity prices fell
markedly as price supports and barriers to competition were reduced.
In Germany, economic recovery became more evident during the past six months,
boosting prospects for the entire region as Germany accounts for about 30% of
Eurozone GDP. The proposed budget reflects the government's determination to
reduce spending and relieve the corporate sector of tax and social security
costs. Despite resistance from trade unions, opposition parties, and liberal
members of the governing party, it appears that compromises will be reached.
Companies that are restructuring include Gehe (pharmaceutical retailer and
wholesaler), which is spinning off its mail order clothing business, and
conglomerate Mannesmann, which plans to split its industrial and telecom
businesses into separate companies. Mannesmann aims to boost its position as the
largest mobile phone operator in Europe by acquiring control of British mobile
telecom Orange. Two of Germany's largest utilities, Veba and Viag, announced a
merger prompted by declining electricity prices. Deutsche Bank, Dresdner Bank,
Commerzbank, and Bayerische Vereinsbank admitted they were involved in merger
discussions with one another and with other European banks.
4
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France was the strongest market within the Eurozone during the six-month period.
Its economic recovery, robust consumer sector, relative absence of political
tension, and a large amount of merger and acquisition activity stimulated the
12% stock market gain. In the banking sector, BNP won control of Paribas
although it failed to acquire Societe Generale as well. In energy, Total Fina (a
recent merger between French Total and Belgian Petrofina) is to acquire
competitor Elf Aquitaine. Carrefour and Promodes, major supermarkets, announced
a merger, creating the world's second-largest retailer after Wal-Mart.
In the Netherlands, earlier progress with structural reform of labor markets and
taxation helped the economy remain strong. The nearly 30% rise in oil prices
over the past six months, and progress in raising shareholder returns, boosted
the performance of Royal Dutch Petroleum. Traditional publishing leaders Wolters
Kluwer and Elsevier weakened as Internet applications expanded. Yet, both
companies continue to invest heavily in electronics. We believe these companies
will remain leading media providers as their distribution channels migrate to
the Internet. Philips Electronics, like other technology holdings in Europe and
Asia, strengthened due to growing international demand, particularly related to
the Internet and mobile communications.
- --------------------------
GEOGRAPHIC DIVERSIFICATION
- --------------------------------------------------------------------------------
[CHART]
Latin America 4%
Far East 7%
Japan 22%
Other and Reserves 3%
Europe 64%
Based on net assets as of 10/31/99.
In Italy, weaker economic growth, higher inflation, and political conflict about
cutting fiscal spending resulted in poor stock market results. Financial
services companies have been consolidating. After insurer Assicurazioni Generali
made a hostile bid for banking and insurance company INA (which had agreed to
merge with bank Sanpaolo IMI), the two companies agreed to split INA's
businesses between them. Unicredito Italiano is discussing an alliance with
Spanish bank Banco Bilbao Vizcaya, which is merging with its Spanish competitor
Argentaria Banca de Espana.
5
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Sweden, not part of the Eurozone, was Europe's strongest major market with a
better than 20% gain for the six months. A healthy economy and the strong
performance of telecom equipment maker Ericsson, a global competitor, boosted
the stock market. Within Scandinavia, banking consolidation will also take
place. Swedish concern Nordbanken Holding has bid for Norway's second-largest
bank Christiania. In addition, Sweden's largest bank SEB announced plans to
acquire second tier German bank BfG, in which it previously held a significant
stake.
With recovery strengthening in the U.K., the central bank reversed its June
interest rate cut by increasing rates a quarter percentage point in September,
even though inflation was below the target. Businesses took important steps to
restructure. For example, engineering and food manufacturing company Tomkins
announced plans to sell its food business. Consumer goods leader Unilever will
slash its brands from 1,600 to 400 to focus on the global "power brands" that
account for 90% of revenues and more of profits. Banks in the U.K. took a step
toward consolidation as Bank of Scotland made a hostile bid for its larger
rival, National Westminster Bank.
- --------------------------------------------------------------------------------
IN JAPAN, STRONGER-THAN-EXPECTED ECONOMIC DATA AND INCREASED EVIDENCE OF
CORPORATE RESTRUCTURING STIMULATED HEAVY FOREIGN BUYING AND PUSHED THE YEN UP
SHARPLY.
- --------------------------------------------------------------------------------
Far East
In Japan, stronger-than-expected economic data and increased evidence of
corporate restructuring stimulated heavy foreign buying and pushed the yen up
sharply. The Bank of Japan's quarterly surveys and industrial production figures
reflected a healthier, but still weak, economy. Private consumption improved
slightly, as did private sector capital expenditure. However, unemployment
remained well above historic levels. The government has announced plans for more
fiscal stimulation later this autumn, although there are limits to how much more
it can do since the budget deficit is already close to 10% of GDP.
Investors were encouraged by positive corporate developments. U.K. telecom giant
Cable & Wireless successfully outbid Nippon Telegraph & Telephone for Japanese
carrier IDC, demonstrating the recent willingness of Japanese shareholders to
vote for the highest bidder regardless of nationality. Other foreign inroads
into Japanese telecommunications this year included British Telecom's and AT&T's
30% stake in
6
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INDUSTRY DIVERSIFICATION
- --------------------------------------------------------------------------------
Percent of Net Assets
4/30/99 10/31/99
- --------------------------------------------------------------------------------
Services 30.4% 29.4%
................................................................................
Finance 21.5 20.3
................................................................................
Consumer Goods 20.8 19.7
................................................................................
Capital Equipment 12.2 16.4
................................................................................
Energy 9.1 7.6
................................................................................
Materials 3.3 2.6
................................................................................
All Other 1.3 1.0
................................................................................
Reserves 1.4 3.0
- --------------------------------------------------------------------------------
Total 100.0% 100.0%
Japan Telecom, and new positions taken by U.K.'s Vodafone Airtouch in regional
mobile companies.
In other sectors, restructuring through collaboration demonstrated that some
businesses are taking steps to improve returns. Notably, electronic giants NEC
and Hitachi announced a joint venture to make memory chips. In August, news
about the merger of three banks -- Dai-Ichi Kangyo, Fuji, and IBJ -- led to
heavy buying of Japanese banks by foreign investors. Last year's government
banking bill, tougher loan disclosure rules, and other measures have made the
sector stronger. We added Sumitomo Bank to the portfolio because of the quality
of its management and its increasing focus on shareholder value.
Concerns about rising U.S. interest rates weighed on markets in the region
outside of Japan. Despite market weakness, Hong Kong's recovery took hold while
China also reported improved economic data. With these markets subdued, both
government and private companies felt the pressure to continue with their
reforms and restructuring. Revenues at China Telecom are strong, and the company
recently announced plans to buy additional mobile phone networks in China, which
would make it one of the world's largest cellular phone operators. Other
regional holdings include electronic component suppliers TSMC in Taiwan and
Samsung Electronics in South Korea, both of which benefited from the upturn in
regional demand.
Australia's economy slowed slightly but remained sound. Resources company Broken
Hill Proprietary continued its ambitious rate of restructuring and announced
plans to sell half its steel business in the next year as it focuses its range
of activities. Commonwealth Bank of Australia and Westpac Bank are prospering
due to the strong economy and their success in marketing asset management
products.
7
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Latin America
The 15% decline of the Brazilian real versus the dollar and, to a lesser extent,
the Mexican peso's 3% fall hurt returns for U.S. investors. The real's nosedive
reflected concern about political obstacles to fiscal reforms. Encouragingly,
Brazil's short-term interest rates were reduced from 32% at the end of April to
19% at the end of October. Brazil also met quarterly IMF budget targets with the
economy stronger and inflation lower than expected. However, policy changes to
reduce fiscal spending in the longer term stalled.
- --------------------------------------------------------------------------------
WE EXPECT FURTHER ECONOMIC RECOVERY TO BOOST EUROPEAN MARKETS, AND WE BELIEVE
THE EURO WILL GAIN STRENGTH AGAINST THE DOLLAR AS WE ENTER 2000.
- --------------------------------------------------------------------------------
In Mexico, the peso's dip retraced some of its 8% rise during the preceding six
months. Mexico's economy surprised investors positively with stronger-than-
expected economic growth and lower inflation. The 28% rise in oil prices during
the past six months benefited Mexico's fiscal position. With an upcoming
presidential election, Mexico secured a substantial line of credit from
international agencies in the event of a financial crisis -- such as the one
that was precipitated by the 1994 presidential election.
Our holdings in Latin America focus on large, blue chip companies with dominant
market positions. Led by better management installed last spring, Brazilian
energy company Petrol Brasileiros (Petrobras) has started to reduce lower margin
businesses, cut costs, and set return targets. With production growth expected
to rise quickly and more restructuring planned, Petrobras could see its earnings
rise substantially. Leading Mexican telecom Telefonos de Mexico (Telmex)
acquired a stake in Puerto Rican Telecommunications and began an alliance with
U.S. giant SBC to develop voice and data services.
INVESTMENT POLICY AND OUTLOOK
We expect further economic recovery to boost European markets, and we believe
the euro will gain strength against the dollar as we enter 2000. Short-term
interest rates were recently raised by the European Central Bank, reversing cuts
made earlier this year, and inflation appears likely to remain under control.
The quest for shareholder value will continue to drive more businesses to
restructure and reposition themselves in an expanding global economy.
8
<PAGE>
In Japan, several economic indicators may continue to encourage investors.
However, the yen is now strong enough to impede export growth, and the
government's ability to provide further fiscal support may be restrained by
growing budget deficits. We believe that further gains in the Japanese stock
market could moderate until investors are convinced that enough company
restructuring is being implemented to improve profitability.
Elsewhere in Asia we see economies improving further, although at less
spectacular rates of growth than in the past. We believe recent market setbacks
provide continued impetus for governments in South Korea, Singapore, and
elsewhere to push ahead with much needed reforms. Steps taken so far have
enhanced the prospects for economic and corporate earnings growth throughout the
region, but more is needed.
Latin America is particularly sensitive to the direction of U.S. interest rates,
although the region's economic outlook is otherwise somewhat better than in the
recent past. Brazil needs more fiscal reforms to create a stable economy and
Mexico's prosperity is reliant on conditions in the U.S. However, we believe the
market has discounted many of these risks. The caliber of the larger Latin
American companies is high, the potential for growth is strong, and stock
valuations are attractive.
Overall, we believe the fund's country, stock, and sector allocations position
it well for continued long-term growth.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
November 19, 1999
9
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T. ROWE PRICE INTERNATIONAL STOCK FUND
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PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
10/31/99
- --------------------------------------------------------------------------------
National Westminster Bank, United Kingdom 2.4%
................................................................................
Nokia, Finland 1.6
................................................................................
Shell Transport & Trading, United Kingdom 1.5
................................................................................
Total, France 1.5
................................................................................
Nestle, Switzerland 1.5
- --------------------------------------------------------------------------------
SmithKline Beecham, United Kingdom 1.5
................................................................................
Murata Manufacturing, Japan 1.5
................................................................................
ING Groep, Netherlands 1.4
................................................................................
Wolters Kluwer, Netherlands 1.4
................................................................................
Glaxo Wellcome, United Kingdom 1.3
- --------------------------------------------------------------------------------
Sony, Japan 1.3
................................................................................
Nippon Telegraph & Telephone, Japan 1.3
................................................................................
Carrefour, France 1.2
................................................................................
NEC, Japan 1.1
................................................................................
Vivendi, France 1.1
- --------------------------------------------------------------------------------
Novartis, Switzerland 1.1
................................................................................
Diageo, United Kingdom 1.1
................................................................................
Kingfisher, United Kingdom 1.1
................................................................................
Mannesmann, Germany 1.1
................................................................................
NTT Mobile Communications Network, Japan 1.1
- --------------------------------------------------------------------------------
Fortis, Belgium/Netherlands 1.0
................................................................................
Telecom Italia Mobile, Italy 1.0
................................................................................
Hennes & Mauritz, Sweden 0.9
................................................................................
Adecco, Switzerland 0.9
................................................................................
Roche Holdings, Switzerland 0.9
- --------------------------------------------------------------------------------
Total (excludes reserves) 31.8%
10
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T. ROWE PRICE INTERNATIONAL STOCK 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.
INTERNATIONAL STOCK FUND
-----------------------------------------------------------------------------
[LINE GRAPH]
Lipper International International
MSCI EAFE Index Funds Average Stock Fund
Oct-89 10,000 10,000 10,000
Oct-90 8,745 10,012 10,431
Oct-91 9,384 10,899 11,434
Oct-92 8,173 10,445 11,087
Oct-93 11,269 13,975 14,849
Oct-94 12,439 15,642 16,636
Oct-95 12,431 15,772 16,699
Oct-96 13,773 17,665 19,183
Oct-97 14,451 19,818 20,699
Oct-98 15,889 20,702 22,247
Oct-99 19,602 25,213 26,844
- ------------------------------------
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.
Periods Ended 10/31/99 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
International Stock Fund 20.67% 11.85% 10.04% 10.38%
................................................................................
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
11
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T. ROWE PRICE INTERNATIONAL STOCK FUND
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- --------------------
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
NET ASSET VALUE
Beginning of period $ 14.39 $ 14.14 $ 13.47 $ 12.09 $ 12.84
...................................................
Investment activities
Net investment income 0.17 0.23 0.19 0.19 0.18
Net realized and
unrealized gain (loss) 2.71 0.77 0.86 1.57 (0.19)
...................................................
Total from
investment activities 2.88 1.00 1.05 1.76 (0.01)
...................................................
Distributions
Net investment income (0.22) (0.20) (0.18) (0.18) (0.12)
Net realized gain (0.35) (0.55) (0.20) (0.20) (0.62)
...................................................
Total distributions (0.57) (0.75) (0.38) (0.38) (0.74)
...................................................
NET ASSET VALUE
End of period $ 16.70 $ 14.39 $ 14.14 $ 13.47 $ 12.09
---------------------------------------------------
Ratios/Supplemental Data
Total return* 20.67% 7.48% 7.90% 14.87% 0.38%
................................................................................
Ratio of total expenses to
average net assets 0.85% 0.85% 0.85% 0.88% 0.91%
................................................................................
Ratio of net investment
income to average
net assets 1.05% 1.50% 1.33% 1.58% 1.56%
................................................................................
Portfolio turnover rate 17.6% 12.2% 15.8% 11.6% 17.8%
................................................................................
Net assets, end of period
(in millions) $ 10,615 $ 9,537 $ 10,005 $ 8,776 $ 6,386
................................................................................
*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.
12
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T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
October 31, 1999
- ------------------------
PORTFOLIO OF INVESTMENTS Shares Value
- --------------------------------------------------------------------------------
In thousands
ARGENTINA 0.3%
Common Stocks 0.3%
Banco de Galicia Buenos Aires (Class B) ADR (USD) 349,610 $ 7,386
................................................................................
Banco Frances del Rio de la Plata ADR (USD) 351,620 7,692
................................................................................
Telefonica de Argentina (Class B) ADR (USD) 526,380 13,488
................................................................................
Total Argentina (Cost $27,594) 28,566
..............
AUSTRALIA 2.3%
Common Stocks 2.1%
Brambles 698,000 19,630
................................................................................
Broken Hill Proprietary 1,290,966 13,342
................................................................................
Colonial Limited 6,314,030 23,233
................................................................................
Commonwealth Bank of Australia 1,899,448 31,130
................................................................................
Lend Lease 1,113,888 12,816
................................................................................
News Corporation 2,666,968 19,286
................................................................................
Publishing & Broadcasting 3,902,850 23,146
................................................................................
TABCORP Holdings 2,378,000 15,073
................................................................................
Telstra 6,189,693 31,487
................................................................................
Telstra, Installment Receipts * 1,864,000 5,979
................................................................................
Westpac Bank 4,446,600 28,532
................................................................................
223,654
..............
Preferred Stocks 0.2%
News 2,595,184 17,571
................................................................................
17,571
..............
Total Australia (Cost $171,942) 241,225
..............
BELGIUM 1.2%
Common Stocks 1.2%
Dexia (EUR) 78,062 11,438
................................................................................
Fortis B (EUR) 1,336,805 45,136
................................................................................
KBC Bancassurance Holding (EUR) 1,101,390 56,766
................................................................................
Societe Europeenne des Satellites (Class A) (EUR) 57,900 7,232
................................................................................
UCB (EUR) 234,490 8,744
................................................................................
Total Belgium (Cost $63,871) 129,316
..............
13
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T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
BRAZIL 1.7%
Common Stocks 1.1%
Pao de Acucar GDR (USD) 605,984 $ 13,256
................................................................................
Telebras ADR (USD) 1,233,799 96,082
................................................................................
Unibanco GDR (USD) 421,960 9,758
................................................................................
119,096
.............
Preferred Stocks 0.6%
Banco Bradesco 1,370,562,854 6,705
................................................................................
Banco Itau 162,870,000 9,345
................................................................................
Companhia Energetica de Minas Gerais 321,753,231 4,582
................................................................................
Companhia Energetica de Minas Gerais ADR, Sponsored
Nonvoting (USD) 383,727 5,468
................................................................................
Pao de Acucar GDR (USD) 21,100 462
................................................................................
Petrol Brasileiros 157,498,189 25,053
................................................................................
Telebras ADR (USD)* 1,347,239 63
................................................................................
Telecomunicacoes de Sao Paulo 82,884,243 7,792
................................................................................
Telecomunicacoes de Sao Paulo Celular (Class B) 98,621,744 5,153
................................................................................
64,623
............
Total Brazil (Cost $221,039) 183,719
............
CANADA 0.3%
Common Stocks 0.3%
Alcan Aluminum 432,360 14,173
................................................................................
Nortel Networks 197,610 12,157
................................................................................
Royal Bank of Canada 185,920 8,014
................................................................................
Total Canada (Cost $24,643) 34,344
............
CHILE 0.0%
Common Stocks 0.0%
Chilectra ADR (144a) (USD) 306,640 5,366
................................................................................
Total Chile (Cost $4,133) 5,366
............
CHINA 0.8%
Common Stocks 0.8%
China Telecom 20,069,000 68,589
................................................................................
Huaneng Power International ADR (USD)* 1,077,000 13,058
................................................................................
Total China (Cost $68,825) 81,647
............
14
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
DENMARK 0.3%
Common Stocks 0.3%
Den Danske Bank 118,020 $ 13,445
................................................................................
Tele Danmark A/S 276,534 16,789
................................................................................
Unidanmark (Class A) 90,549 7,048
................................................................................
Total Denmark (Cost $23,431) 37,282
...........
FINLAND 1.6%
Common Stocks 1.6%
Nokia (Class A) (EUR) 1,446,998 165,612
................................................................................
Total Finland (Cost $34,435) 165,612
...........
FRANCE 11.0%
Common Stocks 11.0%
Alcatel Alsthom (EUR) 316,174 49,386
................................................................................
AXA (EUR) 571,790 80,653
................................................................................
Banque National de Paris (EUR) 661,890 58,133
................................................................................
Cap Gemini (EUR) 210,660 31,908
................................................................................
Carrefour (EUR) 681,998 126,255
................................................................................
Cie de St. Gobain (EUR) 231,048 40,100
................................................................................
Credit Commercial de France (EUR) 146,834 16,912
................................................................................
Danone (EUR) 62,915 16,048
................................................................................
Dexia France (EUR) 131,308 18,508
................................................................................
Hermes (EUR) 200,930 21,980
................................................................................
L'Oreal (EUR) 34,948 23,324
................................................................................
Lafarge (EUR) 131,887 12,693
................................................................................
Legrand (EUR) 214,933 51,433
................................................................................
Pinault Printemps Redoute (EUR) 210,620 40,165
................................................................................
Sanofi Synthelabo (EUR)* 1,611,386 71,103
................................................................................
Schneider (EUR) 807,072 55,604
................................................................................
Societe Generale (EUR) 185,434 40,375
................................................................................
Sodexho Alliance (EUR) 371,036 60,883
................................................................................
Television Francaise (EUR) 231,187 72,466
................................................................................
Total (Class B) (EUR) 1,190,271 160,880
................................................................................
Vivendi (EUR) 1,585,212 120,137
................................................................................
Total France (Cost $713,335) 1,168,946
...........
15
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
GERMANY 6.1%
Common Stocks 5.8%
Allianz (EUR) 161,010 $ 48,792
................................................................................
Bayer (EUR) 857,942 34,942
................................................................................
Bayerische Vereinsbank (EUR) 1,170,117 76,801
................................................................................
Celanese (EUR) 16,322 258
................................................................................
Deutsche Bank (EUR) 807,581 57,746
................................................................................
Deutsche Telekom (EUR) 1,038,490 47,899
................................................................................
Dresdner Bank (EUR) 966,182 49,747
................................................................................
Gehe (EUR) 1,207,752 41,795
................................................................................
Hoechst (EUR) * 297,300 13,131
................................................................................
Mannesmann (EUR) 716,140 112,915
................................................................................
Rhoen Klinikum (EUR) 431,484 17,473
................................................................................
SAP (EUR) 118,370 43,964
................................................................................
Siemens (EUR) 294,612 26,511
................................................................................
Veba (EUR) 748,706 40,550
................................................................................
612,524
.............
Preferred Stocks 0.3%
Fielmann (EUR) 30,426 1,155
................................................................................
Fresenius (EUR) 43,680 7,627
................................................................................
SAP (EUR) 62,529 27,624
................................................................................
36,406
.............
Total Germany (Cost $460,380) 648,930
.............
HONG KONG 1.9%
Common Stocks 1.9%
Cheung Kong Holdings 2,774,000 25,264
................................................................................
CLP Holdings 5,112,000 23,492
................................................................................
Dao Heng Bank Group 1,659,000 7,539
................................................................................
Henderson Land Development 4,474,000 20,330
................................................................................
Hong Kong Telecommunications 9,240,000 21,112
................................................................................
Hutchison Whampoa 6,256,000 62,814
................................................................................
New World Development 4,006,000 7,580
................................................................................
Pacific Century 12,103,000 9,192
................................................................................
Sun Hung Kai Properties 2,384,000 19,333
................................................................................
Total Hong Kong (Cost $167,474) 196,656
.............
16
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
INDIA 0.5%
Common Stocks 0.5%
ICICI ADR (USD)* 1,375,847 $ 15,134
................................................................................
Mahanagar Telephone 4,891,000 19,312
................................................................................
Mahanagar Telephone GDR (USD)* 649,000 5,403
................................................................................
State Bank of India GDR (USD) 1,042,500 13,839
................................................................................
Total India (Cost $58,655) 53,688
............
IRELAND 0.1%
Common Stocks 0.1%
CBT Group ADR (USD)* 744,111 15,347
................................................................................
Total Ireland (Cost $22,092) 15,347
............
ITALY 4.5%
Common Stocks 4.5%
Assicurazioni Generali (EUR) 1,049,652 33,674
................................................................................
Banca di Roma (EUR) 5,936,000 7,992
................................................................................
Banca Popolare di Brescia (EUR) 1,124,000 47,587
................................................................................
Unicredito Italiano (EUR) 7,821,666 36,611
................................................................................
ENI (EUR) 9,593,855 56,108
................................................................................
Gucci Group (USD) 341,254 27,556
................................................................................
Istituto Nazionale delle Assicurazioni (EUR) 9,353,000 28,382
................................................................................
Italgas (EUR) 1,676,093 6,929
................................................................................
Mediolanum (EUR) 2,983,325 24,257
................................................................................
Sanpaolo IMI (EUR) 2,803,884 36,335
................................................................................
Tecnost (EUR) 5,484,000 10,556
................................................................................
Telecom Italia (EUR) 6,369,445 55,005
................................................................................
Telecom Italia Mobile (EUR) 16,425,182 102,624
................................................................................
Total Italy (Cost $346,048) 473,616
............
JAPAN 21.6%
Common Stocks 21.6%
Bridgestone 702,000 19,322
................................................................................
Canon 3,431,000 97,070
................................................................................
Citizen Watch 1,033,000 7,301
................................................................................
17
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Daiichi Pharmaceutical 1,027,000 $ 14,725
................................................................................
Daiwa House 2,162,000 19,781
................................................................................
DDI 4,195 45,865
................................................................................
Denso 2,763,000 59,092
................................................................................
East Japan Railway 4,804 29,440
................................................................................
Fanuc 494,600 38,422
................................................................................
Fujitsu 2,822,000 84,982
................................................................................
Hitachi 3,222,000 34,825
................................................................................
Honda Motor 209,000 8,819
................................................................................
Ito-Yokado 553,000 44,232
................................................................................
Kao 1,875,000 57,183
................................................................................
Kokuyo 1,058,000 19,208
................................................................................
Komori 908,000 19,724
................................................................................
Kuraray 2,455,000 32,963
................................................................................
Kyocera 957,000 91,781
................................................................................
Makita 1,403,000 13,469
................................................................................
Marui 2,649,000 50,048
................................................................................
Matsushita Electric Industrial 4,038,000 85,004
................................................................................
Mitsubishi 2,572,000 18,500
................................................................................
Mitsubishi Heavy Industries 11,026,000 43,250
................................................................................
Mitsui Fudosan 5,548,000 41,449
................................................................................
Murata Manufacturing 1,215,000 156,143
................................................................................
NEC 6,019,000 121,800
................................................................................
Nippon Telegraph & Telephone 9,017 138,364
................................................................................
Nomura Securities 3,983,000 65,740
................................................................................
NTT Mobile Communications Network 4,202 111,629
................................................................................
Sankyo 2,759,000 78,587
................................................................................
Sekisui Chemical 3,428,000 16,866
................................................................................
Sekisui House 2,104,000 22,781
................................................................................
Seven-Eleven Japan 342,000 31,324
................................................................................
Shin-Etsu Chemical 1,047,000 43,177
................................................................................
Shiseido 1,266,000 19,305
................................................................................
Softbank 8,900 3,696
................................................................................
Sony 907,600 141,532
................................................................................
Sumitomo 4,060,000 29,670
................................................................................
Sumitomo Bank 2,890,000 46,508
................................................................................
Sumitomo Electric Industries 4,180,000 56,164
................................................................................
18
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
TDK 807,000 $ 79,021
................................................................................
Tokio Marine & Fire Insurance 1,060,000 13,876
................................................................................
Tokyo Electronics 240,000 19,933
................................................................................
Toppan Printing 1,921,000 23,563
................................................................................
Toshiba 6,985,000 43,945
................................................................................
Uny 1,111,000 14,384
................................................................................
Yamanouchi Pharmaceutical 888,000 40,282
................................................................................
Total Japan (Cost $1,714,744) 2,294,745
............
MEXICO 1.5%
Common Stocks 1.5%
Cemex ADR, Participating Certificates
(Represents 2 Class A and 1 Class B shares) (USD) * 393,785 8,860
................................................................................
Cemex (Represents 2 Class A and 1 Class B shares) * 1,534,044 6,942
................................................................................
Femsa UBD (Represents 1 Class B and 4 Series D shares) 4,291,360 13,930
................................................................................
Gruma (Class B) * 2,317,467 3,028
................................................................................
Gruma ADR (USD) * 557,687 2,928
................................................................................
Grupo Industrial Maseca (Class B) 6,373,007 3,183
................................................................................
Grupo Modelo (Class C) 4,672,264 11,423
................................................................................
Grupo Televisa GDR (USD) * 516,966 21,971
................................................................................
Kimberly-Clark de Mexico (Class A) 3,617,309 11,591
................................................................................
Telefonos de Mexico (Class L) ADR (USD) * 915,222 78,251
................................................................................
TV Azteca ADR (USD) 571,700 2,323
................................................................................
Total Mexico (Cost $159,139) 164,430
............
NETHERLANDS 8.3%
Common Stocks 8.3%
KPN (EUR) 236,387 12,131
................................................................................
ABN Amro (EUR) 1,909,238 46,169
................................................................................
Akzo Nobel (EUR) 188,266 8,107
................................................................................
ASM Lithography (EUR) * 1,145,740 80,865
................................................................................
CSM (EUR) 726,719 33,519
................................................................................
Elsevier (EUR) 2,767,262 26,284
................................................................................
Equant (EUR) 189,540 18,442
................................................................................
Fortis NI (EUR) 1,879,554 64,707
................................................................................
ING Groep (EUR) 2,502,060 147,591
................................................................................
Philips Electronics (EUR) 853,555 87,537
................................................................................
19
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Royal Dutch Petroleum (EUR) 1,189,582 $ 71,109
................................................................................
STMicroelectronics (EUR) * 749,007 65,785
................................................................................
TNT Post Groep (EUR) 228,317 5,812
................................................................................
Unilever (EUR) 467,772 30,998
................................................................................
UPC Comminications (EUR) 151,315 11,635
................................................................................
VNU (EUR) 756,900 25,596
................................................................................
Wolters Kluwer (EUR) 4,294,648 143,515
................................................................................
Total Netherlands (Cost $573,812) 879,802
............
NEW ZEALAND 0.2%
Common Stocks 0.2%
Telecom Corporation of New Zealand 5,703,628 22,956
................................................................................
Total New Zealand (Cost $24,832) 22,956
............
NORWAY 0.6%
Common Stocks 0.6%
Norsk Hydro 310,146 12,369
................................................................................
Orkla (Class A) 3,087,234 43,072
................................................................................
Orkla Asa 3,087,234 5,802
................................................................................
Total Norway (Cost $50,117) 61,243
............
PORTUGAL 0.4%
Common Stocks 0.4%
Jeronimo Martins (EUR) 1,576,603 44,013
................................................................................
Total Portugal (Cost $18,769) 44,013
............
SINGAPORE 0.7%
Common Stocks 0.7%
Singapore Press 1,196,627 20,504
................................................................................
Singapore Telecommunications 4,203,000 7,985
................................................................................
United Overseas Bank 5,747,000 43,535
................................................................................
Total Singapore (Cost $66,460) 72,024
............
20
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
SOUTH KOREA 0.6%
Common Stocks 0.6%
Korea Telecom (USD) * 611,000 $ 21,538
................................................................................
Samsung Electronics 276,037 46,025
................................................................................
Total South Korea (Cost $44,212) 67,563
............
SPAIN 2.9%
Common Stocks 2.9%
Argentaria Banca de Espana (EUR) 953,216 21,156
................................................................................
Banco Bilbao Vizcaya (EUR) 1,051,340 14,133
................................................................................
Banco Popular Espanol (EUR) 175,840 11,837
................................................................................
Banco Central Hispanoamericano (EUR) 4,426,148 45,951
................................................................................
Empresa Nacional de Electricidad (EUR) 1,511,160 30,248
................................................................................
Gas Natural (EUR) 802,203 17,551
................................................................................
Iberdrola (EUR) 2,479,149 36,143
................................................................................
Repsol (EUR) 1,521,502 31,368
................................................................................
Telefonica (EUR) 5,917,352 97,346
................................................................................
Total Spain (Cost $177,800) 305,733
............
SWEDEN 3.7%
Common Stocks 3.7%
ABB (Class A) * 251,507 25,047
................................................................................
AstraZeneca Group 2,181,620 98,549
................................................................................
Atlas Copco (Class B) 598,658 15,578
................................................................................
Electrolux (Class B) 2,768,355 55,205
................................................................................
Ericsson Telephone 333,980 13,889
................................................................................
Esselte (Class B) 299,610 2,004
................................................................................
Hennes & Mauritz (Class B) 3,772,590 100,232
................................................................................
Nordbanken Holding 7,762,634 45,307
................................................................................
Sandvik (Class B) 838,220 21,710
................................................................................
Securitas (Class B) 734,408 10,895
................................................................................
Total Sweden (Cost $241,118) 388,416
............
21
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
SWITZERLAND 6.3%
Common Stocks 6.3%
ABB * 429,984 $ 43,300
................................................................................
Adecco 163,352 99,021
................................................................................
Credit Suisse Group 228,915 44,002
................................................................................
Nestle 82,766 159,635
................................................................................
Novartis 78,569 117,521
................................................................................
Roche Holdings 8,226 98,757
................................................................................
Swisscom 43,996 13,407
................................................................................
UBS 322,935 93,959
................................................................................
Total Switzerland (Cost $430,613) 669,602
............
TAIWAN 0.5%
Common Stocks 0.5%
Hon Hai Precison Technology (USD) 1,152,084 18,692
................................................................................
Taiwan Semiconductor Manufacturing * 6,908,630 30,710
................................................................................
Total Taiwan (Cost $42,958) 49,402
............
UNITED KINGDOM 17.1%
Common Stocks 17.1%
Abbey National 2,777,700 54,224
................................................................................
BG 3,123,270 17,347
................................................................................
BP Amoco 5,229,000 50,823
................................................................................
Cable & Wireless 6,230,050 72,991
................................................................................
Cadbury Schweppes 10,947,586 71,956
................................................................................
Caradon 6,396,438 15,188
................................................................................
Centrica 2,965,536 8,503
................................................................................
Compass Group 8,297,000 88,619
................................................................................
David S. Smith 3,380,120 10,497
................................................................................
Diageo 11,323,305 113,816
................................................................................
Electrocomponents 2,251,000 20,159
................................................................................
GKN 779,000 12,532
................................................................................
Glaxo Wellcome 4,818,710 142,209
................................................................................
Hays 912,000 10,460
................................................................................
HSBC Holdings (HKD) 2,582,800 31,086
................................................................................
John Laing (Class A) 1,373,000 6,498
................................................................................
22
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Kingfisher 11,114,466 $ 113,598
................................................................................
Hilton Group 4,402,940 13,602
................................................................................
National Westminster Bank 11,249,780 254,177
................................................................................
Rank Group 2,471,825 7,697
................................................................................
Reed International 14,103,175 82,732
................................................................................
Rio Tinto 3,280,900 56,068
................................................................................
Safeway 2,835,960 8,901
................................................................................
Shell Transport & Trading 21,359,000 163,552
................................................................................
SmithKline Beecham 12,364,280 159,082
................................................................................
Tesco 16,435,185 48,746
................................................................................
Tomkins 11,022,954 37,313
................................................................................
Unilever 6,235,047 57,807
................................................................................
United News & Media 4,228,430 40,716
................................................................................
Vodafone Airtouch 10,122,500 47,322
................................................................................
Total United Kingdom (Cost $1,193,406) 1,818,221
............
SHORT-TERM INVESTMENTS 2.3%
Money Market Funds 2.3%
Reserve Investment Fund, 5.51% # + 243,167,252 243,167
................................................................................
Total Short-Term Investments (Cost $243,167) 243,167
............
23
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
99.3% of Net Assets (Cost $7,389,044) $ 10,545,577
Other Assets Less Liabilities 69,761
............
NET ASSETS $ 10,615,338
------------
* Non-income producing
+ Affiliated company
# Seven-day yield
144a Security was purchased pursuant to Rule 144a under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers -- total of such securities at period-end amounts to
0.05% of net assets.
ADR American depository receipt
EUR Euro
GDR Global depository receipt
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
October 31, 1999
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value
Affiliated companies (cost $243,167) $ 243,167
Other companies (cost $7,145,877) 10,302,410
............
Total investments in securities 10,545,577
Securities lending collateral 1,272,874
Other assets 199,972
............
Total assets 12,018,423
............
Liabilities
Obligation to return securities lending collateral 1,272,874
Other liabilities 130,211
............
Total liabilities 1,403,085
............
NET ASSETS $ 10,615,338
------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 79,588
Accumulated net realized gain/loss - net of distributions 538,063
Net unrealized gain (loss) 3,155,909
Paid-in-capital applicable to 635,463,915 shares of $0.01 par
value capital stock outstanding; 2,000,000,000 shares
of the Corporation authorized 6,841,778
............
NET ASSETS $ 10,615,338
------------
NET ASSET VALUE PER SHARE $ 16.70
------------
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
- -----------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
10/31/99
Investment Income
Income
Dividend (net of foreign taxes of $22,384) $ 173,933
Interest (including $9,939 from affiliated companies) 17,724
............
Total income 191,657
............
Expenses
Investment management 67,463
Shareholder servicing 14,269
Custody and accounting 2,990
Prospectus and shareholder reports 817
Legal and audit 115
Registration 42
Directors 15
Miscellaneous 65
............
Total expenses 85,776
Expenses paid indirectly (5)
............
Net expenses 85,771
............
Net investment income 105,886
............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 596,113
Foreign currency transactions (6,300)
............
Net realized gain (loss) 589,813
............
Change in net unrealized gain or loss
Securities 1,202,918
Other assets and liabilities
denominated in foreign currencies (1,508)
............
Change in net unrealized gain or loss 1,201,410
............
Net realized and unrealized gain (loss) 1,791,223
............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 1,897,109
------------
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
Year
Ended
10/31/99 10/31/98
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 105,886 $ 151,187
Net realized gain (loss) 589,813 187,607
Change in net unrealized gain or loss 1,201,410 380,637
...........................
Increase (decrease) in net assets from operations 1,897,109 719,431
...........................
Distributions to shareholders
Net investment income (144,745) (138,108)
Net realized gain (230,270) (379,734)
...........................
Decrease in net assets from distributions (375,015) (517,842)
...........................
Capital share transactions *
Shares sold 2,598,320 2,424,698
Distributions reinvested 351,615 485,438
Shares redeemed (3,393,820) (3,579,766)
...........................
Increase (decrease) in net assets from capital
share transactions (443,885) (669,630)
...........................
Net Assets
Increase (decrease) during period 1,078,209 (468,041)
Beginning of period 9,537,129 10,005,170
...........................
End of period $10,615,338 $ 9,537,129
---------------------------
* Share information
Shares sold 168,506 167,589
Distributions reinvested 24,520 36,308
Shares redeemed (220,433) (248,730)
...........................
Increase (decrease) in shares outstanding (27,407) (44,833)
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK 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 International Stock Fund (the fund),
a diversified, open-end management investment company, is one of the
portfolios established by the corporation and commenced operations on May 9,
1980.
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.
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the
outstanding voting securities.
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.
28
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
Other Income and expenses are recorded on the accrual basis. 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. 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 $1,260,676,000; aggregate collateral consisted of $1,272,874,000
in the securities lending collateral pool and U.S. government securities valued
at $34,114,000.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $1,728,114,000 and $2,468,125,000, 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.
29
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
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, 1999. The results
of operations and net assets were not affected by the increases/(decreases) to
these accounts.
- --------------------------------------------------------------------------------
Undistributed net investment income $(26,521,000)
Undistributed net realized gain 26,521,000
At October 31, 1999, the cost of investments for federal income tax purposes was
substantially the same as for financial reporting and totaled $7,389,044,000.
Net unrealized gain aggregated $3,156,533,000 at period-end, of which
$3,540,149,000 related to appreciated investments and $383,616,000 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 $5,885,000 was payable at
October 31, 1999. The fee is computed daily and paid monthly, and consists of an
individual fund fee equal to 0.35% 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,
30
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
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 $9,627,000 for the year ended
October 31, 1999, of which $951,000 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 and
Spectrum Growth Fund held approximately 6.7% of the outstanding shares of the
fund at October 31, 1999. For the year then ended, the fund was allocated
$1,571,000 of Spectrum expenses, $181,000 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
$9,939,000 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 $155,316,000 with
certain affiliates of the manager and paid commissions of $274,000 related
thereto.
31
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of T. Rowe Price International Funds, Inc. and
Shareholders of International Stock 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 International Stock 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
32
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------------------------------------------------
- -----------------------------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 10/31/99
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code. The
amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distributions to shareholders included:
. $59,212,000 from short-term capital gains,
. $171,058,000 from long-term capital gains, subject to the 20% rate gains
category.
The fund will pass through foreign source income of $102,742,000 and foreign
taxes paid of $17,562,000.
33
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10 p.m.
ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe Price Web
site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
* 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.
34
<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.
35
<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 Annuity
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.
36
<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.
37
<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. F37-050 10/31/99
