<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
European Stock Fund
- --------------------------------------------------------------------------------
October 31, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
EUROPEAN STOCK FUND
- -------------------
* Europe's economies performed well, but rising interest rates weighed down
the region's markets.
* Your fund posted a small gain for the six-month period, and a double-digit
return for the full year.
* The pace of mergers, acquisitions, and corporate restructuring increased
significantly.
* Technology and telecommunication stocks outperformed, while media stocks
lagged.
* We expect existing trends in Europe to continue and retain a positive view
of the region's markets.
UPDATES AVAILABLE
- -----------------
For updates on the fund following the end of every calendar quarter, please
see our Web site at www.troweprice.com.
================================================================================
FELLOW SHAREHOLDERS
- -------------------
European economies showed consistent signs of growth during the six months
ended October 31, 1999, and, as in other parts of the world, technology stocks
captured the imaginations of investors. Yet stock markets were weak overall as
global interest rates rose and a flood of new issues outpaced demand, although
certain sectors outperformed strongly. Your fund posted a modest total return
for the half-year but double-digit results for the one-year period.
The fund's 1.27% six-month gain slightly lagged both the MSCI Europe Index
and the Lipper European Funds Average. We were heavily exposed to top-performing
countries, such as France and Sweden, while being light on weaker performers,
such as the U.K. However, relative performance was hurt by an underweighting in
telecommunications compared with the index and the competition, which did
extremely well, and by our greater exposure to weaker media stocks.
<PAGE>
================================================================================
PERFORMANCE COMPARISON
----------------------
Periods Ended 10/31/99 6 Months 12 Months
---------------------- -------- ---------
European Stock Fund 1.27% 11.44%
MSCI Europe Index 1.69 12.85
Lipper European Funds Average 2.37 10.72
================================================================================
Over the past 12 months, your fund rose by 11.44%, ahead of the peer group
average but behind the index. Country allocation was again positive: not only
did we participate in rallies in France (which gained 25%) and Sweden (49%), but
also in Greece, which rose 90% on hopes that it will qualify to join the
European Monetary Union (EMU) in 2001. However, we fell slightly behind the
index's return during the first half of the year and were not able to make up
that difference in the most recent period.
MARKET OVERVIEW
- ---------------
European economic growth gathered momentum across the region. Although it
remained uneven, with France and Spain leading the way among the major
economies, lagging areas like Germany and Italy also appeared to accelerate.
Several factors helped stimulate this growth. European consumer confidence
remained high, while data regarding busine ss confidence, industrial production,
and exports all showed consistent improvement. Very low short-term interest
rates and a weaker currency also contributed to increased activity. The euro
(the currency of the 11 Eurozone countries) has fallen nearly 10% against the
dollar since its introduction in January.
================================================================================
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.
<PAGE>
"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 Globalaztion on Stocks Chart is shown here.
================================================================================
European economies and markets are benefiting from significant changes in
business policies and practices. Governments are working toward reforms that
will improve labor market flexibility and reduce social security and tax costs
for companies; Germany, for example, implemented important tax-system reforms
that will include a corporate tax cut of 15% in 2001. The euro has made cost
comparisons across Europe easier, introducing competitive pressure among
countries keen to attract business investment. Deregulation and the need to
boost shareholder value continued to drive companies to restructure internally,
divest non-core businesses, and merge with or acquire other companies. Industry
consolidation drove a great deal of merger and acquisition activity,
particularly in banking but also in the energy, telecom, and retailing sectors.
Merger activity in 1999 to date has been valued at over $1 trillion, compared
with a previous record of $870 billion for all of 1998.
Improved growth at the economic and corporate levels, however, heightened
inflation fears in central banks around the globe. The U.S. Federal Reserve
raised interest rates twice during the period, in June and August. The European
Central Bank clearly indicated it was adopting a tightening bias to avoid a
rapid rise in inflation as the region's economies recovered, and in November
raised short-term rates by 50 basis points to 3% (100 basis points equal one
percentage point). The Bank of England acted in a similar preemptive fashion,
despite low inflation, and reversed an earlier 25 basis point cut. It took
another 25 basis point action after the period, moving the base rate to 5.5%.
These movements put a damper on stock performance across the region and led to
weak gains or actual losses in most local markets.
A large supply of initial public offerings also strained stock demand and
weakened overall prices. For example, Deutsche Telekom launched a 10 billion
euro rights issue, partly to fund its purchase of One-to-One, a mobile phone
operator in the U.K. The Italian government also offered 35% of electricity
giant ENEL to the public for 35 billion euros N the largest privatization ever
in Italy.
FRANCE was the strongest market within the Eurozone during the six-month
period. Economic recovery, a robust consumer sector, and a relative lack of
political tension, as well as a large amount of merger and acquisition activity,
stimulated a 12% stock market gain.
<PAGE>
================================================================================
MARKET PERFORMANCE
------------------
Six Months Local Local Currency U.S.
Ended 10/31/99 Currency vs. U.S. Dollars Dollars
-------------- ------------ ------------ -------
Belgium -1.09% -0.65% -1.73%
France 12.67 -0.65 11.94
Germany 4.10 -0.65 3.42
Italy -8.74 -0.65 -9.34
Netherlands 0.47 -0.65 -0.19
Spain -1.29 -0.65 -1.93
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.
================================================================================
GERMANY also advanced, but more modestly. Economic recovery there became
more evident during the past six months, boosting prospects for the entire
region as Germany accounts for about 30% of Eurozone gross domestic product
(GDP).
SWEDEN, not part of the Eurozone, was among Europe's strongest markets with
a better than 20% gain for the six months. The country's leading technology and
telecom companies drove the return. On the other hand, ITALY'S market sagged
under weaker economic growth, higher inflation, and political conflict about
cutting fiscal spending. Performance in the U.K. was also poor as the market
struggled with higher interest rates.
PORTFOLIO REVIEW
- ----------------
European corporate activity increased dramatically and had an important
effect on fund performance. The trend was especially pronounced in France. 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) has acquired competitor ELF AQUITAINE. CARREFOUR
and Promodes, major supermarkets, announced a merger that will create the
world's second-largest retailer after Wal-Mart. Major merger announcements,
however, were made all over the region. In Italy, telecom company Olivetti
successfully completed its hostile bid for TELECOM ITALIA, insurance firm
GENERALI bid for INA, and luxury goods company LVMH failed in its hostile
attempt to buy GUCCI. In the U.K., Bank of Scotland launched a hostile bid for
NATIONAL WESTMINSTER BANK (the fund's largest holding) that remains to be
resolved.
<PAGE>
An increased focus on shareholder value by European companies, in response
to the demands of investors, also encouraged many firms to spin off or sell
non-core businesses. For example, fund holding TOMKINS announced plans to
separate its food business from its engineering and construction activities.
GEHE, a German pharmaceutical wholesaler and retailer, spun off its mail order
division. The telecoms sector was particularly active with TELEFONICA (in Spain)
floating its telephone directories business (TPI) and preparing to list its
Internet business (Terra Networks). MANNESMANN announced it would split into two
separate companies next year: Telecoms and Engineering. The fund benefited from
this activity because it gave rise to new, attractive investment opportunities.
For example, we purchased EPCOS when it was spun off from Siemens. The new firm
has a major market position in making filters for the rapidly growing
mobile-phone handset market, but this attractive and profitable activity was
previously hidden within the much larger German conglomerate.
[Geographic Diversification as of 10/31/99; Pie chart with following
segments -- United Kingdom 26%; France 16%; Netherlands 13%; Germany, 10%;
Switzerland 10%; Italy 7%; Sweden 6%; Other and Reserves 12%.]
Most bids remained within national borders as companies tried to improve
their domestic position. But this is a prelude to cross-border activity, which
will be necessary for Europe's corporations to take full advantage of monetary
union and compete on a global scale. In the past year, for example, German-based
Mannesman bought the mobile and fixed telecom assets of Olivetti in Italy and
launched a friendly offer worth 19 billion pounds for Orange (the U.K.'s
third-largest mobile phone operator). These changes have increased investor
attention on changes within Europe's industries, so that it has become as
important to consider what sector a company is in as what country it is in.
Technology and telecommunications were the two key sectors driving the
European markets over the past six months, with investors focused on the
superior growth prospects of these companies. The fund had less exposure than
both the index and the competition in telecoms, particularly in the U.K.
Valuations appeared stretched to us, discounting significant growth while
factoring in little threat from competition. However, mobile telephones, the
Internet, and fixed-line phone access grabbed investor attention, because they
are the key growth areas of an e-based world. Even the old monopoly telecom
incumbents have been given a new lease on life, as the market has focused on the
potential value of their nascent Internet operations and rapidly growing mobile
phone divisions. The fund benefited from large positions in companies moving
aggressively into these markets, such as Mannesmann (in Germany and Italy),
VIVENDI (in France), UPC (a European cable operator), and EQUANT (which offers
global network services.
================================================================================
<PAGE>
INDUSTRY DIVERSIFICATION
------------------------
Percent of Net Assets
4/30/99 10/31/99
------- --------
Services 30.6% 28.9%
Finance 24.3 23.8
Consumer Goods 21.5 21.4
Capital Equipment 8.4 10.9
Energy 10.4 10.0
Materials 2.7 2.6
Multi-industry 0.8 0.7
Reserves 1.3 1.7
Total 100.0% 100.0%
================================================================================
The mobile phone business is one of the few areas of technology where
Europe is leading the U.S., among both manufacturers and service providers.
NOKIA continued to dominate the world market for handsets, with a substantial
product line backed up by heavy investment in research and development and
marketing. The fund added to this holding as its long-term future remains
bright, particularly with the launch of Internet-compatible mobile handsets.
Service providers such as TELECOM ITALIA MOBILE are also well-placed to benefit
from the growth generated by the mobile Internet trend.
Internet mania has truly arrived in Europe from the U.S. However, as yet,
there are only a few relatively small pure Internet companies, and we have
concerns as to whether their business models and valuations will hold up in the
face of competition from the U.S. leaders. We have instead sought alternative
means of investing in this theme. For example, UPC is a European cable operator
that has developed its own Web portal, and CAP GEMINI, Europe's largest
information technology consultant, should benefit from pent-up demand for
e-commerce once Y2K is out of the way.
The media sector in Europe has been hit hard by fears regarding the
potentially erosive impact of the Internet on traditional media businesses. Our
holdings in WOLTERS KLUWER and REED ELSEVIER suffered in this environment. These
companies still offer strong franchises and 'must have' content and are
investing significant sums to migrate their distribution channels to the
Internet. We have held on to our investments in this area because their
valuations are reasonable, and we believe the companies will remain leading
media providers.
Portfolio holdings in the more cyclical electronics sector benefited from
high demand for technology and from the improving economic picture. As the
semiconductor market strengthened, our overweight positions in PHILIPS and
STMICROELECTRONICS (both manufacturers), as well as ASML (a wafer equipment
supplier), outperformed substantially. The proliferation of digital equipment
using sophisticated, high margin semiconductors, such as mobile phones, TVs,
videos, cameras, and TV-top cable boxes, drove demand in this sector.
<PAGE>
OUTLOOK
- -------
As expected, the cut in interest rates earlier this year and the fall in
the value of the euro led to a pick-up in growth across Europe. We expect that
trend will continue and that inflation will remain benign with little need for
further substantial rate rises. Government policy reform is still needed but
there have been encouraging signs of progress. The wave of mergers and
acquisitions sweeping Europe should also continue and expand to include more
cross-border deals. The importance of realizing shareholder value for European
companies will lead to further spin-offs, which could generate exciting new
investment opportunities for the fund. In this environment, we expect corporate
results to be attractive and valuations to remain reasonable, and we retain an
optimistic view on European markets.
Respectfully submitted,
/s/
Martin G. Wade
President
November 25, 1999
================================================================================
T. Rowe Price European Stock Fund
- ---------------------------------
PORTFOLIO HIGHLIGHTS
--------------------
TWENTY-FIVE LARGEST HOLDINGS
----------------------------
Percent of
Net Assets
10/31/99
- -------------------------------------------------------------------------------
National Westminster Bank, United Kingdom 4.0%
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Nokia, Finland 2.7
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Nestle, Switzerland 2.5
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INGGroep, Netherlands 2.3
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Shell Transport & Trading, United Kingdom 2.3
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Total Fina, France 2.3
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Glaxo Wellcome, United Kingdom 2.2
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SmithKline Beecham, United Kingdom 2.1
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Wolters Kluwer, Netherlands 2.0
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Mannesmann, Germany 1.9
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<PAGE>
Roche Holdings, Switzerland 1.8
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Diageo, United Kingdom 1.8
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Kingfisher, United Kingdom 1.7
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Hennes & Mauritz, Sweden 1.6
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AstraZeneca Group, Sweden 1.6
- -------------------------------------------------------------------------------
Novartis, Switzerland 1.6
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Fortis, Netherlands/Belgium 1.5
- -------------------------------------------------------------------------------
Telecom Italia Mobile, Italy 1.5
- -------------------------------------------------------------------------------
Vivendi, France 1.5
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Telefonica de Espana, Spain 1.4
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Unilever, Netherlands/United Kingdom 1.3
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Adecco, Switzerland 1.2
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Television Francaise, France 1.2
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UBS, Switzerland 1.2
- -------------------------------------------------------------------------------
Reed International, United Kingdom 1.2
- -------------------------------------------------------------------------------
Total 46.4%
Note: Table excludes reserves.
================================================================================
T. Rowe Price European 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.
[SEC Chart shown here]
<PAGE>
AVERAGE ANNUAL COMPOUND TOTAL RETURN
------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Since Inception
Periods Ended 10/31/99 1 Year 3 Years 5 Years Inception Date
- ---------------------- ------ ------- ------- --------- ----
European Stock Fund 11.44% 17.21% 17.54% 12.04% 2/28/90
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
T. Rowe Price European Stock Fund
- ---------------------------------
For a share outstanding throughout each period
- ----------------------------------------------
Financial Highlights
- --------------------
Year
Ended
10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
-------- -------- -------- -------- --------
NET ASSET VALUE
Beginning of period $ 22.38 $ 19.84 $ 16.93 $ 14.35 $ 12.72
- -----------------------------------------------------------------------------
Investment activities
Net investment income 0.23 0.28 0.25 0.25 0.20
Net realized and
unrealized gain (loss) 2.14 3.52 3.12 2.79 1.60
- -----------------------------------------------------------------------------
Total from
investment activities 2.37 3.80 3.37 3.04 1.80
- -----------------------------------------------------------------------------
Distributions
Net investment income (0.28) (0.25) (0.26) (0.21) (0.12)
Net realized gain (2.18) (1.01) (0.20) (0.25) (0.05)
- -----------------------------------------------------------------------------
Total distributions (2.46) (1.26) (0.46) (0.46) (0.17)
NET ASSET VALUE
End of period $ 22.29 $ 22.38 $ 19.84 $ 16.93 $ 14.35
Ratios/Supplemental=Data=====================================================
Total return** 11.44% 20.12% 20.30% 21.76% 14.41%
- -----------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.05% 1.05% 1.06% 1.12% 1.20%
- -----------------------------------------------------------------------------
<PAGE>
Ratio of net investment
income to average
net assets 0.97% 1.39% 1.41% 1.81% 1.75%
- -----------------------------------------------------------------------------
Portfolio turnover rate 15.7% 26.8% 17.5% 14.1% 17.2%
- -----------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 1,382 $ 1,412 $ 984 $ 705 $ 491
- --------------------------------------------------------------------------------
** 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.
================================================================================
T. Rowe Price European Stock Fund
- --------------------------------- October 31, 1999
PORTFOLIO OF INVESTMENTS
------------------------
Shares Value
In thousands
BELGIUM 1.8%
Common Stocks 1.8%
Dexia (EUR) 15,914 $ 2,332
- -------------------------------------------------------------------------------
Fortis B (EUR) 260,719 8,803
- -------------------------------------------------------------------------------
KBC Bancassurance Holding (EUR) 185,310 9,551
- -------------------------------------------------------------------------------
Societe Europeenne des Satellites (Class A) (EUR) 8,000 999
- -------------------------------------------------------------------------------
UCB (EUR) 82,950 3,093
- -------------------------------------------------------------------------------
Total Belgium (Cost $15,083) 24,778
DENMARK==0.6%
Common Stocks 0.6%
Den Danske Bank 27,400 3,121
- -------------------------------------------------------------------------------
Tele Danmark A/S 50,380 3,059
- -------------------------------------------------------------------------------
Unidanmark (Class A) 32,380 2,520
- -------------------------------------------------------------------------------
Total Denmark (Cost $5,365) 8,700
- -------------------------------------------------------------------------------
FINLAND==2.7%
Common Stocks 2.7%
Nokia (EUR) 327,550 37,489
- -------------------------------------------------------------------------------
Total Finland (Cost $6,706) 37,489
- -------------------------------------------------------------------------------
<PAGE>
FRANCE==15.9%
Common Stocks 15.9%
Accor (EUR) 6,556 1,476
- -------------------------------------------------------------------------------
Alcatel Alsthom (EUR) 54,478 8,510
- -------------------------------------------------------------------------------
Altran Technologies (EUR) 16,632 5,701
- -------------------------------------------------------------------------------
AXA (EUR) 106,128 14,970
- -------------------------------------------------------------------------------
Banque National de Paris (EUR) 91,390 8,027
- -------------------------------------------------------------------------------
Cap Gemini (EUR) 34,860 5,280
- -------------------------------------------------------------------------------
Carrefour (EUR) 74,810 13,849
- -------------------------------------------------------------------------------
Cie de St. Gobain (EUR) 54,449 9,450
- -------------------------------------------------------------------------------
Credit Commercial de France (EUR) 42,653 4,913
- -------------------------------------------------------------------------------
Danone (EUR) 25,682 6,551
- -------------------------------------------------------------------------------
Dexia France (EUR) 23,420 3,301
- -------------------------------------------------------------------------------
Dexia France, Bearer (EUR) 7,350 1,036
- -------------------------------------------------------------------------------
Hermes (EUR) 17,890 1,957
- -------------------------------------------------------------------------------
L'Oreal (EUR) 6,232 $ 4,159
- -------------------------------------------------------------------------------
Lafarge (EUR) 22,776 2,192
- -------------------------------------------------------------------------------
Legrand (EUR) 26,490 6,339
- -------------------------------------------------------------------------------
Pathe (EUR) 7,641 836
- -------------------------------------------------------------------------------
Pinault Printemps Redoute (EUR) 41,370 7,889
- -------------------------------------------------------------------------------
Sanofi Synthelabo (EUR) * 325,166 14,348
- -------------------------------------------------------------------------------
Schneider (EUR) 193,721 13,347
- -------------------------------------------------------------------------------
Societe Generale (EUR) 35,642 7,760
- -------------------------------------------------------------------------------
Sodexho Alliance (EUR) 61,468 10,086
- -------------------------------------------------------------------------------
Television Francaise (EUR) 52,480 16,450
- -------------------------------------------------------------------------------
Total Fina (Class B) (EUR) 234,446 31,688
- -------------------------------------------------------------------------------
Vivendi (EUR) 267,491 20,272
- -------------------------------------------------------------------------------
Total France (Cost $152,188) 220,387
- -------------------------------------------------------------------------------
<PAGE>
GERMANY==9.7%
Common Stocks 9.1%
Allianz (EUR) 28,880 8,752
- -------------------------------------------------------------------------------
Bayer (EUR) 166,912 6,798
- -------------------------------------------------------------------------------
Bayerische Vereinsbank (EUR) 220,308 14,460
- -------------------------------------------------------------------------------
Celanese (EUR) 3,213 51
- -------------------------------------------------------------------------------
Deutsche Bank (EUR) 182,114 13,022
- -------------------------------------------------------------------------------
Deutsche Telekom (EUR) 217,154 10,016
- -------------------------------------------------------------------------------
Dresdner Bank (EUR) 183,104 9,427
- -------------------------------------------------------------------------------
Epcos (EUR) 68,874 2,824
- -------------------------------------------------------------------------------
Gehe (EUR) 228,053 7,892
- -------------------------------------------------------------------------------
Hoechst (EUR) * 58,510 2,584
- -------------------------------------------------------------------------------
Mannesmann (EUR) 167,270 26,374
- -------------------------------------------------------------------------------
Rhoen Klinikum (EUR 81,813 3,313
- -------------------------------------------------------------------------------
SAP (EUR) 26,200 9,731
- -------------------------------------------------------------------------------
Siemens (EUR) 47,952 4,315
- -------------------------------------------------------------------------------
Veba (EUR) 119,873 6,492
- -------------------------------------------------------------------------------
126,051
- -------------------------------------------------------------------------------
Preferred Stocks 0.6%
Fielmann (EUR) 20,530 780
- -------------------------------------------------------------------------------
Fresenius (EUR) 10,690 1,867
- -------------------------------------------------------------------------------
SAP (EUR) 11,950 5,279
- -------------------------------------------------------------------------------
7,926
- -------------------------------------------------------------------------------
Total Germany (Cost $105,069) 133,977
- -------------------------------------------------------------------------------
GREECE==0.4%
Common Stocks 0.4%
Alpha Credit Bank 8,459 $ 647
- -------------------------------------------------------------------------------
Hellenic Telecommunication 93,808 1,988
- -------------------------------------------------------------------------------
Panafon Hellenic Telecom 173,940 2,300
- -------------------------------------------------------------------------------
Total Greece (Cost $3,722) 4,935
- -------------------------------------------------------------------------------
<PAGE>
HUNGARY==0.1%
Common Stocks 0.1%
EGIS 7,048 210
- -------------------------------------------------------------------------------
OTP Bank GDR (USD) 25,000 1,119
- -------------------------------------------------------------------------------
Total Hungary (Cost $1,387) 1,329
- -------------------------------------------------------------------------------
IRELAND==0.2%
Common Stocks 0.2%
CBT Group ADR (USD) * 124,789 2,574
- -------------------------------------------------------------------------------
Total Ireland (Cost $3,801) 2,574
- -------------------------------------------------------------------------------
ITALY==6.6%
Common Stocks 6.6%
Assicurazioni Generali (EUR) 211,880 6,797
- -------------------------------------------------------------------------------
Banca di Roma (EUR) 1,469,000 1,978
- -------------------------------------------------------------------------------
Banca Popolare di Brescia (EUR) 117,000 4,953
- -------------------------------------------------------------------------------
Credito Italiano (EUR) 2,188,231 10,243
- -------------------------------------------------------------------------------
ENI (EUR) 1,936,376 11,324
- -------------------------------------------------------------------------------
Gucci Group (USD) 64,095 5,176
- -------------------------------------------------------------------------------
Istituto Nazionale delle Assicurazioni (EUR) 1,915,000 5,811
- -------------------------------------------------------------------------------
Italgas (EUR) 514,943 2,129
- -------------------------------------------------------------------------------
Mediolanum (EUR) 410,000 3,334
- -------------------------------------------------------------------------------
Sanpaolo IMI (EUR) 524,844 6,801
- -------------------------------------------------------------------------------
Tecnost (EUR) 579,000 1,115
- -------------------------------------------------------------------------------
Telecom Italia (EUR) 1,210,080 10,450
- -------------------------------------------------------------------------------
Telecom Italia Mobile (EUR) 3,273,435 20,452
- -------------------------------------------------------------------------------
Total Italy (Cost $77,921) 90,563
- -------------------------------------------------------------------------------
NETHERLANDS==13.1%
Common Stocks 13.1%
ABN Amro (EUR) 388,262 $ 9,389
- -------------------------------------------------------------------------------
Akzo Nobel (EUR) 63,708 2,743
- -------------------------------------------------------------------------------
ASM Lithography (EUR) * 179,810 12,691
- -------------------------------------------------------------------------------
CSM (EUR) 150,663 6,949
- -------------------------------------------------------------------------------
<PAGE>
Elsevier (EUR) 345,961 3,286
- -------------------------------------------------------------------------------
Equant (EUR) * 94,130 9,158
- -------------------------------------------------------------------------------
Fortis NI (EUR) 360,230 12,402
- -------------------------------------------------------------------------------
ING Groep (EUR) 550,255 32,458
- -------------------------------------------------------------------------------
KPN (EUR) 70,257 3,605
- -------------------------------------------------------------------------------
Philips Electronics (EUR) 137,164 14,067
- -------------------------------------------------------------------------------
Royal Dutch Petroleum (EUR) 255,946 15,300
- -------------------------------------------------------------------------------
STMicroelectronics (EUR) * 135,201 11,875
- -------------------------------------------------------------------------------
TNT Post Groep (EUR) 32,998 840
- -------------------------------------------------------------------------------
Unilever (EUR) 96,899 6,421
- -------------------------------------------------------------------------------
UPC Comminications (EUR) 162,227 12,474
- -------------------------------------------------------------------------------
Wolters Kluwer (EUR) 810,600 27,088
- -------------------------------------------------------------------------------
Total Netherlands (Cost $133,293) 180,746
- -------------------------------------------------------------------------------
NORWAY==1.1%
Common Stocks and Rights 1.1%
Merkantildata 95,000 805
- -------------------------------------------------------------------------------
Norsk Hydro 109,236 4,356
- -------------------------------------------------------------------------------
Orkla (Class A) 604,676 8,436
- -------------------------------------------------------------------------------
Orkla ASA, Rights, 11/22/99 627,396 1,179
- -------------------------------------------------------------------------------
Tomra Systems 19,800 757
- -------------------------------------------------------------------------------
Total Norway (Cost $16,082) 15,533
- -------------------------------------------------------------------------------
PORTUGAL==0.5%
Common Stocks 0.5%
Jeronimo Martins (EUR) 263,603 7,359
- -------------------------------------------------------------------------------
Total Portugal (Cost $4,971) 7,359
- -------------------------------------------------------------------------------
SPAIN==4.5%
Common Stocks 4.5%
Argentaria Banca de Espana (EUR) 211,514 4,694
- -------------------------------------------------------------------------------
Azkoyen (EUR) 27,500 $ 267
- -------------------------------------------------------------------------------
Banco Bilbao Vizcaya (EUR) 235,600 3,167
- -------------------------------------------------------------------------------
<PAGE>
Banco Popular Espanol (EUR) 34,945 2,352
- -------------------------------------------------------------------------------
Banco Santander Central Hispano (EUR) 1,024,776 10,639
- -------------------------------------------------------------------------------
Empresa Nacional de Electricidad (EUR) 254,266 5,090
- -------------------------------------------------------------------------------
Gas Natural (EUR) 126,603 2,770
- -------------------------------------------------------------------------------
Iberdrola (EUR) 523,175 7,627
- -------------------------------------------------------------------------------
Prosegur Seguridad (EUR) 32,500 267
- -------------------------------------------------------------------------------
Repsol (EUR) 305,573 6,300
- -------------------------------------------------------------------------------
Telefonica (EUR) 1,171,308 19,269
- -------------------------------------------------------------------------------
Total Spain (Cost $41,512) 62,442
- -------------------------------------------------------------------------------
SWEDEN==5.9%
Common Stocks 5.9%
ABB (Class A) * 49,208 4,900
- -------------------------------------------------------------------------------
Assa Abloy (Class B) 76,926 856
- -------------------------------------------------------------------------------
AstraZeneca Group 488,237 22,055
- -------------------------------------------------------------------------------
Atlas Copco (Class B) 164,610 4,283
- -------------------------------------------------------------------------------
Electrolux (Class B) 498,020 9,931
- -------------------------------------------------------------------------------
Esselte (Class B) 23,216 155
- -------------------------------------------------------------------------------
Hennes & Mauritz (Class B) 846,870 22,500
- -------------------------------------------------------------------------------
Nordbanken Holding 1,684,525 9,832
- -------------------------------------------------------------------------------
Sandvik (Class B) 173,310 4,489
- -------------------------------------------------------------------------------
Securitas (Class B) 132,164 1,961
- -------------------------------------------------------------------------------
Total Sweden (Cost $55,409) 80,962
- -------------------------------------------------------------------------------
SWITZERLAND==9.6%
Common Stocks 9.6%
ABB * 82,759 8,334
- -------------------------------------------------------------------------------
Adecco 28,104 17,036
- -------------------------------------------------------------------------------
Credit Suisse Group 46,495 8,937
- -------------------------------------------------------------------------------
Nestle 17,815 34,361
- -------------------------------------------------------------------------------
Novartis 14,354 21,470
- -------------------------------------------------------------------------------
<PAGE>
Roche Holdings 2,058 24,708
- -------------------------------------------------------------------------------
Swisscom 6,672 2,033
- -------------------------------------------------------------------------------
UBS 55,869 16,255
- -------------------------------------------------------------------------------
Total Switzerland (Cost $106,842) 133,134
- -------------------------------------------------------------------------------
UNITED=KINGDOM==25.6%
Common Stocks 25.6%
Abbey National 599,080 $ 11,695
- -------------------------------------------------------------------------------
Ashtead Group 142,999 408
- -------------------------------------------------------------------------------
BG 541,176 3,006
- -------------------------------------------------------------------------------
BP Amoco 982,000 9,544
- -------------------------------------------------------------------------------
Cable & Wireless 1,326,110 15,537
- -------------------------------------------------------------------------------
Cadbury Schweppes 2,125,506 13,970
- -------------------------------------------------------------------------------
Caradon 1,020,223 2,422
- -------------------------------------------------------------------------------
Centrica 278,640 799
- -------------------------------------------------------------------------------
Compass Group 1,490,000 15,914
- -------------------------------------------------------------------------------
David S. Smith 593,416 1,843
- -------------------------------------------------------------------------------
Diageo 2,427,297 24,398
- -------------------------------------------------------------------------------
Electrocomponents 599,000 5,364
- -------------------------------------------------------------------------------
General Electric 165,550 1,806
- -------------------------------------------------------------------------------
GKN 240,000 3,861
- -------------------------------------------------------------------------------
Glaxo Wellcome 1,032,540 30,472
- -------------------------------------------------------------------------------
Hays 66,000 757
- -------------------------------------------------------------------------------
John Laing (Class A) 302,152 1,430
- -------------------------------------------------------------------------------
Kingfisher 2,299,462 23,502
- -------------------------------------------------------------------------------
Ladbroke Group 820,250 2,534
- -------------------------------------------------------------------------------
National Westminster Bank 2,444,328 55,227
- -------------------------------------------------------------------------------
Rank Group 580,625 1,808
- -------------------------------------------------------------------------------
Reed International 2,718,569 15,948
- -------------------------------------------------------------------------------
<PAGE>
Rio Tinto 462,848 7,910
- -------------------------------------------------------------------------------
Safeway 779,000 2,445
- -------------------------------------------------------------------------------
Serco Group 110,500 3,196
- -------------------------------------------------------------------------------
Shell Transport & Trading 4,192,000 32,099
- -------------------------------------------------------------------------------
SmithKline Beecham 2,231,160 28,707
- -------------------------------------------------------------------------------
Tesco 2,630,500 7,802
- -------------------------------------------------------------------------------
Tomkins 2,752,426 9,317
- -------------------------------------------------------------------------------
Unilever 1,259,607 11,678
- -------------------------------------------------------------------------------
United News & Media 887,390 8,545
- -------------------------------------------------------------------------------
Total United Kingdom (Cost $288,593) 353,944
- -------------------------------------------------------------------------------
SHORT-TERM=INVESTMENTS==0.8%
Money Market Funds 0.8%
Reserve Investment Fund, 5.51% # 11,434,251 $ 11,434
- -------------------------------------------------------------------------------
Total Short-Term Investments (Cost $11,434) 11,434
- -------------------------------------------------------------------------------
=Total=Investments=in=Securities
99.1% of Net Assets (Cost $1,029,378) $ 1,370,286
Other Assets Less Liabilities 11,882
NET ASSETS $ 1,382,168
# Seven-day yield
* Non-income producing
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.
================================================================================
<PAGE>
T. Rowe Price European Stock Fund
- --------------------------------- October 31, 1999
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
IN THOUSANDS
ASSETS
------
Investments in securities, at value (cost $1,029,378) $ 1,370,286
Securities lending collateral 158,782
Other assets 22,360
- ------------------------------------------------------------------------------
Total assets 1,551,428
- ------------------------------------------------------------------------------
LIABILITIES
-----------
Obligation to return securities lending collateral 158,782
Other liabilities 10,478
- ------------------------------------------------------------------------------
Total liabilities 169,260
NET ASSETS $ 1,382,168
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 8,524
Accumulated net realized gain/loss - net of distributions 111,702
Net unrealized gain (loss) 340,874
Paid-in-capital applicable to 62,005,215 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 921,068
NET ASSETS $ 1,382,168
NET ASSET VALUE PER SHARE $ 22.29
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price European Stock Fund
- ---------------------------------
STATEMENT OF OPERATIONS
----------------------- IN THOUSANDS
Year
Ended
10/31/99
--------
Investment Income
Income
Dividend (net of foreign taxes of $3,918) $ 27,018
Interest 2,302
- -------------------------------------------------------------------------------
Total income 29,320
- -------------------------------------------------------------------------------
Expenses
Investment management 11,960
Shareholder servicing 2,392
Custody and accounting 563
Prospectus and shareholder reports 214
Registration 69
Legal and audit 24
Directors 7
Miscellaneous 16
- -------------------------------------------------------------------------------
Total expenses 15,245
Expenses paid indirectly (1)
- -------------------------------------------------------------------------------
Net expenses 15,244
- -------------------------------------------------------------------------------
Net investment income 14,076
- -------------------------------------------------------------------------------
Realized=and=Unrealized=Gain=(Loss)
Net realized gain (loss)
Securities 115,353
Futures 1,282
Foreign currency transactions (925)
- -------------------------------------------------------------------------------
Net realized gain (loss) 115,710
- -------------------------------------------------------------------------------
Change in net unrealized gain or loss
Securities 24,637
Other assets and liabilities
denominated in foreign currencies (125)
- -------------------------------------------------------------------------------
Change in net unrealized gain or loss 24,512
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 140,222
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 154,298
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price European Stock Fund
- ---------------------------------
STATEMENT OF CHANGES IN NET ASSETS
---------------------------------- IN THOUSANDS
Year
Ended
10/31/99 10/31/98
-------- --------
Increase=(Decrease)=in=Net=Assets
Operations
Net investment income $ 14,076 $ 17,744
Net realized gain (loss) 115,710 132,809
Change in net unrealized gain or loss 24,512 33,315
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 154,298 183,868
- -------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (17,725) (12,319)
Net realized gain (138,004) (49,758)
- -------------------------------------------------------------------------------
Decrease in net assets from distributions (155,729) (62,077)
- -------------------------------------------------------------------------------
Capital share transactions *
Shares sold 504,968 852,885
Distributions reinvested 149,017 59,319
Shares redeemed (682,394) (606,070)
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions (28,409) 306,134
- -------------------------------------------------------------------------------
Net Assets
Increase (decrease) during period (29,840) 427,925
Beginning of period 1,412,008 984,083
End of period $1,382,168 $ 1,412,008
===============================================================================
*Share information
Shares sold 23,161 38,105
Distributions reinvested 7,202 3,056
Shares redeemed (31,438) (27,678)
- -------------------------------------------------------------------------------
Increase (decrease) in shares outstanding (1,075) 13,483
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price European 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 European Stock Fund (the fund), a
diversified, open-end management investment company, is one of the portfolios
established by the corporation and commenced operations on February 28, 1990.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company industry;
these principles may require the use of estimates by fund management.
Valuation Equity securities are valued at the last quoted sales price at
the time the valuations are made. A security which is listed or traded on more
than one exchange is valued at the quotation on the exchange determined to be
the primary market for such security.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Currency Translation Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and losses.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
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.
<PAGE>
================================================================================
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 $163,317,000; aggregate collateral consisted of
$158,782,000 in the securities lending collateral pool and U.S. government
securities valued at $10,973,000.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $223,527,000 and $359,391,000, 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.
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 $(5,532,000)
Undistributed net realized gain 5,532,000
================================================================================
At October 31, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$1,029,378,000. Net unrealized gain aggregated $340,908,000 at period-end, of
which $380,496,000 related to appreciated investments and $39,588,000 to
depreciated investments.
<PAGE>
================================================================================
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 $948,000 was payable
at October 31, 1999. The fee is computed daily and paid monthly, and consists of
an individual fund fee equal to 0.50% of average daily net assets and a group
fee. The group fee is based on the combined assets of certain mutual funds
sponsored by the manager or Price Associates (the group). The group fee rate
ranges from 0.48% for the first $1 billion of assets to 0.295% for assets in
excess of $120 billion. At October 31, 1999, and for the year then ended, the
effective annual group fee rate was 0.32%. The fund pays a pro-rata share of the
group fee based on the ratio of its net assets to those of the group.
In addition, the fund has entered into agreements with Price Associates and
two wholly owned subsidiaries of Price Associates, pursuant to which the fund
receives certain other services. Price Associates computes the daily share price
and maintains the financial records of the fund. T. Rowe Price Services, Inc. is
the fund's transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc. provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $1,936,000 for the year ended
October 31, 1999, of which $216,000 was payable at period-end.
Additionally, the fund is one of several T. Rowe Price-sponsored mutual
funds (underlying funds) in which the T. Rowe Price Spectrum Funds (Spectrum)
may invest. Spectrum does not invest in the underlying funds for the purpose of
exercising management or control. Expenses associated with the operation of
Spectrum are borne by each underlying fund to the extent of estimated savings to
it and in proportion to the average daily value of its shares owned by Spectrum,
pursuant to special servicing agreements between and among Spectrum, the
underlying funds, T. Rowe Price, and, in the case of T. Rowe Price Spectrum
International, Rowe Price-Fleming International. Spectrum International Fund
held approximately 1.3% of the outstanding shares of the fund at October 31,
1999. For the year then ended, the fund was allocated $82,000 of Spectrum
expenses, $21,000 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
$1,255,000 and are reflected as interest income in the accompanying Statement of
Operations.
<PAGE>
During the year ended October 31, 1999, the fund, in the ordinary course of
business, placed security purchase and sale orders aggregating $31,164,000 with
certain affiliates of the manager and paid commissions of $54,000 related
thereto.
================================================================================
NOTE 5 - INTERFUND BORROWING
================================================================================
Pursuant to the fund's prospectus, the fund may borrow up to 33 1/3% of its
total assets. The fund is party to an interfund borrowing agreement between the
fund and other T. Rowe Price-sponsored mutual funds, which permits it to borrow
or lend cash, at rates beneficial to both the borrowing and lending funds. Loans
totaling 10% or more of a borrowing fund's total assets are collateralized at
102% of the value of the loan; loans of less than 10% are unsecured. During the
year ended October 31, 1999, the fund borrowed $11,700,000 on 4 days, at a
weighted average rate of 5.25%. There were no borrowings outstanding at October
31, 1999.
================================================================================
T. Rowe Price European Stock Fund
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
To the Board of Directors of T. Rowe Price International Funds, Inc. and
Shareholders of European 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 European 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
================================================================================
<PAGE>
T. Rowe Price European 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:
* $16,459,000 from short-term capital gains,
* $121,545,000 from long-term capital gains, subject to the 20%
rate gains category.
The fund will pass through foreign source income of $12,437,000 and foreign
taxes paid of $3,565,000.
================================================================================
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*AccessRegistration Mark and the T. Rowe
Price Web site on the Internet. Address:
www.troweprice.com
<PAGE>
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.
================================================================================
T. Rowe Price Mutual Funds
- --------------------------
STOCK FUNDS
- -----------
DOMESTIC
- --------
Blue Chip Growth
Capital Appreciation
Capital Opportunity
<PAGE>
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
<PAGE>
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
<PAGE>
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.
================================================================================
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 Money Purchase Pension
Roth IRA "Paired" Plans (Money Purchase
Rollover IRA Pension and Profit Sharing Plans)
SEP-IRA 401(k)
SIMPLE IRA 401(b)
Profit Sharing 457 Deferred Compensation
<PAGE>
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 [Registration Mark] From T. Rowe Price
The T. Rowe Price 401(k) Century Plan [Registration Mark]
(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.
================================================================================
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
<PAGE>
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
T. Rowe Price Investment Services, Inc., Distributor. F79-050 10/31/99
