Annual Report
Global
Stock
Fund
October 31, 1999
T. Rowe Price
Report Highlights
Global Stock Fund
o Global stocks and the fund provided good results for the six months ended
October 31 and excellent returns for the fiscal year.
o The fund's returns of 5.41% and 24.17% for the 6- and 12-month periods,
respectively, were strong but somewhat behind the benchmarks for the year
due to an underweighting in Japan and our emphasis on growth stocks, which
lagged in the first half.
o Overseas markets were driven by economic recovery, corporate restructuring,
and merger and acquisition activity, while U.S. stocks were powered by
technology.
o The appreciation of the yen versus the dollar boosted returns for U.S.
investors in Japanese stocks, while France and Sweden were stellar
performers in Europe.
o We are optimistic about prospects for the U.S. and Europe and believe the
fund is well positioned for continuing long-term growth.
UPDATES AVAILABLE
For updates on the fund following the end of each calendar quarter, please see
our Web site www.troweprice.com.
Fellow Shareholders
Global 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 economic recovery overseas, and an increase in
international investment following the crises of mid-1998 drove markets sharply
higher. More recently, however, prospects of stronger global economic growth
sparked concerns about rising inflation, and returns moderated from their
earlier pace. In the U.S., technology stocks far outshone the overall market,
posting excellent returns for the past six months and full year.
Performance Comparison
- --------------------------------------------------------------------------------
Periods Ended 10/31/99 6 Months 12 Months
- --------------------------------------------------------------------------------
Global Stock Fund 5.41% 24.17%
MSCI World Index 4.64 25.33
Lipper Global Funds Average 5.94 28.07
Your fund provided good returns for the past six months, and strong results for
the fiscal year ended October 31. Performance surpassed that of the MSCI World
Index for the six-month period and was slightly behind the Lipper Global Funds
Average. For the full year, results were somewhat short of both benchmarks. The
somewhat weaker annual 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 the fiscal year, an upswing
in the economic cycle favored 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.
The major factors stimulating global 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. U.S. stocks in general provided excellent returns
during the past 12 months, but technology stocks were standout performers. As a
result, the technology-driven Nasdaq Composite Index far outpaced the S&P 500
over the year and the past six months.
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 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 the U.S. was 42%, the
same as six months ago. Europe represented 34% of assets, down from 37% in
April, while 12% was invested in Japan, up from 9%- primarily a result of
varying regional performance. Within Europe, the U.K. was the largest
country exposure. Despite these changes, the fund is still underweighted in
Japan relative to the MSCI World 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.
United States
The past 12 months in the U.S. can be summed up in two words: technology
and the Internet. The Internet's impact on business fundamentals was the
main driver of virtually every stock sector. Retail stocks were hit hard by
expected competition from on-line competitors. Financial companies were
divided into those that benefit from the Internet and those that don't, and
their share prices reflected the disparity. The entire technology sector
benefited from Internet-led demand, but some sectors experienced dramatic
changes in valuation. The stocks of Cisco Systems, Sun Microsystems,
VERITAS Software, and Texas Instruments appreciated significantly as
investors were willing to pay for a precipitous expansion in earnings
multiples. Since the full impact of the Internet on the global economy has
yet to be felt, perceptions have played a major role in stock market
performance. We agree with some of the new stock valuations, but we view
most of them as excessive.
Market Performance
Six Months Local Local Currency U.S.
Ended 10/31/99 Currency vs. U.S. Dollar 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
Switzerland -1.21 -0.08 -1.28
United Kingdom -4.84 1.92 -3.02
United States 2.32 -- 2.32
Source: RIMES Online, using MSCI indices.
Early this year, we increased our technology weighting by adding such
stocks as Solectron, Sun Microsystems, Altera, Computer Associates, Nextel
Communications, and Sprint-all of which have been rewarding. While we
believe the Internet will create significant value over time, investors
should also focus on other growth sectors and companies that offer good
opportunities. With this in mind, we have recently added several financial
growth companies with attractive valuations and the potential for solid
growth, including Capital One Financial and Firstar.
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 more recently 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 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.
Pie Chart - Geographic Diversification
Europe 34
United States 42
Japan 12
Far East 4
Latin America 2
Other and Reserves 6
Based on net assets as of 10/31/99.
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 fiscal 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.
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, Banque
National de Paris 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 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.
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
Istituto Nazionale delle Assicurazioni (which had agreed to merge with bank
San Paolo 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.
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 LM Ericsson Telephone, a global
competitor, boosted the general 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 European 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.
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.
In Japan, stronger-than-expected economic data and increased evidence of
corporate restructuring stimulated heavy foreign buying and pushed the yen
up sharply.
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 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 Taiwan Semiconductor Manufacturing in Taiwan
and Samsung Electronics in South Korea, both of which benefited from the
upturn in regional demand.
Industry Diversification
---------------------------------------------------------------------------
Percent of Net Assets
4/30/99 10/31/99
---------------------------------------------------------------------------
Services 31.5% 31.8%
Consumer Goods 20.4 18.6
Finance 19.5 17.7
Capital Equipment 13.0 17.2
Energy 7.0 5.4
Materials 2.2 2.2
Multi-industry 1.2 0.9
Reserves 5.2 6.2
---------------------------------------------------------------------------
Total 100.0% 100.0%
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.
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.
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 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 are optimistic about prospects for further stock market advances in the
U.S., despite the gains of the past few years. We believe that economic
growth could slow a bit toward the end of the year and forestall any future
action of the Federal Reserve, which remains vigilant on the inflation
front through its monetary policy. While corporate earnings growth could
also slow, we still anticipate an environment of reasonable growth and low
inflation. The fund's U.S. holdings of well-managed companies with a
history of growth through most economic cycles should perform well in this
environment.
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.
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,
Martin G. Wade
President
November 19, 1999
T. Rowe Price Global Stock Fund
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Portfolio Highlights
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
10/31/99
---------------------------------------------------------------------------
Microsoft, United States 1.5%
Freddie Mac, United States 1.2
Citigroup, United States 1.2
National Westminster Bank, United Kingdom 1.2
MCI WorldCom, United States 1.1
---------------------------------------------------------------------------
GE, United States 1.0
Tyco International, United States 1.0
Shell Transport & Trading, United Kingdom 0.9
Murata Manufacturing, Japan 0.9
Nokia, Finland 0.8
---------------------------------------------------------------------------
Nestle, Switzerland 0.8
SmithKline Beecham, United Kingdom 0.8
ING Groep, Netherlands 0.8
Total Fina, France 0.8
Sony, Japan 0.8
---------------------------------------------------------------------------
Glaxo Wellcome, United Kingdom 0.8
Cisco Systems, United States 0.7
Bristol-Myers Squibb, United States 0.7
Wal-Mart, United States 0.7
Nippon Telegraph & Telephone, Japan 0.7
---------------------------------------------------------------------------
Wolters Kluwer, Netherlands 0.7
NEC, Japan 0.7
Sprint, United States 0.6
Novartis, Switzerland 0.6
Carrefour, France 0.6
---------------------------------------------------------------------------
Total 21.6%
Note: Table excludes reserves.
T. Rowe Price Global 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.
GLOBAL STOCK FUND
- --------------------------------------------------------------------------------
As of 10/31/99
MSCI World Lipper Global Global Stock
Index Funds Average Fund
12/29/95 10.000 10.000 10.000
10/96 10.967 11.177 11.350
10/97 12.858 13.130 13.277
10/98 14.875 13.888 14.989
10/99 18.643 17.636 18.612
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 Inception Date
---------------------------------------------------------------------------
Global Stock Fund 24.17% 17.92% 17.57% 12/29/95
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 Global Stock Fund
- --------------------------------------------------------------------------------
Financial Highlights For a share outstanding throughout each period
- --------------------------------------------------------------------------------
Year 12/29/95
Ended Through
10/31/99 10/31/98 10/31/97 10/31/96
NET ASSET VALUE
Beginning of period $ 14.03 $ 13.01 $ 11.35 $ 10.00
Investment activities
Net investment income 0.05* 0.09* 0.06* 0.05*
Net realized and
unrealized gain (loss) 3.24 1.52 1.84 1.30
Total from
investment activities 3.29 1.61 1.90 1.35
Distributions
Net investment income (0.10) (0.06) (0.06) --
Net realized gain (0.45) (0.53) (0.18) --
Total distributions (0.55) (0.59) (0.24) --
NET ASSET VALUE
End of period $ 16.77 $ 14.03 $ 13.01 $ 11.35
-----------------------------------------------
Ratios/Supplemental Data
Total return(diamond) 24.17%* 12.89%* 16.98%* 13.50%*
Ratio of total expenses
to average net assets 1.20%* 1.20%* 1.30%* 1.30%*!
Ratio of net investment
income to average
net assets 0.40%* 0.76%* 0.68%* 0.88%*!
Portfolio turnover rate 37.5% 47.1% 41.8% 50.0%!
Net assets, end of period
(in thousands) $ 73,837 $ 44,116 $ 32,020 $ 14,916
(diamond) 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.
* Excludes expenses in excess of a 1.30% voluntary expense limitation
in effect through 10/31/97 and a 1.20% voluntary expense limitation
in effect through 10/31/99.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
- --------------------------------------------------------------------------------
October 31, 1999
Statement of Net Assets Shares Value
- --------------------------------------------------------------------------------
In thousands
ARGENTINA 0.1%
Common Stocks 0.1%
Banco de Galicia Buenos Aires
(Class B) ADR (USD) 843 $ 18
Banco Frances del Rio de la Plata
ADR (USD) 675 15
Telefonica de Argentina (
Class B) ADR (USD) 2,270 58
Total Argentina (Cost $104) 91
AUSTRALIA 1.2%
Common Stocks 1.1%
Brambles Industries 3,000 84
Broken Hill Proprietary 4,062 42
Colonial Limited 22,187 82
Commonwealth Bank of Australia 6,912 113
Lend Lease 3,266 38
News Corporation 10,928 79
Publishing & Broadcasting 14,400 85
Tabcorp Holdings 9,500 60
Telstra 24,375 124
Telstra, Installment Receipts 6,000 19
Westpac Bank 15,511 100
826
Preferred Stocks 0.1%
News Corporation 10,173 69
69
Total Australia (Cost $764) 895
BELGIUM 0.6%
Common Stocks 0.6%
Dexia (EUR) 279 41
Fortis B (EUR) 5,194 175
KBC Bancassurance Holding (EUR) 4,090 211
Societe Europeenne des Satellites
(Class A) (EUR) 221 28
UCB (EUR) 570 21
Total Belgium (Cost $409) 476
BRAZIL 0.9%
Common Stocks 0.6%
Pao de Acucar GDR (USD) 1,869 $ 41
Telebras ADR (USD) 5,290 412
453
Preferred Stocks 0.3%
Banco Bradesco 3,059,426 15
Banco Itau 310,000 18
Cia Energetica Minas Gerais 613,108 9
Cia Energetica Minas Gerais
ADR (144a) (USD) 183 3
Cia Energetica Minas Gerais ADR
Sponsored, Nonvoting (USD) 2,479 35
Pao de Acucar GDR (USD) 190 4
Petrol Brasileiros 630,720 100
Telebras ADR (USD) * 4,290 0
Telecomunicacoes de Sao Paulo 236,503 22
Telecomunicacoes de Sao Paulo
Celular (Class B) 225,887 12
218
Total Brazil (Cost $866) 671
CANADA 0.2%
Common Stocks 0.2%
Alcan Aluminum 1,550 51
Nortel Networks 730 45
Royal Bank of Canada 790 34
Total Canada (Cost $121) 130
CHILE 0.0%
Common Stocks 0.0%
Chilectra ADR (144a) (USD) 584 10
Total Chile (Cost $14) 10
CHINA 0.4%
Common Stocks 0.4%
China Telecom (HKD) 77,000 263
Huaneng Power International
ADR (USD) * 3,100 38
Total China (Cost $254) 301
DENMARK 0.2%
Common Stocks 0.2%
Den Danske Bank 410 $ 47
Tele Danmark A/S 800 48
Unidanmark (Class A) 280 22
Total Denmark (Cost $93) 117
FINLAND 0.8%
Common Stocks 0.8%
Nokia (EUR) 5,420 620
Total Finland (Cost $255) 620
FRANCE 5.6%
Common Stocks 5.6%
Alcatel Alsthom (EUR) 1,135 177
AXA (EUR) 2,153 304
Banque National de Paris (EUR) 2,460 216
Cap Gemini (EUR) 780 118
Carrefour (EUR) 2,432 450
Cie de St. Gobain (EUR) 762 132
Credit Commercial de France (EUR) 387 45
Danone (EUR) 130 33
Hermes (EUR) 690 75
L'Oreal (EUR) 124 83
Lafarge (EUR) 357 34
Legrand (EUR) 750 179
Pinault Printemps Redoute (EUR) 795 152
Sanofi Synthelabo (EUR) * 5,780 255
Schneider (EUR) 3,245 224
Societe Generale (EUR) 743 162
Sodexho Alliance (EUR) 1,330 218
Television Francaise (EUR) 873 274
Total Fina (Class B) (EUR) 4,162 562
Vivendi (EUR) 5,668 430
Total France (Cost $3,078) 4,123
GERMANY 3.2%
Common Stocks 3.0%
Allianz (EUR) 550 $ 167
Bayer (EUR) 3,222 131
Bayerische Vereinsbank (EUR) 4,317 283
Celanese (EUR) 52 1
Deutsche Bank (EUR) 3,010 215
Deutsche Telekom (EUR) 4,023 186
Dresdner Bank (EUR) 3,277 169
Gehe (EUR) 4,370 151
Hoechst (EUR) * 940 42
Mannesmann (EUR) 2,710 427
Rhoen Klinikum (EUR) 1,521 62
SAP (EUR) 440 163
Siemens (EUR) 1,003 90
Veba (EUR) 2,580 140
2,227
Preferred Stocks 0.2%
Fielmann (EUR) 260 10
Fresenius (EUR) 180 31
SAP (EUR) 271 120
161
Total Germany (Cost $2,111) 2,388
HONG KONG 1.0%
Common Stocks 1.0%
Cheung Kong Holdings 11,000 100
CLP Holdings 16,000 74
Dao Heng Bank Group 8,000 36
Henderson Land Development 14,000 64
Cable & Wireless 31,200 71
Hutchison Whampoa 25,000 251
New World Development 14,000 27
Pacific Century 45,000 34
Sun Hung Kai Properties 8,000 65
Total Hong Kong (Cost $658) 722
INDIA 0.2%
Common Stocks 0.2%
ICICI ADR (USD) * 4,952 $ 54
Mahanagar Telephone 18,000 71
Mahanagar Telephone GDR (USD) * 3,000 25
Total India (Cost $161) 150
IRELAND 0.1%
Common Stocks 0.1%
CBT Group ADR (USD) * 2,084 43
Total Ireland (Cost $59) 43
ITALY 2.3%
Common Stocks 2.3%
Assicurazioni Generali (EUR) 3,480 112
Banca di Roma (EUR) 19,000 26
Banca Popolare di Brescia (EUR) 4,000 169
Credito Italiano (EUR) 28,825 135
ENI (EUR) 34,609 202
Gucci Group (USD) 1,261 102
Istituto Nazionale delle
Assicurazioni (EUR) 35,000 106
Italgas (EUR) 4,600 19
Mediolanum (EUR) 11,230 91
San Paolo IMI (EUR) 10,315 134
Tecnost (EUR) 18,600 36
Telecom Italia (EUR) 23,440 203
Telecom Italia Mobile (EUR) 62,000 387
Total Italy (Cost $1,538) 1,722
JAPAN 11.8%
Common Stocks 11.8%
Bridgestone 3,000 83
Canon 13,000 368
Citizen Watch 4,000 28
Daiichi Pharmaceutical 2,000 29
Daiwa House 7,000 $ 64
DDI 15 164
Denso 11,000 235
East Japan Railway 19 116
Fanuc 1,600 124
Fujitsu 8,000 241
Hitachi 11,000 119
Honda Motor 1,000 42
Ito-Yokado 2,000 160
Kao 7,000 213
Kokuyo 4,000 73
Komori 3,000 65
Kuraray 10,000 134
Kyocera 4,000 384
Makita 4,000 38
Marui 10,000 189
Matsushita Electric Industrial 16,000 337
Mitsubishi 9,000 65
Mitsubishi Heavy Industries 41,000 161
Mitsui Fudosan 19,000 142
Murata Manufacturing 5,000 643
NEC 24,000 486
Nippon Telegraph & Telephone 33 506
Nomura Securities 16,000 264
NTT Mobile Communications Network 15 399
Sankyo 11,000 313
Sekisui Chemical 11,000 54
Sekisui House 9,000 97
Seven-Eleven Japan 2,000 183
Shin-Etsu Chemical 4,000 165
Shiseido 5,000 76
Softbank 100 42
Sony 3,600 561
Sumitomo 17,000 124
Sumitomo Bank 11,000 177
Sumitomo Electric Industries 15,000 202
TDK 3,000 294
Tokio Marine & Fire Insurance 3,000 $ 39
Tokyo Electronics 1,000 83
Toppan Printing 7,000 86
Toshiba 26,000 164
Uny 5,000 65
Yamanouchi Pharmaceutical 3,000 136
Total Japan (Cost $6,554) 8,733
MEXICO 0.8%
Common Stocks 0.8%
Cemex ADR (USD) * 2,800 63
Cemex (Represents 2 Class A
and 1 Class B shares) 3,000 14
Femsa UBD (Represents 1 Class B
and 4 Series D shares) 13,460 44
Gruma (Class B) * 4,987 6
Gruma ADR (USD) 1,062 6
Grupo Industrial Maseca
(Class B) 12,000 6
Grupo Modelo (Class C) 18,000 44
Grupo Televisa GDR (USD) * 1,723 73
Kimberly-Clark de Mexico (Class A) 11,721 37
Telefonos de Mexico (Class L)
ADR (USD) 3,680 315
TV Azteca ADR (USD) 1,100 4
Total Mexico (Cost $502) 612
NETHERLANDS 4.4%
Common Stocks 4.4%
ABN Amro (EUR) 7,096 172
Akzo Nobel (EUR) 520 22
ASM Lithography (EUR) * 4,350 307
CSM (EUR) 2,668 123
Elsevier (EUR) 9,437 90
Equant (EUR) * 790 77
Fortis Nl (EUR) 6,990 241
ING Groep (EUR) 9,770 576
KPN (EUR) 918 47
Philips Electronics (EUR) 3,206 329
Royal Dutch Petroleum (EUR) 4,510 $ 269
STMicroelectronics (EUR) * 2,820 248
TNT Post Groep (EUR) 588 15
Unilever (EUR) 1,608 106
UTD Pan Europe * 560 43
VNU (EUR) 2,480 84
Wolters Kluwer (EUR) 15,142 506
Total Netherlands (Cost $2,836) 3,255
NEW ZEALAND 0.1%
Common Stocks 0.1%
Telecom Corporation of New Zealand 20,800 84
Total New Zealand (Cost $91) 84
NORWAY 0.3%
Common Stocks and Rights 0.3%
Norsk Hydro 1,110 44
Orkla (Class A) 10,472 146
Orkla ASA, Rights, 11/22/99 10,472 20
Total Norway (Cost $251) 210
PORTUGAL 0.2%
Common Stocks 0.2%
Jeronimo Martins (EUR) 5,960 166
Total Portugal (Cost $155) 166
SINGAPORE 0.4%
Common Stocks 0.4%
Singapore Press 4,333 74
Singapore Telecommunications 15,000 28
United Overseas Bank 22,000 167
Total Singapore (Cost $245) 269
SOUTH KOREA 0.3%
Common Stocks 0.3%
Korea Telecom ADR (USD) 2,000 $ 70
Samsung Electronics 701 117
Total South Korea (Cost $104) 187
SPAIN 1.5%
Common Stocks 1.5%
Argentaria Banca de Espana (EUR) 3,080 68
Banco Bilbao Vizcaya (EUR) 3,710 50
Banco Popular Espanol (EUR) 540 36
Banco Santander Central
Hispano (EUR) 16,460 171
Empresa Nacional
de Electricidad (EUR) 5,186 104
Gas Natural (EUR) 2,655 58
Iberdrola (EUR) 8,452 123
Repsol (EUR) 5,171 107
Telefonica (EUR) 23,121 381
Total Spain (Cost $896) 1,098
SWEDEN 2.0%
Common Stocks 2.0%
ABB (Class A) * 898 90
AstraZeneca Group 8,196 370
Atlas Copco (Class B) 2,150 56
Electrolux (Class B) 11,050 220
LM Ericsson Telephone (Class B) 1,220 51
Esselte (Class B) 500 3
Hennes & Mauritz (Class B) 14,800 393
Nordbanken Holding 29,073 170
Sandvik (Class B) 2,985 77
Securitas (Class B) 2,257 34
Total Sweden (Cost $1,145) 1,464
SWITZERLAND 3.5%
Common Stocks 3.5%
ABB * 1,698 $ 171
Adecco 596 361
Credit Suisse Group 790 152
Nestle 320 617
Novartis 311 465
Roche Holdings 35 420
Swisscom 112 34
UBS 1,236 360
Total Switzerland (Cost $2,266) 2,580
TAIWAN 0.3%
Common Stocks 0.3%
Hon Hai Precison * 4,213 68
Taiwan Semiconductor
Manufacturing * 28,070 125
Total Taiwan (Cost $170) 193
UNITED KINGDOM 9.6%
Common Stocks 9.6%
Abbey National 11,000 215
BG 10,058 56
BP Amoco 20,000 194
Cable & Wireless 23,000 269
Cadbury Schweppes 40,000 263
Caradon 11,700 28
Centrica 9,600 27
Compass Group 31,000 331
David S. Smith 9,000 28
Diageo 44,326 446
Electrocomponents 8,000 72
GKN 3,000 48
Glaxo Wellcome 19,000 561
Hays 3,000 34
HSBC Holdings (HKD) 12,800 154
John Laing (Class A) 4,000 19
Kingfisher 41,800 $ 427
Ladbroke Group 15,000 46
National Westminster Bank 39,000 881
Rank Group 6,000 19
Reed International 53,000 311
Rio Tinto 12,000 205
Safeway 11,000 34
Shell Transport & Trading 86,000 659
SmithKline Beecham 45,200 582
Tesco 65,000 193
Tomkins 45,372 154
Unilever 21,178 196
United News & Media 16,400 158
Vodafone Airtouch 37,500 175
Vodafone Airtouch ADR (USD) 5,750 276
Total United Kingdom (Cost $6,109) 7,061
UNITED STATES 41.8%
Common Stocks 41.8%
ACE Limited 10,600 206
AlliedSignal 4,500 256
Altera 5,500 267
Amazon.com * 1,500 106
America Online * 3,400 441
American Home Products 5,700 298
AMFM * 5,400 378
Applied Materials * 2,500 225
Associates First Capital
(Class A) 11,500 420
AT&T Liberty Media Group
(Class A)* 6,300 250
Atlantic Richfield 3,100 289
Automatic Data Processing 6,800 328
Bank of America 5,137 331
Bank of New York 9,000 377
Baxter International 6,200 402
Black & Decker 5,100 219
BMC Software * 5,900 379
Bristol-Myers Squibb 7,000 538
Capital One Financial 6,900 $ 366
Carnival (Class A) 1,700 76
CBS * 5,100 249
Ceridian * 800 18
Cisco Systems * 7,450 551
Citigroup 15,898 860
Citrix Systems * 2,500 160
Coca-Cola 2,400 142
Colgate-Palmolive 5,200 315
Computer Associates 6,900 390
Corning 5,700 448
Costco Wholesale * 3,900 313
Cox Communications (Class A) * 6,000 273
CVS 5,584 243
Danaher 3,600 174
Dayton Hudson 5,900 381
Dell Computer * 9,000 361
Disney 2,000 53
Eli Lilly 3,600 248
EMC * 1,300 95
Fannie Mae 5,500 389
First Data 5,000 228
Firstar 11,000 323
Flextronics International * 2,900 206
Freddie Mac 16,300 881
GE 5,700 773
General Instrument * 4,100 221
Gillette 1,400 51
GTE 2,900 218
Halliburton 3,900 147
Hartford Financial Services Group 1,500 78
Hewlett-Packard 2,700 200
Home Depot 5,000 377
IMS Health 6,800 197
Infinity Broadcasting (Class A) * 5,400 187
Intel 5,300 410
Johnson & Johnson 3,000 314
Jones Apparel Group * 100 $ 3
Kimberly-Clark 2,600 164
Kroger * 9,400 196
Lucent Technologies 4,625 297
Maxim Integrated Products * 3,700 292
McDonald's 4,600 190
MCI WorldCom * 9,734 835
MediaOne Group * 5,000 355
Mellon Financial 8,400 310
Merck 4,600 366
Microsoft * 11,800 1,092
Mobil 3,200 309
Morgan Stanley Dean Witter 2,000 221
Nextel Communications * 2,600 224
NIKE (Class B) 3,400 192
Omnicom 4,300 378
Oracle * 4,700 224
Parametric Technology * 10,000 191
PartnerRe Holdings 2,100 65
PepsiCo 6,500 225
Pfizer 10,400 411
Philip Morris 7,000 176
Procter & Gamble 1,300 136
Qwest Communications
International * 5,000 180
Safeway * 10,800 381
SBC Communications 3,700 188
Schering-Plough 7,600 376
ServiceMaster 7,200 94
Solectron * 4,800 361
Sprint 6,400 476
Starwood Hotels &
Resorts, REIT 4,397 101
Sun Microsystems * 2,100 222
Synopsys * 4,900 305
Teleflex 2,800 95
Texas Instruments 4,200 377
Time Warner 3,600 251
Tyco International 19,264 769
United HealthCare 7,100 $ 367
Unumprovident 2,800 92
USX-Marathon 12,000 350
VERITAS Software * 1,600 173
Wal-Mart 9,100 520
Warnaco Group (Class A) 4,800 68
Warner-Lambert 4,900 391
Waters * 4,500 239
Wellpoint Health Networks * 5,600 325
Wells Fargo 9,100 436
Young & Rubicam 6,100 279
Total United States (Cost $23,518) 30,894
SHORT-TERM INVESTMENTS 5.4%
Money Market Funds 5.4%
Reserve Investment Fund, 5.51% # 3,965,077 3,965
Total Short-Term Investments (Cost $3,965) 3,965
Total Investments in Securities
99.2% of Net Assets (Cost $59,292) $ 73,230
Other Assets Less Liabilities 607
NET ASSETS $ 73,837
----------
Net Assets Consist of:
Accumulated net investment income
- - net of distributions $ 246
Accumulated net realized gain/loss
- - net of distributions 2,186
Net unrealized gain (loss) 13,938
Paid-in-capital applicable to 4,404,111
shares of $0.01 par value capital stock
outstanding; 2,000,000,000 shares
of the Corporation authorized 57,467
NET ASSETS $ 73,837
----------
NET ASSET VALUE PER SHARE $ 16.77
----------
* Non-income producing
# 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
0.02% of net assets.
ADR American depository receipt EUR Euro GDR Global depository receipt HKD Hong
Kong dollar
REIT Real Estate Investment Trust
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
Year
Ended
10/31/99
Investment Income
Income
Dividend (net of foreign taxes of $75) $ 743
Interest 197
Total income 940
Expenses
Investment management 274
Shareholder servicing 199
Custody and accounting 152
Prospectus and shareholder reports 26
Registration 25
Legal and audit 21
Directors 6
Miscellaneous 4
Total expenses 707
Net investment income 233
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 2,345
Foreign currency transactions (18)
Net realized gain (loss) 2,327
Change in net unrealized gain or loss
Securities 9,353
Other assets and liabilities
denominated in foreign currencies (5)
Change in net unrealized gain or loss 9,348
Net realized and unrealized gain (loss) 11,675
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $11,908
-------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global 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 $ 233 $ 299
Net realized gain (loss) 2,327 1,335
Change in net unrealized gain or loss 9,348 2,526
Increase (decrease) in net
assets from operations 11,908 4,160
Distributions to shareholders
Net investment income (317) (153)
Net realized gain (1,428) (1,355)
Decrease in net assets
from distributions (1,745) (1,508)
Capital share transactions *
Shares sold 36,916 28,193
Distributions reinvested 1,702 1,466
Shares redeemed (19,060) (20,215)
Increase (decrease) in
net assets from capital
share transactions 19,558 9,444
Net Assets
Increase (decrease) during period 29,721 12,096
Beginning of period 44,116 32,020
End of period $ 73,837 $ 44,116
--------- ---------
*Share information
Shares sold 2,373 2,017
Distributions reinvested 120 117
Shares redeemed (1,233) (1,452)
Increase (decrease) in
shares outstanding 1,260 682
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global 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 Global Stock Fund (the fund),
a diversified, open-end management investment company, is one of the
portfolios established by the corporation and commenced operations on
December 29, 1995.
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. Credits earned on
daily uninvested cash balances at the custodian 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 $327,000; aggregate
collateral consisted of $341,000 in the securities lending collateral pool.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $35,947,000 and $20,829,000, 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.
At October 31, 1999, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$59,292,000. Net unrealized gain aggregated $13,938,000 at period-end, of
which $16,026,000 related to appreciated investments and $2,088,000 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 $34,000 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 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.
Under the terms of the investment management agreement, the manager is
required to bear any expenses through October 31, 1999, which would cause
the fund's ratio of total expenses to average net assets to exceed 1.20%.
Thereafter, through October 31, 2001, the fund is required to reimburse the
manager for these expenses, provided that average net assets have grown or
expenses have declined sufficiently to allow reimbursement without causing
the fund's ratio of total expenses to average net assets to exceed 1.20%.
Pursuant to this agreement, $120,000 of management fees were not accrued by
the fund for the year ended October 31, 1999, and $185,000 remains
unaccrued from prior periods.
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 $270,000 for the year ended October 31, 1999, of which
$28,000 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 $189,000 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 $1,078,000
with certain affiliates of the manager and paid commissions of $2,000
related thereto.
T. Rowe Price Global Stock Fund
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Board of Directors of T. Rowe Price International Funds, Inc. and
Shareholders of Global Stock Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position
of Global 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
T. Rowe Price Global 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:
o $159,000 from short-term capital gains,
o $1,269,000 from long-term capital gains; subject to the 20% rate gains
category.
For corporate shareholders, $211,000 of the funds distributed income and
short-term capital gains qualified for the dividends-received deduction.
The fund will pass through foreign source income of $454,000 and foreign taxes
paid of $68,000.
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*Access(registered trademark) 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.
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.
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
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900 17th Street N.W.
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T. Rowe Price, Invest with Confidence (registered trademark)
T. Rowe Price Investment Services, Inc., Distributor. F04-051 10/31/99
