<PAGE>
Annual Report
INTERNATIONAL
DISCOVERY
FUND
OCTOBER 31, 1999
T. ROWE PRICE
[LOGO OF T. ROWE PRICE]
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
International Discovery Fund
. The global environment for small-cap stocks was strongly positive, on
balance, during the year ended October 31, 1999.
. Your fund achieved high 6- and 12-month total returns of 37.46% and 82.11%,
significantly outpacing its benchmark indices.
. Although overall European small-cap markets were mixed, several of our
holdings in technology and other sectors appreciated considerably.
. Japan's small-caps enjoyed a powerful rally that lifted valuations on the
type of growth-oriented stocks we prefer.
. Stock selection will remain at the heart of our approach as the
international small-cap market expands.
UPDATES AVAILABLE
For updates on the fund following the end of every calendar quarter, please see
our Web site at www.troweprice.com.
<PAGE>
FELLOW SHAREHOLDERS
The year ended October 31, 1999, proved extremely beneficial to your fund's
international small-capitalization stock strategy. Small-cap markets rallied in
Japan and Europe, and in many cases the best performance was reserved for stocks
with strong growth profiles. Global demand for technology issues also remained
high. Each of these trends contributed to excellent fund results.
As shown in the accompanying table, the fund's 37.46% six-month and 82.11%
12-month total returns exceeded those of the Morgan Stanley Capital
International Europe, Australasia, and Far East (MSCI EAFE) Index by a
significant margin. In this report, we have also added the MSCI EAFE Small Cap
Index and the Salomon Smith Barney Non-U.S. Extended Market Index. The standard
EAFE index is a measure of large-cap stocks; we believe these newer small-cap
indices will more closely represent the markets your fund invests in. Going
forward, we will compare the fund's long-term performance against the Salomon
index in the Performance Comparison chart that appears on page 9 of this report,
as that index has more than 10 years of history. However, we consider the EAFE
Small Cap to be the most appropriate index. Our returns were very attractive
compared with the Salomon index and the EAFE Small Cap's principal gains. (Total
returns are composed of principal gains and dividends: because few stocks in the
index report significant dividends, principal returns are a fair representation
of overall performance in the international small-cap sector.)
A significant portion of fund returns stemmed from a strong small-cap growth
rally in Japan. We trimmed our Japanese holdings somewhat after April, which
proved premature as better-than-expected first quarter GDP growth drove market
gains into August. Fortunately, the portfolio
- ----------------------
PERFORMANCE COMPARISON
- ----------------------------------------------------
Periods Ended 10/31/99 6 Months 12 Months
- ----------------------------------------------------
International Discovery Fund 37.46% 82.11%
....................................................
MSCI EAFE Index 6.87 23.37
....................................................
MSCI EAFE Small Cap Index* 5.03 21.97
....................................................
Salomon Non-U.S.
Extended Market Index 4.76 18.38
....................................................
*Principal return only
1
<PAGE>
- --------------------------------------------
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. Todays investor needs to be aware of global industry trends in
addition to local realities. For the past 20 years, T. Rowe Price and its
international investing arm, Rowe Price-Fleming International, have participated
in the evolution of this new global marketplace and have evolved with it. Rowe
Price-Flemings international sector team works in concert with our regional
portfolio managers, looking at cross-border trends that can create opportunities
and risks in industries such as technology, pharmaceuticals, and financial
services.
Nowhere is this global sector imperative more evident than in
telecommunications. Telecom firms need global scale to compete, and their
fortunes are no longer exclusively tied to local or even regional factors. Hence
Deutsche 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 stocks correlation to
the Italian market declined. The examples of ING Groep and Societe Generale show
that while their stock prices became modestly more correlated to their local
markets, they became even more correlated to other global financial concerns.
"We have sharpened our understanding of global trends that drive stock prices in
the longer term, because we've got to be totally on top of the competitive
forces affecting returns at different companies," said John Ford, chief
investment officer at Rowe Price-Fleming. "For example, what is the relative
attractiveness of a Denso in Japan compared with another auto components company
such as Valeo in France? We've got to be aware of cross-border valuations and
industry trends."
Of course, local factors still dominate the outlook for some companies. The task
for the informed international investor is to appreciate both the global and the
local influences. Rowe Price-Fleming International, with its experienced team of
investment professionals worldwide, is as well positioned as ever to find the
best investment opportunities for you.
[CHART]
INFLUENCE OF GLOBALIZATION ON STOCKS
- -----------------------------------------------------
(Average Changes in Correlation 1997-1998)
Industry Effect Country Effect
Daimler Chrysler (Germany) 0.1 (0.2)
Societe Generale (France) 0.3 0.1
ING Groep (Netherlands) 0.3 0.1
Telecom Italia (Italy) 0.3 (0.0)
Source: Goldman Sachs
2
<PAGE>
still finished the period with a healthy 23% position in that country. Index
performance was more mixed in continental Europe, although the fund's
investments in the region proved beneficial. Our one significant emerging market
allocation, in India, added a lot of value as that market was strong,
particularly in the last quarter of the period. Finally, stock selection was a
positive contributor to performance across all regions.
Although we are pleased with the fund's results over the past year, and believe
further gains are possible, we feel it prudent to point out that gains of this
magnitude are not sustainable. The markets we focus on tend to exhibit
significant volatility, which can result in strong gains or sharp losses in the
short term. For this reason, the fund is most appropriate as a long-term
holding.
MARKET AND PORTFOLIO REVIEW
Europe
In Europe, we maintained a broadly neutral stance relative to the EAFE Small Cap
benchmark. Within the region, we were net sellers in the U.K. but increased
holdings in Sweden and France. We continued to underweight the southern European
markets of Spain and Italy due to a lack of attractive opportunities.
For most of the past year, U.K. small companies sustained a rally as the economy
appeared to be strengthening. However, an interest rate hike by the Bank of
England in early September, intended to preempt inflation, halted the advance.
Fortunately, we booked profits in many cases before rates began to rise. As in
the past several quarters, we also increasingly shifted portfolio emphasis away
from cyclically oriented companies and toward those with better long-term growth
prospects. These decisions accounted in part for the decline in
- ---------------------------
GEOGRAPHIC DIVERSIFICATION
- --------------------------------------------------------------------------------
[CHART]
Europe 46%
Japan 23%
Far East 25%
Other and Reserves 6%
3
<PAGE>
portfolio assets in Europe from 54% six months ago to 46% at the period's end.
Although larger-cap markets in Euroland (the 11 countries that have adopted the
euro) rose slightly, assisted by better economic growth and a stronger euro,
small companies as a whole trended flat to lower. Institutional investors in the
region were still adjusting their portfolios in light of the new currency, an
effect that lasted longer than we anticipated. In many cases this meant selling
small companies domestically to buy larger euro index stocks. The smaller
markets of Netherlands, Ireland, and Spain were particularly affected.
Surprisingly, accelerating economic activity in Euroland during the last six
months also did not provide the typical boost to the small-company markets as a
whole. This was partly because, as in the U.S. market, investor focus was
increasingly on technology issues. Here the number of opportunities continued to
broaden, as there was a very healthy market for initial public offerings (IPOs).
The Neue Markt (New Market) in Germany benefited greatly from this expansion,
although tech stock prices in general were volatile. Many European stocks that
served us well in the first half of the year continued to do well, particularly
companies in the technology and communications areas. Avenir Telecom, a
distributor of mobile phone handsets in France, and Filtronic, an equipment
maker for mobile phone base stations in England, boosted results. The British
market produced other fund leaders, including Pace Micro Tech, which
- ------------------
MARKET PERFORMANCE
- ---------------------------------------------------------------
Six Months Local Local Currency U.S.
Ended 10/31/99 Currency vs. U.S.Dollars Dollars
- ---------------------------------------------------------------
Australia - 6.93% - 3.85% - 10.51%
...............................................................
Brazil 13.05 - 14.50 - 3.34
...............................................................
France 12.67 - 0.65 11.94
...............................................................
Germany 4.10 - 0.65 3.42
...............................................................
Hong Kong - 0.30 - 0.25 - 0.54
...............................................................
India 41.21 - 1.41 39.23
...............................................................
Japan 9.18 14.38 24.88
...............................................................
Mexico - 0.84 - 3.05 - 3.86
...............................................................
Netherlands 0.47 - 0.65 - 0.19
...............................................................
Sweden 20.80 2.10 23.33
...............................................................
United Kingdom - 4.84 1.92 - 3.02
...............................................................
Source: RIMES Online, using MSCI indices.
4
<PAGE>
makes conditional access systems for digital (and potentially interactive)
television, and Eidos, a software house in the entertainment sector. Arm
Holdings, which offers a revolutionary microchip technology, was a top tech
holding. Other strong performers were Navision Software, a Danish supplier of
ERP software, Intershop Communications, which makes e-commerce software,
Neopost, a French supplier of mailroom equipment, and Zapf Creation, a German
toy manufacturer.
Japan
Japanese small companies enjoyed a three-stage rally during the past year. Stage
one, which began in November of last year, was a technical rally in which
oversold positions recovered modestly. A very strong first quarter GDP report in
May this year prompted stage two. Stage three began more recently, driven by
newly launched Japanese investment funds that are specifically trying to invest
in Japan's `new economy'--stocks perceived to benefit from new growth areas,
such as mobile telephones, home PCs, and the Internet.
Lately, the new economy effect has resulted in huge premiums on stocks with real
growth potential, still a rare commodity in Japan. In some cases, these stocks
became overvalued. Consequently, we took profits in this market, and the
country's position in the portfolio slipped from 25% on April 30 to 23% on
October 31. The fund was underweighted in Japan relative to the EAFE Small Cap
Index, which has an unusually high Japan weighting (above 40%). Our stock
selection was effective, however, with the result that Japan was a major
contributor to the fund's investment result.
The portfolio's Japanese holdings remained well diversified. We enjoyed
excellent returns in high-flying Yahoo Japan, the Japanese subsidiary of Yahoo!,
Sumisho Electronic, a selling agent for Silicon Graphics in Japan, and call
center operator Bellsystem24. However,
- ------------------------
INDUSTRY DIVERSIFICATION
- ----------------------------------------------------
Percent of Net Assets
4/30/99 10/31/99
- ----------------------------------------------------
Services 50.2% 55.3%
....................................................
Capital Equipment 15.7 13.7
....................................................
Consumer Goods 14.7 11.6
....................................................
Finance 11.2 6.0
....................................................
Multi-industry 3.1 3.0
....................................................
All Other 1.5 3.5
....................................................
Materials 2.0 1.2
....................................................
Reserves 1.6 5.7
- ----------------------------------------------------
Total 100.0% 100.0%
5
<PAGE>
we made similarly strong gains in nontechnology growth issues such as Sanix,
which supplies pest control services, bowling center operator Round One, and
Hurxley, a regional supplier of Japanese-style box lunches.
The IPO market was quiet but the few available issues commanded premiums,
indicating strong investor demand. While the Japanese equity markets have become
generally more accessible in recent years, listing procedures still require a
company to be mature enough to be profitable. This keeps small-cap IPO volume
lower than we, and apparently the market at large, would prefer.
Other Regions
Our main areas of investment interest outside Europe and Japan were in Australia
and India. India has been a very strong market this year with heavy demand both
from Indian retail investors and foreign investment institutions. Most
foreigners have focused on software stocks, where the fund had some success.
However, consumer growth plays Britannia Inds Demat (foods) and Mcdowell
(spirits) were also rewarding, and media stock Zee Telefilms was again a star
performer.
Over time, we have built our Australia position to 9.6% of assets. As in Europe,
investors focused primarily on high-growth technology stocks. We enjoyed
particularly strong returns in Solution 6 Holdings, a provider of Web-enabled
accountancy software. In the non-technology area, port operator Lang provided us
with good results.
As part of our overall effort at diversification, your fund also held
investments in Hong Kong (4.2% of assets), South Korea (1.3%), Singapore (1.9%),
and New Zealand (1.8%).
INVESTMENT OUTLOOK
Our success during the past year resulted largely from our overall strategy,
which has evolved to focus on stocks with market caps between $100 million and
$1.6 billion that have attractive growth qualities and are in advancing
industries. Your fund has been fully invested in these types of growth stocks
and is well diversified both by industry and by number of holdings. We believe
this is also the right approach for the long term. Looking forward, we expect to
maintain a broadly neutral regional or geographical stance compared with the
6
<PAGE>
MSCI EAFE indices, and will focus instead on adding value at the sector and
stock selection levels. Technology (hardware, software, and Internet) will
continue to be an important area of investment for the fund, as will the life
sciences, media, telecommunications, and support services sectors.
Particularly in these fertile areas of investment, the world is opening up
before us. Given the healthy development of venture capital in Europe, strong
IPO markets in Australia and Europe, and a burgeoning demand for new economy
growth stocks in Japan, opportunities are broadening appreciably. We are hopeful
that in the not-too-distant future the international small-cap market will have
as much scope as the current U.S. small-cap market.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
November 24, 1999
7
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- -------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- -------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
10/31/99
- -------------------------------------------------------------------------------
Zee Telefilms, India 1.9%
...............................................................................
Detron Group, Netherlands 1.6
...............................................................................
Zapf Creation, Germany 1.5
...............................................................................
Neopost, France 1.4
...............................................................................
Solution 6 Holdings, Australia 1.4
- -------------------------------------------------------------------------------
Filtronic, United Kingdom 1.3
...............................................................................
Dialog Semiconductors, United Kingdom 1.3
...............................................................................
Sumisho Electronic, Japan 1.3
...............................................................................
Avenir Telecom, France 1.3
...............................................................................
Pace Micro Tech, United Kingdom 1.2
- -------------------------------------------------------------------------------
GFK, Germany 1.2
...............................................................................
Navision Software, Denmark 1.1
...............................................................................
Yahoo Japan, Japan 1.1
...............................................................................
Lang, Australia 1.1
...............................................................................
Tandberg Televisjo, Norway 1.1
- -------------------------------------------------------------------------------
Aiful, Japan 1.1
...............................................................................
Serco Group, United Kingdom 1.0
...............................................................................
Davnet, Australia 1.0
...............................................................................
Arm Holdings, United Kingdom 1.0
...............................................................................
Eidos, United Kingdom 1.0
- -------------------------------------------------------------------------------
Ipsos, France 1.0
...............................................................................
Cipla, India 1.0
...............................................................................
Pacific Metals, Japan 1.0
...............................................................................
Cegedim, France 0.9
...............................................................................
Europolitan Holdings, Sweden 0.9
- -------------------------------------------------------------------------------
Total 29.7%
Note: Table excludes reserves.
8
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with benchmarks, which may include a broad-
based market index and a peer group average or index. Market indexes do not
include expenses, which are deducted from fund returns as well as mutual fund
averages and indexes.
INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
[CHART]
Salomon
Non-U.S. International
MSCI EAFE Extended Discovery
Index Market Index Fund
10/31/89 10,000 10,000 10,000
10/31/90 8,745 9,437 10,477
10/31/91 9,384 9,284 10,874
10/31/92 8,173 7,538 9,862
10/31/93 11,269 10,301 13,508
10/31/94 12,439 11,469 14,814
10/31/95 12,431 10,930 12,880
10/31/96 13,773 12,329 14,375
10/31/97 14,451 11,930 14,618
10/31/98 15,889 11,826 13,829
10/31/99 19,602 14,000 25,183
- ------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Periods Ended 10/31/99 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
International Discovery Fund 82.11% 20.55% 11.20% 9.68%
................................................................................
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
9
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- ---------------------------------------------------------------------------------------
Year
Ended
10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
NET ASSET VALUE
<S> <C> <C> <C> <C> <C>
Beginning of period $ 14.99 $ 16.11 $ 15.97 $ 14.43 $ 17.63
.....................................................
Investment activities
Net investment income (0.03) 0.05 0.02 0.07 0.10
Net realized and
unrealized gain (loss) 12.09 (0.92) 0.25 1.59 (2.38)
.....................................................
Total from
investment activities 12.06 (0.87) 0.27 1.66 (2.28)
.....................................................
Distributions
Net investment income (0.01) -- (0.07) (0.10) (0.06)
Net realized gain (0.30) (0.25) (0.06) (0.02) (0.87)
.....................................................
Total distributions (0.31) (0.25) (0.13) (0.12) (0.93)
.....................................................
Redemption fees added
to paid-in-capital 0.01 -- -- -- 0.01
.....................................................
NET ASSET VALUE
End of period $ 26.75 $ 14.99 $ 16.11 $ 15.97 $ 14.43
-----------------------------------------------------
Ratios/Supplemental Data
Total return* 82.11% (5.40)% 1.69% 11.60% (13.06)%
........................................................................................
Ratio of total expenses to
average net assets 1.42% 1.47% 1.41% 1.45% 1.50%
........................................................................................
Ratio of net investment
income to average
net assets (0.17)% 0.25% 0.13% 0.40% 0.55%
........................................................................................
Portfolio turnover rate 98.2% 34.2% 72.7% 52.0% 43.5%
........................................................................................
Net assets, end of period
(in thousands) $ 381,462 $189,001 $254,430 $325,639 $325,374
........................................................................................
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions and payment of no redemption or account fees.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
October 31, 1999
- ------------------------
PORTFOLIO OF INVESTMENTS Shares Value
- --------------------------------------------------------------------------------
In thousands
AUSTRALIA 9.6%
Common Stocks 9.6%
Anaconda Nickel 807,000 $ 1,091
................................................................................
Aristocrat Leisure 176,000 1,684
................................................................................
Computershare Limited 374,188 1,360
................................................................................
Davnet 8,548,000 3,925
................................................................................
Energy Development 504,724 2,337
................................................................................
ERG Limited 702,000 2,767
................................................................................
Lang 987,000 4,108
................................................................................
LibertyOne 1,145,000 1,416
................................................................................
Perpetual 143,490 1,848
................................................................................
Program Maintenance Services * 1,134,500 1,338
................................................................................
Reckon 2,515,000 2,326
................................................................................
Sausage Software 1,355,000 2,376
................................................................................
Solution 6 Holdings 1,203,000 5,278
................................................................................
Sonic Healthcare 666,309 2,592
................................................................................
Transurban Group 2,000 2,117
................................................................................
Total Australia (Cost $27,238) 36,563
........
BELGIUM 0.3%
Common Stocks 0.3%
Carestel (EUR) * 40,992 1,035
................................................................................
Total Belgium (Cost $1,369) 1,035
........
BRAZIL 0.0%
Preferred Stocks 0.0%
Telecomunicacoes de Minas Gerais (Class B) 90,565 2
................................................................................
Total Brazil (Cost $3) 2
........
CHINA 0.3%
Common Stocks 0.3%
Guangshen Railway (HKD) 9,524,000 1,091
................................................................................
Total China (Cost $1,159) 1,091
........
11
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
DENMARK 2.0%
Common Stocks 2.0%
GN Store 50,000 $ 1,705
................................................................................
Navision Software 107,200 4,248
................................................................................
Sondagsavisen 27,000 1,490
................................................................................
Total Denmark (Cost $6,513) 7,443
........
FINLAND 2.0%
Common Stocks 2.0%
Aldata Solution (EUR) * 166,376 2,100
................................................................................
Perlos (EUR) * 80,450 1,320
................................................................................
Tampere Telephone (EUR) 218,000 1,417
................................................................................
Teleste (EUR) 328,876 2,785
................................................................................
Total Finland (Cost $7,546) 7,622
........
FRANCE 9.9%
Common Stocks 9.9%
A Novo (EUR) * 43,456 2,514
................................................................................
Alten (EUR) * 5,000 547
................................................................................
Aubay Technology (EUR) 75,239 3,348
................................................................................
Avenir Telecom (EUR) * 51,449 4,789
................................................................................
Boiron (EUR) 33,000 1,961
................................................................................
Cegedim (EUR) 60,000 3,408
................................................................................
Consodata (EUR) 148,089 2,804
................................................................................
CPR (EUR) 38,636 1,926
................................................................................
Groupe Flo (EUR) 37,400 1,613
................................................................................
Ipsos (EUR) * 73,132 3,719
................................................................................
Neopost (EUR) 153,333 5,306
................................................................................
Prologue Software (EUR) 33,234 1,154
................................................................................
Prosodie (EUR) 12,00 1,484
................................................................................
Wavecom (EUR) * 177,900 3,237
................................................................................
Total France (Cost $27,313) 37,810
........
GERMANY 6.5%
Common Stocks 6.5%
Adva (EUR) * 17,930 1,943
................................................................................
12
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Boewe Systec (EUR) 67,390 $ 1,708
................................................................................
GfK (EUR) * 159,381 4,501
................................................................................
Intershop Communications (EUR) * 17,430 2,191
................................................................................
Kamps (EUR) 54,618 3,059
................................................................................
LHS Group (EUR) 39,800 1,124
................................................................................
Pixelpark (EUR) * 69,738 2,479
................................................................................
Rhoen Klinikum (EUR) 59,010 2,266
................................................................................
Zapf Creation (EUR) * 160,262 5,563
................................................................................
Total Germany (Cost $17,385) 24,834
........
HONG KONG 4.2%
Common Stocks and Warrants 4.2%
Esprit Holdings 1,957,431 1,839
................................................................................
Founder Hong Kong 6,226,000 1,984
................................................................................
Global Tech Holdings 2,592,000 1,518
................................................................................
HKR International 180,000 137
................................................................................
HKR International, Warrants, 6/23/00 * 725,200 57
................................................................................
Li & Fung 1,100,000 1,876
................................................................................
Moulin International Holding * 10,819,119 1,045
................................................................................
Sa Sa International Holdings 7,704,000 1,269
................................................................................
Shun Tak Holdings 236,000 41
................................................................................
South China Morning Post 2,915,000 2,158
................................................................................
Top Victory Holdings * 17,780,000 2,334
................................................................................
Varitronix International 829,000 1,787
................................................................................
Total Hong Kong (Cost $14,453) 16,045
........
INDIA 5.8%
Common Stocks 5.8%
Britannia Inds Demat 79,500 1,521
................................................................................
Cipla 123,000 3,666
................................................................................
Global Telephone Systems 192,000 2,370
................................................................................
HCL Infosystems 80,200 805
................................................................................
Hindustan Lever 200 11
................................................................................
Housing Development Finance * 65,000 395
................................................................................
Industrial Credit & Investment 715,750 1,303
................................................................................
Mahanagar Telephone * 2,200 9
................................................................................
13
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Mcdowell 671,800 $ 2,228
................................................................................
Pentafour Software Demat 132,000 1,846
................................................................................
Ranbaxy Laboratories 29,650 598
................................................................................
Zee Telefilms 71,000 7,266
................................................................................
Total India (Cost $11,907) 22,018
............
IRELAND 0.3%
Common Stocks 0.3%
Arnotts (EUR) 165,330 1,261
................................................................................
Total Ireland (Cost $1,488) 1,261
............
ITALY 0.8%
Common Stocks 0.8%
ACEA (EUR) * 284,290 3,164
................................................................................
Total Italy (Cost $2,580) 3,164
............
JAPAN 23.3%
Common Stocks 23.3%
Aeon Credit Service 18,500 2,697
................................................................................
Aiful 26,100 4,055
................................................................................
Asahi Softdrinks 115,000 1,621
................................................................................
Bellsystem24 1,900 1,822
................................................................................
Combi 91,000 1,658
................................................................................
Cresco 17,000 1,451
................................................................................
Don Quijote 4,500 1,122
................................................................................
FCC 67,000 1,266
................................................................................
Fuji Machine 32,000 1,488
................................................................................
Fuji Soft ABC 14,800 1,356
................................................................................
Fujitsu Support and Service 4,000 1,124
................................................................................
Goldcrest 15,000 2,050
................................................................................
Hirose Electric 13,000 2,268
................................................................................
Hokuto 26,000 1,534
................................................................................
Homac 48,600 1,561
................................................................................
Hoya 10,000 719
................................................................................
Hurxley 13,000 933
................................................................................
Internet Initiative Japan (USD) 45,213 2,430
................................................................................
14
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Japan Business Computer 45,600 $ 1,141
................................................................................
JOINT CORPORATION 33,000 1,408
................................................................................
Koha 33,000 2,026
................................................................................
Koyo Seiko 253,000 2,703
................................................................................
Lasertec 16,000 493
................................................................................
Mabuchi Motor 12,000 1,772
................................................................................
Marukyo 50,000 360
................................................................................
Megachips 20,000 1,496
................................................................................
MORITEX CORPORATION 29,000 1,079
................................................................................
Densei-Lambda 48,000 2,302
................................................................................
Net One Systems 118 2,128
................................................................................
Nidec 4,800 932
................................................................................
Nissho Electronics 106,000 3,050
................................................................................
Otsuka Kagu 4,900 1,457
................................................................................
Pacific Metals 1,322,000 3,651
................................................................................
People 23,200 1,533
................................................................................
Plenus 1,000 56
................................................................................
Roland 21,900 666
................................................................................
Round One 194 2,605
................................................................................
Ryohin Keikaku 3,800 731
................................................................................
Santen Pharmaceutical 105,000 2,371
................................................................................
Seiyu 354,000 1,477
................................................................................
Shohkoh Fund 3,500 2,142
................................................................................
Sony Chemicals 25,000 2,218
................................................................................
Sumisho Electronic 128,000 4,898
................................................................................
Sundrug 29,000 1,986
................................................................................
Sysmex 30,900 948
................................................................................
TOC 90,000 653
................................................................................
Toyo Information 47,000 2,375
................................................................................
Union Tool 10,000 1,068
................................................................................
Watami Food Service 25,000 1,738
................................................................................
Yahoo Japan 8 4,220
................................................................................
Total Japan (Cost $45,004) 88,838
.............
NETHERLANDS 3.1%
Common Stocks 3.1%
Ahrend (EUR) 88,124 1,210
................................................................................
15
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Detron Group (EUR) * 483,111 $ 6,098
................................................................................
Draka Holdings (EUR) 28,905 1,041
................................................................................
Endemol Entertainment (EUR) 60,000 2,051
................................................................................
UDT Pan Europe Communications (EUR) 20,245 1,557
................................................................................
Total Netherlands (Cost $14,206) 11,957
.............
NEW ZEALAND 1.8%
Common Stocks 1.8%
Baycorp Holdings 344,000 1,151
................................................................................
Montana Corp. 1,294,500 1,391
................................................................................
Fernz 367,000 847
................................................................................
Sky Network Television 1,084,000 1,648
................................................................................
Warehouse Group 517,900 2,008
................................................................................
Total New Zealand (Cost $6,893) 7,045
.............
NORWAY 1.1%
Common Stocks 1.1%
Tandberg Televisjo 345,443 4,093
................................................................................
Total Norway (Cost $3,325) 4,093
.............
SINGAPORE 1.9%
Common Stocks 1.9%
Avimo Group 821,000 1,456
................................................................................
Delgro 507,000 1,753
................................................................................
GES International 1,591,000 1,387
................................................................................
Pacific Century 365,000 2,106
................................................................................
Sembcorp Logistics Limited 118,000 440
................................................................................
Total Singapore (Cost $6,608) 7,142
.............
SOUTH KOREA 1.3%
Common Stocks and Rights 1.3%
Daou Technology 138,000 2,186
................................................................................
Daou Technology, Rights, 11/9/99 * 31,293 172
................................................................................
Mirae 506,900 2,722
................................................................................
Total South Korea (Cost $3,577) 5,080
.............
16
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
SWEDEN 4.1%
Common Stocks 4.1%
A Com * 98,092 $ 1,133
................................................................................
Assa Abloy 188,619 2,099
................................................................................
Europolitan Holdings 291,535 3,350
................................................................................
HiQ International * 82,600 2,360
................................................................................
Proffice * 175,096 2,119
................................................................................
Semcon 323,000 2,317
................................................................................
Sifo Group (Class B) 330,204 2,088
................................................................................
Total Sweden (Cost $13,158) 15,466
.............
SWITZERLAND 4.5%
Common Stocks 4.5%
Disetronic Holdings 433 1,647
................................................................................
Fantastic (EUR) 39,672 2,733
................................................................................
Kaba Holdings 2,450 1,800
................................................................................
PubliGroupe 4,000 2,934
................................................................................
SEZ Holding 5,000 2,034
................................................................................
Straumann Holding 4,100 1,816
................................................................................
Swisslog Holding 15,560 2,447
................................................................................
Valora Holdings 7,350 1,871
................................................................................
Total Switzerland (Cost $12,140) 17,282
.............
UNITED KINGDOM 11.5%
Common Stocks 11.5%
Arm Holdings 138,400 3,896
................................................................................
Atlantic Telecom 332,120 1,926
................................................................................
Bell Group 851,500 2,057
................................................................................
Dialog Semiconductors (EUR) * 195,985 5,046
................................................................................
Easynet Group 47,000 467
................................................................................
Eidos 54,000 3,776
................................................................................
Electron Boutique 1,500,000 2,385
................................................................................
Filtronic * 273,000 5,056
................................................................................
Scoot.com 3,748,912 2,649
................................................................................
17
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
In thousands
Greggs 55,000 $ 1,807
................................................................................
Icon Public Limited ADR (USD) * 169,400 2,287
................................................................................
Kingston Commerce Hull * 387,080 2,837
................................................................................
N Brown Group 126,340 783
................................................................................
Pace Micro Tech 1,038,000 4,656
................................................................................
Regal Hotel Group 392,000 119
................................................................................
Serco Group 137,500 3,977
................................................................................
Total United Kingdom (Cost $26,937) 43,724
.............
VIETNAM 0.0%
Common Stocks 0.0%
Lazard Vietnam Fund Limited (USD) * 106,600 53
................................................................................
Total Vietnam (Cost $213) 53
.............
SHORT-TERM INVESTMENTS 5.4%
Money Market Funds 5.4%
Reserve Investment Fund, 5.51% # 20,645,325 20,645
................................................................................
Total Short-Term Investments (Cost $20,645) 20,645
.............
Total Investments in Securities
99.7% of Net Assets (Cost $271,660) $ 380,213
Other Assets Less Liabilities 1,249
............
NET ASSETS $ 381,462
------------
* Non-income producing
# Seven day yield
ADR American depository receipt
EUR Euro
HKD Hong Kong dollar
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
October 31, 1999
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $271,660) $ 380,213
Securities lending collateral 28,422
Other assets 5,989
............
Total assets 414,624
............
Liabilities
Obligation to return securities lending collateral 28,422
Other liabilities 4,740
............
Total liabilities 33,162
............
NET ASSETS $ 381,462
------------
Net Assets Consist of:
Accumulated net realized gain/loss - net of distributions $ 43,256
Net unrealized gain (loss) 107,515
Paid-in-capital applicable to 14,262,405 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 230,691
............
NET ASSETS $ 381,462
------------
NET ASSET VALUE PER SHARE $ 26.75
------------
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
- -----------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
10/31/99
Investment Income
Income
Dividend (net of foreign taxes of $240) $ 2,246
Interest 844
............
Total income 3,090
............
Expenses
Investment management 2,637
Shareholder servicing 530
Custody and accounting 211
Prospectus and shareholder reports 66
Legal and audit 24
Registration 24
Directors 6
Miscellaneous 10
............
Total expenses 3,508
............
Net investment income (418)
............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 44,345
Foreign currency transactions (433)
............
Net realized gain (loss) 43,912
............
Change in net unrealized gain or loss
Securities 107,847
Other assets and liabilities
denominated in foreign currencies (44)
............
Change in net unrealized gain or loss 107,803
............
Net realized and unrealized gain (loss) 151,715
............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 151,297
------------
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY 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 $ (418) $ 579
Net realized gain (loss) 43,912 3,019
Change in net unrealized gain or loss 107,803 (14,115)
...........................
Increase (decrease) in net assets from operations 151,297 (10,517)
...........................
Distributions to shareholders
Net investment income (123) --
Net realized gain (3,675) (3,754)
...........................
Decrease in net assets from distributions (3,798) (3,754)
...........................
Capital share transactions*
Shares sold 143,230 28,150
Distributions reinvested 3,583 3,562
Shares redeemed (101,987) (82,937)
Redemption fees received 136 67
...........................
Increase (decrease) in net assets from capital
share transactions 44,962 (51,158)
...........................
Net Assets
Increase (decrease) during period 192,461 (65,429)
Beginning of period 189,001 254,430
...........................
End of period $ 381,462 $ 189,001
---------------------------
*Share information
Shares sold 6,469 1,701
Distributions reinvested 237 237
Shares redeemed (5,049) (5,128)
...........................
Increase (decrease) in shares outstanding 1,657 (3,190)
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
October 31, 1999
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price International Funds, Inc. (the corporation) is registered under
the Investment Company Act of 1940. The International Discovery Fund (the fund),
a diversified, open-end management investment company, is one of the portfolios
established by the corporation and commenced operations on December 30, 1988.
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.
Premiums and Discounts Premiums and discounts on debt securities are amortized
for both financial reporting and tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
22
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
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 $27,026,000; aggregate collateral consisted of $28,422,000 in the
securities lending collateral pool and U.S. government securities valued at
$4,000.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $272,654,000 and $231,982,000, 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 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.
23
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Undistributed net investment income $ 417,000
Undistributed net realized gain (414,000)
Paid-in-capital (3,000)
At October 31, 1999, the cost of investments for federal income tax purposes was
substantially the same as for financial reporting and totaled $271,660,000. Net
unrealized gain aggregated $108,553,000 at period-end, of which $120,421,000
related to appreciated investments and $11,868,000 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 $335,000 was payable at
October 31, 1999. The fee is computed daily and paid monthly, and consists of an
individual fund fee equal to 0.75% 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
excess of $120 billion. At October 31, 1999, and for the year then ended, the
24
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
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 $556,000 for the year ended
October 31, 1999, of which $60,000 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 0.6% of the outstanding shares of the fund at October 31,
1999. For the year then ended, the fund was allocated $4,000 of Spectrum
expenses.
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 $679,000
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 $24,915,000 with
certain affiliates of the manager and paid commissions of $68,000 related
thereto.
25
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of T. Rowe Price International Funds, Inc. and
Shareholders of International Discovery Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of International Discovery 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
26
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY 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 funds distributions to shareholders included $3,675,000 from long-term
capital gains, all of which is subject to the 20% rate gains category.
The fund will pass through foreign source income of $2,333,000 and foreign taxes
paid of $240,000.
- --------------------------------------------------------------------------------
27
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10 p.m.
ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe Price Web
site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services,
Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of order.
28
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS
............................................
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
............................................
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
............................................
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
............................................
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
............................................
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by investing
in the funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
29
<PAGE>
For fund and account information
or to conduct transactions,
24 hours, 7 days a week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
For assistance with your
existing fund account, call:
Shareholder Service Center
1-800-225-5132
To open a brokerage account
or obtain information, call:
1-800-638-5660
Internet address:
www.troweprice.com
Plan Account Lines for retirement
plan participants:
The appropriate 800 number appears
on your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus appropriate to the fund or funds
covered in this report.
Walk-In Investor Centers:
For directions, call 1-800-225-5132
or visit our Web site
Baltimore Area
Downtown
101 East Lombard Street
Owings Mills
Three Financial Center
4515 Painters Mill Road
Boston Area
386 Washington Street
Wellesley
Colorado Springs
4410 ArrowsWest Drive
Los Angeles Area
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
Tampa
4200 West Cypress Street
10th Floor
Washington, D.C.
900 17th Street N.W.
Farragut Square
[LOGO OF T. ROWE PRICE]
T. Rowe Price Investment Services, Inc., Distributor. F38-050 10/31/99
