<PAGE>
Semiannual Report
INTERNATIONAL
DISCOVERY
FUND
APRIL 30, 2000
[LOGO OF T. ROWE PRICE]
<PAGE>
REPORT HIGHLIGHTS
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International Discovery Fund
. International stock markets soared for much of the six-month period ended
April 30, driven by investor demand for New Economy stocks.
. Your fund posted strong gains, far outdistancing its benchmarks for both the
6- and 12-month periods.
. European and Asian markets (excluding Japan) were the chief beneficiaries of
the technology boom, with Japan quieter after peaking last summer.
. The international small-cap universe broadened, with "new" stock markets
gaining momentum and initial public offerings flourishing.
. The outlook is bright for emerging growth companies, but stock selection,
sector strategy, and investment discipline will be important in these
volatile markets.
UPDATES AVAILABLE
For updates on T. Rowe Price funds following the end of each calendar quarter,
please see our Web site at www.troweprice.com.
<PAGE>
FELLOW SHAREHOLDERS
Global interest in New Economy stocks lifted your fund to strong gains for the
6- and 12-month periods ended April 30. Investors' appetite for small-cap stocks
was undiminished until valuation fears and profit taking sparked a worldwide
sell-off late in the period. Markets in Europe and Asia (outside of Japan) were
the prime beneficiaries of the technology boom, especially the small to mid-size
growth companies we favor.
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PERFORMANCE COMPARISON
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Periods Ended 4/30/00 6 Months 12 Months
--------------------------------------------------------------------------------
International Discovery Fund 59.79% 119.65%
MSCI EAFE Index 6.84 14.17
MSCI EAFE Small Cap Index* -1.45 3.50
Salomon Non-U.S. Extended
Market Index 5.67 10.70
*Principal return only.
The fund's 59.79% six-month and 119.65% 12-month returns significantly
outperformed the returns of the Morgan Stanley Capital International Europe,
Australasia, and Far East (MSCI EAFE) Index. Results also exceeded the MSCI EAFE
Small Cap and the Salomon Smith Barney Non-U.S. Extended Market indices, which
we introduced in the fund's 1999 annual report. Because the standard EAFE index
is a measure of large-cap stocks, these indices more closely represent the kinds
of small-company markets your fund invests in. The Performance Comparison chart
on page 9 of this report compares the fund's performance against the Salomon
index because of that index's longer-term history. However, we consider the MSCI
EAFE Small Cap Index to be a more appropriate benchmark for the fund.
Both stock selection and regional allocation contributed to the fund's strong
showing. Much of the performance can be attributed to strength in technology,
media, and telecommunications companies, and much of the gains came in countries
best equipped for the New Economy: Sweden and Finland in Europe and non-Japanese
Asian countries in the Far East. Last year's portfolio changes in Japan proved
timely as Japanese small-company growth stocks backed off from their robust
returns after peaking in August 1999.
We are pleased with the fund's performance over the past six-month and one-year
periods, but returns of this magnitude are often
1
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accompanied by considerable volatility, as market action late in the reporting
period shows--the fund's triple-digit one-year return masks a 13.77% drop in
April. Both strong gains and sharp losses are possible in the short term, and
for this reason the fund is most appropriate as a long-term holding.
MARKET AND PORTFOLIO REVIEW
Europe
The past six months were generally favorable to small-cap growth stocks in
Europe despite rising interest rates and a weak currency. The falling euro
helped stimulate an export-led recovery on the Continent, and low unemployment
lifted consumer confidence, boosting domestic demand. In the U.K., however, low
unemployment sparked inflation fears, leading to higher interest rates.
As elsewhere in the world, technology, media, and telecom stocks were in the
ascendancy, while Old Economy small-caps lagged. Greater participation by retail
investors and the emergence of active day traders
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T. ROWE PRICE BECOMES SOLE OWNER OF INTERNATIONAL INVESTMENT MANAGER
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As an international investor, you may be aware that the T. Rowe Price
international and global stock and bond funds have always been managed by Rowe
Price-Fleming International, Inc., a joint venture formed in 1979 between T.
Rowe Price Associates and London-based Robert Fleming Holdings, Limited.
On April 11, 2000, T. Rowe Price announced an agreement to purchase the 50% of
the joint venture owned by Flemings, thus becoming the sole owner of the
management company. In due course, the name of Rowe Price-Fleming International
will be changed to reflect its new status.
The change in ownership structure will not affect the investment approach or
operations of our international funds. We expect Rowe Price-Fleming's leadership
and professional staff to remain in place, together with the substantial
resources and expertise built up over the past 20 years. Likewise, there will be
no change in the offices in London, Hong Kong, Tokyo, Singapore, Buenos Aires,
Paris, and Baltimore.
Under the U.S. securities laws, the assignment of the funds' investment
management contract to a new entity is subject to shareholder approval.
Accordingly, after the purchase is concluded later this year, we will set a date
for a shareholder meeting and send you a proxy with voting information.
The formation of Rowe Price-Fleming 20 years ago opened the way for T. Rowe
Price to expand the investment services offered to shareholders and clients. As
an integral part of T. Rowe Price, this very successful international investment
manager will provide significant opportunities to enhance those services.
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GEOGRAPHIC DIVERSIFICATION
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[GRAPH]
Europe 48%
Japan 21%
Other and Reserves 19%
Far East 12%
Based on net assets as of 4/30/00
contributed to buoyant market conditions. The top-performing market was Sweden,
up 53.09% (in U.S. dollars), while the U.K. declined 3.14%.
Our overall European weighting rose from 46% in October to 48% at the end of
April, with allocations to Sweden (6.8%) and Finland (3.9%) rising while France
(6%) declined. Our holdings in the U.K. (12.3%) and Germany (5%) remained
roughly the same, and we continued to underweight southern European markets as
Spain and Italy still lack attractive opportunities. Throughout the region we
sold stocks of technology and telecom highfliers whose valuations were stretched
and purchased shares of companies that offered a better risk/reward profile.
The international small- and mid-cap sector continued to broaden and deepen with
"new" stock markets gaining momentum and initial public offerings (IPOs)
flourishing. Germany's Neuer Markt, which is dominated by technology and telecom
stocks, rose threefold from November 1, 1999, to its peak on March 10, 2000. The
one-year forward price/earnings ratio on the Nemax 50 (a subset of the Neuer
Markt) rose from 43 to 105 from November through March. Similarly, France's
Nouveau Marche grew fivefold to its peak. By comparison, the P/E multiple on the
tech-heavy Nasdaq Composite Index went from 43 to 77 over the same period.
Some of our best gains came from Sweden and Finland, where the world's highest
penetration of mobile telephones and wired Internet connectivity makes those
markets among the best prepared to take advantage of the New Economy. Strong
performances by two of the fund's largest holdings, Enea Data, a Swedish
developer of computer operating systems, and Aldata Solutions, a Finnish maker
of e-commerce software, boosted returns. We increased the fund's holdings of
mobile telephone operators in the region, including Europolitan Holdings in
Sweden, Helsinki Telecom in Finland, and Netcom in Norway.
3
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MARKET PERFORMANCE
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Six Months Local Local Currency U.S.
Ended 4/30/00 Currency vs. U.S. Dollars Dollars
-----------------------------------------------------------------
Australia 10.79% -8.43% 1.44%
Brazil 27.85 7.92 37.98
France 32.23 -13.30 14.64
Germany 33.25 -13.30 15.53
Hong Kong 12.27 -0.25 11.99
India 21.24 -0.61 20.50
Japan 7.07 -3.44 3.39
Mexico 18.45 2.19 21.04
Netherlands 17.19 -13.30 1.60
Sweden 66.38 -7.98 53.09
United Kingdom 1.57 -4.64 -3.14
Source: RIMES Online, using MSCI indices.
Technology and telecom stocks rose sharply in the U.K. as well, led by Dialog
Semiconductor. Although we maintained our U.K. weighting, we sold stocks that
had become overvalued during the tech buying frenzy, including microchip maker
Arm Holdings, software developer Eidos, and telecom companies Kingston
Communications and Atlantic Telecom--all winners last year. We added market
research company Taylor Nelson Sofres, media buyer Aegis Group, and interactive
consumer information provider Scoot.com.
Elsewhere, the Netherlands' media ~company Endemol Entertainment contributed
strongly to fund returns, as did market research companies ~Ipsos (France) and
GfK (Germany), media ~buyer PubliGroupe (Switzerland), and the French
marketing-~information service Consodata. For the most part, the best returns
throughout the region came from tech-related stocks, but a number of non-tech
holdings offered solid gains, including Swedish staffing company Proffice and
German toy maker Zapf Creation. We increased exposure to the energy sector
slightly, adding oil services companies Petroleum Geo-Services (Norway) and
Coflexip (France). E-commerce software maker Intershop (Germany) and Avenir
Telecom (France) were among last year's winners that we sold.
Japan
The Japanese small-company market quieted down after a phenomenal rise during
the previous 12 months. Unemployment remained relatively high and the consumer
sector was weak. Overall, Japanese stocks returned 3.39% in U.S. dollar terms, a
modest rise that disguised a period of considerable volatility. Last summer's
high valuations of New Economy holdings began to unwind, and we used periods of
strength to sell some of our technology stocks, such as
4
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INDUSTRY DIVERSIFICATION
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Percent of Net Assets
10/31/99 4/30/00
-----------------------------------------------------------
Services 55.3% 50.8%
Capital Equipment 13.7 11.7
Consumer Goods 11.6 9.3
Finance 6.0 9.3
Energy 0.9 3.4
Multi-industry 3.0 2.8
All Other 3.8 4.4
Reserves 5.7 8.3
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Total 100.0% 100.0%
network integrator Fujitsu Support & Service. The fund's Japanese weighting fell
during the period to 21% of assets from 23% in October, but the decline was
primarily due to Japanese market underperformance. At one point our stake had
dropped to 15%, but we took advantage of lower prices when the market was weak
to increase the weighting.
New Economy returns were mixed in Japan. Previous market darling Hikari Tsushin,
a mobile phone distributor that is not owned by the fund, fell from grace, while
our holding in Yahoo! subsidiary Yahoo Japan provided excellent returns. We
continued to seek growth outside of the New Economy, but this remains rare in
Japan. Recent acquisitions include aggressive restructuring candidate Nissho
Electronics, Santen Pharmaceutical, and nonbank credit companies Aiful and
Shohkoh Fund.
The Tokyo Stock Exchange joined the worldwide trend toward the creation of new
stock markets by launching the "Mothers" Index for emerging companies in
response to Nasdaq Japan, which should begin operations late this year.
Mothers--short for Market for the High Growth and Emerging Stocks--is designed
to foster rapid company development by encouraging investment in high-growth
companies at an early stage. Like the new markets in Europe and Kosdaq in South
Korea, this index should help broaden opportunities in the international
small-cap market.
Other Regions
Outside of Europe and Japan, India and Australia remained our largest regional
allocations, although weightings in each fell over the period. Our exposure in
India dropped to 4.6% from 5.7% and in Australia to 6% from 9.6%, primarily
because we chose not to increase our holdings as the fund tripled in size.
India's Housing Development Finance, one of our largest holdings, posted a solid
gain, but we have been net sellers of media stock Zee Telefilms. Overall, the
Indian
5
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market rose about 20%. In Australia, where the market was essentially
flat in U.S. dollar terms, our holdings were driven by the New Economy theme.
Data communications provider Davnet was a key performer there.
In keeping with our strategy of broad geographic diversification, your fund also
owned companies in Hong Kong (4.2%), Israel (3%), Singapore (1.5%), and New
Zealand (1%).
INVESTMENT OUTLOOK
The past 18 months have been exceptional for emerging growth stocks
internationally. The rise of the New Economy as embodied by the Internet, mobile
telephones, and new technologies has had a huge impact on global economies and
the investment world. The rapid dissemination of information, new channels of
distribution, shortening product life cycles, and the breaking down of old
barriers are reshaping business, and buoyant market conditions have encouraged
entrepreneurs to embrace a stock market culture. The IPO market has flourished
and opportunities have abounded.
Market volatility in March and April remind us, however, of the risk inherent in
this exciting sector. The rapid sell-off and subsequent price swings mean that
weaker businesses requiring additional equity funding will find it increasingly
difficult to raise money. However, the chain of events that sets a growth
company in motion has changed irreversibly. From seed capital to market, from no
sales to rapid maturation of the sales base, the whole process has speeded up,
and this creates more opportunities in the small- and mid-cap sectors. The
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INTERNATIONAL DISCOVERY FUND CLOSED TO NEW INVESTORS
--------------------------------------------------------------------------------
The International Discovery Fund closed to new investors on March 13, 2000. Fund
assets grew dramatically over the preceding months due to exceptional investment
results and substantial cash flows. The fund's Board of Directors and Investment
Advisory Committee were concerned that a continuation of inflows would threaten
the integrity of the fund's investment strategy and harm the interests of
existing shareholders. Although the universe of international small-company
stocks is both large and growing, trading volumes can be relatively low, and
large amounts of new investment in a short time can impair the fund's ability to
buy and sell appropriate and reasonably priced stocks. We wish to assure you,
however, that the fund continues to accept investment from existing
shareholders, and will also accept new IRA rollovers and defined contribution
retirement plan accounts.
6
<PAGE>
emergence of new markets and indices in Japan and Europe and of a credible
small-cap sector in places such as South Korea, Taiwan, and India is more grist
for the mill.
We believe the outlook for small-company stocks is very healthy. The watchword
for the immediate period ahead is investment discipline, and as always we've
undertaken a comprehensive program of company visits across all regions. We
expect your portfolio to remain fully invested across a diversified range of
emerging growth stocks, concentrated in the key areas of technology,
telecommunications, support services, and life sciences.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
Chairman
/s/ Jonh R. Ford
John R. Ford
President
May 22, 2000
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NEW PRESIDENT OF T. ROWE PRICE INTERNATIONAL FUNDS
After more than 20 years as president of T. Rowe Price International Funds,
Inc., Martin G. Wade has passed the baton to his colleague, John R. Ford. John
Ford has been associated with T. Rowe Price's international investment
management arm since 1984. He currently serves on the Investment Advisory
Committees of all the T. Rowe Price international equity funds.
Mr. Wade was instrumental in the launching of T. Rowe Price's first foreign
stock offering, the International Stock Fund, in 1980, and played a key role
thereafter in the company's increasing presence as an international asset
manager. He remains associated with the International Funds as chairman and is
also a member of the Board of Directors of T. Rowe Price Associates.
7
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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---------------------
PORTFOLIO HIGHLIGHTS
--------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
4/30/00
--------------------------------------------------------------------------------
Dialog Semiconductor, United Kingdom 1.9%
Ubizen, Belgium 1.6
Cybertron Telekom, Austria 1.5
NDS Group, United Kingdom 1.4
Software Darmst, Germany 1.2
--------------------------------------------------------------------------------
IHC Caland, Netherlands 1.2
Teleste, Finland 1.2
Shire Pharmaceuticals Group, United Kingdom 1.2
Coflexip, France 1.1
Coface, France 1.1
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Partner Communications, Israel 1.1
Enea Data, Sweden 1.1
Europolitan Holdings, Sweden 1.0
Housing Development Finance, India 1.0
Gilat Satellite Networks, Israel 1.0
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Aiful, Japan 1.0
Aldata Solutions, Finland 1.0
Nissho Electronics, Japan 0.9
Eyretel, United Kingdom 0.9
NH Hoteles, Spain 0.9
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Parkway Holdings, Singapore 0.9
NICE-Systems, Israel 0.9
Davnet, Australia 0.9
Santen Pharmaceutical, Japan 0.8
Tandberg Televisjo, Norway 0.8
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Total 27.6%
Note: Table excludes reserves.
8
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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-----------------------
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
--------------------------------------------------------------------------------
As of 4/30/00
[GRAPH]
Salomon Non-U.S. International
MSCI EAFE Index Extended Market Index Discovery Fund
Apr-90 10,000 10,000 10,000
Apr-91 10,471 10,473 10,519
Apr-92 9,615 9,172 10,430
Apr-93 11,735 10,751 10,849
Apr-94 13,724 12,600 13,765
Apr-95 14,531 12,468 11,891
Apr-96 16,238 14,267 13,881
Apr-97 16,141 13,293 14,088
Apr-98 19,245 14,710 15,848
Apr-99 21,132 14,935 17,407
Apr-00 24,128 16,533 38,236
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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 4/30/00 1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
International Discovery Fund 119.65% 39.49% 26.31% 14.35%
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Unaudited
--------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
4/30/00 10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $26.75 $14.99 $16.11 $15.97 $14.43 $ 17.63
Investment activities
Net investment
income (loss) 0.02 (0.03) 0.05 0.02 0.07 0.10
Net realized and
unrealized gain (loss) 15.29 12.09 (0.92) 0.25 1.59 (2.38)
Total from
investment activities 15.31 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 (2.81) (0.30) (0.25) (0.06) (0.02) (0.87)
Total distributions (2.81) (0.31) (0.25) (0.13) (0.12) (0.93)
Redemption fees added
to paid-in-capital 0.13 0.01 - - - 0.01
NET ASSET VALUE
End of period $39.38 $26.75 $14.99 $16.11 $15.97 $ 14.43
===============================================================
Ratios/Supplemental Data
Total returnu 59.79% 82.11% (5.40)% 1.69% 11.60% (13.06)%
Ratio of total expenses to
average net assets 1.23%+ 1.42% 1.47% 1.41% 1.45% 1.50%
Ratio of net investment
income (loss) to average
net assets 0.13%+ (0.17)% 0.25% 0.13% 0.40% 0.55%
Portfolio turnover rate 99.8%+ 98.2% 34.2% 72.7% 52.0% 43.5%
Net assets, end of period
(in millions) $1,114 $ 381 $ 189 $ 254 $ 326 $ 325
</TABLE>
u 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.
+ Annualized
The accompanying notes are an integral part of these financial statements.
10
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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Unaudited April 30, 2000
-------------------------
PORTFOLIO OF INVESTMENTS Shares Value
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In thousands
AUSTRALIA 6.0%
Common Stocks 6.0%
Anaconda Nickel 207,000 $ 266
Aristocrat Leisure 804,000 7,170
Axon Instruments * 191,632 112
Circadian Technologies + 2,234,545 4,437
Davnet 6,670,968 9,545
Energy Development 504,724 2,405
ERG * 237,510 1,692
ERG 702,000 3,341
ISIS Communications + 7,381,500 3,707
Lang 862,000 4,027
Mogul Mining 9,810,078 1,089
Orbital Engine 9,436,000 7,715
PowerLan 3,913,400 3,714
Sausage Software 1,572,000 2,714
Solution 6 Holdings 1,388,500 4,250
Sonic Healthcare 2,056,309 6,845
Spike Limited + 1,977,583 1,236
Telemedia Networks International 869,000 2,537
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Total Australia (Cost $69,991) 66,802
---------
AUSTRIA 1.5%
Common Stocks 1.5%
Cybertron Telekom (EUR) 100,000 16,837
---------
Total Austria (Cost $9,626) 16,837
---------
BELGIUM 1.9%
Common Stocks 1.9%
Carestel (EUR) 26,975 411
Mobistar (EUR) * 102,150 3,747
Ubizen (EUR) * 124,764 17,331
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Total Belgium (Cost $30,336) 21,489
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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Shares Value
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In thousands
CHINA 0.7%
Common Stocks 0.7%
Nanjing Panda Electric 12,696,000 $ 5,257
TPV Holdings (HKD) 17,780,000 2,077
Total China (Cost $5,325) ----------
7,334
----------
DENMARK 1.5%
Common Stocks 1.5%
GN Store 100,000 8,117
Navision Software 54,912 4,021
Sondagsavisen 71,000 4,506
----------
Total Denmark (Cost $10,861) 16,644
----------
FINLAND 3.9%
Common Stocks 3.9%
Aldata Solutions (EUR) * 1,455,760 10,654
Comptel (EUR) 147,330 3,330
Helsingin Puhelin (EUR) 100,000 7,900
Rapala Normark (EUR) 1,205,220 6,574
Tampere Telephone (EUR) 218,000 1,625
Teleste (EUR) 502,086 13,214
----------
Total Finland (Cost $25,208) 43,297
----------
FRANCE 6.0%
Common Stocks 6.0%
A Novo (EUR) 25,456 5,610
Aubay Technology (EUR) 46,008 6,650
Boiron (EUR) 33,000 1,645
Cegedim (EUR) 60,000 5,482
Coface (EUR) 131,485 12,121
Coflexip (EUR) 131,000 12,743
CPR (EUR) 38,636 1,408
Euler (EUR) * 100,000 5,273
Groupe Flo (EUR) 1,493 49
Ipsos (EUR) 41,732 4,704
12
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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Shares Value
--------------------------------------------------------------------------------
In thousands
Neopost (EUR) 153,333 $ 4,094
Prologue Software (EUR) 39,880 4,532
Wavecom (EUR) * 33,610 2,460
----------
Total France (Cost $41,989) 66,771
----------
GERMANY 5.0%
Common Stocks 4.8%
Articon Information Systems (EUR) 79,601 6,079
Biodata Information Technology (EUR) * 7,419 2,097
Boewe Systec (EUR) 67,390 1,580
Brokat Infosystem (EUR) 40,000 4,858
ce Consumer Electric (EUR) * 2,272 373
GfK (EUR) * 179,215 7,169
LHS Group (EUR) * 39,800 1,599
QS Communications (EUR) * 497,472 6,377
Software Darmst (EUR) 119,247 13,768
Zapf Creation (EUR) 147,887 9,008
----------
52,908
----------
Preferred Stocks 0.2%
Rhoen-Klinikum (EUR) 59,010 2,548
2,548
----------
Total Germany (Cost $38,909) 55,456
----------
HONG KONG 4.2%
Common Stocks 4.2%
DVB Holdings 3,455,000 1,564
e-Kong Group 13,548,000 2,487
Esprit Holdings 6,859,431 7,309
Global Tech Holdings 1,240,000 1,417
Li & Fung 1,876,000 7,322
Next Media 6,454,000 1,284
Sa Sa International Holdings 5,268,000 920
South China Morning Post 4,675,000 4,982
SUNDAY Communications 16,394,000 3,494
Technology Venture Holdings 8,172,000 3,042
Ultronics International 10,560,000 4,338
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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Shares Value
--------------------------------------------------------------------------------
In thousands
Varitronix International 2,170,000 $ 4,945
Vodatel Networks * 16,380,000 4,059
----------
Total Hong Kong (Cost $53,711) 47,163
----------
INDIA 4.6%
Common Stocks 4.6%
Apollo Hospitals 379,350 2,216
Britannia Industries 79,499 927
Cipla 123,000 2,515
Global E-Com * 552,000 3,340
Global Tele-Systems 192,000 5,256
HCL Infosystems 80,200 661
HDFC Bank 552,000 3,116
Housing Development Finance 1,063,000 11,446
ICICI Bank Limited 858,750 2,651
ICICI Bank Limited ADR (USD) * 119,700 2,065
ICICI Limited 997,938 5,411
McDowell 671,786 1,539
Pentafour Software 132,000 1,934
Zee Telefilms 475,900 7,741
----------
Total India (Cost $36,366) 50,818
----------
ISRAEL 3.0%
Common Stocks 3.0%
Gilat Satellite Networks (USD) * 129,433 11,196
NICE-Systems ADR (USD) * 150,000 9,811
Partner Communications (USD) * 1,134,000 12,119
----------
Total Israel (Cost $48,950) 33,126
----------
ITALY 1.2%
Common Stocks 1.2%
ACEA (EUR) 284,290 4,626
Italdesign-Giugar (EUR) 196,185 1,944
Saipem (EUR) 1,500,000 7,418
----------
Total Italy (Cost $9,909) 13,988
----------
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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Shares Value
--------------------------------------------------------------------------------
In thousands
JAPAN 20.7%
Common Stocks 20.7%
Aeon Credit Service 24,700 $ 1,678
Aiful * 104,400 10,857
Bellsystem24 800 553
Canon Chemicals 309,000 3,032
Combi 235,000 2,720
Cresco 45,360 4,199
Don Quijote 40,700 6,895
FCC 106,000 1,236
Fuji Machine 53,000 3,685
Fuji Soft ABC 25,300 1,499
Goldcrest 80,000 8,703
Hirose Electric 43,500 5,260
Hitachi Cable 882,000 7,520
Hitachi Metals 833,000 6,679
Hokuto 91,200 3,276
Homac 113,000 2,804
Hoya 48,000 4,888
Hurxley 69,600 1,869
Internet Initiative Japan ADR (USD) * 69,557 4,147
Japan Business Computer 74,000 3,453
Joint 229,500 7,968
Koha 75,300 2,858
KOSE 187,800 4,016
Koyo Seiko 959,000 6,659
Kuraya 333,000 2,667
Lasertec 16,000 430
Mabuchi Motor 48,000 5,288
Marukyo 50,000 259
Megachips 48,000 2,937
Mitsukoshi 1,001,000 4,087
Mobilephone Telecommunications 102 2,021
Moritex 49,000 3,674
Nemic Lambda 88,300 1,676
Net One Systems 227 7,755
Nidec (New shares) 24,700 1,936
15
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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Shares Value
--------------------------------------------------------------------------------
In thousands
Nidec 24,700 $ 1,715
Nissho Electronics 300,200 10,283
Otsuka Kagu 3,400 790
Pacific Metals 3,416,000 7,274
Relocation Services 52,000 2,576
Roland 91,900 1,676
Round One 340 1,826
Ryohin Keikaku 24,500 4,548
Santen Pharmaceutical 423,000 9,360
Shimadzu 1,028,000 5,187
Shohkoh Fund 27,930 4,991
Sumisho Electronic 138,000 2,555
Sumitomo Rubber Industries 1,397,000 7,307
Sunkus & Associates 95,980 3,421
TOC 90,000 525
Tomen Electronics 167,000 6,076
Toyo Information 92,000 4,642
Union Tool 10,000 1,357
Watami Food Service 59,300 4,941
Yahoo Japan 8 3,999
Yakult Honsha 638,000 6,556
----------
Total Japan (Cost $199,260) 230,789
----------
LUXEMBOURG 0.1%
Common Stocks 0.1%
Thiel Logistik (EUR) * 14,888 927
----------
Total Luxembourg (Cost $521) 927
----------
NETHERLANDS 2.6%
Common Stocks 2.6%
Detron Group (EUR) 194,297 4,010
Drake Holdings (EUR) 134,305 8,589
IFCO Systems (EUR) * 74,257 1,802
IHC Caland (EUR) 340,000 13,755
SNT Group (EUR) * 24,748 754
----------
Total Netherlands (Cost $25,345) 28,910
----------
16
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
In thousands
NEW ZEALAND 1.0%
Common Stocks 1.0%
Baycorp Holdings 775,000 $ 3,914
Montana 2,040,500 1,982
Sky Network Television 2,409,000 4,796
Warehouse Group 390,904 807
----------
Total New Zealand (Cost $10,243) 11,499
----------
NORWAY 2.5%
Common Stocks and Rights 2.5%
EDB Business Partner ASA 345,338 4,549
EDB Business Partner ASA, Rights * 345,338 90
Netcom 194,000 7,688
Petroleum Geo-Services ASA 400,000 6,251
Tandberg Televisjo 1,029,265 9,306
----------
Total Norway (Cost $33,208) 27,884
----------
SINGAPORE 1.5%
Common Stocks 1.5%
Avimo Group 566,000 1,021
Delgro 507,000 1,248
GES International 3,165,000 3,895
Parkway Holdings 3,513,000 10,087
----------
Total Singapore (Cost $16,931) 16,251
----------
SOUTH KOREA 0.6%
Common Stocks 0.6%
Daou Technology 119,628 1,725
Mirae 216,900 1,122
Opicom 125,800 3,831
----------
Total South Korea (Cost $10,214) 6,678
----------
SPAIN 0.9%
Common Stocks 0.9%
NH Hoteles (EUR) 900,000 10,105
----------
Total Spain (Cost $10,730) 10,105
----------
17
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
In thousands
SWEDEN 6.8%
Common Stocks 6.8%
A-Com * 347,691 $ 4,266
Arkivator 155,000 7,364
Assa Abloy 188,619 3,829
Bergman & Beving 500,000 6,079
Enea Data 66,900 11,782
Entra Data 289,820 9,212
Europolitan Holdings 754,535 11,529
Proffice 370,996 7,862
Semcon 459,950 7,156
Sifo Group (Class B) 528,326 6,776
---------
Total Sweden (Cost $51,349) 75,855
---------
SWITZERLAND 2.1%
Common Stocks 2.1%
Disetronic Holdings 433 2,498
Kaba Holdings 2,450 2,813
PubliGroupe 7,030 5,422
Straumann Holding 4,100 4,413
Swisslog Holding 15,560 6,839
Valora Holdings 7,350 1,909
---------
Total Switzerland (Cost $11,451) 23,894
---------
TAIWAN 0.9%
Common Stocks 0.9%
Hitron Technology 806,000 5,164
WYSE Technology Taiwan 2,439,000 5,261
---------
Total Taiwan (Cost $13,362) 10,425
---------
UNITED KINGDOM 12.3%
Common Stocks 12.3%
Aegis Group 1,744,000 4,752
Baltimore Technologies 62,800 6,326
Bell Group 851,500 2,917
18
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
In thousands
Dialog 6,000,000 $ 8,688
Dialog Semiconductor 194,707 21,418
Eyretel 4,416,000 10,176
Galen Holdings 750,935 7,225
Greggs 55,000 1,798
Icon Public Limited ADR (USD) * 169,400 2,361
JSB Software Technologies 135,800 3,436
lastminute.com * 1,430,950 4,790
Lynx Group 2,356,000 6,786
N Brown Group 126,340 1,235
NDS Group ADR (USD) * 273,800 15,110
Pace Micro Technology 519,400 5,944
royalblue 320,000 6,477
Scoot.com 137,317 363
Serco Group 825,000 5,896
Shire Pharmaceuticals Group 900,000 12,836
Taylor Nelson Sofres 2,099,500 8,172
----------
Total United Kingdom (Cost $131,707) 136,706
----------
VIETNAM 0.0%
Common Stocks 0.0%
Lazard Vietnam Fund Limited (USD) * 106,600 111
----------
Total Vietnam (Cost $213) 111
----------
UNITED STATES 0.2%
Common Stocks 0.2%
LookSmart (AUD) 1,583,907 1,878
----------
Total United States (Cost $1,830) 1,878
----------
SHORT-TERM INVESTMENTS 7.8%
Money Market Funds 7.8%
Reserve Investment Fund, 6.18% # 86,847,467 86,847
----------
Total Short-Term Investments (Cost $86,847) 86,847
----------
19
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Value
--------------------------------------------------------------------------------
In thousands
Total Investments in Securities
99.5% of Net Assets (Cost $984,392) $1,108,484
Other Assets Less Liabilities 5,537
----------
NET ASSETS $1,114,021
==========
* Non-income producing
# Seven-day yield
+ Affiliated company
ADR American depository receipt
AUD Australian dollar
HKD Hong kong dollar
USD U.S. dollar
EUR Euro
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Unaudited April 30, 2000
--------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $984,392) $1,108,484
Securities lending collateral 133,399
Other assets 60,054
----------
Total assets 1,301,937
----------
Liabilities
Obligation to return securities lending collateral 133,399
Other liabilities 54,517
----------
Total liabilities 187,916
----------
NET ASSETS $1,114,021
==========
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 578
Accumulated net realized gain/loss - net of distributions 194,983
Net unrealized gain (loss) 122,551
Paid-in-capital applicable to 28,286,040 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 795,909
----------
NET ASSETS $1,114,021
==========
NET ASSET VALUE PER SHARE $ 39.38
==========
The accompanying notes are an integral part of these financial statements.
21
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
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Unaudited
------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
In thousands
6 Months
Ended
4/30/00
Investment Income (Loss)
Income
Interest $ 3,860
Dividend (net of foreign taxes of $177) 2,039
Securities lending 262
---------
Total income 6,161
---------
Expenses
Investment management 4,822
Shareholder servicing 489
Custody and accounting 182
Registration 34
Prospectus and shareholder reports 24
Legal and audit 22
Directors 3
Miscellaneous 8
---------
Total expenses 5,584
Expenses paid indirectly (1)
---------
Net expenses 5,583
---------
Net investment income (loss) 578
---------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (net of foreign taxes of $1,890) 199,492
Foreign currency transactions (1,449)
---------
Net realized gain (loss) 198,043
---------
Change in net unrealized gain or loss
Securities (net of deferred foreign taxes of $419) 15,120
Other assets and liabilities
denominated in foreign currencies (84)
---------
Change in net unrealized gain or loss 15,036
---------
Net realized and unrealized gain (loss) 213,079
---------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 213,657
=========
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Unaudited
------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
4/30/00 10/31/99
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 578 $ (418)
Net realized gain (loss) 198,043 43,912
Change in net unrealized gain or loss 15,036 107,803
----------------------------
Increase (decrease) in net assets from operations 213,657 151,297
----------------------------
Distributions to shareholders
Net investment income - (123)
Net realized gain (46,316) (3,675)
----------------------------
Decrease in net assets from distributions (46,316) (3,798)
----------------------------
Capital share transactions *
Shares sold 1,006,258 143,230
Distributions reinvested 44,298 3,583
Shares redeemed (487,169) (101,987)
Redemption fees received 1,831 136
----------------------------
Increase (decrease) in net assets from capital
share transactions 565,218 44,962
----------------------------
Net Assets
Increase (decrease) during period 732,559 192,461
Beginning of period 381,462 189,001
----------------------------
End of period $ 1,114,021 $ 381,462
============================
*Share information
Shares sold 24,752 6,469
Distributions reinvested 1,347 237
Shares redeemed (12,075) (5,049)
----------------------------
Increase (decrease) in shares outstanding 14,024 1,657
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
Unaudited April 30, 2000
-------------------------------
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 fund seeks long-term growth of capital by investing primarily in the common
stocks of rapidly growing, small- to medium-sized companies outside the U.S.
The accompanying financial statements are prepared in accordance with generally
accepted accounting principles for the investment company industry; these
principles may require the use of estimates by fund management.
Valuation Equity securities are valued at the last quoted sales price at the
time the valuations are made. A security which is listed or traded on more than
one exchange is valued at the quotation on the exchange determined to be the
primary market for such security.
Investments in mutual funds are valued at the closing net asset value per share
of the mutual fund on the day of valuation.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the outstanding
voting securities.
Currency Translation Assets and liabilities are translated into U.S. dollars at
the prevailing exchange rate at the end of the reporting period. Purchases and
sales of securities and income and expenses are translated into U.S. dollars at
the prevailing exchange rate on the dates of such transactions. The effect of
24
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
changes in foreign exchange rates on realized and unrealized security gains and
losses is reflected as a component of such gains and losses.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian and 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.
Emerging Markets At April 30, 2000, the fund held investments in securities of
companies located in emerging markets. Future economic or political developments
could adversely affect the liquidity or value, or both, of such securities.
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 April 30, 2000, the value of loaned securities
was $129,002,000; aggregate collateral consisted of $133,399,000 in the
securities lending collateral pool and U.S. government securities valued at
$476,000.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $830,295,000 and $385,135,000, respectively, for the six
months ended April 30, 2000.
25
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T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
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.
At April 30, 2000, the cost of investments for federal income tax purposes was
substantially the same as for financial reporting and totaled $984,392,000. Net
unrealized gain aggregated $124,092,000 at period-end, of which $247,368,000
related to appreciated investments and $123,276,000 to depreciated investments.
NOTE 4 - FOREIGN TAXES
The fund is subject to foreign income taxes imposed by certain countries in
which it invests. Foreign income taxes are accrued by the fund and withheld from
dividend and interest income.
Gains realized upon disposition of Indian securities held by the fund are
subject to capital gains tax in India. The tax on realized gains is paid prior
to repatriation of sales proceeds. A deferred tax liability is accrued on net
unrealized gains and totaled $1,452,000 at April 30, 2000.
NOTE 5 - 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. Price Associates has entered into an agreement with Fleming
to purchase Fleming's interest in the manager.
The investment management agreement between the fund and the manager provides
for an annual investment management fee, of which $1,044,000 was payable at
April 30, 2000. 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 April 30, 2000, and for the six months 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.
26
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
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 $439,000 for the six months
ended April 30, 2000, of which $56,000 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 0.3% of the outstanding shares of the fund at April 30, 2000.
For the six months then ended, the fund was allocated $6,000 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 six months ended April 30, 2000, totaled
$3,858,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the six months ended April 30, 2000, the fund, in the ordinary course of
business, placed security purchase and sale orders aggregating $72,111,000 with
certain affiliates of the manager and paid commissions of $112,000 related
thereto.
27
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------------------
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. F38-051 4/30/00
