<PAGE> 1
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
SEMIANNUAL REPORT [T. ROWE PRICE LOGO]
June 30, 1995
DEAR INVESTOR
Your fund finished the first six months of 1995 ahead of its benchmark, the
unmanaged Morgan Stanley Capital International Europe, Australia, and Far East
Index (MSCI EAFE), as shown on this page. The fund's 22% underweighting in
Japan accounted for much of the relatively stronger performance, since the
Japanese market was down 8.3% in dollar terms. A far heavier weighting in
Europe, which composed almost half of the portfolio, contributed to positive
returns as many European economies continued their broad-based recoveries.
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
6 Months
Ended 6/30/95
------------
<S> <C>
International Stock Portfolio 3.9%
MSCI EAFE* 2.6
-----------------------------------------------------------------------
</TABLE>
* Net of withholding taxes.
MARKET PERFORMANCE
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
6 Months Ended 6/30/95
---------------------------------------
Local
Currency
Local vs. U.S. In U.S.
Currency* Dollars** Dollars*
--------------------------------------
<S> <C> <C> <C>
Australia 8.3% -8.6% -1.0%
France 2.5 10.1 12.8
Germany 0.3 12.0 12.4
Hong Kong 13.0 0.0 13.0
Italy -0.8 -0.9 -1.6
Japan -22.0 17.5 -8.3
Netherlands 3.3 11.9 15.6
Norway -2.3 9.7 7.1
Singapore -3.6 4.3 0.6
Spain 5.3 8.7 14.5
Sweden 14.0 2.1 16.3
Switzerland 8.1 13.6 22.8
United Kingdom 8.8 1.7 10.7
-----------------------------------------------------------------------
</TABLE>
* Source: MSCI "Perspective," net of withholding taxes.
** Source: NatWest Securities "Quant."
In certain Pacific markets outside Japan, such as Hong Kong, strong
economies combined with declining interest rates led to excellent stock market
returns measured in U.S. dollars, helping fund performance. Latin America was
the major disappointment during the period. However, our small 4% weighting
there enabled us to avoid many of the losses suffered prior to the return of
investor confidence, which sparked a second quarter rebound in these stocks.
MARKET REVIEW
EUROPEAN stock markets generated powerful returns for U.S. investors, largely
because of the weak dollar. In dollar terms, Germany rose 12.4%, Switzerland a
rollicking 22.8%, France 12.8%, the U.K. 10.7%, and the Netherlands 15.6%, all
net of withholding taxes.
Politics played a role in the U.K., where stocks started the second
quarter strongly but gave up much of their gains in late June during a
leadership challenge to Conservative Party head John Major. His high-risk
strategy of threatening to resign because of differences with fellow party
members paid off in the end. The Conservatives still lag in public opinion
polls, but this is counterbalanced to some extent by the opposition Labour
Party's shift from the far left toward the political center. Several U.K.
stocks, including pharmaceutical giant SMITHKLINE BEECHAM and NATIONAL
WESTMINSTER BANK, are among our major holdings.
In GERMANY, despite the wage demands of the metal processing workers,
inflation remains low near 2% per year as the strong mark has reduced the price
of imports. Subdued inflation, coupled with an improvement in government
finances (which will be boosted after the privatization of Deutsche Telecom in
1996), gives the Bundesbank room to lower short-term interest rates further,
creating a more positive environment for stocks.
Less restrictive German monetary policy will be sweet music for the
recently elected president of FRANCE, Jacques Chirac, who was called the French
Ronald Reagan 10 years ago. Chirac will be eager to avoid monetary tightening
as long as unemployment is painfully above 12%, and easing in Germany reduces
pressure on France to tighten. Chirac may tighten fiscal policy instead by
reducing government spending. Our largest positions in France include EAUX CIE
GENERALE and CARREFOUR.
We maintained a heavy weighting in the NETHERLANDS, where WOLTERS
KLUWER, ELSEVIER, and ROYAL DUTCH PETROLEUM were the three largest holdings in
the portfolio as of June 30. We continue to find good stocks at reasonable
valuations in this country. Overall, European stock valuations have improved
over the past few months because of declining bond yields coupled with steady
earnings growth. We forecast earnings growth of more than 25% in France in
1996, 19% in Germany, and 11% in the U.K.
1
<PAGE> 2
While Europe rallied, JAPAN disappointed international investors once
again. Largely due to the powerful yen and the aftermath of the Kobe
earthquake, the Japanese economy has been in a slump. May industrial production
fell for the third month in a row, although it is up from the previous year,
and inventory buildup has worsened. Deflation is much in the news with the
Consumer Price Index currently in negative territory and wholesale prices
falling 1.8% in May alone. This has had a negative impact on corporate earnings
and caused major problems in the banking system.
GEOGRAPHIC DIVERSIFICATION
------------------------------------------------------------------------
[FIGURE 1]
------------------------------------------------------------------------
However, we do not believe that Japan will plummet into a depression.
The recent cut in the discount rate, high savings rates, government finances,
and increasing liquidity in the financial system should foster economic
expansion from current anemic levels. Stock valuations in selected areas are
also becoming attractive, enhanced by declining yields. Many Japanese
technology stocks now appear cheaper than their U.S. counterparts, and we have
been slowly accumulating shares in this sector. KYOCERA, NIPPON DENSO, TDK, and
CANON are among our major holdings here.
Elsewhere in ASIA, after being pummeled in the aftermath of the Mexican
crisis early in the year, the sounder markets here rebounded smartly when
investors began to view them differently. The strong yen resulted in increased
Japanese investment throughout the region. The markets of HONG KONG and
MALAYSIA were particularly strong, and many Asian currencies appreciated
against the U.S. dollar, fattening returns in dollar terms.
Late in the first half, we trimmed our exposure to Hong Kong because
earnings growth was slowing as real estate prices stagnated. We deployed much
of this cash directly into CHINA, where valuations are extremely attractive.
Our exposure to other markets in the area held steady. Industrial production in
THAILAND is growing at 11% a year, exports are growing at more than 15% a year
in SINGAPORE, and the push to revamp the infrastructure in MALAYSIA has
energized that economy.
Markets in LATIN AMERICA, our lowest regional weighting, turned in the
worst regional performance. Stocks throughout the region nosedived during the
first quarter, then rallied in the second, although they failed to recoup
earlier losses in dollar terms. A degree of stability appears to have returned
to MEXICO, but a sharp recession is likely to linger through the rest of the
year with interest rates high and annual inflation running more than 40%. The
picture in BRAZIL is far brighter as economic reforms continue on track. Stocks
here look cheap to us, and we are also increasing positions in ARGENTINA and
CHILE, whose economic prospects appear promising.
Worldwide, regional stock market returns in dollar terms for the first
six months of 1995 are shown below.
PERFORMANCE BY REGION
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Six months ended
6/30/95
--------------
<S> <C>
Europe 12.9%
Japan - 8.3
Asia 7.0
Latin America -14.0
-----------------------------------------------------------------------
</TABLE>
Source: MSCI "Perspective," net of withholding taxes.
SUMMARY AND OUTLOOK
Perhaps the main theme for the first half was the strengthening in global fixed
income markets, resulting in rising bond prices and lower yields, which
rendered stock market valuations increasingly attractive. Looking ahead, we see
economic growth continuing apace in many regions, brightening prospects for
international equity investors. Increasing stability in world currency markets
should also provide an underpinning to stock markets. Inflation should remain
under control in most regions, minimizing the possibility of rising interest
rates anytime soon.
The moderate appreciation of the dollar against the Japanese yen may
continue over the short term, but we believe the long-term trend of the dollar
is downward. Therefore, we will continue to keep your portfolio largely
unhedged to take full advantage of the stronger foreign currencies we expect.
Regarding regional weightings, we will proceed with a view toward
implementing relatively large positions in Asia outside of Japan, in Latin
America, and in the smaller markets of Europe where we believe the greater
values lie. We are generally optimistic about the prospects for returns in
international markets and expect them to narrow the performance gap with U.S.
stocks during the balance of the year.
Respectfully submitted,
/s/ MARTIN G. WADE
------------------
Martin G. Wade
President
July 27, 1995
2
<PAGE> 3
INDUSTRY DIVERSIFICATION
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
June 30, 1995
Percent of
Net Assets
----------
<S> <C>
Services 20.1%
Capital Equipment 16.2
Finance 14.9
Consumer Goods 14.3
Materials 9.5
Energy 9.4
Multi-Industry 2.8
Reserves 12.8
-----------------------------------------------------------------------
Net Assets 100.0%
=======================================================================
</TABLE>
SECURITY CLASSIFICATION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
June 30, 1995
Percent Market
of Net Cost Value
Percent of Net Assets Assets (000) (000)
--------------------- ------ ----- -----
<S> <C> <C> <C>
Common Stocks, Rights and
Warrants 85.2% $16,711 $17,078
Preferred Stocks and Rights 2.0 387 391
Short-Term Investments 10.5 2,094 2,094
----- ------- -------
Total Investments 97.7 19,192 19,563
Other Assets Less Liabilities 2.3 455 456
---------------------------------------------------------------------------
Net Assets 100.0% $19,647 $20,019
===========================================================================
</TABLE>
TWENTY-FIVE LARGEST HOLDINGS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
June 30, 1995
Percent of
Net Assets
----------
<S> <C>
Wolters Kluwer, Netherlands 2.3%
Elsevier, Netherlands 1.9
Royal Dutch Petroleum, Netherlands 1.3
Kyocera, Japan 1.2
SmithKline Beecham, United Kingdom 1.2
National Westminster Bank, United Kingdom 1.1
Reed International, United Kingdom 1.1
Eaux Cie Generale, France 1.0
BBCBrown Boveri & Cie, Switzerland 0.8
Roche Holdings, Switzerland 0.8
Polygram, Netherlands 0.8
Nippon Denso, Japan 0.7
Nestle, Switzerland 0.7
United Engineers, Malaysia 0.7
TDK, Japan 0.7
Mitsubishi Heavy Industries, Japan 0.7
Norsk Hydro, Norway 0.7
Sumitomo Electric, Japan 0.7
Canon, Japan 0.7
Astra, Sweden 0.6
Gehe, Germany 0.6
Mitsui Fudosan, Japan 0.6
Matsushita Electric Industrial, Japan 0.6
Carrefour, France 0.6
Glaxo, United Kingdom 0.6
---------------------------------------------------------------------------
Total 22.7%
===========================================================================
</TABLE>
AVERAGE ANNUAL COMPOUND TOTAL RETURN
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Periods Ended June 30, 1995
Since Inception
1 Year (3/31/94)
------ ---------
<S> <C>
4.7% 4.6%
===========================================================================
</TABLE>
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Performance does not reflect insurance company contract and other separate
account charges. If these charges were deducted, performance would be lower.
3
<PAGE> 4
PORTFOLIO OF INVESTMENTS
T. Rowe Price International Stock Portfolio / June 30, 1995 (Unaudited)
(values in thousands)
<TABLE>
<CAPTION>
Value
-----
<S> <C>
ARGENTINA -- 0.6%
COMMON STOCKS
550 shs. Banco de Galicia Buenos
Aires 'B' ADR (USD) . $ 9
280 Banco Frances del Rio de la
Plata ADR (USD) . . . 5
353 Buenos Aires Embotelladora
'B' ADR (USD) . . . . 9
170 Enron Global Power &
Pipeline (USD) . . . . 4
3,361 Naviera Perez 'B' . . . . . . 14
1,710 Sociedad Comercial del Plata 4
70 * Sociedad Comercial del Plata
ADR (USD) . . . . . . 2
1,020 Telecom Argentina Stet 'B' . 5
1,470 Telefonica de Argentina 'B'
ADR (USD) . . . . . . 36
380 Transportadora de Gas del
Sur 'B' ADS (USD) . . 4
1,270 YPF Sociedad Anonima 'D'
ADR (USD) . . . . . . 24
TOTAL ARGENTINA 116
AUSTRALIA -- 1.8%
COMMON STOCKS & RIGHTS
10,241 Australia Gas & Light . . . . 32
3,244 Broken Hill Proprietary . . . 40
8,153 Burns Philp & Company . . . . 17
3,000 Coca Cola Amatil . . . . . . 18
750 rts. * Coca Cola Amatil . . . . . . 1
1,006 shs. Lend Lease Corporation . . . 13
3,000 MIM . . . . . . . . . . . 4
4,000 Mayne Nickless . . . . . . . 16
7,012 News Corporation . . . . . . 39
7,000 Publishing & Broadcasting . . 21
18,000 * Sydney Harbor Casino 'A' . . . 19
18,000 * TNT . . . . . . . . . . . . . 24
8,000 Tabcorp Holdings . . . . . . 17
5,500 Western Mining . . . . . . . 30
6,000 Woodside Petroleum . . . . . 24
315
PREFERRED STOCKS
3,517 News Corporation . . . . . . 17
13,000 TNT, Cum. Cv., 8.00% . . . . 18
35
TOTAL AUSTRALIA 350
AUSTRIA -- 0.1%
COMMON STOCKS
180 Flughafen Wien . . . . . . . 10
170 Oesterreichische Elektrizitats 12
22
PREFERRED STOCK
100 shs. Creditanstalt - Bankverein . . 6
TOTAL AUSTRIA 28
BELGIUM -- 1.2%
COMMON STOCKS
170 Fortis . . . . . . . . . . . 18
130 Generale Banque . . . . . . . 42
390 Kredietbank . . . . . . . . . 93
91 UCB . . . . . . . . . . . 91
TOTAL BELGIUM 244
BRAZIL -- 1.7%
COMMON STOCKS
1,700 Brazil Fund (USD) . . . . . . 43
330 * Cesp Cia Energetica de
Sao Paulo (USD) . . . 4
360,000 Companhia Siderurgica Nacional 8
80,000 Eletrobras . . . . . . . . . 21
350,000 Telecomunicacoes Brasilias . 10
86
PREFERRED STOCKS & RIGHTS
3,240,000 Banco Bradesco . . . . . . . 28
58,507 rts. * Banco Bradesco . . . . . . . 1
20,000 shs. Banco Itau . . . . . . . . . 6
50,000 Brahma . . . . . . . . . . . 16
918 * Brahma RegD . . . . . . . . . 1
40,000 Brasmotor . . . . . . . . . . 7
40,000 Cia Cimento Portland Itau . . 12
440 * Cia Energetica de Sao Paulo
ADS (USD) . . . . . . 5
511,000 Cia Energetica Minas Gerais . 10
216 * Cia Energetica Minas Gerais
ADR (USD) . . . . . . 4
28,000 Cia Tecidos Norte de Minas . 9
430,000 Lojas American . . . . . . . 9
80,000 Petrol Brasileiros . . . . . 6
490,000 Telecomunicacoes Brasilias . 16
2,887 Telecomunicacoes Brasilias
ADR (USD) . . . . . . 95
100,000 Telecomunicacoes de
Sao Paulo . . . . . . 12
21,970,000 Usiminas . . . . . . . . . . 25
262
TOTAL BRAZIL 348
CANADA -- 0.4%
COMMON STOCKS
1,620 Alcan Aluminium . . . . . . . 49
800 MacMillan Bloedel . . . . . . 11
640 Royal Bank of Canada . . . . 14
TOTAL CANADA 74
</TABLE>
4
<PAGE> 5
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO / PORTFOLIO OF INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
CHILE -- 0.6%
COMMON STOCKS
141 shs. AFP Providia (USD) . . . . . $ 4
800 Chile Fund (USD) . . . . . . 43
280 Chilectra ADR (USD) . . . . . 14
250 Chilgener ADR (USD) . . . . . 8
450 Compania Cervecerias
Unidas ADS (USD) . . . 12
190 Compania de Telefonos de
Chile 'A' ADR (USD) . 15
964 Empresa Nacional de
Electricidad ADS (USD) 26
239 Enersis ADS (USD) . . . . . . 7
TOTAL CHILE 129
CHINA -- 0.4%
COMMON STOCKS
1,800 Huaneng Power International
'N' ADR (USD) . . . . 33
72,000 Shanghai Petrochemical 'H'
(HKD) . . . . . . . . 23
88,000 Yizheng Chemical Fibre 'H'
(HKD) . . . . . . . . 31
TOTAL CHINA 87
DENMARK -- 0.3%
COMMON STOCKS
330 Den Danske Bank . . . . . . . 21
170 Tele Danmark 'B' . . . . . . 9
410 Unidanmark 'A' . . . . . . . 20
TOTAL DENMARK 50
FINLAND -- 0.2%
COMMON STOCK
620 Nokia Oy 'A' . . . . . . . . 36
FRANCE -- 7.6%
COMMON STOCKS & RIGHTS
520 Accor . . . . . . . . . . . . 69
180 Assurances Generales
de France . . . . . . 6
240 Carrefour . . . . . . . . . . 123
270 Chargeurs . . . . . . . . . . 53
100 rts. * Chargeurs . . . . . . . . . . 2
960 shs. Cie de St. Gobain . . . . . . 116
1,870 Eaux Cie Generale . . . . . . 208
465 Ecco . . . . . . . . . . . 73
900 Elf Aquitaine . . . . . . . . 66
300 GTM Entrepose . . . . . . . . 24
515 LVMH . . . . . . . . . . . 93
90 L'Oreal . . . . . . . . . . . 23
740 Lafarge-Coppee . . . . . . . 58
695 Lapeyre . . . . . . . . . . . 46
400 Legrand . . . . . . . . . . . 63
150 Peugeot . . . . . . . . . . . 21
270 shs. Pinault Printemps . . . . . . 58
600 Poliet . . . . . . . . . . . 54
50 Primagaz . . . . . . . . . . 9
150 Rexel . . . . . . . . . . . . 26
150 Societe Generale de France . . 17
130 Sodexho . . . . . . . . . . . 29
1,190 Television Francaise . . . . 117
1,100 Total 'B' . . . . . . . . . . 66
2,100 Valeo . . . . . . . . . . . . 102
TOTAL FRANCE 1,522
GERMANY -- 4.7%
COMMON STOCKS, RIGHTS & WARRANTS
48 Allianz Holdings . . . . . . 86
38 rts. * Allianz Holdings . . . . . . 3
10 wts. * Allianz Holdings, 3/29/96 . . 9
48 shs. Altana . . . . . . . . . . . 26
50 Ava Allgemeine Handels -
Der Verbr . . . . . . 19
270 Bayer . . . . . . . . . . . . 67
40 Bayerische Motoren Werke . . 22
80 Bilfinger & Berger . . . . . 37
32 Buderus . . . . . . . . . . . 15
1,190 Deutsche Bank . . . . . . . . 58
230 Gehe . . . . . . . . . . . 106
50 Gehe, new . . . . . . . . . . 22
180 Hoechst . . . . . . . . . . . 39
30 Hornbach . . . . . . . . . . 20
348 Mannesmann . . . . . . . . . 106
45 Rhon Klinikum . . . . . . . . 53
1,060 Schering . . . . . . . . . . 74
50 Veba . . . . . . . . . . . 20
160 wts. * Veba, 4/6/98 . . . . . . . . 21
130 shs. Volkswagen . . . . . . . . . 38
80 wts. * Volkswagen International
Finance, 10/27/98 . . 6
847
PREFERRED STOCKS
280 shs. Fielmann . . . . . . . . . . 13
32 Hornbach . . . . . . . . . . 43
67 Krones . . . . . . . . . . . 32
88
TOTAL GERMANY 935
HONG KONG -- 2.0%
COMMON STOCKS
11,200 Great Eagle Holdings . . . . 24
36,454 Hong Kong Land Holdings
(USD) . . . . . . . . 66
363 Hopewell Holdings . . . . . . 1
25,000 Hutchison Whampoa . . . . . . 121
9,000 Swire Pacific 'A' . . . . . . 68
36,000 Wharf Holdings . . . . . . . 117
TOTAL HONG KONG 397
</TABLE>
5
<PAGE> 6
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO / PORTFOLIO OF INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
ITALY -- 1.8%
COMMON STOCKS
3,109 shs. Assicurazioni Generali . . . $ 73
15,480 Banca Fideuram . . . . . . . 18
2,000 Danieli & Company,
savings shares . . . . 6
1,700 Imi . . . . . . . . . . . 10
7,500 Istituto Naz Delle
Assicurazioni . . . . 10
6,000 Italgas . . . . . . . . . . . 16
1,000 RAS . . . . . . . . . . . 11
2,000 Rinascente . . . . . . . . . 11
6,000 SME . . . . . . . . . . . 15
6,000 Sasib, savings shares . . . . 16
17,900 Stet . . . . . . . . . . . 49
7,000 Stet, savings shares . . . . 16
24,966 Telecom Italia . . . . . . . 68
12,697 Telecom Italia,
savings shares . . . . 27
740 Unichem . . . . . . . . . . . 4
TOTAL ITALY . . . . . . . . . . . 350
JAPAN -- 22.0%
COMMON STOCKS
1,000 Advantest . . . . . . . . . . 38
4,000 Alps Electric . . . . . . . . 42
8,000 Amada . . . . . . . . . . . . 69
8,000 Canon . . . . . . . . . . . . 130
4,000 Citizen Watch . . . . . . . . 25
6,000 * Dai Nippon Screen
Manufacturing . . . . 40
2,000 Daifuku . . . . . . . . . . . 22
7,000 Daiichi Pharmaceutical . . . 102
7,000 Daiwa House . . . . . . . . . 107
10 East Japan Railway . . . . . 51
2,000 Fanuc . . . . . . . . . . . . 86
12,000 Hitachi . . . . . . . . . . . 120
7,000 Hitachi Zosen . . . . . . . . 28
3,000 Honda Motor . . . . . . . . . 46
4,000 Inax . . . . . . . . . . . 39
4,000 * Ishihara Sangyo Kaisha . . . . 12
2,000 Ito-Yokado . . . . . . . . . 106
1,000 Kawada Industries . . . . . . 8
3,000 Kokuyo . . . . . . . . . . . 67
11,000 Komatsu . . . . . . . . . . . 84
3,000 Komori . . . . . . . . . . . 61
7,000 Kumagai Gumi . . . . . . . . 29
7,000 Kuraray . . . . . . . . . . . 76
3,000 Kyocera . . . . . . . . . . . 247
5,000 Makita . . . . . . . . . . . 69
7,000 Marui . . . . . . . . . . . . 112
8,000 Matsushita Electric
Industrial . . . . . . 125
4,000 Mitsubishi . . . . . . . . . 46
20,000 Mitsubishi Heavy Industries . 136
5,000 Mitsubishi Paper Mills . . . 26
11,000 shs. Mitsui Fudosan . . . . . . . 126
4,000 Mitsui Petrochemical
Industries . . . . . . 30
2,000 Murata Manufacturing . . . . 76
10,000 NEC . . . . . . . . . . . 110
2,000 National House . . . . . . . 37
8,000 Nippon Denso . . . . . . . . 145
2,000 Nippon Hodo . . . . . . . . . 35
35,000 Nippon Steel . . . . . . . . 114
5,000 Nomura Securities . . . . . . 87
4,000 Pioneer Electronic . . . . . 68
1,000 Sangetsu . . . . . . . . . . 27
3,200 Sankyo . . . . . . . . . . . 74
1,000 Sega Enterprises . . . . . . 36
9,000 Sekisui Chemical . . . . . . 106
6,000 Sekisui House . . . . . . . . 74
1,000 Seven-Eleven Japan . . . . . 72
8,000 Sharp . . . . . . . . . . . . 106
4,000 Shinetsu Chemical . . . . . . 70
2,000 Sony . . . . . . . . . . . 96
13,000 Sumitomo . . . . . . . . . . 118
11,000 Sumitomo Electric . . . . . . 131
4,000 Sumitomo Forestry . . . . . . 67
3,000 TDK . . . . . . . . . . . 137
1,000 Taisho Pharmaceutical . . . . 19
13,000 Teijin . . . . . . . . . . . 62
4,000 Tokio Marine & Fire
Insurance . . . . . . 46
2,000 Tokyo Electronics . . . . . . 69
2,000 Tokyo Steel Manufacturing . . 34
3,000 Toppan Printing . . . . . . . 39
2,000 Yurtec . . . . . . . . . . . 44
TOTAL JAPAN 4,404
MALAYSIA -- 2.8%
COMMON STOCKS & WARRANTS
49,000 Affin Holdings . . . . . . . 86
6,200 wts. * Affin Holdings, 8/22/99 . . . 4
12,000 shs. Aokam Perdana . . . . . . . . 30
21,000 Berjaya Sports Toto . . . . . 37
3,000 wts. * Commerce Asset Holdings,
6/27/98 . . . . . . . 8
41,000 shs. Multi-Purpose Holding . . . . 72
40,000 Renong . . . . . . . . . . . 75
39,000 * Technology Resources
Industries . . . . . . 112
22,000 United Engineers . . . . . . 140
TOTAL MALAYSIA 564
MEXICO -- 1.4%
COMMON STOCKS
4,197 Cemex 'B' . . . . . . . . . . 15
44,282 Cifra 'B' ADR (USD) . . . . . 61
3,147 Fomentos Economico
Mexicano 'B' . . . . . 7
3,550 Gruma 'B' . . . . . . . . . . 10
</TABLE>
6
<PAGE> 7
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO / PORTFOLIO OF INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
MEXICO (CONT'D)
3,650 shs. * Grupo Embotellador de
Mexico PC . . . . . . $ 19
670 Grupo Financiero
Banamex 'B' . . . . . 1
33 Grupo Financiero
Banamex 'L' . . . . . 1
820 * Grupo Financiero
Bancomer 'C' GDS (USD). 5
607 Grupo Financiero
Bancomer 'L' . . . . . 1
13,220 Grupo Industrial Maseca 'B' . 8
4,060 * Grupo Sidek 'B' . . . . . . . 3
1,330 Grupo Televisa PC GDS
(USD) . . . . . . . . 27
780 Panamerican Beverages 'A'
(USD) . . . . . . . . 23
2,526 Telefonos de Mexico 'L' ADS
(USD) . . . . . . . . 75
7,540 Tolmex 'B2' . . . . . . . . . 29
TOTAL MEXICO 285
NETHERLANDS -- 9.4%
COMMON STOCKS
1,460 ABN Amro Holdings . . . . . . 56
1,150 Ahold . . . . . . . . . . . . 41
598 Akzo Nobel . . . . . . . . . 72
2,246 CSM . . . . . . . . . . . 99
31,810 Elsevier . . . . . . . . . . 376
970 Fortis AMEV . . . . . . . . . 53
430 Hagemeyer . . . . . . . . . . 19
2,160 Internationale Nederlanden
Groep . . . . . . . . 119
1,190 Koninklijke PTT Nederland . . 43
320 Nutricia . . . . . . . . . . 22
2,566 Polygram . . . . . . . . . . 152
2,190 Royal Dutch Petroleum . . . . 267
830 Unilever . . . . . . . . . . 108
5,198 Wolters Kluwer . . . . . . . 459
TOTAL NETHERLANDS 1,886
NEW ZEALAND -- 0.9%
COMMON STOCKS
14,000 Air New Zealand 'B' . . . . . 41
9,000 Carter Holt Harvey . . . . . 22
4,000 Fernz . . . . . . . . . . . . 11
11,000 Fletcher Challenge . . . . . 31
12,000 Fletcher Challenge, Forests
Division . . . . . . . 16
3,000 Independent Newspapers . . . 9
13,000 Telecom Corporation of
New Zealand . . . . . 49
TOTAL NEW ZEALAND 179
NORWAY -- 1.4%
COMMON STOCKS
500 Bergesen 'A' . . . . . . . . 11
740 shs. Kvaerner 'A' . . . . . . . . 34
3,187 Norsk Hydro . . . . . . . . . 133
2,140 Orkla 'A' . . . . . . . . . . 96
700 Saga Petroleum 'B' . . . . . 9
TOTAL NORWAY 283
PERU -- 0.1%
COMMON STOCK
2,200 Telefonica de Peru 'B' . . . 4
PORTUGAL -- 0.2%
COMMON STOCK
1,020 Jeronimo Martins . . . . . . 52
SINGAPORE -- 2.2%
COMMON STOCKS & WARRANTS
10,000 DBS Land . . . . . . . . . . 31
4,000 Far East Levingston
Shipbuilding . . . . . . 19
4,000 Jurong Shipyard . . . . . . . 29
5,000 Keppel . . . . . . . . . . . 41
11,000 Neptune Orient Lines . . . . 13
3,000 Overseas Union Bank . . . . . 19
5,000 Overseas Union Enterprises . 30
5,000 Sembawang . . . . . . . . . . 30
4,000 Singapore Airlines . . . . . 37
7,000 Singapore Land . . . . . . . 46
3,000 Singapore Press . . . . . . . 45
600 Singapore Press, new . . . . 9
19,000 United Industrial . . . . . . 18
7,480 United Overseas Bank . . . . 71
2,400 wts. * United Overseas Bank,
6/17/97 . . . . . . . 11
TOTAL SINGAPORE 449
SOUTH KOREA -- 0.3%
COMMON STOCK
1,197 shs. Samsung Electronics GDS
(USD) . . . . . . . . . . 63
SPAIN -- 2.1%
COMMON STOCKS
210 Banco Popular Espanol . . . . 31
1,060 Banco Santander . . . . . . . 42
3,205 Centros Comerciales Pryca . . 59
1,960 Empresa Nacional de
Electricidad . . . . . 97
340 Fomento de Construcciones
y Contra . . . . . . . 29
500 Gas Natural . . . . . . . . . 60
5,350 Iberdrola . . . . . . . . . . 40
1,578 Repsol . . . . . . . . . . . 50
90 Repsol ADR (USD) . . . . . . 3
2,704 Sevillana De Electricidad . . 16
TOTAL SPAIN . . . . . . . . . . . 427
</TABLE>
7
<PAGE> 8
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO / PORTFOLIO OF INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
SWEDEN -- 1.9%
COMMON STOCKS
470 shs. Asea 'A' . . . . . . . . . . $ 41
4,280 Astra 'B' . . . . . . . . . . 129
2,660 Atlas Copco 'B' . . . . . . . 37
1,480 Electrolux 'B' . . . . . . . 67
310 Esselte 'B' . . . . . . . . . 4
600 Hennes & Mauritz 'B' . . . . 35
380 Sandvik 'A' . . . . . . . . . 7
2,730 Sandvik 'B' . . . . . . . . . 50
1,500 Stora Kopparberg 'B' . . . . 20
TOTAL SWEDEN 390
SWITZERLAND -- 3.8%
COMMON STOCKS
163 BBC Brown Boveri & Cie . . . 169
470 CS Holding . . . . . . . . . 43
60 Ciba Geigy . . . . . . . . . 44
137 Nestle . . . . . . . . . . . 143
26 Roche Holdings . . . . . . . 167
120 Sandoz . . . . . . . . . . . 83
38 Schweizerische
Bankgesellschaft . . . 39
190 Schweizerischer Bankverein . 67
TOTAL SWITZERLAND 755
THAILAND -- 0.9%
COMMON STOCKS
1,000 Advanced Information
Service . . . . . . . 15
3,400 Bangkok Bank . . . . . . . . . 37
3,900 Bank of Ayudhya . . . . . . . 19
600 Land & House . . . . . . . . 13
500 Siam Cement . . . . . . . . . 32
2,200 Siam Commercial Bank . . . . 21
2,800 Thai Farmers Bank . . . . . . 27
1,200 United Communications . . . . 17
TOTAL THAILAND 181
UNITED KINGDOM -- 14.4%
COMMON STOCKS
16,000 Abbey National . . . . . . . 118
10,000 Argos . . . . . . . . . . . . 68
13,500 Argyll Group . . . . . . . . 72
41,000 Asda Group . . . . . . . . . 62
3,000 BAA . . . . . . . . . . . 23
11,000 British Gas . . . . . . . . . 51
6,000 British Petroleum . . . . . . 43
16,000 Cable & Wireless . . . . . . 109
12,860 Cadbury Schweppes . . . . . . 93
27,000 Caradon . . . . . . . . . . . 101
7,000 Clyde Petroleum . . . . . . . 5
9,000 Coats Viyella . . . . . . . . 27
3,000 Compass Group . . . . . . . . 18
6,000 David S. Smith . . . . . . . 62
6,100 shs. East Midlands Electricity . . 62
2,000 Eastern Group . . . . . . . . 21
4,000 First National Finance . . . 6
10,000 Glaxo . . . . . . . . . . . . 122
18,000 Grand Metropolitan . . . . . 110
15,000 Guinness . . . . . . . . . . 113
2,000 Heath . . . . . . . . . . . . 6
3,000 Heywood Williams Group . . . 11
8,000 Hillsdown Holdings . . . . . 23
7,000 John Laing 'A' . . . . . . . 23
12,000 Kingfisher . . . . . . . . . 81
13,000 Ladbroke Group . . . . . . . 35
9,000 London Electricity . . . . . 91
26,000 National Westminster Bank . . 226
7,000 RTZ . . . . . . . . . . . 91
13,000 Rank Organisation . . . . . . 82
16,000 Reed International . . . . . 225
5,480 Rolls Royce . . . . . . . . . 15
7,000 Sears . . . . . . . . . . . . 11
10,000 Shell Transport & Trading . . 119
26,000 SmithKline Beecham,
equity units . . . . . 230
2,000 South Western Electricity . . 21
16,000 T & N . . . . . . . . . . . . 43
12,000 Tesco . . . . . . . . . . . . 55
32,500 Tomkins . . . . . . . . . . . 116
11,000 United Newspapers . . . . . . 91
TOTAL UNITED KINGDOM 2,881
SHORT-TERM INVESTMENTS -- 10.5%
COMMERCIAL PAPER
$ 5,000 Cargill Financial Services,
6.10%, 7/3/95 . . . . 5
350,000 Ciba-Geigy, 6.00%, 7/17/95 . 345
150,000 General Electric Capital,
5.975%, 7/11/95 . . . 149
250,000 Hershey Foods, 6.00%,
7/10/95 . . . . . . . 247
100,000 KFW International Finance,
6.00%, 7/7/95 . . . . 100
750,000 Preferred Receivables
Funding, 6.00%, 7/6/95 749
500,000 Walmart Stores, 6.00%,
7/14/95 . . . . . . . 499
TOTAL SHORT-TERM INVESTMENTS 2,094
================================================================
TOTAL INVESTMENTS IN SECURITIES -- 97.7% OF
NET ASSETS (COST $19,192) . . . . . . . . . . . 19,563
================================================================
Other Assets Less Liabilities . . . . . . . . . . 456
NET ASSETS . . . . . . . . . . . $ 20,019
============
================================================================
</TABLE>
* - Non-income producing
(HKD) - Hong Kong dollar
(USD) - U.S. dollar
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
T. Rowe Price International Stock Portfolio / June 30, 1995 (Unaudited)
(in thousands)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $19,192) . . . . . $ 19,563
Receivable for foreign exchange contracts . . . . . . . . . . 2,415
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 1,383
-----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 23,361
-----------
LIABILITIES
Payable for investment securities purchased . . . . . . . . . 915
Payable for foreign exchange contracts . . . . . . . . . . . 2,413
Other liabilities . . . . . . . . . . . . . . . . . . . . . . 14
-----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 3,342
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,019
===========
Net Assets Consist of:
Accumulated net investment income - net of distributions . . $ 165
Accumulated realized gains/losses - net of distributions . . (131)
Net unrealized gain (loss) . . . . . . . . . . . . . . . . . 372
Paid-in-capital applicable to 1,903,561 shares
of $0.0001 par value capital stock outstanding,
1,000,000,000 shares of the Corporation authorized . . . . 19,613
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,019
===========
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . $ 10.52
===========
===============================================================================
</TABLE>
STATEMENT OF OPERATIONS
T. Rowe Price International Stock Portfolio / Six Months Ended June 30, 1995
(Unaudited)
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend (net of foreign taxes of $26) . . . . . . . . . . $ 167
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 69
-----------
Total income . . . . . . . . . . . . . . . . . . . . . . . 236
Expenses
Investment management and administrative . . . . . . . . . 71
-----------
Net investment income . . . . . . . . . . . . . . . . . . . . 165
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities . . . . . . . . . . . . . . . . . . . . . . . . (67)
Foreign currency transactions . . . . . . . . . . . . . . (47)
-----------
Net realized gain (loss) . . . . . . . . . . . . . . . . . (114)
-----------
Change in net unrealized gain or loss on:
Securities . . . . . . . . . . . . . . . . . . . . . . . . 581
Other assets and liabilities denominated in foreign currencies 1
-----------
Change in net unrealized gain or loss . . . . . . . . . . 582
-----------
Net realized and unrealized gain (loss) . . . . . . . . . . . 468
-----------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS . . . . . . $ 633
===========
===================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
T. Rowe Price International Stock Portfolio (Unaudited)
<TABLE>
<CAPTION>
(in thousands)
From March 31, 1994
(Commencement of
Six Months Ended Operations) to
June 30, 1995 December 31, 1994
--------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . $ 165 $ 52
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . (114) (17)
Change in net unrealized gain or loss . . . . . . . . . . . . . . . . 582 (210)
--------- ----------
Increase (decrease) in net assets from operations . . . . . . . . . . 633 (175)
--------- ----------
Distributions to shareholders
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . (52) --
Capital share transactions*
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,104 9,293
Distributions reinvested . . . . . . . . . . . . . . . . . . . . . . 52 --
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (813) (123)
--------- ----------
Increase (decrease) in net assets from capital share transactions . . 10,343 9,170
--------- ----------
Increase (decrease) in net assets . . . . . . . . . . . . . . . . . . . . 10,924 8,995
NET ASSETS
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,095 100
--------- ----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,019 $ 29,095
========= ==========
=====================================================================================================================
*Share information
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,085 895
Shares reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . 5 --
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (79) (12)
--------- ----------
Increase (decrease) in shares outstanding . . . . . . . . . . . . . . . . 1,011 883
========= ==========
=====================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
T. Rowe Price International Stock Portfolio / June 30, 1995 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price International Series, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The International Stock Portfolio (the
fund), a diversified, open-end management investment company, is the sole
portfolio currently established by the Corporation. The shares of the fund are
currently being offered only to separate accounts of certain insurance
companies as an investment medium for both variable annuity contracts and
variable life insurance policies.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange (including NASDAQ) 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. Other equity securities and those listed
securities that are not traded on a particular day are valued at a price within
the limits of the latest bid and asked prices deemed by the Board of Directors,
or by persons delegated by the Board, best to reflect fair value.
Short-term debt securities are valued at their cost which, when combined
with accrued interest, approximates fair value.
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.
B) 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.
C) 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 an 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.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks and enhance performance. The
investment objective, policies, program, risk factors, and following practices
of the fund are described more fully in the fund's Prospectus and Statement of
Additional Information.
A) Emerging Markets - At June 30, 1995, 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.
B) Other - Purchases and sales of portfolio securities, other than short-term
securities, aggregated $11,883,000 and $1,279,000, respectively, for the six
months ended June 30, 1995.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
taxable income. The fund has unused realized capital loss carryforwards for
federal income tax purposes of $1,000, which expire in 2002. The fund intends
to retain gains realized in future periods that may be offset by available
capital loss carryforwards.
At June 30, 1995, the aggregate cost of investments for federal income tax
and financial reporting purposes was $19,192,000 and net unrealized gain
aggregated $371,000, of which $1,123,000 related to appreciated investments and
$752,000 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., Robert Fleming Holdings
Limited, and Jardine Fleming Holdings Limited under a joint venture agreement.
The investment management and administrative agreement between the fund and
the Manager provides for an all-inclusive annual fee, computed daily and paid
monthly, equal to 1.05% of the fund's average daily net assets. Pursuant to
the agreement, investment management, shareholder servicing, transfer agency,
accounting and custody services are provided to the fund and interest, taxes,
brokerage commissions and extraordinary expenses are paid directly by the fund.
During the six months ended June 30, 1995, the fund, in the ordinary course
of business, paid commissions of $2,000 to, and placed security purchase and
sale orders aggregating $524,000 with, certain affiliates of the Manager in
connection with the execution of various portfolio transactions.
11
<PAGE> 12
FINANCIAL HIGHLIGHTS
T. Rowe Price International Stock Portfolio (Unaudited)
<TABLE>
<CAPTION>
For a share outstanding throughout each period
----------------------------------------------
From March 31, 1994
Six Months (Commencement of
Ended Operations) to
June 30, 1995 December 31, 1994
------------ -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . . . . $10.18 $ 10.00
------ -------
Investment Activities
Net investment income . . . . . . . . . . . . . . . . . . 0.09 0.06
Net realized and unrealized gain (loss) . . . . . . . . . 0.30 0.12*
------ ------
Total from Investment Activities . . . . . . . . . . . . 0.39 0.18
------ ------
DISTRIBUTIONS
Net Investment Income . . . . . . . . . . . . . . . . . . (0.05) --
----- ------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . . . . $10.52 $ 10.18
====== =======
======================================================================================================
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . . . . . . . . . . . . . 3.9% 1.8%
Ratio of Expenses to Average Net Assets . . . . . . . . . . . 1.05%+ 1.05%+
Ratio of Net Investment Income to Average Net Assets . . . . 2.44%+ 1.50%+
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . 21.8%+ 4.6%+
Net Assets, End of Period (in thousands) . . . . . . . . . . $20,019 $9,095
======================================================================================================
</TABLE>
+ Annualized.
* The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout the
period. This amount is inconsistent with the Fund's aggregate gains and losses
because of the timing of sales and redemptions of Fund's shares in relation to
fluctuating market values for the investment portfolio.
12
<PAGE> 13
ISP CHART DESCRIPTION 2
[Edgar description: insert geographic diversification pie chart showing Europe
49%, Japan 22%, Far East 9%, Latin America 4%, Other and Reserves 16%]
