Semiannual Report
June 30, 1997
International Stock Portfolio
Invest With Confidence(registered trademark)
T. Rowe Price
This report is authorized for distribution only to those who
have received a copy of the portfolio's prospectus.
T. Rowe Price Investment Services, Inc., Distributor
T. Rowe Price
International Stock Portfolio
Semiannual Report
June 30, 1997
Dear Investor
European and Latin American stock markets posted robust returns
in U.S. dollar terms during the past six months. However, a
strong dollar dampened returns for U.S. investors in many
regions. Despite the unfavorable currency translation, your fund
registered impressive returns during the half.
Performance Comparison
Periods Ended 6/30/97 6 Months 12 Months
_________________________________________________________
International
Stock Portfolio 11.63% 17.43%
MSCI EAFE 11.36 13.16
Lipper Variable Annuity
Underlying International
Funds Average 12.13 16.75
The T. Rowe Price International Stock Portfolio maintained its
steady progress during the six months ended June 30, 1997. As
can be seen from the table, results for this period were
slightly ahead of the unmanaged MSCI Europe, Australia, Far East
(EAFE) index. The most important reasons for this outperformance
were the fund's underweighting in the comparatively
disappointing Japanese stock market and a significant position
in the exuberant markets of Latin America-particularly
Brazil-which are not components of the EAFE index. Fund
performance slightly trailed the peer group average.
Over the 12-month period the fund's returns were well ahead of
the EAFE index and also surpassed the average for Lipper peer
group funds. Again, the country weightings compared with theirs
were beneficial-particularly the underweighting in Japan-and
stock selection in most markets was also positive.
INVESTMENT REVIEW
Europe
Several European stock markets got off to a strong start this
year, although returns to the U.S. investor were moderated by
the strength of the dollar. The core continental European
economies are struggling at the moment, but looser monetary
policies and weakening currencies should help them recover.
In Germany a combination of low growth and high labor costs
boosted unemployment to record levels. This in turn has raised
questions as to whether the fiscal deficit can meet the
Maastricht criteria, but Germany seems as committed as ever to
European Monetary Union and a single currency. Despite the dull
economy, the stock market has been strong, led by financials
such as Deutsche Bank and manufacturers such as Volkswagen; the
latter has been helped by a weaker deutschemark and the growing
focus on shareholder value.
Market Performance
Six Months Local
Local Currency vs. U.S.
Ended 6/30/97 Currency U.S. Dollars Dollars
_____________________________________________________________
France 23.54% -11.45% 9.40%
Germany 32.27 -11.56 16.98
Hong Kong 9.94 -0.16 9.76
Italy 24.92 -10.64 11.63
Japan 7.61 1.43 9.16
Mexico 30.76 -0.58 30.00
Netherlands 36.37 -11.72 20.39
Singapore -5.40 -2.17 -7.45
Sweden 30.11 -11.70 14.89
Switzerland 42.90 -7.90 31.61
United Kingdom 12.31 -2.75 9.22
Source: FAME Information Services, Inc., using MSCI indices.
In France, an unexpected defeat for Chirac's party brought the
Socialists to power. The French economy has been subdued, with
unemployment remaining stubbornly high and consumer sentiment
depressed. The government's commitment to a single currency is
now somewhat in doubt, but it will prove difficult to stimulate
the economy without breaching the Maastricht guidelines for
economic convergence. It is possible that concerns about high
unemployment could lead to a relaxation of the fiscal restraints
required for EMU membership, making it easier for other
countries to join. Given these uncertainties, the stock market
has been dull, but core holdings such as the supermarket chain
Carrefour and conglomerate Eaux Cie Generale were able to make
further progress.
The picture looks somewhat brighter in Italy. Improvement in the
debt position is vital for the future of this economy, and the
outlook here is more encouraging following recent legislation
and public sector wage discipline. The lira has now returned to
the European exchange rate mechanism, but it is still an open
question whether Italy will be in the first round of countries
to join the single currency.
In the U.K. the most important news was the General Election on
May 1, which brought the Labour Party under Mr. Blair to power
with a massive majority. Given the strength of the economy, it
was surprising to many observers that the electorate rejected
the Conservative Party so comprehensively. The explanation lies
in a deep desire for change after 17 years of Conservative rule,
a sense that Mr. Major's party was divided over Europe, and, in
contrast to previous elections, a much more professional and
disciplined campaign by the Labour Party.
The new government will at least inherit an economy in good
shape with a strong currency, falling unemployment, and
inflation at low levels. The administration has already
surprised and pleased financial markets by giving more
independence to the Bank of England in setting monetary policy,
and its much more positive attitude toward Europe has been well
received on the Continent.
The stock market greeted the incoming government with enthusiasm
and pushed on to new highs. International growth stocks such as
SmithKline Beecham and Glaxo Wellcome have performed well, and
the conversion and public offerings of building societies
(mutually owned savings associations) stimulated interest in
financial stocks. The announced merger between the food and
drinks group Grand Metropolitan, which owns Burger King, and the
leading wines and spirits company Guinness was welcomed by
investors. Both stocks were in our portfolio during the half and
each moved sharply ahead after the announcement.
Geographic Diversification
Latin Other and
Europe Japan Far East America Reserves
54% 23% 11% 8% 4%
Based on net assets as of 6/30/97.
Some of the best performance came from Europe's smaller bourses,
with Switzerland powering ahead as investors belatedly
appreciated that multinationals such as Novartis and Roche
Holdings-both major pharmaceutical groups-were well positioned
following an unprecedented period of Swiss franc weakness. In
Spain, where ambition to qualify for Monetary Union is driving
widespread reforms, the market also performed well. The sharp
rise in stock prices allowed us to take profits in some of our
positions, including oil company Repsol.
Far East
Stock market performance in the Pacific region was initially
dragged down by the poor performance of Japan during the first
few months of the year. However, Japanese stocks rebounded
sharply in May and June, allowing this market to post solid
returns for the first half, particularly in dollar terms. The
Japanese economy is now performing much better. Fourth quarter
GDP growth of 2.9% was one of the fastest among the leading
industrialized countries. Industrial production continued strong
into the first quarter of this year with inventories declining
and shipments improving significantly. These broad statistics,
however, mask a tale of two economies: domestic consumption
remains poor with the retail and service sectors depressed, but
exports are buoyant aided by the weakness of the yen, which
prevailed throughout 1996.
The loan problems facing Japanese banks have not been helped by
several real estate transactions in Tokyo at prices some 80%
below the peak of the bubble years. However, there are signs
that commercial property prices are stabilizing at this level,
and the stronger banks can survive provided that the valuation
of their loan collateral deteriorates no further.
Our strategy in the Tokyo market favored the export and
technology sectors with stocks such as NEC (communications and
computers), Kyocera (ceramic packaging), and Canon (cameras and
office equipment) among our largest positions. In contrast, your
portfolio had no exposure to the bank stocks-the largest sector
in the index itself. Positive stock selection in this market
made a major contribution to the fund's good performance.
Elsewhere in the Pacific, many countries that have traditionally
linked their currencies to the U.S. dollar recently let them
slide in value, in what amounted to de facto devaluations.
Particularly affected were the currencies of Thailand, the
Philippines, Indonesia, and Malaysia, where your fund has little
or no exposure. The stock market in Thailand was an especially
poor performer in the half. The problem here centered on a
significant oversupply of commercial property, and subsequent
price declines have led to the virtual bankruptcy of one of
Thailand's largest finance companies. Export performance in the
region was also disappointing with countries such as Singapore
and South Korea hurt by the downturn in the electronic component
cycle.
Sector Diversification
Percent of Percent of
Net Assets Net Assets
12/31/96 6/30/97
_____________________________________________________
Services 26.0% 25.8%
Consumer Goods 15.5 18.0
Finance 16.3 16.3
Capital Equipment 12.7 13.9
Energy 10.1 10.7
Materials 7.8 7.4
Multi-industry 3.8 3.6
Miscellaneous 0.1 0.2
Reserves 7.7 4.1
_____________________________________________________
Total 100.0% 100.0%
Turning from economics to politics, the major news was unquestionably the
handover of Hong Kong to China, along with the death of China's paramount
leader Deng Xiaoping. Although Deng held no official posts at the time of his
death, his influence on Chinese history has been immense. Inheriting a
backward economy at the time of his succession from Mao, Deng's policy of
rapid modernization turned the economy into a superpower. In sharp contrast
to previous history, the transfer of power has gone smoothly with Xiang
Zemin, Deng's hand-picked successor, assuming control.
Continued political stability and an open-door policy are essential for
confidence in Hong Kong now that it has reverted to Chinese sovereignty. The
Hong Kong stock market generated a return of nearly 10% during the six months
ended June 30, and we feel confident that the transition to Chinese rule will
not affect Hong Kong's position as the dynamic financial center of the
region.
Latin America
As usual, Latin America provided much of the excitement during the half.
Brazil was up sharply despite fears that a deteriorating trade deficit would
put downward pressure on the currency. The government should rise to these
challenges, and investors have been impressed by its commitment to reform in
areas such as privatization and the deregulation of public sector tariffs.
Our positions in the Brazilian market are built around the telecommunications
company, Telecomunicacoes Brasileiras, which has outperformed handsomely.
Although Brazil dominates our Latin American holdings, other countries in the
region have also moved along the path of reform, and their stock markets have
made a useful contribution to fund performance.
Mexico also returned approximately 30% during the past six months, both in
local currency and dollar terms, despite a fragile banking system and
negative consumer sentiment due to lower real wages. Mexico's stock market
was driven by blue chips such as telecommunications company Telefonos de
Mexico and retailer Cifra.
The stock markets of Argentina and Chile have also been rewarding. Both
countries have shown a mix of strong economic recovery, inflation under much
better control, and a commitment to economic reform that has attracted the
international investor.
INVESTMENT POLICY AND OUTLOOK
We increased our allocation to Japan by three percentage points since
year-end. Our new investments were in the domestic sector, which has been
neglected recently while the exporters and technology stocks enjoyed the
spotlight. Our weighting there, however, is still relatively low, and there
are signs that this market has passed its worst. To complement this modest
increase, we have been shaving positions in better-performing markets of
Southeast Asia, including Hong Kong. Our holdings in Thailand and South Korea
are negligible, but we are not yet convinced that the problems in each
country have been fully addressed.
A little more than half the portfolio is in Europe where we can find an
attractive combination of economies that are beginning to recover, a benign
interest rate environment, and an increasing focus on shareholder value. We
have been reducing holdings in the U.K. where the economic recovery is mature
and the stock market is beginning to look overextended. Valuations look more
reasonable in continental Europe where the potential for company earnings is
greater.
Latin America will probably continue to provide the excitement going forward,
but it must be remembered that these are still developing economies with
volatile capital markets. There will always be room for them in an
international portfolio but prudence will govern our exposure.
Pulling all this together, the fund's portfolio is well diversified by
country and individual stock exposure. It gives the investor a reasonable
balance between the established economies overseas where we can find quality
companies at reasonable valuations, and the less developed markets where
there is perhaps more potential but at higher risk. This broad strategy has
served the fund well in the past and should continue to do so.
Respectfully submitted,
Martin G. Wade
President
July 25, 1997
Portfolio Highlights
Twenty-Five Largest Holdings
Percent of
Net Assets
6/30/97
__________________________________________________________
Royal Dutch Petroleum, Netherlands 2.3%
SmithKline Beecham, United Kingdom 2.0
Telecomunicacoes Brasileiras, Brazil1.8
National Westminster Bank, United Kingdom1.7
Novartis, Switzerland 1.5
Wolters Kluwer, Netherlands 1.4
Reed International, United Kingdom 1.2
Elsevier, Netherlands 1.2
Eaux Cie Generale, France 1.2
Shell Transport & Trading, United Kingdom1.2
Roche Holdings, Switzerland 1.2
Canon, Japan 1.1
ABB, Switzerland/Sweden 1.1
ING Groep, Netherlands 1.1
Kyocera, Japan 1.0
NEC, Japan 1.0
Glaxo Wellcome, United Kingdom 1.0
Nestle, Switzerland 1.0
Astra, Sweden 1.0
Sumitomo Electric Industries, Japan 1.0
Sankyo, Japan 0.9
Mitsubishi Heavy Industries, Japan 0.9
Norsk Hydro, Norway 0.9
Denso, Japan 0.8
Total, France 0.8
Total 30.3%
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 a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
Performance Comparison - International Stock Portfolio
As of 6/30/97
<TABLE>
<CAPTION>
International
Stock Portfolio MSCIEAFE
<S> <C> <C>
3/31/94 $ 10,000$ 10,000
6/94 10,100 10,518
6/95 10,574 10,723
6/96 12,341 12,183
6/97 14,491 13,787
</TABLE>
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.
International Stock Portfolio
Periods Ended 6/30/97
Since Inception
1 Year 3 Years Inception Date
__________________________________________________________
17.43% 12.79% 12.10% 3/31/94
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
Total returns do not include charges imposed by your insurance company's
separate account. If these were included, performance would have been lower.
Financial Highlights
T. Rowe Price International Stock Portfolio
(Unaudited)
For a share outstanding throughout each period
_____________________________________________________
6 Months Year 3/31/94
Ended Ended to
6/30/97 12/31/96 12/31/95 12/31/94
NET ASSET
VALUE
Beginning of
period$ 12.64 $ 11.26 $ 10.18 $ 10.00
Investment
activities
Net
investment
income 0.10 0.09 0.07 0.06
Net real-
ized and
unrealized
gain (loss) 1.37 1.55 1.06 0.12
Total from
investment
activities 1.47 1.64 1.13 0.18
Distributions
Net invest-
ment income - (0.17) (0.05) -
Net realized
gain - (0.09) - -
Total distri-
butions - (0.26) (0.05) -
NET ASSET VALUE
End of period $ 14.11 $ 12.64 $ 11.26 $ 10.18
Ratios/Supplemental Data
Total return 11.63% 14.70% 11.18% 1.80%
Ratio of
expenses to
average net
assets 1.05%! 1.05% 1.05%1.05%!
Ratio of net
investment
income to
average
net assets 1.79%! 1.22% 1.47%1.50%!
Portfolio
turnover rate 13.9%! 9.7% 17.4%4.6%!
Average
commission
rate paid $ 0.0005 $ 0.0014 $ - $ -
Net assets,
end of period
(in thousands) $ 325,548 $ 210,746 $ 51,661 $ 9,095
! Annualized.
The accompanying notes are an integral part of these financial statements.
Statement of Net Assets
T. Rowe Price International Stock Portfolio
June 30, 1997 (Unaudited)
Shares/Par Value
In
thousands
ARGENTINA 0.9%
Common Stocks 0.9%
Banco de Galicia Buenos Aires
(Class B) ADR (USD) 8,490 $ 224
Banco Frances del Rio
de la Plata ADR (USD) 9,247 300
Perez Companc (Class B) 85,378 686
Sociedad Comercial del Plata
ADR (144a) (USD) * 2,620 86
Telecom Argentina Stet
(Class B) 3,260 17
Telecom Argentina Stet
(Class B) ADR (USD) 620 32
Telefonica de Argentina
(Class B) ADR (USD) 19,570 678
Transportadora de Gas
del Sur (Class B)
ADS (USD) 1,200 15
YPF Sociedad Anonima
(Class D) ADR (USD) 23,579 725
Total Argentina (Cost $2,211) 2,763
AUSTRALIA 2.0%
Common Stocks 1.9%
Australia & New Zealand
Bank Group 40,000 299
Australian Gas Light Company 100,251 591
Boral Limited 41,000 129
Broken Hill Proprietary 72,352 1,065
Commonwealth Bank of
Australia, Installment
Receipts, 11/14/97 48,300 425
Fosters Brewing Group 147,000 273
John Fairfax Holdings 51,000 121
Lend Lease 11,073 234
National Australia Bank 26,454 379
National Mutual Holdings 64,000 104
News Corporation 107,399 515
Publishing & Broadcasting 71,000 410
St. George Bank 35,000 233
Tabcorp Holdings 69,000 376
WMC 44,500 281
Westpac Bank 36,000 217
Woodside Petroleum 61,000 526
6,178
Preferred Stocks 0.1%
Sydney Harbour Casino
Holdings * 117,000 $ 184
184
Total Australia (Cost $5,589) 6,362
AUSTRIA 0.0%
Common Stocks 0.0%
EVN Energie Versorgung
Nieder 336 43
Flughafen Wien 870 37
Total Austria (Cost $97) 80
BELGIUM 1.1%
Common Stocks 1.1%
Dexia 2,366 254
Generale de Banque 2,013 775
Generale de Banque,
VVPR Strip 113 -
Kredietbank 5,280 2,128
UCB 173 548
Total Belgium (Cost $2,997) 3,705
BRAZIL 4.3%
Common Stocks 0.4%
Brazil Fund (USD) 1,700 52
Companhia Siderurgica
Nacional 4,224,750 139
Eletrobras 1,084,220 606
Eletrobras ADR (USD) 3,390 95
Telecomunicacoes de
Sao Paulo * 58,539 17
Usiminas ADR (USD) 22,366 252
White Martins 54,268 159
1,320
Preferred Stocks 3.9%
Banco Bradesco 52,879,646 533
Banco Itau 376,070 211
Brahma 817,158 622
Brasmotor 320,560 72
Cia Cimento Portland
Itau 469,150 161
Cia Energetica de Sao
Paulo ADR (USD) * 440 9
Cia Energetica de Sao
Paulo ADR,
Sponsored (USD) * 830 $ 17
Cia Energetica Minas
Gerais 11,713,428 604
Cia Energetica Minas Gerais
ADR, Sponsored,
Nonvoting (USD) 11,656 600
Cia Tecidos Norte
de Minas 376,450 147
Lojas Americanas 2,292,180 31
Pao de Acucar GDS
(USD) * 13,015 296
Petrol Brasileiros 2,486,245 691
Telecomunicacoes
Brasileiras 7,974,499 1,210
Telecomunicacoes Brasileiras
ADR (USD) 31,346 4,757
Telecomunicacoes Brasileiras
ADR (144a) (USD) 17 3
Telecomunicacoes de Minas
Gerais (Class B) 1,178,000 208
Telecomunicacoes de Minas
Gerais (Class B),
Preference Receipts * 14,611 3
Telecomunicacoes de
Sao Paulo 3,106,950 1,014
Telecomunicacoes de
Sao Paulo, Preference
Receipts * 122,691 40
Telecomunicacoes do
Rio de Janeiro 1,111,000 171
Telecomunicacoes do
Rio de Janeiro,
Preference Receipts * 131,719 20
Unibanco 13,802,560 506
Usiminas 41,052 457
Usiminas ADR (USD) 18,350 206
12,589
Total Brazil (Cost $8,719) 13,909
CANADA 0.3%
Common Stocks 0.3%
Alcan Aluminium 18,780 641
Royal Bank of Canada 5,990 271
Total Canada (Cost $781) 912
CHILE 0.5%
Common Stocks and Rights 0.5%
AFP Providia ADR (USD) 141 $ 3
Chile Fund (USD) 6,629 173
Chilectra ADR (144a) (USD) 8,280 248
Chilgener ADS (USD) 4,910 138
Chilgener ADS, Rights,
7/7/97 (USD) * 1,619 4
Compania Cervecerias
Unidas ADS (USD) 2,070 45
Compania de
Telecomunicaciones
de Chile ADR (USD) 9,918 327
Empresa Nacional de
Electricidad de Chile
ADR (USD) 11,046 249
Enersis ADS (USD) 6,846 244
Five Arrows Chile
Investment Trust (USD) 18,990 65
Genesis Chile Fund (USD) 2,120 107
Santa Isabel ADR (USD) 4,221 136
Total Chile (Cost $1,434) 1,739
CHINA 0.3%
Common Stocks 0.3%
Huaneng Power International
(Class N) ADR (USD) * 20,500 523
Shanghai Petrochemical
(Class H) (HKD) 1,177,000 282
Yizheng Chemical Fibre
(Class H) (HKD) 1,028,000 183
Total China (Cost $956) 988
CZECH REPUBLIC 0.0%
Common Stocks 0.0%
SPT Telecom * 630 66
Total Czech Republic (Cost $71) 66
DENMARK 0.2%
Common Stocks 0.2%
Den Danske Bank 4,570 445
Tele Danmark (Class B) 1,620 84
Unidanmark (Class A) 3,610 203
Total Denmark (Cost $613) 732
FINLAND 0.2%
Common Stocks 0.2%
Nokia (Class A) 10,630 $ 801
Total Finland (Cost $546) 801
FRANCE 8.0%
Common Stocks and Warrants 8.0%
AXA 10,189 634
Accor 1,745 261
Alcatel Alsthom 11,728 1,469
Assurances Generales
de France 5,475 175
Canal Plus 2,700 526
Carrefour 3,310 2,404
Chargeurs 987 57
Cie de St. Gobain 7,340 1,070
Dexia France, Bearer 1,878 183
Dexia France, Registered
1998 409 40
Dexia France, Registered
1999 2,820 274
Eaux Cie Generale 30,170 3,866
Eaux Cie Generale,
Warrants, 5/2/01 * 2,540 1
Elf Aquitaine 11,430 1,233
GTM Entrepose 2,040 102
Guilbert 3,028 429
Havas 1,410 102
L'Oreal 844 356
LVMH 7,313 1,966
Lapeyre 5,100 338
Legrand 1,910 336
Pathe 1,607 319
Pinault Printemps 4,363 2,097
Rexel 660 203
Sanofi 12,113 1,187
Schneider 21,292 1,133
Societe Generale 4,444 496
Sodexho 3,200 1,638
Television Francaise 6,720 600
Total (Class B) 26,048 2,633
Total France (Cost $22,819) 26,128
GERMANY 4.2%
Common Stocks and Warrants 4.0%
Allianz 6,130 $ 1,278
Bayer 36,519 1,413
Bayerische Hypotheken
und Wechsel Bank 21,492 643
Bilfinger & Berger 5,910 241
Buderus 406 223
Commerzbank 9,560 271
Deutsche Bank 18,671 1,081
Deutsche Telekom 32,396 780
Gehe 30,781 2,100
Hoechst 6,470 274
Hornbach Baumarkt 690 29
Mannesmann 1,190 530
Praktiker 1,493 27
Rhoen Klinikum 4,960 646
SAP 3,710 744
Schering 3,067 325
Siemens 5,271 313
Veba 29,140 1,637
Veba, Warrants, 4/6/98 * 160 56
Volkswagen 476 361
12,972
Preferred Stocks 0.2%
Fielmann 1,562 47
Hornbach Holdings 3,200 271
Krones 107 44
SAP 1,568 325
687
Total Germany (Cost $12,532) 13,659
HONG KONG 3.8%
Common Stocks 3.8%
Cathay Pacific Airways 248,000 514
China Light & Power 60,000 340
Dao Heng Bank Group 147,000 805
First Pacific 677,876 866
Guoco Group 198,000 1,043
Hong Kong Land
Holdings (USD) 464,127 1,235
Hutchison Whampoa 250,000 2,162
New World Development 372,311 2,220
Swire Pacific (Class A) 162,000 1,458
Wharf Holdings 365,000 $ 1,583
Total Hong Kong (Cost $10,867) 12,226
INDIA 0.2%
Common Stocks 0.2%
State Bank of India GDR
(USD) * 22,800 599
Total India (Cost $323) 599
ITALY 2.5%
Common Stocks 2.5%
Banca Commerciale Italiana 62,000 128
Banca Fideuram 135,920 444
Credito Italiano 394,601 722
ENI 230,339 1,304
Gucci Group (USD) 6,740 434
IMI 53,710 483
Industrie Natuzzi ADR
(USD) 10,060 258
Italgas 62,000 201
Mediolanum 35,259 398
Rinascente 14,000 78
Seat * 157,900 51
Seat, Savings Shares * 57,000 12
Stet 227,900 1,328
Telecom Italia 197,378 633
Telecom Italia Mobile 506,784 1,630
Telecom Italia Mobile,
Savings Shares 52,846 94
Total Italy (Cost $6,629) 8,198
JAPAN 22.5%
Common Stocks 22.5%
Advantest 5,100 392
Alps Electric 33,000 461
Amada 71,000 626
Canon 136,000 3,702
Citizen Watch 43,000 332
DDI 147 1,085
Daifuku 8,000 105
Daiichi Pharmaceutical 88,000 1,551
DaiNippon Screen
Manufacturing 67,000 631
Daiwa House 98,000 $ 1,197
Denso 115,000 2,749
East Japan Railway 258 1,324
Fanuc 18,700 718
Hitachi 142,000 1,586
Hitachi Zosen 92,000 366
Honda Motor 8,000 241
Inax 21,000 157
Ishihara Sangyo Kaisha * 23,000 68
Ito-Yokado 32,000 1,857
Kao 68,000 943
Kawada Industries 6,000 27
Kokuyo 40,000 1,082
Komatsu 107,000 868
Komori 29,000 688
Kumagai Gumi 40,000 67
Kuraray 76,000 756
Kyocera 43,000 3,414
Makita 46,000 674
Marui 87,000 1,617
Matsushita Electric
Industrial 122,000 2,459
Mitsubishi 72,000 898
Mitsubishi Heavy
Industries 383,000 2,937
Mitsubishi Paper Mills 25,000 98
Mitsui Fudosan 186,000 2,564
Mitsui Petrochemical
Industries 20,000 96
Murata Manufacturing 41,000 1,631
NEC 243,000 3,392
National House
Industrial 12,000 158
Nippon Hodo 11,000 95
Nippon Steel 517,000 1,651
Nippon Telephone &
Telecom 113 1,084
Nomura Securities 128,000 1,764
Pioneer Electronic 49,000 1,188
Sangetsu 4,000 85
Sankyo 88,000 2,956
Sega Enterprises 9,100 302
Sekisui Chemical 128,000 1,295
Sekisui House 69,000 698
Seven Eleven Japan 10,000 $ 756
Sharp 119,000 1,640
Shin-Etsu Chemical 69,000 1,830
Shiseido 15,000 247
Sony 29,900 2,606
Sumitomo 158,000 1,503
Sumitomo Electric
Industries 188,000 3,149
Sumitomo Forestry 33,000 363
TDK 30,000 2,201
Teijin 207,000 975
Tokio Marine & Fire
Insurance 36,000 471
Tokyo Electronics 16,100 770
Tokyo Steel Manufacturing 29,500 329
Toppan Printing 69,000 1,084
Uny 37,000 723
Yurtec 10,000 116
Total Japan (Cost $67,345) 73,398
MALAYSIA 1.8%
Common Stocks and Rights 1.8%
Affin Holdings 141,000 335
Berjaya Sports Toto 149,000 702
Commerce Asset Holdings 138,000 364
Commerce Asset Holdings,
Rights, 7/21/97 * 27,600 1
Commerce Asset Holdings,
Rights To Warrants,
7/21/97 * 17,250 3
Multi-Purpose Holdings 230,000 322
Renong 585,000 765
Resorts World 90,000 271
Tanjong 177,000 610
Technology Resources
Industries * 121,000 208
Time Engineering 152,000 230
United Engineers 259,000 1,868
5,679
Preferred Stocks 0.0%
Multi-Purpose Holdings,
Cv. Loan Stock,
3.00%, 1/13/02 360,000 121
Renong, Cv. Loan Stock,
4.00%, 5/21/01 27,400 $ 9
130
Total Malaysia (Cost $6,580) 5,809
MEXICO 1.7%
Common Stocks 1.7%
Cemex (Class B) 82,767 403
Cemex ADS (USD) 59,024 509
Cifra (Class B) ADR (USD) 390,674 709
Fomentos Economico
Mexicano (Class B) 39,149 233
Gruma (Class B) * 57,442 267
Gruma (Class B) ADS
(USD) * 13,490 250
Grupo Financiero Banamex
(Class B) * 86,455 222
Grupo Financiero Banamex
(Class L) * 1,486 4
Grupo Financiero Bancomer
(Class B) GDS (USD) * 820 8
Grupo Financiero Bancomer
(Class L) * 607 -
Grupo Industrial Maseca
(Class B) 153,010 167
Grupo Modelo (Class C) 46,014 319
Grupo Televisa GDR (USD) * 3,145 96
Kimberly-Clark Mexico
(Class A) 95,512 385
Panamerican Beverages
(Class A) (USD) 22,980 755
Telefonos de Mexico
(Class L) ADR (USD) 28,246 1,349
Total Mexico (Cost $4,665) 5,676
NETHERLANDS 9.8%
Common Stocks 9.8%
ABN Amro Holdings 76,392 1,424
Ahold 19,416 1,638
Akzo Nobel 1,956 268
Baan Company * 5,132 348
Baan Company (USD) * 5,410 372
CSM 25,631 1,285
Elsevier 231,864 $ 3,875
Fortis Amev 29,310 1,305
Hagemeyer 5,464 282
ING Groep 75,825 3,496
Koninklijke PTT
Nederland 8,994 353
Nutricia 4,350 687
Otra 2,750 44
Polygram 40,441 2,122
Royal Dutch Petroleum 145,960 7,592
Unilever 10,940 2,303
Wolters Kluwer 36,940 4,498
Total Netherlands (Cost $26,479) 31,892
NEW ZEALAND 0.5%
Common Stocks 0.5%
Air New Zealand (Class B) 89,545 274
Carter Holt Harvey 39,500 102
Fletcher Challenge Building 99,150 298
Fletcher Challenge Energy 5,750 17
Fletcher Challenge Forests
Division 186,897 272
Fletcher Challenge Paper 46,500 113
Telecom Corporation of
New Zealand 64,000 326
Tranz Rail Holdings 17,000 97
Total New Zealand (Cost $1,389) 1,499
NORWAY 1.6%
Common Stocks 1.6%
Bergesen (Class A) 6,500 154
Norsk Hydro 52,197 2,842
Orkla (Class A) 27,220 2,009
Saga Petroleum (Class B) 10,280 180
Total Norway (Cost $4,414) 5,185
PANAMA 0.0%
Common Stocks 0.0%
Banco Latinoamericano
de Exportaciones
(Class E) (USD) 1,998 86
Total Panama (Cost $98) 86
PERU 0.1%
Common Stocks 0.1%
Credicorp (USD) 4,920 $ 108
Telefonica del Peru
(Class B) 7,030 19
Telefonica del Peru
(Class B) ADS (USD) 7,714 202
Total Peru (Cost $276) 329
PHILIPPINES 0.2%
Common Stocks 0.2%
Philippine Long Distance
Telephone 11,600 376
Philippine National Bank * 58,337 396
Total Philippines (Cost $897) 772
PORTUGAL 0.4%
Common Stocks 0.4%
Jeronimo Martins 16,838 1,176
Total Portugal (Cost $588) 1,176
RUSSIA 0.0%
Common Stocks 0.0%
Rao Gazprom ADS (USD) 2,760 48
Total Russia (Cost $43) 48
SINGAPORE 1.8%
Common Stocks and Rights 1.8%
City Developments 49,000 480
DBS Land 129,000 408
Development Bank of
Singapore 35,000 441
Fraser & Neave 52,200 372
Keppel 23,000 102
Keppel (Class A), New * 5,750 25
Overseas Chinese Bank 19,200 199
Overseas Union Bank 120,000 747
Overseas Union Bank,
Rights, 7/2/97 * 24,000 32
Singapore Land 63,000 286
Singapore Press 55,600 1,120
United Industrial 183,000 138
United Overseas Bank 133,480 1,372
Wing Tai Holdings 80,000 $ 231
Total Singapore (Cost $6,309) 5,953
SOUTH KOREA 0.5%
Common Stocks 0.5%
Korea Electric Power 18,400 549
Pohang Iron & Steel 2,600 261
Samsung Electronic 6,985 776
Shinhan Bank 4,630 69
Total South Korea (Cost $1,546) 1,655
SPAIN 2.2%
Common Stocks 2.2%
Aguas de Barcelona, New * 39 1
Argentaria Banca de Espana 8,695 487
Banco Bilbao Vizcaya 4,070 331
Banco Popular Espanol 3,520 862
Banco Santander * 43,614 1,344
Centros Comerciales Pryca 6,417 139
Empresa Nacional de
Electricidad 9,957 836
Gas Natural 3,781 826
Iberdrola 61,950 782
Repsol 12,578 532
Telefonica de Espana 35,538 1,027
Total Spain (Cost $5,624) 7,167
SWEDEN 2.7%
Common Stocks 2.7%
ABB 39,200 550
Astra (Class B) 179,973 3,176
Atlas Copco (Class B) 27,400 715
Electrolux (Class B) 18,000 1,298
Esselte (Class B) 5,680 134
Granges * 7,430 98
Hennes and Mauritz 35,450 1,246
Nordbanken 12,710 429
Sandvik (Class A) 6,010 171
Sandvik (Class B) 31,070 882
Scribona (Class B) 2,670 31
Total Sweden (Cost $6,804) 8,730
SWITZERLAND 5.8%
Common Stocks 5.8%
ABB 1,962 $ 2,970
Adecco 4,587 1,759
Ciba Specialty Chemicals * 3,548 328
Credit Suisse Group 4,870 625
Nestle 2,447 3,228
Novartis 3,148 5,033
Roche Holdings 416 3,763
Schweizerischer
Bankverein 4,300 1,150
Total Switzerland (Cost $14,469) 18,856
THAILAND 0.1%
Common Stocks 0.1%
Advanced Information
Service 9,600 84
Bangkok Bank 19,900 137
Siam Cement 8,400 145
Total Thailand (Cost $690) 366
UNITED KINGDOM 15.6%
Common Stocks 15.6%
Abbey National 105,000 1,430
Argos 123,466 1,120
Asda Group 411,000 849
BG 79,000 292
British Petroleum 85,000 1,056
Cable & Wireless 217,000 1,987
Cadbury Schweppes 132,860 1,186
Caradon 200,700 670
Centrica * 79,000 96
Coats Viyella 51,000 107
Compass Group 80,000 895
David S. Smith 93,000 290
Electrocomponents 76,000 566
GKN 15,000 258
Glaxo Wellcome 160,000 3,304
Grand Metropolitan 255,000 2,463
Guinness 218,000 2,135
Heywood Williams Group 11,000 37
Hillsdown Holdings 72,000 201
John Laing (Class A) 30,000 187
Kingfisher 224,000 $ 2,537
Ladbroke Group 90,000 354
National Westminster
Bank 408,000 5,497
Rank Group 148,000 937
Reed International 414,000 4,012
Rio Tinto 93,000 1,618
Rolls Royce 59,480 227
Safeway 175,500 1,020
Sears 39,000 44
Shell Transport & Trading 562,500 3,841
SmithKline Beecham 345,800 6,363
T & N 123,000 293
Tesco 134,000 826
Tomkins 443,500 1,935
United News & Media 175,000 2,020
Total United Kingdom (Cost $42,247) 50,653
VENEZUELA 0.1%
Common Stocks 0.1%
Compania Anonima
Nacional Telefonos
de Venezuela
(Class D) ADR (USD) 5,040 217
Total Venezuela (Cost $123) 217
SHORT-TERM INVESTMENTS 3.0%
Commercial Paper 3.0%
Commerzbank,
5.55%, 7/9/97 $ 5,000,000 4,994
Investments in Commercial
Paper through a
Joint Account,
6.11%, 7/1/97 4,626,616 4,626
Total Short-Term Investments
(Cost $9,620) 9,620
Total Investments in Securities
98.9% of Net Assets (Cost
$277,390) $321,954
Other Assets Less Liabilities 3,594
NET ASSETS $325,548
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 2,301
Accumulated net realized gain/loss -
net of distributions 3,055
Net unrealized gain (loss) 44,554
Paid-in-capital applicable to
23,069,768 shares of $0.0001
par value capital stock
outstanding; 1,000,000,000
shares authorized 275,638
NET ASSETS $325,548
_________
NET ASSET VALUE PER SHARE $ 14.11
_________
* Non-income producing
144a Security was purchased pursuant to Rule 144a under the Securities
Act of 1933 and may not be resold subject to that rule except to
qualified institutional buyers - total of such securities at
period-end amounts to 0.1% of net assets.
HKD Hong Kong dollar
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price International Stock Portfolio
(Unaudited)
In thousands
6 Months
Ended
6/30/97
Investment Income
Income
Dividend (net of foreign taxes
of $ 445) $ 3,142
Interest 505
Total income 3,647
Expenses
Investment management and
administrative 1,346
Net investment income 2,301
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 3,233
Foreign currency transactions (285)
Net realized gain (loss) 2,948
Change in net unrealized gain or loss
Securities 27,238
Other assets and liabilities
denominated in foreign currencies (10)
Change in net unrealized gain or loss 27,228
Net realized and unrealized gain (loss) 30,176
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 32,477
_________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price International Stock Portfolio
(Unaudited)
In thousands
6 Months Year
Ended Ended
6/30/97 12/31/96
Increase (Decrease) in Net Assets
Operations
Net investment income $ 2,301 $ 1,604
Net realized gain (loss) 2,948 1,089
Change in net unrealized
gain or loss 27,228 15,122
Increase (decrease) in net
assets from operations 32,477 17,815
Distributions to shareholders
Net investment income - (1,993)
Net realized gain - (1,133)
Decrease in net assets
from distributions - (3,126)
Capital share transactions*
Shares sold 95,042 153,908
Distributions reinvested - 3,126
Shares redeemed (12,717) (12,638)
Increase (decrease) in net
assets from capital
share transactions 82,325 144,396
Net Assets
Increase (decrease) during
period 114,802 159,085
Beginning of period 210,746 51,661
End of period $ 325,548 $210,746
*Share information
Shares sold 7,379 12,891
Distributions reinvested - 255
Shares redeemed (986) (1,059)
Increase (decrease) in
shares outstanding 6,393 12,087
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price International Stock Portfolio
June 30, 1997 (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 established by the corporation and commenced operations on
March 31, 1994. 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.
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.
Short-term debt securities are valued at amortized cost which 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.
Currency Translation Assets and liabilities are translated into U.S. dollars
at the prevailing exchange rate at the end of the reporting period. Purchases
and sales of securities and income and expenses are translated into U.S.
dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and
losses.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis. Dividend income and distributions
to shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles.
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 June 30, 1997, 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.
Commercial Paper Joint Account The fund, and other affiliated funds, may
transfer uninvested cash into a commercial paper joint account, the daily
aggregate balance of which is invested in high-grade commercial paper. All
securities purchased by the joint account satisfy the fund's criteria as to
quality, yield, and liquidity.
Securities Lending The fund lends its securities to approved brokers to earn
additional income and takes cash and U.S. Treasury securities as collateral
to secure the loans. Collateral is maintained at not less than 100% of the
value of loaned securities. At June 30, 1997, the value of securities on loan
was $11,684,000. Although the 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.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $104,352,000 and $17,172,000, respectively, for the
six months ended June 30, 1997.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
At June 30, 1997, the aggregate cost of investments for federal income tax
and financial reporting purposes was $277,390,000, and net unrealized gain
aggregated $44,564,000, of which $50,700,000 related to appreciated
investments and $6,136,000 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, of which $307,000 was
payable at June 30, 1997. The fee, computed daily and paid monthly, is 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, 1997, the fund, in the ordinary course
of business, placed security purchase and sale orders aggregating $3,820,000
with certain affiliates of the manager and paid commissions of $12,000
related thereto.
Invest With Confidence(registered trademark)
T. Rowe Price
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to those who have received
a copy of the portfolio's prospectus.
T. Rowe Price Investment Services, Inc., Distributor
TRP653 (6/97)
K15-056 6/30/97
