N-30D 1 srnas.txt T. ROWE PRICE NEW ASIA FUND 4/30/2002 Semiannual Report New Asia Fund April 30, 2002 T. Rowe Price REPORT HIGHLIGHTS -------------------------------------------------------------------------------- New Asia Fund o Many Asian markets surged in the six months ended April 30, 2002. o The New Asia Fund posted impressive gains in the period but lagged its Lipper and MSCI benchmarks. o We increased exposure in Southeast Asia, favoring domestic cyclicals including retail, housing construction, and financial services firms. o Asia's markets benefited from improving economic conditions and corporate earnings, which could mark the start of several good years for stocks in the region. REPORTS ON THE WEB Sign up for our E-mail Program, and you can begin to receive updated fund reports and prospectuses online rather than through the mail. Log on to your account at www.troweprice.com for more information. Fellow Shareholders Foreign equity markets rallied sharply in the six months ended April 30, 2002-an about-face from the prior six-month period. The liftoff commenced as signs of a reasonable U.S. economic recovery emerged. The technology sector, which powered many of Asia's economies for the past five years, rebounded strongly as investors became increasingly optimistic that the sector's recovery was on track and earnings fears were overdone. Performance Comparison -------------------------------------------------------------------------------- Periods Ended 4/30/02 6 Months 12 Months -------------------------------------------------------------------------------- New Asia Fund 35.03% 6.48% MSCI All Country Far East Free Ex-Japan Index 41.02 14.90 Lipper Pacific Ex-Japan Funds Average 36.00 13.42 In this bullish market environment, the New Asia Fund posted solid six-month gains that pulled 12-month returns into positive territory. Although the performance was impressive, your fund's results lagged both the Lipper benchmark and the MSCI All Country Far East Free Ex-Japan Index, which measures the aggregate performance of stock markets in the region. Geographic Diversification -------------------------------------------------------------------------------- South Korea 27% Taiwan 19 Hong Kong 18 Malaysia 11 Other and Reserves 8 India 7 Singapore 6 Thailand 4 Based on net assets as of 4/30/02. Your fund lagged the unmanaged MSCI Index, particularly at the end of 2001 when our exposure to the smaller markets of Southeast Asia, including Malaysia, Thailand, and Indonesia, was relatively low. In addition, holdings in India (trimmed from 15% of net assets six months ago) did not participate to the same degree in the Asian equity rally. In 2002's first quarter, your fund regained much of the ground it had lost to its benchmarks in late 2001, benefiting from the strong performance of our Korean stocks (increased from 21% of assets in October) and a near tripling of our position in Malaysia. Our technology holdings in these markets and Taiwan rebounded strongly. Korea and Taiwan, which benefit most from rallies in the technology sector, were the strongest Asian market performers, rising 75% and 47%, respectively. South Asia also performed well: Malaysia and Thailand were standouts, registering gains of 37% and 45%, respectively. China and India, which are less directly affected by global economic trends, underperformed other areas in the region but still registered double-digit six-month gains. ECONOMIC ENVIRONMENT In our last shareholder letter, we reported that, although economic conditions were sluggish due to the slowing world economy and export outlook, we were beginning to see resilience in domestic Asian economies, particularly in consumption. At the same time, interest rates on savings deposits ebbed to all-time lows, and deflationary trends, particularly in domestic asset prices (property and equities), abated. These trends gathered momentum over the past six months, and evidence of a broadening recovery became apparent, showing up in the economic statistics and in company sales and profit trends. Unemployment also began to stabilize after a particularly painful period following the technology meltdown in early 2000. Market Performance -------------------------------------------------------------------------------- (In U.S. Dollar Terms) Periods Ended 4/30/02 6 Months 12 Months -------------------------------------------------------------------------------- China 10.91% -21.02% Hong Kong 25.84 -4.25 India 13.49 -1.92 Malaysia 36.87 43.16 Philippines 26.91 -6.14 Singapore 31.08 2.30 Korea 74.92 65.05 Taiwan 47.17 7.04 Thailand 44.69 26.11 Source: RIMES Online, using MSCI indices. Improving sentiment spurred consumers to begin drawing down savings for large-ticket purchases (homes, automobiles, and luxury/discretionary products) that had been postponed over the crisis years. Lenders, who had de-emphasized consumer loans during Asia's industrial and investment boom years, and who have also been dealing with bad debts left over from the 1997 Asian Crisis, started increasing consumer credit. As a result, we believe we are seeing the start of several years of consumption-led growth in Asia. In tandem with the shift in economic-growth drivers-from exports (primarily to the U.S.) to domestic demand-we've started to see Asian stocks decouple from U.S. stocks, particularly in Southeast Asia. It is also notable and encouraging that nearly all Asian currencies, with the exception of pegged currencies like the Malaysian ringgit and the Hong Kong dollar, have strengthened relative to the U.S. dollar over the past six months. PORTFOLIO REVIEW Since October, we have gradually increased our exposure to Asia's domestic businesses, a shift from our focus on globally competitive firms in recent years. One of the major offshoots of this initiative has been an increase in the number of stocks in the portfolio and a decrease in the concentration of assets in the 10-largest holdings. At the end of the reporting period, your fund held positions in 110 different companies, versus approximately 70 in recent years. Many of the additions were medium-sized companies, reflecting our search for firms with specific domestic niches. Industry Diversification Percent of Net Assets 10/31/01 4/30/02 -------------------------------------------------------------------------------- Financials 30.2% 35.7% Information Technology 19.7 25.8 Consumer Discretionary 5.2 8.7 Industrials and Business Services 8.8 7.5 Telecommunications Services 10.9 6.3 Consumer Staples 5.9 5.3 Materials 4.3 2.7 All Other 2.6 1.5 Reserves 12.4 6.5 -------------------------------------------------------------------------------- Total 100.0% 100.0% The broadening process has also led to a significantly expanded allocation to Southeast Asia, where we had maintained a minimal exposure since the Asian Crisis. We trimmed positions in India and China, which were largely insulated from the Asian Crisis, as we found better opportunities in these formerly distressed and now recovering regions. We concurrently increased exposure to domestic cyclicals such as retail, housing construction, and financial services. These areas offer solid growth prospects and should be prime beneficiaries of the recovery. Several defensive and slow-growth sectors were also trimmed, including consumer staples and fixed-line telecom, in favor of recovering sectors such as chemicals and natural resources. Throughout the period, we continued to bulk up our financial holdings. In Singapore, we added to positions in DBS and United Overseas Bank, which we highlighted as undervalued in our last report. Both banks have been cutting costs, strengthening their balance sheets, and beefing up loan loss reserves. We also added to the financials in Malaysia, establishing new positions in Hong Leong Bank and Arab Malaysian and adding to existing holdings in RHB Capital. In Thailand, we added to Thai Farmers Bank, Bangkok Bank, and Siam Commercial Bank. Restructuring by corporate borrowers significantly improved the credit quality in these countries, which we believe could be reflected in higher share prices for these banks. In Korea, we boosted our stake in mutual fund company Samsung Securities. In Taiwan, we added to China Development Financial and China Trust Commercial Bank. Concurrently, we trimmed financial services holdings in India that performed well, including Housing Development Finance, which generated excellent returns over the past two years. In Malaysia, we increased our stake in Road Builder and maintained a position in IJM, a pair of premier contractors. Order backlog is recovering strongly due to a reviving housing market and renewed government spending on education and water infrastructure projects. We also added leisure companies such as casino operator Resorts World and established new positions in Genting Berhad and gaming companies Magnum and Berjaya Sports Toto. In Thailand, we initiated a position in Advanced Info Service, arguably the country's leading mobile phone operator, which has seen phenomenal growth in its prepaid services. We sold holdings in Reliance Industries in India and trimmed Hindustan Lever. At the same time, as mid-cap stocks in India strengthened, we reduced positions in Apollo Hospitals and McDowell. We believe these relatively defensive holdings are less attractive than recovering companies such as Kuala Lumpur Kepong in Malaysia, which benefited from recovering palm oil prices, and petrochemical concern LG Chemical, which appears to be on an improving trend. OUTLOOK The summer tends to be relatively quiet for Asian markets, and we expect the region to spend some time digesting the strong gains posted in the last six months. It was encouraging to witness the resilience of the Asian stocks, especially when the Nasdaq languished. The U.S. economic environment should remain relatively benign, generating modest growth, and we hope that as evidence of Asia's earnings recovery emerges, Asian stocks will generate further gains. Markets there are benefiting from improving economic conditions and corporate earnings, which could mark the start of several good years for stocks in the region. What could derail this rosy outlook? The major risks to Asia's recovery are sharply lower U.S. or global growth or sharply higher oil prices. At this juncture, we believe that the probability of one or both of these occurring is low. Nonetheless, we will closely monitor economic developments as the year progresses. Respectfully submitted, John R. Ford President, T. Rowe Price International Funds, Inc. May 26, 2002 T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Portfolio Highlights -------------------------------------------------------------------------------- TWENTY-FIVE LARGEST HOLDINGS Percent of Net Assets 4/30/02 -------------------------------------------------------------------------------- Samsung Electronics, South Korea 7.7% Taiwan Semiconductor Manufacturing, Taiwan 4.7 Hutchison Whampoa, Hong Kong 3.6 United Microelectronics, Taiwan 3.3 South Korea Telecom, South Korea 2.7 -------------------------------------------------------------------------------- Kookmin Bank, South Korea 2.4 Sun Hung Kai Properties, Hong Kong 2.2 Cheung Kong Holdings, Hong Kong 2.2 Samsung Fire & Marine Insurance, South Korea 1.7 Esprit, Hong Kong 1.7 -------------------------------------------------------------------------------- Shinhan Financial, South Korea 1.6 DBS, Singapore 1.5 Bangkok Bank, Thailand 1.4 HDFC Bank, India 1.4 Hyundai Motor, South Korea 1.4 -------------------------------------------------------------------------------- Thai Farmers Bank, Thailand 1.3 Henderson Land Development, Hong Kong 1.3 ICICI, India 1.3 United Overseas Bank, Singapore 1.2 China Mobile, Hong Kong 1.1 -------------------------------------------------------------------------------- Swire Pacific, Hong Kong 1.1 Resorts World, Malaysia 1.1 Siam Commercial Bank, Thailand 1.1 China Trust Commercial Bank, Taiwan 1.0 Samsung Securities, South Korea 1.0 -------------------------------------------------------------------------------- Total 51.0% Note: Table excludes investments in the T. Rowe Price Reserve Investment Fund. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Performance Comparison -------------------------------------------------------------------------------- This chart shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The result is compared with benchmarks, which may include a broad-based market index and a peer group average or index. Market indexes do not include expenses, which are deducted from fund returns as well as mutual fund averages and indexes. NEW ASIA FUND -------------------------------------------------------------------------------- MSCI AC New Asia Far East Lipper Fund -------------------------------------------------------------------------------- 4/30/92 10,000 10,000 10,000 4/30/93 12,712 11,414 11,760 4/30/94 17,790 14,782 15,535 4/30/95 17,524 14,667 14,420 4/30/96 21,979 17,286 17,381 4/30/97 20,326 15,592 16,149 4/30/98 11,890 9,562 10,727 4/30/99 14,944 11,669 11,883 4/30/00 16,608 14,894 18,189 4/30/01 11,396 11,252 12,742 4/30/02 13,093 12,740 13,568 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 4/30/02 1 Year 3 Years 5 Years 10 Years -------------------------------------------------------------------------------- New Asia Fund 6.48% 4.52% -3.42% 3.10% -------------------------------------------------------------------------------- Investment return and principal value represent past performance and will vary. Shares may be worth more or less at redemption than at original purchase. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Unaudited Financial Highlights For a share outstanding throughout each period -------------------------------------------------------------------------------- 6 Months Year Ended Ended 4/30/02 10/31/01 10/31/00 10/31/99 10/31/98 10/31/97 NET ASSET VALUE Beginning of period $ 5.11 $ 7.12 $ 7.20 $ 4.93 $ 5.95 $ 8.64 Investment activities Net investment income (loss) 0.02 0.03 0.04 0.05 0.13 0.09 Net realized and unrealized gain (loss) 1.77 (2.04) (0.08)** 2.31 (1.07) (2.71) Total from investment activities 1.79 (2.01) (0.04) 2.36 (0.94) (2.62) Distributions Net investment income -- -- (0.04) (0.09) (0.08) (0.06) Net realized gain -- -- -- -- -- (0.01) Total distributions -- -- (0.04) (0.09) (0.08) (0.07) NET ASSET VALUE End of period $ 6.90 $ 5.11 $ 7.12 $ 7.20 $ 4.93 $ 5.95 ----------------------------------------------------------------- Ratios/Supplemental Data Total return (diamond) 35.03% (28.23)% (0.68)% 48.73% (15.97)% (30.61)% Ratio of total expenses to average net assets 1.16%! 1.22% 1.08% 1.21% 1.29% 1.10% Ratio of net investment income (loss) to average net assets 0.51%! 0.49% 0.41% 0.87% 2.33% 0.76% Portfolio turnover rate 84.2%! 49.0% 52.2% 69.9% 68.1% 41.8% Net assets, end of period (in millions) $ 727 $ 527 $ 875 $ 996 $ 633 $ 877 (diamond) Total return reflects the rate that an investor would have earned on an investment in the fund during each period, assuming reinvestment of all distributions. ** 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 shares in relation to fluctuating market values for the investment portfolio. ! Annualized The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Unaudited April 30, 2002 Portfolio of Investments Shares Value -------------------------------------------------------------------------------- In thousands HONG KONG 18.4% Common Stocks 18.4% Cheung Kong Holdings 1,660,000 $ 15,804 China Mobile (Hong Kong) * (misc. footnote symbol) 2,540,500 8,323 CNOOC 4,005,500 5,316 Dah Sing Financial 44,600 228 Esprit 6,333,501 12,181 First Pacific (misc. footnote symbol) 19,686,000 3,307 Giordano International 4,476,000 2,855 Global Bio-chem Technology 7,221,600 2,546 Great Eagle (misc. footnote symbol) 4,648,000 5,483 Henderson Land Development (misc. footnote symbol) 1,923,000 9,370 Hutchison Whampoa 2,961,900 25,920 Li & Fung 1,452,000 2,327 Shun Tak Holdings 2,726,000 556 Sino Land 9,626,000 4,196 Sun Hung Kai Properties 1,818,000 15,851 Swire Pacific (Class A) 1,357,000 8,143 Techtronic Industries 5,874,000 4,820 Television Broadcast 459,000 2,236 Varitronix 2,931,000 2,236 Yanzhou Coal Mining 5,622,000 2,253 Total Hong Kong (Cost $100,297) 133,951 INDIA 6.9% Common Stocks 6.9% Apollo Hospitals 692,322 2,163 HDFC Bank 1,910,000 8,605 HDFC Bank ADR (USD) * 95,100 1,436 Hindustan Lever 746,080 3,091 Housing Development Finance 503,600 6,694 ICICI 7,982,108 9,128 ICICI Bank 1,773,861 4,097 ICICI Bank ADR (USD) 117,300 598 Infosys Technologies 72,800 5,465 McDowell 1,215,800 1,275 Moser-Baer 472,000 $ 2,587 Wipro 157,500 4,957 Total India (Cost $57,990) 50,096 MALAYSIA 10.9% Common Stocks 10.9% AMMB Holdings 3,699,000 5,841 Arab Malaysian * 10,180,000 4,072 Berjaya Sports Toto 1,818,000 4,401 British American Tobacco 203,400 1,900 Genting Berhad 1,016,000 4,171 Hong Leong Bank 3,808,000 5,411 IJM 1,131,000 1,622 Kuala Lumpur Kepong 1,135,000 2,091 Magnum 7,915,000 6,186 Malayan Banking Berhad 2,363,400 5,722 Pernas International Hotel & Property 6,221,000 2,161 Phileo Allied 1,300,000 623 Resorts World 2,868,000 7,925 RHB Capital 10,520,000 7,059 Road Builder 2,246,000 3,665 Sime Darby 4,546,000 6,460 Technology Resources (Ordinary Shares) * 5,738,000 4,032 Technology Resources (Restricted Shares) * 2,671,000 1,760 Telekom Malaysia 897,000 2,290 Tenaga Nasional 746,000 2,218 Total Malaysia (Cost $66,839) 79,610 SINGAPORE 5.6% Common Stocks 5.6% CapitaLand 367,000 352 City Developments 410,000 1,402 DBS 1,455,000 11,239 Keppel 2,441,000 5,657 Overseas Chinese Banking 573,000 4,110 Sembcorp Industries 2,197,000 1,903 SIA Engineering 2,555,000 $ 3,031 Singapore Press 242,719 3,013 Singapore Technologies Engineering 1,393,000 1,614 United Overseas Bank 1,095,000 8,700 Total Singapore (Cost $37,227) 41,021 SOUTH KOREA 27.4% Common Stocks 27.4% Daelim Industrial 329,000 4,007 Hana Bank 380,640 4,991 Hite Brewery 78,390 4,409 Hyundai Department Store 111,900 3,533 Hyundai Motor 266,500 9,924 Kook Soon Dang 93,056 2,451 Kookmin Bank 379,766 17,353 KT Corporation ADR (USD) 215,403 4,879 Kumgang Korea Chemical 23,410 2,652 LG Chemical 204,320 6,198 LG Household & Health Care 202,370 6,249 Lotte Chilsung Beverage 11,840 6,751 Lotte Confectonery 1,880 948 NCsoft * 37,390 6,527 Pacific Corporation 20,100 2,331 Pohang Iron & Steel 40,600 4,047 Samsung Electro Mechanics 76,600 4,528 Samsung Electronics 189,822 56,254 Samsung Fire & Marine Insurance * 184,600 12,531 Samsung Securities * 219,000 7,391 Shinhan Financial 855,100 11,609 South Korea Telecom 99,540 19,421 Total South Korea (Cost $91,053) 198,984 TAIWAN 19.1% Common Stocks 19.1% Ambit Microsystems 595,300 2,696 Asustek Computer 1,862,250 6,741 China Development Financial 4,157,231 $ 2,902 China Trust Commercial Bank 8,577,177 7,595 Compal Electronics 2,210,000 2,970 Compeq Manufacturing * 2,402,000 4,226 Delta Electronics 1,558,000 2,719 Faraday Technology 521,000 2,510 Formosa Plastic 3,126,000 3,661 Fubon Financial Holding * 4,144,000 4,231 Hon Hai Precision Industry 978,808 4,291 Nan Ya Plastic 3,393,000 3,533 President Chain Store 2,443,471 4,264 Quanta Computer * 524,530 1,785 Realtek Semiconductor GDR (USD) * 160,300 3,006 Siliconware Precision Industries 3,772,439 3,558 Sunplus Technology 1,172,000 4,057 Taiwan Cellular 3,245,837 3,979 Taiwan Semiconductor Manufacturing 13,595,601 34,312 Unimicron Technology 2,956,000 3,427 United Microelectronics 15,476,256 23,659 Wan Hai Lines 6,654,000 3,474 Yageo * 6,089,000 5,058 Total Taiwan (Cost $113,859) 138,654 THAILAND 4.2% Common Stocks and Rights 4.2% Advanced Info Service 1,418,800 1,345 Bangkok Bank (Foreign Shares) * (misc. footnote symbol) 1,142,400 1,691 Bangkok Bank (Local Shares) * 7,298,000 8,690 PTT (misc. footnote symbol) 2,116,800 1,456 Siam Commercial Bank (Foreign Shares) * (misc. footnote symbol) 4,265,000 2,455 Siam Commercial Bank (Local Shares) * 9,237,000 5,190 TelecomAsia, Rights * 1,597,894 0 Thai Farmers Bank (Foreign Shares) * (misc. footnote symbol) 1,574,100 1,110 Thai Farmers Bank (Local Shares) * (misc. footnote symbol) 14,244,000 8,398 Total Thailand (Cost $30,317) 30,335 UNITED KINGDOM 1.0% Common Stocks 1.0% HSBC (HKD) 606,834 $ 7,217 Total United Kingdom (Cost $5,213) 7,217 SHORT-TERM INVESTMENTS 2.8% Money Market Funds 2.8% T. Rowe Price Reserve Investment Fund, 2.07% # 20,354,744 20,355 Total Short-Term Investments (Cost $20,355) 20,355 Total Investments in Securities 96.3% of Net Assets (Cost $523,150) $ 700,223 Other Assets Less Liabilities 27,228 NET ASSETS $ 727,451 --------------- # Seven-day yield * Non-income producing (misc. footnote symbol) All or a portion of this security is on loan at April 30, 2002 - See Note 2 ADR American Depository Receipts GDR Global Depository Receipts HKD Hong Kong dollar USD United States dollar The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Unaudited April 30, 2002 Statement of Assets and Liabilities -------------------------------------------------------------------------------- In thousands Assets Investments in securities, at value (cost $523,150) $ 700,223 Other assets 59,789 Total assets 760,012 Liabilities Total liabilities 32,561 NET ASSETS $ 727,451 ---------- Net Assets Consist of: Undistributed net investment income (loss) $ 1,661 Undistributed net realized gain (loss) (268,521) Net unrealized gain (loss) 177,076 Paid-in-capital applicable to 105,478,860 shares of $0.01 par value capital stock outstanding; 2,000,000,000 shares of the Corporation authorized 817,235 NET ASSETS $ 727,451 ---------- NET ASSET VALUE PER SHARE $ 6.90 ---------- The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Unaudited Statement of Operations -------------------------------------------------------------------------------- In thousands 6 Months Ended 4/30/02 Investment Income (Loss) Income Dividend (net of foreign taxes of $549) $ 5,032 Interest (net of foreign taxes of $16) 350 Securities lending 71 Total income 5,453 Expenses Investment management 2,679 Shareholder servicing 809 Custody and accounting 165 Prospectus and shareholder reports 65 Legal and audit 25 Proxy and annual meeting 23 Registration 20 Directors 5 Miscellaneous 1 Total expenses 3,792 Net investment income (loss) 1,661 Realized and Unrealized Gain (Loss) Net realized gain (loss) Securities (including foreign tax refunds of $685) (45,507) Foreign currency transactions (527) Net realized gain (loss) (46,034) Change in net unrealized gain (loss) Securities 234,470 Other assets and liabilities denominated in foreign currencies (16) Change in net unrealized gain (loss) 234,454 Net realized and unrealized gain (loss) 188,420 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 190,081 ---------- The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Unaudited Statement of Changes in Net Assets -------------------------------------------------------------------------------- In thousands 6 Months Year Ended Ended 4/30/02 10/31/01 Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 1,661 $ 3,528 Net realized gain (loss) (46,034) (40,838) Change in net unrealized gain (loss) 234,454 (168,504) Increase (decrease) in net assets from operations 190,081 (205,814) Capital share transactions * Shares sold 654,397 1,022,235 Shares redeemed (644,245) (1,163,888) Increase (decrease) in net assets from capital share transactions 10,152 (141,653) Net Assets Increase (decrease) during period 200,233 (347,467) Beginning of period 527,218 874,685 End of period $ 727,451 $ 527,218 ------------------------------------- *Share information Shares sold 103,682 161,232 Shares redeemed (101,457) (180,741) Increase (decrease) in shares outstanding 2,225 (19,509) The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Unaudited April 30, 2002 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 New Asia Fund (the fund), a nondiversified, open-end management investment company, is one of the portfolios established by the corporation and commenced operations on September 28, 1990. The fund seeks long-term growth of capital through investments in companies located, or with primary operations, in Asia (excluding Japan). The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates made by fund management. Valuation Equity securities are valued at the last quoted sale price, or official closing price for certain markets, at the time the valuations are made. A security that 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. 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 denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate, using the mean of the bid and ask prices of such currencies against U.S. dollars quoted by a major bank. Purchases and sales of securities, 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. Credits earned on daily uninvested cash balances at the custodian are used to reduce the fund's custody charges. NOTE 2 - INVESTMENT TRANSACTIONS Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks or enhance performance. The investment objective, policies, program, and risk factors of the fund are described more fully in the fund's prospectus and Statement of Additional Information. Emerging Markets At April 30, 2002, approximately 93% of the fund's net assets were invested 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. It receives as collateral cash and U.S. government securities valued at 102% to 105% of the value of the securities on loan. Cash collateral 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 the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the fund the next business day. 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 the securities. At April 30, 2002, the value of loaned securities was $19,714,000; aggregate collateral consisted of $21,008,000 in the securities lending collateral pool. Other Purchases and sales of portfolio securities, other than short-term securities, aggregated $282,191,000 and $254,227,000, respectively, for the six months ended April 30, 2002. 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 to shareholders all of its taxable income and capital gains. Income and capital gain distributions determined in accordance with federal income tax regulations differ from net investment income and realized gains recognized for financial reporting purposes and, accordingly, the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying financial statements. The fund intends to retain realized gains that may be offset by available capital loss carryforwards for tax purposes. As of October 31, 2001, the fund's most recent tax year-end, the fund had $223,163,000 of capital loss carryforwards available to offset future realized gains, $184,969,000 of which expire in 2006, and $38,194,000 expire in 2009. At April 30, 2002, the cost of investments for federal income tax purposes was substantially the same as for financial reporting and totaled $523,150,000. Net unrealized gain aggregated $177,073,000 at period-end, of which $201,142,000 related to appreciated investments and $24,069,000 related 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 as a reduction of income. Gains realized upon disposition of Indian securities held by the fund are subject to capital gains tax in India, payable prior to repatriation of sale proceeds. The tax is computed on net realized gains, and realized losses in excess of gains may be carried forward eight years to offset future gains. In addition, the fund accrues a deferred tax liability for net unrealized gains on Indian securities. At April 30, 2002, the fund has a capital gain tax refund receivable of $1,367,000, no deferred tax liability, and $12,885,000 of capital loss carryforwards expiring in 2009. NOTE 5 - RELATED PARTY TRANSACTIONS The fund is managed by T. Rowe Price International, Inc. (the manager), a wholly owned subsidiary of T. Rowe Price Associates, Inc. (Price Associates), which is wholly owned by T. Rowe Price Group. The investment management agreement between the fund and the manager provides for an annual investment management fee, of which $481,000 was payable at April 30, 2002. The fee is computed daily and paid monthly, and consists of an individual fund fee equal to 0.50% of average daily net assets and a group fee. The group fee is based on the combined assets of certain mutual funds sponsored by 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, 2002, 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. 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. Expenses incurred pursuant to these related party agreements totaled approximately $671,000 for the six months ended April 30, 2002, of which $122,000 was payable at period-end. Additionally, the fund is one of several mutual funds sponsored by Price Associates (underlying Price funds) in which the T. Rowe Price Spectrum Funds (Spectrum) may invest. Spectrum does not invest in the underlying Price funds for the purpose of exercising management or control. Expenses associated with the operation of Spectrum are borne by each underlying Price 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 Price funds, Price Associates, and, in the case of T. Rowe Price Spectrum International, T. Rowe Price International. For the six months ended April 30, 2002, the fund was allocated $6,000 of Spectrum expenses, $1,000 of which was payable at period-end. At April 30, 2002, approximately 0.26% of the outstanding shares of the fund were held by Spectrum. The fund may invest in the T. Rowe Price Reserve Investment Fund and T. Rowe Price Government Reserve Investment Fund (collectively, the Reserve Funds), open-end management investment companies managed by Price Associates. The Reserve Funds are offered as cash management options only to mutual funds and other accounts managed by Price Associates and/or 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, 2002, totaled $304,000 and are reflected as interest income in the accompanying Statement of Operations. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- About the Fund's Directors and Officers -------------------------------------------------------------------------------- Your fund is governed by a Board of Directors that meets regularly to review investments, performance, expenses, and other business matters, and is responsible for protecting the interests of shareholders. The majority of the fund's directors are independent of T. Rowe Price Associates, Inc.; "inside" directors are officers of T. Rowe Price. The Board of Directors elects the fund's officers, who are listed in the final table. The business address of each director and officer is 100 East Pratt Street, Baltimore, MD 21202. Independent Directors Name (Date of Birth) Principal Occupation(s) During Past 5 Years and Year Elected* Other Directorships of Public Companies -------------------------------------------------------------------------------- Calvin W. Burnett, Ph.D. President, Coppin State College; Director, (3/16/32) Provident Bank of Maryland 2001 -------------------------------------------------------------------------------- Anthony W. Deering Director, Chairman of the Board, President, and (1/28/45) Chief Executive Officer, The Rouse Company, real 1991 estate developers -------------------------------------------------------------------------------- Donald W. Dick, Jr. Principal, EuroCapital Advisors, LLC, an (1/27/43) acquisition and management advisory firm 1988 -------------------------------------------------------------------------------- David K. Fagin Director, Dayton Mining Corp. (6/98 to present), (4/9/38) Golden Star Resources Ltd., and Canyon Resources 2001 Corp. (5/00 to present); Chairman and President, Nye Corp. -------------------------------------------------------------------------------- F. Pierce Linaweaver President, F. Pierce Linaweaver & Associates, (8/22/34) Inc., consulting environmental and civil 2001 engineers -------------------------------------------------------------------------------- Hanne M. Merriman Retail Business Consultant; Director, Ann Taylor (11/16/41) Stores Corp., Ameren Corp., Finlay Enterprises, 2001 Inc., The Rouse Company, and US Airways Group, Inc. -------------------------------------------------------------------------------- John G. Schreiber Owner/President, Centaur Capital Partners, Inc., (10/21/46) a real estate investment company; Senior Advisor 2001 and Partner, Blackstone Real Estate Advisors, L.P.; Director, AMLI Residential Properties Trust, Host Marriott Corp., and The Rouse Company -------------------------------------------------------------------------------- Hubert D. Vos Owner/President, Stonington Capital Corp., a (8/2/33) private investment company 2001 -------------------------------------------------------------------------------- Paul M. Wythes Founding Partner, Sutter Hill Ventures, a (6/23/33) venture capital limited partnership, providing 1996 equity capital to young high-technology companies throughout the United States; Director, Teltone Corp. -------------------------------------------------------------------------------- *Each independent director oversees 98 T. Rowe Price portfolios and serves until the election of a successor. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Inside Directors Name (Date of Birth) Year Elected** [Number of T. Rowe Price Principal Occupation(s) During Past 5 Years and Portfolios Overseen] Other Directorships of Public Companies -------------------------------------------------------------------------------- James S. Riepe Director and Managing Director, T. Rowe Price; (6/25/43) Vice Chairman of the Board, Director, and 2002 [98] Managing Director, T. Rowe Price Group, Inc.; Chairman of the Board and Director, T. Rowe Price Investment Services, Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Services, Inc.; Chairman of the Board, Director, President, and Trust Officer, T. Rowe Price Trust Company; Director, T. Rowe Price International, Inc., and T. Rowe Price Global Investment Services Limited; Vice President, International Funds -------------------------------------------------------------------------------- M. David Testa Chief Investment Officer, Director, and Managing (4/22/44) Director, T. Rowe Price; Vice Chairman of the 1979 [98] Board, Chief Investment Officer, Director, and Managing Director, T. Rowe Price Group, Inc.; Director and Chairman of the Board, T. Rowe Price Global Asset Management Limited; Vice President and Director, T. Rowe Price Trust Company; Director, T. Rowe Price Global Investment Services Limited and T. Rowe Price International, Inc.; Vice President, International Funds -------------------------------------------------------------------------------- Martin G. Wade Managing Director, T. Rowe Price; Director and (2/16/43) Managing Director, T. Rowe Price Group, Inc.; 1982 [15] Chairman of the Board and Director, T. Rowe Price Global Investment Services Limited and T. Rowe Price International, Inc.; Director, T. Rowe Price Global Asset Management Limited; Chairman of the Board, International Funds -------------------------------------------------------------------------------- **Each inside director serves until the election of a successor. Officers Officers Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) -------------------------------------------------------------------------------- Christopher D. Alderson (3/29/62) Managing Director, T. Rowe Price and Vice President, International Funds T. Rowe Price Group, Inc.; Vice President, T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Mark C.J. Bickford-Smith (4/30/62) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Joseph A. Carrier (12/30/60) Vice President, T. Rowe Price, T. Rowe Treasurer, International Funds Price Group, Inc., and T. Rowe Price Investment Services, Inc. -------------------------------------------------------------------------------- Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe Price International for at least five years. T. Rowe Price New Asia Fund -------------------------------------------------------------------------------- Officers (continued) Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) -------------------------------------------------------------------------------- Michael J. Conelius (6/16/64) Vice President, T. Rowe Price, T. Rowe Vice President, International Funds Price Group, Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Ann B. Cranmer (3/23/47) Vice President, T. Rowe Price Group, Assistant Vice President, Inc., and T. Rowe Price International, International Funds Inc.; Vice President and Secretary, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited -------------------------------------------------------------------------------- Frances Dydasco (5/8/66) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Mark J.T. Edwards (10/27/57) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Roger L. Fiery III (2/10/59) Vice President, T. Rowe Price, T. Rowe Assistant Vice President, Price Group, Inc., and T. Rowe Price International Funds International, Inc. -------------------------------------------------------------------------------- John R. Ford (11/25/57) Managing Director, T. Rowe Price and President, International Funds T. Rowe Price Group, Inc.; Director, Chief Investment Officer, and Vice President, T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Henry H. Hopkins (12/23/42) Managing Director, T. Rowe Price; Vice President, International Funds Director and Managing Director, T. Rowe Price Group, Inc.; Vice President, T. Rowe Price International, Inc., and T. Rowe Price Retirement Plan Services, Inc.; Vice President and Director, T. Rowe Price Investment Services, Inc., T. Rowe Price Services, Inc., and T. Rowe Price Trust Company -------------------------------------------------------------------------------- Ian D. Kelson (8/16/56) Managing Director, T. Rowe Price and Vice President, International Funds T. Rowe Price Group, Inc.; formerly Head of Fixed Income, Morgan Grenfell/ Deutsche Asset Management (to 2000) -------------------------------------------------------------------------------- Patricia B. Lippert (1/12/53) Assistant Vice President, T. Rowe Price Secretary, International Funds and T. Rowe Price Investment Services, Inc. -------------------------------------------------------------------------------- Ian J. Macdonald (1/7/62) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- David S. Middleton (1/18/56) Vice President, T. Rowe Price, T. Rowe Controller, International Funds Price Group, Inc., and T. Rowe Price Trust Company -------------------------------------------------------------------------------- George A. Murnaghan (5/1/56) Managing Director, T. Rowe Price and Vice President, International Funds T. Rowe Price Group, Inc.; Vice President, T. Rowe Price International, Inc., T. Rowe Price Investment Services, Inc., and T. Rowe Price Trust Company -------------------------------------------------------------------------------- Gonzalo Pangaro (11/27/68) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- D. James Prey III (11/26/59) Vice President, T. Rowe Price and Vice President, International Funds T. Rowe Price Group, Inc. -------------------------------------------------------------------------------- Robert Revel-Chion (3/9/65) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Christopher J. Rothery (5/26/63) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- James B.M. Seddon (6/17/64) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Robert W. Smith (4/11/61) Managing Director, T. Rowe Price and Vice President, International Funds T. Rowe Price Group, Inc.; Vice President, T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Benedict R.F. Thomas (8/27/64) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Justin Thomson (1/14/68) Vice President, T. Rowe Price Group, Vice President, International Funds Inc., and T. Rowe Price International, Inc.; formerly Portfolio Manager, G.T. Capital/Invesco (to 1998) -------------------------------------------------------------------------------- David J.L. Warren (4/14/57) Managing Director, T. Rowe Price and Executive Vice President, T. Rowe Price Group, Inc.; Director, International Funds Chief Executive Officer, and President, T. Rowe Price International, Inc.; Director, T. Rowe Price Global Asset Management Limited -------------------------------------------------------------------------------- William F. Wendler II (3/14/62) Vice President, T. Rowe Price, T. Rowe Vice President, International Funds Price Group, Inc., and T. Rowe Price International, Inc. -------------------------------------------------------------------------------- Richard T. Whitney (5/7/58) Managing Director, T. Rowe Price and Vice President, International Funds T. Rowe Price Group, Inc.; Vice President, T. Rowe Price International, Inc., and T. Rowe Price Trust Company -------------------------------------------------------------------------------- Edward A. Wiese, CFA (4/12/59) Vice President, T. Rowe Price, T. Rowe Vice President, International Funds Price Group, Inc., and T. Rowe Price Trust Company; Director, Chief Investment Officer, and Vice President, T. Rowe Price Savings Bank -------------------------------------------------------------------------------- Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe Price International for at least five years. T. Rowe Price Investment Services and Information -------------------------------------------------------------------------------- Investment Services and Information KNOWLEDGEABLE SERVICE REPRESENTATIVES By Phone 1-800-225-5132. Available Monday through Friday from 7 a.m. until midnight ET and weekends from 8:30 a.m. until 5 p.m. ET. In Person. Available in T. Rowe Price Investor Centers. Please call a service representative at 1-800-225-5132 or visit the Web at www.troweprice.com/investorcenter to locate a center near you. ACCOUNT SERVICES Automated 24-Hour Services Including Tele*Access(registered trademark) and Account Access through the T. Rowe Price Web site on the Internet. Address: www.troweprice.com. Automatic Investing. From your bank account or paycheck. Automatic Withdrawal. Scheduled, automatic redemptions. IRA Rebalancing. Ensuring that your accounts reflect your desired asset allocation. BROKERAGE SERVICES * Individual Investments. Stocks, bonds, options, precious metals, and other securities at a savings over full-service commission rates. INVESTMENT INFORMATION Consolidated Statement. Overview of all of your accounts. Shareholder Reports. Manager reviews of their strategies and results. T. Rowe Price Report. Quarterly investment newsletter. Performance Update. Quarterly review of all T. Rowe Price fund results. Insights. Educational reports on investment strategies and markets. Investment Guides. Asset Mix Worksheet, Diversifying Overseas: A Guide to International Investing, Retirement Planning Kit, Retirement Readiness Guide, and Tax Considerations Guide. * T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services, Inc., Member NASD/SIPC. T. Rowe Price Planning Tools and Services -------------------------------------------------------------------------------- T. Rowe Price Retirement Services T. Rowe Price offers unique retirement resources that can help you meet a broad variety of planning challenges. Our retirement tools are suitable for individuals, the self-employed, small businesses, corporations, and nonprofit organizations. We also provide recordkeeping, communications, and investment management services. For more information, call us at 1-800-IRA-5000, or visit our Web site at www.troweprice.com. PLANNING TOOLS AND SERVICES T. Rowe Price(registered trademark) Retirement Income Manager* helps retirees or those within two years of retirement determine how much income they can draw down in retirement. The program uses extensive statistical analysis and the input of a T. Rowe Price Advisory Counselor to suggest an income plan that best meets your objectives. Retirement Income Calculator. This free calculator, incorporating the analytic approach of the T. Rowe Price Retirement Income Manager program, simulates 500 potential market scenarios to estimate the probability of maintaining an income strategy throughout retirement. Rollover Investment Service* offers asset allocation and fund selection advice to those planning a 401(k) rollover from a previous employer after changing jobs or retiring. IRA Rebalancing Service. T. Rowe Price will rebalance your IRA at the end of every quarter by exchanging shares between mutual fund accounts. This ensures that your accounts retain your desired asset allocation. Quality Information. Thousands of investors have made their personal choices with the help of our Retirement Readiness Guide, Retirement Planning Kit, IRA Insights, and Retirement Planning Worksheet. INVESTMENT VEHICLES Individual Retirement Accounts (IRAs) No-Load Variable Annuities Small Business Retirement Plans * Services of T. Rowe Price Advisory Services, Inc., a federally registered investment adviser. T. Rowe Price Web Services -------------------------------------------------------------------------------- www.troweprice.com ACCOUNT INFORMATION Account Access allows you to access, in a secure environment, all of your T. Rowe Price mutual fund, brokerage, variable annuity, and workplace retirement accounts with a single login. AccountMinder is a personal page, with one password, that gives you access to all your online financial information and other records from the secure T. Rowe Price Account Access site. FINANCIAL TOOLS AND CALCULATORS College Investment Calculator. This interactive tool allows you to estimate simultaneously the college costs for as many as five children. Morningstar(registered trademark) Portfolio Trackersm. See how your investments are performing at any time. After you enter ticker symbols for your stocks and mutual funds, Portfolio Tracker provides information on prices, market value, and any applicable Morningstar ratings. Investment Strategy Planner. This planning tool can help you develop and implement an asset allocation strategy that's appropriate for you. Retirement Income Calculator. This free calculator simulates 500 potential market scenarios to estimate the probability of maintaining an income strategy throughout retirement. INVESTMENT TRACKING AND INFORMATION My TRP e-Updates. This free e-mail service offers timely market reports, important information about investing, and the latest updates on the T. Rowe Price funds and services. Morningstar(registered trademark) Portfolio Watchlistsm. Like the Portfolio Tracker, the Watchlist allows you to see how your investments are performing. After entering your ticker symbols, the Watchlist automatically provides you with prices, price changes in dollars and percentages, target highs and lows, and target volume. Morningstar(registered trademark) Portfolio X-Raysm. This comprehensive tool goes below the surface to give you an in-depth examination of all your investments. It analyzes your portfolio by asset allocation, stock sector, fees and expenses, stock statistics, world regions, and top holdings. There are costs associated with these services. T. Rowe Price College Planning -------------------------------------------------------------------------------- College Planning With the costs of college steadily increasing, it's critical to plan early for this financial event. Our educational investment vehicles and information can help you lay the foundation for the future of your loved ones. For more information or to request a kit, call us at 1-800-638-5660, or visit our Web site at www.troweprice.com. T. Rowe Price College Savings Plan. This national "529" plan is sponsored by the Education Trust of Alaska and designed to help families prepare for college education costs. The Plan, which is open to any U.S. resident, allows participants to invest up to a maximum account balance of $250,000 for a person's education. With systematic investing, you can invest as little as $50 per month. In addition, assets grow tax-deferred and are free of federal income taxes when used for qualified educational expenses. We also offer two additional college savings plans, including the Maryland College Investment Plan and the University of Alaska College Savings Plan, both of which offer federal tax-deferred growth and benefits for state residents. Education Savings Accounts (formerly Education IRAs). This education investment account allows individuals to invest a total of $2,000 per year per beneficiary to pay for educational costs at eligible schools including elementary, secondary, and post-secondary institutions. Withdrawals from Education Savings Accounts are tax-free if the proceeds are used for qualifying educational expenses. College Investment Calculator. This Web-based application helps you to determine simultaneously the college costs for as many as five children. The calculator is also connected with a database that lets you select specific schools with actual costs of tuition and room and board. College Planning Basics. This Insights report offers a college cost worksheet and describes the options available to individuals planning for college. T. Rowe Price Advisory Services -------------------------------------------------------------------------------- Advisory Services If you are looking for professional investment advisory services with a personal touch, T. Rowe Price offers tools to help you make informed investing decisions and take control of your financial future. The T. Rowe Price(registered trademark) Retirement Income Manager* helps retirees or those within two years of retirement determine how much income they can take in retirement. The program uses extensive statistical analysis and the input of financial planning professionals to suggest an income plan that best meets your objectives. Rollover Investment Service* offers asset allocation advice to those planning a major change in their qualified retirement plans, such as a 401(k) rollover from a previous employer or an IRA transfer. T. Rowe Price Investment Checkup(registered trademark) offers a second opinion on your portfolio. We analyze your investments using proprietary software and provide asset allocation suggestions based on your personal profile. Retirement Income Calculator. This free calculator, incorporating the analytic approach of the T. Rowe Price Retirement Income Manager program, simulates 500 potential market scenarios to estimate the probability of maintaining an income strategy throughout retirement. Morningstar(registered trademark) Clear Futuresm Guidance. This unique retirement planning tool can help you determine an investment strategy for your retirement assets. After you input information about your current financial situation, Clear Future calculates several retirement income ranges you could achieve. * Services of T. Rowe Price Advisory Services, Inc., a federally registered investment adviser. There are costs associated with these services. T. Rowe Price Mutual Funds -------------------------------------------------------------------------------- STOCK FUNDS Domestic Blue Chip Growth* Capital Appreciation Capital Opportunity Developing Technologies 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 Tax-Efficient Multi-Cap Growth Total Equity Market Index Value* BLENDED ASSET FUNDS Balanced Personal Strategy Balanced Personal Strategy Growth Personal Strategy Income Tax-Efficient Balanced BOND FUNDS Domestic Taxable Corporate Income GNMA High Yield* New Income Short-Term Bond Spectrum Income Summit GNMA U.S. Bond Index 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 Tax-Free Bond MONEY MARKET FUNDS!! Taxable Prime Reserve Summit Cash Reserves U.S. Treasury Money Tax-Free California Tax-Free Money Maryland Tax-Free Money New York Tax-Free Money Summit Municipal Money Market Tax-Exempt Money INTERNATIONAL/GLOBAL FUNDS Stock Emerging Europe & Mediterranean Emerging Markets Stock European Stock Global Stock Global Technology International Discovery! International Equity Index International Growth & Income International Stock* Japan Latin America New Asia Spectrum International Bond Emerging Markets Bond International Bond* For more information about T. Rowe Price funds or services, please contact us directly at 1-800-225-5132. * T. Rowe Price Advisor Class available for these funds. The T. Rowe Price Advisor Class is offered only through financial intermediaries. For more information about T. Rowe Price Advisor Class funds, contact your financial professional or T. Rowe Price at 1-877-804-2315. ! 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, which contains complete information, including risks, fees, and expenses. Read it carefully before investing. T. Rowe Price Invest With Confidence (registered trademark) T. Rowe Price Investment Services, Inc. 100 East Pratt Street Baltimore, MD 21202 F39-051 4/30/02