-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T6r2SSVcmJgeycR7sSxaotvAazyc7I09SjYuawWE3K59blKlZ1agcWHBp3znetXt Bbzwm4uplj2Ii9qxA4yigQ== 0000313212-03-000085.txt : 20031223 0000313212-03-000085.hdr.sgml : 20031223 20031223171600 ACCESSION NUMBER: 0000313212-03-000085 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031031 FILED AS OF DATE: 20031223 EFFECTIVENESS DATE: 20031223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICE T ROWE INTERNATIONAL FUNDS INC CENTRAL INDEX KEY: 0000313212 IRS NUMBER: 521175211 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-02958 FILM NUMBER: 031071876 BUSINESS ADDRESS: STREET 1: 100 E PRATT ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 3015472000 FORMER COMPANY: FORMER CONFORMED NAME: PRICE T ROWE INTERNATIONAL TRUST DATE OF NAME CHANGE: 19900301 FORMER COMPANY: FORMER CONFORMED NAME: PRICE T ROWE INTERNATIONAL FUND INC DATE OF NAME CHANGE: 19890914 N-CSR 1 igi.txt T. ROWE PRICE INTERNATIONAL GROWTH & INCOME FUND Item 1. Report to Shareholders - -------------------------------------------------------------------------------- T. Rowe Price International Growth & Income Fund Certified Annual Report This report is certified under the Sarbanes-Oxley Act of 2002, which requires that public companies, including mutual funds, affirm that the information provided in their annual and semiannual shareholder reports fully and fairly represents their financial position. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report 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. [Graphic Omitted] INTERNATIONAL GROWTH & INCOME FUND - -------------------------------------------------------------------------------- As of 10/31/03 International Growth & Income Fund $10,759 MSCI EAFE Index* $9,190 MSCI EAFE Growth Fund Line 12/21/98 10,000 10,000 10/31/99 11,285 11,000 10/31/00 10,984 11,157 10/31/01 8,274 9,150 10/31/02 7,204 8,298 10/31/03 9,190 10,759 * From 12/31/98 Note: Performance for the Advisor Class and R Class will vary due to their differing fee structures. See returns table below. Average Annual Compound Total Return Periods Ended Since Inception 10/31/03 1 Year 3 Years Inception Date International Growth & Income Fund 29.66% -1.20% 1.52% 12/21/98 MSCI EAFE Index 27.57 -5.77 -1.73* Lipper International Funds Average 24.51 -7.03 -0.62* International Growth & Income Fund-Advisor Class 29.80 -- 31.14 9/30/02 International Growth & Income Fund-R Class 29.38 -- 30.75 9/30/02 MSCI EAFE Index 27.57 -- 31.36** Lipper International Funds Average 24.51 -- 27.84** *Benchmark since-inception data are for the time period 12/31/98 - 10/31/03. **Benchmark since-inception data are for the time period 9/30/02 - 10/31/03. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. Past performance cannot guarantee future results. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Dear Shareholder, We are pleased to report that the International Growth & Income Fund, International Growth & Income Fund-Advisor Class, and International Growth & Income Fund-R Class generated solid returns during the 12 months ended October 31, 2003. As you can see in the table on the preceding page, we outperformed the peer group, the Lipper International Funds Average, and the MSCI EAFE Index over the 12-month period. Major International Index Returns - -------------------------------------------------------------------------------- 12-Month Period Ended 10/31/03 Return MSCI EAFE Index 27.57% MSCI Europe Index 24.71 MSCI Japan Index 33.18 MSCI Pacific Ex-Japan Index 37.19 S&P 500 Index 20.80 As you know, the fund's objective is long-term capital growth and reasonable income through investments primarily in common stocks of mature, large-capitalization, non-U.S. companies. The fund employs both growth- and value-oriented approaches, although in general, the fund places more emphasis on "value" characteristics such as price/earnings or price/book value ratios. The Major International Index Returns table shows how the world's major regions performed over the past year. As you can see, international stock markets posted strong gains. Among developed markets, the MSCI Pacific Ex-Japan Index and the MSCI Japan Index performed best while the S&P 500 Index of large-cap U.S. stocks lagged. Largest Country Allocations And Performance - -------------------------------------------------------------------------------- (In U.S. Dollar Terms) Percent of 12-Month Period Ended 10/31/03 Net Assets Return United Kingdom 21.8% 20.25% Japan 18.2 33.18 Australia 9.3 41.01 France 9.1 24.65 Germany 7.4 37.04 Source: RIMES Online, using MSCI indices. The Largest Country Allocations and Performance table shows the portfolio allocation and how the fund's largest markets performed over the past year. All of our largest country allocations performed well, led by Australia's (the third-largest allocation) 41% advance. The U.K. market, our largest country allocation, gained 20% for the past 12 months. [Graphic Omitted] Geographic Diversification - -------------------------------------------------------------------------------- Europe 61% Japan 18% Pacific Rim 16% Latin America 3% Other 2% Based on net assets as of 10/31/03. Source: RIMES Online, using MSCI structure for regional breakdown. European stocks consistently represent the lion's share of the fund's assets because we have been able to identify a larger base of companies in Europe that fit our investment criteria. Conversely, Latin American stocks typically constitute a small slice of the portfolio because of the dearth of companies that fit our investing regime. Finally, I'm sure you are aware that mutual fund companies have recently come under scrutiny for their trading policies. The investigations have led to allegations that executives of several mutual fund companies permitted or engaged in improper mutual fund trading. In addition, certain intermediaries that process fund transactions are alleged to have assisted some investors in executing improper mutual fund trades. I want T. Rowe Price shareholders to know that we emphatically condemn the abuses that have been revealed or alleged against other firms in our industry. Our firm has not entered and will not enter into any agreements with any investors or intermediaries that authorize after-hours trading or excessive short-term trading in any of our funds. T. Rowe Price investors can be assured that our firm unequivocally opposes illegal or inappropriate trading of any nature and has policies and procedures in place designed to protect the best interests of our long-term shareholders. No T. Rowe Price executives or portfolio managers or investment personnel of the T. Rowe Price mutual funds have engaged in any inappropriate trading of T. Rowe Price mutual funds. You may find out more about our trading policies and the steps we take to protect your interests by visiting our Website (troweprice.com). These policies are also spelled out in your fund's prospectus. We thank you for your continued support. Respectfully, James S. Riepe Chairman November 21, 2003 T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Financial Highlights For a share outstanding throughout each period International Growth & Income class Year 12/21/98 Ended Through 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99 NET ASSET VALUE Beginning of period $ 7.34 $ 8.19 $ 10.75 $ 11.00 $ 10.00 Investment activities Net investment income (loss) 0.02* 0.09* 0.11* 0.14* 0.16* Net realized and unrealized gain (loss) 2.13 (0.84) (1.90) 0.03** 0.84 Total from investment activities 2.15 (0.75) (1.79) 0.17 1.00 Distributions Net investment income (0.08) (0.10) (0.13) (0.19) -- Net realized gain (0.01) -- (0.64) (0.23) -- Total distributions (0.09) (0.10) (0.77) (0.42) -- NET ASSET VALUE End of period $ 9.40 $ 7.34 $ 8.19 $ 10.75 $ 11.00 ----------------------------------------------------------- Ratios/ Supplemental Data Total return^ 29.66%* (9.31)%* (17.99)%* 1.43%* 10.00%* Ratio of total expenses to average net assets 1.25%* 1.25%* 1.25%* 1.25%* 1.25%!* Ratio of net investment income (loss) to average net assets 1.36%* 1.25%* 1.24%* 1.24%* 1.87%!* Portfolio turnover rate 53.2% 24.6% 8.5% 32.2% 35.8%! Net assets, end of period (in thousands) $ 114,999 $ 10,654 $ 8,500 $ 10,118 $ 9,776 ^ 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. * Excludes expenses in excess of a 1.25% contractual expense limitation in effect through 2/28/05. ** 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 International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Financial Highlights For a share outstanding throughout each period - -------------------------------------------------------------------------------- Advisor Class Year 9/30/02 Ended Through 10/31/03 10/31/02 NET ASSET VALUE Beginning of period $ 7.34 $ 7.10 Investment activities Net investment income (loss) 0.09* -- Net realized and unrealized gain (loss) 2.07 0.24 Total from investment activities 2.16 0.24 Distributions Net investment income (0.08) -- Net realized gain (0.01) -- Total distributions (0.09) -- NET ASSET VALUE End of period $ 9.41 $ 7.34 ------------------------------------- Ratios/Supplemental Data Total return^ 29.80%* 3.38%* Ratio of total expenses to average net assets 1.15%* 1.15%!* Ratio of net investment income (loss) to average net assets 0.71%* 0.06%!* Portfolio turnover rate 53.2% 24.6% Net assets, end of period (in thousands) $ 3,513 $ 103 ^ 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. * Excludes expenses in excess of a 1.15% contractual expense limitation in effect through 2/28/04. ! Annualized The accompanying notes are an integral part of these financial statements. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Financial Highlights For a share outstanding throughout each period R Class Year 9/30/02 Ended Through 10/31/03 10/31/02 NET ASSET VALUE Beginning of period $ 7.34 $ 7.10 Investment activities Net investment income (loss) 0.09* -- Net realized and unrealized gain (loss) 2.04 0.24 Total from investment activities 2.13 0.24 Distributions Net investment income (0.08) -- Net realized gain (0.01) -- Total distributions (0.09) -- NET ASSET VALUE End of period $ 9.38 $ 7.34 ------------------------------------- Ratios/Supplemental Data Total return^ 29.38%* 3.38%* Ratio of total expenses to average net assets 1.40%* 1.40%!* Ratio of net investment income (loss) to average net assets 0.89%* (0.19)%!* Portfolio turnover rate 53.2% 24.6% Net assets, end of period (in thousands) $ 910 $ 103 ^ 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. * Excludes expenses in excess of a 1.40% contractual expense limitation in effect through 2/28/04. ! Annualized The accompanying notes are an integral part of these financial statements. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report October 31, 2003 Portfolio of Investments (ss.) Shares Value - -------------------------------------------------------------------------------- In thousands EUROPE/FAR EAST 0.7% Common Stocks 0.7% iShares MSCI EAFE (USD) 6,900 $ 860 Total Europe/Far East (Cost $757) 860 AUSTRALIA 9.3% Common Stocks 9.3% Australia & New Zealand Banking 79,320 1,000 Australia & New Zealand Banking, Rights, 11/24/03 * 13,555 41 AXA Asia Pacific 343,437 688 BHP Steel 248,762 955 Boral 222,705 867 Coles Myer 77,161 425 Lion Nathan (NZD) 60,773 238 Macquarie Bank 29,464 727 National Australia Bank 63,658 1,379 Nufarm 113,454 423 Paperlinx 152,727 548 Publishing & Broadcasting 82,133 701 QBE Insurance 97,793 713 Santos 205,406 889 Westfield Trust 461,236 1,088 Westpac Banking 41,039 469 Total Australia (Cost $9,899) 11,151 AUSTRIA 0.2% Common Stocks 0.2% Voest-Alpine 6,301 225 Total Austria (Cost $218) 225 BELGIUM 1.3% Common Stocks 1.3% Dexia 30,216 475 Fortis 34,222 608 KBC Bank 10,081 427 Total Belgium (Cost $1,435) 1,510 BERMUDA 0.7% Common Stocks 0.7% Yue Yuen Industrial (HKD) 302,000 $ 853 Total Bermuda (Cost $781) 853 BRAZIL 0.7% Common Stocks 0.7% Gerdau ADR (USD) 30,890 450 Petrobras ADR (USD) 20,600 448 Total Brazil (Cost $852) 898 CHILE 0.2% Common Stocks 0.2% Banco Santander ADR (USD) 8,600 204 Total Chile (Cost $192) 204 CHINA 0.0% Common Stocks 0.0% PICC Property and Casualty, 144A (HKD) * 22,000 5 Total China (Cost $5) 5 DENMARK 0.8% Common Stocks 0.8% Danske Bank 30,763 620 TDC A/S 9,590 308 Total Denmark (Cost $896) 928 FINLAND 0.6% Common Stocks 0.6% Kesko 42,809 665 Total Finland (Cost $580) 665 FRANCE 9.1% Common Stocks 9.1% Accor 11,659 $ 458 Assurances Generales de France 11,776 621 Aventis 17,535 927 AXA 10,567 200 AXA ADR (USD) 2,100 40 BNP Paribas 25,618 1,344 CNP Assurances 9,976 454 Compagnie de Saint-Gobain 8,334 351 LVMH 3,255 225 Pernod-Ricard 4,687 452 Pinault Printemps Redoute 4,392 447 Publicis 23,528 735 Renault 11,659 770 Sanofi-Synthelabo 21,108 1,305 Societe Generale 12,791 949 Total, Series B 10,074 1,564 TotalFinaElf ADR (USD) 600 47 Total France (Cost $10,105) 10,889 GERMANY 7.4% Common Stocks 6.8% Allianz 1,987 213 Altana 18,896 1,189 AXA Colonia Konzern 3,527 131 BASF 6,658 305 Celesio 10,242 428 Deutsche Bank 8,544 563 E.On 20,718 1,046 Hannover Reckversicherungs 9,349 272 Heidelberger Zement 6,188 264 Jenoptik 14,611 160 MAN 9,974 276 METRO 27,103 1,107 RWE 7,670 213 SAP 3,847 $ 559 Siemens 16,067 1,082 Volkswagen 6,824 344 8,152 Preferred Stocks 0.6% Fresenius 4,364 278 Hugo Boss 19,825 404 682 Total Germany (Cost $8,111) 8,834 HONG KONG 2.9% Common Stocks 2.9% Esprit Holdings 87,000 273 Hong Kong Electric 231,000 901 Hutchison Whampoa 289,800 2,238 Total Hong Kong (Cost $3,163) 3,412 IRELAND 0.7% Common Stocks 0.7% Anglo Irish Bank (London listing) 284 4 Anglo Irish Bank (Dublin listing) 49,042 588 DCC 14,829 199 Total Ireland (Cost $685) 791 ITALY 5.0% Common Stocks 5.0% Banche Poplari Unite * 25,092 382 Davide Campari 7,226 310 ENI 72,666 1,152 ENI ADR (USD) 1,500 119 Italcementi 13,277 160 Mondadori 50,138 384 Parmalat Finanz 186,181 579 RAS 25,318 395 Saipem 34,941 254 San Paolo IMI 35,408 398 San Paolo IMI ADR (USD) 1,500 $ 34 Telecom Italia * 326,946 852 Telecom Italia Mobile 200,193 923 Total Italy (Cost $5,702) 5,942 JAPAN 18.2% Common Stocks 18.2% 77 Bank 56,000 293 Bank of Yokohama 134,000 578 Canon 17,000 821 Dai Nippon Printing 36,000 555 Denso 36,100 683 Fancl 3,700 104 Fuji Heavy Industries 90,000 408 Goldcrest 7,000 318 Honda 16,500 650 iShares MSCI Japan (USD) * 66,000 610 Kaneka 63,000 490 Kao 10,000 205 KDDI 95 515 Kirin Brewery 56,000 447 Koito Manufacturing 52,000 280 Kuraray 63,000 474 Marui 53,000 672 Mitsubishi 65,000 673 Mitsubishi Heavy Industries 319,000 875 Mitsui Sumitomo Insurance 79,000 650 NEC Electronics * 1,000 77 NEC Electronics, 144A * 700 54 NEC Soft 12,400 337 Nippon Express 137,000 617 Nippon Mining Holdings 63,500 232 Nippon Yusen 151,000 642 Nipro 21,000 305 Nomura Holdings 16,000 274 Promise 10,800 484 Sanyo Shokai 48,000 295 Sekisui House 61,000 $ 598 Shimadzu 124,000 480 Sony 5,600 195 Sony ADR (USD) 1,500 53 Sumitomo 79,000 547 Sumitomo Mitsui Financial 27 136 Takeda Chemical Industries 21,200 749 TDK 3,500 229 TDK ADR (USD) 500 33 Terumo 26,800 509 Toho Gas 177,000 518 Tohoku Electric Power 61,500 995 Tonen General Sekiyu 65,000 530 Toyota Motor 46,700 1,327 Yamaha 23,000 463 Yamanouchi Pharmaceutical 29,000 727 Yoshinoya D&C 40 60 Total Japan (Cost $20,635) 21,767 MEXICO 1.8% Common Stocks 1.8% America Movil ADR, Series L (USD) 13,600 324 Carso Global Telecom * 173,000 244 Cemex 48,175 231 Grupo Financiero Banorte 136,700 445 Telmex ADR, Series L (USD) 15,900 511 Wal-Mart de Mexico 146,500 409 Total Mexico (Cost $2,023) 2,164 NETHERLANDS 3.6% Common Stocks 3.6% ABN Amro ADR (USD) 3,000 63 ABN Amro Holdings 9,654 202 Akzo Nobel 14,922 471 Corio 14,310 477 CSM 18,673 382 DSM 5,924 $ 271 European Aeronautic Defense & Space 28,310 575 ING Groep 22,057 458 Koninklijke Numico * 40,424 911 OCE 10,197 135 Royal Dutch Petroleum ADS (USD) 8,200 364 Total Netherlands (Cost $3,963) 4,309 NEW ZEALAND 0.4% Common Stocks 0.4% Fisher & Paykel Healthcare 68,909 511 Total New Zealand (Cost $468) 511 NORWAY 1.1% Common Stocks 1.1% Norsk Hydro 12,237 688 Statoil ASA 70,340 660 Total Norway (Cost $1,226) 1,348 SINGAPORE 2.5% Common Stocks 2.5% Fraser & Neave 102,700 726 MobileOne Limited 521,000 407 Sembcorp 945,000 717 Singapore Land 167,000 371 United Overseas Bank 96,336 753 Total Singapore (Cost $2,785) 2,974 SOUTH KOREA 1.0% Common Stocks 1.0% SK Telecom ADR (USD) 63,260 1,240 Total South Korea (Cost $1,199) 1,240 SPAIN 2.5% Common Stocks 2.5% Acciona 15,242 $ 799 Banco Santander Central Hispano 26,871 257 Banco Santander Central Hispano ADR (USD) 4,100 39 Enagas 29,977 277 Endesa 42,284 670 Endesa ADR (USD) 4,000 63 Iberdrola 34,014 567 Indra Sistemas 29,226 329 Total Spain (Cost $2,950) 3,001 SWEDEN 4.2% Common Stocks 4.2% Autoliv 15,300 504 Brinova Fastighete, Series B * 33,638 22 Electrolux, Series B 36,748 753 ForeningsSparbanken, Series A 35,548 592 NORDEA 200,653 1,244 Peab AB 41,254 215 SSAB Svenskt Stal, Series A 23,865 349 Svenska Handelsbanken, Series A 46,663 822 Tele2 AB, Series B * 10,910 549 Total Sweden (Cost $4,545) 5,050 SWITZERLAND 2.9% Common Stocks 2.9% Kaba Holding 1,024 175 Novartis 24,177 920 Swisscom 2,148 624 UBS 23,917 1,466 UBS (Registered shares) (USD) 316 19 Vontobel 12,439 272 Total Switzerland (Cost $3,348) 3,476 UNITED KINGDOM 21.8% Common Stocks 21.8% Alliance & Leicester 25,482 $ 383 Alliance UniChem 41,258 376 Anglo American 31,191 638 Associated British Foods 87,578 815 AstraZeneca 2,461 116 AstraZeneca ADR (USD) 19,100 911 Astro All Asia Net (Ordinary shares) (MYR) * 19,000 24 Astro All Asia Net (Restricted shares) 144A (MYR) * 84,200 104 Aviva 73,929 606 Barclays 12,549 106 Barclays ADR (USD) 45,600 1,573 BBA 94,379 416 BP ADR (USD) 67,100 2,844 Bradford & Bingley 65,820 351 Cable & Wireless 179,713 415 Cadbury Schweppes ADR (USD) 19,200 499 Centrica 103,486 324 Dixons 127,945 295 FKI 175,069 343 Galen Holdings 30,988 396 GKN 14,506 68 GlaxoSmithKline ADR (USD) 25,500 1,104 Hays 153,701 318 HBOS 80,420 935 Hilton Group 150,118 494 HSBC 95,713 1,437 Imperial Chemical 68,806 226 Imperial Chemical ADR (USD) 2,600 34 J Sainsbury 126,848 609 Kesa Electricals * 26,868 111 Marks & Spencer 79,143 386 Mitchells & Butler * 94,919 374 mm02 * 563,943 $ 612 Persimmon 33,699 265 Pilkington 194,034 286 Prudential 55,638 431 RAC 16,888 156 Rolls-Royce Group 198,238 638 Royal Bank of Scotland 47,166 1,263 Shell Transport & Trading ADR (USD) 60,400 2,305 Tesco 67,287 270 United Utilities 32,472 259 Vodafone ADR (USD) 90,900 1,923 Total United Kingdom (Cost $24,573) 26,039 SHORT-TERM INVESTMENTS 5.5% Money Market Funds 5.5% T. Rowe Price Reserve Investment Fund, 1.10% # 6,538,926 6,539 Total Short-Term Investments (Cost $6,539) 6,539 SECURITIES LENDING COLLATERAL 4.3% Money Market Pooled Account 4.3% Investment in money market pooled account managed by JP Morgan Chase Bank, London 5,106,292 5,106 Total Securities Lending Collateral (Cost $5,106) 5,106 Value - -------------------------------------------------------------------------------- In thousands Total Investments in Securities 109.4% of Net Assets (Cost $122,741) $ 130,691 Other Assets Less Liabilities (11,269) NET ASSETS $ 119,422 -------------------- (ss.) Denominated in currency of the country of incorporation unless otherwise noted # Seven-day yield * Non-income producing 144A Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration only to qualified institutional buyers--total of such securities at period-end amounts to $163,000 and represents 0.1% of net assets ADR American Depository Receipts ADS American Depository Shares HKD Hong Kong dollar MYR Malaysian ringgit NZD New Zealand dollar USD United States dollar The accompanying notes are an integral part of these financial statements. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report October 31, 2003 Statement of Assets and Liabilities - -------------------------------------------------------------------------------- In thousands Assets Investments in securities, at value (Cost $122,741) $ 130,691 Other assets 7,612 Total assets 138,303 Liabilities Payable for investment securities purchased 7,687 Other liabilities 11,194 Total liabilities 18,881 NET ASSETS $ 119,422 -------------------- Net Assets Consist of: Undistributed net investment income (loss) $ 262 Undistributed net realized gain (loss) (1,822) Net unrealized gain (loss) 7,932 Paid-in-capital applicable to 12,704,650 shares of $0.01 par value capital stock outstanding; 2,000,000,000 shares of the Corporation authorized 113,050 NET ASSETS $ 119,422 -------------------- NET ASSET VALUE PER SHARE International Growth & Income shares ($114,999,117/12,234,245 shares outstanding) $ 9.40 -------------------- International Growth & Income-Advisor Class shares ($3,512,914/373,335 shares outstanding) $ 9.41 -------------------- International Growth & Income-R Class shares ($910,337/97,070 shares outstanding) $ 9.38 -------------------- The accompanying notes are an integral part of these financial statements. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Statement of Operations - -------------------------------------------------------------------------------- In thousands Year Ended 10/31/03 Investment Income (Loss) Income Dividend (net of foreign taxes of $84) $ 764 Securities lending 14 Total income 778 Expenses Investment management 198 Custody and accounting 144 Shareholder servicing International Growth & Income class 90 R Class 1 Registration 77 Legal and audit 29 Prospectus and shareholder reports International Growth & Income class 7 Advisor Class 1 R Class 1 Directors 5 Distribution and service (12b-1) Advisor Class 1 R Class 1 Miscellaneous 4 Reductions/repayments pursuant to expense limitation Management fees (waived) repaid (114) Expenses (reimbursed by) repaid to manager (71) Total expenses 374 Net investment income (loss) 404 Realized and Unrealized Gain (Loss) Net realized gain (loss) Securities $ (758) Foreign currency transactions (188) Net realized gain (loss) (946) Change in net unrealized gain (loss) Securities 10,514 Other assets and liabilities denominated in foreign currencies (23) Change in net unrealized gain (loss) 10,491 Net realized and unrealized gain (loss) 9,545 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 9,949 -------------------- The accompanying notes are an integral part of these financial statements. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Statement of Changes in Net Assets - -------------------------------------------------------------------------------- In thousands Year Ended 10/31/03 10/31/02 Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 404 $ 132 Net realized gain (loss) (946) (997) Change in net unrealized gain (loss) 10,491 (269) Increase (decrease) in net assets from operations 9,949 (1,134) Distributions to shareholders Net investment income International Growth & Income class (128) (109) Advisor Class (1) -- R Class (1) -- Net realized gain International Growth & Income class (16) -- Advisor Class -- -- R Class -- -- Decrease in net assets from distributions (146) (109) Capital share transactions * Shares sold International Growth & Income class 106,848 20,241 Advisor Class 3,554 100 R Class 1,464 100 Distributions reinvested International Growth & Income class 128 91 Advisor Class 1 -- R Class 1 -- Shares redeemed International Growth & Income class (12,208) (16,928) Advisor Class (293) -- R Class (737) -- Increase (decrease) in net assets from capital share transactions 98,758 3,604 Net Assets Increase (decrease) during period $ 108,561 $ 2,361 Beginning of period 10,861 8,500 End of period $ 119,422 $ 10,861 ------------------------------------- *Share information Shares sold International Growth & Income class 12,341 2,446 Advisor Class 398 14 R Class 166 14 Distributions reinvested International Growth & Income class 18 11 Shares redeemed International Growth & Income class (1,576) (2,044) Advisor Class (39) -- R Class (83) -- Increase (decrease) in shares outstanding 11,225 441 The accompanying notes are an integral part of these financial statements. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report October 31, 2003 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 1940 Act). The International Growth & Income Fund (the fund), a diversified, open-end management investment company, is one portfolio established by the corporation. The fund seeks long-term growth of capital and reasonable income through investments primarily in the common stocks of well-established, dividend-paying non-U.S. companies. The fund has three classes of shares: International Growth & Income Fund (International Growth & Income class), offered since December 21, 1998, International Growth & Income Fund-Advisor Class (Advisor Class), offered since September 30, 2002, and International Growth & Income Fund-R Class (R Class), offered since September 30, 2002. Advisor Class shares are sold only through brokers and other financial intermediaries, and R Class shares are available to retirement plans serviced by intermediaries. The Advisor Class and R Class each operate under separate Board-approved Rule 12b-1 plans, pursuant to which each class compensates financial intermediaries for distribution and certain administrative services. Each class has exclusive voting rights on matters related solely to that class, separate voting rights on matters that relate to all classes, and, in all other respects, the same rights and obligations as the other classes. 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 The fund values its investments and computes its net asset value per share at the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day that the NYSE is open for business. Equity securities listed or regularly traded on a securities exchange or in the over-the-counter market 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. Listed securities not traded on a particular day are valued at the mean of the latest bid and ask prices for domestic securities and the last quoted sale price for international securities. Investments in mutual funds are valued at the mutual fund's closing net asset value per share on the day of valuation. Other investments and those 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 the T. Rowe Price Valuation Committee, established by the fund's Board of Directors. Most foreign markets close before the NYSE. Normally, developments that could affect the values of securities that occur between the close of a foreign market and the close of the NYSE will not be reflected in security valuations used by the fund to compute its share price. However, if developments are so significant that they will, in the judgment of the fund, clearly and materially affect security values, such valuations may be adjusted to reflect the estimated fair value of the securities as of the close of the NYSE, as determined in good faith by the T. Rowe Price Valuation Committee, established by the fund's Board of Directors. Currency Translation Assets, including investments, 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 as 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 date of the transaction. The effect of changes in foreign currency exchange rates on realized and unrealized security gains and losses is reflected as a component of security gains and losses. Class Accounting The Advisor Class and R Class each pay distribution and administrative expenses in the form of Rule 12b-1 fees, in an amount not exceeding 0.25% and 0.50%, respectively, of the class's average daily net assets. Shareholder servicing, prospectus, and shareholder report expenses incurred by each class are charged directly to the class to which they relate. Expenses common to all classes, investment income, and realized and unrealized gains and losses are allocated to the classes based upon the relative daily net assets of each class. Income distributions are declared and paid by each class on an annual basis. Capital gain distributions, if any, are declared and paid by the fund, typically on an annual basis. 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. Dividends from mutual fund investments are reflected as dividend income; capital gain distributions from mutual fund investments are reflected as realized gain/loss. In the normal course of business, the fund enters into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is dependent on claims that may be made against the fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote. 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 October 31, 2003, approximately 10% of the fund's net assets were invested in securities of companies located in emerging markets or denominated in or linked to the currencies of emerging market countries. 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 managed by the fund's lending agent in accordance with investment guidelines approved by fund management. 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. Securities lending revenue recognized by the fund consists of earnings on invested collateral and borrowing fees, net of any rebates to the borrower and compensation to the lending agent. At October 31, 2003, the value of loaned securities was $4,803,000; aggregate collateral consisted of $5,106,000 in the money market pooled account. Other Purchases and sales of portfolio securities, other than short-term, aggregated $116,369,000 and $17,323,000, respectively, for the year ended October 31, 2003. 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 under Subchapter M of the Internal Revenue Code and distribute to shareholders all of its taxable income and gains. Federal income tax regulations differ from generally accepted accounting principles; therefore, distributions determined in accordance with tax regulations may differ significantly in amount or character from net investment income and realized gains for financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. Distributions during the year ended October 31, 2003 totaled $146,000 and were characterized as ordinary income for tax purposes. At October 31, 2003, the tax-basis components of net assets were as follows: - -------------------------------------------------------------------------------- Unrealized appreciation $ 8,635,000 Unrealized depreciation (760,000) Net unrealized appreciation (depreciation) 7,875,000 Undistributed ordinary income 262,000 Capital loss carryforwards (1,765,000) Paid-in capital 113,050,000 Net assets $ 119,422,000 -------------------- The fund intends to retain realized gains to the extent of available capital loss carryforwards for federal income tax purposes. As of October 31, 2003, the fund had $1,000 of capital loss carryforwards that expire in 2009, $1,006,000 that expire in 2010, and $758,000 that expire in 2011. For the year ended October 31, 2003, the fund recorded the following permanent reclassifications to reflect tax character. Reclassifications between income and gain relate primarily to the character of currency gains and losses. Results of operations and net assets were not affected by these reclassifications. - -------------------------------------------------------------------------------- Undistributed net investment income $ (141,000) Undistributed net realized gain 141,000 At October 31, 2003, the cost of investments for federal income tax purposes was $122,798,000. 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. 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, Inc. The investment management agreement between the fund and the manager provides for an annual investment management fee, which is computed daily and paid monthly. The fee consists of an individual fund fee, equal to 0.35% of the fund's average daily net assets, and the fund's pro-rata share of a group fee. The group fee is calculated based on the combined net assets of certain mutual funds sponsored by Price Associates (the group) applied to a graduated fee schedule, with rates ranging from 0.48% for the first $1 billion of assets to 0.295% for assets in excess of $120 billion. The fund's portion of the group fee is determined by the ratio of its average daily net assets to those of the group. At October 31, 2003, the effective annual group fee rate was 0.32%, and investment management fee payable totaled $15,000. Each class is also subject to a contractual expense limitation through the limitation dates indicated in the table below. During the limitation period, the manager is required to waive its management fee and reimburse a class for any expenses, excluding interest, taxes, brokerage commissions, and extraordinary expenses, that would otherwise cause the class's ratio of total expenses to average net assets (expense ratio) to exceed its expense limitation. Through the repayment date, each class is required to repay the manager for expenses previously reimbursed and management fees waived to the extent the class's net assets have grown or expenses have declined sufficiently to allow repayment without causing the class's expense ratio to exceed its expense limitation. International Growth & Income class Advisor Class R Class Expense Limitation 1.25% 1.15% 1.40% Limitation Date 2/28/05 2/28/04 2/28/04 Repayment Date 2/28/07 2/28/06 2/28/06 At October 31, 2003, management fees waived and expenses previously reimbursed by the manager remain subject to repayment in the following amounts: $352,000 through October 31, 2004, $74,000 through February 28, 2006, and $112,000 through February 28, 2007. In addition, the fund has entered into service agreements with Price Associates and two wholly owned subsidiaries of Price Associates (collectively, Price). Price Associates computes the daily share prices and maintains the financial records of the fund. T. Rowe Price Services, Inc., provides shareholder and administrative services in its capacity as the fund's transfer and dividend disbursing agent. T. Rowe Price Retirement Plan Services, Inc., provides subaccounting and recordkeeping services for certain retirement accounts invested in the International Growth & Income class and R Class. Expenses incurred pursuant to these service agreements totaled $161,000 for the year ended October 31, 2003, of which $13,000 was payable at period-end. Additionally, the fund is one of several mutual funds in which certain college savings plans managed by Price Associates may invest. As approved by the fund's Board of Directors, shareholder servicing costs associated with each college savings plan are borne by the fund in proportion to the average daily value of its shares owned by the college savings plan. For the year ended October 31, 2003, the fund was charged $11,000 for shareholder servicing costs related to the college savings plans, of which $7,000 was for services provided by Price and $2,000 was payable at period-end. At October 31, 2003, approximately 18.6% of the outstanding shares of the International Growth & Income class were held by college savings plans. The fund is also one of several mutual funds sponsored by Price Associates (underlying Price funds) in which the T. Rowe Price Spectrum Funds (Spectrum Funds) may invest. The Spectrum Funds do not invest in the underlying Price funds for the purpose of exercising management or control. Pursuant to a special servicing agreement, expenses associated with the operation of the Spectrum Funds 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 the Spectrum Funds. Expenses allocated under this agreement are reflected as shareholder servicing expense in the accompanying financial statements. For the year ended October 31, 2003, the fund was allocated $9,000 of Spectrum Funds' expenses, of which $6,000 related to services provided by Price and $9,000 was payable at period-end. At October 31, 2003, approximately 53.9% of the outstanding shares of the International Growth & Income class were held by the Spectrum Funds. The fund may invest in the T. Rowe Price Reserve Investment Fund and the 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, trusts, 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. During the year ended October 31, 2003, dividend income from the Reserve Funds totaled $12,000. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Report of Independent Auditors - -------------------------------------------------------------------------------- To the Board of Directors of T. Rowe Price International Funds, Inc. and Shareholders of T. Rowe Price International Growth & Income Fund In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of T. Rowe Price International Growth & Income Fund (one of the portfolios comprising T. Rowe Price International Funds, Inc., hereafter referred to as the "Fund") at October 31, 2003, and the results of its operations, the changes in its net assets and the financial highlights for each of the fiscal periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2003 by correspondence with the custodian, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Baltimore, Maryland November 24, 2003 T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Tax Information (Unaudited) for the Tax Year Ended 10/31/03 - -------------------------------------------------------------------------------- We are providing this information as required by the Internal Revenue Code. The amounts shown may differ from those elsewhere in this report because of differences between tax and financial reporting requirements. The fund's distributions to shareholders included $16,000 from short-term capital gains. For taxable non-corporate shareholders, $346,000 of the fund's distributed income and short-term capital gains represents qualified dividend income subject to the 15% rate category. For corporate shareholders, $10,000 of the fund's distributed income and short-term capital gains qualified for the dividends-received deduction. The fund will pass through foreign source income of $346,000 and foreign taxes paid of $76,000. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report 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. (T. Rowe Price); "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. The Statement of Additional Information includes additional information about the fund directors and is available without charge by calling a T. Rowe Price representative at 1-800-225-5132. Independent Directors Name (Date of Birth) Year Elected* Principal Occupation(s) During Past 5 Years and Directorships of Other Public Companies Anthony W. Deering (1/28/45) 1991 Director, Chairman of the Board, President, and Chief Executive Officer, The Rouse Company, real estate developers; Director, Mercantile Bank (4/03 to present) Donald W. Dick, Jr. (1/27/43) 1988 Principal, EuroCapital Advisors, LLC, an acquisition and management advisory firm David K. Fagin (4/9/38) 2001 Director, Golden Star Resources Ltd., Canyon Resources Corp. (5/00 to present), and Pacific Rim Mining Corp. (2/02 to present); Chairman and President, Nye Corp. F. Pierce Linaweaver (8/22/34) 2001 President, F. Pierce Linaweaver & Associates, Inc., consulting environmental and civil engineers John G. Schreiber (10/21/46) 2001 Owner/President, Centaur Capital Partners, Inc., a real estate investment company; Senior Advisor and Partner, Blackstone Real Estate Advisors, L.P.; Director, AMLI Residential Properties Trust, Host Marriott Corp., and The Rouse Company Hubert D. Vos (8/2/33) 2001 Owner/President, Stonington Capital Corp., a private investment company Paul M. Wythes (6/23/33) 1996 Founding Partner, Sutter Hill Ventures, a venture capital limited partnership, providing equity capital to young high-technology companies throughout the United States; Director, Teltone Corp. *Each independent director oversees 106 T. Rowe Price portfolios and serves until retirement, resignation, or election of a successor. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Inside Directors Name (Date of Birth) Year Elected* [Number of T. Rowe Price Portfolios Overseen] Principal Occupation(s) During Past 5 Years and Directorships of Other Public Companies James S. Riepe (6/25/43) 2002 [106] Director and Vice President, T. Rowe Price; Vice Chairman of the Board, Director, and Vice President, T. Rowe Price Group, Inc.; Chairman of the Board and Director, T. Rowe Price Global Asset Management Limited, T. Rowe Price Global Investment Services Limited, 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.; Chairman of the Board, International Funds M. David Testa (4/22/44) 1979 [106] Chief Investment Officer, Director, and Vice President, T. Rowe Price; Vice Chairman of the Board, Chief Investment Officer, Director, and Vice President, T. Rowe Price Group, Inc.; Director, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited; Chairman of the Board and Director, T. Rowe Price International, Inc.; Director and Vice President, T. Rowe Price Trust Company; Vice President, International Funds *Each inside director serves until retirement, resignation, or election of a successor. Officers Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) Christopher D. Alderson (3/29/62) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Mark C.J. Bickford-Smith (4/30/62) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Stephen V. Booth (6/21/61) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company Brian J. Brennan, CFA (7/14/64) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company Joseph A. Carrier (12/30/60) Treasurer, International Funds Vice President, T. Rowe Price, T. Rowe 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 International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Officers (continued) Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) Michael J. Conelius, CFA (6/16/64) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Ann B. Cranmer (3/23/47) Assistant Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; Vice President and Secretary, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited Julio A. Delgado, CFA (5/13/65) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Frances Dydasco (5/8/66) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Mark J.T. Edwards (10/27/57) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Roger L. Fiery III, CPA (2/10/59) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., and T. Rowe Price Trust Company John R. Ford, CFA (11/25/57) President, International Funds Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chief Investment Officer, Director, and Vice President, T. Rowe Price International, Inc. Gregory S. Golczewski (1/15/66) Vice President, International Funds Vice President, T. Rowe Price and T. Rowe Price Trust Company M. Campbell Gunn (3/9/56) Vice President, International Funds Vice President, T. Rowe Price Global Investment Services Limited, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Henry H. Hopkins (12/23/42) Vice President, International Funds Director and Vice President, T. Rowe Price Group, Inc., T. Rowe Price Investment Services, Inc., T. Rowe Price Services, Inc., and T. Rowe Price Trust Company; Vice President, T. Rowe Price, T. Rowe Price International, Inc., and T. Rowe Price Retirement Plan Services, Inc. Ian D. Kelson (8/16/56) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; formerly Head of Fixed Income, Morgan Grenfell/Deutsche Asset Management (to 2000) Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe Price International for at least five years. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Officers (continued) Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) Patricia B. Lippert (1/12/53) Secretary, International Funds Assistant Vice President, T. Rowe Price and T. Rowe Price Investment Services, Inc. Raymond A. Mills, Ph.D., CFA (12/3/60) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. George A. Murnaghan (5/1/56) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., T. Rowe Price Investment Services, Inc., and T. Rowe Price Trust Company Gonzalo Pangaro, CFA (11/27/68) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. D. James Prey III (11/26/59) Vice President, International Funds Vice President, T. Rowe Price and T. Rowe Price Group, Inc. Robert A. Revel-Chion (3/9/65) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Christopher J. Rothery (5/26/63) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. James B.M. Seddon (6/17/64) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Robert W. Smith (4/11/61) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Benedict R.F. Thomas, CFA (8/27/64) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Justin Thomson (1/14/68) Vice President, International Funds Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc.; formerly Portfolio Manager, G.T. Capital/Invesco (to 1998) Julie L. Waples (6/12/70) Vice President, International Funds Vice President, T. Rowe Price David J.L. Warren (4/14/57) Executive Vice President, International Funds Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chief Executive Officer, Director, and President, T. Rowe Price International, Inc.; Director, T. Rowe Price Global Asset Management Limited and T. Rowe Price Global Investment Services Limited Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe Price International for at least five years. T. Rowe Price International Growth & Income Fund - -------------------------------------------------------------------------------- Certified Annual Report Officers (continued) Name (Date of Birth) Title and Fund(s) Served Principal Occupation(s) William F. Wendler II, CFA (3/14/62) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price International, Inc. Richard T. Whitney, CFA (5/7/58) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price International, Inc., and T. Rowe Price Trust Company Edward A. Wiese, CFA (4/12/59) Vice President, International Funds Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company; Chief Investment Officer, Director, 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. Item 2. Code of Ethics. As of the end of the period covered by this report, the registrant had adopted a code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report. Item 3. Audit Committee Financial Expert. The registrant's Board of Directors/Trustees has determined that Mr. David K. Fagin qualifies as an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Fagin is considered independent for purposes of Item 3 of Form N-CSR. Item 4. Principal Accountant Fees and Services. Not required at this time. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. [Reserved] Item 9. Controls and Procedures (a) The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely. (b) The registrant's principal executive officer and principal financial officer are aware of no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits. (a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is attached. (a)(2) Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached. (b) A certification by the registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. T. Rowe Price International Funds, Inc. By /s/ James S. Riepe James S. Riepe Principal Executive Officer Date December 19, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ James S. Riepe James S. Riepe Principal Executive Officer Date December 19, 2003 By /s/ Joseph A. Carrier Joseph A. Carrier Principal Financial Officer Date December 19, 2003 EX-99.CERT 2 ex-99cert.txt 302 CERTIFICATIONS Item 10(a)(2). CERTIFICATIONS I, James S. Riepe, certify that: 1. I have reviewed this report on Form N-CSR of T. Rowe Price International Growth & Income Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 19, 2003 /s/ James S. Riepe James S. Riepe Principal Executive Officer CERTIFICATIONS I, Joseph A. Carrier, certify that: 1. I have reviewed this report on Form N-CSR of T. Rowe Price International Growth & Income Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 19, 2003 /s/ Joseph A. Carrier Joseph A. Carrier Principal Financial Officer EX-99.CODE ETH 4 ex-99_codeeth.txt CODE OF ETHICS Code of Ethics for Principal Executive and Senior Financial Officers of The Price Funds under the Sarbanes-Oxley Act of 2002 I. General Statement. This Code of Ethics (the "Price Funds S-O Code") has been designed to bring the Price Funds into compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002 (the "Act") rules promulgated by The Securities and Exchange Commission thereunder ("Regulations"). The Price Funds S-O Code applies solely to the Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller of, or persons performing similar functions for, a Price Fund (whether such persons are employed by a Price Fund or third party) ("Covered Officers"). The "Price Funds" shall include each mutual fund that is managed, sponsored and distributed by affiliates of T. Rowe Price Group, Inc. ("Group"). The investment managers to the Price Funds will be referred to as the "Price Fund Advisers." A list of Covered Officers is attached as Exhibit A. The Price Fund Advisers have, along with their parent, T. Rowe Price Group, Inc. ("Group") also maintained a comprehensive Code of Ethics and Conduct (the "Group Code") since 1972, which applies to all officers, directors and employees of the Price Funds, Group and its affiliates. As mandated by the Act, Group has adopted a Code (the "Group S-O Code"), similar to the Price Funds S-O Code, which applies solely to its principal executive and senior financial officers. The Group S-O Code and the Price Funds S-O Code will be referred to collectively as the "S-O Codes". The Price Funds S-O Code has been adopted by the Price Funds in accordance with the Act and Regulations thereunder and will be administered in conformity with the disclosure requirements of Item 2 of Form N-CSR. The S-O Codes are attachments to the Group Code. In many respects the S-O Codes are supplementary to the Group Code, but the Group Code is administered separately from the S-O Codes, as the S-O Codes are from each other. II. Purpose of the Price Funds S-O Code. The purpose of the Price Funds S-O Code, as mandated by the Act and the Regulations, is to establish standards that are reasonably designed to deter wrongdoing and to promote: Ethical Conduct. Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Disclosure. Full, fair, accurate, timely and understandable disclosure in reports and documents that the Price Funds file with, or submit to, the SEC and in other public communications made by the Price Funds. Compliance. Compliance with applicable governmental laws, rules and regulations. Reporting of Violations. The prompt internal reporting of violations of the Price Funds S-O Code to an appropriate person or persons identified in the Price Funds S-O Code. Accountability. Accountability for adherence to the Price Funds S-O Code. III. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest. Overview. Each Covered Officer owes a duty to the Price Funds to adhere to a high standard of honesty and business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, the Price Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with a Price Fund. Certain conflicts of interest covered by the Price Funds S-O Code arise out of the relationships between Covered Officers and the Price Funds and may already be subject to provisions regulating conflicts of interest in the Investment Company Act of 1940 ("Investment Company Act"), the Investment Advisers Act of 1940 ("Investment Advisers Act") and the Group Code. For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Price Fund because of their status as "affiliated persons" of a Price Fund. The compliance programs and procedures of the Price Funds and Price Fund Advisers are designed to prevent, or identify and correct, violations of these provisions. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between a Price Fund and its Price Fund Adviser (and its affiliates) of which the Covered Officers may also be officers or employees. As a result, the Price Funds S-O Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Price Funds or for the Price Fund Advisers, or for both), be involved in establishing policies and implementing decisions which will have different effects on these entities. The participation of the Covered Officers in such activities is inherent in the contractual relationship between each Price Fund and its respective Price Fund Adviser. Such participation is also consistent with the performance by the Covered Officers of their duties as officers of the Price Funds and, if consistent with the provisions of the Investment Company Act and the Investment Advisers Act, it will be deemed to have been handled ethically. Other conflicts of interest are covered by the Price Funds S-O Code, even if these conflicts of interest are not addressed by or subject to provisions in the Investment Company Act and the Investment Advisers Act. Whenever a Covered Officer is confronted with a conflict of interest situation where he or she is uncertain as to the appropriate action to be taken, he or she should discuss the matter with the Chairperson of Group's Ethics Committee or another member of the Committee. Handling of Specific Types of Conflicts. Each Covered Officer (and close family members) must not: Entertainment. Accept entertainment from any company with which any Price Fund or any Price Fund Adviser has current or prospective business dealings, including portfolio companies, unless such entertainment is in full compliance with the policy on entertainment as set forth in the Group Code. Gifts. Accept any gifts, except as permitted by the Group Code. Improper Personal Influence. Use his or her personal influence or personal relationships improperly to influence investment decisions, brokerage allocations or financial reporting by the Price Funds to the detriment of any one or more of the Price Funds. Taking Action at the Expense of a Price Fund. Cause a Price Fund to take action, or fail to take action, for the personal benefit of the Covered Officer rather than for the benefit of one or more of the Price Funds. Misuse of Price Funds' Transaction Information. Use knowledge of portfolio transactions made or contemplated for a Price Fund or any other clients of the Price Fund Advisers to trade personally or cause others to trade in order to take advantage of or avoid the market impact of such portfolio transactions. Outside Business Activities. Engage in any outside business activity that detracts from a Covered Officer's ability to devote appropriate time and attention to his or her responsibilities to a Price Fund. Service Providers. Excluding Group and its affiliates, have any ownership interest in, or any consulting or employment relationship with, any of the Price Funds' service providers, except that an ownership interest in public companies is permitted Receipt of Payments. Have a direct or indirect financial interest in commissions, transaction charges, spreads or other payments paid by a Price Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest (such as compensation or equity ownership) arising from the Covered Officer's employment by Group or any of its affiliates. Service as a Director or Trustee. Serve as a director, trustee or officer of any public or private company or a non-profit organization that issues securities eligible for purchase by any of the Price Funds, unless approval is obtained as required by the Group Code. IV. Covered Officers' Specific Obligations and Accountabilities. A. Disclosure Requirements and Controls. Each Covered Officer must familiarize himself or herself with the disclosure requirements (Form N-1A registration statement, proxy (Schedule 14A), shareholder reports, Forms N-SAR, N-CSR, etc.) applicable to the Price Funds and the disclosure controls and procedures of the Price Fund and the Price Fund Advisers. B. Compliance with Applicable Law. It is the responsibility of each Covered Officer to promote compliance with all laws, rules and regulations applicable to the Price Funds and the Price Fund Advisers. Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Price Funds and the Price Fund Advisers and take other appropriate steps with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Price Funds file with, or submit to, the SEC, and in other public communications made by the Price Funds. C. Fair Disclosure. Each Covered Officer must not knowingly misrepresent, or cause others to misrepresent, facts about a Price Fund to others, whether within or outside the Price organization, including to the Price Fund's directors and auditors, and to governmental regulators and self-regulatory organizations. D. Initial and Annual Affirmations. Each Covered Officer must: 1. Upon adoption of the Price Funds S-O Code (or thereafter, as applicable, upon becoming a Covered Officer), affirm in writing that he or she has received, read, and understands the Price Funds S-O Code. 2. Annually affirm that he or she has complied with the requirements of the Price Funds S-O Code. E. Reporting of Material Violations of the Price Funds S-O Code. If a Covered Officer becomes aware of any material violation of the Price Funds S-O Code or laws and governmental rules and regulations applicable to the operations of the Price Funds, he or she must promptly report the violation ("Report") to the Chief Legal Counsel of the Price Funds ("CLC"). Failure to report a material violation will be considered itself a violation of the Price Funds S-O Code. The CLC is identified in the attached Exhibit B. It is the Price Funds policy that no retaliation or other adverse action will be taken against any Covered Officer or other employee of a Price Fund, a Price Fund Adviser or their affiliates based upon any lawful actions of the Covered Officer or employee with respect to a Report made in good faith. F. Annual Disclosures. Each Covered Officer must report, at least annually, all affiliations or other relationships as called for in the "Annual Questionnaire for Executive Officers and/or Employee Directors/Trustees of Group and the Price Funds." V. Administration of the Price Funds S-O Code. The Ethics Committee is responsible for administering the Price Funds S-O Code and applying its provisions to specific situations in which questions are presented. A. Waivers and Interpretations. The Chairperson of the Ethics Committee has the authority to interpret the Price Funds S-O Code in any particular situation and to grant waivers where justified, subject to the approval of the Joint Audit Committee of the Price Funds. All material interpretations concerning Covered Officers will be reported to the Joint Audit Committee of the Price Funds at its next meeting. Waivers, including implicit waivers, to Covered Officers will be publicly disclosed as required in the Instructions to N-CSR. Pursuant to the definition in the Regulations, an implicit waiver means a Price Fund's failure to take action within a reasonable period of time regarding a material departure from a provision of the Price Funds S-O Code that has been made known to an "executive officer" (as defined in Rule 3b-7 under the Securities Exchange Act of 1934) of a Price Fund. An executive officer of a Price Fund includes its president and any vice-president in charge of a principal business unit, division or function. B. Violations/Investigations. The following procedures will be followed in investigating and enforcing the Price Funds S-O Code: 1. The CLC will take or cause to be taken appropriate action to investigate any potential or actual violation reported to him or her. 2. The CLC, after consultation if deemed appropriate with Outside Counsel to the Price Funds, will make a recommendation to the appropriate Price Funds Board regarding the action to be taken with regard to each material violation. Such action could include any of the following: a letter of censure or suspension, a fine, a suspension of trading privileges or termination of officership or employment. In addition, the violator may be required to surrender any profit realized (or loss avoided) from any activity that is in violation of the Price Funds S-O Code. VI. Amendments to the Price Funds S-O Code. Except as to the contents of Exhibit A and Exhibit B, the Price Funds S-O Code may not be materially amended except in written form, which is specifically approved or ratified by a majority vote of each Price Fund Board, including a majority of the independent directors on each Board. VII. Confidentiality. All reports and records prepared or maintained pursuant to the Price Funds S-O Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law, the Price Funds S-O Code or as necessary in connection with regulations under the Price Funds S-O Code, such matters shall not be disclosed to anyone other than the directors of the appropriate Price Fund Board, Outside Counsel to the Price Funds, members of the Ethics Committee and the CLC and authorized persons on his or her staff. Approved: October 2003 Exhibit A Persons Covered by the Price Funds S-O Code of Ethics James S. Riepe, Chairman and Chief Executive Officer Joseph A. Carrier, Treasurer and Chief Financial Officer Exhibit B Chief Legal Counsel to the Price Funds Henry H. Hopkins EX-99.906 5 ex-99_906cert.txt 906 CERTIFICATIONS Item 10(b). CERTIFICATION UNDER SECTION 906 OF SARBANES-OXLEY ACT OF 2002 Name of Issuer: T. Rowe Price International Growth & Income Fund In connection with the Report on Form N-CSR for the above named issuer, the undersigned hereby certifies, to the best of his knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: December 19, 2003 /s/ James S. Riepe James S. Riepe Principal Executive Officer Date: December 19, 2003 /s/ Joseph A. Carrier Joseph A. Carrier Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----