Item 1. Report to Shareholders
T. Rowe Price Institutional Foreign Equity Fund
- --------------------------------------------------------------------------------
April 30, 2004
Certified Semiannual 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.
Financial Highlights
T. Rowe Price Institutional Foreign Equity Fund
Certified Semiannual Report
(Unaudited)
For a share outstanding throughout each period
------------------------------------------------------------------
6 Months Year
Ended Ended
4/30/04 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99
NET ASSET VALUE
Beginning
of period $ 12.82 $ 10.65 $ 12.70 $ 19.16 $ 20.08 $ 17.03
Investment
activities
Net investment
income (loss) 0.10 0.23 0.18 0.39 0.13 0.21
Net realized
and unrealized
gain (loss) 1.08 2.11 (1.81) (5.35) 0.46 3.26
Total from
investment
activities 1.18 2.34 (1.63) (4.96) 0.59 3.47
Distributions
Net investment
income (0.25) (0.15) (0.42) (0.11) (0.17) (0.29)
Net realized
gain (0.02) (0.02) -- (1.39) (1.34) (0.13)
Total
distributions (0.27) (0.17) (0.42) (1.50) (1.51) (0.42)
NET ASSET VALUE
End of
period $ 13.73 $ 12.82 $ 10.65 $ 12.70 $ 19.16 $ 20.08
-----------------------------------------------------------------
Ratios/
Supplemental
Data
Total return^ 9.30% 22.33% (13.43)% (28.02)% 2.45% 20.79%
Ratio of total
expenses to
average
net assets 0.76%! 0.76% 0.75% 0.74% 0.74% 0.74%
Ratio of net
investment
income (loss)
to average
net assets 1.10%! 1.64% 1.06% 2.25% 0.57% 1.08%
Portfolio
turnover
rate 31.5%! 27.8% 20.0% 21.4% 39.7% 18.2%
Net assets,
end of
period (in
millions) $ 977 $ 1,061 $ 1,168 $ 1,903 $ 3,138 $ 3,361
^ 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.
! Annualized
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments ss. !!
T. Rowe Price Institutional Foreign Equity Fund
Certified Semiannual Report
April 30, 2004 (Unaudited)
Shares Value
- --------------------------------------------------------------------------------
(Cost and value in $ 000s)
AUSTRALIA 1.7%
Common Stocks 0.9%
BHP Billiton 744,091 6,115
Coles Myer 362,000 2,182
8,297
Preferred Stocks 0.8%
News Corporation 933,979 7,934
7,934
Total Australia (Cost $11,891) 16,231
BELGIUM 0.5%
Common Stocks 0.5%
Dexia 158,410 2,593
Fortis 46,584 1,007
UCB 34,655 1,381
Total Belgium (Cost $2,308) 4,981
BRAZIL 0.9%
Common Stocks 0.9%
Companhia de Bebidas
ADR (USD) 95,700 1,795
Grupo Pao de Acucar
ADR (USD) * 44,800 798
Petroleo Brasileiro (Petrobras)
ADR (USD) 105,560 2,634
Tele Norte Leste Participacoes
ADR (USD) 309,800 3,668
Total Brazil (Cost $8,497) 8,895
CANADA 0.2%
Common Stocks 0.2%
Research In Motion (USD) * 27,300 2,369
Total Canada (Cost $2,131) 2,369
DENMARK 0.7%
Common Stocks 0.7%
Novo Nordisk, Series B 142,051 6,733
Total Denmark (Cost $4,305) 6,733
FINLAND 1.0%
Common Stocks 1.0%
Nokia 707,801 9,909
Total Finland (Cost $1,359) 9,909
FRANCE 13.9%
Common Stocks 13.9%
Aventis * 112,061 8,503
AXA 284,544 5,937
BNP Paribas 256,636 15,306
Compagnie de Saint-Gobain 121,104 6,071
Credit Agricole 313,724 7,691
France Telecom * 320,800 7,681
Groupe Danone 8,490 1,418
Hermes 36,927 7,327
L'Oreal 49,899 3,740
Lafarge 12,444 1,030
LVMH 98,853 6,926
Sanofi-Synthelabo 171,208 10,829
Schneider Electric 109,062 7,313
Societe Generale * 30,029 2,488
Societe Television Francaise 1,249,609 7,665
Sodexho Alliance 170,779 4,681
Thomson 125,455 2,403
Total, Series B 144,602 26,582
Vivendi Universal * 75,797 1,890
Total France (Cost $78,911) 135,481
GERMANY 2.5%
Common Stocks 2.5%
Allianz * 26,029 2,744
Bayer * 49,264 1,336
Bayerische Hypo
und Vereinsbank * 118,197 2,040
Celesio 26,996 1,504
Deutsche Bank 50,113 4,106
E.On 35,820 2,365
Hypo Real Estate
(Spin off shares) * 75,704 2,059
Rhoen-Klinikum 37,420 1,851
SAP 28,320 4,265
Siemens 24,396 1,750
Total Germany (Cost $18,985) 24,020
HONG KONG 0.8%
Common Stocks 0.8%
Cheung Kong Holdings 460,000 3,510
Li & Fung 54,000 84
Sun Hung Kai Properties 480,000 4,085
Total Hong Kong (Cost $6,468) 7,679
INDIA 1.0%
Common Stocks 1.0%
Infosys Technologies 24,900 2,879
Oil & Natural Gas * 71,000 1,341
Oil & Natural Gas
(Regulation S shares) * 45,400 857
Zee Telefilms 1,566,800 4,457
Total India (Cost $8,599) 9,534
ISRAEL 0.2%
Common Stocks 0.2%
Check Point Software
Technologies (USD) * 78,016 1,828
Total Israel (Cost $1,433) 1,828
ITALY 4.7%
Common Stocks 4.7%
Alleanza Assicurazioni 498,550 5,490
Banca Intesa 587,490 1,934
Banco Popolare di
Verona e Novara 128,500 2,132
ENI 613,331 12,421
Mediaset 190,173 2,075
Mediolanum 256,135 1,651
Telecom Italia * 231,936 740
Telecom Italia Mobile * 1,092,796 6,208
Telecom Italia-RNC * 1,778,164 4,128
UniCredito Italiano 2,001,183 9,300
Total Italy (Cost $25,047) 46,079
JAPAN 21.3%
Common Stocks 21.3%
Canon 241,000 12,553
Credit Saison 71,500 2,071
Dai Nippon Printing 292,000 4,403
Daito Trust Construction 90,200 3,041
Daiwa Securities 704,000 5,239
Denso 136,700 2,862
Fanuc 103,600 6,298
Fujisawa Pharmaceutical 150,000 3,468
Funai Electric 34,900 5,160
Honda 79,100 3,153
Hoya 43,200 4,647
KDDI 1,113 6,639
Keyence 15,500 3,700
Kirin Brewery 271,000 2,681
Kyocera 52,300 4,277
Marui 228,600 3,562
Mitsubishi 810,000 7,685
Mitsubishi Estate 301,000 3,529
Mitsui Fudosan 853,000 9,324
Mitsui Trust Holdings 496,000 3,482
NEC 778,000 6,048
Nissan Motor 582,000 6,439
Nomura Holdings 744,000 11,969
NTT DoCoMo 1,476 2,906
Oji Paper 400,000 2,485
Orix 22,900 2,406
Rohm 42,900 5,309
Secom 237,500 10,101
Seven-Eleven Japan 229,000 7,725
Shin-Etsu Chemical 164,200 6,577
SMC 23,700 2,690
Sumitomo Metal Industries 2,664,000 3,199
Sumitomo Mitsui Financial 1,148 8,616
Suzuki Motor 230,000 3,614
Teijin 690,000 2,067
Toyota Motor 155,200 5,587
UFJ Holdings 1,035 6,339
Uniden 149,000 2,610
Vodafone Holdings K.K. 2,327 5,457
Yamanouchi Pharmaceutical 163,500 5,425
Yamato Transport 173,000 2,616
Total Japan (Cost $172,301) 207,959
KAZAKHSTAN 0.3%
Common Stocks 0.3%
PetroKazakhstan (USD) 95,600 2,563
Total Kazakhstan (Cost $2,630) 2,563
MALAYSIA 0.2%
Common Stocks 0.2%
Astro All Asia * 915,000 1,252
Astro All Asia
(Regulation S shares) * 810,000 1,109
Total Malaysia (Cost $1,960) 2,361
MEXICO 1.4%
Common Stocks 1.4%
America Movil ADR (USD) 122,900 4,154
Femsa UBD Units 385,190 1,673
Grupo Modelo, Series C 146,000 365
Grupo Televisa ADR (USD) 69,900 3,047
Wal-Mart de Mexico 1,715,573 4,996
Total Mexico (Cost $10,168) 14,235
NETHERLANDS 4.7%
Common Stocks 4.7%
Akzo Nobel 13,241 480
ASML * 292,130 4,582
Fortis (Unified shares) 85,507 1,862
ING Groep GDS 424,420 9,013
Koninklijke Numico * 187,436 5,171
Philips Electronics GDS 305,493 8,239
Reed Elsevier 108,330 1,516
Royal Dutch Petroleum 59,329 2,872
Royal KPN 573,600 4,119
Royal KPN 144A 219,800 1,579
STMicroelectronics * 130,456 2,841
VNU 49,753 1,384
Wolters Kluwer GDS 153,520 2,583
Total Netherlands (Cost $31,757) 46,241
NORWAY 0.2%
Common Stocks 0.2%
Orkla, Series A 87,395 2,112
Total Norway (Cost $770) 2,112
RUSSIA 0.9%
Common Stocks 0.9%
Lukoil ADR (USD) 7,900 853
Lukoil ADR 144A (USD) 28,990 3,131
Norilsk Nickel ADR (USD) 30,100 1,795
YUKOS ADR (USD) 73,690 3,297
Total Russia (Cost $7,334) 9,076
SINGAPORE 1.0%
Common Stocks 1.0%
MobileOne Limited 2,449,000 2,116
United Overseas Bank 909,060 7,287
Total Singapore (Cost $7,522) 9,403
SOUTH KOREA 2.4%
Common Stocks 2.4%
Kookmin Bank * 107,940 3,999
POSCO ADR (USD) 73,342 2,255
Samsung Electronics 26,893 12,666
South Korea Telecom 24,940 4,235
Total South Korea (Cost $11,379) 23,155
SPAIN 4.1%
Common Stocks 4.1%
Banco Bilbao Vizcaya Argentaria 724,163 9,489
Banco Santander Central
Hispano 623,663 6,649
Endesa 206,107 3,762
Gas Natural 168,250 4,111
Inditex 196,800 4,260
Repsol 106,895 2,240
Telefonica 473,040 6,987
Telefonica ADR (USD) * 61,307 2,705
Total Spain (Cost $28,348) 40,203
SWEDEN 3.0%
Common Stocks 3.0%
Electrolux, Series B 137,105 2,704
Electrolux * 137,105 44
Hennes & Mauritz, Series B 245,100 5,990
LM Ericsson, Series B * 997,213 2,659
Sandvik 34,170 1,108
Securitas, Series B 825,135 11,826
Tele2 AB, Series B * 115,200 5,234
Total Sweden (Cost $23,760) 29,565
SWITZERLAND 6.5%
Common Stocks 6.5%
Adecco * 240,720 10,571
Credit Suisse Group 296,020 10,381
Nestle 80,082 20,195
Roche Holding
(Participation certificates) 55,100 5,755
UBS 229,732 16,229
Total Switzerland (Cost $33,535) 63,131
TAIWAN 0.9%
Common Stocks 0.9%
China Trust Finance Holdings 1,663,000 1,779
Taiwan Semiconductor
Manufacturing 4,035,669 6,928
Total Taiwan (Cost $8,555) 8,707
TURKEY 0.2%
Common Stocks 0.2%
Turkcell Iletisim Hizmetleri
ADR (USD) * 60,486 1,721
Total Turkey (Cost $959) 1,721
UNITED KINGDOM 23.6%
Common Stocks 23.6%
Abbey National 193,154 1,551
AstraZeneca 233,801 10,907
Autonomy * 123,128 543
British Sky Broadcast 262,189 3,090
Cadbury Schweppes 375,777 2,984
Capita 223,200 1,225
Carnival 44,467 1,989
Celltech * 289,655 2,141
Centrica 955,710 3,691
Compass 2,333,250 14,646
David S. Smith 373,804 1,141
Diageo 482,576 6,459
Electrocomponents 559,040 3,522
GlaxoSmithKline 1,542,421 31,831
Hays 1,574,400 3,280
Hilton Group 330,940 1,454
Kesa Electricals 330,515 1,639
Kingfisher 2,567,803 12,846
MFI Furniture Group * 1,108,900 3,072
Reed Elsevier (Ordinary shares) 1,111,309 10,316
Rio Tinto (Ordinary shares) 397,352 8,681
Royal Bank of Scotland Group 866,933 25,948
Shell Transport & Trading 2,199,136 15,123
Standard Chartered 178,100 2,719
Tesco 2,040,134 8,984
Tomkins 940,486 4,514
Unilever (Ordinary shares) 724,216 6,808
United Business Media 157,589 1,283
Vodafone Group 10,886,607 26,313
William Morrison Supermarkets 698,400 2,964
WPP Group 958,480 9,407
Total United Kingdom (Cost $191,291) 231,071
SHORT-TERM INVESTMENTS 0.0%
Money Market Funds 0.0%
T. Rowe Price Reserve
Investment Fund, 1.09% # 1,000 1
Investments (Cost $1) 1
SECURITIES LENDING COLLATERAL 25.3%
Money Market Pooled Account 25.3%
Investment in money market pooled
account managed by JP
Morgan Chase Bank London
1.06% # 247,239,049 247,239
Total Securities Lending
Collateral (Cost $247,239) 247,239
Total Investments in Securities
124.1% of Net Assets (Cost $949,443) $1,212,482
ss. Denominated in currency of the country of incorporation unless otherwise
noted
!! At April 30, 2004, a substantial number of the fund's international
securities were valued by the T. Rowe Price Valuation Committee,
established by the fund's Board of Directors. See Note 1.
# 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 value of such securities at
period-end amounts to $4,710 and represents 0.5% of net assets
ADR American Depository Receipts
GDS Global Depository Shares
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities
T. Rowe Price Institutional Foreign Equity Fund
Certified Semiannual Report
April 30, 2004 (Unaudited)
(Amounts in $ 000s except shares and per share amounts)
Assets
Investments in securities, at value (cost $949,443) $ 1,212,482
Other assets 52,331
Total assets 1,264,813
Liabilities
Obligation to return securities lending collateral 247,239
Other liabilities 40,888
Total liabilities 288,127
NET ASSETS $ 976,686
--------------------
Net Assets Consist of:
Undistributed net investment income (loss) $ 5,331
Undistributed net realized gain (loss) (406,782)
Net unrealized gain (loss) 263,003
Paid-in-capital applicable to 71,118,207 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares of the Corporation authorized 1,115,134
NET ASSETS $ 976,686
--------------------
NET ASSET VALUE PER SHARE $ 13.73
--------------------
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Institutional Foreign Equity Fund
Certified Semiannual Report
April 30, 2004 (Unaudited)
($ 000s)
6 Months
Ended
4/30/04
Investment Income (Loss)
Income
Dividend (net of foreign taxes of $1,241) $ 9,452
Securities lending 340
Interest (net of foreign taxes of $1) 34
Total income 9,826
Expenses
Investment management 3,697
Custody and accounting 236
Registration 35
Legal and audit 22
Shareholder servicing 8
Prospectus and shareholder reports 3
Directors 3
Miscellaneous 7
Total expenses 4,011
Net investment income (loss) 5,815
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 53,105
Foreign currency transactions 56
Net realized gain (loss) 53,161
Change in net unrealized gain (loss)
Securities 35,030
Other assets and liabilities
denominated in foreign currencies (60)
Change in net unrealized gain (loss) 34,970
Net realized and unrealized gain (loss) 88,131
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 93,946
--------------------
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Institutional Foreign Equity Fund
Certified Semiannual Report
(Unaudited)
($ 000s)
6 Months Year
Ended Ended
4/30/04 10/31/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 5,815 $ 18,927
Net realized gain (loss) 53,161 (37,680)
Change in net unrealized gain (loss) 34,970 253,179
Increase (decrease) in net assets
from operations 93,946 234,426
Distributions to shareholders
Net investment income (18,935) (16,127)
Net realized gain (1,515) (2,150)
Decrease in net assets from
distributions (20,450) (18,277)
Capital share transactions *
Shares sold 86,824 256,719
Distributions reinvested 17,963 14,775
Shares redeemed (262,717) (594,653)
Increase (decrease) in net assets from
capital share transactions (157,930) (323,159)
Net Assets
Increase (decrease) during period (84,434) (107,010)
Beginning of period 1,061,120 1,168,130
End of period $ 976,686 $ 1,061,120
--------------- ---------------
(Including undistributed net
investment income of $5,331 at
4/30/04 and
$18,451 at 10/31/03)
*Share information
Shares sold 6,210 23,184
Distributions reinvested 1,369 1,413
Shares redeemed (19,239) (51,540)
Increase (decrease) in shares outstanding (11,660) (26,943)
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Institutional Foreign Equity Fund
Certified Semiannual Report
April 30, 2004 (Unaudited)
Note 1 - Significant Accounting Policies
T. Rowe Price Institutional International Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940 (the 1940 Act). The
Institutional Foreign Equity Fund (the fund), a diversified, open-end management
investment company, is one portfolio established by the corporation and
commenced operations on September 7, 1989. The fund seeks long-term growth of
capital through investments primarily in the common stocks of established,
non-U.S. companies.
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, for certain markets, the official closing price at
the time the valuations are made, except for OTC Bulletin Board securities,
which are valued at the mean of the latest bid and asked prices. 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 asked 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 close of trading on the NYSE. If the fund
determines that developments between the close of a foreign market and the close
of the NYSE will, in its judgment, materially affect the value of some or all of
its portfolio securities, which in turn will affect the fund's share price, the
fund will adjust the previous closing prices to reflect the 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 Director.
A fund may also fair value securities in other situations, such as when a
particular foreign market is closed but the fund is open. In deciding whether to
make fair value adjustments, the fund reviews a variety of factors, including
developments in foreign markets, the performance of U.S. securities markets, and
the performance of instruments trading in U. S. markets that represent foreign
securities and baskets of foreign securities. The fund uses outside pricing
services to provide it with closing market prices and information used for
adjusting those prices. The fund cannot predict how often it will use closing
prices and how often it will adjust those prices. As a means of evaluating its
fair value process, the fund routinely compares closing market prices, the next
day's opening prices in the same markets, and adjusted prices.
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 asked 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.
Investment Transactions, Investment Income, and Distributions
Income and expenses are recorded on the accrual basis. Dividends received from
mutual fund investments are reflected as dividend income; capital gain
distributions are reflected as realized gain/loss. Dividend income and capital
gain distributions are recorded on the ex-dividend date. Investment transactions
are accounted for on the trade date. Realized gains and losses are reported on
the identified cost basis. Distributions to shareholders are recorded on the
ex-dividend date. Income distributions are declared and paid on an annual basis.
Capital gain distributions, if any, are declared and paid by the fund, typically
on an annual basis.
Other
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 April 30, 2004, approximately 10% 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 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 April 30, 2004, the value of loaned
securities was $232,410,000; aggregate collateral consisted of $247,239,000 in
the money market pooled account.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $162,129,000 and $330,278,000, respectively, for the six months ended
April 30, 2004.
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 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. The amount and character of
tax-basis distributions and composition of net assets are finalized at fiscal
year-end; accordingly, tax-basis balances have not been determined as of April
30, 2004.
The fund intends to retain realized gains to the extent of available capital
loss carryforwards. As of October 31, 2003, the fund had $459,872,000 of unused
capital loss carryforwards, of which $206,390,000 expire in fiscal 2009,
$214,055,000 that expire in fiscal 2010, and $39,427,000 that expire in fiscal
2011.
At April 30, 2004, the cost of investments for federal income tax purposes was
$949,443,000. Net unrealized gain aggregated $263,003,000 at period-end, of
which $295,855,000 related to appreciated investments and $32,852,000 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.
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 equal to 0.70% of the fund's average daily net assets. The fee
is computed daily and paid monthly. At April 30, 2004, investment management
fee payable totaled $602,000.
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 price 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 fund. Expenses incurred pursuant to these service agreements
totaled $63,000 for the six months ended April 30, 2004, of which $10,000 was
payable at period-end.
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 to mutual funds, trusts,
and other accounts managed by Price Associates and/or its affiliates, and are
not available for direct purchase by members of the public. The Reserve Funds
pay no investment management fees. During the six months ended April 30, 2004,
dividend income from the Reserve Funds totaled $68,000.
Note 6 - Interfund Borrowing
Pursuant to its prospectus, the fund may borrow up to 33 1/3% of its total
assets. The fund is party to an interfund borrowing agreement between itself and
other T. Rowe Price-sponsored mutual funds, which permits it to borrow or lend
cash at rates beneficial to both the borrowing and lending funds. Loans totaling
10% or more of a borrowing fund's total assets are collateralized at 102% of the
value of the loan; loans of less than 10% are unsecured. During the six months
ended April 30, 2004, the fund had outstanding borrowings on five days, in the
average amount of $11,800,000, and at an average annual rate of 1.36%. At April
30, 2004, the fund had outstanding borrowings of $10,600,000, at an annual rate
of 1.41%.
T. Rowe Price Institutional Foreign Equity Fund
Certified Semiannual Report
Information on Proxy Voting
- --------------------------------------------------------------------------------
A description of the policies and procedures that the T. Rowe Price
Institutional Foreign Equity Fund uses to determine how to vote proxies relating
to portfolio securities is available, without charge, upon request by calling
1-800-225-5132. It also appears in the fund's Statement of Additional
Information (Form 485B), which can be found on the SEC's Web site, www.sec.gov.
Item 2. Code of Ethics.
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 is filed as an
exhibit to the registrant's annual Form N-CSR. No substantive amendments were
approved or waivers were granted to this code of ethics during the registrant's
most recent fiscal half-year.
Item 3. Audit Committee Financial Expert.
Disclosure required in registrant's annual Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Disclosure required in registrant's annual Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable. The complete schedule of investments is included in Item 1 of
this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 10. 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 11. Exhibits.
(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is filed
with the registrant's annual Form N-CSR.
(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.
(3) Written solicitation to repurchase securities issued by closed-end
companies: not applicable.
(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 Institutional International Funds, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date June 15, 2004
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 June 15, 2004
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date June 15, 2004