<PAGE>
T. Rowe Price
TAX-EXEMPT MONEY FUND
August 31, 1994
Sector Diversification
<TABLE>
<CAPTION>
Percent of Percent of
Net Assets Net Assets
------------ ------------
<S> <C> <C> <C>
Hospital Revenue 29% Housing Finance Revenue 4%
Educational Revenue 18 Water & Sewer Revenue 4
General Obligation - Local 13 Electric Revenue 3
Industrial & Pollution Dedicated Tax Revenue 2
Control Revenue 9 Pooled Loan Revenue 2
General Obligation - State 6 Miscellaneous Revenue 2
Pre-Refunded Bonds 5 Lease Revenue 2
Nuclear Revenue 4 Other Assets Less Liabilities (3)
</TABLE>
Statement of Net Assets / August 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- ----------
<S> <C> <C>
ARIZONA -- 2.2%
Phoenix, GO, VRDN (Currently 3.15%)........................................ $ 2,800 $ 2,800
Salt River Project, Agricultural Improvement & Power Dist., TECP,
2.85 - 3.20%, 9/2 - 9/27/94.................................... 14,000 14,000
- ---------------------------------------------------------------------------------------------------------------------------
ARKANSAS -- 1.9%
Arkansas Dev. Fin. Auth., Sisters of Mercy,
VRDN (Currently 3.15%)......................................... 14,000 14,000
- ---------------------------------------------------------------------------------------------------------------------------
CALIFORNIA -- 6.5%
Alameda County, TRAN, 4.75%, 8/11/95....................................... 5,000 5,006
California, GO, (AMBAC Insured), 5.00%, 8/1/95............................. 4,300 4,329
GO, RAW, 3.75%, 12/21/94........................................... 5,000 5,005
Contra Costa County, TRAN, 4.25%, 7/7/95................................... 3,600 3,590
Los Angeles County, Local Ed. Agencies, TRAN, 4.50%, 7/6/95................ 5,000 5,015
Oakland, COP, VRDN (Currently 3.40%)....................................... 7,500 7,500
San Diego County Regional Transportation Commission,
(FGIC Insured), VRDN (Currently 2.85%)......................... 14,600 14,600
Solano County, TRAN, 3.25%, 11/1/94........................................ 4,000 3,999
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
T. Rowe Price Tax-Exempt Money Fund
Statement of Net Assets
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- ----------
<S> <C> <C>
COLORADO -- 0.8%
Colorado HFA, Kaiser Permanente, VRDN (Currently 3.15%).................... $ 4,000 $ 4,000
Denver IDR, W. W. Grainger, VRDN (Currently 3.25%)......................... 2,190 2,190
- ---------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA -- 1.1%
Dist. of Columbia, American Univ., VRDN (Currently 3.15%).................. 8,130 8,130
- ---------------------------------------------------------------------------------------------------------------------------
FLORIDA -- 6.6%
Fort Pierce Utilities Auth., 8.00%, 10/1/94 (Escrowed to Maturity)......... 1,000 1,004
Jacksonville Electric Auth., TECP, 2.95 - 3.50%, 9/9 - 1/12/95............. 22,700 22,696
Jacksonville HFA, Baptist Medical Center, (MBIA Insured),
VRDN (Currently 3.35%)......................................... 400 400
Orange County IDA, W. W. Grainger, VRDN (Currently 3.25%).................. 1,185 1,185
Orlando, Waste Water System, TECP, 3.20 - 3.35%, 9/26 - 10/21/94........... 18,000 17,998
Sunshine State Gov't. Fin. Commission, TECP, 3.05 - 3.25%,
9/7 - 10/11/94................................................. 6,200 6,200
- ---------------------------------------------------------------------------------------------------------------------------
GEORGIA -- 2.1%
Dekalb County Hosp. Auth., DeKalb Medical Center, VRDN (Currently 3.15%) .. 500 500
Fulton County Dev. Auth., National Red Cross, VRDN (Currently 3.15%)....... 550 550
Georgia, GO, 5.80%, 3/1/95................................................. 5,275 5,328
Georgia Tech Foundation Fac. Auth., Wardlaw Project,
VRDN (Currently 3.15%)......................................... 500 500
Municipal Electric Auth. of Georgia, 9.70%, 1/1/98 (Pre-refunded 1/1/95+).. 500 520
10.00%, 1/1/01 (Pre-refunded 1/1/95+).............................. 1,250 1,301
10.50%, 1/1/20 (Pre-refunded 1/1/95+).............................. 1,000 1,043
Private Colleges & Univ. Fac. Auth., Emory Univ., TECP, 3.20%, 9/21/94..... 6,000 6,000
- ---------------------------------------------------------------------------------------------------------------------------
HAWAII -- 2.4%
Hawaii Dept. of Budget & Fin., Queens Medical Center, (FGIC Insured),
VRDN (Currently 3.10%)......................................... 4,400 4,400
Honolulu City & County, GO, 10.00%, 11/1/99 (Pre-refunded 11/1/94+)........ 1,000 1,026
GO, TECP, 2.95 - 3.25%, 9/12 - 10/18/94............................ 12,650 12,650
- ---------------------------------------------------------------------------------------------------------------------------
IDAHO -- 0.5%
Idaho, GO, TAN, 4.50%, 6/29/95............................................. 3,500 3,512
- ---------------------------------------------------------------------------------------------------------------------------
ILLINOIS -- 9.8%
Chicago, GO, VRDN (Currently 3.05%)........................................ 5,300 5,300
Illinois Dev. Fin. Auth., Palos Community Hosp., VRDN (Currently 3.05%).... 23,500 23,500
Illinois EFA, Field Museum of Natural History, VRDN (Currently 2.70%)...... 2,000 2,000
Northwestern Univ., VRDN (Currently 3.625%)........................ 1,500 1,500
VRDN (Currently 3.10%)......................................... 11,586 11,586
VRDN (Currently 3.15%)......................................... 8,200 8,200
Illinois HFA, Pooled Loan, VRDN (Currently 3.05%).......................... 1,700 1,700
Children's Memorial Hosp., VRDN (Currently 3.15%).................. 7,700 7,700
10.50%, 1/1/01 (Pre-refunded 1/1/95+).......................... 1,000 1,023
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- ----------
<S> <C> <C>
ILLINIOIS (cont'd)
Illinois HFA (cont'd)
Hosp. Equipment, VRDN (Currently 3.05%)............................ $ 3,400 $ 3,400
Resurrection Health Care Systems, VRDN (Currently 3.35%)........... 5,700 5,700
Illinois, GO, 9.00%, 1/1/02 (Pre-refunded 1/1/95+)......................... 1,030 1,069
Niles Village, IDR, W. W. Grainger, VRDN (Currently 3.25%)................. 1,000 1,000
- ---------------------------------------------------------------------------------------------------------------------------
INDIANA -- 2.9%
Gary, IDR, W. W. Grainger, VRDN (Currently 3.25%).......................... 730 730
Mount Vernon, PCR, General Electric, TECP, 3.00 - 3.30%, 9/12 - 11/10/94... 20,990 20,990
- ---------------------------------------------------------------------------------------------------------------------------
KENTUCKY -- 0.4%
Trimble County, PCR, Louisville Gas and Electric, TECP, 2.90%, 9/8/94...... 3,000 3,000
- ---------------------------------------------------------------------------------------------------------------------------
LOUISIANA -- 5.8%
Louisiana Offshore Terminal Auth., VRDN (Currently 3.15%).................. 1,600 1,600
Louisiana PFA, Willis Knighton Medical Center, (AMBAC Insured),
VRDN (Currently 3.00%)......................................... 14,300 14,300
Sisters of Charity of the Incarnate Word, TECP, 3.15%, 10/11/94.... 2,000 2,000
Louisiana GO, 9.30%, 1/1/99 (Pre-refunded 1/1/95+)......................... 1,000 1,038
New Orleans Exhibition Hall Auth., Special Tax, VRDN (Currently 3.10%)..... 2,500 2,500
Orleans Levee Dist., Levee Improvement, VRDN (Currently 3.95%)............. 4,420 4,420
Public Improvement, VRDN (Currently 3.95%)......................... 8,000 8,000
Parish of East Baton Rouge, Exxon, TECP, 3.15%, 10/12/94................... 10,000 9,999
- ---------------------------------------------------------------------------------------------------------------------------
MAINE -- 0.5%
Maine, TAN, 4.50%, 6/30/95................................................. 4,000 4,015
- ---------------------------------------------------------------------------------------------------------------------------
MARYLAND -- 4.9%
Baltimore County, Sheppard and Enoch Pratt Hosp. Fac.,
VRDN (Currently 3.00%)......................................... 7,500 7,500
Howard County, Consolidated Public Improvement, GO, BAN,
VRDN (Currently 2.95%)......................................... 1,000 1,000
Kent County, Washington College, 10.75%, 1/1/10 (Pre-refunded 1/1/95+)..... 600 632
Maryland HHEFA, Johns Hopkins Univ., 6.20%, 7/1/95......................... 10,080 10,160
Kennedy Kreiger Institute, VRDN (Currently 3.15%).................. 3,500 3,500
Loyola College, VRDN (Currently 2.80%)............................. 7,600 7,600
Montgomery County, GO, BAN, VRDN (Currently 2.95%)......................... 1,000 1,000
Washington Suburban Sanitary Dist., GO, BAN,
VRDN (Currently 2.95%)......................................... 5,000 5,000
- ---------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS -- 0.3%
Boston Water and Sewer Commission, 10.50%, 1/1/09
(Pre-refunded 1/1/95+)......................................... 2,250 2,346
- ---------------------------------------------------------------------------------------------------------------------------
MICHIGAN -- 2.2%
Detroit School District, State Aid Note, RAN, 5.00%, 5/1/95................ 9,500 9,563
Regents of the Univ. of Michigan Hosp., VRDN (Currently 2.90%)............. 6,500 6,500
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
T. Rowe Price Tax-Exempt Money Fund
Statement of Net Assets
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- ----------
<S> <C> <C>
MINNESOTA -- 5.1%
Cottage Grove, PCR, Minnesota Mining & Mfg., VRDN (Currently 3.32%)........ $ 2,000 $ 2,000
Rochester Health Care Fac., Mayo Foundation/Mayo Medical Center,
VRDN (Currently 2.95%)......................................... 12,400 12,400
TECP, 3.00 - 3.30%, 9/23 - 10/26/94............................ 11,135 11,134
Univ. of Minnesota, TECP, 2.85-3.30%, 9/9-10/11/94......................... 12,425 12,426
- ---------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI -- 0.3%
Mississippi, Institutions of Higher Learning, Historic Properties,
and Fairground Renovation, GO, 11.00%, 12/15/94.................... 735 751
Rankin County, PCR, Siemens Energy & Automation,
VRDN (Currently 3.15%)......................................... 1,600 1,600
- ---------------------------------------------------------------------------------------------------------------------------
MISSOURI -- 3.2%
Independence, Water Utility, TECP, 2.75 - 3.05%, 9/7 - 9/14/94............. 3,400 3,400
Missouri Environmental Improvement and Energy Resource Auth.,
Union Electric Company, TECP, 3.30%, 11/14/94.................. 2,000 2,000
Missouri HEFA, Sisters of Mercy Health, VRDN (Currently 3.15%)............. 6,200 6,200
St. Anthony's Medical Center, VRDN (Currently 3.20%)............... 12,700 12,700
- ---------------------------------------------------------------------------------------------------------------------------
NEW JERSEY -- 0.0%
New Jersey, GO, 9.00%, 10/1/99 (Pre-refunded 10/1/94+)..................... 200 205
- ---------------------------------------------------------------------------------------------------------------------------
NEW MEXICO -- 0.1%
New Mexico, 6.50%, 9/1/98 (Pre-refunded 9/1/94+)........................... 1,000 1,015
- ---------------------------------------------------------------------------------------------------------------------------
NEW YORK -- 2.7%
New York City, 10.75%, 11/15/99 (Pre-refunded 11/15/94+)................... 800 836
GO, RAN, 4.50%, 4/12/95........................................ 8,000 8,031
GO, TAN, 4.25%, 2/15/95........................................ 6,000 6,016
New York State Power Auth., 3.80%, 3/1/95.................................. 5,000 4,998
- ---------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA -- 4.4%
New Hanover County Industrial & Pollution Control Fin. Fac. PCR, Siemens
Energy & Automation, VRDN (Currently 3.15%)........................ 7,500 7,500
North Carolina Eastern Municipal Power Agency, 8.50%,
1/1/11 (Pre-refunded 1/1/95+).................................. 2,000 2,033
9.00%, 1/1/13 (Pre-refunded 1/1/95+)........................... 1,000 1,038
10.25%, 1/1/09 (Pre-refunded 1/1/95+).......................... 7,000 7,361
TECP, 3.00 - 3.20%, 9/22 - 10/11/94................................ 8,300 8,300
North Carolina Municipal Leasing Corp., Winston-Salem, COP, 3.40%, 12/1/94. 7,000 6,998
- ---------------------------------------------------------------------------------------------------------------------------
OHIO -- 0.3%
Cleveland-Cuyahoga County Port Auth., VRDN (Currently 3.20%)............... 2,000 2,000
- ---------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA -- 0.2%
Montgomery County IDA, W. W. Grainger, VRDN (Currently 3.25%).............. 1,230 1,230
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- ----------
<S> <C> <C>
RHODE ISLAND -- 1.0%
Rhode Island, GO, TAN, 4.25%, 6/30/95...................................... $ 7,100 $ 7,110
- ---------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA -- 1.4%
Piedmont Municipal Power Agency, 9.50%, 1/1/18 (Pre-refunded 1/1/95+)...... 1,000 1,049
11.00%, 1/1/14 (Pre-refunded 1/1/95+).......................... 1,825 1,924
(AMBAC Insured), 10.50%, 1/1/19 (Pre-refunded 1/1/95+)......... 1,000 1,052
Spartanburg County, Siemens Energy & Automation,
VRDN (Currently 3.15%)......................................... 6,400 6,400
- ---------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA -- 1.5%
South Dakota State HEFA, Sioux Valley Hosp., VRDN (Currently 3.45%)........ 11,500 11,500
- ---------------------------------------------------------------------------------------------------------------------------
TENNESSEE -- 2.5%
Knox County Health, Education & Housing Fac. Board, Mercy Health System,
(MBIA Insured), VRDN (Currently 3.10%)......................... 8,910 8,910
Memphis, GO, VRDN (Currently 3.20%)........................................ 10,000 10,000
- ---------------------------------------------------------------------------------------------------------------------------
TEXAS -- 19.5%
Brownsville Utility System, 10.625%, 9/1/09 (Pre-refunded 9/1/94+)......... 4,650 4,766
Dallas County Community College Dist., VRDN (Currently 3.25%).............. 21,600 21,600
Dallas/Fort Worth Regional Airport, TECP, 3.30%, 11/14/94.................. 1,300 1,300
Hale County Industrial Dev. Corp., PCR, 3.75%, 3/1/95...................... 5,000 4,998
Harris County, TAN, 4.00%, 2/28/95......................................... 16,200 16,227
Harris County Health Fac. Dev. Corp., Methodist Hosp.,
VRDN (Currently 3.15%)......................................... 8,400 8,400
Sisters of Charity of the Incarnate Word, TECP, 3.30%,
10/20 - 11/22/94............................................... 18,900 18,898
St. Luke's Episcopal Hosp., VRDN (Currently 3.15%)................. 6,900 6,900
Harris County IDC, Lubrizol Corp., VRDN (Currently 3.10%).................. 3,000 3,000
Texas A & M Univ., Permanent Univ. Fund, TECP, 2.75 - 3.30%,
9/8 - 11/21/94..................................................... 23,300 23,292
Texas PFA, GO, TECP, 2.60 - 3.05%, 9/7 - 12/1/94........................... 13,000 12,988
University of Texas Board of Regents, TECP, 2.90 - 3.30%, 9/1 - 10/17/94... 24,107 24,105
- ---------------------------------------------------------------------------------------------------------------------------
UTAH -- 2.8%
Alpine School Dist., GO, (AMBAC Insured), 5.00%, 3/15/95................... 2,365 2,381
Utah HFA, Single Family Mortgage, (CGIC Insured),
VRDN (Currently 3.10%)......................................... 18,500 18,500
- ---------------------------------------------------------------------------------------------------------------------------
VIRGINIA -- 6.0%
Fairfax County IDA, Fairfax Hosp. System, VRDN (Currently 3.00%)........... 5,600 5,600
Inova Health System, TECP, 2.55 - 3.30%, 10/3 - 11/18/94........... 14,200 14,193
Hampton Roads Sanitation Dist., 2.80%, 10/1/94............................. 6,090 6,087
Roanoke IDA, Roanoke Memorial Hosp., VRDN (Currently 3.15%)................ 4,900 4,900
Rockingham County PCR, Merck & Company, VRDN (Currently 3.40%)............. 2,400 2,400
Virginia HDA, 3.00%, 12/15/94.............................................. 12,000 11,974
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
T. Rowe Price Tax-Exempt Money Fund
Statement of Net Assets
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- ----------
<S> <C> <C>
WASHINGTON -- 1.0%
King County, GO, 4.00%, 1/1/95............................................. $ 2,735 $ 2,738
Municipality of Metropolitan Seattle, 7.00%, 1/1/16 (Pre-refunded 1/1/95+). 3,535 3,645
Washington Health Care Fac., Fred Hutchinson Cancer,
VRDN (Currently 3.10%)............................................. 900 900
- ---------------------------------------------------------------------------------------------------------------------------
WISCONSIN -- 0.4%
Oak Creek, Wisconsin Electric Power Co., VRDN (Currently 3.10%)............ 2,900 2,900
===========================================================================================================================
Total Investments In Securities - 103.3% (Cost - $775,043)................. 774,857
===========================================================================================================================
Other Assets Less Liabilities - (3.3)% .................................... (24,735)
----------
Net Assets Consisting Of:
Accumulated net investment income - net of distributions................... 142
Accumulated realized gains/losses - net of distributions................... (263)
Net unrealized depreciation of investments................................. (186)
Paid-in-capital applicable to 750,505,058 shares of $0.01 par value capital
stock outstanding; 5,000,000,000 shares authorized................. 750,429
---------
Net Assets - 100.0%........................................................ $ 750,122
==========
Net Asset Value Per Share.................................................. $1.00
======
</TABLE>
+ - Used in determining portfolio maturity
AMBAC - AMBAC Indemnity Corp.
BAN - Bond Anticipation Note
CGIC - Capital Guaranty Insurance Corporation
COP - Certificates of Participation
EFA - Education Facility Authority
FGIC - Financial Guaranty Insurance Company
GO - General Obligation
HDA - Housing, Development Authority
HEFA - Health & Educational Facility Authority
HFA - Health Facility Authority
HHEFA - Health & Higher Educational
Facility Authority
IDA - Industrial Development Authority
IDC - Industrial Development Corporation
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance
Corporation
PCR - Pollution Control Revenue
PFA - Public Facility Authority
RAN - Revenue Anticipation Note
RAW - Revenue Anticipation Warrant
TAN - Tax Anticipation Note
TECP - Tax-Exempt Commercial Paper
TRAN - Tax Revenue Anticipation Note
VRDN - Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
T. Rowe Price Tax-Exempt Money Fund
Statement of Operations / Six Months Ended August 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Amounts in Thousands
------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest income............................................................... $10,796
Expenses
Investment management fees.................................................. $ 1,734
Shareholder servicing fees & expenses....................................... 373
Custodian and accounting fees & expenses.................................... 94
Legal & auditing fees....................................................... 27
Registration fees & expenses................................................ 25
Prospectus & shareholder reports............................................ 18
Directors' fees & expenses.................................................. 8
Proxy & annual meeting expenses............................................. 5
Miscellaneous............................................................... 9
--------
Total expenses.............................................................. 2,293
-------
Net investment income......................................................... 8,503
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss)
Net realized gain on securities............................................. 3
Change in net unrealized appreciation or depreciation....................... (70)
--------
Net loss on investments....................................................... (67)
-------
INCREASE IN NET ASSETS FROM OPERATIONS........................................ $ 8,436
=======
========================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
T. Rowe Price Tax-Exempt Money Fund
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Amounts in Thousands
-----------------------------------------
Six Months Ended Year Ended
Aug. 31, 1994 Feb. 28, 1994
---------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income...................................... $ 8,503 $ 14,241
Net realized gain on investments........................... 3 1,171
Change in unrealized appreciation or depreciation
of investments............................................ (70) (713)
---------- ---------
Increase in net assets from operations..................... 8,436 14,699
---------- ---------
Distributions to shareholders
Net investment income...................................... (8,503) (14,241)
---------- ---------
Capital share transactions ($1.00 per share)
Proceeds from sales of shares ............................. 466,709 909,622
Distributions reinvested .................................. 7,895 13,181
Payment for shares redeemed................................ (457,315) (886,060)
---------- ---------
Increase in net assets from capital share transactions..... 17,289 36,743
---------- ---------
Total increase............................................... 17,222 37,201
NET ASSETS
Beginning of period........................................ 732,900 695,699
---------- ---------
End of period.............................................. $ 750,122 $ 732,900
========== =========
======================================================================================================================
</TABLE>
T. Rowe Price Tax-Exempt Money Fund
Notes to Financial Statements / August 31, 1994 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Tax-Exempt Money Fund (the Fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company.
A) Security valuation - Securities with more than 60 days remaining to
maturity are stated at fair value which is determined by using a matrix
system that establishes a value for each security based on money market
yields. Securities with remaining maturities of 60 days or less are valued
at amortized cost.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by, or under the supervision of, the
officers of the Fund, as authorized by the Board of Directors.
B) Premiums and Discounts - Premiums on municipal securities are amortized
for both financial and tax reporting purposes. Discounts, other than
original issue, are not amortized for financial reporting purposes.
C) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on an identified cost basis. Distributions to shareholders are
8
<PAGE>
recorded by the Fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
NOTE 2 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the Fund intends to
continue to qualify as a regulated investment company and distribute all of
its income. The Fund has unused realized capital loss carryforwards for
federal income tax purposes of $266,000 at February 28, 1994, which expire in
1998. Capital loss carryforwards utilized in the fiscal year ended February
28, 1994 amounted to $1,171,000. The Fund intends to retain gains realized
in future periods that may be offset by available capital loss carryforwards.
At August 31, 1994, the aggregate cost of investments for federal
income tax and financial reporting purposes was $775,043,000 and net
unrealized depreciation aggregated $186,000, of which $54,000 related to
appreciated investments and $240,000 to depreciated investments.
NOTE 3 - RELATED PARTY TRANSACTIONS
The investment management agreement between the Fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management
fee, computed daily and paid monthly, consisting of an Individual Fund Fee
equal to 0.10% of average daily net assets and a Group Fee. The Group Fee is
based on the combined assets of certain mutual funds sponsored by the Manager
or Rowe Price-Fleming International, Inc. (the Group). The Group Fee rate
ranges from 0.48% for the first $1 billion of assets to 0.31% for assets in
excess of $34 billion. The effective annual Group Fee rate at August 31,
1994, and for the six months then ended was 0.34%. The Fund pays a pro rata
portion of the Group Fee based on the ratio of the Fund's net assets to those
of the Group.
T. Rowe Price Services, Inc. (TRPS) is a wholly owned subsidiary of the
Manager. TRPS provides transfer and dividend disbursing agent functions and
shareholder services for all accounts. The Manager, under a separate agreement,
calculates the daily share price and maintains the financial records of the
Fund. For the six months ended August 31, 1994, the Fund incurred fees totalling
approximately $330,000 for these services provided by related parties. At August
31, 1994, investment management and service fees payable were $370,000.
9
<PAGE>
T. Rowe Price Tax-Exempt Money Fund
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
For a share outstanding throughout each period
---------------------------------------------------------------------
Six Months Year Ended
Ended ----------------------------------------------------------
Aug. 31, Feb. 28, Feb. 28, Feb. 29, Feb. 28, Feb. 28,
1994 1994 1993 1992 1991 1990
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- ----------
Investment Activities
Net investment income................. 0.011 0.020 0.023 0.036 0.051 0.057
Distributions
Net investment income................. (0.011) (0.020) (0.023) (0.036) (0.051) (0.057)
-------- -------- -------- -------- -------- ----------
NET ASSET VALUE, END OF PERIOD............ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ==========
======================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Total Return.............................. 1.10% 2.05% 2.36% 3.69% 5.22% 5.87%
Ratio of Expenses to Average Net Assets... 0.59%+ 0.59% 0.60% 0.61% 0.60% 0.60%
Ratio of Net Investment Income
to Average Net Assets................. 2.19%+ 2.04% 2.35% 3.65% 5.12% 5.75%
Net Assets, End of Period (in thousands).. $750,122 $732,900 $695,699 $801,846 $977,638 $1,064,141
======================================================================================================================
</TABLE>
+ Annualized.
10
<PAGE>
Shareholder Services
To help shareholders monitor their current investments and make decisions
that accurately reflect their financial goals, T. Rowe Price offers a wide
variety of information and services -- at no extra cost.
KNOWLEDGEABLE SERVICE REPRESENTATIVES
BY PHONE--Shareholder service representatives are available from 8:00 a.m. to
10:00 p.m., Monday - Friday, and weekends from 9:00 a.m. to 5:00 p.m., E.T. Call
1-800-225-5132 to speak directly with a representative who will be able to
assist you with your accounts.
IN PERSON--Visit one of our investor center locations to meet with a
representative who will be able to assist you with your accounts. While
there, you can drop off applications or obtain prospectuses and other
literature.
AUTOMATED 24-HOUR SERVICES
Tele*Access/(R)/ (1-800-638-2587) provides information such as
account balance, date and amount of your last transaction, latest dividend
payment, and fund prices and yields. Additionally, you have the ability to
request prospectuses, statements, account and tax forms; reorder checks; and
initiate purchase, redemption, and exchange orders for identically registered
accounts.
PC*Access/(R)/ provides the same information as Tele*Access, but on
a personal computer via dial-up modem.
ACCOUNT SERVICES
Checking--Write checks for $500 or more on any money market and bond
fund accounts (except the High Yield Fund).
Automatic Investing--Build your account over time by investing directly
from your bank account or paycheck with Automatic Asset Builder. Additionally,
Automatic Exchange enables you to set up systematic investments from one fund
account into another, such as from a money fund into a stock fund. A low, $50
minimum makes it easy to get started.
Automatic Withdrawal--If you need money from your fund account on a
regular basis, you can establish scheduled, automatic redemptions.
Dividend and Capital Gains Payment Options--Reinvest all or some of your
distributions, or take them in cash. We give you maximum flexibility and
convenience.
INVESTMENT INFORMATION
Combined Statement--A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax category, provides
total portfolio value, and lists your investments by type -- stock, bond, and
money market. Detail pages itemize account transactions by fund.
Quarterly Shareholder Reports--Portfolio managers review the
performance of the funds in plain language and discuss T. Rowe Price's
economic outlook.
The T. Rowe Price Report--A quarterly newsletter with relevant
articles on market trends, personal financial planning, and T. Rowe Price's
economic perspective.
Insights--A library of information that includes reports on mutual
fund tax issues, investment strategies, and financial markets.
Detailed Investment Guides--Our widely acclaimed Asset Mix
Worksheet, College Planning Kit, Retirees Financial Guide, Retirement
Planning Kit (also available on disk for PC use), and Guide to Risk-Adjusted
Performance can help you determine and reach your investment goals.
DISCOUNT BROKERAGE
You can trade stocks, bonds, options, precious metals, and other securities
at a substantial savings over regular commission rates. Call a shareholder
service representative for more information.
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T. Rowe Price No-Load Mutual Funds
STABILITY
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money
Market
Tax-Exempt Money
CONSERVATIVE INCOME
Adjustable Rate
U.S. Government
Short-Term Bond
Short-Term Global Income
Summit Limited-Term Bond
U.S. Treasury Intermediate
Florida Insured Intermediate
Tax-Free
Maryland Short-Term
Tax-Free Bond
Summit Municipal
Intermediate
Tax-Free Insured
Intermediate Bond
Tax-Free Short-Intermediate
INCOME
Global Government Bond
GNMA
New Income
Spectrum Income
Summit GNMA
U.S. Treasury Long-Term
California Tax-Free Bond
Georgia Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Tax-Free Income
Virginia Tax-Free Bond
AGGRESSIVE INCOME
High Yield
International Bond
Tax-Free High Yield
CONSERVATIVE GROWTH
Balanced
Capital Appreciation
Dividend Growth
Equity Income
Equity Index
Growth & Income
Spectrum Growth
Value
GROWTH
Blue Chip Growth
European Stock
Growth Stock
International Stock
Japan
Mid-Cap Growth
New Era
Small-Cap Value
AGGRESSIVE GROWTH
International Discovery
Latin America
New America Growth
New Asia
New Horizons
OTC
Science & Technology
PERSONAL STRATEGY FUNDS
Personal Strategy Income
Personal Strategy Balanced
Personal Strategy Growth
Call if you want to know about any T. Rowe Price Fund. We'll send you a
prospectus with more complete information, including management fees and other
expenses. Read it carefully before you invest or send money.
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