Report - Financial Statements
T. Rowe Price Tax-Exempt Money Fund
August 31, 1996
Portfolio Highlights
Sector Diversification
Percent ofPercent of
Net AssetsNet Assets
2/29/96 8/31/96
Hospital Revenue 30% 27%
Educational Revenue 14 14
General Obligation - State 11 13
General Obligation - Local 13 12
Prerefunded Bonds 5 10
Industrial and Pollution
Control Revenue 9 9
Dedicated Tax Revenue - 3
Air and Sea Transportation Revenue 3 2
Pooled Loan Revenue 2 2
Electric Revenue 2 2
Miscellaneous Revenue 1 2
Lease Revenue 2 2
All Other 8 4
Other Assets Less Liabilities - -2
Total 100% 100%
T. Rowe Price Tax-Exempt Money Fund
Unaudited
Financial HighlightsFor a share outstanding throughout each period
6 Months Year
Ended Ended
8/31/96 2/29/96 2/28/95 2/28/94 2/28/93 2/29/92
NET ASSET VALUE
Beginning of
period $ 1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Investment activities
Net invest-
ment income 0.015 0.033 0.026 0.020 0.023 0.036
Distributions
Net invest-
ment income(0.015) (0.033) (0.026) (0.020) (0.023) (0.036)
NET ASSET VALUE
End of period$ 1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Ratios/Supplemental Data
Total return 1.52% 3.38% 2.63% 2.05% 2.36% 3.69%
Ratio of expenses
to average
net assets 0.55%! 0.56% 0.58% 0.59% 0.60% 0.61%
Ratio of net
investment income
to average
net assets 2.96%! 3.33% 2.59% 2.04% 2.35% 3.65%
Net assets,
end of period
(in thousands)$668,166$679,143$687,022 $732,900$695,699 $801,846
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Exempt Money Fund
Unaudited August 31, 1996
Statement of Net Assets
Par Value
In thousands
ALABAMA 4.4%
Birmingham, GO
VRDN (Currently 3.40%) $ 6,650 $ 6,650
VRDN (Currently 3.45%) 5,700 5,700
Jefferson County
GO, VRDN (Currently 3.55%) 10,000 10,000
Sewer, RAW, VRDN (Currently 3.50%) 7,000 7,000
Total Alabama (Cost $29,350) 29,350
ALASKA 0.0%
Valdez Marine Terminal
Exxon Pipeline, VRDN (Currently 3.75%) 200 200
Total Alaska (Cost $200) 200
ARKANSAS 2.0%
Arkansas Dev. Fin. Auth.
Sisters of Mercy, VRDN (Currently 3.45%) 13,200 13,200
Total Arkansas (Cost $13,200) 13,200
CALIFORNIA 6.2%
California, GO, RAN, 4.50%, 6/30/97 9,365 9,404
Oakland
COP, VRDN (Currently 3.75%) 3,000 3,000
GO, TRAN, 4.75%, 6/30/97 10,000 10,068
Riverside County, COP, VRDN (Currently 3.50%) 2,550 2,550
San Diego, GO, TAN, 4.50%, 7/2/97 5,000 5,030
San Jose, Convention Center, COP
7.875%, 9/1/10 (Prerefunded 9/1/96!) 11,000 11,220
Total California (Cost $41,272) 41,272
COLORADO 1.1%
Colorado HFA, Sisters Of Charity Health System
VRDN (Currently 3.40%) 5,400 5,400
Denver, IDR, W. W. Grainger, VRDN (Currently 3.60%)2,190 2,190
Total Colorado (Cost $7,590) 7,590
DISTRICT OF COLUMBIA 1.9%
Dist. of Columbia, American Univ.,
VRDN (Currently 3.55%) $ 12,890 $ 12,890
Total District of Columbia (Cost $12,890) 12,890
FLORIDA 2.6%
First Florida Gov't. Fin. Corp.
VRDN (Currently 3.35%)
(MBIA Insured) 2,205 2,205
Florida Municipal Power Agency
St. Lucie Project, 6.50%, 10/1/15
(Prerefunded 10/1/96!) 2,500 2,506
Jacksonville HFA
Baptist Medical Center, VRDN (Currently 3.95%)
(MBIA Insured) 2,800 2,800
Genesis Rehabilitation Hosp.
VRDN (Currently 3.85%) 7,100 7,100
Orange County IDA
W. W. Grainger, VRDN (Currently 3.60%) 1,185 1,185
Sunshine State Gov't. Fin. Commission,
TECP, 3.65%, 10/9/96 1,700 1,700
Total Florida (Cost $17,496) 17,496
GEORGIA 3.0%
Atlanta, 7.50%, 12/1/08 (Prerefunded 12/1/96!) 810 835
Atlanta Downtown Dev. Auth., IDR, Underground Atlanta Project
7.55%, 10/1/05
(Prerefunded 10/1/96!) 2,070 2,118
De Kalb Hosp. Auth., Egleston Childrens Health Care System
VRDN (Currently 3.35%) 2,300 2,300
Fulton County Building Auth., Judicial Center Fac.
8.20%, 1/1/15 (Prerefunded 1/1/97!) 1,370 1,419
Fulton County School Dist.
7.50%, 5/1/08 (Prerefunded 5/1/97!) 1,000 1,053
7.625%, 5/1/17 (Prerefunded 5/1/97!) 3,000 3,161
Georgia, GO
6.50%, 12/1/96 1,100 1,109
6.70%, 9/1/96 3,000 3,000
6.75%, 9/1/99 (Prerefunded 9/1/96!) 1,000 1,020
Georgia Tech Foundation Fac. Auth.
Wardlaw Project, VRDN (Currently 3.45%) $ 1,700 $ 1,700
Municipal Electric Auth. of Georgia
7.75%, 1/1/18 (Prerefunded 1/1/97!) 2,000 2,065
Total Georgia (Cost $19,780) 19,780
HAWAII 0.0%
Honolulu City and County, GO
6.90%, 10/1/96
(Escrowed to Maturity) 300 301
Total Hawaii (Cost $301) 301
IDAHO 2.3%
Custer County, PCR, Amoco Oil, 3.40%, 10/1/96 7,000 7,000
Idaho, GO, TAN, 4.50%, 6/30/97 8,065 8,106
Total Idaho (Cost $15,106) 15,106
ILLINOIS 12.1%
Chicago, GO
3.10%, 2/4/97 8,300 8,300
3.65%, 10/31/96 5,000 5,000
Chicago Public Building Commission
7.45%, 1/1/97 (FGIC Insured)
(Escrowed to Maturity) 1,200 1,215
Illinois
Sales Tax
5.50%, 6/15/97 500 506
7.30%, 6/15/00 (Prerefunded 6/15/97!) 2,000 2,094
Illinois Dev. Fin. Auth.
Palos Community Hosp., VRDN
(Currently 3.45%) 20,400 20,400
Illinois EFA
Northwestern Univ.
VRDN (Currently 3.55%) 14,800 14,800
VRDN (Currently 4.125%) 1,500 1,500
Illinois HFA
Children's Memorial Hosp.
VRDN (Currently 3.50%) $ 9,200 $ 9,200
Grant Hosp., 7.50%, 12/1/13
(Prerefunded 12/1/96!) 2,500 2,575
Univ. of Chicago Hosp., VRDN (Currently 3.40%)
(MBIA Insured) 12,400 12,400
Joliet Regional Port Dist. Marine Terminal, Exxon Project
VRDN (Currently 3.75%) 800 800
Niles Village, IDR, W. W. Grainger,
VRDN (Currently 3.60%) 1,000 1,000
Springfield Electric,
5.00%, 9/1/97 (Escrowed to Maturity) 1,000 1,011
Total Illinois (Cost $80,801) 80,801
INDIANA 0.4%
Gary, IDR, W. W. Grainger, VRDN (Currently 3.60%) 730 730
Indiana HFFA, Daughters of Charity,
VRDN (Currently 3.45%) 1,700 1,700
Total Indiana (Cost $2,430) 2,430
KANSAS 0.3%
Wyandotte County, Criminal Justice Complex
6.75%, 9/1/96 (FGIC Insured)
(Escrowed to Maturity) 2,115 2,115
Total Kansas (Cost $2,115) 2,115
LOUISIANA 3.8%
Louisiana, 7.00%, 8/1/02 (Prerefunded 8/1/97!) 1,670 1,749
Louisiana Offshore Terminal Auth.,
VRDN (Currently 3.75%) 800 800
Louisiana PFA, Willis Knighton Medical Center
VRDN (Currently 3.40%)
(AMBAC Insured) 12,700 12,700
New Orleans Aviation Board, VRDN (Currently 3.35%)
(MBIA Insured) 9,900 9,900
Total Louisiana (Cost $25,149) 25,149
MAINE 1.1%
Maine, GO, TAN, 4.50%, 6/27/97 $ 7,000 $ 7,034
Total Maine (Cost $7,034) 7,034
MARYLAND 9.0%
Baltimore County
GO, TECP, BAN, 3.50%, 10/3/96 8,000 8,000
Sheppard and Enoch Pratt Hosp.
VRDN (Currently 3.40%) 6,800 6,800
Carroll County, County Commissioners
Consolidated Public Improvement, GO
4.45%, 11/1/96 1,000 1,001
Frederick County, Sheppard Pratt Residential
VRDN (Currently 3.40%) 2,000 2,000
Howard County, Consolidated Public Improvement
6.40%, 3/15/02
(Prerefunded 9/15/96) 1,000 1,021
Maryland DOT, 6.70%, 7/1/98 (Prerefunded 7/1/97!) 1,000 1,031
Maryland HHEFA
Johns Hopkins Univ., 6.20%, 7/1/97 10,255 10,255
Pooled Loan Program
VRDN (Currently 3.45%) 4,700 4,700
VRDN (Currently 3.50%) 5,000 5,000
Montgomery County, Consolidated Public Improvement, GO
5.20%, 10/1/96 2,930 2,934
Montgomery County Economic Dev.
Howard Hughes Medical Fac.
VRDN (Currently 3.45%) 10,000 10,000
Washington Suburban Sanitary Dist.
GO, BAN, VRDN (Currently 3.40%) 6,000 6,000
General Construction, GO, 7.375%, 1/1/07
(Prerefunded 1/1/97!) 1,200 1,240
Total Maryland (Cost $59,982) 59,982
MASSACHUSETTS 0.3%
Massachusetts,
GO, 7.125%, 10/1/05 (Prerefunded 10/1/96!) 2,000 2,045
Total Massachusetts (Cost $2,045) 2,045
MICHIGAN 2.8%
Detroit School Dist., Wayne County School Aid, GO, RAN
4.50%, 5/1/97 $ 5,000 $ 5,018
Michigan, GO, TAN, 4.00%, 9/30/96 5,300 5,301
Univ. of Michigan Hosp., VRDN (Currently 3.85%) 8,600 8,600
Total Michigan (Cost $18,919) 18,919
MINNESOTA 1.6%
Cottage Grove, PCR, Minnesota Mining and Mfg. Co.
VRDN (Currently 3.79%) 2,000 2,000
Rochester Health Care Fac.
Mayo Foundation/Mayo Medical Center
TECP, 3.60 - 3.65%, 9/5 - 10/2/96 2,500 2,500
VRDN (Currently 3.65%) 5,000 5,000
Univ. of Minnesota, TECP, 3.65%, 10/16/96 1,250 1,250
Total Minnesota (Cost $10,750) 10,750
MISSISSIPPI 0.2%
Rankin County, PCR, Siemens Energy and Automation
VRDN (Currently 3.50%) 1,600 1,600
Total Mississippi (Cost $1,600) 1,600
MISSOURI 1.1%
Missouri, Fourth State Building, GO, 6.00%, 8/1/971,675 1,705
Missouri Environmental Improvement and
Energy Resources Auth.
Union Electric, TECP, 3.65%, 9/6/96 3,300 3,300
Missouri HEFA
Sisters Of Mercy, 3.60%, 12/1/96 750 750
St. Anthony's Medical Center
VRDN (Currently 3.45%) 500 500
Washington Univ., VRDN (Currently 3.80%) 1,000 1,000
Total Missouri (Cost $7,255) 7,255
NEW HAMPSHIRE 1.6%
New Hampshire HHEFA
Dartmouth Ed. Loan Corp.
3.75%, 6/1/97 $ 4,000 $ 4,000
3.80%, 6/1/97 1,000 1,000
St. Paul's School, VRDN (Currently 3.40%) 6,000 6,000
Total New Hampshire (Cost $11,000) 11,000
NEW MEXICO 0.4%
Albuquerque, VRDN (Currently 3.50%) 3,000 3,000
Total New Mexico (Cost $3,000) 3,000
NEW YORK 1.9%
New York State Local Gov't. Assistance Corp.
VRDN (Currently 3.20%) 6,000 6,000
VRDN (Currently 3.25%) 6,800 6,800
Total New York (Cost $12,800) 12,800
NORTH CAROLINA 2.6%
Charlotte Mecklenburg Hosp. Auth.,
North Carolina Health Care System,
VRDN (Currently 3.40%) 6,800 6,800
North Carolina Eastern Municipal Power Agency
7.50%, 1/1/15 (Prerefunded 1/1/97!) 5,000 5,160
North Carolina EFA, Bowman Gray School of Medicine
VRDN (Currently 3.40%) 1,950 1,950
Winston Salem, GO, COP, 3.50%, 9/5/96 3,700 3,700
Total North Carolina (Cost $17,610) 17,610
OHIO 2.1%
Akron, Sanitary Sewer System, VRDN (Currently 3.50%)500 500
Cleveland - Cuyahoga County Port Auth.,
Rock and Roll Hall of Fame Museum,
VRDN (Currently 3.50%) 2,000 2,000
Cuyahoga County, Cleveland Clinic Foundation
VRDN (Currently 3.40%) 5,000 5,000
Erie County, Firelands Community Hosp.
8.875%, 1/1/15 (Prerefunded 1/1/97!) $ 3,260 $ 3,347
Franklin County, Holy Cross Health System,
4.75%, 6/1/97 1,230 1,239
Ohio Public Fac. Commission, Mental Health Fac.
4.50%, 12/1/96 (MBIA Insured) 1,900 1,906
Total Ohio (Cost $13,992) 13,992
PENNSYLVANIA 1.2%
Geisinger Auth., Health Systems, 3.75%, 9/3/96 3,500 3,500
Montgomery County, IDA
W. W. Grainger, VRDN (Currently 3.60%) 1,230 1,230
Pennsylvania Intergovernmental Coop. Auth.,
Philadelphia Funding Program,
5.00%, 6/15/97 (FGIC Insured) 3,000 3,030
Total Pennsylvania (Cost $7,760) 7,760
SOUTH CAROLINA 1.4%
South Carolina Public Service Auth.,
Santee Cooper Project
6.00%, 1/1/97 (MBIA Insured) 3,000 3,023
Spartanburg County, Siemens Energy and Automation
VRDN (Currently 3.50%) 6,400 6,400
Total South Carolina (Cost $9,423) 9,423
SOUTH DAKOTA 1.5%
South Dakota HEFA
Sioux Valley Hosp., VRDN (Currently 3.55%) 10,200 10,200
Total South Dakota (Cost $10,200) 10,200
TENNESSEE 4.1%
Metropolitan Gov't. of Nashville and Davidson County
Vanderbilt Univ.
3.50%, 1/15/97 10,000 10,000
3.70%, 5/1/97 (FGIC Insured) 1,150 1,150
Tennessee, School Bond Auth., GO, BAN
VRDN (Currently 3.30%) 16,000 16,000
Total Tennessee (Cost $27,150) 27,150
TEXAS 13.3%
Dallas County Community College,
VRDN (Currently 3.60%) $ 19,200 $ 19,200
Harris County Health Fac. Dev. Corp.
Methodist Hosp., VRDN (Currently 3.75%) 1,600 1,600
Sisters of Charity of the Incarnate Word, TECP
3.65%, 9/5/96 10,600 10,600
St. Luke's Episcopal Hosp.
VRDN (Currently 3.75%) 8,300 8,300
Harris County IDC, Lubrizol Corp.,
VRDN (Currently 3.40%) 14,400 14,400
Houston Water and Sewer
6.60%, 12/1/99 (Prerefunded 12/1/96!) 1,000 1,028
8.10%, 12/1/09 (BIGI Insured)
(Prerefunded 12/1/96!) 2,000 2,062
Midland, IDC, W. W. Grainger, VRDN (Currently 3.60%)775 775
North Central Texas
Kaiser Permenente, VRDN (Currently 3.40%) 3,400 3,400
Plano Independent School Dist., GO
8.625%, 2/15/97 (FGIC Insured)
(Escrowed to Maturity) 2,100 2,148
San Antonio, Water Systems, 5.40%, 5/15/97 2,000 2,023
Texas, GO, TRAN, 4.75%, 8/29/97 15,000 15,117
West Calhoun County Dev.
Sohio Chemical, VRDN (Currently 3.75%) 8,200 8,200
Total Texas (Cost $88,853) 88,853
UTAH 0.1%
Intermountain Power Agency
8.625%, 7/1/21 (Prerefunded 7/1/97!) 500 529
Total Utah (Cost $529) 529
VERMONT 1.8%
Vermont, GO, TECP (Currently 3.65%), 10/8/96 10,000 10,000
Vermont Ed. and Health Buildings Fin. Agency
Middlebury College, 3.70%, 5/1/97 2,000 2,000
Total Vermont (Cost $12,000) 12,000
VIRGINIA 1.8%
Big Stone Gap Redev. and Housing Auth.
Correctional Fac. Lease, Wallens Ridge Dev.
4.25%, 9/1/96 $ 2,815 $ 2,815
Fairfax County IDA
Fairfax Hosp. System, VRDN (Currently 3.55%) 900 900
Inova Health Care System
VRDN (Currently 3.55%) 1,100 1,100
Rockingham County IDA
Merck and Co., VRDN (Currently 3.65%) 2,400 2,400
Univ. of Virginia, VRDN (Currently 3.50%) 4,500 4,500
Total Virginia (Cost $11,715) 11,715
WASHINGTON 6.3%
Municipality of Metropolitan Seattle,
Limited Sales Tax, GO
7.20%, 1/1/20 (Prerefunded 1/1/97!) 2,630 2,713
Port of Seattle, GO, VRDN (Currently 3.50%) 3,800 3,800
Seattle Municipal Light and Power
6.60%, 10/1/97
(Prerefunded 10/1/96!) 2,400 2,454
Snohomish County Public Utility Dist.
8.00%, 1/1/15 (Prerefunded 1/1/97!) 6,365 6,580
Washington
GO, VRDN (Currently 3.45%) 10,000 10,000
GO, 10.00%, 10/1/99
(Prerefunded 10/1/96!) 2,000 2,010
GO, TAN, 7.40%, 9/1/97
(Prerefunded 9/1/96!) 1,000 1,000
Washington HFA, Fred Hutchinson Cancer Research Center
VRDN (Currently 3.85%) 13,680 13,680
Total Washington (Cost $42,237) 42,237
WEST VIRGINIA 1.2%
Marshall County, PCR, Mountaineer Carbon Company
VRDN (Currently 3.75%) 8,100 8,100
Total West Virginia (Cost $8,100) 8,100
WISCONSIN 1.7%
Milwaukee
GO, 7.70%, 12/1/96 $ 1,330 $ 1,344
GO, RAN, 3.50%, 2/27/97 5,000 4,989
Oak Creek, Wisconsin Electric Power Co.
VRDN (Currently 3.55%) 500 500
Wisconsin
GO, 7.20%, 5/1/01 (Prerefunded 5/1/97!) 1,000 1,033
Transportation, 5.00%, 7/1/97 (FGIC Insured) 3,525 3,559
Total Wisconsin (Cost $11,425) 11,425
WYOMING 2.5%
Converse County, PCR, Pacificorp, TECP, 3.55%, 9/12/967,485 7,485
Gillette County, PCR, Pacificorp, TECP
(Currently 3.65%), 10/11/96 2,500 2,500
Kemmerer County, PCR, Exxon, VRDN (Currently 3.75%)1,000 1,000
Lincoln County, PCR
Pacificorp, VRDN (Currently 3.75%)
(AMBAC Insured) 2,200 2,200
Sweetwater County, PCR
Pacificorp, VRDN (Currently 3.75%)
(AMBAC Insured) 1,000 1,000
Uinta County, PCR, Amoco Oil, 3.98%, 12/1/96 2,500 2,500
Total Wyoming (Cost $16,685) 16,685
Total Investments in Securities
101.7% of Net Assets (Cost $679,744) $ 679,744
Other Assets Less Liabilities (11,578)
NET ASSETS $ 668,166
Net Assets Consist of:
Accumulated net investment income - net of distributions$ 142
Accumulated net realized gain/loss - net of distributions (207)
Paid-in-capital applicable to 668,306,963 shares of $0.01 par
value capital stock outstanding; 5,000,000,000 shares authorized668,231
NET ASSETS $ 668,166
NET ASSET VALUE PER SHARE $ 1.00
! Used in determining portfolio maturity
AMBACAMBAC Indemnity Corp.
BAN Bond Anticipation Note
BIGI Bond Investors Guaranty Insurance
COP Certificates of Participation
DOT Department of Transportation
EFA Educational Facility Authority
FGIC Financial Guaranty Insurance Company
GO General Obligation
HEFA Health & Educational Facility Authority
HFA Health Facility Authority
HFFA Health Facility Financing Authority
HHEFAHealth & Higher Educational Facility Authority
IDA Industrial Development Authority
IDC Industrial Development Corp.
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance Corp.
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.
T. Rowe Price Tax-Exempt Money Fund
Unaudited
Statement of Operations
In thousands
6 Months
Ended
8/31/96
Investment Income
Interest income $ 11,823
Expenses
Investment management 1,449
Shareholder servicing 270
Custody and accounting 87
Registration 24
Prospectus and shareholder reports 14
Legal and audit 11
Directors 5
Miscellaneous 6
Total expenses 1,866
Net investment income 9,957
Realized and Unrealized Gain/Loss
Net realized gain (loss) on securities (18)
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 9,939
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Exempt Money Fund
Unaudited
Statement of Changes in Net Assets
In thousands
6 Months Year
Ended Ended
8/31/96 2/29/96
Increase (Decrease) in Net Assets
Operations
Net investment income $ 9,957 $ 22,740
Net realized gain (loss) (18) 56
Change in net unrealized gain or loss - 92
Increase (decrease) in net assets from operations9,939 22,888
Distributions to shareholders
Net investment income (9,957) (22,740)
Capital share transactions *
Shares sold 284,354 665,684
Distributions reinvested 9,496 21,267
Shares redeemed (304,809) (694,978)
Increase (decrease) in net assets from capital
share transactions (10,959) (8,027)
Net Assets
Increase (decrease) during period (10,977) (7,879)
Beginning of period 679,143 687,022
End of period $ 668,166 $ 679,143
*Share information
Shares sold 284,354 665,684
Distributions reinvested 9,496 21,267
Shares redeemed (304,809) (694,978)
Increase (decrease) in shares outstanding (10,959) (8,027)
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Exempt Money Fund
Unaudited August 31, 1996
Notes to Financial Statements
Note 1 - Significant Accounting Policies
T. Rowe Price Tax-Exempt Money Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company and commenced operations on April 8, 1981.
Valuation Securities are valued at amortized cost. Assets and liabilities for
which such valuation procedures 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 .
Premiums and Discounts Premiums and original issue discounts on municipal
securities are amortized for both financial reporting and tax purposes. Market
discounts are recognized upon disposition of the security as gain or loss for
financial reporting purposes and as ordinary income for tax purposes.
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. Distributions to shareholders are
recorded by the fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax regulations
and may differ from those determined in accordance with generally accepted
accounting principles.
Note 2 - 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 $183,000 which expires in 1998. The fund
intends to retain gains realized in future periods that may be offset by
available capital loss carryforwards.
At August 31, 1996, the aggregate cost of investments for federal income tax
and financial reporting purposes was $679,744,000.
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, of which $241,000 was payable at August 31, 1996. The fee is computed
daily and paid monthly, and consists 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 0.305% for assets in excess of $50
billion. At August 31, 1996, and for the six months then ended, the effective
annual group fee rate was 0.33%. The fund pays a pro-rata share of the group
fee based on the ratio of its net assets to those of the group.
In addition, the fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which the fund receives
certain other services. The manager computes the daily share price and
maintains the financial records of the fund. T. Rowe Price Services, Inc., is
the fund's transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. The fund incurred expenses pursuant to
these related party agreements totaling approximately $253,000 for the six
months ended August 31, 1996, of which $48,000 was payable at period-end.
T. Rowe Price
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Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
T. Rowe Price
100 East Pratt Street
Baltimore, Maryland 21202
http://www.troweprice.com
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price Tax-Exempt
Money Fund(registered trademark).
T. Rowe Price Investment Services, Inc., DistributorRPRTTEM 8/31/96
