<PAGE>
Semiannual Report
TAX-FREE
FUNDS
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AUGUST 31, 2000
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[LOGO OF T. ROWE PRICE]
T. ROWE PRICE
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Report Highlights
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Tax-Free Funds
. Favorable supply-and-demand conditions helped municipal bonds post strong
returns for the six months ended August 31.
. The intermediate and long-term funds provided the best absolute results,
while the other funds generated returns in line with or above their peer
group averages.
. A combination of duration and credit strategy helped relative returns in a
choppy market that saw high-quality bonds outperform lower-grade
securities.
. Municipal bonds were undervalued at the start of the year but have made up
much lost ground; the economic environment favors a stable to improving
market barring unforeseen developments.
UPDATES AVAILABLE
For updates on T. Rowe Price funds following the end of each calendar quarter,
please see our Web site at www.troweprice.com.
<PAGE>
FELLOW SHAREHOLDERS
Municipal bonds turned in a strong performance for the six months ended August
31, largely due to favorable supply-and-demand factors in the market. Investors
were encouraged by aggressive action taken by the Federal Reserve in its effort
to curb above-average economic growth and stem inflation. As a result, your
funds provided good absolute and relative returns versus their peers.
MARKET ENVIRONMENT
------------------------------
MUNICIPAL BOND AND NOTE YIELDS
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[GRAPH]
30-Year 5-Year 1-Year
AAA General AAA General Moody's Investment
Obligation Obligation Grade 1 Note
8/31/99 5.6 4.4 3.75
5.7 4.43 3.75
5.89 4.58 3.95
11/30/00 5.87 4.53 3.95
5.93 4.68 4.1
6.03 4.9 4.1
2/29/00 5.9 4.94 4.2
5.69 4.82 4.3
5.8 4.96 4.35
5/31/00 5.91 5.04 4.7
5.72 4.74 4.35
5.6 4.58 4.3
8/31/00 5.5 4.43 4.3
Source: T. Rowe Price Associates
Fixed-income markets in 2000 have been largely influenced by the Federal
Reserve's tightening program, heightened volatility in the equity market, and
the government's buyback of U.S. Treasury bonds. Fed activity, which includes
federal funds rate increases totaling 75 basis points during the past six
months, finally seems to be exerting some weight on the resilient U.S. economy.
(One hundred basis points equal one percent.) The Fed's expressed determination
to slow economic growth and engineer a soft landing has injected a note of
sobriety into equity markets.
Long-term Treasury bonds, on the other hand, have returned about 15% so far this
year due to a scarcity premium for the bonds since the government announced its
buyback program, which led to investors' fears of a dwindling supply of long-
term Treasuries. The Treasury yield curve has remained inverted since January,
with yields on short-term Treasuries higher than long-term yields as Fed actions
have put upward pressure on short-term yields while long-term yields have come
down.
1
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Municipal bond yields have also fallen, aided by outsized demand for tax-exempt
securities. The supply of new issues, down 20% through August versus the same
period last year, has been capped by higher borrowing costs than last year and
lower borrowing needs of state and local governments. Demand, particularly from
buyers of individual bonds, has been quite strong as attractive taxable-
equivalent yields have enticed investors seeking to rebalance their portfolios
with bonds. High-yield bonds, however, have lagged the general market as the
yield differential between many lower- and higher-quality bonds widened. This
sector continues to feel pressure from profitability problems experienced by
health care providers and various corporate issuers. The prospect of slower
economic growth has also weighed on the high-yield market, which tends to be
more vulnerable. Money market yields also moved somewhat higher due to the
Federal Reserve's activity.
TAX-EXEMPT MONEY FUND AND PLUS SHARES
----------------------
PERFORMANCE COMPARSION
--------------------------------------------
Periods Ended 8/31/00 6 Months 12 Months
--------------------------------------------
Tax-Exempt Money Fund 1.85% 3.42%
Tax-Exempt Money Fund
PLUS Class 1.73 3.22
Lipper Tax-Exempt Money
Market Funds Average 1.78 3.27
Performance for the Tax-Exempt Money Fund exceeded the peer group averages for
both the 6- and 12-month periods ended August 31. The fund returned 1.85% and
3.42%, respectively, versus 1.78% and 3.27% for the Lipper averages. The Tax-
Exempt Money Fund PLUS Class shares lagged slightly behind Lipper, due to the
fund's higher expenses in exchange for the additional services offered.
During the past six months, the Federal Reserve raised short-term interest rates
two more times for a total of 75 basis points. Rates have been hiked six times
in all since June 1999 in a series of tightening moves that have lifted the key
fed funds rate 175 basis points to 6.50%. Since February 29, short-term tax-
exempt rates reacted less to the Fed's actions than would be expected, rising 20
basis points to 4.25% for six-month securities and only 10 basis points to 4.30%
for one-year notes. Evidence of higher short-term rates was more readily seen in
the tax-exempt variable rate sector, where yields over the past six months
averaged 4.18%, about 70 basis points more than their average over the previous
six-month period.
2
<PAGE>
The larger move in the variable rate market, comprising one- and seven-day
maturities, relative to 6- and 12-month maturities resulted in a flatter short-
term yield curve. On August 31, a one-day investment in the tax-exempt market
yielded the same as a one-year investment. The average variable rate security
over the past six months yielded 4.18% compared with an average of 4.39% for a
one-year security. Indeed, for investors there has not been much of a sacrifice
in yields associated with highly liquid cash investments.
The fund closed the six-month period with a weighted average maturity (WAM) of
39 days, considerably shorter than the 55 days recorded at the end of February.
Additionally, the fund's WAM closed the period about equal to that of our peer
group, whereas six months ago we were 17 days longer. We are content to maintain
this posture in the near term as long as the short end of our maturity range
continues to provide such attractive yields with virtually no interest rate
risk.
TAX-FREE SHORT-INTERMEDIATE FUND
----------------------
PERFORMANCE COMPARISON
--------------------------------------------
Periods Ended 8/31/00 6 Months 12 Months
--------------------------------------------
Tax-Free Short-
Intermediate Fund 3.74% 4.50%
Lipper Short-Intermediate
Municipal Debt Funds Average 3.54 3.98
The fund turned in good results that were solidly ahead of the Lipper average
for the 6- and 12-month periods ended August 31. During the past six months, we
kept the duration of the fund close to three years. (A fund with a duration of
three years would fall or rise about 3% in price in response to a one-
percentage-point rise or fall in interest rates.) We were tempted to shorten
duration to defend against the Fed's hikes in short-term rates, but earlier in
the period yields reached levels not seen in years, and we believed tighter
monetary conditions would eventually slow the economy to a more sustainable
rate of growth. So rather than shorten duration prior to the Fed's actions, we
decided to maintain our duration and then extend it when rates were under
pressure--a strategy that paid off in terms of performance.
As part of our long-term strategy, we pursued investments that will produce a
higher stream of income to our investors. This we have done in two ways:
structure (callability) and credit. The call on a bond gives the issuer the
option to redeem the security prior to maturity. In
3
<PAGE>
effect, the investor has sold this option to the issuer and, in return, receives
compensation in the form of higher yield because of the additional uncertainty.
We purchased longer-term bonds with short-term calls, which trade in the
marketplace with higher yields similar to long-term bonds, but with the reduced
volatility of shorter-term securities because of the call feature.
We also relied on internal credit research to locate bonds whose fundamentals we
expect to improve over time. For example, for the past five years we have
maintained large positions in New York City and Denver International Airport
securities. Both were under pressure in the mid-1990s but have improved
dramatically since then and received multiple upgrades from the national rating
agencies. In addition, we have recently been increasing our overall exposure to
lower-rated bonds with attractive yields whose fundamentals are improving.
TAX-FREE INTERMEDIATE BOND FUND
----------------------
PERFORMANCE COMPARISON
--------------------------------------------
Periods Ended 8/31/00 6 Months 12 Months
--------------------------------------------
Tax-Free Intermediate
Bond Fund 5.00% 5.51%
Lipper Intermediate
Municipal Debt Funds Average 5.05 4.97
Fund performance was strong for the past six months. Returns slightly lagged the
Lipper average during the period but surpassed it for the 12 months ended August
31. Our strategy for most of the recent period was to keep the portfolio's
duration longer than 5.5 years, where it was at the end of February. (A fund
with a duration of five years would fall or rise about 5% in price in response
to a one-percentage-point rise or fall in interest rates.) However, starting in
the middle of July we began to reduce our exposure slightly to interest rate
volatility. We lowered duration more aggressively in early August, which
unfortunately curtailed our relative performance versus our peer group.
We initially extended duration by buying long-term bonds, which had previously
been hurt the most and, therefore, were not likely to decline in price as much
as intermediate bonds if the Federal Reserve continued to raise short-term
interest rates. However, as our view of Fed policy changed, we began to move
some portfolio assets into securities with 5- to 10-year maturities. These bonds
did very well when a strong rally got under way in June, and we sold many of
these positions in August to lock in the gains.
4
<PAGE>
Another investment objective was to build up the fund's dividend yield by doing
tax swaps, which involve selling bonds at a loss and buying similar bonds to
replace them. This strategy has two benefits: the realization of losses and
increased income distribution. By realizing losses, we can offset future gains
and minimize capital gain distributions. Distributed income is based on the
yield of a bond at the time of purchase. By swapping a bond purchased in a
lower-yielding environment and replacing it with a bond reflecting higher
yields, we can increase the amount of income for shareholders.
In July, the Board of Directors approved an amendment to allow the use of BBB
rated securities for this fund. The fund's Investment Advisory Committee
believes the change could result in higher returns with lower interest rate
volatility through the use of our in-house credit research. The fund continues
to be limited to investment-grade securities (AAA, AA, A, BBB) and is not
permitted to invest in below-investment-grade bonds. We will begin to use these
bonds this fall where appropriate.
TAX-FREE INCOME FUND
----------------------
PERFORMANCE COMPARISON
--------------------------------------------
Periods Ended 8/31/00 6 Months 12 Months
--------------------------------------------
Tax-Free Income Fund 6.55% 6.08%
Lipper General Municipal
Debt Funds Average 6.43 5.10
The fund provided a strong return over the past six months with a combination of
price appreciation and income as we recovered from a period of rising rates last
year. Performance was ahead of the Lipper average for both periods shown in the
table. Net asset value rose from $9.10 to $9.44 per share. Dividend yield
declined from 5.51% to 5.27%, but less than overall market rates as our higher-
yielding purchases from the past year continued to benefit the fund's income.
While our weighted average maturity was essentially unchanged from February, we
managed the fund through a choppy period in early 2000. We shortened average
maturity to 15.5 years from 16 years in April and weathered a rise in rates to
the end of May. At that point, we extended again and benefited from a declining
rate environment through August. Our duration was lower at the end of August
versus six months ago as more bonds were priced to shorter call dates. (See
report on Tax-Free Short-Intermediate Fund for a discussion of duration and
callable bonds.) We are holding duration within a neutral
5
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range relative to the market and focusing on maintaining the fund's income
level.
Six months ago we anticipated adding some lower-rated bonds to the portfolio to
benefit from a wide differential in yields with top-quality securities. Instead,
these bonds continued to underperform, and we therefore focused on higher-
quality securities. In terms of sector concentrations, we are modestly
overweighted in some investor-owned utility bonds, which are benefiting from
efficiencies as the industry consolidates. We have not added to our hospital
exposure as we believe we are overweighted there, but we are beginning to see
signs of stabilization and improvement in the sector, which has been under
pressure for two years.
TAX-FREE HIGH YIELD FUND
----------------------
PERFORMANCE COMPARISON
--------------------------------------------
Periods Ended 8/31/00 6 Months 12 Months
--------------------------------------------
Tax-Free High Yield Fund 5.58% 2.65%
Lipper High Yield Municipal
Debt Funds Average 3.73 0.90
The Tax-Free High Yield Fund performed extremely well against its peer group for
the past six months and year, a period in which lower-quality bonds lagged
higher-grade securities. The strong relative performance came from the fund's
lower exposure to below-investment-grade securities and the longer duration of
the investment-grade part of the portfolio that performed well as interest rates
declined. (See report on Tax-Free Short-Intermediate Fund for a discussion of
duration.) Six-month results were achieved through a combination of price
appreciation, with net asset value rising from $11.21 to $11.49 per share, and
higher income from purchases made early in the year. While long-term municipal
interest rates ended the period 40 basis points lower (100 basis points equal
one percent), the fund's dividend yield fell only 15 basis points.
We lightened our component of below-investment-grade bonds by about 4% of
portfolio assets, mainly by reducing exposure to corporate-backed tax-exempt
securities. This move proved fortuitous since corporate bonds came under
pressure as heavy supply combined with the risk of merger and acquisition
activity caused their yields to rise, and prices to slip, relative to government
and other nonprofit securities. Our exposure to health care and retirement
project credits was unchanged at a
6
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-----------------------
QUALITY DIVERSIFICATION
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Tax-Free High Yield Fund
[GRAPH]
BB and Below 28%
BBB 28%
A 17%
AA 15%
AAA 12%
Based on net assets as of 8/31/00.
combined 29% of the portfolio. We believe we are overweighted in hospital
credits but think this sector is beginning to show signs of stabilization after
two years of intense profitability pressure. We put 2% of the portfolio's assets
to work in housing project bonds, which we expect to provide steady income in
the months ahead.
At the beginning of the year, municipal bonds were undervalued relative to
taxable bonds, in our view. This assessment bore fruit as high-quality
municipals appreciated sharply in price, second only to Treasuries during the
past six months. As mentioned, the fund's longer duration in investment-grade
bonds helped performance. Over the summer, we gradually reduced duration as
municipals recovered from their earlier weakness. Our goal going forward is to
focus on maintaining the portfolio's yield while holding interest rate risk at a
moderate level.
Currently, the high-yield sector reflects concerns about a slowing economy and
how it might affect lower-quality bonds. Solid credit research is essential to
sidestepping potential problems and picking good all-weather investments. Our
focus will be on increasing exposure to lower-rated investments in order to
provide higher income with a well-diversified portfolio, but we will continue to
select our investments carefully as we proceed.
OUTLOOK
While higher oil prices have not yet caused significant deterioration in the
inflation outlook, they are acting like a tax on consumer activity. Slower
consumer demand growth and the resultant need of manufacturers to reduce the
pace of inventory accumulation will continue to restrain production and hiring.
Energy price pressures may persist, but other costs should continue to ease as
production growth moderates. As a result, it appears increasingly likely that
the Fed's tightening cycle may have ended for the foreseeable future.
7
<PAGE>
We began the year believing that the municipal market was substantially
undervalued after a particularly weak period in late 1999. Municipal bonds have
recovered much ground in 2000, and we expect the current mix of low supply and
strong demand to continue. The economic backdrop favors stable to improving
municipal bond prices barring a change in the outlook for inflation.
Respectfully submitted,
/s/ MARY J. MILLER
Mary J. Miller
Director
Municipal Bond Department
September 22, 2000
8
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T. ROWE PRICE TAX-FREE FUNDS
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--------------------
PORTFOLIO HIGHLIGHTS
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Key statistics
2/29/00 8/31/00
Tax-Exempt Money Fund
------------------------------------------------------------------------------
Price Per Share $ 1.00 $ 1.00
Dividends Per Share
For 6 months 0.015 0.018
For 12 months 0.029 0.034
Dividend Yield (7-Day Compound)* 3.41% 3.77%
Weighted Average Maturity (days) 55 39
Weighted Average Quality** First Tier First Tier
Tax-Exempt Money Fund PLUS Class Shares
------------------------------------------------------------------------------
Price Per Share $ 1.00 $ 1.00
Dividends Per Share
For 6 months 0.015 0.017
For 12 months 0.028 0.032
Dividend Yield (7-Day Compound)* 3.22% 3.47%
Weighted Average Maturity (days) 55 39
Weighted Average Quality** First Tier First Tier
To request a prospectus for any T. Rowe Price fund, please call
1-800-638-5660. Read the prospectus carefully before investing.
[continued on next page)
9
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T. ROWE PRICE TAX-FREE FUNDS
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--------------------
PORTFOLIO HIGHLIGHTS
--------------------------------------------------------------------------------
KEY STATISTICS
2/29/00 8/31/00
Tax-Free Short-Intermediate Fund
------------------------------------------------------------------------------
Price Per Share $ 5.20 $ 5.28
Dividends Per Share
For 6 months 0.11 0.11
For 12 months 0.21 0.22
Dividend Yield*
For 6 months 4.22% 4.25%
For 12 months 4.19 4.25
30-Day Standardized Yield 4.48 4.17
Weighted Average Maturity (years) 4.3 4.3
Weighted Average Effective Duration (years) 3.1 3.0
Weighted Average Quality*** AA- AA-
Tax-Free Intermediate Bond Fund
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Price Per Share $ 10.46 $ 10.73
Dividends Per Share
For 6 months 0.24 0.25
For 12 months 0.48 0.49
Dividend Yield*
For 6 months 4.66% 4.60%
For 12 months 4.64 4.63
30-Day Standardized Yield 4.61 4.28
Weighted Average Maturity (years) 8.0 7.5
Weighted Average Effective Duration (years) 5.5 5.1
Weighted Average Quality*** AA AA
(continued on next page)
10
<PAGE>
T. ROWE PRICE TAX-FREE FUNDS
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--------------------
PORTFOLIO HIGHLIGHTS
--------------------------------------------------------------------------------
Key statistics
2/29/00 8/31/00
Tax-Free Income Fund
------------------------------------------------------------------------------
Price Per Share $ 9.10 $ 9.44
Dividends Per Share
For 6 months 0.25 0.25
For 12 months 0.49 0.50
Dividend Yield*
For 6 months 5.51% 5.27%
For 12 months 5.55 5.36
30-Day Standardized Yield 5.23 4.84
Weighted Average Maturity (years) 16.1 16.0
Weighted Average Effective Duration (years) 8.2 7.8
Weighted Average Quality*** AA- AA-
Tax-Free High Yield Fund
------------------------------------------------------------------------------
Price Per Share $ 11.21 $ 11.49
Dividends Per Share
For 6 months 0.33 0.34
For 12 months 0.66 0.67
Dividend Yield*
For 6 months 6.02% 5.87%
For 12 months 6.01 5.96
30-Day Standardized Yield 5.85 5.49
Weighted Average Maturity (years) 18.7 17.6
Weighted Average Effective Duration (years) 8.6 7.6
Weighted Average Quality*** BBB+ BBB+
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the fund's net asset value at the end of the period.
** All securities purchased in the money fund are rated in the two highest
categories (tiers) as established by national rating agencies or, if
unrated, are deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
11
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T. ROWE PRICE TAX-FREE FUNDS
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PERFORMANCE COMPARISON
--------------------------------------------------------------------------------
These charts show the value of a hypothetical $10,000 investment in each 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.
TAX-EXEMPT MONEY SHARES
--------------------------------------------------------------------------------
[GRAPH]
Lipper Tax-Exempt Money TAX EXEMPT
Market Funds Average MONEY SHARES
Aug-90 10,000 10,000
Aug-91 10,473 10,441
Aug-92 10,802 10,753
Aug-93 11,026 10,978
Aug-94 11,250 11,217
Aug-95 11,613 11,585
Aug-96 11,970 11,951
Aug-97 12,335 12,327
Aug-98 12,716 12,721
Aug-99 13,053 13,074
Aug-00 13,483 13,522
TAX-EXEMPT MONEY PLUS SHARES
--------------------------------------------------------------------------------
[GRAPH]
TAX EXEMPT Lipper Tax-Exempt Money
MONEY PLUS SHARES Market Funds Average
11-1-98 10,000 10,000
Aug-99 10,206 10,214
Aug-00 10,535 10,549
12
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T. ROWE PRICE TAX-FREE FUNDS
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----------------------
PERFORMANCE COMPARISON
--------------------------------------------------------------------------------
TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Lippor Short-Intermediate Tax-Free
7-Year Munical Munical Debt Short-Intermediate
Bond Index Funds Average Fund
Aug-90 10,000 10,000 10,000
Aug-91 10,883 10,862 10,738
Aug-92 11,840 11,773 11,499
Aug-93 12,619 12,675 12,244
Aug-94 12,946 12,890 12,511
Aug-95 13,831 13,676 13,246
Aug-96 14,375 14,167 13,755
Aug-97 15,173 14,971 14,488
Aug-98 16,048 15,803 15,299
Aug-99 16,515 16,090 15,654
Aug-00 17,291 16,777 16,359
TAX-FREE INTERMEDIATE BOND FUND
--------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Lippor Intermediate Tax-Free
7-Year Munical Munical Debt Intermediate
Bond Index Funds Average Bond Fund
11/31/92 10,000 10,000 10,000
Aug-93 10,883 10,900 11,103
Aug-94 11,037 11,028 11,308
Aug-95 12,007 11,838 12,212
Aug-96 12,475 12,355 12,696
Aug-97 13,589 13,279 13,572
Aug-98 14,471 14,266 14,599
Aug-99 14,688 14,318 14,652
Aug-00 15,597 15,073 15,460
TAX-FREE INCOME FUND
--------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Lippor General Tax-Free
Munical Municipal Debt Income
Bond Index Funds Average Fund
Aug-90 10,000 10,000 10,000
Aug-91 11,179 11,184 11,131
Aug-92 12,427 12,466 12,428
Aug-93 13,944 14,011 14,109
Aug-94 13,963 13,891 13,997
Aug-95 15,201 14,941 15,131
Aug-96 15,997 15,697 15,956
Aug-97 17,476 17,132 17,389
Aug-98 18,988 18,588 18,930
Aug-99 19,083 18,315 18,714
Aug-00 20,375 19,278 19,852
13
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T. ROWE PRICE TAX-FREE FUNDS
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----------------------
PERFORMANCE COMPARISON
--------------------------------------------------------------------------------
TAX-FREE HIGH YIELD FUND
--------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Lipper High Yield
Revenue Bond Municipal Debt Tax-Free
Index Fund Average High Yield Fund
Aug-90 10,000 10,000 10,000
Aug-91 11,251 10,978 11,073
Aug-92 12,580 12,107 12,341
Aug-93 14,219 13,459 13,969
Aug-94 14,197 13,528 14,075
Aug-95 15,461 14,572 15,172
Aug-96 16,363 15,362 16,057
Aug-97 17,969 16,869 17,707
Aug-98 19,565 18,347 19,277
Aug-99 19,649 18,288 19,049
Aug-00 20,930 18,353 19,553
-------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
--------------------------------------------------------------------------------
This table shows how each fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Since Inception
Periods Ended 8/31/00 1 Year 5 Years 10 Years Inception Date
Tax-Exempt Money 3.42% 3.14% 3.06% -- 4/8/81
Tax-Exempt Money PLUS 3.22 -- -- 2.89% 11/1/98
Tax-Free Short-Intermediate 4.50 4.31 5.05 -- 12/23/83
Tax-Free Intermediate Bond 5.51 4.83 -- 5.78 11/30/92
Tax-Free Income 6.08 5.58 7.10 -- 10/26/76
Tax-Free High Yield 2.65 5.20 6.94 -- 3/1/85
Investment returns represent past performance and will vary. Shares of the
bond funds may be worth more or less at redemption than at original purchase.
Investments in the Money Fund and PLUS Class shares are not insured or
guaranteed by the FDIC or any other government agency. Although they seek to
preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the fund and PLUS Class shares.
14
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
--------------------------------------------------------------------------------
STOCK FUNDS
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Developing Technologies
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
International/Global
Emerging Europe & Mediterranean
Emerging Markets Stock
European Stock
Global Stock
Global Technology
International Discovery*
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government*
Spectrum Income
Summit GNMA
Summit Limited-Term Bond*
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond*
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond*
International Bond
MONEY MARKET FUNDS+
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the funds.
Please call for a prospectus, which contains complete information, including
fees and expenses. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
15
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
--------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10 p.m.
ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed-income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R)and the T. Rowe Price Web
site on the Internet. Address: www.troweprice.com.
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services,
Inc., Member NASD/SIPC.
** Based on a July 2000 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of order.
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T. ROWE PRICE ADVISORY SERVICES AND RETIREMENT RESOURCES
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ADVISORY SERVICES, RETIREMENT RESOURCES
T. Rowe Price is your full-service retirement specialist. We have developed
unique advisory services that can help you meet the most difficult retirement
challenges. Our broad array of retirement plans is suitable for individuals, the
self-employed, small businesses, corporations, and nonprofit organizations. We
also provide recordkeeping, communications, and investment management services,
and our educational materials, self-help planning guides, and software tools are
recognized as among the industry's best. For information or to request
literature, call us at 1-800-638-5660, or visit our Web site at
www.troweprice.com.
ADVISORY SERVICES
................................................................................
T. Rowe Price Retirement Income Manager/SM/ helps retirees or those within two
years of retirement determine how much income they can take in retirement. The
program uses extensive statistical analysis and the input of financial planning
professionals to suggest an income plan that best meets your objectives.
T. Rowe Price Rollover Investment Service offers asset allocation advice to
those planning a major change in their qualified retirement plans, such as a
401(k) rollover from a previous employer or an IRA transfer.
RETIREMENT RESOURCES AT T. ROWE PRICE
................................................................................
Traditional, Roth, and Rollover IRAs
SEP-IRA and SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase
Pension and Profit Sharing Plans)
401(k) and 403(b)
457 Deferred Compensation
Planning and Informational Guides
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
Insights Reports
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
Software Packages
T. Rowe Price Retirement Planning
Analyzer/TM/ CD-ROM or diskette $19.95.
To order, please call 1-800-541-5760.
Also available on the Internet for $9.95.
T. Rowe Price Variable Annuity Analyzer/TM/
CD-ROM or diskette, free. To order,
please call 1-800-469-5304.
T. Rowe Price Immediate Variable Annuity (Income Account)
Investment Kits
We will be happy to send you one of our easy-to-follow investment kits when you
are ready to invest in any T. Rowe Price retirement vehicle, including IRAs,
qualified plans, small-business plans, or our no-load variable annuities.
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For fund and account information or to conduct transactions, 24 hours, 7 days a
week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132
To open a brokerage account or obtain information, call:
1-800-638-5660
For the hearing impaired, call:
1-800-367-0763
Internet address:
www.troweprice.com
Plan Account Lines for retirement plan participants:
The appropriate 800 number appears on your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus appropriate to the fund or funds
covered in this report.
Walk-In Investor Centers:
For directions, call 1-800-225-5132 or visit our Web site.
Baltimore Area
Downtown - new address
105 East Lombard Street
Owings Mills
Three Financial Center
4515 Painters Mill Road
Boston Area
386 Washington Street
Wellesley
Colorado Springs
4410 ArrowsWest Drive
Los Angeles Area
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
Tampa
4200 West Cypress Street
10th Floor
Washington, D.C.
900 17th Street N.W.
Farragut Square
[LOGO OF T. ROWE PRICE]
T. Rowe Price Investment Services, Inc., Distributor. C03-051 8/31/00
