<PAGE>
T. Rowe Price
Tax-Free Short-Intermediate Fund
August 31, 1994
Sector Diversification
Percent of
Net Assets
----------
Pre-Refunded Bonds 19%
General Obligation-State 15
General Obligation-Local 14
Dedicated Tax Revenue 8
Educational Revenue 8
Hospital Revenue 8
Housing Finance Revenue 7
Electric Revenue 6
Industrial & Pollution
Control Revenue 4
Percent of
Net Assets
----------
Nuclear Revenue 3%
Water & Sewer Revenue 3
Lease Revenue 3
Escrowed to Maturity 1
Pooled Loan Revenue 1
Air & Sea Transportation Revenue 1
Miscellaneous Revenue 1
Other Assets Less Liabilities (2)
Statement of Net Assets / August 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Amounts in Thousands
------------------------------
Face Amount Value
----------- -----
<S> <C> <C>
ALABAMA -- 2.0%
Jefferson County, Capital Appreciation Warrants, GO, (MBIA Insured),
Zero Coupon, 4/1/98................................................ $ 3,545 $ 2,976
Mobile, Capital Improvement Warrants, GO, (MBIA Insured), 4.75%, 2/15/96... 1,650 1,660
4.75%, 8/15/96..................................................... 1,715 1,729
4.95%, 2/15/97..................................................... 1,755 1,772
4.95%, 8/15/97..................................................... 1,700 1,720
- ---------------------------------------------------------------------------------------------------------------------------
ARIZONA -- 5.7%
Arizona, COP, (AMBAC Insured), 5.40%, 9/1/98............................... 1,000 1,022
Arizona Transportation Board Excise Tax, Maricopa County Regional Area
Road Fund, TRAN, 7.30%, 7/1/98.......................................... 4,500 4,818
Maricopa County, Gilbert School Dist., GO, (FGIC Insured),
Zero Coupon, 7/1/95................................................ 4,000 3,865
Kyrene Elementary School Dist., GO, (FGIC Insured),
Zero Coupon, 7/1/95................................................ 1,500 1,449
Zero Coupon, 1/1/96................................................ 1,250 1,178
Zero Coupon, 7/1/96................................................ 1,500 1,380
Mesa Unified School Dist. No. 4, GO, (FGIC Insured), Zero Coupon, 7/1/98 2,675 2,213
Unified School Dist., (FGIC Insured), 4.25%, 7/1/95..................... 3,000 3,002
</TABLE>
<PAGE>
T. Rowe Price Tax-Free Short-Intermediate Fund
Statement of Net Assets
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- -----
<S> <C> <C>
ARIZONA (cont'd)
Mesa, GO, (AMBAC Insured), 6.75%, 7/1/98................................... $ 5,800 $ 6,202
Phoenix, Street and Highway User, 7.30%, 7/1/98 (Escrowed to Maturity)..... 900 974
Tucson, 7.90%, 7/1/15 (Pre-refunded 7/1/96+)............................... 2,000 2,160
- ---------------------------------------------------------------------------------------------------------------------------
ARKANSAS -- 0.6%
Pulaski County Health Fac. Board, Sisters of Charity,
9.375%, 11/1/02 (Pre-refunded 11/1/95+)............................ 2,830 3,047
- ---------------------------------------------------------------------------------------------------------------------------
CALIFORNIA -- 8.0%
Alameda County Transportation Auth., Sales Tax,
(FGIC Insured), 4.60%, 11/1/96..................................... 3,000 3,018
4.75%, 5/1/97...................................................... 2,300 2,313
5.00%, 5/1/98...................................................... 1,000 1,010
California, RAW, 5.75%, 4/25/96............................................ 7,000 7,115
(AMBAC Insured), 5.00%, 8/1/95.......................................... 5,000 5,033
(FGIC Insured), 5.75%, 4/25/96.......................................... 3,000 3,052
California Housing Fin. Agency, Multi. Unit Rental, 5.75%, 8/1/98.......... 1,000 1,017
Newport Beach, Hoag Memorial Hosp. Presbyterian,
VRDN (Currently 3.05%)............................................. 2,600 2,600
Sacramento Municipal Utility Dist., (FGIC Insured), 5.70%, 7/1/98.......... 2,500 2,587
Sacramento Regional County Sanitation Dist., GO, 5.25%, 2/1/98............. 2,200 2,207
San Diego, GO, 4.50%, 9/29/95.............................................. 9,375 9,366
- ---------------------------------------------------------------------------------------------------------------------------
COLORADO -- 0.7%
Colorado Student Obligation Bond Auth., Student Loan Program,
5.70%, 9/1/94...................................................... 2,300 2,300
6.125%, 12/1/98.................................................... 1,345 1,383
- ---------------------------------------------------------------------------------------------------------------------------
CONNECTICUT -- 1.4%
Connecticut, GO, 5.375%, 8/15/97........................................... 4,500 4,616
Connecticut Resources Recovery Auth., Mid-Connecticut System,
5.10%, 11/15/96.................................................... 2,360 2,391
- ---------------------------------------------------------------------------------------------------------------------------
DELAWARE -- 0.5%
Delaware State, GO, 4.60%, 3/1/96.......................................... 2,240 2,254
- ---------------------------------------------------------------------------------------------------------------------------
FLORIDA -- 5.1%
Celebration Community Dev. Dist., Osceola County,
(MBIA Insured), 4.90%, 5/1/98...................................... 4,085 4,115
East County Water Control Dist., Lee County Drain,
14.00%, 11/1/00 (Pre-refunded 11/1/96+)............................ 1,075 1,328
14.00%, 11/1/01 (Pre-refunded 11/1/96+)............................ 1,220 1,507
Florida Municipal Power Agency, St. Lucie Project,
7.00%, 10/1/97 (Pre-refunded 10/1/96+)............................. 1,000 1,069
Gainesville, Utilities Systems, 7.875%, 10/1/10 (Pre-refunded 6/1/97+)..... 3,525 3,914
Jacksonville, Excise Tax, (MBIA Insured), 6.90%, 10/1/98................... 3,610 3,906
Jacksonville Electric Auth., 6.90%, 10/1/19 (Pre-refunded 4/1/97+)......... 5,000 5,347
St. John River Power Park System, 3.75%, 10/1/96........................ 4,000 3,968
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- -----
<S> <C> <C>
GEORGIA -- 5.1%
Fulton County School Dist., 7.625%, 5/1/17 (Pre-refunded 5/1/97+).......... $ 9,400 $ 10,352
Georgia, GO, 5.80%, 3/1/96................................................. 5,500 5,631
7.00%, 11/1/97..................................................... 1,000 1,075
5.95%, 3/1/98...................................................... 2,000 2,091
Gwinnett County Water & Sewerage Auth., COP, GO, 8.05%, 8/1/98............. 1,000 1,115
Municipal Electric Auth. of Georgia, 7.20%, 1/1/97......................... 3,000 3,164
7.40%, 1/1/98...................................................... 1,500 1,578
- ---------------------------------------------------------------------------------------------------------------------------
HAWAII -- 0.8%
Hawaii, GO, 5.60%, 11/1/98................................................. 3,000 3,103
Hawaii Airport System, (AMBAC Insured), 4.25%, 7/1/96 *.................... 1,000 996
- ---------------------------------------------------------------------------------------------------------------------------
ILLINOIS -- 4.4%
Chicago Public Building Commission, Chicago Board of Ed., (FGIC Insured),
7.45%, 1/1/97 (Escrowed to Maturity)............................... 1,200 1,276
7.50%, 1/1/98 (Escrowed to Maturity)............................... 1,000 1,085
Cook County, GO, (FGIC Insured), 4.10%, 11/15/95........................... 1,250 1,250
Illinois Dev. Fin. Auth., Palos Community Hosp., VRDN (Currently 3.05%).... 7,500 7,500
Illinois HFA, Resurrection Health Care Systems, VRDN (Currently 3.35%)..... 1,200 1,200
Kane, Cook & DuPage County School Dist., GO, (FGIC Insured), 9.00%, 1/1/98. 1,350 1,520
Metropolitan Pier and Exposition Auth., Dedicated State Tax, 7.60%, 6/1/98. 1,500 1,609
(AMBAC Insured), Zero Coupon, 6/15/95................................... 2,285 2,215
Metropolitan Water Reclamation Dist. of Greater Chicago, Cook County,
7.50%, 1/1/98...................................................... 1,000 1,080
Township High School Dist., GO, (FGIC Insured), 5.60%, 6/1/98.............. 3,000 3,097
- ---------------------------------------------------------------------------------------------------------------------------
INDIANA -- 0.3%
Indiana HFFA, Methodist Hosp., 4.00%, 9/1/94............................... 500 500
4.30%, 9/1/95...................................................... 500 500
4.60%, 9/1/96...................................................... 545 546
- ---------------------------------------------------------------------------------------------------------------------------
IOWA -- 0.3%
Muscatine, Electric, (AMBAC Insured), 4.80%, 1/1/97........................ 1,700 1,701
- ---------------------------------------------------------------------------------------------------------------------------
KANSAS -- 0.4%
Kansas City Utility System, (AMBAC Insured), 4.45%, 9/1/94................. 2,000 2,000
- ---------------------------------------------------------------------------------------------------------------------------
KENTUCKY -- 1.0%
Kentucky Housing Corp., 3.65%, 7/1/96...................................... 2,000 1,972
Owensboro Electric Light and Power System, (AMBAC Insured),
Zero Coupon, 1/1/96................................................ 2,000 1,884
Zero Coupon, 1/1/98................................................ 1,000 852
- ---------------------------------------------------------------------------------------------------------------------------
LOUISIANA -- 4.1%
Louisiana, GO, (MBIA Insured), 8.00%, 5/1/98............................... 2,000 2,214
Louisiana Housing Fin. Agency, Zero Coupon, 3/1/95......................... 5,000 4,903
</TABLE>
3
<PAGE>
T. Rowe Price Tax-Free Short-Intermediate Fund
Statement of Net Assets
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- -----
<S> <C> <C>
LOUISIANA (cont'd)
Louisiana Offshore Terminal Auth., Deepwater Port, 6.75%, 9/1/94........... $ 2,000 $ 2,000
4.60%, 9/1/95...................................................... 5,890 5,917
Louisiana PFA, Student Loan, 6.10%, 9/1/00................................. 2,500 2,583
Sisters of Mercy Health System, 7.25%, 6/1/98........................... 1,000 1,076
Louisiana Recovery Dist., (AMBAC Insured), 7.375%, 7/1/96.................. 1,620 1,693
- ---------------------------------------------------------------------------------------------------------------------------
MAINE -- 1.0%
Maine Ed. Loan Marketing Corp., Student Loan, 5.75%, 11/1/01............... 5,000 5,036
- ---------------------------------------------------------------------------------------------------------------------------
MARYLAND -- 5.6%
Baltimore City IDA, Days Inn Project, 12.625%, 12/1/04
(Pre-refunded 12/1/97+)........................................... 7,315 9,061
Maryland HHEFA, Johns Hopkins Hosp., 7.20%, 7/1/09 (Pre-refunded 7/1/00+).. 3,000 3,377
Peninsula Regional Medical Center, 4.375%, 7/1/00....................... 1,000 941
4.50%, 7/1/01...................................................... 1,200 1,121
4.60%, 7/1/02...................................................... 1,175 1,090
4.70%, 7/1/03...................................................... 1,250 1,153
Univ. of Maryland Medical System, 9.50%, 1/1/14 (Pre-refunded 7/22/96+) 10,000 11,104
- ---------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS -- 3.3%
Massachusetts Bay Transportation Auth., General Transportation,
6.00%, 3/1/00...................................................... 9,980 10,440
Massachusetts HEFA, Pooled Loan, (MBIA Insured), VRDN (Currently 3.05%).... 2,200 2,200
Massachusetts Housing Fin. Agency, 4.80%, 10/1/98.......................... 2,700 2,684
Insured Rental, (AMBAC Insured), 4.90%, 1/1/97 *........................ 1,000 999
- ---------------------------------------------------------------------------------------------------------------------------
MINNESOTA -- 1.1%
Minnesota PFA, Water Pollution Control, 5.70%, 3/1/99...................... 2,000 2,067
Southern Minnesota Municipal Power Agency, 4.40%, 1/1/00................... 3,500 3,369
- ---------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI -- 2.1%
Mississippi Higher Ed. Assistance Corp., Student Loan, 6.00%, 7/1/00....... 5,000 5,076
6.10%, 1/1/01...................................................... 5,000 5,081
- ---------------------------------------------------------------------------------------------------------------------------
MISSOURI -- 1.7%
Kansas City School Dist., Elementary School Project, (FGIC Insured),
3.45%, 2/1/96...................................................... 1,300 1,286
Missouri, Board of Public Buildings (State Office Building),
8.50%, 8/1/06 (Pre-refunded 8/1/95+)............................... 3,000 3,171
Missouri Economic Dev., Export & Infrastructure Board, 6.75%, 9/1/96....... 835 843
Missouri Higher Ed. Loan Auth., Student Loan (Pattonville R-3 School Dist.),
5.375%, 2/15/99.................................................... 3,000 3,010
- ---------------------------------------------------------------------------------------------------------------------------
MONTANA -- 0.5%
Montana Higher Ed. Student Assistance Corp., Student Loan, 4.00%, 12/1/95 * 2,500 2,491
- ---------------------------------------------------------------------------------------------------------------------------
NEBRASKA -- 0.4%
Omaha Public Power Dist., 5.20%, 2/1/00.................................... 2,000 2,026
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- -----
<S> <C> <C>
NEVADA -- 0.3%
Clark County, Transportation Improvement, GO,
(AMBAC Insured), 5.50%, 6/1/98 $ 1,335 $ 1,371
- ---------------------------------------------------------------------------------------------------------------------------
NEW JERSEY -- 3.0%
New Jersey, GO, 5.80%, 1/15/96............................................. 3,300 3,368
New Jersey Housing and Mortgage Fin. Agency, 4.80%, 5/1/96................. 3,530 3,545
New Jersey Sports & Exposition Auth., GO, 7.60%, 1/1/96.................... 3,500 3,649
New Jersey Transportation Trust Fund Auth., 5.40%, 6/15/97................. 4,315 4,402
- ---------------------------------------------------------------------------------------------------------------------------
NEW MEXICO -- 2.6%
Albuquerque, Hosp. System (Presbyterian Healthcare Services),
(MBIA Insured), 5.40%, 8/1/98...................................... 2,985 3,061
Albuquerque IDR, Ethicon Inc., 10/1/94, Floating Rate (Currently 4.805%)... 1,600 1,602
Farmington, San Juan Unit Project, 13.625%, 7/1/01 (Pre-refunded 7/1/96+).. 2,000 2,320
Gallup, PCR, Plains Electric Generation and Transmission Coop.,
(MBIA Insured), 5.50%, 8/15/98..................................... 1,640 1,681
New Mexico, Severance Tax, 5.20%, 7/1/95................................... 1,550 1,562
5.30%, 7/1/97...................................................... 1,000 1,017
New Mexico Mortgage Fin. Auth., 5.90%, 1/1/99.............................. 1,630 1,648
- ---------------------------------------------------------------------------------------------------------------------------
NEW YORK -- 4.1%
New York City, GO, VRDN (Currently 3.20%).................................. 1,600 1,600
VRDN (Currently 3.10%)............................................. 1,000 1,000
5.625%, 8/1/01.......................................................... 5,000 5,018
New York City Municipal Water Fin. Auth., (FGIC Insured),
VRDN (Currently 3.15%)............................................. 2,000 2,000
New York State Urban Dev. Corp., Correctional Capital Fac.,
6.50%, 1/1/21 (Pre-refunded 1/1/01+)............................... 4,900 5,300
Triborough Bridge and Tunnel Auth., 7.625%, 1/1/14 (Pre-refunded 1/1/96+).. 5,200 5,534
- ---------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA -- 2.8%
North Carolina Eastern Municipal Power Agency, 7.75%, 1/1/15
(Pre-refunded 1/1/96+)............................................. 9,545 10,241
Catawba Electric, (FGIC Insured), 5.10%, 1/1/99.................... 3,500 3,535
- ---------------------------------------------------------------------------------------------------------------------------
OHIO -- 0.8%
Butler County Hosp. Fac., Middletown Regional Hosp., (FGIC Insured),
6.00%, 11/15/97.................................................... 1,260 1,309
Franklin County, American Chemical Society, 4.35%, 4/1/95.................. 2,750 2,755
- ---------------------------------------------------------------------------------------------------------------------------
OKLAHOMA -- 0.7%
Tulsa Public Fac. Auth., Capital Improvement, 4.05%, 5/1/95................ 3,460 3,460
- ---------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA -- 5.6%
New Castle Area Hosp. Auth., St. Frances Hosp., Zero Coupon, 11/15/97...... 2,535 2,155
Pennsylvania, GO, 5.50%, 10/15/98.......................................... 3,000 3,036
Pennsylvania Higher Ed. Fac. Auth., Thomas Jefferson Univ., 5.75%, 8/15/98. 3,380 3,502
</TABLE>
5
<PAGE>
T. Rowe Price Tax-Free Short-Intermediate Fund
Statement of Net Assets
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- -----
<S> <C> <C>
PENNSYLVANIA (cont'd)
Pennsylvania Housing Fin. Agency, Rental Housing, (FNMA Insured)
5.00%, 7/1/98...................................................... $ 1,250 $ 1,255
Pennsylvania IDA, Economic Dev., (AMBAC Insured), 5.00%, 1/1/96............ 1,575 1,586
6.00%, 1/1/99...................................................... 3,000 3,118
6.00%, 7/1/99...................................................... 4,575 4,773
Pennsylvania Intergovernmental Cooperation Auth., Special Tax Revenue,
(FGIC Insured), 5.60%, 6/15/98..................................... 5,000 5,137
Philadelphia, Water & Sewer Revenue, 8.40%, 10/1/96 (Pre-refunded 10/1/95+) 1,255 1,333
8.55%, 10/1/97 (Pre-refunded 10/1/95+)............................. 1,500 1,596
- ---------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND -- 0.4%
Rhode Island Student Loan, 6.20%, 12/1/98.................................. 2,000 2,069
- ---------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA -- 1.3%
Charleston County School Dist. Dev. Corp., Central Administrative Building,
COP, 5.00%, 2/1/99................................................. 2,500 2,501
South Carolina, Capital Improvement, GO, 5.70%, 2/1/98..................... 2,400 2,460
South Carolina Public Service Auth., Electric Systems Expansion,
7.875%, 7/1/21 (Pre-refunded 1/1/96+).............................. 1,590 1,693
- ---------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA -- 0.5%
South Dakota HDA, Homeownership Mortgage, 6.50%, 5/1/96.................... 2,005 2,047
7.10%, 5/1/96...................................................... 390 397
- ---------------------------------------------------------------------------------------------------------------------------
TENNESSEE -- 0.2%
Chattanooga-Hamilton County Hosp. Auth., Erlanger Medical Center, VRDN
(Currently 3.15%).................................................. 1,000 1,000
- ---------------------------------------------------------------------------------------------------------------------------
TEXAS -- 8.9%
Anderson County, Coffield State Prison, (AMBAC Insured), 6.50%, 3/15/98.... 2,000 2,113
Arlington, GO, 6.70%, 5/1/95............................................... 1,000 1,018
Brazos Higher Ed. Auth. Inc., Student Loan, 5.45%, 6/1/98 *................ 1,000 1,004
5.60%, 6/1/99 *.................................................... 1,000 1,014
5.85%, 6/1/01 *.................................................... 1,000 1,007
5.95%, 6/1/02 *.................................................... 1,000 1,014
Dallas, Water and Sewer, 9.50%, 4/1/97..................................... 1,515 1,692
Dallas Independent School Dist., 8.70%, 8/1/95 (Escrowed to Maturity)...... 3,000 3,119
8.00%, 8/15/97 (Pre-refunded 8/15/95+)............................. 3,700 3,917
Dallas-Fort Worth Regional Airport, 5.50%, 11/1/98......................... 2,000 2,045
Goose Creek Consolidated Independent School Dist., GO,
Zero Coupon, 2/15/98............................................... 1,200 1,014
Zero Coupon, 2/15/99............................................... 1,200 958
Harris County Health Fac. Dev. Corp., St. Luke's Episcopal Hosp.,
6.20%, 2/15/98..................................................... 1,420 1,477
Methodist Hosp., VRDN (Currently 3.15%)................................. 3,500 3,500
Hays Consolidated Independent School Dist., GO, Zero Coupon, 2/15/98....... 1,050 887
Houston, Water and Sewer, (FGIC Insured), 5.55%, 12/1/95................... 2,050 2,084
Lubbock, Waterworks System, GO, 8.75%, 2/15/97............................. 510 558
8.75%, 2/15/98..................................................... 510 573
</TABLE>
6
<PAGE>
T. Rowe Price Tax-Free Short-Intermediate Fund
Statement of Net Assets
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- -----
<S> <C> <C>
TEXAS (cont'd)
Plano Independent School Dist., GO, (FGIC Insured), 8.625%, 2/15/97................ $ 2,100 $ 2,292
Port of Houston Auth., Capital Appreciation,
Zero Coupon, 10/1/96....................................................... 2,360 2,147
Zero Coupon, 10/1/97....................................................... 2,660 2,301
San Antonio, GO, 8.625%, 8/1/97.................................................... 1,200 1,330
Water System, GO, (FGIC Insured), 5.60%, 5/15/98........................... 5,000 5,127
Texas Housing Agency, 6.15%, 3/1/97................................................ 1,060 1,082
6.80%, 7/1/97.............................................................. 150 154
6.25%, 3/1/98.............................................................. 330 338
6.25%, 9/1/98.............................................................. 275 281
- ---------------------------------------------------------------------------------------------------------------------------
UTAH -- 3.1%
Board of Regents of the Univ. of Utah, Student Loan, 4.45%, 11/1/95................ 1,500 1,498
Univ. Hosp., 5.50%, 5/15/97..................................................... 1,860 1,895
Intermountain Power Agency, Utah Power Supply, 9.00%, 7/1/95....................... 1,500 1,558
5.00%, 7/1/97.............................................................. 5,615 5,672
10.375%, 7/1/16............................................................ 3,795 4,073
Utah Housing Fin. Agency, 6.00%, 1/1/99............................................ 490 497
- ---------------------------------------------------------------------------------------------------------------------------
VIRGINIA -- 3.3%
Peninsula Ports Auth., Shell Oil, VRDN (Currently 3.10%)........................... 1,000 1,000
Virginia College Building Auth., 4.10%, 8/1/95..................................... 2,795 2,790
Virginia Ed. Loan Auth., Student Loan Program, 4.30%, 9/1/94....................... 1,700 1,700
5.40%, 9/1/98.............................................................. 1,205 1,220
Virginia HDA, 9.875%, 9/1/95....................................................... 295 300
4.65%, 5/1/96 *............................................................ 1,500 1,498
5.20%, 1/1/97 *............................................................ 4,300 4,330
5.75%, 1/1/99 *............................................................ 1,390 1,389
5.90%, 1/1/00 *............................................................ 1,865 1,868
- ---------------------------------------------------------------------------------------------------------------------------
WASHINGTON -- 5.2%
North Shore School Dist. No. 417, GO, (FGIC Insured), 5.35%, 12/1/97............... 2,575 2,631
Washington, GO, 3.35%, 10/1/95..................................................... 4,245 4,221
3.70%, 8/1/96.............................................................. 5,500 5,449
5.10%, 9/1/98.............................................................. 3,050 3,096
Washington HFA, Franciscan Health System, St. Joseph's Hosp. & Health
Center, (MBIA Insured), 4.15%, 1/1/97...................................... 1,560 1,535
The Children's Hosp. and Medical Center, (FGIC Insured), 5.55%, 10/1/98........ 1,325 1,361
Virginia Mason Medical Center, (MBIA Insured), 6.80%, 7/1/96................... 1,000 1,040
7.20%, 7/1/98.............................................................. 1,000 1,079
Washington Public Power Supply System, 3.50%, 7/1/96............................... 3,355 3,275
3.75%, 7/1/96.............................................................. 2,000 1,962
- ---------------------------------------------------------------------------------------------------------------------------
WISCONSIN -- 0.6%
Wisconsin HFA, Childrens Hosp., 9.375%, 8/1/15 (Pre-refunded 8/1/95+).............. 3,000 3,194
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Amounts in Thousands
----------------------------
Face Amount Value
----------- -----
<S> <C> <C>
MULTI-STATE -- 2.1%
IVRC Trust, Tax-Exempt Inverse Floating Rate Certificate, Residual Interest
Bond 144a, 1/1/13 (Currently 15.155%), (Pre-refunded 9/15/97+)..... $ 8,000 $ 10,220
TOTAL INVESTMENTS IN SECURITIES - 101.6% (COST - $498,844)................. 502,520
Other Assets Less Liabilities - (1.6%) .................................... (7,680)
----------
NET ASSETS CONSISTING OF:
Accumulated net investment income - net of distributions................... 8
Accumulated realized gains/losses - net of distributions................... (2,887)
Net unrealized appreciation of investments................................. 3,676
Paid-in-capital applicable to 94,026,433 shares of $0.01 par value capital
stock outstanding; 1,000,000,000 shares authorized................. 494,043
------------
NET ASSETS - 100.0%........................................................ $ 494,840
==========
NET ASSET VALUE PER SHARE.................................................. $5.26
======
</TABLE>
144a - Security was purchased pursuant to Rule 144a
under the Securities Act of 1933 and may not
be resold subject to that rule except to the
qualified institutional buyers.
* - Interest subject to alternative minimum tax
+ - Used in determining portfolio maturity
AMBAC - AMBAC Indemnity Corp.
COP - Certificates of Participation
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
GO - General Obligation
HDA - Housing Development Authority
HEFA - Health & Educational Facility Authority
HFA - Health Facility Authority
HFFA - Health Facility Financing Authority
HHEFA - Health & Higher Educational Facility Authority
IDA - Industrial Development Authority
IDR - Industrial Development Revenue
IVRC - Inverse Variable Rate Certificates
MBIA - Municipal Bond Investors Assurance
Corporation
PCR - Pollution Control Revenue
PFA - Public Facility Authority
RAW - Revenue Anticipation Warrant
VRDN - Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
T. Rowe Price Tax-Free Short-Intermediate Fund
Statement of Operations / Six Months Ended August 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Amounts in Thousands
--------------------
<S> <C> <C>
INVESTMENT INCOME
Interest income............................................................... $11,816
Expenses
Investment management fees.................................................. $ 1,138
Shareholder servicing fees & expenses....................................... 204
Custodian and accounting fees & expenses.................................... 83
Registration fees & expenses................................................ 34
Legal & auditing fees....................................................... 19
Prospectus & shareholder reports............................................ 15
Directors' fees & expenses.................................................. 7
Proxy & annual meeting...................................................... 4
Miscellaneous............................................................... 7
-------
Total expenses.............................................................. 1,511
-------
Net investment income......................................................... 10,305
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss)
Securities.................................................................. (1,483)
Futures..................................................................... 238
-------
Net realized loss........................................................... (1,245)
Change in net unrealized appreciation or depreciation......................... (5,143)
-------
Net loss on investments....................................................... (6,388)
-------
INCREASE IN NET ASSETS FROM OPERATIONS........................................ $ 3,917
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
T. Rowe Price Tax-Free Short-Intermediate 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.......................................... $ 10,305 $ 21,073
Net realized gain (loss) on investments........................ (1,245) 3,525
Change in net unrealized appreciation or depreciation
of investments................................................. (5,143) (7,342)
---------- ----------
Increase in net assets from operations......................... 3,917 17,256
---------- ----------
Distributions to shareholders
Net investment income.......................................... (10,305) (21,073)
---------- ----------
Capital share transactions
Sold 16,219 and 55,259 shares.................................. 85,402 295,712
Distributions reinvested of 1,535 and 3,098 shares............. 8,068 16,568
Redeemed 25,286 and 41,461 shares.............................. (132,970) (221,897)
---------- ----------
Increase (decrease) in net assets from capital share (39,500) 90,383
transactions ---------- ----------
Total increase (decrease)........................................ (45,888) 86,566
NET ASSETS
Beginning of period............................................ 540,728 454,162
---------- ----------
End of period.................................................. $ 494,840 $ 540,728
========== ==========
</TABLE>
T. Rowe Price Tax-Free Short-Intermediate Fund
Notes to Financial Statements / August 31, 1994 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Tax-Free Short-Intermediate Fund (the Fund) is registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company.
A) Security valuation - Debt securities are generally traded in the
over-the-counter market. Investments in securities with remaining maturities
of one year or more are stated at fair value as furnished by dealers who make
markets in such securities or by an independent pricing service, which
considers yield or price of bonds of comparable quality, coupon, maturity,
and type, as well as prices quoted by dealers who make markets in such
securities. Securities with remaining maturities less than one year 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.
Financial futures contracts are valued at closing settlement prices.
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.
10
<PAGE>
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 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. Payments ("variation margin")
made or received by the Fund, dependent on the daily fluctuations in the value
of the futures contracts, are recorded as unrealized gains or losses until the
contracts are closed.
NOTE 2 - PORTFOLIO TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $208,855,000 and $245,682,000, respectively, for the
six months ended August 31, 1994.
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 and distribute all of
its income. The Fund has unused realized capital loss carryforwards for
federal income tax purposes of $1,062,000 which expire in 1996 through 1998.
Capital loss carryforwards utilized in the fiscal year ending February 28,
1994 amounted to $3,352,000. 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 $498,844,000 and net unrealized
appreciation aggregated $3,676,000, of which $5,183,000 related to appreciated
investments and $1,507,000 to depreciated investments.
NOTE 4 - 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 $198,000 for these services provided by related parties. At August
31, 1994, investment management and service fees payable were $237,000.
11
<PAGE>
T. Rowe Price Tax-Free Short-Intermediate 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........ $ 5.32 $ 5.36 $ 5.22 $ 5.15 $ 5.09 $ 5.03
------- --------- ------- ------- -------- --------
Investment Activities
Net investment income................. 0.11 0.22 0.24 0.28 0.29 0.30
Net realized and unrealized gain (loss) (0.06) (0.04) 0.14 0.07 0.06 0.06
------- --------- ------- ------- -------- --------
Total from Investment Activities............ 0.05 0.18 0.38 0.35 0.35 0.36
------- --------- ------- ------- -------- --------
Distributions
Net investment income................. (0.11) (0.22) (0.24) (0.28) (0.29) (0.30)
------- --------- ------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD.............. $ 5.26 $ 5.32 $ 5.36 $ 5.22 $ 5.15 $ 5.09
======= ========= ======= ======= ======== ========
RATIOS/SUPPLEMENTAL DATA
Total Return................................ 0.90% 3.49% 7.51% 6.94% 7.06% 7.36%
Ratio of Expenses to Average Net Assets..... 0.59%+ 0.60% 0.63% 0.67% 0.74% 0.75%
Ratio of Net Investment Income
to Average Net Assets................. 4.02%+ 4.18% 4.61% 5.34% 5.67% 5.93%
Portfolio Turnover Rate..................... 85.4%+ 51.1% 38.5% 81.3% 190.1% 190.8%
Net Assets, End of Period (in thousands).... $494,840 $540,728 $454,162 $328,312 $232,923 $223,180
</TABLE>
+ Annualized.
12
