<PAGE>
--------------------------------------------------------------------------------
Semiannual Report - Financial Statements
--------------------------------------------------------------------------------
T. ROWE PRICE
TAX-FREE
SHORT-INTERMEDIATE
FUND
---------------
AUGUST 31, 2000
---------------
--------------------
PORTFOLIO HIGHLIGHTS
--------------------------------------------------------------------------------
SECTOR Diversification
Percent of Percent of
Net Assets Net Assets
2/29/00 8/31/00
--------------------------------------------------------------------------------
General Obligation - State 14% 14%
Prerefunded Bonds 10 13
Nuclear Revenue 16 13
General Obligation - Local 13 12
Air and Sea Transportation 8 10
Hospital Revenue 7 7
Lease Revenue 7 7
Dedicated Tax Revenue 7 5
Educational Revenue 5 5
Water and Sewer Revenue 3 4
Solid Waste Revenue 2 3
Industrial and Pollution Control Revenue 3 3
All Other 3 2
Other Assets Less Liabilities 2 2
--------------------------------------------------------------------------------
Total 100% 100%
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE Fund
--------------------------------------------------------------------------------
Unaudited
--------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
8/31/00 2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 5.20 $ 5.39 $ 5.37 $ 5.35 $ 5.37 $ 5.25
--------- --------- --------- -------- --------- ---------
Investment activities
Net investment
income (loss) 0.11 0.21 0.22 0.22 0.23 0.23
Net realized and
unrealized gain (loss) 0.08 (0.18) 0.04 0.05 (0.02) 0.12
--------- --------- --------- -------- --------- ---------
Total from
investment activities 0.19 0.03 0.26 0.27 0.21 0.35
--------- --------- --------- -------- --------- ---------
Distributions
Net investment income (0.11) (0.21) (0.22) (0.22) (0.23) (0.23)
Net realized gain - (0.01) (0.02) (0.03) - -
Total distributions (0.11) (0.22) (0.24) (0.25) (0.23) (0.23)
--------- --------- --------- -------- --------- ---------
NET ASSET VALUE
End of period $ 5.28 $ 5.20 $ 5.39 $ 5.37 $ 5.35 $ 5.37
--------- --------- --------- -------- --------- ---------
Ratios/Supplemental Data
Total return* 3.74% 0.67% 4.90% 5.28% 4.02% 6.87%
Ratio of total expenses to
average net assets 0.52%+ 0.53% 0.53% 0.54% 0.56% 0.57%
Ratio of net investment
income (loss) to average
net assets 4.26%+ 4.07% 4.06% 4.23% 4.30% 4.39%
Portfolio turnover rate 37.6%+ 49.7% 39.9% 76.8% 84.3% 69.9%
Net assets, end of period
(in thousands) $ 382,817 $ 404,634 $ 459,319 $ 438,951 $ 443,631 $ 445,228
--------- --------- --------- --------- --------- ---------
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
Unaudited August 31, 2000
<TABLE>
<CAPTION>
-----------------------
STATEMENT OF NET ASSETS Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
ALABAMA 1.4%
Huntsville Alabama Solid Waste Disposal
5.75%, 10/1/05 (MBIA Insured)* $ 3,985 $ 4,159
Selma Ind. Dev. Board, International Paper, 5.50%, 7/15/01 1,250 1,250
------------
Total Alabama (Cost $5,326) 5,409
------------
ALASKA 1.1%
Alaska Housing Fin., 5.35%, 12/1/07* 1,630 1,659
Alaska Student Loan, 5.50%, 7/1/05 (AMBAC Insured)* 2,500 2,577
------------
Total Alaska (Cost $4,164) 4,236
------------
ARIZONA 2.3%
Arizona Transportation Board
6.35%, 7/1/05 (Prerefunded 7/1/01+) 6,400 6,603
Salt River Agricultural Improvement and Power
Dist. Electric Systems, 5.75%, 1/1/08 2,000 2,139
------------
Total Arizona (Cost $8,651) 8,742
------------
COLORADO 4.9%
Denver City and County Airport
6.00%, 11/15/03 (MBIA Insured)* 3,965 4,126
6.75%, 11/15/13* 5,080 5,327
7.00%, 11/15/25* 4,525 4,616
7.30%, 11/15/00* 4,750 4,776
-----------
Total Colorado (Cost $18,862) 18,845
-----------
DELAWARE 0.3%
Delaware, GO, 5.25%, 4/1/05 1,120 1,158
-----------
Total Delaware (Cost $1,141) 1,158
-----------
FLORIDA 2.9%
Dade County Aviation, Miami Int'l. Airport
5.75%, 10/1/04 (FSA Insured)* 5,000 5,204
Florida Board of Ed., GO, Lottery, 5.25%, 7/1/05
(FGIC Insured) 1,940 2,007
Jacksonville Electric Auth., St. Johns River, 5.50%,
10/1/09 3,660 3,755
-----------
Total Florida (Cost $10,849) 10,966
-----------
</TABLE>
3
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
GEORGIA 7.3%
Athens-Clarke Residential Care Fac. for the Elderly Auth.
Wesley Woods of Athens, 5.30%, 10/1/01 $ 1,500 $ 1,495
Atlanta Airport Fac., 6.25%, 1/1/05 (AMBAC Insured) 6,220 6,629
Georgia, GO, 5.75%, 7/1/04 5,000 5,241
Municipal Electric Auth. of Georgia
5.00%, 1/1/02 (MBIA Insured) 6,000 6,042
5.00%, 1/1/04 5,600 5,668
Savannah Hosp. Auth., St. Josephs/Candler Health System
5.00%, 7/1/02 (FSA Insured) 2,950 2,978
------------
Total Georgia (Cost $27,788) 28,053
------------
HAWAII 2.5%
Hawaii, GO, 5.50%, 10/1/08 (FGIC Insured) 5,000 5,266
Hawaii Airport System, 6.125%, 7/1/05 (FGIC Insured)* 4,000 4,230
------------
Total Hawaii (Cost $9,295) 9,496
------------
ILLINOIS 2.6%
Chicago Public Building Commerce
5.125%, 2/1/04 (FGIC Insured) 1,500 1,528
Illinois Sales Tax, 6.00%, 6/15/06 2,000 2,139
Metropolitan Pier & Expo Auth., McCormick Place
6.50%, 6/15/27 (Prerefunded 6/15/03+) 4,000 4,290
Southwestern Dev. Auth.
Anderson Hosp.
5.25%, 8/15/02 415 413
5.25%, 8/15/05 485 468
5.25%, 8/15/06 510 487
5.50%, 8/15/07 535 513
-----------
Total Illinois (Cost $9,815) 9,838
-----------
INDIANA 1.7%
Indiana EFA, Univ. of Notre Dame, VRDN (Currently 4.25%) 2,000 2,000
Indianapolis Airport Auth., Federal Express, 7.10%, 1/15/17* 3,000 3,170
Indianapolis Gas Utility System, Distribution System
5.00%, 8/15/02 (AMBAC Insured) 1,180 1,192
----------
Total Indiana (Cost $6,475) 6,362
----------
</TABLE>
4
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T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
KENTUCKY 0.8%
Kenton County Airport Board, Delta Airlines,
7.50%, 2/1/20* $ 3,080 $ 3,195
------------
Total Kentucky (Cost $3,243) 3,195
------------
LOUISIANA 2.3%
Louisiana, GO
5.00%, 4/15/03 (AMBAC Insured) 1,000 1,012
5.50%, 4/15/07 (AMBAC Insured) 5,000 5,234
Louisiana PFA, Student Loan, 6.10%, 9/1/00 1,180 1,180
West Feliciana Parish, PCR, Entergy Gulf States, 5.65%,
9/1/04 1,225 1,234
------------
Total Louisiana (Cost $8,520) 8,660
------------
MAINE 1.1%
Maine, GO, 5.50%, 6/15/04 4,000 4,150
------------
Total Maine (Cost $4,075) 4,150
------------
MARYLAND 2.2%
Maryland, State and Local Fac., GO, 5.00%, 7/15/06 1,500 1,542
Maryland DOT, 5.50%, 9/1/06 1,265 1,330
Maryland Energy Fin. Administration
Wheelabrator
5.30%, 12/1/00* 825 826
5.45%, 12/1/01* 1,185 1,195
Maryland HHEFA, Peninsula Regional Medical Center
4.60%, 7/1/02 855 850
Northeast Maryland Waste Disposal Auth.
Southwest Resources Recovery Fac.
7.05%, 1/1/02 (MBIA Insured) 2,430 2,511
------------
Total Maryland (Cost $8,180) 8,254
------------
MASSACHUSETTS 3.2%
Dev. Fin. Agency, Biomedical Research
5.75%, 8/1/03 700 715
5.75%, 8/1/04 500 512
Massachusetts, GO, 6.00%, 11/1/06 4,000 4,318
Massachusetts Municipal Wholesale Electric
6.75%, 7/1/05 (MBIA Insured) 1,750 1,848
</TABLE>
5
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T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Massachusetts Water Resources Auth.
5.60%, 11/1/26 (FGIC Insured)
(Prerefunded 11/1/06+) $ 4,500 $ 4,805
------------
Total Massachusetts (Cost $12,001) 12,198
------------
MICHIGAN 3.2%
Detroit Sewage Disposal, 5.00%, 7/1/02 (FGIC Insured) 7,400 7,476
Michigan Hosp. Fin. Auth.
Mercy Health
5.25%, 8/15/01 715 720
5.25%, 8/15/02 555 563
6.00%, 8/15/01 2,450 2,485
6.00%, 8/15/02 1,000 1,028
------------
Total Michigan (Cost $12,237) 12,272
------------
MINNESOTA 0.5%
Minnesota, GO, 5.75%, 8/1/05 2,000 2,116
------------
Total Minnesota (Cost $2,078) 2,116
------------
MISSISSIPPI 1.3%
Mississippi Higher Ed. Assistance, Student Loan, 6.10%,
1/1/01 5,000 5,024
------------
Total Mississippi (Cost $5,015) 5,024
------------
MISSOURI 2.3%
Sikeston Electric
6.25%, 6/1/22 (MBIA Insured)
(Prerefunded 6/1/02+) 4,825 5,068
St. Louis, Lambert Int'l. Airport, 6.00%, 7/1/02
(FGIC Insured)* 2,770 2,839
St. Louis Airport, 6.25%, 1/1/03 765 777
------------
Total Missouri (Cost $8,681) 8,684
------------
NEBRASKA 1.8%
Omaha Public Power Dist., Nebraska Electric, 5.25%, 2/1/04 3,000 3,071
Univ. of Nebraska Fac., Deferred Maintenance, 5.25%, 7/15/06 3,720 3,847
------------
Total Nebraska (Cost $6,815) 6,918
------------
</TABLE>
6
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
NEW JERSEY 1.1%
New Jersey, GO, 5.25%, 3/1/08 $ 1,040 $ 1,083
New Jersey Transportation Auth., Trust Fund
Transportation Systems, 5.75%, 6/15/11 2,750 2,966
------------
Total New Jersey (Cost $3,855) 4,049
------------
NEW MEXICO 1.8%
Bernalillo County Gross Receipts
5.75%, 4/1/26 (Prerefunded 4/1/06+) 5,000 5,295
Ed. Assistance Foundation, Ed. Loan, 5.50%, 11/1/10* 1,750 1,678
------------
Total New Mexico (Cost $6,835) 6,973
------------
NEW YORK 16.3%
Dormitory Auth. of the State of New York
City Univ., 5.50%, 7/1/03 2,860 2,926
Interfaith Medical Center, 5.00%, 2/15/03 2,210 2,229
Mental Health Services Fac., 6.00%, 8/15/03 10,905 11,328
Wyckoff Heights Hosp., 5.50%, 2/15/03 4,095 4,178
Nassau County, GO
6.30%, 11/1/02 (FGIC Insured) 3,295 3,425
7.00%, 3/1/04 2,810 2,988
New York City, GO
5.25%, 8/1/03 10,540 10,748
6.20%, 2/1/07 (MBIA Insured) 3,770 4,104
6.75%, 8/1/04 4,300 4,629
7.00%, 8/1/04 4,000 4,336
New York City Municipal Water Fin. Auth.
6.125%, 6/15/20 (Prerefunded 6/15/05 ) 4,000 4,329
New York State Urban Dev. Corp., Correctional Fac.
6.25%, 1/1/20 (Prerefunded 1/1/05+) 6,775 7,382
------------
Total New York (Cost $61,708) 62,602
------------
NORTH CAROLINA 2.9%
Charlotte, GO, Water & Sewer, 5.75%, 2/1/11
(Prerefunded 2/1/04+) 3,040 3,222
North Carolina Eastern Municipal Power Agency, Power Systems
5.45%, 1/1/04 3,665 3,701
7
</TABLE>
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
North Carolina Municipal Power Agency
Catawba Electric
5.90%, 1/1/03 $ 3,000 $ 3,056
6.00%, 1/1/04 1,000 1,027
------------
Total North Carolina (Cost $10,885) 11,006
------------
NORTH DAKOTA 1.2%
Burleigh County Health Care
Medcenter One
5.00%, 5/1/01 (MBIA Insured) 2,160 2,169
5.00%, 5/1/03 (MBIA Insured) 2,380 2,408
------------
Total North Dakota (Cost $4,590) 4,577
------------
OHIO 2.3%
Cuyahoga County
GO, 5.50%, 11/15/05 1,400 1,463
Univ. Hosp., 6.00%, 1/15/02 (MBIA Insured) 2,340 2,386
Ohio Air Quality Dev. Auth., PCR, Ohio Edison
5.80%, 12/1/04 2,000 2,033
Ohio Building Auth., Adult Correctional Fac.
5.75%, 4/1/01 (AMBAC Insured) 2,920 2,944
------------
Total Ohio (Cost $8,748) 8,826
------------
PENNSYLVANIA 5.8%
Beaver County IDA, PCR, Toledo Edison, 4.85%, 6/1/04 4,000 3,881
Montgomery County IDA, PCR, 5.20%, 10/1/04 2,000 1,994
Pennsylvania, GO
5.125%, 9/15/03 (AMBAC Insured) 2,800 2,857
6.00%, 7/1/09 4,375 4,785
Pennsylvania Intergovernmental Cooperative Auth.
Philadelphia Funding Program
6.00%, 6/15/02 (FGIC Insured) 5,000 5,133
Special Tax, 5.00%, 6/15/03 (FGIC Insured) 3,600 3,654
------------
Total Pennsylvania (Cost $22,142) 22,304
------------
</TABLE>
8
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
PUERTO RICO 0.4%
Puerto Rico Municipal Fin. Agency, GO, 5.50%, 8/1/02 $ 1,665 $ 1,702
------------
Total Puerto Rico (Cost $1,690) 1,702
------------
SOUTH CAROLINA 3.2%
South Carolina, GO, School Fac., 5.75%, 1/1/07 4,960 5,289
South Carolina Public Service Auth., Santee Cooper
6.50%, 7/1/24 (AMBAC Insured)
(Prerefunded 7/1/02+) 6,750 7,130
------------
Total South Carolina (Cost $12,079) 12,419
------------
TEXAS 6.0%
Austin Utilities
5.75%, 11/15/03 (FSA Insured) 4,570 4,746
5.75%, 11/15/03 (FSA Insured)
(Escrowed to Maturity) 430 447
Dallas-Fort Worth Int'l. Airport Fac., 6.05%, 5/1/05* 750 754
Gulf Coast Waste Disposal Auth., PCR, Amoco Oil Project
VRDN (Currently 4.45%)* 600 600
Texas, TRAN, GO, 5.25%, 8/31/01 7,000 7,066
Tomball Hosp. Auth.
Tomball Regional Hosp.
5.50%, 7/1/03 800 796
5.50%, 7/1/04 800 790
5.50%, 7/1/05 1,300 1,276
Tyler Health Fac. Dev.
Mother Frances Hosp.
5.25%, 7/1/01 700 698
5.25%, 7/1/02 1,200 1,193
Univ. of Texas, Fin. Systems
5.25%, 8/15/04 2,375 2,437
6.25%, 7/1/13 (Prerefunded 7/1/02+) 2,000 2,066
------------
Total Texas (Cost $22,895) 22,869
------------
</TABLE>
9
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
-----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
VIRGINIA 6.4%
Arlington County IDA, Alexandria/Arlington Waste to Energy
5.00%, 1/1/02 (FSA Insured) $ 3,000 $ 3,024
Bedford County IDA, Georgia-Pacific, 4.60%, 8/1/04 1,540 1,525
Charles County IDA., Waste Management, 4.875%, 2/1/09 * 2,000 1,761
Chesterfield County, Water & Sewer, Zero Coupon, 11/1/07 6,000 4,271
Fairfax County, GO, Public Improvement, 5.50%, 12/1/05 4,100 4,303
Hampton Roads Medical College, 6.30%, 11/15/02 1,000 1,025
Newport News, GO, 5.50%, 5/1/07 2,075 2,190
Virginia Public School Auth., GO
School Fin.
5.25%, 8/1/05 2,000 2,067
5.50%, 8/1/02 4,150 4,235
------------
Total Virginia (Cost $23,957) 24,401
------------
WASHINGTON 2.4%
Washington Public Power Supply System
Nuclear Project
5.25%, 7/1/03 3,000 3,055
5.50%, 7/1/02 5,000 5,086
6.30%, 7/1/01 (FSA Insured) 1,000 1,015
------------
Total Washington (Cost $9,190) 9,156
------------
WEST VIRGINIA 0.8%
Hospital Fin. Auth.
Charleston Area Medical Center
5.90%, 9/1/06 1,155 1,181
6.30%, 9/1/03 1,000 1,027
6.50%, 9/1/05 815 854
------------
Total West Virginia (Cost $2,997) 3,062
------------
WISCONSIN 1.8%
Milwaukee Metropolitan Sewage Dist., GO, 6.25%, 10/1/05 3,000 3,228
Wisconsin Transportation
5.00%, 7/1/02 1,630 1,646
5.40%, 7/1/04 2,000 2,030
------------
Total Wisconsin (Cost $6,850) 6,904
------------
</TABLE>
10
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
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Value
--------------------------------------------------------------------------------
In Thousands
Total Investments in Securities
98.1% of Net Assets (Cost $371,632) $ 375,426
Other Assets Less Liabilities 7,391
-------------
NET ASSETS $ 382,817
-------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 18
Accumulated net realized gain/loss - net of distributions (2,252)
Net unrealized gain (loss) 3,794
Paid-in-capital applicable to 72,509,203 shares of $0.01 par
value capital stock outstanding; 1,000,000,000 shares authorized 381,257
-------------
NET ASSETS $ 382,817
-------------
NET ASSET VALUE PER SHARE $ 5.28
-------------
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
DOT Department of Transportation
EFA Educational Finance Authority
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
HHEFA Health & Higher Educational Facility Authority
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
PFA Public Facilities Authority
TRAN Tax Revenue Anticipation Note
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
Unaudited
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
In thousands
6 Months
Ended
8/31/00
Investment Income (Loss)
Interest income $ 9,480
------------
Expenses
Investment management 823
Shareholder servicing 124
Custody and accounting 52
Registration 15
Prospectus and shareholder reports 12
Legal and audit 7
Directors 4
Miscellaneous 2
------------
Total expenses 1,039
Expenses paid indirectly (1)
------------
Net expenses 1,038
------------
Net investment income (loss) 8,442
------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (1,070)
Futures (84)
------------
Net realized gain (loss) (1,154)
Change in net unrealized gain or loss on securities 7,317
------------
Net realized and unrealized gain (loss) 6,163
------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 14,605
------------
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
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Unaudited
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
8/31/00 2/29/00
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 8,442 $ 17,529
Net realized gain (loss) (1,154) (1,042)
Change in net unrealized gain or loss 7,317 (13,714)
--------------------------
Increase (decrease) in net assets from operations 14,605 2,773
--------------------------
Distributions to shareholders
Net investment income (8,442) (17,529)
Net realized gain - (848)
--------------------------
Decrease in net assets from distributions (8,442) (18,377)
--------------------------
Capital share transactions*
Shares sold 39,662 99,955
Distributions reinvested 6,496 14,393
Shares redeemed (74,138) (153,429)
--------------------------
Increase (decrease) in net assets from capital
share transactions (27,980) (39,081)
--------------------------
Net Assets
Increase (decrease) during period (21,817) (54,685)
Beginning of period 404,634 459,319
--------------------------
End of period $ 382,817 $ 404,634
--------------------------
* Share information
Shares sold 7,599 18,985
Distributions reinvested 1,243 2,730
Shares redeemed (14,203) (29,126)
--------------------------
Increase (decrease) in shares outstanding (5,361) (7,411)
The accompanying notes are an integral part of these financial statements.
13
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--------------------------------------------------------------------------------
Unaudited August 31, 2000
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Tax-Free Short-Intermediate 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 December
23, 1983. The fund seeks a high level of income exempt from federal income
taxes consistent with modest price fluctuation by investing primarily in
short- and intermediate-term investment-grade municipal securities.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company
industry; these principles may require the use of estimates by fund
management.
Valuation Debt securities are generally traded in the over-the-counter
market. Investments in securities 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.
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.
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. Expenses paid indirectly reflect
credits earned on daily uninvested cash balances at the custodian and are
used to reduce the fund's custody charges.
14
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T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
--------------------------------------------------------------------------------
Note 2 - Investment Transactions
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $71,491,000 and $101,220,000, respectively, for the
six months ended August 31, 2000.
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. As of February 29, 2000, the fund had capital loss
carryforwards for federal income tax purposes of $243,000, all of which
expires in 2008. The fund intends to retain gains realized in future
periods that may be offset by available capital loss carryforwards.
At August 31, 2000, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled
$371,632,000. Net unrealized gain aggregated $3,794,000 at period-end, of
which $4,481,000 related to appreciated investments and $687,000 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, of which $135,000 was payable at August 31, 2000. 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
T. Rowe Price International, Inc. (the group). The group fee rate ranges
from 0.48% for the first $1 billion of assets to 0.295% for assets in
excess of $120 billion. At August 31, 2000, and for the six months then
ended, the effective annual group fee rate was 0.32%. 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
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T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND
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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 $130,000 for the six
months ended August 31, 2000, of which $27,000 was payable at
period-end.
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T. ROWE PRICE SHAREHOLDER SERVICES
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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 MUTUAL FUNDS
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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.
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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. F56-051 8/31/00
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