Annual Report
FLORIDA
INTERMEDIATE
TAX-FREE FUND
FEBRUARY 29, 2000
[LOGO]
T. ROWE PRICE
<PAGE>
REPORT HIGHLIGHTS
Florida Intermediate Tax-Free Fund
o Interest rates rose and bond prices fell as the Federal Reserve took steps
to reduce inflationary pressures.
o Fund returns were weak for the most recent 6- and 12-month periods but
ahead of our Lipper peer group average.
o Our duration strategy helped boost the fund's dividend yield as we
positioned the portfolio for the year ahead.
o Municipal yields are currently very attractive compared with yields on
taxable alternatives.
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
The Federal Reserve raised the federal funds rate three times in 1999 and twice
so far in 2000 in a continuing effort to slow economic growth to a pace that
will reduce inflationary pressures. Reflecting a powerful economy and higher
interest rates, many intermediate-term bond funds posted negative returns during
the 6- and 12-month periods ended February 29, although the tone of the market
began to improve early this year. The Florida Intermediate Tax-Free Fund's
returns were weak in both periods but better than those of the Lipper peer group
average.
MARKET ENVIRONMENT
30-Year AAA 5-Year AAA 1-Year Moody's
General Obligation General Obligation Investment Grade 1 Note
------------------ ------------------ -----------------------
2/28 4.99 3.78 3
5.04 3.83 3.15
5.08 3.85 3.2
5/31 5.16 4 3.2
5.33 4.33 3.5
5.41 4.3 3.55
8/31 5.6 4.4 3.75
5.7 4.43 3.75
5.89 4.58 3.95
11/30 5.87 4.53 3.95
5.93 4.68 4.1
6.03 4.9 4.1
2/29 5.9 4.94 4.2
*********************************************************************
The Fed has drawn a clear line in the sand in the face of a persistently strong
economy, which surged more than 6% in the second half of 1999. By early 2000, it
was evident that domestic demand was not slowing sufficiently to temper the
powerful economy, which has been augmented by a recovery in U.S. exports and by
increased government spending made possible by soaring tax receipts. In this
environment, Fed Chairman Alan Greenspan left no room for doubt that the Fed
will remain vigilant in its fight to contain inflation.
Interest rates and municipal bond yields rose in response to the Fed's hikes in
key short-term rates. After outperforming taxable bonds during the first half of
1999, municipals lost ground in the second half as lower-quality tax-exempt
securities, in particular, did poorly. Year-end was particularly challenging for
municipal bond funds due to a confluence of events. Municipals began to weaken
when some buyers fled
1
<PAGE>
into higher-yielding corporate bonds. In the fourth quarter, normally strong
demand from retail investors waned because of competition from the surging stock
market and from year-end tax loss selling. Redemptions from municipal bond funds
increased as a result of these factors. One factor that aided municipals in 1999
was the relatively light supply of new issues, down 21% from the previous year.
The fund's fiscal year ended on a positive note, however, as prices climbed and
longer-term municipal yields fell in February along with longer-term Treasury
yields. The rally in bond prices began when the Treasury announced its intention
to improve the liquidity of Treasury debt through a "buyback" program aimed at
increasing the availability of popular "on the run" issues. The proposed
reduction in federal debt sent shock waves through the bond market as investors
scrambled to discern which maturities would be affected most and searched for
alternative securities. The Treasury's buyback program led to an inversion of
the yield curve, as 30-year Treasury yields fell below two-year yields. The
municipal yield curve, however, maintained a positive slope, although it is
flatter than it was last year.
- --------------------------------------------------------------------------------
MUCH OF THE STATE'S JOB GROWTH WAS IN THE SERVICE SECTOR...
- --------------------------------------------------------------------------------
Florida continued to experience rapid population growth and remained one of the
nation's fastest-growing states. Much of the state's job growth was in the
service sector, with construction and transportation close behind. Tourism
remained a critical driver in services industries, and the Miami and Orlando
areas have recently witnessed new development.
Bond issuance decreased 24% in 1999, in part due to rising interest rates and
efforts by state officials to cap debt at "affordable" levels. The state
continued to manage its financial operations responsibly, maintaining high
credit ratings from each of the rating agencies. Fiscal year 1999 revenue growth
slowed somewhat from the previous year but was still above projections. Much of
the state's tax revenue growth came from the sales tax. To provide a cushion
against potentially negative financial developments, Florida has increased its
reserves to $787 million, or 5% of general fund revenues.
PERFORMANCE AND STRATEGY REVIEW
The fund posted a negative total return over the past year, as shown in the
table on the next page, as income of 46 cents per share was not
2
<PAGE>
enough to offset the net asset value's (NAV's) decline of 62 cents. In the last
six months, the fund's total return was slightly positive, as income of 23 cents
per share offset the NAV's 19 cent decline. Results for both periods surpassed
those of the fund's benchmark, the Lipper Florida Intermediate Municipal Debt
Funds Average. The better relative performance was primarily attributable to our
duration strategy and to relatively low fund expenses.
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Periods Ended 2/29/00 6 Months 12 Months
- --------------------------------------------------------------------------------
Florida Intermediate
Tax-Free Fund 0.38% -1.32%
- --------------------------------------------------------------------------------
Lipper Florida Intermediate
Municipal Debt Funds Average -0.01 -1.85
One of our goals in a rising interest rate environment is to realize losses for
tax purposes by selling certain holdings and reinvesting the proceeds in
higher-yielding bonds. (This is why portfolio turnover tends to increase as
interest rates rise.) As a result of recent portfolio changes, the fund's
6-month dividend yield has increased from 4.36% last August to 4.53% at the end
of February. For investors in the 36% federal tax bracket, this is equivalent to
a taxable yield of 7.08%.
We kept the portfolio's duration between 5.3 and 5.6 years during the last six
months. (Duration is a measure of a bond fund's sensitivity to interest rates.
For example, 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.)
When interest rates are rising, we attempt to reduce the portfolio's risk by
maintaining a relatively low duration. When rates are falling, we would keep the
duration in a range from 5.5 to 6.0 years to benefit from price appreciation of
our holdings.
Earlier in the period, we had adopted a so-called "barbell" maturity structure,
with positions in cash equivalents and longer maturities, which protects the
portfolio against a flattening of the yield curve. (This occurs when short-term
rates rise more than long-term rates and the difference between them narrows).
Recently, we have begun to unwind it in favor of a "laddered" structure with
maturities ranging between 10 and 15 years, since this area of the yield curve
provides higher yields than a barbell structure. We accomplished this shift in
the maturity structure by using cash reserves, as well as the proceeds from
selling bonds maturing in more than 15 years, to increase our holdings of 10- to
15-year bonds without significantly changing the overall duration of the fund.
3
<PAGE>
Overall, sector changes during the last six months were minimal. The most
noteworthy adjustments in the fund's sector diversification--fewer holdings of
water and sewer revenue bonds and larger positions in dedicated tax revenue
bonds--do not reflect a change in our views on these high-quality sectors.
Rather, the reallocation was simply a consequence of our strategy to increase
the fund's yield and to change the portfolio's structure from a barbell to a
ladder.
OUTLOOK
Economic growth has yet to show signs of slowing to a pace the Fed would prefer.
Rather, available economic data suggest that real GDP growth could approach 5%
in the first quarter of 2000. Except for soaring oil and some other commodity
prices, overall inflation remains in check. However, the strong rate of economic
growth is straining the supply of both labor and products. Cost pressures have
been mounting, and the Fed is concerned that they will be reflected in higher
inflation. As long as accelerating inflation remains a threat, the Fed is likely
to move short-term rates higher in the months ahead.
Municipal prices have built up some momentum after their February gains. Light
municipal supply to date continues to benefit our segment of the fixed income
market, and there has been a slight pickup in cash flows into municipal bond
funds. Any slowdown in economic growth as a result of Fed tightening should bode
well for the overall bond market. Yields on municipal bonds are extremely
attractive compared with taxable yields.
Florida issuance thus far in 2000 is high relative to other states but has not
had a negative effect on the market. In fact, Florida bonds are performing
relatively well, considering last year's cut in the Florida intangibles tax and
the possibility of an additional reduction this year. The credit outlook for
Florida also remains very good.
Respectfully submitted,
/s/ Charles B. Hill
Charles B. Hill
Chairman of the Investment Advisory Committee
March 24, 2000
4
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
KEY STATISTICS
8/31/99 2/29/00
- --------------------------------------------------------------------------------
Price Per Share $10.43 $10.24
- -------------------------------------------------------------------------------
Dividends Per Share
- -------------------------------------------------------------------------------
For 6 months 0.23 0.23
---------------------------------------------------------------------------
For 12 months 0.45 0.46
---------------------------------------------------------------------------
Dividend Yield *
- -------------------------------------------------------------------------------
For 6 months 4.36% 4.53%
---------------------------------------------------------------------------
For 12 months 4.43 4.53
---------------------------------------------------------------------------
30-Day Standardized Yield 4.20 4.55
- -------------------------------------------------------------------------------
Weighted Average Maturity (years) 7.4 7.4
- -------------------------------------------------------------------------------
Weighted Average Effective Duration (years) 5.4 5.6
- -------------------------------------------------------------------------------
Weighted Average Quality ** AA AA
- -------------------------------------------------------------------------------
* 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.
** Based on T. Rowe Price research.
5
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
Percent of Percent of
Net Assets Net Assets
8/31/99 2/29/00
- -------------------------------------------------------------------------------
Dedicated Tax Revenue 17% 26%
- -------------------------------------------------------------------------------
General Obligation - Local 15 17
- -------------------------------------------------------------------------------
Electric Revenue 8 9
- -------------------------------------------------------------------------------
Hospital Revenue 9 9
- -------------------------------------------------------------------------------
Air and Sea Transportation Revenue 7 6
- -------------------------------------------------------------------------------
Ground Transportation Revenue 6 6
- -------------------------------------------------------------------------------
Water and Sewer Revenue 12 6
- -------------------------------------------------------------------------------
Solid Waste Revenue 6 6
- -------------------------------------------------------------------------------
Prerefunded Bonds 4 4
- -------------------------------------------------------------------------------
Nuclear Revenue 4 3
- -------------------------------------------------------------------------------
Life Care/Nursing Home Revenue 2 3
- -------------------------------------------------------------------------------
Housing Finance Revenue 2 2
- -------------------------------------------------------------------------------
All Other 8 2
- -------------------------------------------------------------------------------
Other Assets Less Liabilities -- 1
===============================================================================
Total 100% 100%
6
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the 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.
Lehman 7-Year GO Lipper Florida Intermediate Florida Intermediate
Municipal Bond Index Debt Funds Average Tax-Free Fund
3/31/93 10,000 10,000 10,000
2/94 10,574 10,596 10,684
2/95 10,788 10,813 11,005
2/96 11,982 11,769 12,041
2/97 12,585 12,159 12,500
2/98 13,541 12,970 13,338
2/99 14,360 13,581 14,054
2/00 14,236 13,356 13,868
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
<TABLE>
<CAPTION>
Since Inception
Periods Ended 2/29/00 1 Year 3 Years 5 Years Inception Date
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Florida Intermediate Tax-Free Fund -1.32% 3.52% 4.73% 4.84% 3/31/93
- -------------------------------------------------------------------------------------
</TABLE>
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
7
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Ended
2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 10.86 $ 10.75 $ 10.52 $ 10.61 $ 10.14
---------------------------------------------------------------------------
Investment activities
Net investment income (loss) 0.46 0.46* 0.46* 0.46* 0.47*
Net realized and
unrealized gain (loss) (0.60) 0.11 0.23 (0.07) 0.47
---------------------------------------------------------------------------
Total from
investment activities (0.14) 0.57 0.69 0.39 0.94
---------------------------------------------------------------------------
Distributions
Net investment income (0.46) (0.46) (0.46) (0.46) (0.47)
Net realized gain (0.02) -- -- (0.02) --
---------------------------------------------------------------------------
Total distributions (0.48) (0.46) (0.46) (0.48) (0.47)
---------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 10.24 $ 10.86 $ 10.75 $ 10.52 $ 10.61
===========================================================================
Ratios/Supplemental Data
Total return+ (1.32)% 5.37%* 6.71%* 3.81%* 9.41%*
- -----------------------------------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.60% 0.60%* 0.60%* 0.60%* 0.60%*
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 4.35% 4.23%* 4.35%* 4.39%* 4.47%*
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30.9% 26.9% 25.0% 75.8% 98.7%
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 84,116 $ 102,620 $ 90,941 $ 78,783 $ 67,260
- -----------------------------------------------------------------------------------------------------------
</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.
* Excludes expenses in excess of a 0.60% voluntary expense limitation in
effect through 2/28/99.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
February 29, 2000
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS Par Value
- -------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
FLORIDA 94.7%
Brevard County HFA, Holmes Regional Medical Center
5.20%, 10/1/05 (MBIA Insured) $ 2,000 $ 2,016
- -------------------------------------------------------------------------------------------------
Broward County Airport, 5.25%, 10/1/10 (MBIA Insured) * 2,000 1,965
- -------------------------------------------------------------------------------------------------
Dade County
Aviation
5.40%, 10/1/03 (MBIA Insured) * 1,140 1,158
------------------------------------------------------------------------------------------
6.20%, 10/1/24 (MBIA Insured) * 50 51
------------------------------------------------------------------------------------------
Resource Recovery Fac.
6.00%, 10/1/06 (AMBAC Insured) * 2,500 2,607
- -------------------------------------------------------------------------------------------------
Dade County IDA, PCR, Florida Power and Light Co.
VRDN (Currently 3.80%) 600 600
- -------------------------------------------------------------------------------------------------
Dade County School Dist., GO
5.50%, 8/1/04 (MBIA Insured) 2,000 2,050
------------------------------------------------------------------------------------------
6.00%, 7/15/04 (MBIA Insured) 3,545 3,701
- -------------------------------------------------------------------------------------------------
Duval County School Dist., GO
6.125%, 8/1/04 (AMBAC Insured) 2,000 2,083
- -------------------------------------------------------------------------------------------------
Florida, GO, Board of Ed., 5.125%, 7/1/11 (FGIC Insured) 1,000 981
- -------------------------------------------------------------------------------------------------
Florida Dept. of Corrections, Okeechobee Correctional
5.80%, 3/1/02 (AMBAC Insured) 1,005 1,027
- -------------------------------------------------------------------------------------------------
Florida Dept. of Natural Resources
Dept. of Environmental Protection
6.00%, 7/1/08 (AMBAC Insured) 2,845 3,009
------------------------------------------------------------------------------------------
Dept. of Environmental Preservation
5.50%, 7/1/07 (FSA Insured) 1,000 1,026
------------------------------------------------------------------------------------------
5.50%, 7/1/09 (FSA Insured) 3,000 3,070
- -------------------------------------------------------------------------------------------------
Florida Dept. of Transportation, Turnpike Auth
5.25%, 7/1/11 (MBIA Insured) 1,950 1,938
- -------------------------------------------------------------------------------------------------
Florida Division of Bond Fin
Dept. of Environmental Preservation
5.50%, 7/1/07 (AMBAC Insured) 2,000 2,043
------------------------------------------------------------------------------------------
6.00%, 7/1/05 (MBIA Insured) 500 524
------------------------------------------------------------------------------------------
6.00%, 7/1/06 (MBIA Insured) 4,350 4,574
- -------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
- -------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Florida Housing Fin. Agency
Multi-Family Housing
5.80%, 2/1/08 $ 1,000 $ 1,024
------------------------------------------------------------------------------------------
5.80%, 8/1/08 1,000 1,026
- -------------------------------------------------------------------------------------------------
Florida Municipal Power Agency
All-Requirements Power Supply
6.25%, 10/1/21 (AMBAC Insured)
(Prerefunded 10/1/02+) 1,700 1,793
- -------------------------------------------------------------------------------------------------
Florida Turnpike Auth., 5.50%, 7/1/05 (AMBAC Insured) 1,000 1,025
- -------------------------------------------------------------------------------------------------
Gainesville, Utilities, 6.40%, 10/1/05 1,500 1,582
- -------------------------------------------------------------------------------------------------
Hillsborough County
Environmentally Sensitive Lands Acquisition
6.20%, 7/1/05 (AMBAC Insured)
(Prerefunded 7/1/02+) 1,485 1,561
------------------------------------------------------------------------------------------
Improvement Program
6.00%, 8/1/04 (FGIC Insured) 1,895 1,979
- -------------------------------------------------------------------------------------------------
Hillsborough County IDA, PCR, Tampa Electric
VRDN (Currently 3.75%) 300 300
- -------------------------------------------------------------------------------------------------
Hillsborough County Port Dist., Tampa Port Auth
6.50%, 6/1/04 (FSA Insured) * 2,000 2,108
- -------------------------------------------------------------------------------------------------
Hillsborough County School Dist., GO
7.00%, 8/15/05 (MBIA Insured) 3,700 4,050
- -------------------------------------------------------------------------------------------------
Indian Trace Community Dev. Dist.
Water Management
5.50%, 5/1/06 (MBIA Insured) 1,215 1,244
------------------------------------------------------------------------------------------
5.50%, 5/1/07 (MBIA Insured) 550 563
- -------------------------------------------------------------------------------------------------
Jacksonville HFA, Charity Obligation Group
5.00%, 8/15/11 (MBIA Insured) 750 723
- -------------------------------------------------------------------------------------------------
Kissimmee Water and Sewer Systems
5.50%, 10/1/11 (FGIC Insured) 1,500 1,520
- -------------------------------------------------------------------------------------------------
Lakeland Electric and Water, 6.55%, 10/1/04 (FSA Insured) 3,755 4,002
- -------------------------------------------------------------------------------------------------
Lee County IDA, Bonita Springs Utilities
5.80%, 11/1/11 (MBIA Insured) * 1,325 1,349
- -------------------------------------------------------------------------------------------------
Manatee County, Public Utilities
6.75%, 10/1/05 (MBIA Insured) 2,000 2,171
- -------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
- -------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Orange County, Public Service Tax
5.60%, 10/1/07 (FGIC Insured) $ 500 $ 516
- -------------------------------------------------------------------------------------------------
Orlando and Orange County
Expressway Auth.
6.50%, 7/1/10 (FGIC Insured) 1,000 1,100
------------------------------------------------------------------------------------------
6.50%, 7/1/11 (FGIC Insured) 1,000 1,103
- -------------------------------------------------------------------------------------------------
Osceola County HFA
Evangelical Lutheran Good Samaritan Society
5.50%, 5/1/03 (AMBAC Insured) 660 672
------------------------------------------------------------------------------------------
5.50%, 5/1/04 (AMBAC Insured) 700 713
------------------------------------------------------------------------------------------
5.50%, 5/1/05 (AMBAC Insured) 735 749
- -------------------------------------------------------------------------------------------------
Palm Beach County
5.75%, 6/1/13 (FGIC Insured) 3,000 3,084
- -------------------------------------------------------------------------------------------------
Palm Beach County, GO, 6.875%, 12/1/03 325 348
- -------------------------------------------------------------------------------------------------
Pasco County, Solid Waste Disposal and Resource Recovery
5.75%, 4/1/05 (AMBAC Insured) * 1,130 1,161
- -------------------------------------------------------------------------------------------------
Reedy Creek Improvement Dist.
5.125%, 10/1/14 (MBIA Insured) 1,500 1,421
------------------------------------------------------------------------------------------
6.375%, 6/1/05 (MBIA Insured)
(Prefunded 6/1/01+) 65 67
- -------------------------------------------------------------------------------------------------
Reedy Creek Improvement Dist., GO
6.375%, 6/1/05 (MBIA Insured) 435 448
- -------------------------------------------------------------------------------------------------
Tampa, Catholic Health East, 5.25%, 11/15/11 (MBIA Insured) 2,550 2,519
- -------------------------------------------------------------------------------------------------
Tampa Solid Waste Systems, McKay Bay Refuse to Energy
5.25%, 10/1/12 * 1,300 1,264
- -------------------------------------------------------------------------------------------------
Venice, Bon Secours Health Systems
5.40%, 8/15/08 (MBIA Insured) 1,290 1,306
- -------------------------------------------------------------------------------------------------
West Orange Healthcare Dist., 5.50%, 2/1/10 750 706
- -------------------------------------------------------------------------------------------------
Total Florida (Cost $79,647) 79,620
--------
PUERTO RICO 4.1%
Puerto Rico Electric Power Auth
5.25%, 7/1/14 (MBIA Insured) 2,000 1,945
- -------------------------------------------------------------------------------------------------
Puerto Rico Municipal Fin. Agency, GO
5.875%, 8/1/14 (FSA Insured) 1,500 1,547
- -------------------------------------------------------------------------------------------------
Total Puerto Rico (Cost $3,600) 3,492
--------
</TABLE>
11
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C>
Total Investments in Securities
98.8% of Net Assets (Cost $83,247) $ 83,112
Other Assets Less Liabilities 1,004
--------
NET ASSETS $ 84,116
========
Net Assets Consist of:
Accumulated net realized gain/loss - net of distributions $ (1,087)
Net unrealized gain (loss) (135)
Paid-in-capital applicable to 8,215,460 no par value shares
of beneficial interest outstanding; unlimited number of shares authorized 85,338
--------
NET ASSETS $ 84,116
========
NET ASSET VALUE PER SHARE $ 10.24
========
</TABLE>
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
HFA Health Facility Authority
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
Year
Ended
2/29/00
Investment Income (Loss)
Interest income $ 4,630
-------
Expenses
Investment management 352
Custody and accounting 98
Shareholder servicing 67
Prospectus and shareholder reports 20
Legal and audit 13
Trustees 6
Registration 3
Miscellaneous 4
-------
Total expenses 563
Expenses paid indirectly (2)
-------
Net expenses 561
-------
Net investment income (loss) 4,069
-------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (953)
Futures (68)
-------
Net realized gain (loss) (1,021)
Change in net unrealized gain or loss on securities (4,518)
-------
Net realized and unrealized gain (loss) (5,539)
-------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $(1,470)
=======
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
Year
Ended
2/29/00 2/28/99
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 4,069 $ 3,907
Net realized gain (loss) (1,021) 492
Change in net unrealized gain or loss (4,518) 468
----------------------
Increase (decrease) in net assets from operations (1,470) 4,867
----------------------
Distributions to shareholders
Net investment income (4,069) (3,907)
Net realized gain (189) --
----------------------
Decrease in net assets from distributions (4,258) (3,907)
----------------------
Capital share transactions*
Shares sold 30,649 39,525
Distributions reinvested 3,020 2,822
Shares redeemed (46,445) (31,628)
----------------------
Increase (decrease) in net assets from capital
share transactions (12,776) 10,719
----------------------
Net Assets
Increase (decrease) during period (18,504) 11,679
Beginning of period 102,620 90,941
----------------------
End of period $ 84,116 $ 102,620
======================
*Share information
Shares sold 2,948 3,646
Distributions reinvested 289 261
Shares redeemed (4,469) (2,923)
----------------------
Increase (decrease) in shares outstanding (1,232) 984
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
February 29, 2000
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price State Tax-Free Income Trust (the trust) is registered under
the Investment Company Act of 1940. The Florida Intermediate Tax-Free Fund
(the fund), a nondiversified, open-end management investment company, is
one of the portfolios established by the trust and commenced operations on
March 31, 1993.
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 Trustees.
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.
15
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $27,645,000 and $37,871,000 respectively, for the
year ended February 29, 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 $871,000, 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.
In order for the fund's capital accounts and distributions to shareholders
to reflect the tax character of certain transactions, the following
reclassifications were made during the year ended February 29, 2000. The
results of operations and net assets were not affected by the
increases/(decreases) to these accounts.
--------------------------------------------------------------------------
Undistributed net realized gain $26,000
Paid-in-capital (26,000)
At February 29, 2000, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$83,247,000. Net unrealized loss aggregated $135,000 at period-end, of
which $599,000 related to appreciated investments and $734,000 to
depreciated investments.
16
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T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
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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 $25,000 was payable at February 29, 2000. The fee
is computed daily and paid monthly, and consists of an individual fund fee
equal to 0.05% 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 0.295%
for assets in excess of $120 billion. At February 29, 2000, and for the
year 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.
Under the terms of the investment management agreement, the manager had
been required to bear any expenses through February 28, 1999, which would
cause the fund's ratio of total expenses to average net assets to exceed
0.60%. Thereafter, through February 28, 2001, the fund is required to
reimburse the manager for these expenses, provided that average net assets
have grown or expenses have declined sufficiently to allow reimbursement
without causing the fund's ratio of total expenses to average net assets
to exceed 0.60%. Pursuant to this agreement, $6,000 of unaccrued
management fees were repaid during the year ended February 29, 2000.
In addition, the fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which the fund
receives certain other services. The manager computes the daily share
price and maintains the financial records of the fund. T. Rowe Price
Services, Inc. is the fund's transfer and dividend disbursing agent and
provides shareholder and administrative services to the fund. The fund
incurred expenses pursuant to these related party agreements totaling
approximately $124,000 for the year ended February 29, 2000, of which
$12,000 was payable at period-end.
17
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Trustees of T. Rowe Price State Tax-Free Income Trust
and Shareholders of Florida Intermediate Tax-Free Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial
position of Florida Intermediate Tax-Free Fund (one of the portfolios
comprising T. Rowe Price State Tax-Free Income Trust, hereafter referred
to as "the Fund") at February 29, 2000, and the results of its operations,
the changes in its net assets and the financial highlights for each of the
fiscal periods presented, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at February 29,
2000, by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
March 17, 2000
18
<PAGE>
T. ROWE PRICE FLORIDA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 2/29/00
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code. The
amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distributions to shareholders included:
o $40,000 from short-term gains,
o $49,000 from long-term capital gains, subject to the 20% rate gains
category,
o $4,102,000 which qualified as exempt-interest dividends.
- --------------------------------------------------------------------------------
19
<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 September 1999 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of
order.
20
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
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 Markets Stock
European Stock
Global Stock
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. 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.
21
<PAGE>
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
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
101 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
Invest With Confidence(R)
T.RowePrice [LOGO]
T. Rowe Price Investment Services, Inc., Distributor. F91-050 2/29/00
