<PAGE>
================================================================================
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
California Tax-Free Funds
- --------------------------------------------------------------------------------
February 29, 2000
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
CALIFORNIA TAX-FREE FUNDS
- -------------------------
* A persistently strong economy and rising interest rates hurt the bond
market over the past year.
* The California Tax-Free Money Fund's returns for the 6- and 12-month
periods ended February 29 were in line with its Lipper peer group average.
* Returns were weak for the California Tax-Free Bond Fund but well ahead of
its Lipper category for both periods.
* The tone of the bond market improved early this year, and tax- free bond
yields are highly attractive compared with 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.
FELLOW SHAREHOLDERS
- -------------------
A powerful economy and four rate hikes by the Federal Reserve set a
negative tone for the bond markets for the 12 months ended February 29, 2000.
Interest rates rose and bond prices fell, causing weak returns for long-term
bond funds, though bond prices recovered somewhat early this year. The
California Tax-Free Bond Fund declined during the period, but handily
outperformed its peer group average. Money market funds benefited from higher
short-term rates, and the California Tax-Free Money Fund delivered returns in
line with its Lipper category.
MARKET ENVIRONMENT
- ------------------
The Federal Reserve demonstrated its determination to slow economic growth
to a more sustainable, noninflationary pace with a series of quarter-point
increases in the key federal funds rate beginning on June 30, 1999. The
persistently strong U.S. economy grew 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 also benefited from a recovery in U.S.
exports and increased government spending made possible by soaring tax receipts.
Fed Chairman A lan Greenspan has made it clear to the markets that he will
continue to gradually increase short-term interest rates until there is a
significant slowdown in economic growth. (Indeed, on March 21, after the close
of the period, the Fed increased the federal funds target rate another quarter
point, to 6%.)
<PAGE>
******************************************************
California Yield Indexes
------------------------
California Bond Index California Money Index
--------------------- ----------------------
2/28/99 5.05 2.5
5.04 2.75
5.07 3.85
5/31 5.22 3.0
5.47 3.2
5.5 2.6
8/31 5.71 2.85
5.8 3.35
6.06 3.2
11/30 5.94 3.4
6.15 4.95
6.23 2.2
2/29/00 6.13 2.9
******************************************************
Interest rates and municipal bond yields rose in response to the strong
economy and the Fed's rate hikes. 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 into higher-yielding corporate bonds,
which flooded the market in the third quarter. In the fourth quarter, normally
strong demand from retail investors waned because of competition from the
surging stock market and from tax-loss selling at year-end. Redemptions from
munic-ipal bond funds increased as a result of these factors. One factor that
aided municipals in 1999 was the relatively light supply of new issues, which
was down 21% from the previous year.
The fiscal year ended on a positive note, however, as prices climbed and
long-term municipal yields fell in February along with long-term Treasury
yields. The rally in bond prices began when the Treasury announced its intention
to repurchase Treasury bonds. The markets seemed taken by surprise, and
investors scrambled to discern which maturities would be most affected and
searched for alternative securities. The Treasury's buy back program led to an
inversion of the yield curve, as 30-year yields plunged below two-year Treasury
yields, which had been moving higher with Fed rate hikes. The municipal yield
curve, however, maintained a positive slope, although it flattened out somewhat.
(A yield curve is a chart made by plotting the interest rates on bonds and notes
of various maturities. The curve is said to "flatten" when the gap between
long-term and short-term yields narrows.) The more pronounced drop in long-term
Treasury yields made long-term tax-free yields very attractive by comparison.
<PAGE>
California's economy continued its healthy expansion, spurred by the
high-tech sector. Nonfarm employment grew 3.3% in 1999, and the state's
unemployment rate fell to 4.7% in January, the lowest level in 30 years.
California personal income grew an impressive 6.6% last year, compared with a
national rate of 5.2%, while retail sales grew 8.8%.
The improving economy has enhanced California's financial condition.
Standard & Poor's upgraded the state's general obligation debt rating in August
to AA- from A+. Moody's Investors Service upgraded its rating to Aa3 last
October from A1. Fitch IBCA, which upgraded its rating two years ago to AA- from
A+, raised its rating again to AA in February 2000. California's general fund
revenues were 4.3% above forecast through January, led by continued growth in
personal income tax and sales tax receipts. Legislative analysts estimate that
the state will have $4.2 billion more to spend over the next two fiscal years
than the state has budgeted.
The only cloud on California's otherwise bright economic horizon remains
home affordability and availability. Median existing home sale prices are
escalating and new home construction is not keeping pace with demand, primarily
due to difficulty securing land and permits. There is some concern that this may
impede economic growth, especially in the state's densely populated coastal
communities.
CALIFORNIA TAX-FREE MONEY FUND
- ------------------------------
================================================================================
PERFORMANCE COMPARISON
----------------------
Periods Ended 2/29/00 6 Months 12 Months
--------------------- -------- ---------
California Tax-Free Money Fund 1.27% 2.51%
Lipper California Tax-Exempt
Money Market Funds Average 1.28 2.52
================================================================================
Your fund returned 1.27% and 2.51%, respectively, for the 6- and 12-month
periods ended February 29, as shown in the table. Both results were in line with
those of the Lipper California Tax-Exempt Money Market Funds Average. Our
weighted average maturity was somewhat shorter than that of our average
competitor, especially early in the period, and this restrained relative
results. The fund's average maturity was 39 days at the end of the period,
little changed from 38 days six months ago, as shown in the table on page 7. The
average competing fund, meanwhile, shortened its average maturity significantly,
from 58 days in August to 41 days at the end of February, so our stance is now
comparable to that of the peer group. We have been reluctant to extend our
maturities because of the Fed's ongoing rate hikes and because short-term
California yields are now quite low relative to national tax-exempt yields.
Notes with longer maturities would be subject to sharper price declines than
shorter-term notes if California yields were to rise closer to national yields.
<PAGE>
For example, over the past year, the Fed has increased its key federal
funds rate 100 basis points (one percentage point). During that period, national
short-term municipal yields rose as much or more -- one-year yields from 3% to
4.2%. Short-term California tax-exempt yields, however, did not rise nearly as
much, and those on very short maturities actually fell over the past six months.
It was not unusual for California overnight securities to yield an entire
percentage point less than comparable national issues. Strong cash flows into
California money market funds and diminished supply of new securities has kept
California tax-free yields low. When we foresee an end to the Fed's tightening
program, we expect to adopt a longer maturity posture to lock in higher yields
and also focus on securities that are more reasonably priced in relation to
national tax-free issues.
As a result of the price movements just described, the short-term municipal
yield curve has become steeper -- that is, one-year yields have become
significantly higher than overnight and weekly yields. Such was not the case a
year ago, when the short-term yield curve was essentially flat and little
advantage was gained by investing at the longer end of the curve. As of the end
of February, one-year tax-free yields were nearly half a percentage point higher
than weekly yields.
CALIFORNIA TAX-FREE BOND FUND
- -----------------------------
================================================================================
PERFORMANCE COMPARISON
----------------------
Periods Ended 2/29/00 6 Months 12 Months
--------------------- -------- ---------
California Tax-Free Bond Fund -0.16% -2.94%
Lipper California Municipal
Debt Funds Average -1.40 -4.88
================================================================================
The California Tax-Free Bond Fund turned in good relative performance in a
weak bond market, as long-term California bond yields rose nearly a full
percentage point over the past year, from about 5% to 6%. As shown in the table,
the fund's losses were significantly less than those of the peer group average.
Our investment strategy, higher credit profile, and a lower-than-average expense
ratio aided results. The drop in the fund's net asset value, from $10.96 a year
ago to $10.11 on February 29, was only partially offset by income. The fund's
dividends per share held steady during the fiscal year, at $0.52 compared with
the same amount for the year ended February 28, 1999. As a result, the fund's
12-month dividend yield increased from 4.89% in our previous fiscal year to
5.26%. For an investor in the 36% tax bracket, that is equivalent to a taxable
yield of 8.22%.
<PAGE>
In many ways, the past year was a mirror image of the preceding year. A
year ago, we were concerned about the erosion of portfolio income in a low
interest rate environment. The last 12 months, by contrast, provided ample
opportunity to invest in higher-yielding bonds while attempting to mitigate
price declines as a result of rising rates. We limited holdings of bonds with
maturities of 20 years and longer and focused on bonds with maturities in the
10- to 20-year range, which held up better as rates rose. We maintained duration
at or below a neutral level relative to the peer group for most of the period.
(Duration is a measure of a bond fund's sensitivity to interest rates. For
example, a fund with a duration of eight years would fall or rise about 8% in
price in response to a one percentage-point rise or fall in interest rates.) The
fund's duration increased to 8.3 years, compared with 7.2 years last February,
largely because the effective maturity of our holdings increased as rates rose.
(When market yields rise above a bond's coupon rate, call risk disappears and
the bond trades based on its maturity rather than its call date.) Our decision
to underweight BBB and lower-rated bonds, especially those in the hospital
sector, also aided results as these performed poorly in the past six months.
In August we raised cash levels in anticipation of year-end liquidity
needs. Our concerns proved well founded as we weathered higher-than-normal
redemptions from November through January. The higher cash position enabled us
to meet these redemptions without having to sell bonds in a weak market.
Entering the new year, we became more positive about the market as long-term
California bond yields rose above 6%, which is equivalent to a taxable yield of
nearly 10% for investors in the highest federal tax bracket (39.6%). We
reinvested some of our cash reserves in time to enjoy the February recovery in
bond prices.
Overall credit quality was unchanged for the period at AA-, and our sector
weightings also were little changed. In the first half of our fiscal year, we
reduced hospital exposure and increased our stake in education bonds. In the
second half, we modestly increased exposure to the housing sector. We continue
to like California general obligation debt, which is benefiting from a strong
economy and growing tax revenues.
We may move to a slightly more aggressive posture if we sense the Fed is
near the end of its rate hike program. In the meantime, we will continue to try
to increase the fund's yield by selling bonds at losses and reinvesting the
proceeds in new issues with higher coupons. These losses may be used to offset
future realized capital gains, helping to make the fund more tax-efficient.
OUTLOOK
- -------
The economy 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, strong 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 will
continue to increase short-term rates in the months ahead.
<PAGE>
*****************************
Any slowdown in economic
growth . . . should bode
well for the overall bond
market.
*****************************
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, which should make tax-exempt bonds
appealing even to investors in lower tax brackets. The near-term credit outlook
for California is excellent.
Respectfully submitted,
/s/
Patrice L. Berchtenbreiter
Chairman of the Investment Advisory Committee
California Tax-Free Money Fund
/s/
Mary J. Miller
Chairman of the Investment Advisory Committee
California Tax-Free Bond Fund
March 24, 2000
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Funds
- ---------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
KEY STATISTICS
- --------------
8/31/99 2/29/00
CALIFORNIA TAX-FREE MONEY FUND
- ------------------------------
Price Per Share $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
Dividends Per Share
- -------------------------------------------------------------------------------
For 6 months 0.012 0.013
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For 12 months 0.024 0.025
- -------------------------------------------------------------------------------
Dividend Yield (7-Day Compound) * 2.43% 2.21%
- -------------------------------------------------------------------------------
Weighted Average Maturity (days) 38 39
- -------------------------------------------------------------------------------
Weighted Average Quality ** First Tier First Tier
- -------------------------------------------------------------------------------
CALIFORNIA TAX-FREE BOND FUND
- -----------------------------
Price Per Share $ 10.39 $ 10.11
- -------------------------------------------------------------------------------
Dividends Per Share
- -------------------------------------------------------------------------------
For 6 months 0.26 0.26
- -------------------------------------------------------------------------------
For 12 months 0.52 0.52
- -------------------------------------------------------------------------------
Dividend Yield *
- -------------------------------------------------------------------------------
For 6 months 5.00% 5.25%
- -------------------------------------------------------------------------------
For 12 months 5.11 5.26
- -------------------------------------------------------------------------------
30-Day Standardized Yield 4.76 5.07
- -------------------------------------------------------------------------------
Weighted Average Maturity (years) 16.1 16.1
- -------------------------------------------------------------------------------
Weighted Average Effective Duration (years) 8.0 8.3
- -------------------------------------------------------------------------------
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.
** All securities purchased in the money fund are rated in the two highest
categories as established by national rating agencies or, if unrated, are
deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Funds
- ---------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
SECTOR DIVERSIFICATION
- ----------------------
Percent of Percent of
Net Assets Net Assets
8/31/99 2/29/00
CALIFORNIA TAX-FREE MONEY FUND
- ------------------------------
Water and Sewer Revenue 18% 17%
- ------------------------------------------------------------------------------
Housing Finance Revenue 8 13
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Hospital Revenue 20 12
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Lease Revenue 12 11
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Prerefunded Bonds 5 9
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Educational Revenue 9 8
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General Obligation-- Local 9 7
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Nuclear Revenue 8 7
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Electric Revenue 1 6
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Air and Sea Transportation Revenue 6 5
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General Obligation-- State 4 2
- ------------------------------------------------------------------------------
All Others - 2
- ------------------------------------------------------------------------------
Other Assets Less Liabilities - 1
- ------------------------------------------------------------------------------
Total 100% 100%
CALIFORNIA TAX-FREE BOND FUND
- -----------------------------
Dedicated Tax Revenue 23% 18%
- ------------------------------------------------------------------------------
Lease Revenue 13 14
- ------------------------------------------------------------------------------
Housing Finance Revenue 7 10
- ------------------------------------------------------------------------------
Prerefunded Bonds 8 10
- ------------------------------------------------------------------------------
General Obligation-- Local 8 8
- ------------------------------------------------------------------------------
Water and Sewer Revenue 8 7
- ------------------------------------------------------------------------------
General Obligation-- State 5 6
- ------------------------------------------------------------------------------
Air and Sea Transportation Revenue 5 5
- ------------------------------------------------------------------------------
Escrowed to Maturity 3 5
- ------------------------------------------------------------------------------
Educational Revenue 3 4
- ------------------------------------------------------------------------------
Nuclear Revenue 4 3
- ------------------------------------------------------------------------------
Hospital Revenue 2 3
- ------------------------------------------------------------------------------
All Others 10 6
- ------------------------------------------------------------------------------
Other Assets Less Liabilities 1 1
- ------------------------------------------------------------------------------
Total 100% 100%
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Funds
- ---------------------------------------
PERFORMANCE COMPARISON
- ----------------------
These charts show the value of a hypothetical $10,000 investment in each
fund over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
Lipper California Tax-
Exempt Money Market Funds California Tax-Free
Average Money fund
------- ----------
2/90 10000 10000
2/91 10519 10473
2/92 10919 10844
2/93 11187 11095
2/94 11412 11308
2/95 11710 11596
2/96 12094 11972
2/97 12447 12316
2/98 12827 12687
2/99 13171 13023
2/00 13507 13351
Lehman Municipal Lipper California Municipal California Tax-
Bond Index Debts Funds Average Free Bond Fund
---------- ------------------- --------------
2/90 10000 10000 10000
2/91 10922 10806 10784
2/92 12013 11831 11868
2/93 13666 13486 13434
2/94 14423 14232 14307
2/95 14695 14284 14535
2/96 16318 15792 16030
2/97 17217 16565 16934
2/98 18790 18134 18510
2/99 19946 19165 19612
2/00 19530 18264 19035
<PAGE>
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- ------------------------------------
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 2/29/00 1 Year 3 Years 5 Years 10 Years
- --------------------- ------ ------- ------- --------
California Tax-Free Money Fund 2.51% 2.73% 2.86% 2.93%
California Tax-Free Bond Fund -2.94 3.98 5.54 6.65
Investment return represents past performance and will vary. Shares of the
bond fund may be worth more or less at redemption than at original purchase.
Investments in the Money Fund are not insured or guaranteed by the FDIC or any
other government agency. Although it seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
fund.
================================================================================
T. Rowe Price California Tax-Free Money Fund
- --------------------------------------------
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
Year
Ended
2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
NET ASSET VALUE
Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- -------------------------------------------------------------------------------
Investment activities
Net investment income(loss) 0.025* 0.026* 0.030* 0.028* 0.032*
Distributions
Net investment income (0.025) (0.026) (0.030) (0.028) (0.032)
- -------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Ratios/Supplemental=Data=======================================================
Total return** 2.51%* 2.65%* 3.01%* 2.87%* 3.24%*
- -------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.55%* 0.55%* 0.55%* 0.55%* 0.55%*
- -------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 2.48%* 2.62%* 2.98%* 2.82%* 3.20%*
- -------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $108,219 $102,346 $ 92,406 $ 82,210 $ 72,739
- -------------------------------------------------------------------------------
** 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 0.55% voluntary expense limitation in
effect through 2/28/01.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Bond Fund
- -------------------------------------------
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
Year
Ended
2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
NET ASSET VALUE
Beginning of period $ 10.96 $ 10.88 $ 10.47 $ 10.45 $ 10.00
- -------------------------------------------------------------------------------
Investment activities
Net investment income(loss) 0.52 0.52 0.54 0.55 0.55
Net realized and
unrealized gain (loss) (0.84) 0.11 0.41 0.02 0.45
- -------------------------------------------------------------------------------
Total from
investment activities (0.32) 0.63 0.95 0.57 1.00
- -------------------------------------------------------------------------------
Distributions
Net investment income (0.52) (0.52) (0.54) (0.55) (0.55)
Net realized gain (0.01) (0.03) - - -
- -------------------------------------------------------------------------------
Total distributions (0.53) (0.55) (0.54) (0.55) (0.55)
- -------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 10.11 $ 10.96 $ 10.88 $ 10.47 $ 10.45
Ratios/Supplemental=Data=======================================================
Total return** (2.94)% 5.95% 9.31% 5.64% 10.28%
- -------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.56% 0.58% 0.58% 0.62% 0.63%
- -------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 4.99% 4.80% 5.09% 5.29% 5.40%
- -------------------------------------------------------------------------------
Portfolio turnover rate 40.8% 27.2% 35.0% 47.3% 61.9%
- -------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $211,898 $226,001 $195,100 $160,813 $146,194
- -------------------------------------------------------------------------------
** 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.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Money Fund
- -------------------------------------------- February 29, 2000
STATEMENT OF NET ASSETS
- -----------------------
Par Value
In thousands
CALIFORNIA 92.0%
California, GO
VRDN (Currently 3.11%)
(FGIC Insured) $ 1,500 $ 1,500
- --------------------------------------------------------------------------
5.00%, 10/1/00 200 201
- --------------------------------------------------------------------------
6.00%, 9/1/00 650 657
- --------------------------------------------------------------------------
California Dept. of Water Resources
Water Systems
6.25%, 12/1/03 (Prerefunded 6/1/00+) 550 561
- --------------------------------------------------------------------------
TECP, 2.85%, 4/12/00 1,011 1,011
- --------------------------------------------------------------------------
California, EFA
California Institute of Technology
VRDN (Currently 2.30%) 500 500
- --------------------------------------------------------------------------
Pepperdine Univ.
VRDN (Currently 2.50%) 2,000 2,000
- --------------------------------------------------------------------------
Stanford Univ.
VRDN (Currently 2.50%) 4,000 4,000
- --------------------------------------------------------------------------
California, HFA
Good Samaritan Health System
7.00%, 5/1/20 (Prerefunded 5/1/00+) 230 236
- --------------------------------------------------------------------------
California, Housing Fin. Agency
Home Mortgage
VRDN (Currently 2.35%)
(FSA Insured) * 2,000 2,000
- --------------------------------------------------------------------------
VRDN (Currently 2.40%)
(AMBAC Insured) * 2,000 2,000
- --------------------------------------------------------------------------
3.02%, 4/30/00 * 1,000 1,000
- --------------------------------------------------------------------------
4.70%, 8/1/00 2,940 2,952
- --------------------------------------------------------------------------
Single Family
VRDN (Currently 3.40%) * 2,485 2,485
- --------------------------------------------------------------------------
<PAGE>
California, HFFA
VRDN (Currently 2.35%) (MBIA Insured) 4,000 4,000
- --------------------------------------------------------------------------
Pooled Loan Program
VRDN (Currently 2.25%) (FGIC Insured) 1,500 1,500
- --------------------------------------------------------------------------
Santa Barbara Cottage Hosp.
VRDN (Currently 2.50%) 3,200 3,200
- --------------------------------------------------------------------------
California Pollution Control Fin. Auth., PCR
Pacific Gas and Electric
VRDN (Currently 2.45%) * $ 1,800 $ 1,800
- --------------------------------------------------------------------------
Chula Vista IDA, San Diego Gas and Electric
VRDN (Currently 3.40%) * 1,100 1,100
- --------------------------------------------------------------------------
East Bay Municipal Utility Dist.,
Waste Water Systems
TECP, 2.85%, 4/12/00 1,000 1,000
- --------------------------------------------------------------------------
Elsinore Valley Municipal Water, COP
VRDN (Currently 2.40%) (FGIC Insured) 1,200 1,200
- --------------------------------------------------------------------------
Fresno County, GO, TRAN, 4.00%, 6/30/00 1,000 1,002
- --------------------------------------------------------------------------
Golden Empire Schools Fin. Auth., Kern High
School Dist.
VRDN(Currently 2.40%) 4,000 4,000
- --------------------------------------------------------------------------
Irvine Public Fac. and Infrastructure Auth.
VRDN (Currently 2.40%) 3,015 3,015
- --------------------------------------------------------------------------
Long Beach Harbor
VRDN (Currently 3.16%) (FGIC Insured) 2,000 2,000
- --------------------------------------------------------------------------
Los Angeles, GO
VRDN (Currently 3.11%) (FGIC Insured) 1,250 1,250
- --------------------------------------------------------------------------
Los Angeles, Wastewater
7.15%, 6/1/20 (Prerefunded 6/1/00+) 100 103
- --------------------------------------------------------------------------
Los Angeles County, GO
VRDN (Currently 2.45%)
(AMBAC Insured) 2,000 2,000
- --------------------------------------------------------------------------
Los Angeles County, COP
Correctional Facilities Project
6.50%, 9/1/13 (MBIA Insured)
(Prerefunded 9/1/00+) 215 222
- --------------------------------------------------------------------------
<PAGE>
Los Angeles Harbor Dept., 4.875%, 11/1/00 395 398
- --------------------------------------------------------------------------
Los Angeles Water and Power, TECP
2.25%, 3/9/00 1,000 1,000
- --------------------------------------------------------------------------
2.25%, 3/10/00 1,000 1,000
- --------------------------------------------------------------------------
2.90%, 3/10/00 1,000 1,000
- --------------------------------------------------------------------------
Metropolitan Water Dist. of Southern California
VRDN (Currently 2.30%) 1,500 1,500
- --------------------------------------------------------------------------
VRDN (Currently 2.40%)
(AMBAC Insured) 1,000 1,000
- --------------------------------------------------------------------------
3.60%, 3/15/00 1,000 1,000
- --------------------------------------------------------------------------
3.65%, 6/1/00 2,000 2,000
- --------------------------------------------------------------------------
Metropolitan Water Dist. of Southern California
4.00%, 7/1/00 $ 225 $ 225
- --------------------------------------------------------------------------
6.25%, 7/1/00 200 202
- --------------------------------------------------------------------------
Newport Beach, Hoag Memorial Hosp.
VRDN (Currently 2.35%) 4,000 4,000
- --------------------------------------------------------------------------
Northern California Transmission Agency
7.00%, 5/1/10 (MBIA Insured)
(Prerefunded 5/1/00+) 235 240
- --------------------------------------------------------------------------
7.00%, 5/1/24 (Prerefunded 5/1/00+)
(MBIAInsured) 100 102
- --------------------------------------------------------------------------
Oakland, COP
VRDN (Currently 2.40%) 4,730 4,730
- --------------------------------------------------------------------------
Port of Oakland, Air/Sea
TECP, 2.85%, 4/10/00 * 1,000 1,000
- --------------------------------------------------------------------------
Sacramento Municipal Utility Dist.
TECP
2.25%, 3/8/00 700 700
- --------------------------------------------------------------------------
2.60%, 4/13/00 2,550 2,550
- --------------------------------------------------------------------------
2.75%. 3/8/00 250 250
- --------------------------------------------------------------------------
Electric
7.00%, 7/1/20
(Prerefunded 7/1/00+) (MBIAInsured) 145 149
- --------------------------------------------------------------------------
<PAGE>
San Diego Housing Auth.
VRDN (Currently 2.35%)
(FHLMCGuaranteed) 4,000 4,000
- --------------------------------------------------------------------------
San Francisco Bay Area Trust Fin. Auth.
TECP, 2.80%, 4/11/00 3,000 3,000
- --------------------------------------------------------------------------
San Francisco Bay Transport Tax
VRDN (Currently 3.11%) (FGIC Insured) 1,000 1,000
- --------------------------------------------------------------------------
San Jose/Santa Clara Water Fin. Auth.
VRDN (Currently 2.45%) (FGIC Insured) 1,000 1,000
- --------------------------------------------------------------------------
Santa Clara County, GO
VRDN (Currently 2.45%) 3,000 3,000
- --------------------------------------------------------------------------
Santa Clara Electric
VRDN (Currently 3.30%)
(AMBAC Insured) 970 970
- --------------------------------------------------------------------------
Santa Clara/El Camino Hosp. Dist.
Valley Medical Center
VRDN (Currently 2.30%) 490 490
- --------------------------------------------------------------------------
Southern California Public Power Auth.
5.50%, 7/1/20 (Prerefunded 7/1/00+) $ 500 $ 503
- --------------------------------------------------------------------------
7.00%, 7/1/09 (Prerefunded 7/1/00+) 170 175
- --------------------------------------------------------------------------
Southern Transmission
VRDN (Currently 2.45%)
(AMBAC Insured) 2,000 2,000
- --------------------------------------------------------------------------
4.50%, 7/1/00 (MBIAInsured) 1,000 1,004
- --------------------------------------------------------------------------
Univ. of California, 6.10%, 9/1/00(MBIAInsured) 2,300 2,329
- --------------------------------------------------------------------------
Vallecitos Water Dist.,Twin Oaks Reservoir,COP
VRDN (Currently 2.40%) 3,500 3,500
- --------------------------------------------------------------------------
West Basin Municipal Water Dist., COP
VRDN (Currently 2.40%) 4,100 4,100
- --------------------------------------------------------------------------
VRDN (Currently 2.45%) 1,000 1,000
- --------------------------------------------------------------------------
Total California (Cost $99,612) 99,612
- --------------------------------------------------------------------------
<PAGE>
PUERTO=RICO==6.6%=========================================================
Puerto Rico Commonwealth
7.30%, 7/1/20 (MBIA Insured)
(Prerefunded 7/1/00+) 140 144
- --------------------------------------------------------------------------
7.70%, 7/1/20 (Prerefunded 7/1/00+) 5,700 5,891
- --------------------------------------------------------------------------
Puerto Rico Commonwealth, GO
7.625%, 7/1/10 (Prerefunded 7/1/00+) 575 595
- --------------------------------------------------------------------------
Puerto Rico Highway and Transportation Auth.
7.60%, 7/1/20 (Prerefunded 7/1/02+) 100 103
- --------------------------------------------------------------------------
7.75%, 7/1/16 (Prerefunded 7/1/00+) 250 258
- --------------------------------------------------------------------------
Puerto Rico Telephone Auth.
4.80%, 1/1/01 (Escrowed to Maturity) 140 141
- --------------------------------------------------------------------------
Total Puerto Rico (Cost $7,132) 7,132
- --------------------------------------------------------------------------
98.6% of Net Assets (Cost $106,744) $ 106,744
Other Assets Less Liabilities 1,475
NET ASSETS $ 108,219
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 4
Accumulated net realized gain/loss -
net of distributions (74)
Paid-in-capital applicable to 108,293,256
no par value shares of beneficial
interest outstanding; unlimited number of
shares authorized 108,289
NET ASSETS $ 108,219
NET ASSET VALUE PER SHARE $ 1.00
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
COP Certificates of Participation
EFA Educational Facility Authority
FGIC Financial Guaranty Insurance Company
FHLMC Federal Home Loan Mortgage Corp.
FSA Financial Security Assurance Corp.
GO General Obligation
HFA Health Facility Authority
HFFA Health Facility Financing Authority
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
TECP Tax-Exempt Commercial Paper
TRAN Tax Revenue Anticipation Note
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Bond Fund
- ------------------------------------------- February 29, 2000
STATEMENT OF NET ASSETS
- -----------------------
Par Value
In thousands
CALIFORNIA 97.2%
Alameda County, Public Fac., COP
6.00%, 9/1/21 (MBIA Insured) $ 1,740 $ 1,753
- --------------------------------------------------------------------------
Anaheim Public Fin. Auth., Public Improvements
5.00%, 9/1/27 (FSA Insured) 2,435 2,094
- --------------------------------------------------------------------------
Antioch Public Fin. Auth., 5.85%, 9/2/15 2,485 2,260
- --------------------------------------------------------------------------
Brea Public Fin. Auth., Tax Allocation
6.75%, 8/1/22 (MBIA Insured) 1,435 1,501
- --------------------------------------------------------------------------
California, GO
5.00%, 2/1/25 (MBIA Insured) 1,000 866
- --------------------------------------------------------------------------
5.00%, 8/1/29 (MBIA Insured) 2,000 1,708
- --------------------------------------------------------------------------
5.25%, 10/1/20 1,700 1,565
- --------------------------------------------------------------------------
5.375%, 6/1/26 (FGIC Insured) 1,500 1,382
- --------------------------------------------------------------------------
5.40%, 12/1/16 (FSA Insured) * 1,000 962
- --------------------------------------------------------------------------
5.45%, 12/1/25 3,000 2,752
- --------------------------------------------------------------------------
6.40%, 2/1/20 * 2,200 2,202
- --------------------------------------------------------------------------
California Dept. of Water Resources
Central Valley
7.00%, 12/1/11 1,730 2,005
- --------------------------------------------------------------------------
7.00%, 12/1/12 1,000 1,165
- --------------------------------------------------------------------------
California EFA
Loyola Marymount
Zero Coupon, 10/1/13
(MBIA Insured) 4,755 2,137
- --------------------------------------------------------------------------
Pooled College and Univ.
5.60%, 12/1/14 1,000 989
- --------------------------------------------------------------------------
5.60%, 12/1/20 1,000 945
- --------------------------------------------------------------------------
St. Mary's College of California
7.50%, 10/1/20
(Prerefunded 10/1/00+) 2,000 2,081
- --------------------------------------------------------------------------
Stanford Univ., 5.25%, 12/1/26 2,000 1,809
- --------------------------------------------------------------------------
Univ. of Southern California
5.50%, 10/1/27 1,250 1,170
- --------------------------------------------------------------------------
<PAGE>
California HFFA
Cedars Sinai Medical Center
6.125%, 12/1/19 2,000 1,945
- --------------------------------------------------------------------------
Pomona Valley Hosp.
5.75%, 7/1/15 (MBIA Insured) 1,800 1,815
- --------------------------------------------------------------------------
California Housing Fin. Agency
6.15%, 8/1/16 * $ 1,000 $ 1,003
- --------------------------------------------------------------------------
6.70%, 8/1/15 1,100 1,145
- --------------------------------------------------------------------------
6.70%, 8/1/25 * 635 645
- --------------------------------------------------------------------------
6.85%, 8/1/17 3,015 3,101
- --------------------------------------------------------------------------
7.25%, 8/1/10 185 188
- --------------------------------------------------------------------------
7.25%, 8/1/17 905 929
- --------------------------------------------------------------------------
Home Mortgage
VRDN (Currently 2.40%)
(FSA Insured) * 2,000 2,000
- --------------------------------------------------------------------------
VRDN (Currently 3.75%)
(AMBAC Insured) * 2,000 2,000
- --------------------------------------------------------------------------
5.85%, 8/1/16 (MBIA Insured) 1,970 1,973
- --------------------------------------------------------------------------
California Pollution Control Fin. Auth., PCR
Laidlaw Enviromental, 6.70%, 7/1/07 * 1,000 985
- --------------------------------------------------------------------------
Pacific Gas and Electric
5.85%, 12/1/23 (MBIA Insured) * 1,000 973
- --------------------------------------------------------------------------
Shell Oil, VRDN (Currently 3.10%) * 1,600 1,600
- --------------------------------------------------------------------------
USA Waste Services, 5.00%, 6/1/18 2,500 2,209
- --------------------------------------------------------------------------
California Public Works Board
Dept. of Corrections
6.875%, 11/1/14
(Prerefunded 11/1/04+) 1,000 1,110
- --------------------------------------------------------------------------
Univ. of California
5.50%, 6/1/14 2,000 2,021
- --------------------------------------------------------------------------
6.40%, 12/1/16 (AMBAC Insured)
(Prerefunded 12/1/02+) 1,000 1,068
- --------------------------------------------------------------------------
<PAGE>
California Statewide CDA
Sutter Health, COP
5.50%, 8/15/23 (MBIA Insured) 2,000 1,875
- --------------------------------------------------------------------------
The Internext Group
5.375%, 4/1/17 3,400 2,800
- --------------------------------------------------------------------------
Carmichael Water District, Water & Sewer, COP
5.125%, 9/1/29 (MBIA Insured) 2,000 1,737
- --------------------------------------------------------------------------
Castaic Lake Water Agency
Water System Improvement
5.125%, 8/1/30 (AMBAC Insured) 2,000 1,736
- --------------------------------------------------------------------------
7.00%, 8/1/12 (MBIA Insured) 1,000 1,146
- --------------------------------------------------------------------------
7.00%, 8/1/13 (MBIA Insured) 1,700 1,950
- --------------------------------------------------------------------------
Castaic Union School Dist., GO
Zero Coupon, 5/1/18 (FGIC Insured) $ 5,175 $ 1,752
- --------------------------------------------------------------------------
Central Coast Water Auth., State Water
Project Regional Fac.
6.60%, 10/1/22 (AMBAC Insured)
(Prerefunded 10/1/02+) 1,000 1,070
- --------------------------------------------------------------------------
Chula Vista, Sub-Gateway Town Center
7.50%, 1/1/32 * 4,500 4,075
- --------------------------------------------------------------------------
Chula Vista IDA, San Diego Gas and Electric
VRDN (Currently 3.40%) * 100 100
- --------------------------------------------------------------------------
Contra Costa County, Merrithew Memorial Hosp., COP
5.375%, 11/1/17 (MBIA Insured) 2,185 2,081
- --------------------------------------------------------------------------
Corona Redev. Agency, Tax Allocation
6.25%, 9/1/13 (FGIC Insured) 1,000 1,044
- --------------------------------------------------------------------------
Dry Creek Joint Elementary School Dist., GO
Zero Coupon, 8/1/13 (FSA Insured) 1,300 614
- --------------------------------------------------------------------------
Zero Coupon, 8/1/14 (FSA Insured) 1,340 591
- --------------------------------------------------------------------------
East Bay Municipal Utility Dist., Water Systems
6.00%, 6/1/12 (FSA Insured) 2,000 2,040
- --------------------------------------------------------------------------
East Palo Alto Redev. Agency, Univ. Circle-Gateway
6.625%, 10/1/29 1,500 1,467
- --------------------------------------------------------------------------
Emeryville Public Fin. Auth., PFA
6.20%, 9/1/25 510 501
- --------------------------------------------------------------------------
<PAGE>
Escondido, Multi-Family Housing
Terrace Gardens Apartments
5.40%, 1/1/27 (FNMAGuaranteed) 1,000 1,002
- --------------------------------------------------------------------------
Fontana Redev. Agency, Jurupa Hills, 5.50%, 10/1/27 3,400 2,834
- --------------------------------------------------------------------------
Foothill / Eastern Transportation Corridor Agency
Zero Coupon, 1/15/17
(MBIA Insured) 2,500 895
- --------------------------------------------------------------------------
California Toll Road
Zero Coupon, 1/1/07
(Escrowed to Maturity) 1,000 803
- --------------------------------------------------------------------------
Zero Coupon, 1/1/17
(Escrowed to Maturity) 4,000 1,488
- --------------------------------------------------------------------------
Zero Coupon, 1/1/25
(Escrowed to Maturity) 850 188
- --------------------------------------------------------------------------
Zero Coupon, 1/1/27
(Escrowed to Maturity) 1,910 375
- --------------------------------------------------------------------------
Gateway Refinancing Auth., 5.50%, 9/1/19 $ 2,000 $ 1,693
- --------------------------------------------------------------------------
Inglewood Redev. Agency, Century Redev.
6.125%, 7/1/23 2,800 2,613
- --------------------------------------------------------------------------
Inland Empire Solid Waste Fin. Auth.
Landfill Improvement Project
6.25%, 8/1/11 (FSA Insured)
(Escrowed to Maturity) * 1,000 1,076
- --------------------------------------------------------------------------
Intermodal Container Transfer Fac.
Intermodal Container
5.75%, 11/1/14 (AMBAC Insured) 1,500 1,560
- --------------------------------------------------------------------------
Jefferson Union High School Dist., GO
6.45%, 8/1/25 (MBIA Insured) 1,250 1,354
- --------------------------------------------------------------------------
6.45%, 8/1/29 (MBIA Insured) 1,000 1,084
- --------------------------------------------------------------------------
Kern County Union High School Dist., GO
7.00%, 8/1/10 (MBIA Insured)
(Escrowed to Maturity) 1,000 1,147
- --------------------------------------------------------------------------
Long Beach Harbor, 6.00%, 5/15/17 (FGIC Insured) * 1,000 1,027
- --------------------------------------------------------------------------
Los Angeles City, Dept. of Water and Power
6.40%, 5/15/28 2,000 2,048
- --------------------------------------------------------------------------
<PAGE>
Los Angeles County, GO, COP, Marina del Rey
6.50%, 7/1/08 1,000 1,041
- --------------------------------------------------------------------------
Los Angeles County Metropolitan
Transportation Auth.
6.00%, 7/1/26 (MBIA Insured)
(Prerefunded 7/1/06+) 2,000 2,148
- --------------------------------------------------------------------------
Los Angeles County Public Works Fin. Auth.
Multiple Capital Fac.
5.125%, 6/1/17 (AMBAC Insured) 2,000 1,852
- --------------------------------------------------------------------------
Rowland Heights
5.50%, 10/1/18 (FSA Insured) 1,500 1,457
- --------------------------------------------------------------------------
Los Angeles Harbor
6.50%, 8/1/25 (Prerefunded 8/1/02+) 1,000 1,064
- --------------------------------------------------------------------------
6.625%, 8/1/19 * 2,500 2,599
- --------------------------------------------------------------------------
7.60%, 10/1/18
(Escrowed to Maturity) 3,045 3,652
- --------------------------------------------------------------------------
Los Angeles Municipal Improvement, Central Library
6.35%, 6/1/20 1,500 1,518
- --------------------------------------------------------------------------
Midpeninsula Regional Open Space Auth.
Capital Appreciation
Zero Coupon, 8/1/18
(AMBAC Insured) $ 3,500 $ 1,095
- --------------------------------------------------------------------------
Midpeninsula Regional Open Space Dist. Fin. Auth.
5.90%, 9/1/14 (AMBAC Insured) 1,250 1,279
- --------------------------------------------------------------------------
Modesto Irrigation Dist. Fin. Auth., Geysers
6.00%, 10/1/15 (MBIA Insured) 1,500 1,551
- --------------------------------------------------------------------------
Mojave Water Agency, Morongo Basin
5.75%, 9/1/15 (FGIC Insured) 2,000 2,021
- --------------------------------------------------------------------------
Mt. Diablo Hosp. Dist.
8.00%, 12/1/11 (AMBAC Insured)
(Prerefunded 12/1/00+) 1,250 1,312
- --------------------------------------------------------------------------
Newport Beach, Hoag Memorial Hosp.
VRDN (Currently 3.25%) 300 300
- --------------------------------------------------------------------------
Orange County, Recovery
6.00%, 6/1/10 (MBIA Insured) 3,120 3,337
- --------------------------------------------------------------------------
COP
6.00%, 7/1/26 (MBIA Insured) 1,000 1,002
- --------------------------------------------------------------------------
8.285%, 7/1/19 (MBIA Insured) 6,000 6,050
- --------------------------------------------------------------------------
<PAGE>
Orange County Transportation Auth., Sales Tax
6.00%, 2/15/09 (AMBAC Insured) 750 802
- --------------------------------------------------------------------------
Orchard School Dist.
6.50%, 8/1/19 (FGIC Insured)
(Prerefunded 8/1/05+) 1,000 1,101
- --------------------------------------------------------------------------
Palmdale Civic Auth.
6.60%, 9/1/34 (Prerefunded 9/1/04+) 2,955 3,234
- --------------------------------------------------------------------------
Pasadena Parking Fac., GO
6.25%, 1/1/18 3,000 3,200
- --------------------------------------------------------------------------
Placentia Public Fin. Auth., Special Tax
6.60%, 9/1/15 1,000 1,003
- --------------------------------------------------------------------------
Placer County Water Agency,
Capital Improvement Project
5.50%, 7/1/29 (AMBAC Insured) 2,000 1,868
- --------------------------------------------------------------------------
Pomona Unified School Dist., GO
6.15%, 8/1/15 (MBIA Insured) 1,000 1,063
- --------------------------------------------------------------------------
Poway Community Fac. Dist., 6.75%, 8/15/15 800 808
- --------------------------------------------------------------------------
Riverside County, Desert Justice Fac., COP
6.00%, 12/1/12 (MBIA Insured)
(Prerefunded 12/1/04+) 1,000 1,064
- --------------------------------------------------------------------------
Sacramento City Fin. Auth.
5.00%, 11/1/14 $ 2,000 $ 1,870
- --------------------------------------------------------------------------
5.40%, 11/1/20 6,000 5,656
- --------------------------------------------------------------------------
Sacramento County Public Fac.,
Coroner Crime Lab., COP
6.375%, 10/1/14 (AMBAC Insured) 1,000 1,074
- --------------------------------------------------------------------------
Saddleback Valley Unified School Dist.
Special Tax
Zero Coupon, 9/1/19 (FSA Insured) 2,370 734
- --------------------------------------------------------------------------
6.00%, 9/1/15 (FSA Insured) 1,375 1,448
- --------------------------------------------------------------------------
San Diego, IDR, San Diego Gas and Electric
6.40%, 9/1/18 (MBIA Insured) 1,175 1,231
- --------------------------------------------------------------------------
San Francisco Bay Area Rapid Transit
5.50%, 7/1/15 (FGIC Insured) 1,800 1,783
- --------------------------------------------------------------------------
<PAGE>
San Francisco City and County
Int'l. Airport
5.80%, 5/1/21 (FGIC Insured) * 1,000 973
- --------------------------------------------------------------------------
6.30%, 5/1/25 (FGIC Insured) * 1,000 1,013
- --------------------------------------------------------------------------
6.50%, 5/1/18 (AMBAC Insured) * 4,000 4,164
- --------------------------------------------------------------------------
San Joaquin Hills Transportation
Corridor Agency, Toll Road
Zero Coupon, 1/15/14
(MBIA Insured) 6,500 2,952
- --------------------------------------------------------------------------
San Jose Multifamily Housing
Helzer Courts Apartments
6.40%, 12/1/41 * 1,000 882
- --------------------------------------------------------------------------
Santa Ana Housing Auth., Villa Del Sol Apartments
5.65%, 11/1/21 (FNMAGuaranteed) * 1,000 1,012
- --------------------------------------------------------------------------
Santa Clara, Electric
6.25%, 7/1/19 (MBIA Insured)
(Prerefunded 7/1/01+) 2,000 2,091
- --------------------------------------------------------------------------
Santa Clara County, GO, VRDN (Currently 2.45%) 2,000 2,000
- --------------------------------------------------------------------------
Santa Clara County Fin. Auth., VMC Fac.
7.75%, 11/15/11 (AMBAC Insured) 1,000 1,217
- --------------------------------------------------------------------------
Santa Clara Redev. Agency, Bayshore North Project
5.375%, 6/1/16 (AMBAC Insured) 2,000 1,915
- --------------------------------------------------------------------------
7.00%, 7/1/10 (AMBAC Insured) 3,000 3,360
- --------------------------------------------------------------------------
Santa Cruz County Housing Auth.,
Northgate Apartments
5.35%, 7/20/22 (GNMA Guaranteed) * 1,000 882
- --------------------------------------------------------------------------
Santa Margarita/Dana Point Auth.
7.25%, 8/1/10 (MBIA Insured) $ 1,000 $ 1,168
- --------------------------------------------------------------------------
South Orange County, Public Fin. Auth.
7.00%, 9/1/07 (MBIA Insured) 2,000 2,258
- --------------------------------------------------------------------------
Southern California Public Power Auth.
6.75%, 7/1/10 2,100 2,333
- --------------------------------------------------------------------------
6.75%, 7/1/12 1,700 1,908
- --------------------------------------------------------------------------
Torrance, Little Co. of Mary Hosp.
6.875%, 7/1/15
(Escrowed to Maturity) 1,205 1,286
- --------------------------------------------------------------------------
<PAGE>
Tri-City Hosp. Dist.
7.50%, 2/1/17 (MBIA Insured)
(Prerefunded 2/1/02+) 2,000 2,148
- --------------------------------------------------------------------------
Tulare County, Capital Improvement, COP
6.00%, 2/15/16 (MBIA Insured) 1,000 1,078
- --------------------------------------------------------------------------
Union Elementary School Dist, GO
Zero Coupon, 9/1/14 (FGIC Insured) 3,665 1,601
- --------------------------------------------------------------------------
Univ. of California, Multi Purpose Project
5.375%, 9/1/25 (FGIC Insured) 1,635 1,510
- --------------------------------------------------------------------------
Walnut Valley Unified School Dist., GO
7.20%, 2/1/16 (MBIA Insured) 1,000 1,148
- --------------------------------------------------------------------------
Total California (Cost $206,128) 205,938
- --------------------------------------------------------------------------
PUERTO=RICO==1.5%=========================================================
Puerto Rico Electric Power Auth.
7.00%, 7/1/21
(Prerefunded 7/1/01+) 1,000 1,054
- --------------------------------------------------------------------------
Puerto Rico Municipal Fin. Agency, GO
5.50%, 8/1/02 2,195 2,230
- --------------------------------------------------------------------------
Total Puerto Rico (Cost $3,245) 3,284
- --------------------------------------------------------------------------
U.=S.=VIRGIN=ISLANDS==0.5%================================================
Virgin Islands Public Fin. Auth., GO
Gross Receipts Taxes
6.50%, 10/1/24 1,000 989
- --------------------------------------------------------------------------
Total U. S. Virgin Islands (Cost $1,000) 989
- --------------------------------------------------------------------------
=Total=Investments=in=Securities==========================================
99.2% of Net Assets (Cost $210,373) $210,211
Other Assets Less Liabilities 1,687
NET ASSETS $211,898
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 15
Accumulated net realized gain/loss -
net of distributions (2,104)
Net unrealized gain (loss) (162)
Paid-in-capital applicable to 20,958,462 no
par value shares of beneficial
interest outstanding; unlimited
number of shares authorized 214,149
- --------------------------------------------------------------------------
NET ASSETS $211,898
NET ASSET VALUE PER SHARE $ 10.11
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
CDA Community Development Administration
COP Certificates of Participation
EFA Educational Facility Authority
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Corp.
GNMA Government National Mortgage Association
GO General Obligation
HFFA Health Facility Financing Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
PFA Public Facility Authority
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Funds
- ---------------------------------------
STATEMENT OF OPERATIONS
- ----------------------- In thousands
Money Fund Bond Fund
Year Year
Ended Ended
2/29/00 2/29/00
Investment Income (Loss)
Interest income $ 3,059 $ 12,306
- -----------------------------------------------------------------------------
Expenses
Investment management 344 932
Custody and accounting 94 118
Shareholder servicing 85 151
Legal and audit 13 14
Prospectus and shareholder reports 8 20
Trustees 6 6
Registration 1 1
Miscellaneous 3 7
- -----------------------------------------------------------------------------
Total expenses 554 1,249
Expenses paid indirectly - (1)
- -----------------------------------------------------------------------------
Net expenses 554 1,248
- -----------------------------------------------------------------------------
Net investment income (loss) 2,505 11,058
- -----------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 8 (1,988)
Futures - 15
- -----------------------------------------------------------------------------
Net realized gain (loss) 8 (1,973)
Change in net unrealized gain or loss on securities - (16,110)
- -----------------------------------------------------------------------------
Net realized and unrealized gain (loss) 8 (18,083)
- -----------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,513 $ (7,025)
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Funds
- ---------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------- In thousands
Money Fund Bond Fund
Year Year
Ended Ended
2/29/00 2/28/99 2/29/00 2/28/99
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 2,505 $ 2,620 $ 11,058 $ 10,007
Net realized gain (loss) 8 10 (1,973) 779
Change in net unrealized
gain or loss - - (16,110) 1,387
- -------------------------------------------------------------------------------
Increase (decrease) in
net assets from operations 2,513 2,630 (7,025) 12,173
- -------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (2,505) (2,620) (11,058) (10,007)
Net realized gain - - (209) (578)
- -------------------------------------------------------------------------------
Decrease in net assets
from distributions (2,505) (2,620) (11,267) (10,585)
- -------------------------------------------------------------------------------
Capital share transactions *
Shares sold 98,632 88,664 53,047 58,571
Distributions reinvested 2,350 2,456 7,557 7,355
Shares redeemed (95,117) (81,190) (56,415) (36,613)
- -------------------------------------------------------------------------------
Increase (decrease) in
net assets from capital
share transactions 5,865 9,930 4,189 29,313
- -------------------------------------------------------------------------------
Net Assets
Increase (decrease)
during period 5,873 9,940 (14,103) 30,901
Beginning of period 102,346 92,406 226,001 195,100
- -------------------------------------------------------------------------------
End of period $ 108,219 $ 102,346 $ 211,898 $ 226,001
*Share information
Shares sold 98,632 88,664 5,040 5,359
Distributions reinvested 2,350 2,456 724 673
Shares redeemed (95,117) (81,190) (5,418) (3,359)
- -------------------------------------------------------------------------------
Increase (decrease)
in shares outstanding 5,865 9,930 346 2,673
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Funds
- --------------------------------------- February 29, 2000
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
T. Rowe Price California Tax-Free Income Trust (the trust) is registered
under the Investment Company Act of 1940. The California Tax-Free Money Fund
(the Money Fund) and the California Tax-Free Bond Fund (the Bond Fund),
diversified, open-end management investment companies, are two of the portfolios
established by the trust and commenced operations on September 15, 1986.
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. Except for securities held by the Money Fund, 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. Securities held by the
Money Fund are valued at amortized cost.
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 that
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 each fund on the ex-divid end 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 each fund's
custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
- --------------------------------
Purchases and sales of portfolio securities for the Bond Fund, other than
short-term securities, aggregated $89,506,000 and $85,606,000 respectively, for
the year ended February 29, 2000.
<PAGE>
NOTE 3 - FEDERAL INCOME TAXES
- -----------------------------
No provision for federal income taxes is required since each fund intends
to continue to qualify as a regulated investment company and distribute all of
its income. The Money Fund utilized capital loss carryforwards of $8,000 in
fiscal 2000. As of February 29, 2000, the Money Fund had capital loss
carryforwards for federal income tax purposes of $74,000, all of which expires
in 2003. As of February 29, 2000, the Bond Fund had capital loss carryforwards
of $1,330,000, all of which expires in 2008. Each 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 to the Bond Fund 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 investment income $ 8,000
Undistributed net realized gain (20,000)
Paid-in-capital 12,000
================================================================================
At February 29, 2000, the costs of investments for the Money and Bond Funds
for federal income tax purposes were substantially the same as for financial
reporting and totaled $106,744,000 and $210,373,000, respectively. For the Money
Fund, amortized cost is equivalent to value; and for the Bond Fund, net
unrealized loss aggregated $162,000 at period-end, of which $5,629,000 was
related to appreciated investments and $5,791,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
The investment management agreement between each fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $28,000 and $70,000 were payable at February 29, 2000 by the Money and
Bond Funds, respectively. The fee is computed daily and paid monthly, and
consists of an individual fund fee equal to 0.10% of average daily net assets
and a group fee. The group fee is based on the combined assets of certain mutual
funds sponsored by the manager or Rowe Price-Fleming International, Inc. (the
group). The group fee rate ranges from 0.48% for the first $1 billion of assets
to 0.295% for assets in excess of $120 billion. At February 29, 2000, and for
the year ended, the effective annual group fee rate was 0.32%. Each fund pays a
pro-rata share of the group fee based on the ratio of its net assets to those of
the group.
<PAGE>
Under the terms of the investment management agreement, the manager is
required to bear any expenses through February 28, 2001, which would cause the
Money Fund's ratio of total expenses to average net assets to exceed 0.55%.
Pursuant to this agreement, $80,000 of management fees were not accrued by the
Money Fund for the year ended February 29, 2000, and $188,000 remain unaccrued
from prior periods. Subject to shareholder approval, the Money Fund may
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
0.55%.
In addition, each fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which each fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of each fund. T. Rowe Price Services, Inc. is each fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the funds. The Money and Bond Funds incurred expenses
pursuant to these related party agreements totaling approximately $139,000 and
$199,000, respectively, for the year ended February 29, 2000, of which $14,000
and $22,000, respectively, were payable at period-end.
================================================================================
T. Rowe Price California Tax-Free Funds
- ---------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
To the Board of Trustees of T. Rowe Price California Tax-Free Income
Trust and Shareholders of California Tax-Free Money Fund and
California Tax-Free Bond Fund
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial high-
lights present fairly, in all material respects, the financial position of
California Tax-Free Money Fund and California Tax-Free Bond Fund (comprising T.
Rowe Price California Tax-Free Income Trust, hereafter referred to as "the
Funds") at February 29, 2000, and the results of each of their operations, the
changes in each of their 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
high-lights (hereafter referred to as "financial statements") are the
responsibility of the Funds' 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 and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
March 17, 2000
================================================================================
<PAGE>
T. Rowe Price California Tax-Free Funds
- ---------------------------------------
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 Bond Fund's distributions to shareholders included:
* $150,000 from short-term capital gains,
* $59,000 from long-term capital gains, subject to the 20% rate
gains category.
The Money and Bond Funds' distributions to shareholders included $2,475,000
and $11,031,000, respectively, which qualified as exempt-interest dividends.
================================================================================
T. Rowe Price Shareholder Services
- ----------------------------------
INVESTMENT SERVICES AND INFORMATION
-----------------------------------
KNOWLEDGEABLE SERVICE REPRESENTATIVES
-------------------------------------
By Phone Shareholder service
representatives are available from 8
a.m. to 10 p.m. ET Monday through Friday
and from 8:30 a.m. to 5 p.m. ET on
weekends. Call 1-800-225-5132 to speak
directly with a representative who will
be able to assist you with your
accounts.
In Person Visit one of our investor
center locations to meet with a
representative who will be able to
assist you with your accounts. You can
also drop off applications or obtain
prospectuses and other literature at
these centers.
AUTOMATED 24-HOUR SERVICES
--------------------------
Tele*Access [Registration Mark] Call
1-800-638-2587 to obtain information
such as account balance, date and amount
of your last transaction, latest
dividend payment, fund prices, and
yields. Additionally, you have the
ability to request prospectuses,
statements, and account and tax forms;
to reorder checks; and to initiate
purchase, redemption, and exchange
orders for identically registered
accounts.
<PAGE>
Internet. T. Rowe Price Web site:
www.troweprice.com All the information
and services available on Tele*Access
are available on our Web site, including
transactions in your fund and brokerage
accounts (with preauthorized access).
ACCOUNT SERVICES
----------------
Checking Write checks for $500 or more
on any money market and most bond fund
accounts (except the High Yield and
Emerging Markets Bond Funds).
Automatic Investing Build your account
over time by investing directly from
your bank account or paycheck with
Automatic Asset Builder. Additionally,
Automatic Exchange enables you to set up
systematic investments from one fund
account into another, such as from a
money fund into a stock fund. A $50
minimum makes it easy to get started.
Automatic Withdrawal If you need money
from your fund account on a regular
basis, you can establish scheduled,
automatic redemptions.
Dividend and Capital Gains Payment
Options Reinvest all or some of your
distributions, or take them in cash. We
give you maximum flexibility and
convenience.
BROKERAGE SERVICES*
-------------------
Investments Available You can trade
stocks, bonds, options, precious metals,
and other securities at a savings over
full-service commission rates.**
To Open an Account Call a shareholder
service representative for more
information.
<PAGE>
INVESTMENT INFORMATION
----------------------
Combined Statement A comprehensive
overview of your T. Rowe Price accounts
is provided. The summary page gives you
earnings by tax category, provides total
portfolio value, and lists your
investments by type. Detail pages
itemize account transactions.
Shareholder Reports Portfolio managers
review the performance of the funds in
plain language and discuss T. Rowe
Price's economic outlook.
T. Rowe Price Report This is a quarterly
newsletter with relevant articles on
market trends, personal financial
planning, and T. Rowe Price's economic
perspective. Performance Update This
quarterly report reviews recent market
develop- ments and provides
comprehensive performance information
for every T. Rowe Price fund. Insights
These are reports on mutual fund tax
issues, investment strategies,
investment fundamentals, and financial
markets.
Detailed Investment Guides Our Asset Mix
Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to
International Investing, Retirees
Financial Guide, and Retirement Planning
Kit (also available on disk or CD-ROM
for PC use) can help you determine and
reach your investment goals.
* 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.
================================================================================
<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
STOCK FUNDS
- -----------
DOMESTIC
- --------
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
<PAGE>
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
<PAGE>
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.
================================================================================
T. Rowe Price Advisory Services and Retirement Resources
- --------------------------------------------------------
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.
<PAGE>
ADVISORY SERVICES
- -----------------
T. Rowe Price Retirement Income
ManagerSM 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 AnalyzerTM 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 AnalyzerTM CD-ROM or diskette, free. To
order, please call 1-800-469-5304.
<PAGE>
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.
================================================================================
T. Rowe Price Insights Reports
- ------------------------------
THE FUNDAMENTALS OF INVESTING
-----------------------------
Whether you are unsure how to get
started or are saving for a specific
goal, such as retirement or college, the
T. Rowe Price Insights series can help
you make informed investment decisions.
These reports, written in plain English
about fundamental investment topics, can
be useful at every stage of your
investment journey. They cover a range
of topics, from the basic, such as
getting started with mutual funds, to
the more advanced, such as managing risk
through diversification or buying
individual securities through a broker.
To request one or more Insights, call us
at 1-800-638-5660.
<PAGE>
INSIGHTS REPORTS
----------------
GENERAL INFORMATION
The ABCs of Giving
Back to Basics: The ABCs of Investing
The Challenge of Preparing for Retirement
Financial Planning After Retirement
Getting Started: Investing With Mutual Funds
The Roth IRA: A Review
Tax Information for Mutual Fund Investors
INVESTMENT STRATEGIES
Conservative Stock Investing
Dollar Cost Averaging
Equity Index Investing
Growth Stock Investing
Investing for Higher Yield
Managing Risk Through Diversification
The Power of Compounding
Value Investing
TYPES OF SECURITIES
The Basics of International Stock Investing
The Basics of Tax-Free Investing
The Fundamentals of Fixed Income Investing
Global Bond Investing
Investing in Common Stocks
Investing in Emerging Growth Stocks
Investing in Financial Services Stocks
Investing in Health Care Stocks
Investing in High-Yield Municipal Bonds
Investing in Money Market Securities
Investing in Mortgage-Backed Securities
Investing in Natural Resource Stocks
Investing in Science and Technology Stocks
Investing in Small-Company Stocks
Understanding Derivatives
Understanding High-Yield "Junk" Bonds
BROKERAGE INSIGHTS
Combining Individual Securities With Mutual Funds
Getting Started: An Introduction to Individual Securities
What You Should Know About Bonds
What You Should Know About Margin and Short-Selling
What You Should Know About Options
What You Should Know About Stocks
T. Rowe Price Insights are also available for reading or downloading on the
Internet at www.troweprice.com.
================================================================================
<PAGE>
T. Rowe Price Brokerage
- -----------------------
BROKERAGE SERVICES
------------------
T. Rowe Price Brokerage is a division of T. Rowe Price
Investment Services, Inc., Member NASD/SIPC.
T. Rowe Price Brokerage provides high-quality services and
financial tools you can use to manage your investments effectively and
conveniently. We also offer significant commission savings over
full-service brokerages on a wide range of individual securities and
other investments.*
Internet and Automated Services You can enter
trades, access quotes, and review account information 24 hours a
day, seven days a week, by telephone or computer. We offer a
flat-rate commission of $24.95 on stock trades placed through
our Internet-Trader service.**
Research Services To help you make informed
investment decisions, we offer access to several sources of
data. You can research your investments using our Online
Research & News Service, provided by Thomson Investors Network,
which includes company profiles, intra-day and 12-month
interactive charting, and analysts' ratings and earnings
estimates. Using our Research On Call service, you can request
reports from Standard & Poor's, Vicker's, Lipper, and other
well-known research providers to be delivered by fax or by mail.
Dividend Reinvestment Service This service helps
keep more of your money working for you. Cash dividends (of $10
or greater) from your eligible securities will be invested
automatically in additional shares of the same company, free of
charge. Most stocks listed on national securities exchanges or
Nasdaq are eligible for this service.
* Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may
vary depending on size of order.
** $24.95 per trade for up to 1,000 shares plus an additional
$.02 for each share over 1,000 shares. Visit our Web site
for a complete commission schedule or call for rates on
representative-assisted and other non-Internet trades.
================================================================================
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
<PAGE>
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
T. Rowe Price Investment Services, Inc., Distributor. C05-050 2/29/00
