Fellow Shareholders
The past three months have been difficult for the bond markets, where
developments were dominated by the strength of the domestic economy and the
accompanying credit tightening measures taken by the Federal Reserve. Gross
domestic product (GDP) for the final quarter of 1993 weighed in at a strong
7.0%, followed by a preliminary first quarter 1994 figure of 2.6%. Though the
first quarter pace seemed moderate at face value, it was dampened by severe
weather, the earthquakes in Los Angeles, and the impact of higher tax
rates-events that caused most forecasters to expect higher rates of growth to
resume in the next three months.
A number of factors underpin the market's expectation of continued
economic strength: impressive payroll gains, averaging 245,000 new jobs each
month this year (a pace that would, if continued, suggest full employment by
year-end); personal income gains; steady consumer spending and rising consumer
confidence; and increased productivity and corporate profits.
In response to the sharp acceleration in the economy, the Federal
Reserve hiked interest rates three times in as many months, raising the
federal funds rate by 75 basis points to 3.75% by the end of April. In a
fashion uncharacteristic for the Fed, each tightening move was accompanied by
an announcement, almost as if to prevent any misinterpretation. It seems quite
clear that the Fed has abandoned its accommodative policy and is moving to
slow economic growth and to prevent inflation from accelerating.
As a result, yields soared in the fixed-income markets over the last
quarter. In the taxable sector, the 52-week Treasury bill rate rose 145 basis
points and the 30-year Treasury bond yield was up 108 basis points. Both gave
back in a quarter the price gains they had taken more than a year to achieve.
To illustrate the significance of the move, the record-low yields posted by a
30-year Treasury bond only six months ago can now be earned on a two-year
Treasury security.
Chart #1 - Municipal Bond and Note Yields
Yields in the tax-exempt market moved up similarly, though not quite as
sharply. Very short-term yields (i.e., overnight and 7-day rates) held
firm-actually registering three-month lows in mid-April-before closing the
quarter 85 to 100 basis points higher. Moving out on the yield curve, one-year
municipal notes closed the quarter at 3.35%, an increase of 85 basis points,
while intermediate- and long-term yields averaged 95 to 100 basis points
higher. Money market funds maintained a stable $1.00 share price, but the
substantive rise in yields resulted in lower share prices and negative total
returns for most intermediate- and long-term bond funds, including the Summit
Funds.
Market Strategy
Municipal Money Market Fund
As the Fed began to raise short-term rates, we sought to lower our weighted
average maturity targets in the Money Market Fund. Strong cash flows into the
Fund allowed us to reduce the weighted average maturity from 72 to 38 days.
The Fund benefited from purchases of smaller, odd-lot blocks of securities
which trade at higher yields relative to larger blocks. Additionally, we
modestly increased holdings of higher-yielding securities subject to the
alternative minimum tax (AMT). Consequently, the Fund delivered top quartile
performance relative to its peer group for the quarter.
We expect to maintain a shorter portfolio maturity over the near term
for several reasons. First, we expect that further tightening by the Fed is
imminent, and we want to be in a position to take advantage of higher yields
as they occur. Secondly, good demand and light supply for tax-exempt money
market securities is currently causing a less favorable yield relationship
relative to taxable securities of similar maturity. Finally, expected seasonal
note issuance will increase supply late in the next quarter and should put
upward pressure on yields, providing good buying opportunities and restoring a
more attractive yield relationship for tax-free securities.
Municipal Intermediate Fund
To combat declining prices in the intermediate and long end of the market, the
Summit bond funds adopted defensive strategies. The Intermediate Fund
weathered this rising rate environment with a shortened duration, which helped
it perform among the top quartile of its peer group for the quarter. (See
duration explanation on page 3.) We continue to try to exploit opportunities
for higher yields in this growing Fund by investing in both BBB-rated and AMT
bonds-albeit at the shorter end of the intermediate maturity range to minimize
principal risk. At quarter-end, the portfolio was well diversified, with over
50 holdings in 14 sectors.
Portfolio Characteristics
1/31/94 4/30/94
________ ________
Weighted Average Effective
Duration (Yrs.) 5.09 4.46
Weighted Average
Maturity (Yrs.) 7.48 7.07
_____________________________________________________________________________
Municipal Income Fund
The Income Fund maintained cash reserves in excess of 10% throughout the
quarter and reduced the weighted average maturity from a high of 21.5 years in
February to 17.4 years at quarter-end. At the same time, the Fund's duration
increased during the quarter to 7.66 years as shown below. This anomaly
occurred because, as interest rates increased rapidly, holdings which had
traded to their shorter call dates in a falling interest rate environment
began to trade to their stated maturity dates. Therefore, the Fund's duration
rose because of the rising rate environment-not because of a more aggressive
strategy. As a result of our relatively defensive posture, the Fund achieved
top quartile performance for the quarter.
Portfolio Characteristics
1/31/94 4/30/94
_______ _______
Weighted Average Effective
Duration (Yrs.) 6.75 7.66
Weighted Average
Maturity (Yrs.) 18.73 17.44
_____________________________________________________________________________
Outlook
The fixed-income markets have reacted strongly to the Federal Reserve's moves,
with long-term rates in particular moving much higher than expected. However,
in their typical anticipatory fashion, the bond markets may have already moved
to interest rate levels that largely reflect additional tightening. Tax-exempt
bonds, especially longer maturities, are currently attractive versus
Treasuries and should outperform as municipal new issuance declines. Through
April, the volume of new offerings was down 33% from 1993 levels.
While we think that the municipal market looks attractive relative to other
fixed-income investments and that supply looks manageable, the overall
direction of our market will be determined by the movement of rates in the
taxable market (specifically, the U.S. Treasury sector). For now, we have
moved our Funds back to a more neutral posture after the sharp correction
of the last several months and, over the next quarter, we will take our cue
from the forthcoming economic indicators that typically shape the prospects
for GDP and inflation.
Considering the volatile market of late, we encourage all shareholders to
make sure their current investments are consistent with their personal
financial objectives. If, in the course of your review, you want additional
information, our investor service representatives will be happy to assist you.
We appreciate the opportunity to serve your investment needs.
Respectfully submitted,
William T. Reynolds
Assistant Director,
Fixed-Income Division
May 23, 1994
Duration as a Guide to Interest Rate Risk
Duration is a more accurate measure of interest rate sensitivity than
maturity. Unlike maturity, which merely indicates when the bond repays
principal, "duration" incorporates the cash flows of all interest and
principal payments over the life of the bond to reflect the recovery of the
original investment. Future payments are discounted to reflect their present
value. These payments are then multiplied by the number of years over which
they will be received to produce a value that is expressed in years, i.e., the
duration. Effective duration is an even better measure of a bond's sensitivity
to interest rate changes because it takes into account call features and
sinking fund payments which may shorten a bond's life.
You can multiply the duration by the potential change in interest rates
to estimate the change in principal value. For example, a bond or bond fund
with a duration of five years would rise or fall roughly 5% in price if rates
fell or rose by one percentage point.
Performance Comparison
T. Rowe Price Summit Period Benchmark Period
Municipal Funds Ended 4/30/94 Comparisons Ended 4/30/94
_______________ ___________________
3 Months 6 Months 3 Months 6 Months
Money Fund Donoghue's Money Fund Average*
Municipal Money
Market 0.49% 1.01% Tax-Free Money 0.45% 0.92%
Bond Funds Lipper Bond Fund Averages
Municipal Intermediate
Intermediate -3.76 -0.69 Municipal -4.47 -2.44
Municipal Income -5.93 -3.52 General Municipal -6.57 -4.61
*Stockbroker and General Purpose Funds.
Financial Summary
Net Asset Value Net Assets Dividend Per Share Dividend Yield*
Per Share (Millions) 3 Months Ended 3 Months Ended
______________ ____________ ______________ _______________
1/31/94 4/30/941/31/944/30/94 1/31/944/30/94 1/31/944/30/94
Money Fund
Municipal Money
Market $1.00 $1.00 $8.1 $19.6 $.005 $.005 2.05% 1.99%
Bond Funds
Municipal
Intermediate10.22 9.73 10.4 13.2 0.10 0.11 3.89 4.36
Municipal
Income 10.13 9.41 4.8 5.8 0.12 0.12 4.95 5.10
*Dividends earned and reinvested for the periods indicated are annualized and
divided by the average daily net asset values per share for the same period.
Quality Diversification
Quality Ratings* Weighted Average Quality
_____________________________ ______________________
1 2 3 4 5-10 4/30/94
Money Fund
Municipal Money Market 22% 78% 0% 0% 0% 1.83
Bond Funds
Municipal Intermediate 0 28 34 38 0 3.10
Municipal Income 7 36 16 33 8 2.97
*On a T. Rowe Price scale of 1 to 10, with Grade 1 representing highest
quality.
Portfolio of Investments (Amounts in thousands)
T. Rowe Price Summit Municipal Funds / April 30, 1994 (Unaudited)
Municipal Money Market Fund
Face Amount Value
____________ __________
ALASKA - 0.3%
Anchorage Telephone Utility, (FGIC Insured),
6.00%, 6/1/95 (Pre-refunded 12/1/94!). . . . . . . . $ 50 $ 52
_____________________________________________________________________________
CALIFORNIA - 7.4%
California State, GO, RAN, 3.50%, 6/28/94. . . . . . 500 500
Riverside County, Public Fac., COP,
VRDN (Currently 3.15%) . . . . . . . . . . . . . . 400 400
Sacramento County, GO, TRAN, 3.00%, 7/29/94. . . . . 50 50
San Diego County Transportation Commission,
(FGIC Insured), VRDN (Currently 3.00%) . . . . . . 500 500
_____________________________________________________________________________
COLORADO - 0.3%
El Paso County School Dist., Building Bonds,
GO, 9.70%, 12/15/97 (Pre-refunded
12/15/94!) . . . . . . . . . . . . . . . . . . . . 50 52
_____________________________________________________________________________
FLORIDA - 5.6%
Gulf Breeze, Local Gov't. Loan Program,
(FGIC Insured), VRDN (Currently 3.15%) . . . . . . 335 335
Jacksonville Electric Auth., 7.25%, 10/1/16
(Pre-refunded 10/1/94!). . . . . . . . . . . . . . 50 52
Jacksonville HFA, Baptist Medical Center,
(MBIA Insured), VRDN (Currently 3.10%) . . . . . . . 600 600
Orlando Utilities Commission, Water & Electric,
7.75%, 10/1/94 (Escrowed to Maturity). . . . . . . 100 102
_____________________________________________________________________________
GEORGIA - 4.9%
De Kalb Private Hosp. Auth., Eagleston Children's
Hosp., RAC, VRDN (Currently 3.45%). . . . . . . . . 500 500
Georgia, GO, 6.30%, 9/1/94 . . . . . . . . . . . . . 450 455
_____________________________________________________________________________
HAWAII - 1.3%
Hawaii Airports System, (MBIA Insured), 8.25%,
7/1/04 (Pre-refunded 7/1/94!)* . . . . . . . . . . 50 52
Honolulu City & County, GO, TECP, 3.00%,
7/14/94. . . . . . . . . . . . . . . . . . . . . . 200 200
_____________________________________________________________________________
ILLINOIS - 13.3%
Chicago School Fin. Auth., GO, (MBIA Insured),
9.80%, 6/1/97 (Pre-refunded 6/1/94!) . . . . . . . 60 62
10.50%, 6/1/09 (Pre-refunded 6/1/94!). . . . . . . 100 104
Illinois EFA, Northwestern Univ., VRDN
(Currently 3.25%). . . . . . . . . . . . . . . . . 700 700
T. Rowe Price Summit Municipal Funds / Portfolio of Investments
Municipal Money Market Fund (cont'd)
Face Amount Value
__________ __________
ILLINOIS (cont'd)
Illinois HFA, Children's Memorial Hosp., VRDN
(Currently 3.25%). . . . . . . . . . . . . . . . . $ 700 $ 700
Evangical Hosp., VRDN (Currently 3.10%). . . . . . 100 100
MacNeal Memorial Hosp., 6.35%, 8/1/94
(Escrowed to Maturity) . . . . . . . . . . . . . 25 25
Resurrection Health Care System, VRDN
(Currently 3.20%). . . . . . . . . . . . . . . . 600 600
Southwestern Illinois Dev. Auth., Solid
Waste Disposal, Shell Oil,
VRDN (Currently 3.10%)* . . . . . . . . . . . . 300 300
Western Illinois Univ., 4.10%, 9/1/94
(Escrowed to Maturity) . . . . . . . . . . . . . 10 10
_____________________________________________________________________________
INDIANA - 2.5%
Mount Vernon PCR, General Electric,
TECP, 2.95%, 6/9/94. . . . . . . . . . . . . . . . 500 500
_____________________________________________________________________________
KENTUCKY - 3.6%
Kentucky Housing Corp., 4.30%, 7/1/94. . . . . . . . 100 100
Kentucky Pollution Abatement and Water Resources
Fin. Auth., Toyota Motor Manufacturing,
U.S.A., Inc., VRDN (Currently 3.10%) . . . . . . 600 600
_____________________________________________________________________________
LOUISIANA - 6.1%
Lake Charles Harbor and Terminal Dist. PCR,
CONOCO, VRDN (Currently 3.15%)*. . . . . . . . . . 600 600
Louisiana PFA, Sisters of Charity of the
Incarnate Word, TECP, 3.05%, 6/10/94 . . . . . . . 300 300
Saint Charles Parish PCR, Shell Oil, VRDN
(Currently 3.10%)* . . . . . . . . . . . . . . . . 300 300
_____________________________________________________________________________
MARYLAND - 8.3%
Baltimore County, GO, 7.80%, 5/1/94. . . . . . . . . 25 25
5.40%, 6/1/94. . . . . . . . . . . . . . . . . . . 50 50
Howard County, Consolidated Public Improvement,
GO, BAN, VRDN (Currently 3.10%). . . . . . . . . . 300 300
Maryland, GO, 11.00%, 7/1/94 . . . . . . . . . . . . 10 10
6.20%, 10/15/94. . . . . . . . . . . . . . . . . . 15 15
Maryland HHEFA, Howard County General Hosp.,
10.00%, 7/1/09 (Pre-refunded 7/1/94!). . . . . . . 25 26
North Charles General Hosp, 12.00%, 7/1/07
(Pre-refunded 7/1/94!) . . . . . . . . . . . . . 400 414
Prince George's County, Economic Dev., Cintas
Corp., VRDN (Currently 3.45%)* . . . . . . . . . . 100 100
Solid Waste Management System, 6.00%, 6/30/94
(Escrowed to Maturity) . . . . . . . . . . . . . 200 201
Washington Suburban Sanitary Dist., Administration
Building Construction, GO, 4.50%, 6/1/94 . . . . . 80 80
Water First Series, GO, 6.90%, 6/1/94. . . . . . . 400 401
_____________________________________________________________________________
Face Amount Value
__________ __________
MASSACHUSETTS - 0.1%
Massachusetts, GO, (MBIA Insured),
6.75%, 12/1/94 . . . . . . . . . . . . . . . . . . $ 25 $ 25
_____________________________________________________________________________
MINNESOTA - 2.5%
Rochester Health Care Fac., Mayo Foundation/Mayo
Medical Center, TECP, 2.15 - 2.50%,
5/3 - 5/10/94 . . . . . . . . . . . . . . . . . 500 500
_____________________________________________________________________________
MISSOURI - 6.1%
Missouri HEFA, Sisters of Mercy Health, VRDN
(Currently 3.15%). . . . . . . . . . . . . . . . . 500 500
St. Anthony's Medical Center, VRDN
(Currently 3.20%). . . . . . . . . . . . . . . . 700 700
_____________________________________________________________________________
NEW JERSEY - 2.5%
New Jersey State, GO, TRAN, 3.00%, 6/15/94 . . . . . 200 200
New Jersey Turnpike Auth., (FGIC Insured),
VRDN (Currently 3.15%) . . . . . . . . . . . . . . 300 300
_____________________________________________________________________________
NEW YORK - 4.3%
Metropolitan Transportation Auth., 9.625%,
7/1/04 (Pre-refunded 7/1/94!). . . . . . . . . . . 50 52
11.125%, 7/1/04 (Pre-refunded 7/1/94!) . . . . . . 105 109
11.375%, 7/1/11 (Pre-refunded 7/1/94!) . . . . . . 250 259
New York City, GO, 6.70%, 8/15/94
(Escrowed to Maturity) . . . . . . . . . . . . . . 35 35
New York Housing Fin. Agency, Mental Hygiene,
7.30%, 11/1/94 (Escrowed to Maturity). . . . . . . 25 26
New York State Local Gov't. Assistance Corp.,
VRDN (Currently 3.00%) . . . . . . . . . . . . . . 200 200
Triborough Bridge & Tunnel Auth.,
9.50%, 1/1/05 (Pre-refunded 1/1/95!) . . . . . . . 150 159
_____________________________________________________________________________
NORTH CAROLINA - 1.7%
North Carolina Eastern Municipal Power Agency,
TECP, 2.50%, 5/9/94. . . . . . . . . . . . . . . . 340 340
_____________________________________________________________________________
PUERTO RICO - 0.5%
Puerto Rico Commonwealth, GO, TRAN,
3.00%, 7/29/94 . . . . . . . . . . . . . . . . . . 65 65
Puerto Rico Housing Bank and Fin. Agency,
7.25%, 12/1/06 (Pre-refunded 12/1/94!) . . . . . . 30 32
_____________________________________________________________________________
RHODE ISLAND - 1.0%
Rhode Island, GO, TAN, 3.25%, 6/30/94. . . . . . . . 200 200
_____________________________________________________________________________
TENNESSEE - 6.6%
Clarksville Public Building Auth., Pooled Loan,
(MBIA Insured), VRDN (Currently 3.45%) . . . . . . 700 700
Memphis Airport, GO, VRDN (Currently 3.40%)* . . . . 600 600
_____________________________________________________________________________
T. Rowe Price Summit Municipal Funds / Portfolio of Investments
Municipal Money Market Fund (cont'd)
Face Amount Value
___________ ___________
TEXAS - 11.6%
Coastal Bend Health Fac. Dev., (AMBAC Insured),
4.10%, 1/1/95. . . . . . . . . . . . . . . . . . . $ 570 $ 573
College Station Independent School Dist.,
9.80%, 8/1/98 (Pre-refunded 8/1/94!) . . . . . . . 100 102
Del Valle Independent School Dist.,
10.10%, 8/1/00 (Pre-refunded 8/1/94!). . . . . . . 50 51
Paris Hosp. Auth., St. Joseph's Hosp.,
8.75%, 8/1/94 (Escrowed to Maturity) . . . . . . . 45 46
San Antonio Electric and Gas Systems,
(BIGI Insured), 9.375%, 2/1/09
(Pre-refunded 2/1/95!) . . . . . . . . . . . . . . 25 26
San Antonio Sewer, 5.00%, 12/1/98
(Pre-refunded 12/1/94!). . . . . . . . . . . . . . 10 10
Texas, GO, TRAN, 3.25%, 8/31/94. . . . . . . . . . . 250 250
Texas A & M Univ., Permanent Univ. Fund,
TECP, 2.65%, 5/25/94 . . . . . . . . . . . . . . . 400 400
Texas PFA, GO, TECP, 2.40%, 6/7/94 . . . . . . . . . 300 300
University of Texas Board of Regents,
TECP, 2.00%, 5/4/94. . . . . . . . . . . . . . . . 400 400
Waco Health Fac. Dev. Corp., Hillcrest
Baptist Medical Center, 11.25%, 9/1/14
(Pre-refunded 9/1/94!) . . . . . . . . . . . . . . 115 120
_____________________________________________________________________________
UTAH - 3.6%
Utah Housing Fin. Agency, Single Family Mortgage,
(CGIC Insured), VRDN (Currently 3.40%) . . . . . . 700 700
_____________________________________________________________________________
VIRGINIA - 2.5%
Fairfax County IDA, Fairfax Hosp. System, VRDN
(Currently 3.15%). . . . . . . . . . . . . . . . . 100 100
Inova Health System, TECP, 2.60 - 3.00%,
7/20 - 10/3/94. . . . . . . . . . . . . . . . . 400 399
_____________________________________________________________________________
WYOMING - 2.0%
Lincoln County PCR, Exxon, VRDN
(Currently 2.75%). . . . . . . . . . . . . . . . . 400 400
_____________________________________________________________________________
Total Investments in Securities - 98.6%
(Cost - $19,351) . . . . . . . . . . . . . . . . . $ 19,352
_____________________________________________________________________________
* - Interest subject to alternative minimum tax
! - Used in determining portfolio maturity
AMBAC - American Municipal Bond Assurance Corp.
BAN - Bond Anticipation Note
BIGI - Bond Investors Guaranty Insurance
CGIC - Capital Guaranty Insurance Corporation
COP - Certificates of Participation
EFA - Educational Facility Authority
FGIC - Financial Guaranty Insurance Company
GO - General Obligation
HEFA - Health & Educational Facility Authority
HFA - Health Facility Authority
HHEFA - Health & Higher Educational Facility Auth.
IDA - Industrial Development Authority
MBIA - Municipal Bond Insurance Association
PCR - Pollution Control Revenue
PFA - Public Facility Authority
RAC - Revenue Anticipation Certificate
RAN - Revenue Anticipation Note
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.
Municipal Intermediate Fund
Face Amount Value
___________ ___________
CALIFORNIA - 4.6%
Los Angeles County, Marina Del Ray,
COP, 5.25%, 7/1/96 . . . . . . . . . . . . . . . . $ 600 $ 607
_____________________________________________________________________________
DISTRICT OF COLUMBIA - 4.2%
Metropolitan Washington D.C. Airport Auth.,
(BIGI Insured), 8.10%, 10/1/08*. . . . . . . . . . 400 443
(FGIC Insured), 7.00%, 10/1/18*. . . . . . . . . . 100 106
_____________________________________________________________________________
FLORIDA - 2.3%
Jacksonville HFA, HSI Support Systems, Inc.,
(MBIA Insured), VRDN (Currently 3.10%) . . . . . . 300 300
_____________________________________________________________________________
HAWAII - 0.4%
Honolulu City & County, GO, 6.90%, 2/1/98. . . . . . 50 54
_____________________________________________________________________________
ILLINOIS - 8.4%
Chicago - O'Hare Int'l. Airport, (MBIA Insured),
5.70%, 1/1/03* . . . . . . . . . . . . . . . . . . 120 119
International Terminal, 7.50%, 1/1/05* . . . . . . 160 173
(MBIA Insured), 7.50%, 1/1/05* . . . . . . . . . . 250 275
Illinois HFA, Glen Oak Medical Center,
Hinsdale Health System, 9.50%, 11/15/15. . . . . . 75 86
Holy Cross Hosp., 4.875%, 3/1/96 . . . . . . . . . 350 348
Resurrection Health Care System, VRDN
(Currently 3.20%). . . . . . . . . . . . . . . . 100 100
_____________________________________________________________________________
KENTUCKY - 3.2%
Kentucky State Property & Buildings,
6.40%, 11/1/01 . . . . . . . . . . . . . . . . . . 390 417
_____________________________________________________________________________
LOUISIANA - 1.5%
Louisiana Offshore Terminal Auth., VRDN
(Currently 3.00%). . . . . . . . . . . . . . . . . 200 200
_____________________________________________________________________________
MAINE - 3.3%
Maine Municipal Bond Bank, GO, 6.10%, 11/1/01. . . . 410 430
_____________________________________________________________________________
MARYLAND - 4.3%
Northeast Waste Disposal Auth., Montgomery County
Resource Recovery, 5.70%, 7/1/03*. . . . . . . . . 100 100
Prince George's County, Dimensions Health
Corp., 4.50%, 7/1/01 . . . . . . . . . . . . . . . 500 466
_____________________________________________________________________________
T. Rowe Price Summit Municipal Funds / Portfolio of Investments
Municipal Intermediate Fund (cont'd)
Face Amount Value
___________ ___________
MASSACHUSETTS - 2.0%
Commonwealth of Massachusetts, GO,
4.90%, 8/1/04. . . . . . . . . . . . . . . . . . . $ 125 $ 118
Massachusetts Port Auth., (FGIC Insured),
7.375%, 7/1/10*. . . . . . . . . . . . . . . . . . 135 146
_____________________________________________________________________________
MICHIGAN - 2.5%
Charter County of Wayne, Detroit
Metropolitan Wayne County Airport,
(MBIA Insured), 4.90%, 12/1/05 . . . . . . . . . . 100 92
7.25%, 12/1/10*. . . . . . . . . . . . . . . . . 130 140
Regents of the Univ. of Michigan Hosp., VRDN
(Currently 3.00%). . . . . . . . . . . . . . . . . 100 100
_____________________________________________________________________________
MISSOURI - 3.1%
Missouri HEFA, Bethesda Health Group of
St. Louis, Inc., 5.25%, 8/15/96. . . . . . . . . . 400 406
_____________________________________________________________________________
NEW HAMPSHIRE - 3.7%
New Hampshire Housing Fin. Auth.,
Single Family Mortgage, 5.90%, 1/1/01* . . . . . . 115 115
5.90%, 7/1/01* . . . . . . . . . . . . . . . . . . 115 115
6.00%, 7/1/02* . . . . . . . . . . . . . . . . . . 125 126
6.10%, 1/1/03* . . . . . . . . . . . . . . . . . . 130 130
_____________________________________________________________________________
NEW JERSEY - 4.1%
New Jersey Wastewater Treatment Trust,
6.875%, 6/15/05. . . . . . . . . . . . . . . . . . 500 538
_____________________________________________________________________________
NEW YORK - 10.3%
Dormitory Auth. of the State of New York,
City Univ., 5.60%, 7/1/04. . . . . . . . . . . . . 150 146
State Univ. Ed. Fac., 7.40%, 5/15/01 . . . . . . . 150 164
Metropolitan Transportation Auth.,
5.375%, 7/1/02 . . . . . . . . . . . . . . . . . . 95 93
New York City, GO, 5.30%, 8/1/99 . . . . . . . . . . 500 493
6.10%, 8/1/02. . . . . . . . . . . . . . . . . . . 450 457
_____________________________________________________________________________
OHIO - 0.8%
Cuyahoga County, Univ. Hosp. of Cleveland,
VRDN (Currently 2.95%) . . . . . . . . . . . . . . 100 100
_____________________________________________________________________________
OKLAHOMA - 4.0%
Trustees of the Tulsa Municipal Airport,
American Airlines, 9.375%, 6/1/04 . . . . . . . . 500 534
_____________________________________________________________________________
PENNSYLVANIA - 8.9%
Delaware County Health Care Auth.,
Mercy Health Care Corp. of Southeastern
Pennsylvania, 4.625%, 11/15/96 . . . . . . . . . 800 775
Philadelphia Gas Works, (AMBAC Insured),
4.25%, 8/1/00. . . . . . . . . . . . . . . . . . . 425 402
_____________________________________________________________________________
PUERTO RICO - 1.6%
Puerto Rico Housing Bank and Fin. Agency,
Loan Insurance Claims, 4.125%, 12/1/96 . . . . . . $ 215 $ 212
_____________________________________________________________________________
RHODE ISLAND - 4.9%
Rhode Island Housing & Mortgage Fin. Corp.,
5.15%, 4/1/03* . . . . . . . . . . . . . . . . . . 685 646
_____________________________________________________________________________
TENNESSEE - 2.0%
Metropolitan Nashville Airport Auth.,
(FGIC Insured), 6.25%, 7/1/00. . . . . . . . . . . 250 264
_____________________________________________________________________________
TEXAS - 3.5%
Coastal Bend Health Fac. Dev. Corp., Incarnate Word
Health Services, (AMBAC Insured),
5.40%, 11/15/01. . . . . . . . . . . . . . . . . . 95 96
Harris County Flood Control Dist., GO,
6.75%, 10/1/02 . . . . . . . . . . . . . . . . . . 85 93
Port of Houston Auth. of Harris County,
(MBIA Insured), 6.00%, 5/1/01. . . . . . . . . . . 255 267
_____________________________________________________________________________
UTAH - 3.4%
Davis County Solid Waste Management and
Energy Recovery, Special Service District,
5.30%, 6/15/99 . . . . . . . . . . . . . . . . . 95 92
Intermountain Power Agency, Utah Power
Supply, 5.90%, 7/1/03. . . . . . . . . . . . . . . 350 363
_____________________________________________________________________________
VIRGINIA - 7.8%
Hampton Museum, 4.50%, 1/1/02. . . . . . . . . . . . 485 454
Norfolk, GO, 6.75%, 10/1/00
(Pre-refunded 10/1/98!). . . . . . . . . . . . . . 400 435
Prince William County IDA, Prince William
Hosp., 5.15%, 4/1/04 . . . . . . . . . . . . . . . 100 95
Virginia HDA, 6.125%, 1/1/99*. . . . . . . . . . . . 50 51
_____________________________________________________________________________
WASHINGTON - 2.3%
Snohomish County Public Utility Dist.,
4.90%, 1/1/01* . . . . . . . . . . . . . . . . . . 200 193
Washington Public Power Supply System,
Bonneville Power Administration,
6.30%, 7/1/01. . . . . . . . . . . . . . . . . . 110 115
_____________________________________________________________________________
T. Rowe Price Summit Municipal Funds / Portfolio of Investments
Municipal Intermediate Fund (cont'd)
Face Amount Value
___________ __________
WISCONSIN - 0.7%
Wisconsin Housing & Economic Dev. Auth.,
4.70%, 11/1/99*. . . . . . . . . . . . . . . . . . $ 100 $ 97
_____________________________________________________________________________
Total Investments in Securities - 97.8%
(Cost - $13,176) . . . . . . . . . . . . . . . . . $ 12,887
_____________________________________________________________________________
* - Interest subject to alternative minimum tax
! - Used in determining portfolio maturity
AMBAC - American Municipal Bond Assurance Corporation
BIGI - Bond Investors Guaranty Insurance
COP - Certificates of Participation
FGIC - Financial Guaranty Insurance Company
GO - General Obligation
HDA - Housing Development Authority
HEFA - Health & Educational Facility Authority
HFA - Health Facility Authority
IDA - Industrial Development Authority
MBIA - Municipal Bond Insurance Association
VRDN - Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
Municipal Income Fund
Face Amount Value
___________ _________
CALIFORNIA - 5.1%
Los Angeles County, Marina Del Ray,
COP, 5.25%, 7/1/96 . . . . . . . . . . . . . . . . $ 200 $ 202
San Joaquin Hills Transportation Corridor Agency,
Toll Road, 6.75%, 1/1/32 . . . . . . . . . . . . . 95 92
_____________________________________________________________________________
COLORADO - 4.4%
Denver City & County, Sisters of
Charity of Leavenworth Health Services
Corp., 5.125%, 12/1/10 . . . . . . . . . . . . . 150 133
Mesa County, Sisters of Charity of
Leavenworth Health Services Corp.,
5.00%, 12/1/14. . . . . . . . . . . . . . . . . 145 123
_____________________________________________________________________________
CONNECTICUT - 1.5%
Connecticut HEFA, 6.00%, 7/1/13. . . . . . . . . . . 95 85
_____________________________________________________________________________
DISTRICT OF COLUMBIA - 1.9%
Metropolitan Washington D.C. Airport Auth.,
(BIGI Insured), 8.10%, 10/1/08*. . . . . . . . . . 100 111
_____________________________________________________________________________
GEORGIA - 4.1%
Georgia Housing and Fin. Auth., Single Family
Mortgage, (FHA Insured), 5.65%, 12/1/14. . . . . . 120 111
Rockdale County Dev. Auth., Solid Waste Disposal,
Visy Paper, Inc., 7.50%, 1/1/26* . . . . . . . . . 125 123
_____________________________________________________________________________
ILLINOIS - 15.5%
Chicago, The Peoples Gas Light and Coke Company,
5.75%, 12/21/23* . . . . . . . . . . . . . . . . . 100 89
Chicago - O'Hare Int'l. Airport,
International Terminal, MBIA Insured),
7.50%, 1/1/17 . . . . . . . . . . . . . . . . . 85 93
Illinois Dev. Fin. Auth., Citizens Utilities
Project, 5.90%, 11/15/28*. . . . . . . . . . . . . 130 123
Illinois HFA, Glen Oak Medical Center,
Hinsdale Health System, 9.50%, 11/15/15. . . . . . 80 92
Holy Cross Hosp., 6.70%, 3/1/14. . . . . . . . . . 300 294
Resurrection Health Care System, VRDN
(Currently 3.20%). . . . . . . . . . . . . . . . 200 200
_____________________________________________________________________________
LOUISIANA - 5.2%
Parish of Saint Charles PCR, Shell Oil Company,
VRDN (Currently 2.95%) . . . . . . . . . . . . . . 100 100
Parish of West Baton Rouge Ind. Dist. No. 3,
Dow Chemical, VRDN (Currently 3.30%)*. . . . . . . 200 200
_____________________________________________________________________________
MARYLAND - 6.0%
Anne Arundel County, Consolidated Water &
Sewer, GO, 5.00%, 2/1/20 . . . . . . . . . . . . . 300 255
Maryland Community Dev. Administration,
7.375%, 4/1/26*. . . . . . . . . . . . . . . . . . 90 93
_____________________________________________________________________________
T. Rowe Price Summit Municipal Funds / Portfolio of Investments
Municipal Income Fund (cont'd)
Face Amount Value
____________ _________
MICHIGAN - 1.7%
Warren County PCR, Michigan Power and Light,
7.00%, 4/1/22. . . . . . . . . . . . . . . . . . . $ 100 $ 100
_____________________________________________________________________________
MISSISSIPPI - 2.0%
Claiborne County PCR, Systems Energy Resources,
9.875%, 12/1/14. . . . . . . . . . . . . . . . . . 100 115
_____________________________________________________________________________
NEW HAMPSHIRE - 3.5%
New Hampshire Housing Fin. Auth., Single Family
Mortgage, 6.85%, 7/1/14* . . . . . . . . . . . . . 200 202
_____________________________________________________________________________
NEW JERSEY - 7.7%
Camden County Pollution Control Fin. Auth.,
Solid Waste Disposal and Resource Recovery,
7.50%, 12/1/09*. . . . . . . . . . . . . . . . . 150 153
New Jersey Housing Finance Agency,
6.20%, 10/1/25 . . . . . . . . . . . . . . . . . . 200 195
Union County Utility Auth., Solid Waste,
6.75%, 6/15/01*. . . . . . . . . . . . . . . . . . 90 93
_____________________________________________________________________________
NEW MEXICO - 3.7%
New Mexico Ed. Assistance Foundation,
Student Loan, 4.90%, 12/1/01*. . . . . . . . . . . 225 216
_____________________________________________________________________________
NEW YORK - 17.5%
Dormitory Auth. of the State of New York,
Dept. of Health of the State of New York,
5.50%, 7/1/20. . . . . . . . . . . . . . . . . . 100 87
State Univ. Ed. Fac., 5.00%, 5/15/18 . . . . . . . 250 203
Erie County Water Auth., (AMBAC Insured),
Zero Coupon, 12/1/17 . . . . . . . . . . . . . . . 550 102
New York City, GO, 5.75%, 8/15/10. . . . . . . . . . 250 234
New York State Energy Research and Dev.
Auth., New York State Electric & Gas Corp.,
5.95%, 12/1/27*. . . . . . . . . . . . . . . . . 90 81
New York State Medical Care Fac. Fin. Auth.,
Hosp. & Nursing Home Program,
(FHA Insured), 6.125%, 2/15/14 . . . . . . . . . 100 100
New York State Mortgage Agency,
Homeowner Mortgage, 6.45%, 10/1/17 . . . . . . . . 100 100
The Port Auth. of New York & New Jersey,
VRDN (Currently 3.00%)*. . . . . . . . . . . . . . 100 100
_____________________________________________________________________________
OHIO - 2.6%
Ohio Water Dev. Auth. PCR, Toledo Edison,
7.40%, 11/1/22*. . . . . . . . . . . . . . . . . . 150 151
_____________________________________________________________________________
PENNSYLVANIA - 2.5%
Delaware County Health Care Auth., Mercy
Health Care Corp., 4.875%, 11/15/97. . . . . . . . 150 142
_____________________________________________________________________________
PUERTO RICO - 1.7%
Puerto Rico Housing Bank and Fin. Agency, Loan
Insurance Claims, 5.00%, 12/1/02 . . . . . . . . . 100 95
_____________________________________________________________________________
Municipal Income Fund (cont'd)
Face Amount Value
_____________ ________
SOUTH DAKOTA - 3.2%
South Dakota Housing Dev. Auth.,
Homeowner Mortgage, 6.65%, 5/1/14. . . . . . . . . $ 185 $ 186
_____________________________________________________________________________
TEXAS - 2.1%
Alliance Airport Auth., American Airlines,
7.00%, 12/1/11*. . . . . . . . . . . . . . . . . . 125 123
_____________________________________________________________________________
VIRGINIA - 1.9%
Virginia HDA, 4.80%, 1/1/05. . . . . . . . . . . . . 120 111
_____________________________________________________________________________
WASHINGTON - 3.9%
Snohomish County Public Utility Dist. No. 001,
Electric Revenue Generation System,
5.80%, 1/1/24* . . . . . . . . . . . . . . . . . 150 136
Washington Public Power Supply System,
Bonneville Power Administration,
(MBIA Insured), 5.60%, 7/1/15. . . . . . . . . . 95 86
_____________________________________________________________________________
WYOMING - 5.2%
Kemmerer County PCR, Exxon, VRDN
(Currently 2.85%). . . . . . . . . . . . . . . . . 200 200
Lincoln County PCR, Exxon, VRDN
(Currently 2.75%). . . . . . . . . . . . . . . . . 100 100
_____________________________________________________________________________
Total Investments in Securities - 102.9%
(Cost - $6,165). . . . . . . . . . . . . . . . . . $ 5,930
_____________________________________________________________________________
* - Interest subject to alternative minimum tax
AMBAC - American Municipal Bond Assurance Corporation
BIGI - Bond Investors Guaranty Insurance
COP - Certificates of Participation
FHA - Federal Housing Authority
GO - General Obligation
HDA - Housing Development Authority
HEFA - Health & Educational Facility Authority
HFA - Health Facility Authority
MBIA - Municipal Bond Insurance Association
PCR - Pollution Control Revenue
VRDN - Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities
T. Rowe Price Summit Municipal Funds / April 30, 1994 (Unaudited)
Amounts in Thousands
__________________________________
Money
Market Intermediate Income
Fund Fund Fund
________ __________ ________
ASSETS
Investments in securities at value
(Cost - $19,351, $13,176, and
$6,165). . . . . . . . . . . . . . . $ 19,352 $ 12,887 $ 5,930
Receivable for investment
securities sold. . . . . . . . . . . - 766 96
Other assets . . . . . . . . . . . . . 378 359 417
_________ _________ ________
Total assets 19,730 14,012 6,443
_________ _________ ________
LIABILITIES
Payable for investment securities
purchased . . . . . . . . . . . . . . - 654 590
Other liabilities. . . . . . . . . . . 105 178 88
_________ _________ ________
Total liabilities. . . . . . . . . . . 105 832 678
_________ _________ ________
Net Assets . . . . . . . . . . . . . . $ 19,625 $ 13,180 $ 5,765
_________ _________ ________
_________ _________ ________
Net Assets Consisting of:
Accumulated realized gains/losses -
net of distributions . . . . . . . . - (153) (89)
Unrealized appreciation (depreciation)
of investments . . . . . . . . . . . 1 (289) (235)
Paid-in-capital applicable to 19,624,319,
1,354,321, and 612,498 shares of
$0.0001 par value capital stock
outstanding; 1,000,000,000 shares
of the Corporation authorized. . . . 19,624 13,622 6,089
_________ _________ ________
Net Assets . . . . . . . . . . . . . . $ 19,625 $ 13,180 $ 5,765
_________ _________ ________
_________ _________ ________
Net Asset Value Per Share. . . . . . . $ 1.00 $ 9.73 $ 9.41
______ ______ ______
______ ______ ______
_____________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Summit Municipal Funds / From October 29, 1993 (Commencement of
Operations) to April 30, 1994 (Unaudited)
Amounts in Thousands
__________________________________
Money
Market Intermediate Income
Fund Fund Fund
________ __________ ________
INVESTMENT INCOME
Interest income. . . . . . . . . . . . $ 95 $ 189 $ 106
EXPENSES
Investment management fee. . . . . . . (17) (20) (10)
________ ________ ________
Net investment income. . . . . . . . . 78 169 96
________ ________ ________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss. . . . . . . . . . . - (153) (89)
Change in unrealized appreciation
or depreciation. . . . . . . . . . . 1 (289) (235)
________ ________ ________
Net gain (loss) on investments . . . . 1 (442) (324)
________ ________ ________
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS. . . . . . . . . . . $ 79 $ (273) $ (228)
________ ________ ________
________ ________ ________
_____________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Summit Municipal Funds / From October 29, 1993 (Commencement of
Operations) to April 30, 1994 (Unaudited)
Amounts in Thousands
__________________________________
Money
Market Intermediate Income
Fund Fund Fund
________ __________ ________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income. . . . . . . $ 78 $ 169 $ 96
Net realized loss on
investments . . . . . . . . . . - (153) (89)
Change in unrealized appreciation
or depreciation of
investments . . . . . . . . . . 1 (289) (235)
________ ________ ________
Increase (decrease) in net assets
from operations. . . . . . . . . . 79 (273) (228)
________ ________ ________
Distributions to shareholders
Net investment income. . . . . . . (78) (169) (96)
________ ________ ________
Capital share transactions (1)
Sold . . . . . . . . . . . . . . . 25,300 shs. 15,634 shs. 6,413 shs.
Distributions reinvested . . . . . 74 148 85
Redeemed . . . . . . . . . . . . . (5,790) (2,190) (439)
________ ________ ________
Increase in net assets from
capital share transactions . . . 19,584 13,592 6,059
________ ________ ________
Total increase . . . . . . . . . . . 19,585 13,150 5,735
NET ASSETS
Beginning of period. . . . . . . . 40 30 30
________ ________ ________
End of period. . . . . . . . . . . $ 19,625 $ 13,180 $ 5,765
________ ________ ________
________ ________ ________
(1)Share transactions
Sold. . . . . . . . . . . . . . . 25,300shs. 1,557shs. 646shs.
Distributions reinvested. . . . . 74 15 9
Redeemed. . . . . . . . . . . . . (5,790) (221) (46)
________ ________ ________
Net increase in shares
outstanding . . . . . . . . . . . 19,584 1,351 609
________ ________ ________
________ ________ ________
_____________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Summit Municipal Funds / April 30, 1994 (Unaudited)
Note 1 - Significant Accounting Policies
T. Rowe Price Summit Municipal Funds, Inc. (the Corporation) is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The Summit Municipal Money Market Fund (the Money Market
Fund), the Summit Municipal Intermediate Fund (the Intermediate Fund) and the
Summit Municipal Income Fund (the Income Fund), are the three portfolios
established by the Corporation.
A) Security valuation - Debt securities are generally traded in the
over-the-counter market. Investments in securities with remaining maturities
of one year or more are stated at fair value as furnished by dealers who make
markets in such securities or by an independent pricing service, which
considers yield or price of bonds of comparable quality, coupon, maturity, and
type, as well as prices quoted by dealers who make markets in such securities.
Except with respect to certain securities held by the Money Market Fund,
securities with remaining maturities less than one year are stated at fair
value which is determined by using a matrix system that establishes a value
for each security based on money market yields. Securities held by the Money
Market Fund with remaining maturities of 60 days or less are valued at
amortized cost. Financial futures contracts and options on futures contracts
are valued at closing settlement prices.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by, or under the supervision of, the officers of
the Fund, as authorized by the Board of Directors.
B) Premiums and Discounts - Premiums on municipal securities are amortized for
both financial and tax reporting purposes. Discounts, other than original
issue, are not amortized for financial reporting purposes.
C) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on an identified cost basis. Distributions to shareholders are
recorded by the Fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles.
Note 2 - Organization
The Corporation was organized on September 14, 1993 and had no operations
prior to October 29, 1993, other than those related to organizational matters,
including the following sale of shares of the Funds' capital stock on October
22, 1993, to T. Rowe Price Associates, Inc.:
Money
Market Intermediate Income
Fund Fund Fund
_________ ___________ _________
Shares Sold 40,000 3,000 3,000
Net Asset Value
Per Share $1.00 $10.00 $10.00
Note 3 - Portfolio Transactions
Purchase and sales of portfolio securities, other than short-term securities,
for the period ended April 30, 1994, were as follows:
Intermediate Income
Fund Fund
_____________ ____________
Purchases $18,954,000 $8,859,000
Sales 5,408,000 3,506,000
Note 4 - Federal Income Taxes
No provision for federal income taxes is required since each Fund intends to
qualify as a regulated investment company and distribute all of its income. At
April 30, 1994, the aggregate costs of investments for the Money Market,
Intermediate and Income Funds for federal income tax and financial reporting
purposes were $19,351,000, $13,176,000, and $6,165,000, respectively. Net
unrealized appreciation (depreciation) was as follows:
Money
Market Intermediate Income
Fund Fund Fund
_________ ___________ ________
Appreciated
Investments $ 3,000 $ 21,000 $ 5,000
Depreciated
Investments (2,000) (310,000) (240,000)
__________ ___________ ___________
Net Unrealized
Appreciation
(Depreciation) $ 1,000 $(289,000) $ (235,000)
_________ _________ _________
_________ _________ _________
Note 5 - Related Party Transactions
The investment management agreement between each Fund and T. Rowe Price
Associates, Inc. (the Manager) provides for a single, all-inclusive fee,
computed daily and paid monthly, based on each Fund's average daily net
assets. This fee will not fluctuate. All the expenses of each Fund are paid by
the Manager except interest, taxes, brokerage commissions, and extraordinary
expenses. The all-inclusive fee is equal to 0.45% of average daily net assets
for the Money Market Fund, and 0.50% of average daily net assets for the
Intermediate and Income Funds.
Financial Highlights
T. Rowe Price Summit Municipal Funds / From October 29, 1993 (Commencement of
Operations) to April 30, 1994 (Unaudited)
For a share outstanding throughout the period
_____________________________________________
Money
Market Intermediate Income
Fund Fund Fund
________ __________ ________
NET ASSET VALUE, BEGINNING
OF PERIOD. . . . . . . . . . . . . . $ 1.000 $ 10.00 $ 10.00
________ __________ __________
Investment Activities
Net investment income. . . . . . . . 0.010 0.21 0.25
Net realized and
unrealized loss. . . . . . . . . . - (0.27) (0.59)
________ __________ __________
Total from Investment Activities . . . 0.010 (0.06) (0.34)
________ __________ __________
Distributions
Net investment income. . . . . . . . (0.010) (0.21) (0.25)
________ __________ __________
NET ASSET VALUE, END OF PERIOD . . . . $ 1.000 $ 9.73 $ 9.41
__________ __________ __________
__________ __________ __________
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . . 1.01% (0.69)% (3.52)%
Ratio of Expenses to Average
Net Assets . . . . . . . . . . . . . 0.45%! 0.50%! 0.50%!
Ratio of Net Investment Income
to Average Net Assets. . . . . . . . . 2.03%! 4.23%! 5.03%!
Portfolio Turnover Rate. . . . . . . . - 151.5%! 220.2%!
Net Assets, End of Period
(in thousands) . . . . . . . . . . . $19,625 $ 13,180 $ 5,765
Number of Shareholder Accounts,
End of Period. . . . . . . . . . . . 167 229 114
! Annualized.
Shareholder Services
To help shareholders monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety
of information and services-at no extra cost.
Telephone Services
Access your account 24 hours a day by calling 1-800-638-2587.
Tele*Access(registered trademark)-Gives you your account balance, date
and amount of your last transaction, latest dividend payment, and fund prices
and yields. Also, lets you purchase, exchange, or redeem shares.
Shareholder Service Representatives are available from 8:30 a.M. To 10:00
p.M., Monday-Friday, and Saturday from 9:00 a.M. To 5:00 p.M., E.T. Call 1-
800-225-5132.
Shareholder Service Center-Call to exchange shares or move money between
your bank and fund accounts.
ACCOUNT SERVICES
Checking-Write checks for $500 or more on any money market and most bond
fund accounts.
Automatic Investing-Build your account over time by investing directly
from your bank account or paycheck. A low, $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.
INVESTMENT INFORMATION
Combined Statement-A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax cate-gory, provides
total portfolio value, and lists your investments by type-stock, bond, and
money market. Detail pages itemize account transactions by fund.
Quarterly Shareholder Reports-Portfolio
managers review the performance of the funds in plain language and discuss T.
Rowe Price's economic outlook.
The T. Rowe Price Report-A quarterly newsletter with relevant articles
on market trends, personal financial planning, and T. Rowe Price's economic
perspective.
Insights-A library of information that includes reports on mutual fund
tax issues, investment strategies, and financial markets.
Detailed Investment Guides-Our widely acclaimed Asset Mix Worksheet,
College Planning Kit, Retirees Financial Guide, Retire-ment Planning Kit (also
available on disk for PC use) and Guide to Risk-Adjusted Perfor-mance can help
you determine and reach your investment goals.
DISCOUNT BROKERAGE
Trade stocks, bonds, options, and precious met-als at substantial savings over
full- cost brokers.
Tele*Trade-Call this automated phone ser-vice after business hours to
place your orders.
Fax*Trade-Buy and sell by simply faxing your order.
Tele*Quote-Provides 24-hour access to stock and option quotes.
Money Fund Sweep Feature-Buy and sell securities and have your "sweep"
account auto-matically debited or credited. Dividend and interest payments
are credited daily.
If you have questions or would like to add a service to your account, please
call our Shareholder Service Center.
T. Rowe Price No-Load Mutual Funds
STABILITY
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
CONSERVATIVE INCOME
Adjustable Rate U.S. Government
Short-Term Bond
Short-Term Global Income
Summit Limited-Term Bond
U.S. Treasury Intermediate
Florida Insured Intermediate Tax-Free
Maryland Short-Term Tax-Free Bond
Summit Municipal Intermediate
Tax-Free Insured Intermediate Bond
Tax-Free Short-Intermediate
INCOME
Global Government Bond
GNMA
New Income
Spectrum Income
Summit GNMA
U.S. Treasury Long-Term
California Tax-Free Bond
Georgia Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Virginia Tax-Free Bond
Tax-Free Income
AGGRESSIVE INCOME
High Yield
International Bond
Tax-Free High Yield
CONSERVATIVE
GROWTH
Balanced
Capital Appreciation
Dividend Growth
Equity Income
Growth & Income
Spectrum Growth
GROWTH
Blue Chip Growth
European Stock
Growth Stock
International Stock
Japan
Mid-Cap Growth
New Era
Small-Cap Value
AGGRESSIVE GROWTH
International Discovery
Latin America
New America Growth
New Asia
New Horizons
OTC
Science & Technology
Call if you want to know about any T. Rowe Price Fund. We'll send you a
prospectus with more complete information, including management fees and other
expenses. Read it carefully before you invest or send money.
APPENDIX
Chart #1 - Municipal Bond and Note Yields - A line graph compares the yields
on the Lehman Brothers Municipal Bond Index, the Five-Year General Obligation,
and the Six-Month Moody's Investment Grade 1 Note for the six-month period
from 10/29/93 to 4/29/94.
