For yield, price, last transaction,
and current balance, 24 hours,
7 days a week, call:
1-800-638-2587 toll free
625-7676 Baltimore area
For assistance with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. Rowe Price
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 of the T. Rowe Price Summit Income
Funds(registered trademark).
Invest With Confidence(Registered Trademark)
T. Rowe Price
SUMIN
Annual Report
T. Rowe Price
Summit Income Funds
October 31, 1995
Fellow Shareholders
After giving back some gains during the summer, the bond market rebounded in
the last quarter, ending a positive year on a strong note. The Summit Income
funds, benefiting from favorable bond market conditions, posted attractive
results for the quarter and the year ended October 31.
Market Environment
This was a year that bond investors will remember with great fondness. The
market rebounded strongly from a dismal 1994, when a robust economy compelled
the Federal Reserve to repeatedly raise key interest rates, culminating in a 6%
federal funds rate last February. As the Fed policy took hold, the economy
slowed to an annualized growth rate of 2.7% so far this year, down from 4.1%
last year.
The slowing yet fundamentally sound economy, combined with relatively
benign inflation, sparked a sustained rally in bond prices. Interest rates fell
sharply; the benchmark 30-year Treasury bond yield dropped from 8% a year ago
to 6.3% at the end of October.
In July, amid concern that the economy was losing too much steam, the Fed
reversed course, trimming the fed funds target to 5.75%, its first reduction in
nearly three years. Bond prices, which had risen in anticipation of the Fed
cut, declined slightly afterward when the economy appeared stronger than
initially thought.
However, the market bounced back on continued signs of subdued inflation
and the renewed vigor of budget-balancing efforts in Washington. In the last
quarter, while interest rates moved moderately compared with their sharp
declines earlier in the year, yields on current coupon GNMAs and 90-day
Treasury bills dropped by more than 10 basis points, to 7.2% and 5.2%,
respectively. The 5-year Treasury note yield dropped by more than 20 basis
points, ending at 5.8% (100 basis points is equal to one percentage point).
In fact, favorable economic fundamentals allowed the market to shrug off
political brinkmanship in Washington that threatened
Chart 1 - Interest Rate Levels
the U.S. Treasury's ability to pay its debt. In November, after the end of the
fund's fiscal year, a budget dispute between the Republican-led Congress and
the Clinton Administration delayed a rise in the Treasury's $4.9 trillion debt
ceiling, endangering its ability to meet impending debt obligations. While the
threat was shortlived -- the Treasury borrowed funds from other government
sources -- the budget battle and the debt ceiling issue remained unresolved.
Any further doubt about the federal government's ability to make timely
interest and principal payments could hurt bonds in the long run.
Market Strategy and Performance
Cash Reserves Fund
With interest rates dropping, your fund's seven-day compound yield dipped from
5.68% in July to 5.56% at the end of October. We adopted a slightly longer
maturity posture than our peers, reflecting our view that the Fed may lower
rates due to the slowing economy, moderate inflation, and progress on a
balanced budget. At the end of October, the fund's weighted average maturity
was 64 days, up from an effective WAM of 61 days last July. (Although the table
at the end of this letter shows a WAM of 69 days on July 31, it was effectively
eight days shorter because of technical factors related to a callable
security). These moves helped your fund turn in good results for the quarter
and fiscal year, ahead of the Donoghue peer group average in both periods.
Performance Comparison
Periods Ended 10/31/95
3 Months 12 Months
_________ _________
Cash Reserves Fund 1.38% 5.68%
Donoghue's 1st Tier
Average* 1.32 5.39
* Estimated
We also reduced the fund's exposure to floating rate instruments in favor
of fixed rate obligations, which are more attractive in a falling rate
environment. As usual, to ensure the safety of principal expected of this fund,
we maintained very high credit quality, with nearly 90% of holdings receiving
at least our second highest rating. In the months ahead, if the economy and
inflation remain subdued as we expect, short-term rates and your fund's yield
could move moderately lower.
Limited-Term Bond Fund
Your fund produced good absolute performance for the quarter and fiscal year,
but trailed the Lipper peer group average in both periods. In early 1995, when
it was not clear that the Fed was finished raising interest rates, we
maintained a relatively short effective duration. While a shorter duration
protects a fund's share price during periods of rising rates, it restrains
price appreciation when interest rates drop. Consequently, the fund's
performance lagged its competitors when interest rates dropped sharply in the
spring.
Performance Comparison
Periods Ended 10/31/95
3 Months 12 Months
_________ _________
Limited-Term Bond Fund 1.87% 7.36%
Lipper Short Investment-
Grade Debt Funds Average 2.10 8.79
In the last quarter, we maintained a posture similar to our peer group,
with an effective duration of 2.1 years, down slightly since the July quarter.
We further reduced the fund's exposure to Treasuries (20% of net assets on
October 31) in favor of corporates (an aggregate of 37% of net assets).
Corporates provide higher income and investment returns than Treasuries, and we
minimized the added credit risk by focusing on issuers with improving financial
conditions.
GNMA Fund
While GNMA interest rates have been on a roller coaster all year, the overall
trend has been down, translating into attractive price appreciation. As a
result, your fund enjoyed very strong results, exceeding its peer group average
in both the quarter and fiscal year ended October 31.
Performance Comparison
Periods Ended 10/31/95
3 Months 12 Months
_________ _________
GNMA Fund 3.48% 15.43%
Lipper GNMA
Funds Average 2.94 14.07
The evidence indicates that mortgage prepayments, which can reduce total
return on GNMAs, will remain far below their 1993 peaks, despite sharply lower
interest rates. Nevertheless, mortgage security prices lagged those of
comparable Treasuries because investors assumed prepayments would surge. We
maintained our exposure to GNMAs at well over three quarters of net assets,
focusing on new, lower-coupon securities purchased at a discount. If interest
rates fall, the prices of these securities will rise closer to par value. Some
of them were purchased in the forward market, providing the liquidity to change
our coupon mix efficiently. We also hold higher-coupon issues trading at a
premium, which offer attractive income. In anticipation of lower interest
rates, we increased the fund's exposure to Treasuries to 16% of net assets,
mainly by purchasing a long Treasury bond.
Balancing these holdings in case interest rates rise is a 2% position in
interest only (IO) CMOs. The combination of long-term Treasuries and IOs
results in a high-yielding portfolio offering protection against sharp
fluctuations in interest rates, while the mortgage securities should perform
well in a stable rate environment. Overall, we held the fund's duration, a
measure of its price sensitivity to changing interest rates, steady at five
years.
Outlook
While preliminary reports indicate the economy grew at a robust 4.2% rate in
the third quarter, we believe it will grow at its historical pace of around
2.5% for the year. Inflation should remain moderate. The economic expansion is
now into its fifth year, with little likelihood of a near-term recession.
We expect the bond market to perform well under these conditions. The
possibility of a further ease by the Fed would increase if progress were made
on reducing the federal deficit. However, bond prices could be hurt if the
budget battle drags on.
Respectfully submitted,
William T. Reynolds
Director, Fixed Income Division
November 17, 1995
Sector Diversification
Summit Cash Reserves Fund
Percent of Net Assets
7/31/95 10/31/95
________ ________
Commercial Paper 55% 60%
Negotiable CDs/BNs Foreign and Domestic 28 23
Foreign and Canadian Government
and Municipalities 14 10
All Other 3 7
Fixed Rate Obligations 86 91
Floating Rate Instruments 14 9
Summit GNMA Fund
Percent of Net Assets
7/31/95 10/31/95
________ ________
GNMA 90% 89%
Government Agencies 7 7
Agency-Backed STRIPs 3 2
U.S. Treasury Securities 12 16
All Other -12 -14
Summit Limited-Term Bond Fund
Percent of Net Assets
7/31/95 10/31/95
________ ________
Mortgage-Backed Securities 25% 25%
U.S. Treasury Obligations 35 20
Corporates
Banking and Finance 8 12
Industrial 7 9
Brokers/Dealers 3 4
Broadcasting/Media 2 4
Consumer Products 1 4
Other Corporate 4 4
All Other 15 18
<TABLE>
Financial Summary
Net Asset Value Dividend Per Share Dividend Yield*
Per Share 3 Months Ended 3 Months Ended
________________ ________________ ________________
7/31/95 10/31/95 7/31/95 10/31/95 7/31/95 10/31/95
_______ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Cash Reserves Fund $1.00 $1.00 $0.014 $0.014 5.68% 5.56%
Limited-Term Bond Fund 4.64 4.65 0.08 0.08 6.61 6.55
GNMA Fund 9.65 9.81 0.18 0.17 7.28 7.13
* 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. Cash Reserves fund reports a seven-day compound
yield.
Quality Diversification
Quality Ratings as of 10/31/95* Weighted Average Quality*
________________________________ ______________________
1 2 3 4 5-10 7/31/95 10/31/95
____ ____ ____ ____ ____ _______ _______
Cash Reserves Fund 21% 68% 11% - - 1.8 1.9
Limited-Term Bond Fund 56 9 18 11% 6% 1.8 2.0
GNMA Fund 100 - - - - 1.0 1.0
* On a T. Rowe Price scale of 1 to 10, with Grade 1 representing the highest credit quality.
Duration and Maturity
Weighted Average Weighted Average
Effective Duration (years) Maturity (years)
______________________ ______________________
7/31/95 10/31/95 7/31/95 10/31/95
_______ _______ _______ _______
Cash Reserves Fund - - 69* 64*
Limited-Term Bond Fund 2.4 2.1 3.3 3.1
GNMA Fund 5.0 5.0 9.0 10.1
* Maturity is in days.
</TABLE>
Chart 2 - Performance Comparison
Chart 3 - Performance Comparison
Chart 4 - Performance Comparison
Average Annual Compound Total Returns
Periods ended 10/31/95
Since Inception
1 Year 10/29/93
______ _____________
Cash Reserves* 5.68% 4.62%
Limited-Term Bond 7.36 3.24
GNMA 15.43 6.52
Investment return and principal value represent past performance and will
vary. Shares of the bond funds may be worth more or less at redemption
than at original purchase.
* An investment in the Cash Reserves Fund is not insured or guaranteed by
the U.S. government.
Statement of Net Assets
T. Rowe Price Summit Cash Reserves Fund / October 31, 1995
(amounts in thousands)
Amount Value
______ _____
Auto-Backed - 0.6%
Banc One Auto Trust, 6.363%,
4/15/96. . . . . . . . . . . . . . . . . . . . . . $ 1,081 $ 1,082
John Deere Owner Trust, VR, 5.813%,
11/15/95 . . . . . . . . . . . . . . . . . . . . . 1,382 1,382
Total Auto-Backed (Cost $2,463) 2,464
Bank Notes - 6.0%
Bank of New York (Delaware), 5.92%,
10/24/96 . . . . . . . . . . . . . . . . . . . . . 10,000 9,995
Boatmen's Bank, VR, 5.875%,
11/15/95 . . . . . . . . . . . . . . . . . . . . . 4,000 3,999
Lasalle National Bank, 5.80%,
11/20/95 . . . . . . . . . . . . . . . . . . . . . 8,000 8,000
PNC Bank, N.A., VR, 5.825%,
11/20/95 . . . . . . . . . . . . . . . . . . . . . 4,000 3,999
Total Bank Notes (Cost $25,998) 25,993
Certificates of Deposit - 17.3%
Banco Bilbao Vizcaya, (London), 5.75%,
3/15/96. . . . . . . . . . . . . . . . . . . . . . 5,000 4,999
Banque Nationale de Paris, 5.805%,
1/26/96. . . . . . . . . . . . . . . . . . . . . . 5,000 5,000
Bayerische Hypotheken, 5.80%,
1/8/96 . . . . . . . . . . . . . . . . . . . . . . 10,000 9,999
Bayerische Vereinsbank, (London), 5.79%,
1/10/96. . . . . . . . . . . . . . . . . . . . . . 5,000 4,999
Credit Suisse, 5.64%, 1/17/96. . . . . . . . . . . 3,000 2,998
Fifth Third Bank, 6.08%, 11/10/95. . . . . . . . . 3,000 3,000
Mercantile Safe Deposit & Trust, 6.00%,
11/30/95 . . . . . . . . . . . . . . . . . . . . . 5,000 5,000
National Bank Canada, VR, 5.867%,
11/24/95 . . . . . . . . . . . . . . . . . . . . . 5,000 4,999
National Westminster Bank, 6.125%,
11/8/95. . . . . . . . . . . . . . . . . . . . . . 4,000 4,000
NBD Bank, N.A., 5.775%, 11/2/95. . . . . . . . . . 13,000 13,000
Royal Bank of Scotland, (London), 5.72%,
1/22/96. . . . . . . . . . . . . . . . . . . . . . 5,000 4,998
Societe Generale, 5.76 - 6.82%,
1/8 - 3/7/96 . . . . . . . . . . . . . . . . . . . 7,000 7,004
Union Bank Switzerland, 5.77%,
12/28/95 . . . . . . . . . . . . . . . . . . . . . 5,000 4,999
Total Certificates of Deposit
(Cost $75,000) 74,995
Commercial Paper - 64.3%
Allied Signal, 5.74%, 11/8/95. . . . . . . . . . . 2,800 2,792
American Home Products, 4(2), 5.77%,
11/3/95. . . . . . . . . . . . . . . . . . . . . . 2,000 1,999
Asset Securitization Cooperative, 4(2),
5.65 - 5.75%, 11/7 - 12/8/95 . . . . . . . . . . . 17,000 16,834
AT&T, 5.70%, 1/24/96 . . . . . . . . . . . . . . . 5,000 4,915
B.B.V. Finance (Delaware), 5.61%,
1/26/96. . . . . . . . . . . . . . . . . . . . . . 3,000 2,915
Barnett Banks, 5.78%, 11/9/95. . . . . . . . . . . 6,300 6,271
BMW U.S. Capital, 5.65 - 5.75%,
11/13 - 12/20/95 . . . . . . . . . . . . . . . . . 9,500 9,378
British Gas Capital, 5.73%,
11/17/95 . . . . . . . . . . . . . . . . . . . . . 1,820 1,807
Countrywide Funding, 5.77%,
11/13/95 . . . . . . . . . . . . . . . . . . . . . 6,300 6,267
Cregem North America, 5.60%,
12/29/95 . . . . . . . . . . . . . . . . . . . . . 5,000 4,854
Delaware Funding, 5.72%, 12/15/95. . . . . . . . . 12,000 11,859
Deutsche Bank Financial, 5.875%,
11/1/95. . . . . . . . . . . . . . . . . . . . . . 15,000 14,997
Du Pont (EI) de Nemours, 4(2),
5.70 -5.75%, 11/9 - 11/24/95 . . . . . . . . . . . 7,000 6,931
Dun & Bradstreet, 5.67%, 1/30/96 . . . . . . . . . 10,000 9,827
Finnish Export Credit Ltd., 5.71%,
1/17 - 1/23/96 . . . . . . . . . . . . . . . . . . 6,100 6,004
Fleet Mortgage Group, 5.76 - 5.77%,
11/17 - 11/21/95 . . . . . . . . . . . . . . . . . 6,000 5,972
General Electric Capital, 5.60%,
11/6/95. . . . . . . . . . . . . . . . . . . . . . 2,000 1,952
Golden Peanut, 5.68%, 1/10 - 1/12/96 . . . . . . . 11,000 10,845
Knight-Ridder, 5.75%, 11/13/95 . . . . . . . . . . 5,700 5,663
Korea Development Bank, 5.72%,
1/25/96. . . . . . . . . . . . . . . . . . . . . . 5,000 4,924
National Australia Funding (Delaware),
5.73%, 1/16/96 . . . . . . . . . . . . . . . . . . 4,000 3,949
NationsBank, 5.625%, 1/12/96 . . . . . . . . . . . 2,000 1,950
Norfolk Southern, 4(2), 5.70%, 1/12/96 . . . . . . 3,864 3,805
Oesterrichische Kontrollbank, 5.46%,
1/11/96. . . . . . . . . . . . . . . . . . . . . . 6,000 5,829
Panasonic Finance, 4(2), 5.70 - 5.75%,
11/7 - 12/29/95. . . . . . . . . . . . . . . . . . 12,000 11,852
PHH, 5.75%, 11/10/95 . . . . . . . . . . . . . . . 8,000 7,951
Preferred Receivables Funding,
5.73 - 5.75%, 11/1 - 11/20/95. . . . . . . . . . . 13,650 13,596
Province of British Columbia, 5.61 - 6.20%,
11/17/95 - 1/3/96. . . . . . . . . . . . . . . . . 6,300 6,078
Province of Quebec, 5.60 - 6.20%,
12/6/95 - 2/26/96. . . . . . . . . . . . . . . . . 7,000 6,744
Republic of New York, 5.61%, 1/4/96. . . . . . . . 5,000 4,881
RTZ America, 4(2), 5.62%, 12/15/95 . . . . . . . . 2,600 2,562
SBNSW (Delaware), 5.67%, 12/14/95. . . . . . . . . 10,000 9,841
Statoil (Den Norske Stats Oljeselskap),
5.78 - 5.92%, 11/1/95. . . . . . . . . . . . . . . 11,237 11,228
Teco Finance, 4(2), 5.68%, 11/30/95. . . . . . . . 3,000 2,962
Transamerica Financial Group, 5.60%,
2/15/96. . . . . . . . . . . . . . . . . . . . . . 4,470 4,354
UBS Finance (Delaware), 5.88%,
11/1/95. . . . . . . . . . . . . . . . . . . . . . 12,000 11,998
Vermont American, 4(2), 5.73%,
11/9/95. . . . . . . . . . . . . . . . . . . . . . 2,015 2,003
Warner-Lambert, 5.65%, 12/22/95. . . . . . . . . . 4,000 3,883
Western Australian Treasury, 5.62 - 5.72%,
11/17/95 - 1/8/96. . . . . . . . . . . . . . . . . 12,000 11,820
Westpac Capital, 5.61 - 5.62%,
1/22 - 1/31/96 . . . . . . . . . . . . . . . . . . 7,000 6,800
WMX Technologies, 4(2), 5.68%,
11/29/95 . . . . . . . . . . . . . . . . . . . . . 7,737 7,625
Total Commercial Paper (Cost $278,790) 278,717
Medium-Term Notes - 10.1%
ABB International Finance, (Eurobond),
6.375%, 2/20/96 . . . . . . . . . . . . . . . . . 5,000 5,007
Australian Wheat Board, 6.99%,
2/15/96. . . . . . . . . . . . . . . . . . . . . . 2,400 2,407
Bear Stearns, VR, 5.886%, 11/29/95 . . . . . . . . 5,000 4,997
First Chicago, VR, 5.938%, 11/1/95 . . . . . . . . 2,500 2,500
Ford Motor Credit, 5.15 - 8.875%,
3/15 - 8/14/96 . . . . . . . . . . . . . . . . . . 3,805 3,834
VR, 6.141%, 12/18/95 . . . . . . . . . . . . 3,400 3,404
General Electric Capital, VR, 5.875 - 5.938%,
11/24/95 . . . . . . . . . . . . . . . . . . . . . 1,500 1,500
General Motors Acceptance Corporation, 8.625%,
7/15/96. . . . . . . . . . . . . . . . . . . . . . 3,100 3,160
Goldman Sachs Group L.P., VR, 5.828 - 6.108%,
11/24 - 11/28/95 . . . . . . . . . . . . . . . . . 8,000 8,000
Norwest, VR, 5.875%, 11/15/95. . . . . . . . . . . 1,000 1,000
Sears Roebuck Acceptance, 8.98%,
7/11/96. . . . . . . . . . . . . . . . . . . . . . 3,580 3,657
Wells Fargo & Company, VR, 5.878%,
12/20/95 . . . . . . . . . . . . . . . . . . . . . 1,500 1,499
World Savings and Loan Assn., VR,
5.875%, 11/21/95 . . . . . . . . . . . . . . . . . 3,000 2,999
Total Medium-Term Notes (Cost $43,938) 43,964
U.S. Government Agency Obligations - 2.3%
Federal National Mortgage Assn., 5.813 - 6.00%,
9/27 - 10/7/96 (Cost $10,000). . . . . . . . . . . 10,000 9,995
Total Investments in Securities - 100.6% of Net Assets
(Cost $436,189). . . . . . . . . . . . . . . . . . 436,128
Other Assets Less Liabilities . . . . . . . . . . (2,664)
_________
Net Assets Consist of: Value
_________
Accumulated net realized gain/loss -
net of distributions . . . . . . . . . . . . . . . $ 5
Net unrealized gain (loss) . . . . . . . . . . . . (61)
Paid-in-capital applicable to 433,519,796
shares of $0.0001 par value capital
stock outstanding; 1,000,000,000 shares
of the Corporation authorized. . . . . . . . . . . 433,520
_________
NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 433,464
_________
_________
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $1.00
_____
_____
VR Variable Rate
4(2) Commercial Paper sold within terms of a private placement memorandum,
exempt from registration under section 4.2 of the Securities Act of
1933, as amended, and may be sold only to dealers in that program or
other "accredited investors".
The accompanying notes are an integral part of these financial statements.
Statement of Net Assets
T. Rowe Price Summit Limited-Term Bond Fund / October 31, 1995
(amounts in thousands)
Amount Value
______ _____
Corporate Bonds and Notes - 36.6%
BANKING - 5.5%
ABN AMRO Bank (Chicago), N.V., 7.25%,
5/31/05. . . . . . . . . . . . . . . . . . . . . . $ 250 $ 253
Bankers Trust New York, Sub. Notes,
9.50%, 6/14/00 . . . . . . . . . . . . . . . . . . 225 249
Dime Bancorp, Sr. Notes, 10.50%,
11/15/05 . . . . . . . . . . . . . . . . . . . . . 90 100
Firstar, Sub. Notes, 7.15%, 9/1/00 . . . . . . . . 135 137
Hartford National, Sub. Capital Notes,
9.85%, 6/1/99. . . . . . . . . . . . . . . . . . . 50 55
Huntington National Bank, 4.48%,
10/14/96 . . . . . . . . . . . . . . . . . . . . . 130 128
Northern Trust, MTN, 9.15%, 3/13/98. . . . . . . . 225 240
Provident Bank, MTN, 5.00%, 6/15/96. . . . . . . . 125 124
Shawmut, Notes, 8.875%, 4/1/96 . . . . . . . . . . 200 202
1,488
BROADCASTING AND MEDIA - 3.7%
Granite Broadcasting, Sr. Sub. Notes,
10.375%, 5/15/05 . . . . . . . . . . . . . . . . . 85 87
Heritage Media, Sr. Sub. Notes, 11.00%,
10/1/02. . . . . . . . . . . . . . . . . . . . . . 100 106
News America Holdings, Sr. Notes, 7.50%,
3/1/00 . . . . . . . . . . . . . . . . . . . . . . 225 233
TCI Communications, Sr. Notes, 8.00%,
8/1/05 . . . . . . . . . . . . . . . . . . . . . . 230 238
Time Warner, Notes, 7.95%, 2/1/00. . . . . . . . . 225 234
Young Broadcasting, Gtd. Sr. Sub. Notes,
11.75%, 11/15/04 . . . . . . . . . . . . . . . . . 85 94
992
BROKER/DEALERS - 4.1%
Bear Stearns, 7.625%, 9/15/99. . . . . . . . . . . 225 234
Morgan Stanley Group, 7.32%,
1/15/97. . . . . . . . . . . . . . . . . . . . . . 100 101
PaineWebber Group, Notes, 7.00%,
3/1/00 . . . . . . . . . . . . . . . . . . . . . . 250 251
Salomon, MTN, 5.47%, 8/29/97 . . . . . . . . . . . 225 220
Smith Barney Holdings, Notes, 7.00%,
5/15/00. . . . . . . . . . . . . . . . . . . . . . 300 306
1,112
BUILDING AND REAL ESTATE - 0.4%
Rouse, Sr. Notes, 8.50%, 1/15/03 . . . . . . . . . 110 118
CONSUMER PRODUCTS - 3.9%
Coca-Cola Bottling Group, Sr. Sub. Notes,
9.00%, 11/15/03. . . . . . . . . . . . . . . . . . 100 100
Coleman Holdings, Sr. Sec. Disc. Note,
Zero Coupon, 5/27/98 . . . . . . . . . . . . . . . 85 67
General Mills, MTN, 7.16%, 10/3/97 . . . . . . . . 250 255
Pepsico, MTN, 6.80%, 5/15/00 . . . . . . . . . . . 200 204
Philip Morris, 7.75%, 5/1/99 . . . . . . . . . . . 225 234
Seagram (Joseph E.) & Sons, Gtd. Notes,
9.75%, 6/15/00 . . . . . . . . . . . . . . . . . . 200 203
1,063
CONSUMER SERVICES - 1.3%
Columbia HCA Healthcare, Notes, 6.41%,
6/15/00. . . . . . . . . . . . . . . . . . . . . . 185 185
6.50%, 3/15/99 . . . . . . . . . . . . . . . 65 65
President Casinos, Sr. Notes, 13.00%,
9/15/01. . . . . . . . . . . . . . . . . . . . . . 100 88
Warrants*. . . . . . . . . . . . . . . . . . 1 wts. 1
339
FINANCE AND CREDIT - 6.1%
Advanta, MTN, 7.07%, 9/2/97. . . . . . . . . . . . $ 100 102
American Express, 8.75%, 6/15/96 . . . . . . . . . 50 51
Aristar, Sr. Notes, 7.875%, 2/15/99. . . . . . . . 225 236
Ciesco, MTN, 7.38%, 4/19/00. . . . . . . . . . . . 250 257
First USA Bank (Delaware), 6.125%,
10/30/97 . . . . . . . . . . . . . . . . . . . . . 250 252
Fleet Mortgage Group, Notes, 6.50%,
6/15/00. . . . . . . . . . . . . . . . . . . . . . 250 251
Greyhound Financial, FR, 6.125%,
2/15/96. . . . . . . . . . . . . . . . . . . . . . 200 200
Providian, MTN, 6.92%, 5/16/00 . . . . . . . . . . 300 308
1,657
INDUSTRIALS - 8.9%
Agriculture Minerals and Chemicals,
Sr. Notes, 10.75%, 9/30/03 . . . . . . . . . . . . 85 90
American Standard, Sr. Deb.,
11.375%, 5/15/04 . . . . . . . . . . . . . . . . . 100 111
Boise Cascade, MTN, 6.81%, 2/1/99. . . . . . . . . 225 226
Coltec Industries, Sr. Sub. Deb.,
10.25%, 4/1/02 . . . . . . . . . . . . . . . . . . 100 102
Container Corporation of America,
Sr. Notes, 11.25%, 5/1/04. . . . . . . . . . . . . 100 105
Dow Capital, Deb., 8.25%, 2/15/96. . . . . . . . . 125 126
Exide, Sr. Notes, 10.00%, 4/15/05. . . . . . . . . 45 48
Ford Motor, MTN, 7.02%, 10/10/00 . . . . . . . . . 250 257
General Motors Acceptance Corporation,
9.625%, 12/15/01 . . . . . . . . . . . . . . . . . 300 346
IMO Industries, Sr. Sub. Deb.,
12.00%, 11/1/01. . . . . . . . . . . . . . . . . . 100 103
Lockheed, Deb., 9.375%, 10/15/99 . . . . . . . . . 85 94
McDonnell Douglas, Notes, 8.625%,
4/1/97 . . . . . . . . . . . . . . . . . . . . . . 125 129
Reynolds Metals, MTN, 9.20%, 7/6/00. . . . . . . . 225 248
Tenneco, 8.00%, 11/15/99 . . . . . . . . . . . . . 270 285
Westinghouse Electric, 7.75%,
4/15/96. . . . . . . . . . . . . . . . . . . . . . 125 126
2,396
PETROLEUM - 0.7%
Occidental Petroleum, MTN,
5.90%, 11/9/98 . . . . . . . . . . . . . . . . . . 125 124
Petroleum Heat and Power, Sub. Deb.,
12.25%, 2/1/05 . . . . . . . . . . . . . . . . . . 45 50
174
RAILROADS - 0.3%
CSX, 9.50%, 11/15/95 . . . . . . . . . . . . . . . 80 80
RETAIL - 1.1%
Federated Department Stores, Sr. Notes,
10.00%, 2/15/01. . . . . . . . . . . . . . . . . . 85 91
Sears Roebuck and Company, Notes,
8.55%, 8/1/96. . . . . . . . . . . . . . . . . . . 200 203
294
UTILITIES - 0.6%
Consumers Power Company, 1st Mtg. Notes,
6.875%, 5/1/98 . . . . . . . . . . . . . . . . . . 152 153
Total Corporate Bonds and Notes
(Cost $9,760) 9,866
U.S. Government Mortgage-Backed Securities - 25.2%
U.S. GOVERNMENT AGENCY OBLIGATIONS - 12.2%
Federal Home Loan Mortgage,
6.725%, 8/15/00. . . . . . . . . . . . . . . . . . 225 227
6.80%, 4/15/18 . . . . . . . . . . . . . . . 300 300
7.45%, 10/15/15. . . . . . . . . . . . . . . 193 196
7.50%, 9/15/06 . . . . . . . . . . . . . . . 829 844
8.25%, 7/15/12 . . . . . . . . . . . . . . . 100 103
10.75%, 12/1/09. . . . . . . . . . . . . . . 182 199
5 year Balloon, 6.00%, 4/1/99. . . . . . . . 473 470
7 year Balloon, 7.00%, 7/1/02. . . . . . . . 699 708
Federal National Mortgage Assn., REMIC,
9.00%, 8/25/11 . . . . . . . . . . . . . . . . . . 11 11
9.50%, 9/25/18 . . . . . . . . . . . . . . . 235 238
3,296
U.S. GOVERNMENT GUARANTEED OBLIGATIONS - 13.0%
Government National Mortgage Assn., I,
10.00%, 11/15/09 - 10/15/21. . . . . . . . . . . . 1,166 1,277
II, 10.00%, 10/20/20 . . . . . . . . . . . . 288 311
Midget, I, 9.00%, 4/15 - 12/15/01. . . . . . 111 117
9.50%, 3/15/98 . . . . . . . . . . . . . . . 27 28
10.00%, 8/15/98 - 4/15/01. . . . . . . . . . 883 928
10.50%, 2/15/98 - 2/15/01. . . . . . . . . . 807 848
3,509
Total U.S. Government Mortgage-Backed Securities
(Cost $6,768) 6,805
U.S. Government Obligations - 20.4%
U.S. Treasury Notes,
6.125%, 5/15/98. . . . . . . . . . . . . . . 500 505
6.875%, 3/31/00. . . . . . . . . . . . . . . 1,300 1,353
7.25%, 8/31/96 . . . . . . . . . . . . . . . 1,000 1,013
7.75%, 1/31/00 . . . . . . . . . . . . . . . 750 804
7.875%, 7/15/96. . . . . . . . . . . . . . . 250 254
9.375%, 4/15/96. . . . . . . . . . . . . . . 1,550 1,576
Total U.S. Government Obligations
(Cost $5,457) 5,505
Asset-Backed Securities - 3.8%
AUTO-BACKED - 1.2%
Ford Credit Auto Loan Master Trust,
6.50%, 8/15/02 . . . . . . . . . . . . . . . . . . 225 228
USAA Auto Loan Grantor Trust, 5.00%,
11/15/99 . . . . . . . . . . . . . . . . . . . . . 100 99
327
CREDIT CARD-BACKED - 1.7%
Banc One Credit Card Master Trust,
6.15%, 7/15/02 . . . . . . . . . . . . . . . . . . 240 240
NationsBank Credit Card Master Trust,
6.45%, 4/15/03 . . . . . . . . . . . . . . . . . . 225 228
468
RECEIVABLES-BACKED - 0.8%
Oakwood Mortgage, 6.45%, 12/31/99. . . . . . . . . 225 225
WHOLE LOANS-BACKED - 0.1%
Bear Stearns, CMO, 9.00%, 6/1/17 . . . . . . . . . 11 12
Total Asset-Backed Securities
(Cost $1,025) 1,032
Commerical Paper - 12.2%
BMW U.S. Capital, 5.75%, 11/13/95. . . . . . . . . 500 499
Campbell Soup, 5.72%, 11/2/95. . . . . . . . . . . 205 205
Dillard Investment, 5.71%, 11/10/95. . . . . . . . 315 314
Hewlett Packard, 5.65%, 1/19/96. . . . . . . . . . 400 394
Investments in Commercial Paper through
a joint account, 5.87 - 5.88%,
11/1/95. . . . . . . . . . . . . . . . . . . . . . 1,327 1,327
Mobil Australia Finance,
5.70%, 11/30/95. . . . . . . . . . . . . . . . . . 564 561
Total Commercial Paper
(Cost $3,300) 3,300
Total Investments in Securities -
98.2% of Net Assets (Cost $26,310) . . . . . . . . 26,508
Other Assets Less Liabilities . . . . . . . . . . 496
_________
Net Assets Consist of: Value
__________
Accumulated net investment income -
net of distributions . . . . . . . . . . . . . . . $ (139)
Accumulated net realized gain/loss -
net of distributions . . . . . . . . . . . . . . . (1,370)
Net unrealized gain (loss) . . . . . . . . . . . . 198
Paid-in-capital applicable to 5,802,467
shares of $0.0001 par value capital
stock outstanding; 1,000,000,000 shares
of the Corporation authorized. . . . . . . . . . . 28,315
__________
NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 27,004
_________
_________
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $4.65
_____
_____
* Non-income Producing
CMO Collateralized Mortgage Obligation
FR Floating Rate
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
The accompanying notes are an integral part of these financial statements.
Statement of Net Assets
T. Rowe Price Summit GNMA Fund / October 31, 1995
(amounts in thousands)
Amount Value
______ ______
U.S. Government Mortgage-Backed Securities - 98.2%
U.S. GOVERNMENT GUARANTEED OBLIGATIONS - 89.3%
Government National Mortgage Assn., I,
7.00%, 4/15/24 . . . . . . . . . . . . . . . $ 337 $ 335
7.50%, 6/15/22 - 5/15/24 . . . . . . . . . . 2,587 2,630
8.00%, 4/15/17 - 9/15/24 . . . . . . . . . . 2,502 2,596
8.50%, 6/15/16 - 11/15/22. . . . . . . . . . 909 958
9.00%, 8/15/08 - 8/15/21 . . . . . . . . . . 929 987
9.50%, 6/15/09 - 3/15/25 . . . . . . . . . . 2,075 2,229
10.00%, 3/15/18. . . . . . . . . . . . . . . 112 123
10.50%, 9/15/13 - 12/15/19 . . . . . . . . . 1,467 1,621
11.00%, 12/15/09 - 7/15/19 . . . . . . . . . 301 338
11.50%, 6/15 - 12/15/15. . . . . . . . . . . 88 100
II, 9.00%, 5/20/22 - 3/20/25 . . . . . . . . . . 1,070 1,119
9.50%, 2/20/17 - 12/20/20. . . . . . . . . . 413 437
10.00%, 1/20/14 - 3/20/21. . . . . . . . . . 349 377
11.00%, 9/20/17. . . . . . . . . . . . . . . 49 55
GPM, I, 9.25%, 7/15/16 - 8/15/21 . . . . . . . . 150 158
9.50%, 7/15/09 . . . . . . . . . . . . . . . 84 90
10.00%, 8/15/13. . . . . . . . . . . . . . . 4 5
Project Loan, I, 8.50%, 1/15/27. . . . . . . . . 201 210
9.25%, 9/15/23 . . . . . . . . . . . . . . . 289 289
REMIC, 6.50%, 10/16/24 . . . . . . . . . . . . . 3,000 2,746
TBA, I, 6.50%, 1/1/25. . . . . . . . . . . . . . 2,000 1,946
7.00%, 1/1/25. . . . . . . . . . . . . . . . 1,000 994
20,343
U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.6%
Federal Home Loan Mortgage, 5.00%, 7/15/05 . . . . 50 49
7.50%, 12/15/19. . . . . . . . . . . . . . . 500 511
Federal National Mortgage Assn.,
5.00%, 11/25/20 - 8/25/22. . . . . . . . . . 1,016 916
6.00%, 3/25/11 . . . . . . . . . . . . . . . 2 2
8.00%, 1/25/21 . . . . . . . . . . . . . . . 37 38
1,516
STRIPPED MORTGAGE SECURITIES - 2.3%
Federal National Mortgage Assn., CMO,
Interest Only, 6.50%, 10/1/23**. . . . . . . . . . 872 277
8.50%, 4/1/22**. . . . . . . . . . . . . . . 925 216
REMIC, Principal Only, Zero Coupon,
9/25/98. . . . . . . . . . . . . . . . . . . . . 29 25
518
Total U.S. Government Mortgage-Backed
Securities (Cost $22,104) 22,377
U.S. Government Obligations - 15.8%
U.S. Treasury Bonds, 6.875%,
8/15/25. . . . . . . . . . . . . . . . . . . . . . 2,500 2,683
U.S. Treasury Notes, 6.00%, 6/30/96. . . . . . . . 915 917
Total U.S. Government Obligations
(Cost $3,591) 3,600
Asset-Backed Securities - 0.4%
HOME EQUITY LOANS-BACKED - 0.4%
Prudential Home Mortgage Securities,
6.00%, 10/25/07 (Cost $92) . . . . . . . . . . . . 92 91
Total Investments in Securities - 114.4% of
Net Assets (Cost $25,787) 26,068
Other Assets Less Liabilities . . . . . . . . . . (3,291)
_________
Net Assets Consist of: Value
_________
Accumulated net investment income -
net of distributions . . . . . . . . . . . . . . . $ (128)
Accumulated net realized gain/loss -
net of distributions . . . . . . . . . . . . . . . (187)
Net unrealized gain (loss) . . . . . . . . . . . . 281
Paid-in-capital applicable to 2,321,071
shares of $0.001 par value capital
stock outstanding; 1,000,000,000 shares
of the Corporation authorized. . . . . . . . . . . 22,811
_________
NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 22,777
_________
_________
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $9.81
_____
_____
** For Interest Only securities, amount represents notional principal,
on which the fund receives interest.
CMO Collateralized Mortgage Obligation
GPM Graduated Payment Mortgage
REMIC Real Estate Mortgage Investment Conduit
TBA To be announced security was purchased on a forward commitment basis.
Statement of Operations
T. Rowe Price Summit Income Funds / Year Ended October 31, 1995
(in thousands)
Cash
Reserves Limited-Term GNMA
Fund Bond Fund Fund
_________ _________ _________
INVESTMENT INCOME
Interest income. . . . . . . . . . $ 18,408 $ 1,662 $ 1,497
Investment management and
administrative
expenses . . . . . . . . . . . . . 1,381 123 113
_________ _________ _________
Net investment income. . . . . . . 17,027 1,539 1,384
_________ _________ _________
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities . . . . . . . . . . . 4 (439) (275)
Futures. . . . . . . . . . . . . - - (13)
_________ _________ _________
Net realized
gain (loss). . . . . . . . . . . 4 (439) (288)
Change in net unrealized
gain or loss
on securities. . . . . . . . . . . 22 503 1,547
_________ _________ _________
Net realized and
unrealized gain (loss) . . . . . . 26 64 1,259
_________ _________ _________
INCREASE (DECREASE) IN
NET ASSETS FROM
OPERATIONS . . . . . . . . . . . . $ 17,053 $ 1,603 $ 2,643
_________ _________ _________
_________ _________ _________
The accompanying notes are an integral part of these financial statements.
<TABLE>
Statement of Changes in Net Assets
T. Rowe Price Summit Income Funds
(in thousands)
Cash Reserves Fund Limited-Term Bond Fund GNMA Fund
____________________ ____________________ ____________________
Year Oct. 29, Year Oct. 29, Year Oct. 29,
Ended 1993* to Ended 1993* to Ended 1993* to
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1995 1994 1995 1994 1995 1994
_______ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment
income . . . . . . . . . . $ 17,027 $ 3,647 $ 1,539 $ 1,057 $ 1,384 $ 1,001
Net realized gain
(loss) . . . . . . . . . . 4 1 (439) (1,132) (288) (223)
Change in net unrealized
gain or loss . . . . . . . 22 (83) 503 (305) 1,547 (1,266)
________ ________ ________ ________ ________ ________
Increase (decrease) in
net assets
from operations. . . . . . 17,053 3,565 1,603 (380) 2,643 (488)
________ ________ ________ ________ ________ ________
Distributions to shareholders
Net investment
income . . . . . . . . . . (17,027) (3,647) (1,478) (1,056) (1,309) (1,001)
Tax return of
capital. . . . . . . . . . - - (62) - (75) -
________ ________ ________ ________ ________ ________
Decrease in net
assets from
distributions. . . . . . . (17,027) (3,647) (1,540) (1,056) (1,384) (1,001)
________ ________ ________ ________ ________ ________
Capital share transactions**
Shares sold. . . . . . . . 720,697 340,645 17,791 32,622 11,514 22,577
Distributions
reinvested . . . . . . . . 15,823 3,318 1,190 861 1,002 774
Shares redeemed. . . . . . (489,605) (157,398) (13,156) (10,961) (8,182) (4,708)
________ ________ ________ ________ ________ ________
Increase (decrease)
in net assets from
capital share
transactions . . . . . . . 246,915 186,565 5,825 22,522 4,334 18,643
________ ________ ________ ________ ________ ________
Increase (decrease) in
net assets . . . . . . . . 246,941 186,483 5,888 21,086 5,593 17,154
NET ASSETS
Beginning of
period . . . . . . . . . . 186,523 40 21,116 30 17,184 30
________ ________ ________ ________ ________ ________
End of period. . . . . . . $ 433,464 $ 186,523 $ 27,004 $ 21,116 $ 22,777 $ 17,184
________ ________ ________ ________ ________ ________
________ ________ ________ ________ ________ ________
**Share information
Shares sold. . . . . . . . 720,697 340,645 3,847 6,654 1,206 2,285
Distributions
reinvested . . . . . . . . 15,823 3,318 257 181 105 81
Shares
redeeemed. . . . . . . . . (489,605) (157,398) (2,858) (2,285) (868) (491)
________ ________ ________ ________ ________ ________
Increase (decrease)
in shares
outstanding. . . . . . . . 246,915 186,565 1,246 4,550 443 1,875
________ ________ ________ ________ ________ ________
________ ________ ________ ________ ________ ________
* Commencement of operations
The accompanying notes are an integral part of these financial statements.
</TABLE>
Notes to Financial Statements
T. Rowe Price Summit Income Funds / October 31, 1995
Note 1 - Significant Accounting Policies
T. Rowe Price Summit Funds, Inc., (the Corporation) is registered under the
Investment Company Act of 1940. The Summit Cash Reserves Fund (the Cash
Reserves Fund), the Summit Limited-Term Bond Fund (the Limited-Term Bond Fund)
and the Summit GNMA Fund (the GNMA Fund), diversified, open-end management
investment companies, are the three portfolios established by the Corporation.
A) 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 Cash Reserves Fund, securities with remaining
maturities of 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 Cash Reserves Fund with remaining
maturities of 60 days or less are valued at amortized cost. Equity securities
are valued at the last bid price.
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 each
fund, as authorized by the Board of Directors.
B) Premiums and Discounts - Premiums and discounts on debt securities, other
than mortgage-backed securities, are amortized for both financial reporting and
tax purposes. Premiums and discounts on mortgage-backed securities are
recognized upon principal repayment as gain or loss for financial reporting
purposes and as ordinary income for tax 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 the identified cost basis. Distributions to shareholders are
recorded by each fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax regulations
and may differ from those determined in accordance with generally accepted
accounting principles.
Note 2 - Investment Transactions
A) Commercial Paper Joint Account - The Limited-Term Bond Fund, and other
affiliated funds, may transfer uninvested cash into a commercial paper joint
account, the daily aggregate balance of which is invested in high-grade
commercial paper. All securities purchased by the joint account satisfy the
Limited-Term Bond Fund's criteria as to quality, yield, and liquidity.
B) Other - Purchases and sales of U.S. government securities and other
portfolio securities, excluding short-term securities, for the year ended
October 31, 1995, were as follows:
Limited-Term
Bond Fund GNMA Fund
_____________ ____________
U.S. Government Securities
Purchases $ 8,572,000 $ 42,015,000
Sales 11,155,000 35,851,000
Other Securities
Purchases 9,648,000 -
Sales 5,043,000 7,000
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
taxable income. The Limited-Term Bond Fund has unused realized capital loss
carryforwards for federal income tax purposes of $1,371,000, of which
$1,017,000 expires in 2002, and $354,000 in 2003. The GNMA Fund has an unused
realized capital loss carryforward for federal income tax purposes of $187,000,
which expires in 2003. Each fund intends to retain gains realized in future
periods that may be offset by available capital loss carryforwards.
In order for each fund's capital accounts and distributions to shareholders to
reflect the tax character of certain transactions, the following
reclassifications were made during the year ended October 31, 1995. The results
of operations and net assets were not affected by the reclassifications.
Limited-Term
Bond Fund GNMA Fund
_____________ ____________
Undistributed Net
Investment Income $ (139,000) $ (128,000)
Undistributed Net
Realized Gain 201,000 211,000
Paid-in-Capital (62,000) (83,000)
At October 31, 1995, the aggregate cost of investments for the Cash
Reserves, Limited-Term Bond, and GNMA funds for federal income tax and
financial reporting purposes was $436,189,000, $26,310,000, and $25,787,000,
respectively. Net unrealized gain (loss) on investments was as follows:
Cash Reserves Limited-Term
Fund Bond Fund GNMA Fund
__________ __________ __________
Appreciated
Investments $ 41,000 $ 236,000 $ 485,000
Depreciated
Investments (102,000) (38,000) (204,000)
__________ __________ __________
Net Unrealized
Gain (Loss) $ (61,000) $ 198,000 $ 281,000
__________ __________ __________
__________ __________ __________
Note 4 - Related Party Transactions
The investment management and administrative agreement between each fund and T.
Rowe Price Associates, Inc. (the Manager), provides for an all-inclusive annual
fee, of which $138,000 was payable at October 31, 1995 by the Cash Reserves
Fund. The fee, computed daily and paid monthly, is equal to 0.45% of average
daily net assets for the Cash Reserves Fund, 0.55% of average daily net assets
for the Limited-Term Bond Fund, and 0.60% of average daily net assets for the
GNMA Fund. Pursuant to the agreement, investment management, shareholder
servicing, transfer agency, accounting, and custody services are provided to
each fund, and interest, taxes, brokerage commissions, and extraordinary
expenses are paid directly by each fund.
<TABLE>
Financial Highlights
T. Rowe Price Summit Income Funds
For a share outstanding throughout each period
Cash Reserves Fund Limited-Term Bond Fund GNMA Fund
____________________ ____________________ ____________________
Year Oct. 29, Year Oct. 29, Year Oct. 29,
Ended 1993* to Ended 1993* to Ended 1993* to
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct.31, Oct. 31,
1995 1994 1995 1994 1995 1994
______ ______ ______ ______ ______ ______
<S> <C> <S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD . . . . . . . . . . $1.000 $1.000 $4.64 $5.00 $9.15 $10.00
______ ______ ______ ______ ______ ______
Investment activities
Net investment
income . . . . . . . . . . 0.055 0.035 0.32 0.33 0.70 0.69
Net realized and
unrealized gain
(loss) . . . . . . . . . . - - 0.01 (0.36) 0.66 (0.85)
______ ______ ______ ______ ______ ______
Total from investment
activities . . . . . . . . 0.055 0.035 0.33 (0.03) 1.36 (0.16)
______ ______ ______ ______ ______ ______
Distributions
Net investment
income . . . . . . . . . (0.055) (0.035) (0.31) (0.33) (0.67) (0.69)
Tax return of
capital. . . . . . . . . - - (0.01) - (0.03) -
______ ______ ______ ______ ______ ______
Total
distributions. . . . . . (0.055) (0.035) (0.32) (0.33) (0.70) (0.69)
______ ______ ______ ______ ______ ______
NET ASSET VALUE,
END OF PERIOD. . . . . . . $1.000 $1.000 $4.65 $4.64 $9.81 $9.15
______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total return . . . . . . . 5.68% 3.60% 7.36% (0.71)% 15.43% (1.67)%
Ratio of expenses
to average
net assets . . . . . . . . 0.45% 0.45%! 0.55% 0.55%! 0.60% 0.60%!
Ratio of net investment
income to average
net assets . . . . . . . . 5.55% 4.03%! 6.85% 6.98%! 7.40% 7.31%!
Portfolio turnover
rate . . . . . . . . . . . - - 84.3% 296.0%! 173.8% 61.5%!
Net assets, end of period
(in thousands) . . . . . . $433,464 $186,523 $27,004 $21,116 $22,777 $17,184
! Annualized
* Commencement of operations
The accompanying notes are an integral part of these financial statements.
</TABLE>
Report of Independent Accountants
To the Board of Directors of the T. Rowe Price Summit Funds, Inc.
and Shareholders of the T. Rowe Price Summit Cash Reserves Fund,
T.Rowe Price Summit Limited-Term Bond Fund and T. Rowe Price Summit GNMA Fund.
We have audited the accompanying statement of net assets of the T. Rowe Price
Summit Funds, Inc. (which include the T. Rowe Price Summit Cash Reserves Fund,
T. Rowe Price Summit Limited-Term Bond Fund and T. Rowe Price Summit GNMA
Fund), as of October 31, 1995, and the related statements of operations for the
year then ended, and the statement of changes in net assets and financial
highlights for the year ended October 31, 1995 and the period October 29, 1993
(commencement of operations) to October 31, 1994. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of October 31, 1995 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of T.
Rowe Price Summit Funds, Inc. as of October 31, 1995, the results of their
operations, the changes in their net assets and financial highlights for the
periods stated in the first paragraph in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
November 17, 1995
Chart 1 - Interest Rate Levels
A 3-line chart showing interest rate levels on the current coupon GNMA, 5-year
Treasury note, and the 90-day Treasury bill from 10/31/94 through 10/31/95.
Chart 2 - Performance Comparison
Fiscal-year performance comparison line graph for Summit Cash Reserves Fund
shows value of $10,000 investments in Summit Fund and Donoghue's 1st Tier
Average from 10/93 to 10/95.
Chart 3 - Performance Comparison
Fiscal-year performance comparison line graph for Summit GNMA Fund shows value
of $10,000 investments in Summit Fund, Lipper GNMA Funds Average, and Salomon
GNMA Index from 10/93 to 10/95.
Chart 4 - Performance Comparison
Fiscal-year performance comparison line graph for Summit Limited-Term Bond Fund
shows value of $10,000 investments in Summit Fund, Merrill Lynch 1-5 Year
Corporate/Government Index, and Lipper Short Investment-Grade Debt Funds
Average from 10/93 to 10/95.
