Semiannual Report
Summit
Income
Funds
April 30, 1998
T. Rowe Price
Report Highlights
Summit Income Funds
o Interest rates reversed course often throughout the last
six months, ultimately ending the period flat to slightly
lower.
o The Summit Cash Reserves Fund posted solid results for
the six-month period, using a slightly longer maturity to
outperform its Lipper peer group.
o Summit Limited-Term Bond Fund also outpaced its peers
over the past six months, aided by a large weighting in
corporate bonds and a dose of high-yield issues.
o Summit GNMA Fund posted better returns than its Lipper
peer group average with the help of
prepayment-insensitive holdings.
o As long as the economy and inflation remain favorable and
the Federal Reserve keeps interest rates steady, we will
pursue mildly aggressive strategies to help maintain the
funds' dividend levels.
Fellow Shareholders
The U.S. bond market benefited from another period of steady
economic growth, low inflation, and flat to declining interest
rates during the six months ended April 30, 1998. Corporate
and high-yield bonds regained market leadership, while
mortgage-backed bonds were sluggish. In this environment, the
Summit Income Funds posted respectable returns and
successfully outpaced their peer group averages.
Market Environment
Investors in the U.S. bond market largely took a wait-and-see
attitude over the past six months, concerned by conflicting
interest rate pressures. The economy's continued record of
strong growth stirred concerns over the future of inflation,
and the bond market was prone to frequent but brief sell-offs
as it feared the Federal Reserve would be motivated to raise
interest rates. Nonetheless, a surge in inflation never
materialized. The consumer price index (CPI) remained below
2%, and the producer price index (PPI) declined.
The Fed, seeing no inflation but remaining anxious about
growth, has kept short-term interest rates at their current
levels for more than a year. In the absence of Fed action,
interest rates fluctuated often during the last six months,
but within a relatively narrow range. Five-year Treasury
rates, for example, swung back and forth in a 34-basis-point
range before ending the period virtually where they began. In
the past three months alone, intermediate-term interest rates
rose about 25 basis points, retracing earlier declines.
Interest Rate Levels
Current Coupon 5-Year Treasury 90-Day Treasury
GNMA Note Bill
4/30/97 7.66 6.62 5.29
7.68 6.60 5.09
7.49 6.33 5.10
7/31 7.00 6.00 5.25
7.38 6.22 5.26
6.98 5.94 5.07
10/31 6.95 5.78 5.18
6.99 5.82 5.27
6.90 5.71 5.40
1/31 6.63 5.48 5.22
6.87 5.60 5.30
6.69 5.58 5.13
4/30/98 6.67 5.72 5.05
The fallout from the Asian currency crisis of late 1997 was
surprisingly beneficial. As many economists predicted, weak
currencies caused many Asian nations to boost exports, and the
influx of inexpensive goods was among the reasons domestic
inflation remained tame during the period.
As the economy remained strong and interest rate fears spread,
better performance was posted by sectors of the market that
would be less sensitive to a rise in rates and that provided
relatively good income. Over the last three months, for
example, intermediate Treasuries did better than their
long-term counterparts. Corporate bonds outperformed
lower-yielding Treasuries throughout the period, with
high-yield bonds performing best in response to the strong
economy. Investors shied away from mortgage-backed bonds, as a
year of declining interest rates sparked a flurry of mortgage
prepayments.
Summit Cash Reserves Fund
Performance Comparison
Periods Ended 4/30/98 6 Months 12 Months
______________________________________________________________
Cash Reserves Fund 2.62% 5.40%
Lipper Money Market
Funds Average 2.43 4.98
With little overall change in short-term interest rates, your fund's
returns were stable. Its seven-day compound dividend yield changed only
slightly, from 5.41% six months ago to 5.38% at April 30, and its
dividends per share were fairly steady. Six-month and one-year total
returns significantly outpaced those of the Lipper Money Market Funds
Average, due to the fund's relatively low expense ratio and effective
management of its weighted average maturity.
The fund gained an advantage over its competitors during the past three
months: as one- to five-year interest rates rose modestly, we emphasized
purchases of one-year notes for their somewhat higher yields. Many of our
rivals pursued a similar strategy, though to a lesser extent. The
resulting extension of the fund's maturity, from 67 to 79 days, was
rewarded as we outpaced our peer group.
Sector allocation remained generally the same, with a few alterations that
reflected modest shifts in relative value within the marketplace.
Eurodollar negotiable CDs were trimmed, for example, to make room for
additional U.S. dollar-denominated foreign negotiable CDs. Similarly, in
the commercial paper segment of the portfolio, we reduced the banking
sector from 15% to 8% of assets while increasing other finance-related
sectors (including asset-backed, finance and credit, and automotive
captive finance issues), which we felt offered slightly more attractive
yields. The fund's weighted average credit quality remained high as it
continued to invest only in first-tier money market instruments.
Summit Limited-Term Bond Fund
Performance Comparison
Periods Ended 4/30/98 6 Months 12 Months
______________________________________________________________
Limited-Term Bond Fund 3.06% 8.04%
Lipper Short-Intermediate
Investment Grade
Debt Funds Average 2.79 7.65
Your fund finished the six-month period with a 3.06% total return, well
ahead of the 2.79% gain for the Lipper Short-Intermediate Investment Grade
Debt Funds Average. Over the past 12 months, your fund has been able to
outperform its benchmark average in all but one month. We have added value
by maintaining a slightly longer duration than the peer group and by
overweighting corporate debt securities, particularly lower-rated issues.
The fund currently carries a 4.3-year weighted average maturity and a
3.1-year weighted average effective duration, mildly "longer" (more
interest rate-sensitive) than six months ago. This slightly more
aggressive approach was made possible by the persistently favorable
interest rate environment as well as low (and falling) domestic inflation.
The fund's success, however, owed more to its relatively high weighting in
corporate bonds and holdings of high-yield debt. More than half of fund
assets were in corporate bonds at the end of the period, with a 6% stake
in noninvestment-grade issues. These holdings not only offered a
comparatively high income, but also responded very well to sustained
economic growth and a continuing trend toward improving credit quality.
Quality Diversification
Summit Limited-Term Bond Fund
AAA . . . AA. . . . A . . . . BBB . . . BB
42% . . . 9%. . . . 25% . . . 18% . . . 6%
Utilities were among the largest corporate sector weightings, as were
industrials, which became more attractive after lagging the market
year-to-date. We reduced banking and media and communications issues after
they performed strongly. On the other hand, we added some attractively
priced consumer products and services holdings in response to the growing
strength in consumer sentiment and demand.
The fund finished the period with an average credit quality of AA-, the
same as six months ago. As the period progressed and some of the best
opportunities played out, however, we reduced corporate holdings from 58%
to 54% of assets. Additionally, we trimmed the fund's mortgage
overweighting to be more neutral relative to its peer group after the drop
in interest rates caused mortgage prepayment risk to rise. The freed-up
assets were redeployed to some higher-quality asset-backed and government
agency securities. This shift may only be temporary, however. As long as
the economy and corporate profits remain favorable, the fund will continue
to maintain a high weighting in lower-quality corporate issues. Should the
environment change, we would probably increase holdings in higher-quality
asset-backed, federal agency, and mortgage-backed securities.
Summit GNMA Fund
Performance Comparison
Periods Ended 4/30/98 6 Months 12 Months
_____________________________________________________________
GNMA Fund 3.21% 10.66%
Lipper GNMA Funds Average 3.17 9.59
Your fund achieved a 3.21% return for the six-month period and has
returned 10.66% over the past 12 months, both ahead of the Lipper GNMA
Funds Average. These performances reflected the effects of a year's worth
of decreasing interest rates-by almost one full percentage point across
the yield curve.
As the more modest performance over the past six months suggests, these
rate declines have been a mixed blessing for your fund. In the first half
of our fiscal year, they added some price appreciation to its total return
but they also dampened its overall performance potential. Mortgage-backed
bonds tend to lag behind Treasuries and corporate bonds when interest
rates fall, because the market fears increases in mortgage prepayments.
(Prepayments occur when homeowners refinance their high-rate mortgages,
causing losses for investors when premium-priced mortgage-backed bonds are
redeemed at par.)
The Mortgage Bankers' Association Refinancing Index jumped to an all-time
high in January 1998, touching off a period of weakness for this segment
of the market. Fortunately, we were able to fare better than our average
peer fund until prepayments started to level off. As noted in the last
annual report, we have for more than a year purchased GNMAs we thought
would hold their value better against prepayments, as well as some less
traditional mortgage securities with specific prepayment protection.
Project loans and collateralized mortgage obligations (CMOs), which have
lockout periods preventing early prepayments, were especially helpful in
this regard.
Overall, the fund's price per share remained relatively constant over the
last six months, near $9.82. Dividends over the last six and 12 months
also held up. However, overall dividend yield declined, reflecting lower
interest rates.
Outlook
The future of the domestic bond market will depend largely on how long the
U.S. economy and inflation maintain their surprising balancing act.
Economic growth is increasing the pressure on interest rates, but the
continuing Asian crisis may help keep inflation in a range that encourages
Fed inaction. As long as the Fed holds the line on interest rates, your
funds are likely to pursue mildly aggressive strategies compared with
their peer groups, which may help prevent their dividend yields from
slipping in this low interest rate environment.
Respectfully submitted,
Peter Van Dyke
President
May 19, 1998
T. Rowe Price Summit Income Funds
Portfolio Highlights
Key statistics
10/31/97 4/30/98
Summit Cash Reserves Fund
_______________________________________________________________________
Price Per Share $ 1.00 $ 1.00
Dividends Per Share
For 6 months 0.027 0.026
For 12 months 0.052 0.053
Dividend Yield (7-Day Compound) * 5.41% 5.38%
Weighted Average Maturity (days) 67 79
Weighted Average Quality ** First Tier First Tier
Summit Limited-Term Bond Fund
_______________________________________________________________________
Price Per Share $ 4.61 $ 4.61
Dividends Per Share
For 6 months 0.15 0.14
For 12 months 0.29 0.29
Dividend Yield *
For 6 months 6.55% 6.24%
For 12 months 6.56 6.50
30-Day Standardized Yield 6.06 5.90
Weighted Average Maturity (years) 3.9 4.3
Weighted Average Effective Duration (years) 2.7 3.1
Weighted Average Quality *** AA- AA-
(continued on next page)
T. Rowe Price Summit Income Funds
Portfolio Highlights
Key statistics
10/31/97 4/30/98
Summit GNMA Fund
_______________________________________________________________________
Price Per Share $ 9.83 $ 9.82
Dividends Per Share
For 6 months 0.33 0.32
For 12 months 0.67 0.66
Dividend Yield *
For 6 months 6.90% 6.75%
For 12 months 7.14 6.95
30-Day Standardized Yield 6.46 6.20
Weighted Average Maturity (years) 10.1 10.4
Weighted Average Effective Duration (years) 3.9 3.9
Weighted Average Quality *** AAA AAA
* 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.
** All securities purchased in the money fund are rated in the two
highest categories (tiers) as established by national rating agencies
or, if unrated, are deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
T. Rowe Price Summit Income Funds
Portfolio Highlights
Sector Diversification
Percent of Percent of
Net Assets Net Assets
10/31/97 4/30/98
Summit Cash Reserves Fund
_______________________________________________________________________
U.S. Negotiable Bank Notes 2% 3%
Certificates of Deposit 39 39
Domestic Negotiable CDs 5 4
Eurodollar Negotiable CDs 15 12
U.S. Dollar-Denominated Foreign
Negotiable CDs 19 23
Commercial Paper and Medium-Term Notes 56 53
Asset-Backed 10 12
Finance and Credit 7 9
Asset-Backed Structured Notes 8 8
Banking 15 8
Automobiles and Related 2 4
All Other 14 12
Foreign Government and Municipalities 4 4
Other Assets Less Liabilities -1 1
_______________________________________________________________________
Total 100% 100%
Fixed Rate Obligations 90 92
Floating Rate Instruments 10 8
(continued on next page)
T. Rowe Price Summit Income Funds
Portfolio Highlights
Sector Diversification
Percent of Percent of
Net Assets Net Assets
10/31/97 4/30/98
Summit Limited-Term Bond Fund
_______________________________________________________________________
Corporate Bonds and Notes 58% 54%
Industrial 5 11
Electric Utilities 10 11
Banking 10 7
Consumer Products 3 5
Finance and Credit 8 5
All Other 22 15
Asset-Backed Securities 2 5
Mortgage-Backed Securities 24 18
U.S. Government Obligations 13 17
U.S. Treasuries 9 9
Government Agency Obligations 4 8
Money Market Funds* 3 4
Other Assets Less Liabilities - 2
_______________________________________________________________________
Total 100% 100%
Summit GNMA Fund
_______________________________________________________________________
GNMA 90% 81%
U.S. Government Agencies 15 14
Agency-Backed STRIPS 1 3
Money Market Funds* 3 6
Other Assets Less Liabilities -9 -4
_______________________________________________________________________
Total 100% 100%
*See note at end of financial statements.
T. Rowe Price Summit Income Funds
Performance Comparison
These charts show the value of a hypothetical $10,000 investment in each
fund over the past 10 fiscal year periods or since inception (for funds
lacking 10-year records). The result is compared with a broad-based
average or index. The index return does not reflect expenses, which have
been deducted from the fund's return.
Summit Cash Reserves Fund
As of 4/30/98
Lipper Money
Market Funds Summit Cash
Average Reserves Fund
10/29/93 $ 10,000 $10,000
4/94 10,133 10,149
4/95 10,593 10,647
4/96 11,143 11,235
4/97 11,682 11,815
4/98 12,272 12,453
Summit Limited-Term Bond Fund
As of 4/30/98
Merrill Lynch Lipper Short-
1-5 Year Intermediate Summit
Corporate/Government Investment Grade Limited-Term
Index Debt Funds Average Bond Fund
10/29/93 $ 10,000 $ 10,000 $ 10,000
4/94 9,858 9,742 9,782
4/95 10,461 10,245 10,248
4/96 11,239 10,986 10,818
4/97 11,939 11,654 11,448
4/98 12,879 12,555 12,368
T. Rowe Price Summit Income Funds
Performance Comparison
Summit GNMA Fund
As of 4/30/98
. . . . .
Salomon GNMA Lipper GNMA Summit GNMA
Index Funds Average Fund
10/29/93 $ 10,000 $10,000 $ 10,000
4/94 9,785 9,685 9,852
4/95 10,598 10,354 10,570
4/96 11,536 11,191 11,401
4/97 12,467 11,972 12,190
4/98 13,695 13,144 13,489
Average Annual Compound Total Return
This table shows how each fund would have performed each year if its
actual (or cumulative) returns for the periods shown had been earned at a
constant rate.
Periods Ended Since Inception
4/30/98 1 Year 3 Years Inception Date
_____________________________________________________________________
Summit Cash
Reserves Fund 5.40% 5.36% 5.00% 10/29/93
Summit Limited-Term
Bond Fund 8.04 6.47 4.84 10/29/93
Summit GNMA
Fund 10.66 8.47 6.88 10/29/93
Investment return represents past performance and will vary. Shares of the
bond funds may be worth more or less at redemption than at original
purchase. The money fund's $1.00 share price is not guaranteed, nor is the
fund insured by the U.S. government.
T. Rowe Price Summit Cash Reserves Fund
Unaudited
For a share outstanding throughout each period
Financial Highlights
6 Months Year 10/29/93
Ended Ended through
4/30/9810/31/97 10/31/96 10/31/95 10/31/94
NET ASSET VALUE
Beginning of
period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment activities
Net investment
income 0.026 0.052 0.051 0.055 0.035
Distributions
Net investment
income (0.026) (0.052) (0.051) (0.055) (0.035)
NET ASSET VALUE
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
____________________________________________________
Ratios/Supplemental Data
Total return 2.62% 5.33% 5.23% 5.68% 3.60%
Ratio of expenses
to average net
assets 0.45%! 0.45% 0.45% 0.45% 0.45%!
Ratio of net
investment
income to
average net
assets 5.30%! 5.18% 5.09% 5.55% 4.03%!
Net assets, end
of period
(in thousands)$1,384,216$1,303,120$741,561$433,464$186,523
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Limited-Term Bond Fund
Unaudited
For a share outstanding throughout each period
Financial Highlights
6 Months Year 10/29/93
Ended Ended through
4/30/98 10/31/9710/31/9610/31/95 10/31/94
NET ASSET VALUE
Beginning of
period $ 4.61 $ 4.60 $ 4.65 $ 4.64 $ 5.00
Investment activities
Net investment
income 0.14 0.29 0.30 0.32 0.33
Net realized and
unrealized
gain (loss) - 0.01 (0.05) 0.01 (0.36)
Total from
investment
activities 0.14 0.30 0.25 0.33 (0.03)
Distributions
Net investment
income (0.14) (0.28) (0.29) (0.31) (0.33)
Tax return of
capital - (0.01) (0.01) (0.01) -
Total distri-
butions (0.14) (0.29) (0.30) (0.32) (0.33)
NET ASSET VALUE
End of period $ 4.61 $ 4.61 $ 4.60 $ 4.65 $ 4.64
_____________________________________________________
Ratios/Supplemental Data
Total return 3.06% 6.73% 5.48% 7.36% (0.71)%
Ratio of expenses to
average net
assets 0.55%! 0.55% 0.55% 0.55% 0.55%!
Ratio of net
investment
income to
average net
assets 6.14%! 6.28% 6.43% 6.85% 6.98%!
Portfolio
turnover rate 27.9% 74.5% 116.1% 84.3% 296.0%!
Net assets, end
of period
(in thousands)$34,983 $ 29,620 $25,984 $27,004 $ 21,116
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit GNMA Fund
Unaudited
For a share outstanding throughout each period
Financial Highlights
6 Months Year 10/29/93
Ended Ended through
4/30/98 10/31/9710/31/9610/31/95 10/31/94
NET ASSET VALUE
Beginning of
period $ 9.83 $ 9.65 $ 9.81 $ 9.15 $ 10.00
Investment activities
Net investment
income 0.32 0.67 0.67 0.70 0.69
Net realized and
unrealized
gain (loss) (0.01) 0.18 (0.16) 0.66 (0.85)
Total from
investment
activities 0.31 0.85 0.51 1.36 (0.16)
Distributions
Net investment
income (0.32) (0.64) (0.62) (0.67) (0.69)
Tax return of
capital - (0.03) (0.05) (0.03) -
Total distri-
butions (0.32) (0.67) (0.67) (0.70) (0.69)
NET ASSET VALUE
End of period $ 9.82 $ 9.83 $ 9.65 $ 9.81 $ 9.15
_____________________________________________________
Ratios/Supplemental Data
Total return 3.21% 9.17% 5.47% 15.43% (1.67)%
Ratio of expenses
to average net
assets 0.60%! 0.60% 0.60% 0.60% 0.60%!
Ratio of net
investment income
to average
net assets 6.68%! 6.91% 6.99% 7.40% 7.31%!
Portfolio turnover
rate 53.7% 111.8% 136.1% 173.8% 61.5%!
Net assets, end of
period (in
thousands) $ 38,995 $ 29,530 $24,718 $22,777 $ 17,184
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Cash Reserves Fund
Unaudited
April 30, 1998
Statement of Net Assets
Par Value
In thousands
BANK NOTES 3.3%
Bank of America National Trust &
Savings, 5.65%, 1/7/99 $ 20,000 $ 20,002
FCC National Bank, 5.71%, 3/5/99 5,000 4,998
First Tennessee Bank, 6.08%, 6/5/98 5,000 5,000
National Bank of Commerce, VR,
5.746%, 5/26/98 5,250 5,251
Westpac Banking, 6.07%, 5/27/98 9,800 9,800
Total Bank Notes (Cost $45,051) 45,051
CERTIFICATES OF DEPOSIT 38.4%
ABN AMRO
5.60%, 9/4/98 10,000 10,000
5.82%, 7/17/98 10,000 9,998
5.85%, 8/7/98 19,750 19,748
Banco Santander, (London), 5.55%,
5/7 - 5/11/98 20,000 20,000
Bank of Austria AG, 5.70%, 3/30/99 9,250 9,246
Bank of Brussels, 5.81%, 8/4/98 19,000 19,000
Bank of Montreal, 5.53%, 5/11/98 23,000 23,000
Bank of Nova Scotia, (London),
5.95%, 6/29/98 3,000 3,000
Bank of Scotland, 5.535%, 5/27/98 10,000 10,000
Bankers Trust
5.85%, 7/7/98 1,000 1,000
6.00%, 7/7/98 10,000 10,000
Banque Nationale de Paris
5.52%, 5/29/98 2,600 2,589
5.75%, 5/21/98 700 698
5.78%, 7/28/98 5,000 4,999
6.11%, 6/3/98 5,000 5,000
Barclays Bank PLC, (London),
5.85%, 7/28/98 16,000 16,003
Bayerische Hypotheken und Wechsel,
5.70%, 3/30/99 10,000 9,996
Bayerische Landesbank Girozentrale,
(London), 5.57%, 6/5/98 15,000 15,000
Bayerische Vereinsbank, (London),
5.76%, 5/29/98 15,000 15,000
Canadian Imperial Bank of Commerce
5.745%, 4/27/99 5,000 4,997
5.91%, 8/28/98 20,000 20,009
5.915%, 8/12/98 10,000 9,999
Chase Manhattan Bank, 5.59%, 6/8/98 10,000 10,000
Commerzbank, 5.93%, 6/26/98 4,900 4,900
Credit Agricole Indosuez, 5.75%, 4/26/99$10,000 $ 9,995
Creditanstalt Bankverein, 5.71%, 3/30/9910,000 9,996
Den Danske Bank A/S, 5.75%, 4/26/99 10,000 9,995
Deutsche Bank AG, 5.70%, 3/5 - 3/30/99 20,000 19,989
First National Bank of Maryland,
5.95%, 10/22/98 10,000 9,998
First Tennessee Bank N.A., 5.50%, 5/4/9815,000 15,000
Generale Bank, 5.96%, 6/18/98 14,000 13,999
ING Bank, 6.10%, 6/5/98 2,000 2,000
Kredietbank NV
5.69%, 3/29/99 10,000 9,995
5.75%, 4/28/99 10,000 9,995
National Bank of Canada, 6.15%, 5/15/98 5,000 5,000
Norddeutsche Landesbank Girozentrale, (London)
5.57%, 1/29/99 5,000 4,999
Rabobank Nederland N.V., (London),
5.86%, 8/21/98 25,000 24,996
Royal Bank of Canada
5.835%, 8/25/98 3,000 3,000
5.91%, 6/17/98 9,900 9,899
Societe Generale, 5.92%, 10/16/98 5,000 5,000
Sudwestdeutsche Landesbank, (London),
5.54%, 5/18/98 25,000 25,000
Svenska Handelsbanken, 5.59%, 8/26/98 20,000 20,000
Swiss Bank
5.65%, 3/24/99 5,000 4,998
5.80%, 4/30/99 20,000 19,988
Toronto Dominion Bank, (London),
6.14%, 6/3/98 5,000 5,000
Union Bank of California, 5.80%, 10/6/9810,000 10,000
Westdeutsche Landesbank, (London),
5.53%, 5/5/98 19,000 19,000
Westpac Banking, 5.93%, 8/12/98 10,000 10,008
Total Certificates of Deposit (Cost
$532,032) 532,032
COMMERCIAL PAPER 44.6%
ABB Treasury Center (USA), 4(2), 5.50%,
6/1/98 8,059 8,021
Alliance & Leicester, 5.52%, 5/13/98 10,000 9,982
AON
5.53%, 6/10/98 1,200 1,193
5.55%, 5/26/98 5,400 5,379
Asset Securitization Cooperative, 4(2)
5.51%, 5/6 - 5/19/98 30,000 29,937
Associates Finance Services of Puerto Rico
5.50%, 6/9 - 6/11/98 $ 6,565 $ 6,525
5.51%, 5/26/98 7,000 6,973
5.52%, 5/12/98 3,131 3,126
Beta Finance, 4(2), 5.50%, 6/12/98 3,000 2,981
BMW U.S. Capital
5.51%, 6/4/98 7,100 7,063
5.52%, 5/14/98 5,000 4,990
Caisse des Depots et Consignations
4(2)
5.50%, 5/7 - 5/22/98 23,531 23,459
5.55%, 5/6/98 3,000 2,998
Chevron UK Investment PLC, 5.52%, 5/21/9810,000 9,969
Ciesco
5.50%, 5/14 - 5/22/98 44,000 43,888
5.51%, 5/15/98 3,800 3,792
CIT Group Holdings, 5.51%, 5/1/98 20,000 20,000
Corporate Asset Funding, 4(2),
5.51%, 5/11/98 15,000 14,977
Countrywide Home Loans
5.55%, 5/13 - 5/15/98 17,700 17,663
Cregem N.A.
5.50%, 6/12/98 10,000 9,936
5.52%, 6/2/98 2,475 2,463
Daimler-Benz North America, 5.52%, 5/13/9812,500 12,477
Delaware Funding
4(2)
5.50%, 5/19/98 20,199 20,143
5.52%, 5/8 - 5/20/98 13,000 12,977
Deutsche Bank Finance, 5.50%, 7/6/98 20,000 19,798
Diageo Capital PLC
5.50%, 6/2/98 10,500 10,449
5.51%, 5/6/98 8,000 7,994
Falcon Asset Securitization
4(2)
5.52%, 5/5/98 8,675 8,670
5.53%, 5/19/98 1,571 1,566
General Electric Capital, 5.51%, 5/21/9820,000 19,939
Golden Managers Acceptance, 5.52%, 5/28/985,520 5,497
Island Finance of Puerto Rico
5.50%, 6/15/98 $ 9,000 $ 8,938
5.52%, 5/11/98 9,900 9,885
Jefferson Pilot, 5.54%, 5/5/98 6,600 6,596
Kellogg, 5.50%, 5/22/98 100 100
Merrill Lynch, 5.52%, 5/15/98 9,000 8,981
National City Credit, 5.51%, 5/21/98 10,000 9,969
National Rural Utilities Cooperative
Finance, 5.50%, 6/18/98 10,000 9,927
New York State Power Authority,
5.55%, 5/1/98 5,000 5,000
Nordbanken North America, 5.55%, 5/20/9825,000 24,927
Preferred Receivables Funding
5.51%, 6/2/98 15,000 14,926
5.52%, 6/4/98 10,000 9,948
5.55%, 5/1/98 3,602 3,602
Progress Capital Holdings, 5.53%, 5/13/98 500 499
Province of Quebec, 5.57%, 6/9/98 10,120 10,059
Rabobank Nederland N.V., 5.52%, 6/2/98 1,963 1,953
Repeat Offering
5.50%, 5/11/98 20,000 19,970
5.55%, 6/29 - 7/27/98 21,617 21,370
Rio Tinto, 5.50%, 6/5 - 6/11/98 17,900 17,797
Safeco Credit
5.50%, 5/14/98 10,000 9,980
5.53%, 5/28/98 7,950 7,917
Salomon Smith Barney, 5.51%, 5/21/98 8,400 8,374
Statoil (Den Norske Stats Oljeselskap),
5.51%, 5/27/98 1,849 1,842
Sunamerica Life Insurance, 5.51%, 6/30/986,700 6,638
Telstra
5.50%, 6/4/98 30,000 29,844
5.52%, 5/14/98 4,094 4,086
Total S.A., 5.52%, 5/26/98 5,000 4,981
Yale University
5.50%, 6/18/98 2,040 2,025
5.53%, 5/13/98 2,000 1,996
Total Commercial Paper (Cost $616,955) 616,955
MEDIUM-TERM NOTES 12.2%
Beta Finance, 6.00%, 10/27/98 1,000 1,000
Chrysler Financial
5.92%, 12/16/98 $ 1,500 $ 1,503
7.26%, 7/1/98 2,750 2,755
Depfa Bank, VR, 5.648%, 7/7/98 10,000 9,996
Ford Capital, 9.00%, 8/15/98 17,480 17,631
Ford Motor Credit
8.00%, 1/15/99 1,800 1,827
8.45%, 12/30/98 2,500 2,541
General Electric Capital, 8.10%, 1/26/99 5,605 5,693
General Motors Acceptance Corp.
5.625%, 1/25/99 3,610 3,602
5.95%, 12/14/98 1,750 1,749
Goldman Sachs Group
VR
5.656%, 5/18/98 10,000 10,000
5.688%, 5/1/98 10,000 10,000
Merrill Lynch, 5.905%, 10/21/98 5,000 5,001
Nationsbank, 5.125%, 9/15/98 2,000 1,994
Quebec Province of Canada, 9.375%, 4/1/9910,695 11,030
Rabobank, VR, 5.656%, 5/18/98 19,385 19,385
Reed Elsevier, 7.66%, 2/19/99 800 812
Salomon, 6.22%, 11/19/98 1,039 1,040
Sears Roebuck, 6.25%, 10/6/98 10,000 10,022
SMM Trust, VR, 5.680%, 5/5/98 25,000 25,000
STINT Trust, VR, 5.688%, 6/30/98 10,000 10,000
Tiers Trust, VR, (144a), 5.656%,
5/15/98 16,900 16,900
Total Medium-Term Notes (Cost
$169,481) 169,481
U.S. GOVERNMENT OBLIGATIONS 0.0%
Federal Home Loan Mortgage, Disc. Notes,
5.41%, 5/28/98 127 127
Total U.S. Government Obligations
(Cost $127) 127
FUNDING AGREEMENTS 0.7%
General American Life Insurance,
5.89%, 5/1/98 ! 10,000 10,000
Total Funding Agreements (Cost $10,000) 10,000
Total Investments in Securities
99.2% of Net Assets (Cost $1,373,646) $1,373,646
Other Assets Less Liabilities 10,570
NET ASSETS $1,384,216
____________
Net Assets Consist of:
Accumulated net realized gain/loss -
net of distributions 37
Paid-in-capital applicable to 1,384,178,868
shares of $0.0001 par value capital
stock outstanding; 1,000,000,000 shares
of the Corporation authorized 1,384,179
NET ASSETS $1,384,216
____________
NET ASSET VALUE PER SHARE $ 1.00
____________
! Private Placement
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".
144a Security was purchased pursuant to Rule 144a under the
Securities Act of 1933 and may not be resold subject to that
rule except to qualified institutional buyers - total of such
securities at period-end amounts to 1.2% of net assets.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Limited-Term Bond Fund
UnauditedApril 30, 1998
Statement of Net Assets
Par/Shares Value
In thousands
CORPORATE BONDS AND NOTES 54.0%
Banking 7.0%
ABN AMRO Bank (Chicago), N.V., Gtd.
Sub. Notes
7.25%, 5/31/05 $ 250 $ 261
Banco Generale, Sr. Sub. Notes,
(144a), 7.70%, 8/1/02 300 289
First National Bank of Commerce (New
Orleans), Sr. Notes
6.50%, 1/14/00 300 302
Hartford National, Sub. Cap. Notes,
9.85%, 6/1/99 50 52
Kansallis Osake Pankki (New York),
Sub. Notes
10.00%, 5/1/02 250 282
MBNA, Sub. Notes, 7.25%, 9/15/02 200 206
Mercantile Safe Deposit & Trust,
6.53%, 7/3/00 300 303
Morgan Guaranty Trust, Sub. Notes,
7.375%, 2/1/02 250 260
Union Planters, Sub. Notes, 6.25%,
11/1/03 225 224
Westamerica Bank, Sub. Notes, 6.99%,
9/30/03 250 251
2,430
Consumer Products 5.1%
Coca Cola Femsa, 8.95%, 11/1/06 275 287
Grand Metropolitan Investment, Gtd. Notes,
6.50%, 9/15/99 250 252
Nabisco, 6.125%, 2/1/03 300 295
Pepsico, MTN, 5.75%, 1/2/03 250 247
Philip Morris, 7.25%, 9/15/01 325 334
Sony, 6.125%, 3/4/03 375 374
1,789
Consumer Services 2.6%
Beckman Instruments, Sr. Notes, (144a),
7.10%, 3/4/03 200 200
Tenet Healthcare, Sr. Sub. Notes,
8.625%, 1/15/07 300 311
Time Warner, (144a), 6.10%, 12/30/01 400 393
904
Electric Utilities 10.7%
CE Electric UK Funding, Sr. Notes, (144a),
6.853%, 12/30/04 400 406
Cleveland Electric, 7.19%, 7/1/00 250 254
Consumers Energy, 1st Ref. Mtg. Bonds,
6.875%, 5/1/98 152 152
Entergy Mississippi, 6.45%, 4/1/08 375 372
Long Island Lighting, Gen. Ref. Bonds,
9.75%, 5/1/21 250 251
Midamerican Energy, Sr. Notes, 6.50%,
12/15/01 250 252
Niagara Mohawk Power, 7.375%, 8/1/03 275 284
Orange & Rockland Utilities, Deb.,
6.14%, 3/1/00 $ 250 $ 250
Pacific Gas & Electric, 1st Mtg.
Bonds, 8.75%, 1/1/01 250 266
Progress Capital Holdings, MTN, (144a),
6.88%, 8/1/01 250 255
Public Service Electric & Gas, Mtg.
Bonds, 8.875%, 6/1/03 325 361
Texas NM Power, 1st Mtg. Notes, 9.25%,
9/15/00 200 211
Texas Power, Secured Deb., 10.75%, 9/15/03 225 242
United Illuminating, 6.25%, 12/15/02 190 188
3,744
Energy & Petroleum 3.6%
MCN Financing, 6.305%, 6/1/37 300 299
PDV America
Sr. Notes
7.25%, 8/1/98 225 226
7.875%, 8/1/03 450 467
Williams Cos, 6.125%, 2/15/02 275 273
1,265
Finance and Credit 5.0%
Amvescap, Sr. Notes, (144a), 6.375%,
5/15/03 400 399
Aristar, Sr. Notes, 7.875%, 2/15/99 225 229
Ciesco, MTN, (144a), 7.38%, 4/19/00 250 254
General Electric Capital, MTN, 6.15%,
11/5/01 350 354
HSBC Finance Nederland, Sub. Gtd. Notes, (144a)
7.40%, 4/15/03 270 282
Heller Financial, 7.875%, 11/1/99 220 225
1,743
Industrials 11.0%
Allied Signal, 5.75%, 3/15/01 350 348
General Motors Acceptance Corp., MTN,
6.625%, 4/24/00 300 303
Hutchison Whampoa Finance, (144a),
6.95%, 8/1/07 600 575
Ingersoll Rand, Sr. Notes, 6.255%, 2/15/01 300 300
Lockheed Martin
6.75%, 3/15/03 375 382
Deb., 9.375%, 10/15/99 85 89
Oracle, Sr. Notes, 6.91%, 2/15/07 120 122
Praxair, 6.15%, 4/15/03 350 348
Tenneco, 8.20%, 11/15/99 270 278
USA Waste Services, Sr. Notes, 6.50%,
12/15/02 375 375
Waste Management, 6.625%, 7/15/02 $ 350 $ 351
YPF Sociedad Anonima, 7.25%, 3/15/03 375 374
3,845
Insurance 3.1%
American Annuity Group Capital Trust,
Zero Coupon, 9/25/01 240 245
Chubb, Deb., 8.75%, 11/15/99 125 128
Lincoln National, 6.50%, 3/15/08 450 449
USF&G, 7.00%, 5/15/98 275 275
1,097
Investment Dealers 2.0%
Lehman Brothers, Sr. Notes, 7.25%, 4/15/03 375 390
Salomon, 7.30%, 5/15/02 300 311
701
Media and Communications 2.6%
Cox Communications, 8.875%, 3/1/01 245 261
NWCG Holdings, Sr. Secured Disc. Notes
Zero Coupon, 6/15/99 300 280
Viacom
6.75%, 1/15/03 250 251
Sr. Notes, 7.75%, 6/1/05 100 105
897
Transportation 1.3%
Delta Air Lines, Deb., 9.60%,
5/26 - 6/1/00 197 209
Northwest Airlines, 8.375%, 3/15/04 250 256
465
Total Corporate Bonds and Notes (Cost
$18,833) 18,880
WARRANTS 0.0%
Hotels and Gaming 0.0%
President Casinos, (144a), 9/30/99 !*> 1 -
Total Warrants (Cost $4) -
U.S. GOVERNMENT MORTGAGE-BACKED SECURITIES 17.6%
U.S. Government Agency Obligations 13.8%
Federal Home Loan Mortgage
10.75%, 12/1/09 140 154
Federal Home Loan Mortgage
5 year balloon
5.00%, 6/1/99 $ 204 $ 204
6.00%, 4/1/99 271 271
7 year balloon, 6.50%, 12/1/99 436 437
CMO, 6.92%, 1/25/12 240 242
REMIC
6.00%, 8/15/06 - 1/15/08 1,600 1,596
6.50%, 1/15/17 275 276
6.75%, 10/15/03 426 428
6.80%, 4/15/18 163 163
7.50%, 9/15/06 277 279
Federal National Mortgage Assn.
7.00%, 4/1/09 341 349
9.00%, 5/1/05 291 298
REMIC, 7.50%, 8/25/05 131 132
4,829
U.S. Government Guaranteed Obligations 3.8%
Government National Mortgage Assn.
I, 10.00%, 11/15/09 - 10/15/21 543 603
II, 10.00%, 10/20/20 137 150
Midget, I
9.00%, 4/15 - 12/15/01 52 54
10.00%, 8/15/98 - 4/15/01 333 343
10.50%, 5/15/98 - 2/15/01 158 162
1,312
Total U.S. Government Mortgage-Backed
Securities (Cost $6,111) 6,141
U.S. GOVERNMENT OBLIGATIONS 17.4%
U.S. Government Agency Obligations 8.1%
Federal National Mortgage Assn.
5.75%, 4/15/03 1,500 1,495
Deb., 6.15%, 12/14/01 300 300
MTN
7.15%, 4/11/07 275 296
7.65%, 10/6/06 500 510
U.S. Department Housing & Urban Development
6.49%, 8/1/07 $ 240 $ 241
2,842
U.S. Treasury Obligations 9.3%
U.S. Treasury Notes
6.375%, 4/30/99 - 8/15/02 1,090 1,113
6.50%, 8/31/01 - 10/15/06 2,050 2,140
3,253
Total U.S. Government Obligations (Cost
$6,003) 6,095
ASSET-BACKED SECURITIES 4.7%
Auto-Backed 0.6%
Banc One Auto Grantor Trust, 6.27%,
11/20/03 212 213
USAA Auto Loan Grantor Trust, 5.00%,
11/15/99 5 4
217
Receivables-Backed 1.8%
Fingerhut Master Trust, 6.07%, 2/15/05 375 375
Harley Davidson Eaglemark
5.94%, 2/15/04 125 125
(144a), 6.35%, 10/15/02 125 126
626
Utility "Stranded" Asset Trust 2.3%
California Infrastructure & Economic
6.25%, 6/25/04 175 177
6.38%, 9/25/08 600 617
794
Total Asset-Backed Securities (Cost
$1,625) 1,637
MUNICIPAL BONDS 0.2%
Taxable Municipal 0.2%
University of Miami, GO, 6.90%, 4/1/04 85 88
Total Municipal Bonds (Cost $85) 88
MONEY MARKET FUNDS 3.8%
Reserve Investment Fund, 5.43% # 1,341 1,341
Total Money Market Funds (Cost $1,341) 1,341
Total Investments in Securities
97.7% of Net Assets (Cost $34,002) $ 34,182
Other Assets Less Liabilities 801
NET ASSETS $ 34,983
____________
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ (136)
Accumulated net realized gain/loss - net
of distributions (1,516)
Net unrealized gain (loss) 180
Paid-in-capital applicable to 7,588,631
shares of $0.0001 par value capital stock
outstanding; 1,000,000,000 shares of the
Corporation authorized 36,455
NET ASSETS $ 34,983
____________
NET ASSET VALUE PER SHARE $ 4.61
____________
! Private Placement
* Non-income producing
> Securities contain some restrictions as to public resale.
# Seven-day yield
CMO Collateralized Mortgage Obligation
GO General Obligation
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
144a Security was purchased pursuant to Rule 144a under the Securities
Act of 1933 and may not be resold subject to that rule except to
qualified institutional buyers - total of such securities at
period-end amounts to 8.7% of net assets.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit GNMA Fund
Unaudited
April 30, 1998
Portfolio of Investments
Par Value
In thousands
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES 90.6%
U.S. Government Guaranteed
Obligations 84.4%
Government National Mortgage Assn.
I
6.50%, 3/15 - 5/15/26 $ 2,206 $ 2,189
7.00%, 4/15/00 - 1/15/28 2,097 2,128
7.50%, 6/15/22 - 3/15/28 2,145 2,210
8.00%, 4/15/17 - 11/15/27 2,544 2,658
8.50%, 6/15/16 - 11/15/27 4,775 5,053
9.00%, 8/15/08 - 8/15/21 662 714
9.50%, 6/15/09 - 7/15/20 519 566
10.00%, 12/15/17 - 3/15/18 532 593
10.50%, 7/15/15 - 12/15/19 787 884
11.00%, 12/15/09 - 12/15/15 119 135
11.50%, 7/15 - 12/15/15 27 31
II
9.00%, 5/20/22 - 3/20/25 400 426
9.50%, 2/20/17 - 12/20/20 187 203
10.00%, 1/20/14 - 3/20/21 168 185
11.00%, 9/20/17 37 41
GPM, I
9.25%, 7/15/16 - 7/15/17 12 13
9.50%, 7/15/09 61 66
10.00%, 8/15/13 4 4
Project Loan, I
7.35%, 7/15/32 168 178
7.75%, 3/15/20 300 322
7.875%, 6/15/27 457 493
8.00%, 11/15/17 400 435
8.50%, 1/15/27 198 209
REMIC
6.50%, 10/16/24 3,000 2,904
7.00%, 5/16/24 3,000 3,026
7.493%, 7/16/24 3,000 3,181
7.50%, 5/16/27 970 992
TBA
6.00%, 9/15/23 1,000 959
Construction Loan, 7.00%, 7/15/38 743 759
U.S. Department of Veteran Affairs, REMIC,
6.75%, 8/15/20 $ 1,354 $ 1,358
32,915
Stripped Mortgage Securities 3.2%
Federal National Mortgage Assn.
CMO, Interest Only, 8.50%, 4/1/22 ** 538 113
REMIC, Principal Only
Zero Coupon, 9/25/98 - 10/25/21 1,240 1,148
1,261
U.S. Government Agency Obligations 3.0%
Federal Home Loan Mortgage
5.00%, 7/15/05 25 25
5.85%, 11/15/17 185 185
Federal National Mortgage Assn.
5.00%, 8/25/22 16 16
6.50%, 1/1/26 428 424
REMIC
8.00%, 1/25/21 11 11
Inverse Floater, 11.588%, 6/25/99 499 515
1,176
Total U.S. Government Mortgage-Backed
Securities (Cost $34,470) 35,352
U.S. GOVERNMENT OBLIGATIONS 7.9%
U.S. Government Agency Obligations 7.9%
Tennessee Valley Authority
5.88%, 4/1/36 2,000 2,057
6.235%, 7/15/45 1,000 1,019
Total U.S. Government Obligations
(Cost $3,045) 3,076
ASSET-BACKED SECURITIES 0.1%
Home Equity Loans-Backed 0.1%
Prudential Home Mortgage Securities,
6.00%, 10/25/07 40 40
Total Asset-Backed Securities (Cost $40) 40
MONEY MARKET FUNDS 5.5%
Reserve Investment Fund, 5.43% # 2,135 2,135
Total Money Market Funds (Cost $2,135) 2,135
Total Investments in Securities
104.1% of Net Assets (Cost $39,690) $ 40,603
Other Assets Less Liabilities (1,608)
NET ASSETS $ 38,995
_____________
** For Interest Only securities, amount represents notional
principal, on which the fund receives interest
# Seven-day yield
CMO Collateralized Mortgage Obligation
GPM Graduated Payment Mortgage
Inverse
Floater Inverse Floating rate note; interest rate is inversely tied to
a published index - rate shown reflects current rate at
4/30/98.
REMIC Real Estate Mortgage Investment Conduit
TBA To be announced security was purchased on a forward commitment
basis.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit GNMA Fund
Unaudited
April 30, 1998
Statement of Assets and Liabilities
In thousands
Assets
Investments in securities, at value
(cost $39,690) $ 40,603
Receivable for investment securities sold 2,911
Other assets 280
Total assets 43,794
Liabilities
Payable for investment securities purchased 4,656
Other liabilities 143
Total liabilities 4,799
NET ASSETS $ 38,995
____________
Net Assets Consist of:
Accumulated net investment income - net of
distributions $ (143)
Accumulated net realized gain/loss - net
of distributions (485)
Net unrealized gain (loss) 913
Paid-in-capital applicable to 3,972,341
shares of $0.0001 par value capital stock
outstanding; 1,000,000,000 shares of the
Corporation authorized 38,710
NET ASSETS $ 38,995
____________
NET ASSET VALUE PER SHARE $ 9.82
____________
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Income Funds
Unaudited
Statement of Operations
In thousands
Cash ReservesLimited-Term GNMA
Fund Bond Fund Fund
6 Months 6 Months 6 Months
Ended Ended Ended
4/30/98 4/30/98 4/30/98
Investment Income
Income
Interest income $ 38,834 $ 1,052 $ 1,240
Expenses
Investment management and
administrative 3,040 86 102
Net investment income 35,794 966 1,138
Realized and Unrealized
Gain (Loss)
Net realized gain (loss)
on securities 24 71 (1)
Change in net unrealized
gain or loss on
securities - (63) (89)
Net realized and unrealized
gain (loss) 24 8 (90)
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 35,818 $ 974 $ 1,048
__________________________________________
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Cash Reserves Fund
Unaudited
Statement of Changes in Net Assets
In thousands
6 Months Year
Ended Ended
4/30/98 10/31/97
Increase (Decrease) in Net Assets
Operations
Net investment income $ 35,794 $ 54,228
Net realized gain (loss) 24 2
Increase (decrease) in net assets
from operations 35,818 54,230
Distributions to shareholders
Net investment income (35,794) (54,228)
Capital share transactions*
Shares sold 1,188,009 2,247,386
Distributions reinvested 33,814 52,014
Shares redeemed (1,140,751) (1,737,843)
Increase (decrease) in net
assets from capital share
transactions 81,072 561,557
Net Assets
Increase (decrease) during period 81,096 561,559
Beginning of period 1,303,120 741,561
End of period $1,384,216 $1,303,120
___________________________
*Share information
Shares sold 1,188,010 2,247,386
Distributions reinvested 33,814 52,014
Shares redeemed (1,140,751) (1,737,843)
Increase (decrease) in shares
outstanding 81,073 561,557
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Limited-Term Bond Fund
Unaudited
Statement of Changes in Net Assets
In thousands
6 Months Year
Ended Ended
4/30/98 10/31/97
Increase (Decrease) in Net Assets
Operations
Net investment income $ 966 $ 1,704
Net realized gain (loss) 71 (98)
Change in net unrealized gain or loss (63) 133
Increase (decrease) in net assets
from operations 974 1,739
Distributions to shareholders
Net investment income (968) (1,667)
Tax return of capital - (37)
Decrease in net assets from
distributions (968) (1,704)
Capital share transactions*
Shares sold 9,806 12,694
Distributions reinvested 750 1,325
Shares redeemed (5,199) (10,418)
Increase (decrease) in net assets
from capital share transactions 5,357 3,601
Net Assets
Increase (decrease) during period 5,363 3,636
Beginning of period 29,620 25,984
End of period $ 34,983 $ 29,620
______________________________
*Share information
Shares sold 2,123 2,771
Distributions reinvested 163 290
Shares redeemed (1,126) (2,283)
Increase (decrease) in shares
outstanding 1,160 778
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit GNMA Fund
Unaudited
Statement of Changes in Net Assets
In thousands
6 Months Year
Ended Ended
4/30/98 10/31/97
Increase (Decrease) in Net Assets
Operations
Net investment income $ 1,138 $ 1,852
Net realized gain (loss) (1) (229)
Change in net unrealized gain
or loss (89) 789
Increase (decrease) in net assets
from operations 1,048 2,412
Distributions to shareholders
Net investment income (1,138) (1,777)
Tax return of capital - (75)
Decrease in net assets from
distributions (1,138) (1,852)
Capital share transactions*
Shares sold 13,981 14,057
Distributions reinvested 851 1,356
Shares redeemed (5,277) (11,161)
Increase (decrease) in net assets
from capital share transactions 9,555 4,252
Net Assets
Increase (decrease) during period 9,465 4,812
Beginning of period 29,530 24,718
End of period $ 38,995 $ 29,530
___________________________
*Share information
Shares sold 1,417 1,461
Distributions reinvested 86 140
Shares redeemed (535) (1,160)
Increase (decrease) in shares
outstanding 968 441
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Income Funds
Unaudited
April 30, 1998
Notes to Financial Statements
Note 1 - Significant Accounting Policies
T. Rowe Price Summit Income 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 and commenced operations on
October 29, 1993.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company
industry; these principles may require the use of estimates by fund
management.
Valuation Debt securities are generally traded in the over-the-counter
market. Except for securities held by the Cash Reserves Fund, investments
in securities originally issued with 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.
Securities held by the bond funds with original 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 are valued at amortized
cost. Investments in mutual funds are valued at the closing net asset
value per share of the mutual fund on the day of valuation.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by or under the supervision of the
officers of that fund, as authorized by the Board of Directors.
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.
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
Purchases and sales of portfolio securities, other than short-term
securities, for the six months ended April 30, 1998, were as follows:
Limited-Term GNMA
Bond Fund Fund
U.S. government securities
Purchases $2,916,000 $26,165,000
Sales 1,651,000 18,823,000
Other securities
Purchases 9,874,000 -
Sales 6,778,000 12,000
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 $1,575,000,
of which $1,016,000 expires in 2002, $354,000 in 2003, and $205,000
thereafter through 2005. The GNMA Fund has unused realized capital loss
carryforwards for federal income tax purposes of $461,000, of which
$187,000 expires in 2003, $142,000 in 2004, and $132,000 in 2005. Each
fund intends to retain gains realized in future periods that may be offset
by available capital loss carryforwards.
At April 30, 1998, the aggregate costs of investments for the Cash
Reserves, Limited-Term Bond, and GNMA Funds for federal income tax and
financial reporting purposes were $1,373,646,000, $34,002,000, and
$39,690,000, respectively. For the Cash Reserves Fund, amortized cost is
equivalent to value; and for the Limited-Term Bond and GNMA Funds, net
unrealized gain (loss) on investments was as follows:
Limited-Term GNMA
Bond Fund Fund
Appreciated investments $ 286,000 $1,076,000
Depreciated investments (106,000) (163,000)
Net unrealized gain (loss) $ 180,000 $ 913,000
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 $425,000 and $3,000 were payable at
April 30, 1998, by the Cash Reserves and GNMA Funds, respectively. 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.
The funds may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and
other accounts managed by T. Rowe Price and its affiliates and are not
available to the public. The Reserve Funds pay no investment management
fees. Distributions from the Reserve Funds to the Limited-Term Bond Fund
and the GNMA Fund for the six months ended April 30, 1998, totaled $33,000
and $28,000, respectively, and are reflected as interest income in the
accompanying Statement of Operations.
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(registered trademark):
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price Summit Income Funds.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
Invest With Confidence(registered trademark)
T. Rowe Price Investment Services, Inc., Distributor.
C09-051 4/30/98
