Annual Report
Summit
Municipal
Funds
October 31, 1998
T. Rowe Price
Report Highlights
Summit Municipal Funds
o Declining interest rates pushed municipal bond prices higher over
the past year. Money market yields also moved lower.
o All three funds posted solid returns that once again exceeded the
performance of their Lipper peer group averages for the past 6- and
12-month periods.
o Each fund benefited from longer-than-average duration and the
above-average yield derived from our low expense structure.
o The municipal bond market remains attractive, with yields on
long-term bonds nearly as high as long-term Treasury yields, which are
fully taxable.
o We expect slower economic growth and low inflation, a favorable
environment for fixed income investors.
Fellow Shareholders
Municipal bonds provided solid absolute returns over the past 12 months. Prices
rose and yields declined, with the most significant rate movements occurring
since April in short and intermediate securities, particularly money market
instruments. But the respectable gains in the strictly domestic market for
tax-exempt bonds paled in comparison to the dramatic rise of U.S. Treasury
prices and the corresponding plunge in their yields as investors around the
world sought safety from global crises.
MARKET ENVIRONMENT
Municipal Bond and Note Yields
30-Yr AAA 5-Yr AAA 1-Yr Moody's
10/97 5.23 4.15 3.80
5.18 4.20 3.85
5.03 4.10 3.85
1/98 5.00 4.00 3.65
5.08 4.05 3.60
5.13 4.10 3.65
4/98 5.20 4.30 3.85
5.05 4.10 3.75
5.05 4.10 3.60
7/98 5.10 4.10 3.70
4.93 3.85 3.50
4.82 3.70 3.30
10/98 4.92 3.70 2.95
In early October, yields on long-term Treasuries fell nearly to the same level
as long-term municipal yields-a highly unusual circumstance since municipal bond
income is tax-exempt. Despite the relative attractiveness of the municipal
market, demand did not keep pace with the supply of new longer-term issues,
which is 32% ahead of last year. In general, municipal bonds have been less
volatile than taxable bonds, both on the upside and the downside, throughout the
year. Over much of the past year, global economic and financial market
developments have overshadowed domestic economic concerns in the eyes of U.S.
investors and Federal Reserve policymakers. The worsening global picture
affected our markets in two primary ways. The first was that investors, with
encouragement from Fed Chairman Alan Greenspan, paid more attention to a
possible slowdown caused by global weakness than to the still-evident strength
of the domestic economy. The Federal Reserve reinforced this view with two
quarter-point interest rate cuts in September and October. (After the close of
the period, the Fed cut rates a third time.) Overall rates were thus able to
move lower on the likelihood of slower growth and further Fed easing.
Preparing For The Year 2000
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The Year 2000 draws closer every day, and it holds special meaning beyond the
arrival of a new millennium. The issue for investors is that many computer
programs throughout the world use two digits instead of four to identify the
year and may assume the next century starts with 1900. If these programs are not
modified, they will not be able to correctly handle the century change when the
year changes from "99" to "00" on January 1, 2000, and they will no longer be
able to perform necessary functions. The Year 2000 issue affects all companies
and organizations. T. Rowe Price has been taking steps to assure that its
computer systems and processes are capable of functioning in the Year 2000.
Detailed plans for remediation efforts have been developed and are currently
being executed.
OUR PLAN OF ACTION
We began to address these issues several years ago by requiring that all new
systems process and store four-digit years. We plan to complete all
reprogramming efforts for the major application systems, including business
applications required to service our customers and processing infrastructure
necessary to ensure the integrity of customer data and investments, by December
31, 1998, leaving a full 12 months for system testing. Because we exchange data
electronically with customers and vendors, we are working with them to assess
the adequacy of their own compliance efforts. Our goal is to ensure the
continuation of the same level of service to all our mutual fund shareholders
and clients after December 31, 1999.
We are asking all vendors and companies we do business with for a Year 2000
compliance status, with the expectation that some organizations will not be able
to modify their interface files prior to December 31, 1999. Our goal is to
identify any noncompliant files so that we can implement alternative solutions.
In addition, we are scheduling tests for critical vendors and companies that
claim Year 2000 compliance to ensure that time-related data and calculations
function properly as we move into the next century.
SMOOTH TRANSITION PLANNED
We believe our programs and initiatives will provide a smooth transition into
the next millennium. We are assessing all systems providing products or services
to our retail mutual fund shareholders, retirement plan sponsors, and
participants, and we are taking steps to modify them where necessary for the
Year 2000. Our plan provides time to develop solutions for all noncompliant
systems and data files from customers or vendors.
The Securities Industry Association (SIA) is coordinating Year 2000 testing to
assure that securities markets, clearing corporations, depositories, and third
party service providers can send, receive, and process files and transactions
accurately. In late July 1998, the SIA completed a beta test of Year 2000
readiness. The test was considered successful in terms of transactions completed
and will serve as the basis for the SIA's industry-wide approach. During October
1998, T. Rowe Price completed its beta test of Year 2000 readiness with the SIA
and is ready for the industry-wide test that is scheduled for March and April
1999.
For a more detailed discussion of our Year 2000 effort, as well as continuing
updates on our progress, please check our Web site (www.troweprice.com).
The second effect was that the bond market became more focused on credit risk
than interest rate risk. Russia's government bond default in August caused a
widespread flight from riskier assets, pressuring everything from emerging
market debt and global equity markets to a wide swath of corporate debt. A
massive flight-to-quality pushed long-term Treasury yields to levels not seen in
30 years. Lower-quality municipal bonds suffered from investor risk aversion, as
credit spreads widened. Near the end of the period, improved perceptions of the
global situation undid some of the Treasury market's year-to-date gains.
Treasury rates rose sharply from their early October lows, while municipal
yields rose to a lesser degree.
SUMMIT MUNICIPAL MONEY MARKET FUND
Performance Comparison
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Periods Ended 10/31/98 6 Months 12 Months
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Municipal Money Market Fund 1.62% 3.27%
Lipper Tax-Exempt Money
Market Funds Average 1.48 3.00
Your fund continued to outperform its peers, returning 1.62% and 3.27% for the
past 6- and 12-month periods, respectively. These results are mainly due to the
continued success of our longer-than-average maturity strategy and our
below-average expenses. The fund ranked ninth of 132 tax-exempt money market
funds for the year ended October 31, according to Lipper Analytical Services.*
Over the past six months, short-term tax-exempt yields moved dramatically lower
after being virtually unchanged during the first half of the fiscal year. Most
of the move came at the end of the period in anticipation of, and in response
to, the Fed's rate cuts. As a result, six-month and one-year municipal note
yields ended the fiscal year at 2.85% and 2.95%, respectively-a decline of
almost one percentage point from six months ago. These are the lowest levels in
almost five years. Despite the drop in short-term rates, as shown by the decline
of the fund's seven-day compound yield, the fund's actual cash payout over the
past six months remained unchanged from the previous six months. The current
seven-day compound yield of 2.93% is equivalent to a taxable yield of 4.85% for
investors in the top 39.6% income tax bracket.
* For the five-year period ended October 31, the fund ranked 11th out of 104
tax-exempt money market funds, according to Lipper.
Reduced supply and increased demand also drove rates lower. Short-term issuance
over the past 12 months was off 31%, or $13 billion. The improved financial
health of municipalities coupled with the low cost of long-term financing has
dampened short-term borrowing needs. On the demand side, money funds have
benefited from investors' flight to quality. Uncertainty in the financial
markets pushed total money fund assets (taxable and tax-exempt) up 27% over the
past 12 months, to $1.3 trillion.
The fund maintained a relatively long weighted average maturity over the past
six months. Initially, our expectation was for a steady rate environment, and we
maintained the long position to take advantage of moderately higher yields. As
the period progressed, our aggressive posture proved even more beneficial when
interest rates declined. However, the short-term yield curve is currently flat,
meaning that one-year investments do not provide any additional yield over
one-week investments. Nevertheless, we are comfortable with our long-maturity
strategy because we believe rates will trend still lower, and our longer
holdings will enable us to lock in the current rates for a longer period of
time. At the end of the fiscal year, our weighted average maturity was 65 days,
compared with the peer group average of 44 days.
SUMMIT MUNICIPAL INTERMEDIATE FUND
Performance Comparison
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Periods Ended 10/31/98 6 Months 12 Months
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Municipal Intermediate Fund 4.73% 6.89%
Lipper Intermediate Municipal
Debt Funds Average 4.45 6.53
The fund again outperformed its Lipper peer group average, returning 4.73% and
6.89% over the past six and 12 months, respectively. The first half of the
fiscal year was characterized by fluctuating rates with no clear trend. As a
result, our strong relative performance came from our income advantage over
competitor funds. In the second half, our slightly longer duration strategy
boosted performance, as our portfolio rose in response to a 40 basis point
decline in intermediate rates. (Duration measures a bond fund's sensitivity to
interest rates. For example, a fund with a duration of five years will rise
about 5% in price in response to a one-percentage-point decline in rates and
will fall 5% in response to a one-percentage-point increase in rates.)
While credit spreads (the difference in yield between higher- and lower-quality
bonds) narrowed in the first half of the year, the reverse took place in the
latter part. As lower-quality securities underperformed higher-quality bonds,
some of the fund's earlier gains were eroded. However, we were able to
capitalize on the wider spreads (and cheaper prices) by purchasing bonds in
sectors that we consider stable in terms of credit quality. For example, while
the price of airport bonds fell in the last few months, we still believed the
sector was stable and increased our exposure to various insured airport issues.
In like manner, we added selectively to our holdings of industrial revenue and
pollution control revenue bonds as spreads for these sectors widened. Steps like
these enabled us to maintain the fund's yield advantage.
Assets increased from $65 million to $76 million over the past six months,
allowing us to make some changes in the fund's diversification. With a slowdown
in the economy on the horizon, we reallocated assets toward sectors we believe
to be more resilient and away from those that might come under pressure in the
months ahead. For example, we added to state general obligation debt while
decreasing exposure to hospitals. We also concentrated on states for which we
have a favorable outlook, such as California, where we added considerably to our
positions. While new California bonds have been issued at a record pace so far
this year, demand continues to outstrip supply and we expect prices to remain
strong.
we . . . concentrated on states for which we have a favorable outlook . . .
As of October 31, the fund's duration was 5.3 years, versus 5.7 years in April.
We extended duration last spring to take advantage of higher interest rates,
after yields trended up early in the year. Then, in September, with interest
rates falling toward historic lows, we allowed the fund's duration to shorten,
reducing our exposure to interest rate risk. As a result, the fund was well
positioned as bond yields moved higher and prices moved lower in October.
Although we were able to keep dividends per share unchanged over the last six
months from the preceding six-month period, due to an increase in share price
the dividend yield declined modestly, from 4.61% in the first half of our fiscal
year to 4.52% as of October 31. That is equivalent to a pretax yield of 7.48%
for investors in the 39.6% income tax bracket.
SUMMIT MUNICIPAL INCOME FUND
Performance Comparison
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Periods Ended 10/31/98 6 Months 12 Months
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Municipal Income Fund 5.16% 8.44%
Lipper General Municipal
Debt Funds Average 4.55 7.12
Over the past year we continued our aggressive duration stance-that is,
emphasizing longer-maturity bonds-in accordance with our favorable outlook for
the bond market. Our efforts over the past three months to improve the fund's
credit quality also enhanced returns, as lower-quality bonds underperformed
higher-quality bonds. As a result of these factors and our below-average expense
ratio, your fund once again outperformed its peer average, returning 5.16% and
8.44% over the past six and 12 months, respectively.
Quality Diversification
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Summit Municipal Income Fund
AAA AA A BBB BB B and Below
8 49 19 14 7 3
The credit quality upgrade and lower overall interest rates pushed the fund's
yield lower, but it remains higher than that of the average competing fund. We
were able to keep dividends per share unchanged over the last six months from
the preceding six-month period, but because of a rising share price, the
dividend yield fell from 4.96% in the first half of our fiscal year to 4.81% on
October 31. That is equivalent to a pretax yield of 7.96% for investors in the
39.6% income tax bracket.
Moving forward, the fund will focus on accumulating higher-quality positions,
targeting essential services and general obligation bonds. Stronger credits have
historically shown more stable returns in environments of slower economic
growth. Over the past six months, BBB and lower-rated investments have been
reduced to 24% of the fund from 34%. These assets were shifted into AA rated
investments, which currently account for 49% of holdings. The portfolio
continues to hold some lower-rated investments in cases where our own credit
research and financial outlook suggest opportunities for superior returns. As
for the fund's duration, we expect to become somewhat less aggressive while
still maintaining a longer-than-neutral posture.
OUTLOOK
The negative impact on the U.S. economy from a year of global
financial and economic upheaval is becoming evident. Export weakness has
widened the trade deficit, and export growth seems likely to be meager, if
not negative. Weak exports and surging imports have put pressure on the
manufacturing sector. Corporate profit growth has also waned, in large
measure because of the lack of pricing power. This confluence of forces has
begun to depress business investment and employment growth, in turn
limiting personal income growth.
The cumulative effect will be to hold down economic growth at least
through the middle of next year, but below-trend growth should cause
unemployment to rise, alleviating wage and price pressures. Thus, inflation
should remain in check. The Federal Reserve is likely to trim interest
rates in response, with the federal funds rate possibly falling further by
mid-1999. In that scenario, the Treasury yield curve should return to a
more positive, upward slope (with interest rates getting progressively
higher as you move from short-term to long-term securities) even if the
30-year Treasury yield moves lower.
We expect municipal bonds to perform well in this environment. Our
main concerns are the degree to which the anticipated economic slowdown
will affect state and local government finances and lower-quality bonds.
Compared with taxable fixed income alternatives, municipal bond yields are
particularly attractive. The tax-exempt sector should outperform if supply
and demand become better balanced.
Respectfully submitted,
William T. Reynolds
Director, Fixed Income Division
Mary J. Miller
Director, Municipal Bond Department
November 23, 1998
T. Rowe Price Summit Municipal Funds
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Portfolio Highlights
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KEY STATISTICS
4/30/98 10/31/98
Summit Municipal Money Market Fund
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Price Per Share $1.00 $1.00
Dividends Per Share
For 6 months 0.016 0.016
For 12 months 0.034 0.032
Dividend Yield (7-Day Compound) * 3.71% 2.93%
Weighted Average Maturity (days) 58 65
Weighted Average Quality ** First Tier First Tier
Summit Municipal Intermediate Fund
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Price Per Share $10.45 $10.70
Dividends Per Share
For 6 months 0.24 0.24
For 12 months 0.48 0.48
Dividend Yield *
For 6 months 4.61% 4.52%
For 12 months 4.67 4.62
30-Day Standardized Yield 4.25 3.92
Weighted Average Maturity (years) 9.6 9.9
Weighted Average Effective Maturity (years) 8.2 7.4
Weighted Average Effective Duration (years) 5.7 5.3
Weighted Average Quality *** A+ A+
(continued on next page)
T. Rowe Price Summit Municipal Funds
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Portfolio Highlights
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KEY STATISTICS
4/30/98 10/31/98
Summit Municipal Income Fund
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Price Per Share $10.51 $10.79
Dividends Per Share
For 6 months 0.26 0.26
For 12 months 0.53 0.51
Dividend Yield *
For 6 months 4.96% 4.81%
For 12 months 5.22 4.95
30-Day Standardized Yield 4.77 4.41
Weighted Average Maturity (years) 18.29 18.18
Weighted Average Effective Duration (years) 8.07 8.39
Weighted Average Quality *** A A+
* 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 Municipal Funds
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Portfolio Highlights
SECTOR DIVERSIFICATION
Percent of Percent of
Net Assets Net Assets
4/30/98 10/31/98
Summit Municipal Money Market Fund
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Air and Sea Transportation Revenue 25% 28%
Educational Revenue 10 15
Industrial and Pollution Control Revenue 17 13
General Obligation - Local 8 10
Prerefunded Bonds 10 8
General Obligation - State 10 8
Hospital Revenue 2 5
Electric Revenue 2 5
All Other 13 5
Nuclear Revenue 3 2
Other Assets Less Liabilities -- 1
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Total 100% 100%
(continued on next page)
T. Rowe Price Summit Municipal Funds
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Portfolio Highlights
SECTOR DIVERSIFICATION
Percent of Percent of
Net Assets Net Assets
4/30/98 10/31/98
Summit Municipal Intermediate Fund
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Industrial and Pollution Control Revenue 11% 13%
Hospital Revenue 14 11
Solid Waste Revenue 10 10
General Obligation - Local 13 10
Air and Sea Transportation Revenue 5 7
Nuclear Revenue 7 6
Lease Revenue 7 6
Life Care and Nursing Home Revenue 3 6
Electric Revenue 5 5
Prerefunded Bonds 5 5
General Obligation - State 1 4
Housing Finance Revenue 4 4
Miscellaneous 5 4
Dedicated Tax Revenue 2 3
Escrowed to Maturity 2 2
All Other 6 4
Other Assets Less Liabilities -- --
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Total 100% 100%
(continued on next page)
T. Rowe Price Summit Municipal Funds
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Portfolio Highlights
SECTOR DIVERSIFICATION
Percent of Percent of
Net Assets Net Assets
4/30/98 10/31/98
Summit Municipal Income Fund
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Hospital Revenue 19% 17%
Industrial and Pollution Control Revenue 15 11
Nuclear Revenue 9 10
Dedicated Tax Revenue 5 9
Lease Revenue 4 7
Housing Finance Revenue 9 6
Electric Revenue 3 6
Life Care and Nursing Home Revenue 6 5
General Obligation - Local 8 5
Water and Sewer Revenue 4 5
Solid Waste Revenue 6 5
Prerefunded Bonds 2 4
General Obligation - State -- 3
Ground Transportation Revenue 2 3
Educational Revenue 4 3
Air and Sea Transportation Revenue 2 2
Escrowed to Maturity 2 2
Other Revenue 2 2
Other Assets Less Liabilities -2 -5
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Total 100% 100%
T. Rowe Price Summit Municipal Funds
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Performance Comparison
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These charts show the value of a hypothetical $25,000 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 MUNICIPAL MONEY MARKET FUND
As of 10/31/98
Lipper SMM
10/29/93 25.000 25.000
10/94 25.535 25.588
10/95 26.378 26.491
10/96 27.178 27.361
10/97 28.008 28.284
10/98 28.850 29.210
SUMMIT MUNICIPAL INTERMEDIATE FUND
As of 10/31/98
Lehman Lipper SMT SMT Area
10/29/93 25.000 25.000 25.000 25.000
10/94 24.492 24.404 25.045 25.045
10/95 27.599 27.174 27.899 27.899
10/96 28.912 28.415 29.403 29.403
10/97 31.104 30.376 31.691 31.691
10/98 33.419 32.420 33.875 33.875
T. Rowe Price Summit Municipal Funds
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Performance Comparison
SUMMIT MUNICIPAL INTERMEDIATE FUND
As of 10/31/98
Lehman Lipper SMI SMI Area
10/29/93 25.000 25.000 25.000 25.000
10/94 23.910 23.525 23.905 23.905
10/95 27.458 26.750 27.416 27.416
10/96 29.025 28.178 29.345 29.345
10/97 31.490 30.530 32.438 32.438
10/98 34.013 32.738 35.177 35.177
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.
Since Inception
Periods Ended 10/31/98 1 Year 3 Years 5 Years Inception Date
Summit Municipal Money
Market Fund 3.27% 3.31% 3.16% 3.16% 10/29/93
Summit Municipal
Intermediate Fund 6.89 6.68 6.26 6.26 10/29/93
Summit Municipal
Income Fund 8.44 8.66 7.07 7.06 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 Municipal Money Market Fund
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Financial Highlights
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For a share outstanding throughout each period
Year 10/29/93
Ended Through
10/31/98 10/31/97 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 0.032 0.033 0.032 0.035 0.023
Distributions
Net investment
income (0.032) (0.033) (0.032) (0.035) (0.023)
NET ASSET VALUE
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------------------------------------------------------
Ratios/
Supplemental Data
Total return* 3.27% 3.37% 3.28% 3.53% 2.35%
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 3.23% 3.31% 3.23% 3.48% 2.56%!
Net assets,
end of period
(in thousands) $170,924 $140,557 $96,264 $77,958 $42,592
* Total return reflects the rate that an investor would have earned on
an investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Intermediate Fund
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Financial Highlights
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For a share outstanding throughout each period
Year 10/29/93
Ended Through
10/31/98 10/31/97 10/31/96 10/31/95 10/31/94
NET ASSET VALUE
Beginning of period $ 10.51 $ 10.22 $ 10.17 $ 9.59 $ 10.00
Investment activities
Net investment income 0.48 0.49 0.48 0.48 0.43
Net realized and
unrealized gain (loss) 0.23 0.29 0.05 0.58 (0.41)
Total from
investment activities 0.71 0.78 0.53 1.06 0.02
Distributions
Net investment income (0.48) (0.49) (0.48) (0.48) (0.43)
Net realized gain (0.04) -- -- -- --
Total distributions (0.52) (0.49) (0.48) (0.48) (0.43)
NET ASSET VALUE
End of period $ 10.70 $ 10.51 $ 10.22 $ 10.17 $ 9.59
----------------------------------------------------
Ratios/Supplemental Data
Total return* 6.89% 7.78% 5.39% 11.39% 0.18%
Ratio of expenses to
average net assets 0.50% 0.50% 0.50% 0.50% 0.50%!
Ratio of net investment
income to average
net assets 4.51% 4.67% 4.77% 4.93% 4.50%!
Portfolio turnover rate 22.2% 53.8% 72.9% 86.1% 157.5%!
Net assets,
end of period
(in thousands) $ 75,928 $ 46,906 $ 29,175 $ 22,145 $ 13,309
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Income Fund
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Financial Highlights
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For a share outstanding throughout each period
Year 10/29/93
Ended Through
10/31/98 10/31/97 10/31/96 10/31/95 10/31/94
NET ASSET VALUE
Beginning of period $ 10.44 $ 9.97 $ 9.84 $ 9.08 $ 10.00
Investment activities
Net investment income 0.51 0.55 0.54 0.54 0.50
Net realized and
unrealized gain (loss) 0.35 0.47 0.13 0.76 (0.92)
Total from
investment activities 0.86 1.02 0.67 1.30 (0.42)
Distributions
Net investment income (0.51) (0.55) (0.54) (0.54) (0.50)
NET ASSET VALUE
End of period $ 10.79 $ 10.44 $ 9.97 $ 9.84 $ 9.08
Ratios/Supplemental Data
Total return* 8.44% 10.54% 7.04% 14.68% (4.38)%
Ratio of expenses to
average net assets 0.50% 0.50% 0.50% 0.50% 0.50%!
Ratio of net investment
income to average
net assets 4.82% 5.38% 5.51% 5.68% 5.23%!
Portfolio
turnover rate 48.1% 35.7% 56.7% 73.7% 161.1%!
Net assets,
end of period
(in thousands) $ 65,958 $ 29,102 $ 15,909 $ 11,108 $ 6,453
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Money Market Fund
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October 31, 1998
Statement of Net Assets
Par Value
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In thousands
COLORADO 0.9%
Colorado, GO, TRAN, 4.00%, 6/25/99 $ 1,500 $ 1,504
Total Colorado (Cost $1,504) 1,504
CONNECTICUT 0.2%
Connecticut, Transportation Infrastructure
5.90%, 10/1/99 250 256
Total Connecticut (Cost $256) 256
FLORIDA 5.3%
Florida Board of Ed., Capital Outlay
7.00%, 6/1/19 (Prerefunded 6/1/99!) 90 94
Florida Board of Ed., GO
4.40%, 6/1/99 300 302
6.00%, 6/1/99 105 106
Florida Turnpike Auth.
7.50%, 7/1/19 (Prerefunded 7/1/99!) 310 325
7.60%, 7/1/19 (Prerefunded 7/1/99!) 220 230
Greater Orlando Aviation Auth.,
TECP 3.15%, 1/25/99 * 8,000 8,000
Total Florida (Cost $9,057) 9,057
GEORGIA 4.7%
Atlanta, GO
5.00%, 12/1/98 185 185
Public Improvement, 5.00%, 12/1/98 100 100
Fulton De Kalb Hospital Auth.
6.85%, 1/1/99 (AMBAC Insured)
(Escrowed to Maturity) 1,000 1,005
Georgia, GO, 7.45%, 1/1/99 1,500 1,509
Georgia Tollway Auth., 3.60%, 7/1/99 750 752
Savannah Economic Dev. Auth., Home Depot
VRDN (Currently 3.20%) * 4,400 4,400
Total Georgia (Cost $7,951) 7,951
IDAHO 1.2%
Idaho, GO, TAN, 4.50%, 6/30/99 $ 2,000 $ 2,012
Total Idaho (Cost $2,012) 2,012
ILLINOIS 4.0%
Chicago Metropolitan Water Reclaimation Dist., GO
4.50%, 12/1/98 400 400
7.25%, 1/1/05 (Prerefunded 1/1/99!) 100 101
9.00%, 1/1/03 (FGIC Insured)
(Prerefunded 1/1/99!) 400 403
Chicago Water Revenue,
4.10%, 11/1/98 (FGIC Insured) 1,000 1,000
Cook County, GO, 5.00%,
11/15/98 (FGIC Insured) 250 250
Illinois, GO
5.50%, 12/1/98 100 100
5.50%, 2/1/99 500 502
Illinois Sales Tax, GO,
7.00%, 6/15/19 (Prerefunded 6/15/99!) 500 520
Illinois Health Facilities Auth.,
Parkside Med. Services
7.25%, 4/1/18 (Prerefunded 4/1/99!) 250 259
Illinois HFA, Northwestern Memorial
6.50%, 8/15/04 (Prerefunded 8/15/99!) 270 281
Illinois Student Assistance Commission,
Student Loan
VRDN (Currently 3.20%) * 700 700
Lake County, PCR, W. W. Grainger
VRDN (Currently 3.40%) * 1,500 1,500
Southwestern Illinois Dev. Auth.,
Solid Waste Disposal
Shell Oil, Wood River
VRDN (Currently 3.80%) * 900 900
Total Illinois (Cost $6,916) 6,916
INDIANA 4.3%
Indiana Ed. Fac. Auth., Butler Univ. Project
7.60%, 11/1/98 (FGIC Insured) 450 459
Merrillville Multi School Building
7.00%, 1/15/99 (Escrowed to Maturity) 300 302
Petersburg Solid Waste Disposal
Indianapolis Power and Light
VRDN (Currently 3.25%) * $ 6,600 $ 6,600
Total Indiana (Cost $7,361) 7,361
KENTUCKY 0.5%
Kentucky Property and Buildings Commission
7.10%, 6/1/99 (Escrowed to Maturity) 500 510
7.35%, 12/1/04 (Prerefunded 12/1/99!) 100 106
Univ. of Kentucky,
7.20%, 5/1/08 (Prerefunded 5/1/99!) 250 259
Total Kentucky (Cost $875) 875
LOUISIANA 5.4%
Jefferson Parish Home Mortgage Auth.,
3.625%, 9/1/99 * 1,120 1,120
Louisiana, GO,
6.00%, 5/15/99 (MBIA Insured) 950 962
Louisiana Public Fac. Auth.,
Sisters of Mercy Health System
7.375%, 6/1/09 (Prerefunded 6/1/99!) 140 146
New Orleans Aviation Board
VRDN (Currently 3.30%)
(MBIA Insured) * 5,395 5,395
Plaquemines Parish, British Petroleum,
VRDN (Currently 3.85%) * 200 200
Saint Charles Parish, PCR
Shell Oil, VRDN (Currently 3.80%) * 1,400 1,400
Total Louisiana (Cost $9,223) 9,223
MAINE 3.8%
Maine Ed. Loan Marketing Corp
VRDN (Currently 3.15%)
(AMBAC Insured) * 6,500 6,500
Total Maine (Cost $6,500) 6,500
MARYLAND 1.4%
Bel Air, Parking Fac., COP
7.80%, 6/1/10 (CGIC Insured)
(Prerefunded 12/1/98!) 1,000 1,023
Carroll County, GO,
Volunteer Fire Department
4.00%, 12/1/98 $ 205 $ 205
Maryland DOT
Consolidated Transportation
4.00%, 12/15/98 100 100
6.90%, 11/15/04 (Prerefunded 11/15/98!) 200 204
Maryland Stadium Auth.,
Convention Center Expansion
5.25%, 12/15/98 100 100
Maryland-National Capital Park
and Planning Commission, GO
Prince George's County, 5.50%, 1/15/99 200 201
Montgomery County,
Consolidated Public Improvement, GO
5.10%, 7/1/99 250 252
Saint Marys County, GO, Public Facility Project
7.00%, 3/1/99 (MBIA Insured) 100 101
Washington Suburban Sanitary Dist., GO,
Water Supply
6.75%, 6/1/99 150 153
Total Maryland (Cost $2,339) 2,339
MASSACHUSETTS 1.1%
Massachusetts, GO
6.10%, 8/1/99 100 102
7.00%, 7/1/99 175 179
7.375%, 12/1/08 (FGIC Insured)
(Prerefunded 12/1/98!) 300 307
Consolidated Loan
7.00%, 3/1/99 (FGIC Insured) 35 35
7.00%, 6/1/09 (Prerefunded 6/1/99!) 700 727
Massachusetts State Industrial Fin. Agency
Morton Hosp. and Med. Center
8.75%, 7/1/11 (Prerefunded 7/1/99!) 555 583
Total Massachusetts (Cost $1,933) 1,933
MICHIGAN 5.5%
Detroit City School Dist.,
School Aid, RAN, 4.50%, 7/1/99 1,000 1,006
Univ. of Michigan, Hosp., 7.40%, 12/1/98 800 802
Wayne/Charter County Airport
Detroit Metropolitan Airport
VRDN (Currently 3.15%) * $ 7,510 $ 7,510
Total Michigan (Cost $9,318) 9,318
MISSISSIPPI 2.2%
Jackson County Industrial Sewage Fac.,
Chevron VRDN (Currently 3.85%) * 1,000 1,000
Mississippi, GO
5.00%, 6/1/99 2,000 2,015
Small Enterprise Dev.
4.00%, 12/1/98 405 405
6.00%, 3/1/99 * 420 423
Total Mississippi (Cost $3,843) 3,843
NEVADA 3.1%
Clark County Airport, Subordinated Lien,
VRDN (Currently 3.25%) * 5,300 5,300
Total Nevada (Cost $5,300) 5,300
NEW JERSEY 0.6%
New Jersey, GO
4.90%, 2/15/99 375 376
6.50%, 1/15/04 (Prerefunded 1/15/99!) 150 153
New Jersey Building Auth.
9.875%, 2/1/13 (Prerefunded 2/1/99!) 60 61
New Jersey Highway Auth., Senior Parkway
7.25%, 1/1/16 (MBIA Insured)
(Prerefunded 1/1/99!) 265 271
Ocean County New Jersey, GO, 6.90%, 8/15/99 100 103
Total New Jersey (Cost $964) 964
NEW MEXICO 0.6%
New Mexico, GO, TAN, 4.25%, 6/30/99 1,000 1,004
Total New Mexico (Cost $1,004) 1,004
NEW YORK 1.1%
New York City, VRDN
(Currently 3.35%) (MBIA Insured) $ 1,795 $ 1,795
Total New York (Cost $1,795) 1,795
NORTH CAROLINA 2.1%
Charlotte Airport, VRDN
(Currently 3.15%) * 2,245 2,245
Durham County, COP, 4.05%, 5/1/99 1,000 1,002
North Carolina, GO, 4.25%, 6/1/99 150 151
North Carolina Clean Water,
5.20%, 6/1/99 140 141
Total North Carolina (Cost $3,539) 3,539
OHIO 1.0%
Cleveland, GO, 6.75%, 7/1/04 (MBIA Insured)
(Prerefunded 7/1/99!) 100 104
Cleveland Airport Systems,
VRDN (Currently 3.20%) * 1,500 1,500
Ohio Public Facilities Commission,
Higher Education
4.50%, 11/1/99 100 101
Total Ohio (Cost $1,705) 1,705
OKLAHOMA 1.5%
Comanche Hosp. Auth., 8.05%, 7/1/16
(Prerefunded 7/1/99!) 1,575 1,651
Oklahoma Turnpike Auth.
First Senior Systems
7.40%, 1/1/00 (Prerefunded 1/1/99!) 485 497
7.75%, 1/1/09 (Prerefunded 1/1/99!) 485 498
Total Oklahoma (Cost $2,646) 2,646
PENNSYLVANIA 7.6%
Geisinger Auth. Health Systems,
Penn State Geisinger Health
4.50%, 8/15/99 1,000 1,006
Pennsylvania, GO
4.00%, 7/1/99 100 100
5.25%, 11/15/98 (FGIC Insured) 500 500
6.60%, 6/1/05 (Prerefunded 6/1/99!) 500 516
Pennsylvania Higher Ed. Fac. Auth.
Student Loan, VRDN
(Currently 3.10%) * $ 7,400 $ 7,400
Philadelphia, GO,
TRAN, 4.25%, 6/30/99 2,000 2,008
Philadelphia Hosp. and Higher Ed. Fac. Auth.,
Childrens Hosp.
5.625%, 2/15/99 1,500 1,508
Total Pennsylvania (Cost $13,038) 13,038
SOUTH CAROLINA 1.8%
Berkeley County, Amoco Chemical,
VRDN (Currently 3.80%) * 3,000 3,000
Total South Carolina (Cost $3,000) 3,000
SOUTH DAKOTA 0.2%
South Dakota HDA, VRDN (Currently 3.40%) * 420 420
Total South Dakota (Cost $420) 420
TENNESSEE 0.6%
Nashville and Davidson County, Water and Sewer
4.00%, 1/1/99 (FGIC Insured) 200 200
Shelby County, GO, 4.50%, 3/1/99 900 904
Total Tennessee (Cost $1,104) 1,104
TEXAS 11.7%
Harris County Health Facilities Hosp.
7.00%, 6/1/02 (Prerefunded 6/1/99!) 35 36
Houston Airport, TECP, 3.20 - 3.35%,
11/12 - 12/8/98 * 8,100 8,100
Joshua Independent School Dist.
6.125%, 2/15/26 (Prerefunded 2/15/99!) 400 403
North Central Texas Health, Methodist Hosp.
TECP 3.25%, 11/20/98 5,000 5,000
Panhandle-Plains Higher Ed. Auth.
VRDN (Currently 3.15%) * 6,200 6,200
San Antonio Electric and Gas,
7.00%, 2/1/99 200 202
Texas, GO, 5.125%, 10/1/99 100 101
Total Texas (Cost $20,042) 20,042
UTAH 8.2%
Intermountain Power Agency
5.25%, 7/1/99 (MBIA Insured) $ 500 $ 505
5.50%, 7/1/99 (MBIA Insured) 1,550 1,569
Power Supply, 7.20%,
7/1/11 (Prerefunded 7/1/99!) 250 261
Salt Lake City, Airport,
VRDN (Currently 3.15%) * 3,379 3,379
Salt Lake City Hosp., 7.25%, 2/15/20
(Prerefunded 2/15/99!) 450 464
Salt Lake County, Kennecott/RTZ ,
Solid Waste Disposal
VRDN (Currently 3.30%) * 3,400 3,400
Utah State Board of Regents,
Student Loan, VRDN (Currently 3.10%) 4,500 4,500
Total Utah (Cost $14,078) 14,078
VIRGINIA 13.3%
Capital Region Airport Commission,
Richmond Int'l. Airport
VRDN (Currently 3.15%) (AMBAC Insured) * 3,000 3,000
Fairfax County, GO, 4.90%, 10/1/99 100 101
Hampton Roads Sanitation Dist., Sewer
7.10%, 7/1/01 (Prerefunded 7/1/99!) 300 312
Henrico County IDA, White Oak Semiconductor
VRDN (Currently 3.20%) * 5,844 5,844
Manassas, GO, 6.00%, 1/1/99 * 810 813
Newport News, BAN
VRDN (Currently 3.15%) 7,000 7,000
Norfolk Capital Improvement, GO
5.25%, 6/1/99 (FGIC Insured) 1,000 1,009
Peninsula Ports Auth.,
Riverside Health Systems
5.80%, 7/1/99 500 507
Southeastern Public Service Auth.,
Waste Systems
6.90%, 7/1/01
(Prerefunded 7/1/99!) (MBIA Insured) 550 572
Southeastern Public Service Auth.
6.90%, 7/1/02 (Prerefunded 7/1/99!)
(MBIA Insured) 500 521
Virginia Beach, GO, 4.40%, 7/15/99 200 201
Virginia Housing Development Auth.,
Commonwealth Mortgage
3.90%, 1/1/99 465 465
Virginia Public School Auth.
6.70%, 1/1/07 (Prerefunded 1/1/99!) $ 150 $ 154
6.75%, 1/1/11 (Prerefunded 1/1/99!) 770 789
School Finance, 8.00%, 1/1/99 300 302
Virginia State Higher Ed., GO,
5.00%, 6/1/99 135 136
Virginia State Transportation Board,
Corridor Dev.
6.50%, 5/15/99 1,000 1,015
Total Virginia (Cost $22,741) 22,741
WASHINGTON 4.6%
King County, GO, 9.00%, 12/1/98 1,000 1,004
Port of Seattle, VRDN
(Currently 3.15%) * 3,000 3,000
Washington Housing Fin. Commission,
Single Family
3.90%, 12/15/98 * 255 255
Washington Public Power Supply System
5.00%, 7/1/99 100 101
5.00%, 7/1/99 (FSA Insured) 1,230 1,241
Nuclear Project
4.75%, 7/1/99 (FSA Insured) 145 146
7.20%, 7/1/99 1,000 1,022
Washington State, GO, 5.50%, 7/1/99 1,000 1,012
Total Washington (Cost $7,781) 7,781
WEST VIRGINIA 0.4%
West Virginia Water Dev. Auth.
8.625%, 11/1/28 (Prerefunded 11/1/98!) 750 765
Total West Virginia (Cost $765) 765
WISCONSIN 0.5%
Wisconsin, GO
4.125%, 11/1/98 100 100
5.90%, 5/1/99 200 202
Wisconsin HEFA, St. Lukes Medical Center
7.40%, 8/15/19 (MBIA Insured)
(Prerefunded 8/15/99!) 500 525
Total Wisconsin (Cost $827) 827
Total Investments in Securities
99.4% of Net Assets (Cost $169,837) $ 169,837
Other Assets Less Liabilities 1,087
NET ASSETS $ 170,924
----------
Net Assets Consist of:
Accumulated net realized gain/loss -
net of distributions $ 5
Paid-in-capital applicable to 170,919,252
shares of $0.0001 par value capital stock
outstanding; 2,000,000,000 shares
of the Corporation authorized 170,919
NET ASSETS $ 170,924
----------
NET ASSET VALUE PER SHARE $ 1.00
----------
* Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
CGIC Capital Guaranty Insurance Corp.
COP Certificates of Participation
DOT Department of Transportation
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
HDA Housing Development Authority
HEFA Health & Educational Facility Authority
HFA Health Facility Authority
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
RAN Revenue Anticipation Note
TAN Tax Anticipation Note
TECP Tax-Exempt Commercial Paper
TRAN Tax Revenue Anticipation Note
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Intermediate Fund
- --------------------------------------------------------------------------------
October 31, 1998
Par Value
- --------------------------------------------------------------------------------
In thousands
ALABAMA 0.8%
Birmingham Airport Auth.
7.35%, 7/1/04 (AMBAC Insured) * $ 500 $ 530
Columbia Industrial Dev. Board,
Alabama Power Project
VRDN (Currently 3.60%) 100 100
Total Alabama (Cost $617) 630
CALIFORNIA 4.6%
California Pollution Control Fin. Auth.,
PCR, USA Waste Services
5.00%, 6/1/18 1,000 1,016
California Public Works Board,
Dept. of Corrections
6.00%, 11/1/05 (MBIA Insured) 250 282
Foothill / Eastern Transportation
Corridor Agency, Toll Road
Zero Coupon, 1/1/05 350 263
San Francisco Bay Area Rapid Transit,
District Sales Tax
5.25%, 7/1/18 1,250 1,290
San Joaquin Hills Transportation
Corridor Agency Toll Road
Zero Coupon, 1/15/10 (MBIA Insured) 1,000 611
Total California (Cost $3,319) 3,462
COLORADO 0.9%
Denver City and County Airport
6.75%, 11/15/22 (MBIA Insured)
(Prerefunded 11/15/02!) * 105 118
6.75%, 11/15/22 (MBIA Insured) * 395 439
E-470 Public Highway Auth.
Zero Coupon, 8/31/26
(Prerefunded 8/31/05!) 1,000 158
Total Colorado (Cost $662) 715
CONNECTICUT 1.2%
Connecticut Dev. Auth.,
Mystic Marinelife Aquarium
6.875%, 12/1/17 150 161
Mashantucket Western Pequot Tribe
5.60%, 9/1/09 $ 200 $ 211
5.70%, 9/1/12 500 525
Total Connecticut (Cost $850) 897
DISTRICT OF COLUMBIA 1.4%
Washington D.C. Metropolitan Airport Auth.
6.25%, 10/1/21 (MBIA Insured) * 500 544
6.625%, 10/1/12 (MBIA Insured) * 500 554
Total District of Columbia (Cost $1,064) 1,098
FLORIDA 7.7%
Dade County, Resource Recovery Fac.
6.00%, 10/1/06 (AMBAC Insured) * 500 561
Dade County School Board, COP
5.75%, 5/1/08 (MBIA Insured) 365 402
Dade County School Dist., GO
6.00%, 7/15/04 (MBIA Insured) 1,700 1,884
Escambia County, PCR, Champion Intl.
6.90%, 8/1/22 * 1,250 1,373
Florida Division of Bond Fin.
Dept. of Environmental Preservation
6.00%, 7/1/06 (MBIA Insured) 500 565
Indian Trace Community Dev. Dist.,
Water Management
5.50%, 5/1/07 (MBIA Insured) 500 548
Leesburg Hosp., Regional Medical Center,
5.20%, 7/1/02 500 523
Total Florida (Cost $5,573) 5,856
GEORGIA 0.6%
Coweta County Residential Care Fac.
for the Elderly Auth.
Wesley Woods of Newnan-Peachtree City
7.625%, 10/1/06 400 452
Total Georgia (Cost $400) 452
HAWAII 7.2%
Hawaii, Airport, 6.70%, 7/1/05
(MBIA Insured) * $ 500 $ 543
Hawaii Dept. of Budget and Finance
Hawaiian Electric, 4.95%, 4/1/12
(MBIA Insured) 3,000 3,101
Wilcox Memorial Hosp., 5.50%, 7/1/09 1,690 1,795
Total Hawaii (Cost $5,301) 5,439
ILLINOIS 3.9%
Chicago, GO, 5.75%, 1/1/05
(AMBAC Insured) 660 721
Chicago-O'Hare Int'l. Airport,
Int'l. Terminal
7.50%, 1/1/05 (Prerefunded 1/1/00!) * 50 53
7.50%, 1/1/05 * 110 117
7.50%, 1/1/05 (MBIA Insured) * 170 180
7.50%, 1/1/05 (MBIA Insured)
(Prerefunded 1/1/00!) * 80 85
Illinois HFA
Edward Obligated Group
5.00%, 2/15/09 (AMBAC Insured) 500 524
Glen Oaks Medical Center
9.50%, 11/15/15 (Escrowed to Maturity) 70 79
Hinsdale Hosp.
7.00%, 11/15/19 (Escrowed to Maturity) 260 302
Southwestern Dev. Auth.,
Solid Waste Disposal
Shell Oil, Wood River
VRDN (Currently 3.80%) * 900 900
Total Illinois (Cost $2,846) 2,961
INDIANA 1.7%
Goshen, Greencroft Obligation Group,
5.20%, 8/15/06 750 745
St. Joseph County Economic Dev. Rev.
Madison Center
5.10%, 2/15/05 260 266
5.25%, 2/15/07 295 305
Total Indiana (Cost $1,300) 1,316
IOWA 0.3%
Iowa HFA, Wesley Retirement,
6.25%, 2/1/12 $ 250 $ 257
Total Iowa (Cost $250) 257
KENTUCKY 3.4%
Kenton County Airport Board,
Delta Airlines, 7.50%, 2/1/12 * 2,000 2,188
Kentucky Property and Buildings Commission,
6.40%, 11/1/01 390 420
Total Kentucky (Cost $2,603) 2,608
LOUISIANA 1.4%
Louisiana, GO, 5.00%, 4/15/03 1,000 1,047
Total Louisiana (Cost $1,030) 1,047
MARYLAND 9.6%
Maryland, GO, 4.75%, 3/1/05 1,500 1,572
Maryland Energy Fin. Administration
Wheelabrator Technologies
5.85%, 12/1/05 * 1,510 1,635
6.30%, 12/1/10 * 250 275
Maryland HHEFA
Good Samaritan Hosp , 5.50%, 7/1/05 700 763
Univ. of Maryland Medical System
6.50%, 7/1/21 (FGIC Insured)
(Prerefunded 7/1/01!) 250 268
Maryland-National Capital Park
and Planning Commission
GO, BAN, Prince George's County
VRDN (Currently 3.70%) 800 800
Northeast Maryland Waste Disposal Auth.
Montgomery County Resources
6.20%, 7/1/10 * 750 806
6.30%, 7/1/16 (MBIA Insured) * 500 548
7.10%, 1/1/03 (MBIA Insured) 550 617
Total Maryland (Cost $7,029) 7,284
MASSACHUSETTS 0.6%
Massachusetts, GO, 6.30%, 11/1/05
(FGIC Insured) $ 250 $ 283
Massachusetts Port Auth., 7.375%, 7/1/10
(FGIC Insured) * 135 145
Total Massachusetts (Cost $391) 428
MICHIGAN 7.8%
Garden City HFA, Garden City Hosp.,
5.375%, 9/1/03 1,465 1,452
Greater Detroit Resource Recovery Auth.
6.25%, 12/13/05 (AMBAC Insured) 1,000 1,134
Michigan HFA, Mercy Health,
5.00%, 8/15/12 1,395 1,425
Michigan Strategic Fund,
Holland Home, 5.00%, 11/15/03 830 827
Wayne County Airport
5.25%, 12/1/12 (MBIA Insured) * 1,000 1,047
Total Michigan (Cost $5,708) 5,885
MISSISSIPPI 0.4%
Claiborne County, PCR, Systems Energy Resources
9.875%, 12/1/14 300 310
Total Mississippi (Cost $310) 310
MISSOURI 0.8%
Good Shepherd Nursing Home Dist.
Nursing Home Facilities, 5.45%, 8/15/08 475 479
Missouri HEFA, Washington Univ.,
VRDN (Currently 3.70%) 100 100
Total Missouri (Cost $575) 579
NEW HAMPSHIRE 0.7%
New Hampshire Housing Fin. Auth.
Single Family
5.90%, 1/1/01 * 115 118
5.90%, 7/1/01 * 115 119
6.00%, 7/1/02 * 125 130
6.10%, 1/1/03 * 130 136
Total New Hampshire (Cost $485) 503
NEW JERSEY 0.7%
Port Auth. of New York and New Jersey,
6.50%, 10/1/01 * $ 500 $ 529
Total New Jersey (Cost $506) 529
NEW YORK 13.6%
Dormitory Auth. of the State of New York
City Univ.
5.50%, 7/1/03 1,000 1,063
6.875%, 7/1/14 (MBIA Insured) 350 408
Mental Health Services Fac.,
6.00%, 2/15/06 1,500 1,658
Nyack Hosp., 6.00%, 7/1/06 250 275
State Univ. Ed. Fac , 7.40%, 5/15/01 150 161
Long Island Power Auth.
VRDN (Currently 3.60%) 200 200
5.00%, 4/1/05 500 526
Nassau County IDA, Hofstra Univ.,
6.70%, 1/1/09 250 290
New York City, GO
5.00%, 11/15/08 1,500 1,567
5.25%, 8/1/03 1,500 1,580
7.00%, 8/1/04 1,000 1,145
New York State Environmental Fac. PCR
Water Revolving Fund
6.875%, 6/15/10 50 55
6.875%, 6/15/10 (Prerefunded 6/15/01!) 450 495
New York State Housing Fin. Agency
Service Contract Obligation
5.85%, 9/15/09 300 331
New York State Mortgage Agency,
Homeowner Mortgage
5.80%, 10/1/06 * 500 536
Total New York (Cost $9,761) 10,290
OHIO 0.3%
Fairfield Economic Dev. Auth.,
Beverly Enterprises
8.50%, 1/1/03 215 232
Total Ohio (Cost $226) 232
PENNSYLVANIA 2.7%
Pennsylvania, GO, 5.375%, 11/15/03
(FGIC Insured) $ 500 $ 536
Pennsylvania Intergovernmental
Cooperative Auth., Special Tax
7.00%, 6/15/04 (FGIC Insured)
(Escrowed to Maturity) 400 462
Philadelphia HHEFA, Childrens Hosp.,
5.25%, 2/15/06 1,000 1,060
Total Pennsylvania (Cost $1,959) 2,058
SOUTH CAROLINA 8.0%
Charleston County Resource Recovery,
Foster Wheeler
5.10%, 1/1/08 (AMBAC Insured) * 1,700 1,800
Connector 2000 Assoc., Greenville Toll Road
Zero Coupon, 1/1/12 1,100 479
South Carolina Public Service Auth.
6.25%, 1/1/05 (MBIA Insured) 1,350 1,518
Santee Cooper
5.75%, 1/1/22 (MBIA Insured) 1,600 1,726
6.50%, 7/1/24 (AMBAC Insured)
(Prerefunded 7/1/02!) 495 551
Total South Carolina (Cost $5,776) 6,074
TENNESSEE 1.7%
Memphis-Shelby County Airport Auth.
6.25%, 2/15/11 (MBIA Insured) * 200 231
Tennessee Housing Dev. Agency
4.95%, 7/1/10 * 420 425
5.05%, 7/1/11 * 620 629
Total Tennessee (Cost $1,246) 1,285
TEXAS 10.9%
Abilene Health Fac. Dev.,
Sears Methodist Retirement System
5.40%, 11/15/09 700 699
Alliance Airport Auth.
American Airlines, 7.50%, 12/1/29 * 1,500 1,608
Federal Express, 6.375%, 4/1/21 * 2,000 2,156
Austin Airport, 5.75%, 11/15/08
(MBIA Insured) * $ 500 $ 549
Brazos Higher Ed. Auth.,
Student Loan, 5.95%, 6/1/02 * 475 504
Gulf Coast Waste Disposal Auth., PCR,
Amoco Oil
VRDN (Currently 3.80%) * 300 300
Harris County, Toll Road
6.50%, 8/15/17 (AMBAC Insured)
(Prerefunded 8/15/02!) 750 837
Houston, Water and Sewer, 7.00%, 12/1/03
(AMBAC Insured) 270 308
Houston Airport, 5.25%, 7/1/15 * 750 768
Tarrant County Health Fac. Dev.,
Texas Health Resources
5.75%, 2/15/10 (MBIA Insured) 500 556
Total Texas (Cost $8,084) 8,285
VIRGINIA 3.2%
Leesburg Utilities System
6.10%, 7/1/07 (MBIA Insured)
(Prerefunded 7/1/02!) 500 550
Southeastern Public Service Auth.,
Solid Waste Systems
5.875%, 7/1/08 * 500 529
Virginia HDA
5.75%, 7/1/99 * 500 506
6.125%, 1/1/99 * 50 50
6.50%, 7/1/03 * 250 262
Virginia Transportation Board
Northern Virginia Transportation Dist.
5.80%, 5/15/04 500 547
Total Virginia (Cost $2,351) 2,444
WASHINGTON 1.4%
Washington Health Care Fac. Auth.
Virginia Mason Medical Center
6.00%, 8/15/08 (MBIA Insured) 500 565
Washington Public Power Supply System
6.30%, 7/1/01 (FSA Insured) 500 533
Total Washington (Cost $1,056) 1,098
WEST VIRGINIA 2.5%
West Virginia Building Commission,
GO, Lottery
5.00%, 7/1/04 (MBIA Insured) $ 1,835 $ 1,932
Total West Virginia (Cost $1,852) 1,932
WYOMING 0.3%
Lincoln County, PCR, Exxon, VRDN
(Currently 3.80%) * 200 200
Total Wyoming (Cost $200) 200
Total Investments in Securities
100.3% of Net Assets (Cost $73,330) $ 76,154
Futures Contracts
In thousands
Contract Unrealized
Expiration Value Gain (Loss)
Short, 10 year U.S. Treasury Notes,
12 contracts, $1,500,000 of
Maryland, GO
pledged as initial margin 12/98 $1,444 $ 9
Net receipts of variation
margin to date 0
Variation margin receivable
on open futures contracts 9
Other Assets Less Liabilities (235)
NET ASSETS $ 75,928
----------
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 1
Accumulated net realized gain/loss -
net of distributions 72
Net unrealized gain (loss) 2,833
Paid-in-capital applicable to 7,093,664
shares of $0.0001 par value capital stock
outstanding; 2,000,000,000 shares
of the Corporation authorized 73,022
NET ASSETS $ 75,928
----------
NET ASSET VALUE PER SHARE $ 10.70
----------
* Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
COP Certificates of Participation
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
HDA Housing Development Authority
HEFA Health & Educational Facility Authority
HFA Health Facility Authority
HHEFA Health & Higher Educational Facility Authority
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Income Fund
- --------------------------------------------------------------------------------
October 31, 1998
Statement of Net Assets
Par Value
- --------------------------------------------------------------------------------
In thousands
ALABAMA 1.5%
Baldwin County Eastern Shore Health Care Auth.
Thomas Hosp., 6.75%, 4/1/21 $ 200 $ 219
Decatur Ind. Dev. Board, Solid Waste Disposal
Amoco Chemical, VRDN (Currently 3.80%) * 100 100
Jefferson County, Sewer, 5.625%, 2/1/22
(FGIC Insured) 250 266
Montgomery Special Care Fac.,
Baptist Medical Center
5.25%, 5/1/20 (AMBAC Insured) 370 375
Total Alabama (Cost $900) 960
ALASKA 0.4%
Alaska Housing Fin., General Mortgage
Zero Coupon, 12/1/17 (MBIA Insured) 750 240
Total Alaska (Cost $236) 240
CALIFORNIA 4.7%
California Pollution Control Fin. Auth., PCR
USA Waste Services, 5.00%, 6/1/18 600 610
Foothill / Eastern Transportation Corridor Agency
Toll Road, Zero Coupon, 1/1/26 500 118
Los Angeles County Public Works Fin. Auth.
Rowland Heights, 5.50%, 10/1/18
(FSA Insured) 145 158
Orange County PFA, Management Systems
5.25%, 12/1/13 (AMBAC Insured) * 500 530
Placentia PFA, Special Tax,
6.60%, 9/1/15 100 104
Pomona Unified School Dist., GO
6.15%, 8/1/15 (MBIA Insured) 145 168
Poway Community Fac. Dist.,
6.75%, 8/15/15 225 247
San Jose Unified School Dist.,
Capital Appreciation
Zero Coupon, 8/1/20 1,000 320
Santa Ana Housing Auth.,
Villa Del Sol Apartments
5.65%, 11/1/21 * 300 320
Torrance Redev. Agency, 5.50%, 9/1/28
(MBIA Insured) 500 513
Total California (Cost $2,958) 3,088
COLORADO 0.5% E-470 Public Highway Auth.
Zero Coupon, 8/31/26
(Prerefunded 8/31/05!) $ 2,000 $ 315
Total Colorado (Cost $275) 315
CONNECTICUT 0.8%
Connecticut Dev. Auth.,
Mystic Marinelife Aquarium
7.00%, 12/1/27 200 215
Mashantucket Western Pequot Tribe,
5.75%, 9/1/27 300 312
Total Connecticut (Cost $491) 527
DELAWARE 0.5%
Delaware Economic Dev. Auth.
Peninsula United Methodist Homes,
6.30%, 5/1/22 300 321
Total Delaware (Cost $295) 321
FLORIDA 3.8%
Dade County, 4.75%, 10/1/30
(MBIA Insured) 1,000 950
Jacksonville Electric Auth.,
St. John River, 5.375%, 10/1/13 1,000 1,064
Jacksonville, IDR,
Beverly Enterprises, 9.75%, 10/1/11 480 511
Total Florida (Cost $2,486) 2,525
GEORGIA 4.1%
Athens-Clarke Residential Care Fac.
for the Elderly Auth.
Wesley Woods of Athens, 6.375%, 10/1/27 200 206
Coweta County Residential Care Fac.
for the Elderly Auth.
Wesley Woods of Newnan-Peachtree City
8.20%, 10/1/16 215 250
Fulco Hospital Auth., Catholic Health East
5.25%, 11/15/13 (MBIA Insured) 1,000 1,045
Georgia Housing Fin. Auth.,
Single Family, 6.45%, 12/1/27 * 210 226
Municipal Electric Auth. of Georgia
Zero Coupon, 1/1/09 1,000 579
5.70%, 1/1/19 (MBIA Insured) 170 186
Rockdale County Dev. Auth.,
Solid Waste Disposal
Visy Paper, 7.50%, 1/1/26 * $ 225 $ 242
Total Georgia (Cost $2,612) 2,734
IDAHO 0.2%
Idaho Housing Agency, Single Family
6.60%, 7/1/27 (FHA Guaranteed) * 100 107
Total Idaho (Cost $100) 107
ILLINOIS 7.6%
Chicago, GO, 5.50%, 1/1/18
(AMBAC Insured) 250 268
Chicago - O'Hare Int'l. Airport,
Int'l. Terminal
7.50%, 1/1/17 (MBIA Insured) * 85 90
Chicago Board of Ed., GO
School Reform Board
Zero Coupon, 12/1/15 (AMBAC Insured) 1,000 424
5.75%, 12/1/20 (AMBAC Insured) 300 325
Illinois EFA, Northwest Univ.,
5.25%, 11/1/32 800 839
Illinois HFA
Community Hosp. of Ottawa,
6.85%, 8/15/24 200 220
Glen Oaks Medical Center
7.00%, 11/15/19 (Escrowed to Maturity) 145 169
9.50%, 11/15/15 (Escrowed to Maturity) 75 85
Highland Park Hosp.
5.75%, 10/1/17 (MBIA Insured) 140 151
Holy Cross Hosp., 6 70%, 3/1/14 300 327
Loyola Univ. Health Systems
6.00%, 7/1/12 (MBIA Insured) 225 255
Riverside Health Systems,
6.00%, 11/15/18 750 801
Metropolitan Pier and Exposition Auth.,
McCormick Place
Zero Coupon, 6/15/21 (MBIA Insured) 400 125
Southwestern Illinois Dev. Auth.,
Solid Waste Disposal
Shell Oil, Wood River, VRDN
(Currently 3.80%) * 700 700
Village of Carol Stream, DuPage County,
Windsor Park Manor
7.20%, 12/1/14 200 219
Total Illinois (Cost $4,731) 4,998
INDIANA 1.0%
Indiana State Office Building Commission,
Correctional Fac.
5.50%, 7/1/20 (AMBAC Insured) $ 500 $ 525
St. Joseph County Economic Dev.,
Madison Center
5.50%, 2/15/21 150 151
Total Indiana (Cost $620) 676
IOWA 1.0%
Iowa Fin. Auth., Mercy Health Systems
5.25%, 8/15/27 (FSA Insured) 500 504
Iowa HFA, Wesley Retirement,
6.25%, 2/1/12 160 165
Total Iowa (Cost $663) 669
KENTUCKY 0.2%
Kenton County Airport Board,
Delta Airlines, 7.50%, 2/1/20 * 100 110
Total Kentucky (Cost $100) 110
LOUISIANA 3.5%
Jefferson Sales Tax Dist.
Capital Appreciation
Zero Coupon, 12/1/09 (FSA Insured) 1,000 610
Special Sales
Zero Coupon, 12/1/13 (FSA Insured) 2,000 965
Saint Charles Parish, PCR, Shell Oil
VRDN (Currently 3.80%) * 700 700
Total Louisiana (Cost $2,227) 2,275
MARYLAND 2.3%
Maryland CDA
Single Family
7.25%, 4/1/19 * 140 151
7.375%, 4/1/26 * 90 93
Maryland Energy Fin. Administration
Wheelabrator Technologies,
6.45%, 12/1/16 500 551
Maryland-National Capital Park
and Planning Commission
Prince George's County, GO, BAN
VRDN (Currently 3.70%) $ 200 $ 200
Northeast Maryland Waste Disposal Auth.
Montgomery County Resources,
6.20%, 7/1/10 * 500 537
Total Maryland (Cost $1,491) 1,532
MASSACHUSETTS 6.7%
Massachusetts, GO,
5.25%, 8/1/18 2,000 2,098
Massachusetts HEFA,
Melrose Wakefield Healthcare
5.375%, 7/1/05 350 377
Massachusetts Port Auth.,
5.00%, 7/1/28 1,000 976
Massachusetts Turnpike Auth.
Metropolitan Highway Systems
Zero Coupon, 1/1/21 (MBIA Insured) 750 245
Massachusetts Water Resources Auth.
4.75%, 8/1/17 (FSA Insured) 700 687
Total Massachusetts (Cost $4,306) 4,383
MICHIGAN 1.0%
Dickinson County Economic Dev.,
Champion Int'l
5.85%, 10/1/18 200 208
Michigan Strategic Fund
Holland Home
5.00%, 11/15/03 200 199
5.75%, 11/15/18 250 251
Total Michigan (Cost $646) 658
MINNESOTA 0.7%
Minneapolis, GO, 4.75%, 12/1/26 500 484
Total Minnesota (Cost $481) 484
MISSISSIPPI 1.2%
Claiborne County, PCR,
Systems Energy Resources
7.30%, 5/1/25 150 158
Mississippi Business Fin.,
Systems Energy Resources
5.875%, 4/1/22 $ 500 $ 499
Warren County, PCR,
Mississippi Power and Light
7.00%, 4/1/22 100 110
Total Mississippi (Cost $746) 767
NEBRASKA 0.4%
City of Kearney, Great Platte River Road,
6.75%, 1/1/23 300 290
Total Nebraska (Cost $293) 290
NEVADA 0.7%
Clark County Airport Fac.,
McCarren Int'l. Airport
6.00%, 7/1/17 (MBIA Insured) * 250 271
Clark County, IDR,
Southwest Gas, 6.50%, 12/1/33 * 200 213
Total Nevada (Cost $430) 484
NEW HAMPSHIRE 1.1%
New Hampshire HHEFA,
Wentworth Douglass Hosp.
5.375%, 1/1/15 (MBIA Insured) 500 534
New Hampshire Housing Fin. Auth.,
Single Family
6.85%, 7/1/14 * 200 215
Total New Hampshire (Cost $698) 749
NEW JERSEY 4.5%
New Jersey Economic Dev. Auth.,
Evergreens, 6.00%, 10/1/17 130 137
New Jersey EFA, Seton Hall Univ.
5.00%, 7/1/18 (AMBAC Insured) 250 251
New Jersey HFFA
Irvington General Hosp.
5.875%, 8/1/06 (FHA Guaranteed) 170 187
Kennedy Health, 5.00%, 7/1/12
(MBIA Insured) 500 515
New Jersey Housing and Mortgage Fin. Agency
6.35%, 10/1/27 (MBIA Insured) * 250 269
New Jersey Sports and Exposition Auth.,
Monmouth Park
8.00%, 1/1/25 100 114
New Jersey Turnpike Auth.
10.375%, 1/1/03 (Escrowed to Maturity) $ 670 $ 761
New Jersey Wastewater Treatment Trust,
6.375%, 4/1/11 200 227
Port Auth. of New York and New Jersey,
6.50%, 10/1/01 * 200 212
Rutgers, The State Univ.,
6.35%, 5/1/06 250 275
Total New Jersey (Cost $2,785) 2,948
NEW MEXICO 0.6%
Farmington, PCR
Public Service Co. of New Mexico
6.30%, 12/1/16 200 215
6.375%, 4/1/22 150 163
Total New Mexico (Cost $350) 378
NEW YORK 14.4%
Dormitory Auth. of the State of New York
Interfaith Medical Center,
5.30%, 2/15/19 1,000 1,007
North Shore Univ. Hosp.
5.50%, 11/1/14 (MBIA Insured) 500 542
Nyack Hosp., 6.00%, 7/1/06 250 274
Presbyterian Hosp.
4.75%, 8/1/27 (FHA Guaranteed) 1,000 955
Wyckoff Heights, 5.30%, 8/15/21 500 503
Erie County Water Auth.
Zero Coupon, 12/1/17 (AMBAC Insured) 1,215 310
Metropolitan Transportation Auth.
Commuter Fac., 5.00%, 7/1/05 275 288
Transit Fac., 4.75%, 7/1/26
(FGIC Insured) 500 479
Nassau County IDA, Hofstra Univ.,
6.80%, 1/1/11 290 338
New York City, GO
VRDN (Currently 3.60%) (FGIC Insured) 400 400
6.25%, 8/1/09 350 397
New York City Municipal Water Fin. Auth.
Water and Sewer
5.00%, 6/15/17 (FGIC Insured) 100 100
5.75%, 6/15/26 (AMBAC Insured) 500 541
6.00%, 6/15/09 200 227
New York City Transitional Fin. Auth.,
Future Tax
4.75%, 5/1/23 $ 1,000 $ 958
New York State Energy Research
and Dev. Auth., PCR
New York Electric and Gas
6.15%, 7/1/26 (MBIA Insured) * 200 220
New York State Environmental Fac., PCR
State Water Revolving Fund,
6.90%, 11/15/15 200 232
New York State Mortgage Agency
Homeowner Mortgage
6.45%, 10/1/17 100 108
6.625%, 4/1/25 * 100 109
7.50%, 4/1/26 * 250 274
New York State Urban Dev.,
State Fac., 5.60%, 4/1/15 150 161
New York Thruway Auth.,
Local Highway and Bridge
5.375%, 4/1/16 (MBIA Insured) 1,000 1,047
Total New York (Cost $9,081) 9,470
NORTH CAROLINA 2.9%
North Carolina Eastern Municipal Power Agency
4.50%, 1/1/24 (Prerefunded 1/1/22!) 1,000 950
North Carolina Medical Care Health,
Duke Univ., 4.75%, 6/1/21 1,000 949
Total North Carolina (Cost $1,913) 1,899
OHIO 3.4%
Akron, Municipal Baseball Stadium, COP
STEP, 0%-6.90%, 12/1/16 300 287
Fairfield Economic Dev. Auth.,
Beverly Enterprises
8.50%, 1/1/03 85 92
Franklin County Health Care Fac.,
Ohio Presbyterian
5.35%, 7/1/09 500 521
Montgomery County, Grandview Hosp.
and Medical Center
5.40%, 12/1/09 200 211
Ohio Air Quality Dev. Auth., PCR,
Cleveland Electric
6.00%, 8/1/20 500 513
Ohio HFA, Residential Mortgage,
5.75%, 9/1/28 * 490 508
Ohio Water Dev. Auth., PCR,
Toledo Edison, 8.00%, 10/1/23 * 100 114
Total Ohio (Cost $2,117) 2,246
OKLAHOMA 0.2%
Tulsa Municipal Airport,
American Airlines, 7.375%, 12/1/20 * $ 150 $ 160
Total Oklahoma (Cost $148) 160
PENNSYLVANIA 0.4%
Beaver County IDA, PCR,
Cleveland Electric, 7.625%, 5/1/25 100 113
Erie County IDA, Beverly Enterprises,
6.625%, 5/1/02 85 86
Philadelphia Airport Auth.,
6.10%, 6/15/25 (AMBAC Insured) * 75 82
Total Pennsylvania (Cost $267) 281
PUERTO RICO 0.8%
Puerto Rico Electric Power Auth.,
4.75%, 7/1/24 250 239
Puerto Rico Highway and Transportation Auth.,
5.50%, 7/1/15 250 270
Total Puerto Rico (Cost $469) 509
SOUTH CAROLINA 3.0% Connector 2000 Assoc.
Greenville Toll Road
Zero Coupon, 1/1/11 425 198
Zero Coupon, 1/1/12 1,000 474
South Carolina Public Service Auth.
5.875%, 1/1/23 (FGIC Insured) 1,000 1,085
Santee Cooper, 6.25%, 1/1/22
(AMBAC Insured) 200 226
Total South Carolina (Cost $1,944) 1,983
SOUTH DAKOTA 1.2%
South Dakota Ed. Loans,
Student Loan, 5.60%, 6/1/20 * 600 611
South Dakota HDA, Homeownership,
6.65%, 5/1/14 185 200
Total South Dakota (Cost $785) 811
TENNESSEE 0.7%
Memphis-Shelby County Airport Auth.
6.25%, 2/15/11 (MBIA Insured) * 100 116
Metropolitan Gov't. of Nashville
and Davidson Counties
Mur-Ci Homes, 7.75%, 12/1/26 $ 200 $ 210
Tennessee Housing Dev. Agency, Homeownership
Zero Coupon, 7/1/17 * 445 158
Total Tennessee (Cost $450) 484
TEXAS 10.2%
Alliance Airport Auth., American Airlines,
7.50%, 12/1/29 * 1,000 1,072
Amarillo Health Fac. Dev.,
Sears Panhandle Retirement
7.75%, 8/15/26 200 249
Austin Utility System,
Zero Coupon, 5/15/14 2,000 940
Gulf Coast Waste Disposal Auth., PCR,
Amoco Oil Project
VRDN (Currently 3.80%) * 700 700
Harris County, Toll Road
6.375%, 8/15/24 (MBIA Insured)
(Prerefunded 8/15/04!) 250 286
Irving Independent School Dist., GO,
Capital Appreciation
Zero Coupon, 2/15/16 500 212
Matagorda County Navigation,
Houston Lighting Power
5.125%, 11/1/28 * 1,500 1,499
Rockwal Independent School Dist., GO,
Capital Appreciation
Zero Coupon, 8/15/16 500 198
Texas, GO, Veterans Housing Assistance,
6.25%, 12/1/15 85 89
Texas Water Dev. Board,
4.75%, 7/15/20 1,000 964
Tyler Health Fac. Dev.,
Mother Frances Hosp , 5.625%, 7/1/13 500 504
Total Texas (Cost $6,605) 6,713
UTAH 4.2%
Carbon County, Solid Waste Disposal,
Laidlaw Environmental
7.45%, 7/1/17 (MBIA Insured) * 200 221
Intermountain Power Agency
5.25%, 7/1/15 (MBIA Insured) 1,000 1,031
5.75%, 7/1/16 (MBIA Insured) 500 545
Salt Lake County, Kennecott/RTZ,
Solid Waste Disposal
VRDN (Currently 3.30%) * 1,000 1,000
Total Utah (Cost $2,709) 2,797
VIRGINIA 2.2%
Newport News Redev. and Housing Auth.,
5.85%, 12/20/30 $ 100 $ 105
Peninsula Port Auth., Riverside Health,
6.625%, 7/1/18 200 219
Pocahontas Parkway Assoc., Toll Road,
Zero Coupon, 8/15/15 1,500 614
Prince William County Service Auth.,
Water & Sewer Systems
6.00%, 7/1/29 (FGIC Insured) 85 90
Virginia Ed. Loan Auth., Student Loan
5.55%, 9/1/10 (Prerefunded 3/1/06!) * 55 60
Virginia HDA
6.50%, 5/1/13 * 100 108
6.60%, 7/1/20 * 250 262
Total Virginia (Cost $1,392) 1,458
WASHINGTON 5.3%
Chelan County Public Utility Dist. No. 1
5.25%, 7/1/33 (FSA Insured) 500 498
Columbia River-Rock Hydroelectric
Zero Coupon, 6/1/18 (MBIA Insured) 585 216
Tacoma, Solid Waste Utilities,
5.50%, 12/1/17 (AMBAC Insured) 800 844
Washington Health Care Fac. Auth.
Virginia Mason Medical Center
6.00%, 8/15/08 (MBIA Insured) 400 452
Washington HFA, Sisters of Providence
VRDN (Currently 3.70%) 1,000 1,000
Washington Public Power Supply System,
Nuclear Project
5.50%, 7/1/17 500 503
Total Washington (Cost $3,412) 3,513
WEST VIRGINIA 2.4%
West Virginia Building Commission
5.375%, 7/1/18 (AMBAC Insured) 500 529
Regional Jail, 5.375%, 7/1/21
(AMBAC Insured) 1,000 1,059
Total West Virginia (Cost $1,576) 1,588
WISCONSIN 3.0%
Oconto Falls CDA, Oconto Falls Tissue,
7.75%, 12/1/22 * $ 200 $ 215
Wisconsin HEFA
Childrens Hospital of Wisconsin
5.625%, 2/15/15 (AMBAC Insured) 500 542
National Regency of New Berlin,
8.00%, 8/15/25 200 227
Sinai Samaritan Medical Center
5.875%, 8/15/26 (MBIA Insured) 200 216
Waukesha Memorial Hosp.
5.25%, 8/15/19 (AMBAC Insured) 300 303
Wisconsin Housing and Economic Dev. Auth.
Homeownership
6.20%, 3/1/27 * 200 212
6.45%, 9/1/27 * 250 270
Total Wisconsin (Cost $1,836) 1,985
WYOMING 1.3%
Lincoln County, PCR
Exxon
VRDN (Currently 3.40%) * 540 540
VRDN (Currently 3.80%) * 100 100
Wyoming CDA, 5.85%, 6/1/28 * 200 208
Total Wyoming (Cost $840) 848
Total Investments in Securities
104.6% of Net Assets (Cost $66,464) $ 68,963
Other Assets Less Liabilities (3,005)
NET ASSETS $ 65,958
----------
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 1
Accumulated net realized gain/loss -
net of distributions 211
Net unrealized gain (loss) 2,499
Paid-in-capital applicable to 6,115,717 shares
of $0.0001 par value capital stock outstanding;
2,000,000,000 shares of the Corporation
authorized 63,247
NET ASSETS $ 65,958
----------
NET ASSET VALUE PER SHARE $ 10.79
----------
* Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
CDA Community Development Administration
COP Certificates of Participation
EFA Educational Facility Authority
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FSA Financial Security Assurance Corp.
GO General Obligation
HDA Housing Development Authority
HEFA Health & Educational Facility Authority
HFA Health Facility Authority
HFFA Health Facility Financing Authority
HHEFA Health & Higher Educational Facility Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
PFA Pblic Facility Authority
STEP Stepped Coupon note for which the interest rate will adjust on
specified future date
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Funds
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
In thousands Money Intermediate Income
Market Fund Fund
Year Year Year
Ended Ended Ended
10/31/98 10/31/98 10/31/98
Investment Income
Interest income $ 5,685 $ 3,187 $ 2,629
Expenses
Investment management
and administrative 695 318 247
Net investment income 4,990 2,869 2,382
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 5 118 291
Futures -- (8) (22)
Net realized gain (loss) 5 110 269
Change in net unrealized gain or loss
Securities -- 1,250 1,035
Futures -- 9 --
Change in net unrealized gain or loss -- 1,259 1,035
Net realized and unrealized gain (loss) 5 1,369 1,304
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 4,995 $ 4,238 $ 3,686
---------------------------------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Funds
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands Money market Fund Intermediate Fund Income Fund
Year Year Year
Ended Ended Ended
10/31/98 10/31/97 10/31/98 10/31/97 10/31/98 10/31/97
Increase (Decrease) in Net Assets
Operations
Net investment
income $4,990 $3,825 $2,869 $1,726 $2,382 $1,110
Net realized
gain (loss) 5 - 110 330 269 152
Change in net
unrealized
gain or loss - - 1,259 780 1,035 884
Increase (decrease)
in net assets from
operations 4,995 3,825 4,238 2,836 3,686 2,146
Distributions to shareholders
Net investment
income (4,990) (3,825) (2,869) (1,726) (2,382) (1,110)
Net realized gain - - (196) - - -
Decrease in
net assets from
distributions (4,990) (3,825) (3,065) (1,726) (2,382) (1,110)
Capital share
transactions*
Shares sold 185,986 166,033 41,899 23,381 50,158 17,972
Distributions
reinvested 4,737 3,552 2,005 1,184 1,568 581
Shares redeemed (160,361) (125,292) (16,055) (7,944) (16,174) (6,396)
Increase (decrease)
in net assets from
capital share
transactions 30,362 44,293 27,849 16,621 35,552 12,157
Net Assets
Increase (decrease)
during period 30,367 44,293 29,022 17,731 36,856 13,193
Beginning of
period 140,557 96,264 46,906 29,175 29,102 15,909
End of period $170,924 $140,557 $75,928 $46,906 $65,958 $29,102
----------------------------------------------------------
*Share information
Shares sold 185,986 166,033 3,958 2,265 4,699 1,766
Distributions
reinvested 4,737 3,552 189 115 147 57
Shares redeemed (160,361) (125,292) (1,517) (770) (1,517) (631)
Increase
(decrease)
in shares
outstanding 30,362 44,293 2,630 1,610 3,329 1,192
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Summit Municipal Funds
- --------------------------------------------------------------------------------
October 31, 1998
Notes to Financial Statements
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Summit Municipal Funds, Inc. (the corporation) is registered under
the Investment Company Act of 1940. The Summit Municipal Money Market Fund (the
Money Market Fund), the Summit Municipal Intermediate Fund (the Intermediate
Fund), and the Summit Municipal Income Fund (the Income Fund), 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 Money Market 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 Intermediate and Income 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 Money Market Fund are
valued at amortized cost. Financial futures contracts are valued at closing
settlement prices.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of that
fund, as authorized by the Board of Directors.
Premiums and Discounts Premiums and original issue discounts on municipal
securities are amortized for both financial reporting and tax purposes. Market
discounts are recognized upon disposition of the security as gain or loss for
financial reporting purposes and as ordinary income for tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Distributions to shareholders are
recorded by each fund on the ex-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. Payments ("variation margin") made or received by each
fund to settle the daily fluctuations in the value of futures contracts are
recorded as unrealized gains or losses until the contracts are closed.
Unrealized gains and losses on futures contracts are included in Change in net
unrealized gain or loss in the accompanying financial statements.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with their investment objectives, the funds engage in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of each fund are
described more fully in each fund's prospectus and Statement of Additional
Information.
Noninvestment-Grade Debt Securities At October 31, 1998, the Income Fund held
investments in noninvestment-grade debt securities, commonly referred to as
"high-yield" or "junk" bonds. A real or perceived economic downturn or higher
interest rates could adversely affect the liquidity or value, or both, of such
securities because such events could lessen the ability of issuers to make
principal and interest payments.
Futures Contracts At October 31, 1998, the Intermediate Fund was a party to
futures contracts, which provide for the future sale by one party and purchase
by another of a specified amount of a specific financial instrument at an agreed
upon price, date, time, and place. Risks arise from possible illiquidity of the
futures market and from movements in security values.
Other Purchases and sales of portfolio securities, other than short-term
securities, for the year ended October 31, 1998, were as follows:
- --------------------------------------------------------------------------------
Intermediate Income
Fund Fund
Purchases $40,454,000 $56,128,000
Sales 13,487,000 23,046,000
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
income. Capital loss carryforwards utilized by Income Fund in 1998 amounted to
$31,000.
At October 31, 1998, the aggregate costs of investments for the Money Market,
Intermediate, and Income Funds for federal income tax purposes was substantially
the same as for financial reporting and totaled $169,837,000, $73,329,000, and
$66,464,000, respectively. For the Money Market Fund, amortized cost is
equivalent to value. For the Intermediate and Income Funds, net unrealized gain
(loss) on investments was as follows:
- --------------------------------------------------------------------------------
Intermediate Income
Fund Fund
Appreciated investments $2,881,000 $2,596,000
Depreciated investments (57,000) (97,000)
Net unrealized gain (loss) $2,824,000 $2,499,000
-------------------------
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 $81,000, $42,000, and $40,000 were payable at October 31, 1998, by
the Money Market, Intermediate, and Income Funds, respectively. The fee,
computed daily and paid monthly, is equal to 0.45% of average daily net assets
for the Money Market Fund and 0.50% of average daily net assets for the
Intermediate and Income Funds. 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.
T. Rowe Price Summit Municipal Funds
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Board of Directors of T. Rowe Price
Summit Municipal Funds, Inc. and Shareholders of
Summit Municipal Money Market Fund,
Summit Municipal Intermediate Fund, and
Summit Municipal Income Fund
In our opinion, the accompanying statements of net assets and the
related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the
financial position of Summit Municipal Money Market Fund, Summit Municipal
Intermediate Fund, and Summit Municipal Income Fund (comprising T. Rowe
Price Summit Municipal Funds, Inc., hereafter referred to as the "Funds")
at October 31, 1998, and the results of each of their operations, the
changes in each of their net assets and the financial highlights for each
of the fiscal periods presented, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Funds' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
November 18, 1998
Tax Information (Unaudited) for the Tax Year Ended 10/31/98
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code. The
amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The Intermediate Fund's distributions to shareholders included:
- -- $52,000 from short-term capital gains,
- -- $143,000 from long-term capital gains; of which $53,000 was subject
to the 20% rate gains category and $90,000 to the 28% rate gains category,
- -- $2,765,000 which qualified as exempt-interest dividends.
The Money Market and Income Funds' dividend income included $4,949,000 and
$2,254,000, respectively, which qualified as exempt-interest dividends.
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 Municipal Funds.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
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T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor. C09-050 10/31/98
