Item 1. Report to Shareholders
T. Rowe Price Tax-Free Short-Intermediate Fund
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August 31, 2003
Certified
Semiannual Report
This report is certified under the Sarbanes-Oxley Act of 2002, which requires
that public companies, including mutual funds, affirm that the information
provided in their annual and semiannual shareholder reports fully and fairly
represents their financial position.
T. Rowe Price Tax-Free Short-Intermediate Fund
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Certified Semiannual Report (Unaudited)
Financial Highlights For a share outstanding throughout each period
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6 Months Year
Ended Ended
8/31/03 2/28/03 2/28/02 2/28/01 2/29/00 2/28/99
NET ASSET VALUE
Beginning of
period $ 5.53 $ 5.48 $ 5.38 $ 5.20 $ 5.39 $ 5.37
Investment activities
Net investment
income (loss) 0.09 0.19 0.21 0.23 0.21 0.22
Net realized
and unrealized
gain (loss) (0.07) 0.07 0.10 0.18 (0.18) 0.04
Total from
investment
activities 0.02 0.26 0.31 0.41 0.03 0.26
Distributions
Net investment
income (0.09) (0.19) (0.21) (0.23) (0.21) (0.22)
Net realized
gain (0.01) (0.02) -- -- (0.01) (0.02)
Total
distributions (0.10) (0.21) (0.21) (0.23) (0.22) (0.24)
NET ASSET VALUE
End of period $ 5.45 $ 5.53 $ 5.48 $ 5.38 $ 5.20 $ 5.39
-------- -------- -------- -------- -------- --------
Ratios/Supplemental Data
Total return^ 0.28% 4.94% 5.92% 7.97% 0.67% 4.90%
Ratio of total
expenses to
average net
assets 0.51%! 0.52% 0.52% 0.53% 0.53% 0.53%
Ratio of net
investment
income (loss)
to average
net assets 3.10%! 3.54% 3.92% 4.27% 4.07% 4.06%
Portfolio
turnover rate 43.1%! 29.7% 30.0% 40.7%(CKMK) 49.7% 39.9%
Net assets,
end of period
(in thousands) $585,267 $581,009 $471,780 $415,813 $404,634 $459,319
^ 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.
(CKMK) Excludes the effect of the acquisition of the Virginia Short-Term Bond
Funds assets.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
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Certified Semiannual Report (Unaudited) August 31, 2003
Statement of Net Assets Par Value
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In thousands
ALABAMA 2.4%
Alabama Federal Highway Fin. Auth.
5.00%, 3/1/08 (MBIA Insured) $ 5,000 $ 5,484
Huntsville Solid Waste Disposal Auth.
5.75%, 10/1/05 (MBIA Insured) (misc. symbol1) 985 1,063
Jefferson County Sewer
5.50%, 2/1/40 (Prerefunded 2/1/11!)
(FGIC Insured) 6,405 7,200
Total Alabama (Cost $13,354) 13,747
ALASKA 2.4%
Alaska, GO, 5.00%, 7/15/05 6,465 6,897
Alaska HFC,
5.35%, 12/1/07 (misc. symbol1) 1,580 1,653
Alaska Student Loan Corp.
5.50%, 7/1/05 (AMBAC Insured) (misc. symbol1) 2,500 2,669
Valdez Marine, Phillips Petroleum,
2.00%, 1/1/04 3,000 3,007
Total Alaska (Cost $13,972) 14,226
ARIZONA 3.4%
Arizona School Fac. Board, 5.50%, 7/1/13 1,910 2,102
Arizona Transportation Board, 5.00%, 7/1/10 3,290 3,590
Salt River Agricultural Improvement & Power
5.00%, 1/1/05 3,650 3,829
5.00%, 1/1/08 2,625 2,879
5.00%, 1/1/09 5,000 5,479
5.75%, 1/1/08 2,000 2,252
Total Arizona (Cost $19,838) 20,131
CALIFORNIA 1.2%
California Dept. of Water Resources
5.50%, 5/1/10 3,000 3,269
Power Supply, 5.50%, 5/1/11 500 542
California Statewide CDA, 3.70%, 6/1/05 2,000 2,054
San Francisco City & County, GO
5.00%, 6/15/06 (MBIA Insured) 1,125 1,222
Total California (Cost $6,986) 7,087
COLORADO 1.6%
Colorado DOT, 5.75%, 6/15/07
(AMBAC Insured) $ 4,950 $ 5,551
Denver City & County Airport
6.00%, 11/15/03 (MBIA Insured) (misc.symbol1) 3,965 4,005
Total Colorado (Cost $9,509) 9,556
CONNECTICUT 1.0%
Connecticut
5.375%, 10/1/12 (FSA Insured) 2,500 2,754
Connecticut, GO
5.25%, 6/15/09 1,800 2,004
Mohegan Tribe Indians, 5.50%, 1/1/06 1,250 1,294
Total Connecticut (Cost $5,991) 6,052
DELAWARE 0.2%
Delaware, GO, 5.25%, 4/1/05 1,120 1,189
Total Delaware (Cost $1,128) 1,189
DISTRICT OF COLUMBIA 2.2%
District of Columbia, GO, 5.50%, 6/1/08
(FSA Insured) 2,235 2,497
Metropolitan Washington D.C. Airports Auth.
5.00%, 10/1/03 (misc. symbol1) 860 863
5.50%, 10/1/04 (FGIC Insured) (misc. symbol1) 1,640 1,712
5.50%, 10/1/05 (misc. symbol1) 1,750 1,868
5.50%, 10/1/07 (FGIC Insured) (misc. symbol1) 4,000 4,401
5.50%, 10/1/12 (FGIC Insured) (misc. symbol1) 965 1,040
5.75%, 10/1/03 (FGIC Insured) (misc. symbol1) 300 301
Total District of Columbia (Cost $12,442) 12,682
FLORIDA 8.2%
Broward County Airport Systems
5.00%, 10/1/05 (FGIC Insured) 2,630 2,820
5.00%, 10/1/07 (FGIC Insured) 1,900 2,084
Broward County Resource Recovery,
5.00%, 12/1/05 4,650 4,950
Broward County School Dist., GO,
5.00%, 2/15/06 2,500 2,694
Collier County, 5.00%, 6/1/09
(AMBAC Insured) $ 2,000 $ 2,202
Collier County Health Fac. Auth.
Cleveland Clinic Obligation Group
VRDN (Currently 0.80%) 1,000 1,000
Florida, GO
5.25%, 7/1/05 (FGIC Insured) 1,940 2,076
Ed. Lottery, 5.50%, 7/1/08 (FGIC Insured) 5,185 5,829
Florida Board of Ed., GO, Public Ed.,
5.00%, 6/1/06 1,000 1,084
Florida Dept. of Environmental Protection
5.00%, 7/1/06 (FGIC Insured) 3,000 3,259
Florida Dept. of Natural Resources
5.00%, 7/1/12 (AMBAC Insured) 4,000 4,249
6.00%, 7/1/09 (AMBAC Insured) 5,000 5,762
Hillsborough County Aviation Auth.
5.50%, 10/1/09 (MBIA Insured) (misc. symbol1) 1,985 2,187
Kissimmee Utility Auth.,
5.25%, 10/1/09 (FSA Insured) 870 973
Miami-Dade County Aviation,
5.75%, 10/1/04 (FSA Insured) (misc. symbol1) 5,000 5,234
Volusia County School Dist.,
5.00%, 8/1/06 (FGIC Insured) 1,400 1,524
Total Florida (Cost $47,008) 47,927
GEORGIA 5.3%
Albany-Dougherty County Hosp. Auth.
Phoebe Putney Memorial Hosp.
VRDN (Currently 0.81%)
(AMBAC Insured) 3,100 3,100
Atlanta Airport Fac.
6.25%, 1/1/05 (AMBAC Insured) 6,620 7,043
6.50%, 1/1/06 (Escrowed to Maturity)
(AMBAC Insured) 500 552
Atlanta Water & Sewer
5.25%, 1/1/27 (Prerefunded 1/1/07!)
(FGIC Insured) 4,550 5,033
Columbus Water & Sewer, 5.25%, 5/1/13
(FSA Insured) 1,720 1,891
DeKalb County Water & Sewage, 6.125%, 10/1/04 5,275 5,563
Georgia, GO, 7.20%, 3/1/05 2,000 2,173
Municipal Electric Auth. of Georgia
5.00%, 1/1/04 5,070 5,135
5.00%, 1/1/04 (Escrowed to Maturity) 530 537
Total Georgia (Cost $30,455) 31,027
HAWAII 1.3%
Hawaii Airport System,
6.125%, 7/1/05 (FGIC Insured)
(misc. symbol1) $ 4,000 $ 4,299
Honolulu, 5.60%, 4/1/07 (Escrowed to
Maturity) 2,995 3,337
Total Hawaii (Cost $7,363) 7,636
ILLINOIS 2.7%
Chicago, GO
6.00%, 1/1/11 (AMBAC Insured) 1,150 1,311
Neighborhoods Alive
5.00%, 1/1/09 (MBIA Insured) 1,350 1,473
Chicago O' Hare Int'l. Airport
VRDN (Currently 0.95%)
(MBIA Insured) (misc. symbol1) 1,400 1,400
Chicago Public Building Commission
Chicago Board of Ed.
5.125%, 2/1/04 (FGIC Insured) 1,515 1,541
Illinois
5.50%, 6/15/05 4,195 4,498
6.00%, 6/15/06 2,000 2,219
Illinois, GO, 5.50%, 8/1/16 (MBIA Insured) 1,650 1,792
Southwestern Dev. Auth.
Anderson Hosp.
5.25%, 8/15/05 485 507
5.25%, 8/15/06 510 537
5.50%, 8/15/07 535 568
Total Illinois (Cost $15,407) 15,846
INDIANA 0.5%
Indianapolis Airport Auth., IDRB
Federal Express Corp.
7.10%, 1/15/17 (misc. symbol1) 3,000 3,158
Total Indiana (Cost $3,112) 3,158
KANSAS 2.4%
Kansas DOT
5.40%, 3/1/08 $ 4,850 $ 5,407
5.50%, 9/1/08 4,000 4,514
7.25%, 3/1/05 3,500 3,803
Total Kansas (Cost $13,484) 13,724
KENTUCKY 3.3%
Kenton County Airport
5.00%, 3/1/08 (MBIA Insured) (misc. symbol1) 1,785 1,919
5.00%, 3/1/09 (MBIA Insured) (misc. symbol1) 1,250 1,333
Kentucky Property & Building Commission
5.00%, 8/1/04 7,170 7,432
5.25%, 10/1/04 2,500 2,614
Kentucky Turnpike Auth.,
5.30%, 7/1/04 (AMBAC Insured) 4,750 4,921
Louisville & Jefferson County Regional Airport
United Parcel Service of America
VRDN (Currently 0.86%) (misc. symbol1) 1,050 1,050
Total Kentucky (Cost $18,892) 19,269
LOUISIANA 1.7%
Louisiana, GO
5.50%, 4/15/05 (AMBAC Insured) 3,000 3,199
5.50%, 4/15/07 (AMBAC Insured) 5,000 5,545
West Feliciana Parish PCR, Entergy Corp.,
5.65%, 9/1/04 1,225 1,249
Total Louisiana (Cost $9,474) 9,993
MARYLAND 7.4%
Anne Arundel County, GO, 5.00%, 3/1/12 4,750 5,138
Maryland, GO
5.00%, 7/15/06 1,500 1,633
5.25%, 7/15/06 8,000 8,767
Maryland DOT
5.50%, 9/1/06 1,265 1,398
5.50%, 2/1/09 7,370 8,272
Maryland Economic Dev. Corp.
Maryland Aviation Administration
5.00%, 6/1/09 (FSA Insured) (misc.
symbol1) $ 3,250 $ 3,505
Northeast Maryland Waste Disposal Auth.
Waste Management, Resco Retrofit
5.50%, 4/1/11 (AMBAC Insured) (misc.
symbol1) 6,000 6,510
Northeast Maryland Waste Disposal Auth., IDRB
4.75%, 1/1/12 (misc. symbol1) 1,000 962
Prince Georges County, GO, 5.00%, 10/1/07 1,500 1,657
Univ. of Maryland Auxiliary Fac.,
5.00%, 4/1/06 5,000 5,402
Total Maryland (Cost $42,739) 43,244
MASSACHUSETTS 2.4%
Boston, GO, 5.00%, 8/1/13 3,180 3,399
Massachusetts, 5.75%, 6/1/20 (Prerefunded
6/1/10!) 2,545 2,895
Massachusetts, GO, Central Artery
VRDN (Currently 0.87%) 900 900
Massachusetts Dev. Fin. Agency
5.00%, 1/1/04 (MBIA Insured) (misc. symbol1) 3,000 3,037
Massachusetts General Hosp.
Biomedical Research
5.75%, 8/1/04 500 519
Massachusetts Municipal Wholesale Electric
Electric Power Supply
5.25%, 7/1/04 (MBIA Insured) 3,000 3,105
Total Massachusetts (Cost $13,699) 13,855
MICHIGAN 2.1%
Michigan, Comprehensive Transportation Fund
5.25%, 5/15/07 (FSA Insured) 1,240 1,368
5.25%, 5/15/09 (FSA Insured) 4,800 5,338
Michigan Building Auth., GO,
5.25%, 10/15/04 2,585 2,707
Michigan Municipal Bond Auth.
Clean Water, 5.50%, 10/1/04 1,310 1,372
Michigan Public Power Agency
Belle River, 5.25%, 1/1/08 (MBIA Insured) 1,500 1,659
Total Michigan (Cost $12,306) 12,444
MINNESOTA 1.1%
Minneapolis-St. Paul Metropolitan Airport
Commission
5.50%, 1/1/10 (FGIC Insured) (misc.
symbol1) $ 3,305 $ 3,567
Northwest Airlines, 6.50%, 4/1/05 (misc.
symbol1) 1,000 892
Minnesota, GO, 5.75%, 8/1/05 2,000 2,165
Total Minnesota (Cost $6,555) 6,624
NEBRASKA 1.4%
Omaha Public Power Dist.
5.25%, 2/1/04 3,000 3,054
5.40%, 2/1/06 800 868
Univ. of Nebraska Fac., 5.25%, 7/15/06 3,720 4,068
Total Nebraska (Cost $7,608) 7,990
NEVADA 1.2%
Clark County Airport
5.00%, 7/1/06 (AMBAC Insured) (misc. symbol1) 200 214
5.00%, 7/1/07 (AMBAC Insured) (misc. symbol1) 1,200 1,293
Clark County IDRB, PCR
Southwest Gas Corp.,
5.80%, 3/1/13 (misc. symbol1) 2,300 2,318
Reno, GO, 5.00%, 4/1/05 (FGIC Insured) 2,825 2,986
Total Nevada (Cost $6,782) 6,811
NEW JERSEY 2.8%
New Jersey, GO, 5.25%, 3/1/08 1,040 1,151
New Jersey Transit Corp.
5.50%, 2/1/06 (AMBAC Insured) 5,000 5,429
COP, 5.00%, 9/15/04 (AMBAC Insured) 2,025 2,107
New Jersey Transportation Trust Fund Auth.
5.75%, 6/15/11 (Escrowed to Maturity) 2,750 3,141
6.00%, 6/15/07 (Escrowed to Maturity) 4,000 4,534
Total New Jersey (Cost $15,393) 16,362
NEW MEXICO 1.7%
Bernalillo County, 5.75%, 4/1/26
(Prerefunded 4/1/06!) $ 5,000 $ 5,497
Farmington PCR
Public Service Company of New Mexico
2.75%, 4/1/04 2,650 2,645
New Mexico Ed. Assistance Foundation,
5.50%, 11/1/10 (misc. symbol1) 1,750 1,775
Total New Mexico (Cost $9,411) 9,917
NEW YORK 7.1%
Long Island Power Auth., 5.00%, 12/1/06 4,000 4,320
Metropolitan Transportation Auth.
5.375%, 7/1/27 (Prerefunded 7/1/09!) 5,000 5,643
Nassau County, GO, 7.00%, 3/1/04 2,810 2,886
New York City, GO
6.75%, 8/1/04 6,900 7,236
7.00%, 8/1/04 4,000 4,203
New York City Transitional Fin. Auth.,
5.00%, 2/1/10 4,850 5,250
New York State Thruway Auth.
Highway & Bridge
5.25%, 4/1/10 (MBIA Insured) 5,000 5,515
Transportation, 5.50%, 3/15/13 3,500 3,849
Tobacco Settlement Financing Corp.
Tobacco Settlement, 5.25%, 6/1/13 2,500 2,592
Total New York (Cost $41,085) 41,494
NORTH CAROLINA 0.9%
Charlotte, 5.75%, 2/1/11
(Prerefunded 2/1/04!) ** 2,040 2,122
North Carolina Eastern Municipal Power Agency
5.45%, 1/1/04 915 926
7.00%, 1/1/08 2,010 2,278
Total North Carolina (Cost $5,206) 5,326
OHIO 2.7%
Cleveland Airport Systems,
VRDN (Currently 0.85%) (misc. symbol1) 1,230 1,230
Cuyahoga County, GO, 5.50%, 11/15/05 1,400 1,523
Ohio
Solid Waste Disposal
VRDN (Currently 0.89%) (misc. symbol1) $ 600 $ 600
Ohio, GO
5.25%, 5/1/05 2,495 2,656
Ohio Air Quality Dev. Auth., PCR
FirstEnergy, 5.80%, 12/1/04 2,000 2,047
Ohio Turnpike Commission
5.50%, 2/15/26 (Prerefunded 2/15/06!)
(MBIA Insured) 4,650 5,156
Steubenville Hosp. Fac.
Trinity Health
5.45%, 10/1/03 640 642
5.50%, 10/1/04 585 607
5.55%, 10/1/05 630 668
5.60%, 10/1/06 730 786
Total Ohio (Cost $15,454) 15,915
OKLAHOMA 0.5%
Oklahoma Capital Improvement Auth.
5.00%, 6/1/10 (MBIA Insured) 1,060 1,158
Oklahoma Transportation Auth.
5.25%, 1/1/07 (AMBAC Insured) 1,780 1,951
Total Oklahoma (Cost $3,091) 3,109
PENNSYLVANIA 4.6%
Beaver County IDA, PCR
FirstEnergy, 4.85%, 6/1/04 4,000 4,029
Montgomery County IDA, PCR
Peco Energy, 5.20%, 10/1/04 2,000 2,067
Pennsylvania, GO
5.00%, 9/15/04 2,500 2,603
5.00%, 9/15/06 6,000 6,549
5.00%, 2/1/07 5,250 5,721
6.00%, 7/1/09 4,375 5,040
Philadelphia Redev. Auth.
Schuylkill Apartments, 5.10%, 12/1/03 (misc.
symbol1) 1,000 1,003
Total Pennsylvania (Cost $26,234) 27,012
PUERTO RICO 0.8%
Puerto Rico Commonwealth, GO
5.00%, 7/1/21 (FSA Insured) $ 1,000 $ 1,099
Puerto Rico Electric Power Auth.,
5.00%, 7/1/06 2,870 3,086
Puerto Rico Ind. Medical & Environmental IDRB
PCR, 4.25%, 9/1/03 500 500
Total Puerto Rico (Cost $4,665) 4,685
SOUTH CAROLINA 2.1%
South Carolina, GO
5.00%, 7/1/10 3,525 3,866
School Fac., 5.75%, 1/1/07 4,960 5,517
South Carolina Public Service Auth.
5.00%, 1/1/05 1,000 1,048
6.50%, 1/1/06 (FGIC Insured) 1,800 1,992
Total South Carolina (Cost $11,909) 12,423
TEXAS 11.5%
Austin Utility Systems
5.75%, 11/15/03 (FSA Insured) 4,570 4,616
5.75%, 11/15/03 (Escrowed to Maturity)
(FSA Insured) 430 434
Brazos River Auth., TXU Energy, 5.75%,
11/1/11 (misc. symbol1) 2,500 2,599
Brazos River Harbor Navigation Dist.
IDRB, Dow Chemical, 4.95%,
5/15/07 (misc. symbol1) 1,500 1,558
Dallas-Fort Worth Int'l Airport Fac.
VRDN (Currently 0.95%)
(MBIA Insured) (misc. symbol1) 4,625 4,625
5.625%, 11/1/12 (FGIC Insured) (misc. symbol1) 5,000 5,384
Fort Worth, GO
5.00%, 3/1/05 1,000 1,055
5.00%, 3/1/06 1,000 1,077
Fort Worth Water & Sewer, 5.50%, 2/15/05 4,225 4,476
Gulf Coast IDA, BP, VRDN (Currently 0.90%)
(misc. symbol1) 200 200
Gulf Coast Waste Disposal Auth.
BP, VRDN (Currently 0.90%) (misc. symbol1) 800 800
Exxon Mobil Corp., VRDN
(Currently 0.85%) (misc. symbol1) 1,200 1,200
Harris County Health Fac. Dev. Corp.
St. Lukes Episcopal Hosp.
VRDN (Currently 0.80%) $ 1,500 $ 1,500
5.50%, 2/15/11 2,140 2,302
5.50%, 2/15/12 2,000 2,138
Houston, GO
Public Improvement
5.00%, 3/1/11 (MBIA Insured) 4,710 5,071
5.25%, 3/1/05 6,750 7,137
Lower Colorado River Auth.,
6.00%, 5/15/07 (FSA Insured) 5,000 5,628
San Antonio, GO, 5.00%, 8/1/10 5,850 6,376
San Antonio Electric & Gas, 5.00%, 2/1/07 1,535 1,669
Texas State Univ., 4.00%, 3/15/06
(FSA Insured) 2,790 2,936
Tomball Hosp. Auth.
5.50%, 7/1/04 800 821
5.50%, 7/1/05 1,300 1,359
Univ. of Texas, Board of Regents,
5.25%, 8/15/04 2,375 2,471
Total Texas (Cost $65,667) 67,432
VIRGINIA 6.4%
Arlington County IDA
Virginia Hosp. Center
5.50%, 7/1/09 3,200 3,527
5.50%, 7/1/12 3,760 4,055
Bedford County IDA, PCR, Georgia-Pacific,
4.60%, 8/1/04 780 773
Charles County IDA, IDRB
Waste Management
4.875%, 2/1/09 (misc. symbol1) 750 762
6.25%, 4/1/12 (misc. symbol1) 750 791
Chesterfield County IDA
Bon Secours Health System
5.70%, 11/15/03 3,600 3,633
Fairfax County, GO, 5.50%, 12/1/05 2,100 2,292
Louisa IDA, Solid Waste Disposal,
3.40%, 3/1/04 (misc. symbol1) 3,000 3,036
Newport News, GO, 5.50%, 5/1/07 1,875 2,085
Virginia Public School Auth., GO,
5.25%, 8/1/05 1,500 1,610
Virginia Beach, GO, Public Improvement,
5.25%, 3/1/09 1,870 2,080
Virginia Biotechnology Research
Park Auth., 5.00%, 9/1/03 $ 1,950 $ 1,951
Virginia Port Auth., 5.50%, 7/1/07 (misc.
symbol1) 4,500 4,956
Virginia Transportation Board
Federal Highway Reimbursement
5.50%, 10/1/04 5,500 5,767
Total Virginia (Cost $36,159) 37,318
WASHINGTON 0.6%
King County, GO, 5.25%, 12/1/07 3,195 3,561
Total Washington (Cost $3,259) 3,561
WEST VIRGINIA 0.6%
West Virginia Hosp. Fin. Auth.
Charleston Medical Center
5.90%, 9/1/06 225 246
5.90%, 9/1/06 (Escrowed to Maturity) 930 1,034
6.30%, 9/1/03 195 195
6.30%, 9/1/03 (Escrowed to Maturity) 805 805
6.50%, 4/1/05 160 173
6.50%, 4/1/05 (Escrowed to Maturity) 655 719
Total West Virginia (Cost $2,975) 3,172
WISCONSIN 1.0%
Milwaukee Metropolitan Sewage Dist., GO,
6.25%, 10/1/05 3,000 3 ,294
Wisconsin HEFA
Froedert & Community Health Obligation
5.50%, 10/1/07 1,000 1,087
5.50%, 10/1/08 1,250 1,361
Total Wisconsin (Cost $5,426) 5,742
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
98.7% of Net Assets (Cost $564,038) $ 577,686
Futures Contracts
Contract Unrealized
Expiration Value Gain (Loss)
----------- ----------- -------------
In thousands
Short, 50 ten year
U.S. Treasury
contracts $120,000
of 5.75% Charlotte,
North Carolina bonds
pledged as initial
margin 12/03 $ (5,486) $ (19)
Net payments (receipts)
of variation margin
to date 28
Variation margin receivable
(payable) on open futures
contracts 9
Other Assets Less Liabilities 7,572
NET ASSETS $ 585,267
----------
Net Assets Consist of:
Undistributed net investment income (loss) $ 99
Undistributed net realized gain (loss) (2,629)
Net unrealized gain (loss) 13,629
Paid-in-capital applicable to 107,452,312
shares of $0.01 par value capital stock
outstanding; 1,000,000,000 shares authorized 574,168
NET ASSETS $ 585,267
----------
NET ASSET VALUE PER SHARE $ 5.45
----------
(misc. symbol1) Interest subject to alternative minimum tax
** All or a portion of this security is pledged to cover margin
requirements on futures contracts at August 31, 2003
! Used in determining portfolio maturity
AMBAC AMBAC Assurance Corp.
CDA Community Development Administration
COP Certificates of Participation
DOT Department of Transportation
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Inc.
GO General Obligation
HEFA Health & Educational Facility Authority
HFC Housing Finance Corp.
IDA Industrial Development Authority/Agency
IDRB Industrial Development Revenue Bond
MBIA MBIA Insurance Corp.
PCR Pollution Control Revenue
VRDN Variable-Rate Demand Note
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Semiannual Report (Unaudited)
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
8/31/03
Investment Income (Loss)
Interest income $ 10,716
Expenses
Investment management 1,248
Shareholder servicing 149
Custody and accounting 71
Registration 22
Prospectus and shareholder reports 13
Legal and audit 8
Directors 3
Miscellaneous 3
Total expenses 1,517
Net investment income (loss) 9,199
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (1,191)
Futures 52
Net realized gain (loss) (1,139)
Change in net unrealized gain (loss)
Securities (7,404)
Futures (4)
Change in net unrealized gain (loss) (7,408)
Net realized and unrealized gain (loss) (8,547)
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 652
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The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
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Certified Semiannual Report (Unaudited)
Statement of Changes in Net Assets
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In thousands
6 Months Year
Ended Ended
8/31/03 2/28/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 9,199 $ 18,301
Net realized gain (loss) (1,139) 1,963
Change in net unrealized gain (loss) (7,408) 4,859
Increase (decrease) in net assets
from operations 652 25,123
Distributions to shareholders
Net investment income (9,185) (18,276)
Net realized gain (1,058) (1,859)
Decrease in net assets from
distributions (10,243) (20,135)
Capital share transactions *
Shares sold 118,202 214,442
Distributions reinvested 8,048 15,732
Shares redeemed (112,401) (125,933)
Increase (decrease) in net assets
from capital share transactions 13,849 104,241
Net Assets
Increase (decrease) during period 4,258 109,229
Beginning of period 581,009 471,780
End of period $ 585,267 $ 581,009
--------------- ---------------
*Share information
Shares sold 21,437 39,080
Distributions reinvested 1,464 2,871
Shares redeemed (20,442) (23,014)
Increase (decrease) in shares outstanding 2,459 18,937
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
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Certified Semiannual Report (Unaudited) August 31, 2003
Notes to Financial Statements
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NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc. (the fund) is registered
under the Investment Company Act of 1940 (the 1940 Act) as a diversified,
open-end management investment company and commenced operations on December 23,
1983. The fund seeks to provide, consistent with modest price fluctuation, a
high level of income exempt from federal income taxes by investing primarily in
short-and intermediate-term, investment-grade municipal securities.
The accompanying financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America, which
require the use of estimates made by fund management.
Valuation
Investments are valued at the close of the New York Stock Exchange (NYSE),
normally 4 p.m. ET, each day that the NYSE is open for business. Debt securities
are generally traded in the over-the-counter market. Securities are valued at
prices 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.
Financial futures contracts are valued at closing settlement prices.
Other investments and those for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Premiums and Discounts
Premiums and discounts on municipal securities are amortized for financial
reporting purposes.
Expenses Paid Indirectly
Credits earned on temporarily uninvested cash balances at the custodian are used
to reduce the fund's custody charges.
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 the
fund on the ex-dividend date. Payments ("variation margin") made or received by
the 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 its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Futures Contracts
During the six months ended August 31, 2003, the 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 and/or interest rates.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $142,438,000 and $121,903,000, respectively, for the six months ended
August 31, 2003.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute to
shareholders all of its income and gains. Federal income tax regulations differ
from generally accepted accounting principles; therefore, distributions
determined in accordance with tax regulations may differ in amount or character
from net investment income and realized gains for financial reporting purposes.
Financial reporting records are adjusted for permanent book/tax differences to
reflect tax character. Temporary differences are not adjusted. The amount and
character of tax-basis distributions and composition of net assets are finalized
at fiscal year-end; accordingly, tax-basis balances have not been determined as
of August 31, 2003.
At August 31, 2003, the cost of investments for federal income tax purposes was
$563,962,000. Net unrealized gain aggregated $13,705,000 at period-end, of which
$14,507,000 related to appreciated investments and $802,000 related to
depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The fund is managed by T. Rowe Price Associates, Inc. (the manager or Price
Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. The
investment management agreement between the fund and the manager provides for an
annual investment management fee, which is computed daily and paid monthly. The
fee consists of an individual fund fee, equal to 0.10% of the fund's average
daily net assets, and the fund's pro-rata share of a group fee. The group fee is
calculated based on the combined net assets of certain mutual funds sponsored by
Price Associates (the group) applied to a graduated fee schedule, with rates
ranging from 0.48% for the first $1 billion of assets to 0.295% for assets in
excess of $120 billion. The fund's portion of the group fee is determined by the
ratio of its net assets to those of the group. At August 31, 2003, the effective
annual group fee rate was 0.32%, and investment management fee payable totaled
$208,000.
In addition, the fund has entered into service agreements with Price Associates
and a wholly owned subsidiary of Price Associates (collectively, Price). Price
Associates computes the daily share price and maintains the financial records of
the fund. T. Rowe Price Services, Inc. provides shareholder and administrative
services in its capacity as the fund's transfer and dividend disbursing agent.
Expenses incurred pursuant to these service agreements totaled $130,000 for the
six months ended August 31, 2003, of which $23,000 was payable at period-end.
Item 2. Code of Ethics.
Not required at this time.
Item 3. Audit Committee Financial Expert.
Not required at this time.
Item 4. Principal Accountant Fees and Services.
Not required at this time.
Item 5. Audit Committee of Listed Registrants.
Not required at this time.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved]
Item 9. Controls and Procedures
(a) The registrant's principal executive officer and principal financial officer
have evaluated the registrant's disclosure controls and procedures within 90
days of this filing and have concluded that the registrant's disclosure controls
and procedures were effective, as of that date, in ensuring that information
required to be disclosed by the registrant in this Form N-CSR was recorded,
processed, summarized, and reported timely.
(b) The registrant's principal executive officer and principal financial officer
are aware of no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) Not required at this time.
(a)(2) Separate certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(b) A certification by the registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940,
is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date October 17, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date October 17, 2003
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date October 17, 2003