Item 1. Report to Shareholders
T. Rowe Price Tax-Free Short-Intermediate Fund
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February 29, 2004
Certified Annual 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 Annual Report
Performance Comparison
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This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
[Graphic Omitted]
TAX-FREE SHORT-INTERMEDIATE FUND
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As of 2/29/04
Tax-Free Short-Intermediate Fund $15,787
Lipper Short-Intermediate Municipal Debt Funds Average $15,648
Lipper Short-Intermediate Tax-Free
Municipal Debt Funds Average Short-Intermediate Fund
2/94 10,000 10,000
2/95 10,159 10,291
2/96 10,913 10,998
2/97 11,343 11,440
2/98 12,000 12,044
2/99 12,567 12,634
2/00 12,486 12,718
2/01 13,469 13,731
2/02 14,201 14,544
2/03 14,999 15,263
2/04 15,648 15,787
Average Annual Compound Total Return
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Periods Ended 2/29/04 1 Year 5 Years 10 Years
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Tax-Free Short-Intermediate Fund 3.43% 4.56% 4.67%
Lipper Short-Intermediate Municipal
Debt Funds Average 3.92 4.31 4.57
Returns do not reflect taxes that the shareholder may pay on fund distributions
or the redemption of fund shares. Past performance cannot guarantee future
results.
T. Rowe Price Tax-Free Short-Intermediate Fund
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Certified Annual Report
Dear Shareholder,
We are pleased to report that your fund posted a respectable return of 3.43%
during the 12 months ended February 29, 2004, trailing the Lipper
Short-Intermediate Municipal Debt Funds Average during the period, as shown in
the table on the preceding page. While fund performance was good, results would
have been better had we not taken actions to offset the portfolio's increasing
duration.
As you know, the fund seeks to provide, consistent with modest price
fluctuation, a high level of income that is exempt from federal income taxes by
investing primarily in short- and intermediate-term investment-grade municipal
bonds. The fund's weighted average maturity normally ranges from two to five
years.
Major Index Returns
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Period Ended 2/29/04 12-Month Return
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Lehman Brothers U.S. Aggregate Index 4.54%
Lehman Brothers Municipal Bond Index 6.30
Lehman Brothers High Yield Municipal Bond Index 16.15
The Major Index Returns table shows how various quality bonds performed over the
fund's fiscal year. High-yield municipal bonds far outperformed their
higher-rated counterparts--the types of securities in which we invest--in both
the tax-exempt and taxable markets over the 12-month period.
Top 5 Sectors
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Percent of Percent of
Net Assets Net Assets
Periods Ended 2/28/03 2/29/04
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General Obligation - State 14.2% 15.7%
General Obligation - Local 11.8 14.1
Electric Revenue 13.5 12.3
Dedicated Tax Revenue 13.6 12.2
Air and Sea Transportation Revenue 10.0 6.2
The Top 5 Sectors table shows how portfolio assets were allocated during the
reporting period. State and local general obligation securities accounted for
15.7% and 14.1% of fund assets, respectively, followed by electric revenue bonds
at 12.3%, dedicated tax revenue bonds at 12.2%, and air and sea transportation
securities at 6.2%.
The Portfolio Characteristics table shows various portfolio details as of
February 29, 2004, compared with one year earlier. The weighted average maturity
of the portfolio increased marginally from 3.8 to 3.9 years, the 30-day
standardized yield to maturity slipped from 1.77% to 1.65% as rates declined in
general, and the portfolio's weighted average quality remained stable at AA.
Portfolio Characteristics
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Periods Ended 2/28/03 2/29/04
Price Per Share $5.53 $5.54
Dividends Per Share
for 12 Months 0.19 0.17
30-Day Standardized
Yield to Maturity 1.77% 1.65%
Weighted Average Maturity (years) 3.8 3.9
Weighted Average Effective
Duration (years) 3.1 3.2
Weighted Average Quality * AA AA
* Based on T. Rowe Price research.
Note: Yield will vary and is not guaranteed.
Finally, I'm sure you are aware that mutual fund companies have recently come
under scrutiny for their trading policies. The investigations have led to
allegations that executives of several mutual fund companies permitted or
engaged in improper mutual fund trading. In addition, certain intermediaries
that process fund transactions are alleged to have assisted some investors in
executing improper mutual fund trades. I want T. Rowe Price shareholders to know
that we emphatically condemn the abuses that have been revealed or alleged
against other firms in our industry. Our firm has not entered and will not enter
into any agreements with any investors or intermediaries that authorize
after-hours trading or excessive short-term trading in any of our funds. T. Rowe
Price investors can be assured that our firm unequivocally opposes illegal or
inappropriate trading of any nature and has policies and procedures in place
designed to protect the best interests of our long-term shareholders. We have
reviewed trading by T. Rowe Price personnel in the T. Rowe Price mutual funds
over the
last several years and did not uncover the existence of any of the abusive
trading practices described in recent regulatory enforcement actions relating to
fund portfolio managers and senior fund executives. You may find out more about
our trading policies and the steps we take to protect your interests by visiting
our Web site (troweprice.com). These policies are also spelled out in your
fund's prospectus.
We thank you for your continued support.
Respectfully,
James S. Riepe
Chairman
March 19, 2004
T. Rowe Price Tax-Free Short-Intermediate Fund
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Certified Annual Report
Financial Highlights For a share outstanding throughout each period
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Year
Ended
2/29/04 2/28/03 2/28/02 2/28/01 2/29/00
NET ASSET VALUE
Beginning of period $ 5.53 $ 5.48 $ 5.38 $ 5.20 $ 5.39
Investment activities
Net investment
income (loss) 0.17 0.19 0.21 0.23 0.21
Net realized and
unrealized gain
(loss) 0.02 0.07 0.10 0.18 (0.18)
Total from
investment activities 0.19 0.26 0.31 0.41 0.03
Distributions
Net investment income (0.17) (0.19) (0.21) (0.23) (0.21)
Net realized gain (0.01) (0.02) -- -- (0.01)
Total distributions (0.18) (0.21) (0.21) (0.23) (0.22)
NET ASSET VALUE
End of period $ 5.54 $ 5.53 $ 5.48 $ 5.38 $ 5.20
-------------------------------------------------------
Ratios/Supplemental Data
Total return^ 3.43% 4.94% 5.92% 7.97% 0.67%
Ratio of total expenses
to average net assets 0.51% 0.52% 0.52% 0.53% 0.53%
Ratio of net investment
income (loss) to average
net assets 3.03% 3.54% 3.92% 4.27% 4.07%
Portfolio turnover
rate 41.6% 29.7% 30.0% 40.7%(Ckmk.) 49.7%
Net assets,
end of period
(in thousands) $ 600,153 $ 581,009 $ 471,780 $ 415,813 $ 404,634
^ 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.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
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Certified Annual Report February 29, 2004
Portfolio of Investments (ss.) Par Value
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($ 000s)
ALABAMA 2.4%
Alabama Federal Highway Fin. Auth.,
5.00%, 3/1/08 (MBIA Insured) 5,000 5,577
Decatur Ind. Dev. Board IDRB, BP Amoco
VRDN (Currently 1.03%) # 500 500
Huntsville Solid Waste Disposal Auth.,
5.75%, 10/1/05 (MBIA Insured) # 985 1,055
Jefferson County Sewer, 5.50%, 2/1/40
(Prerefunded 2/1/11!) (FGIC Insured) 6,405 7,589
Total Alabama (Cost $13,792) 14,721
ALASKA 1.8%
Alaska, GO, 5.00%, 7/15/05 6,465 6,812
Alaska HFC, 5.35%, 12/1/07 # 1,580 1,661
Alaska Student Loan Corp., 5.50%, 7/1/05
(AMBAC Insured) # 2,500 2,635
Total Alaska (Cost $10,856) 11,108
ARIZONA 2.8%
Arizona School Fac. Board, 5.50%, 7/1/13 1,910 2,219
Arizona Transportation Board, 5.00%, 7/1/10 3,290 3,753
Salt River Agricultural Improvement & Power
5.00%, 1/1/08 2,625 2,919
5.00%, 1/1/09 5,000 5,625
5.75%, 1/1/08 2,000 2,279
Total Arizona (Cost $15,941) 16,795
CALIFORNIA 3.3%
California, GO
5.00%, 6/1/07 1,475 1,601
5.00%, 2/1/08 3,590 3,913
5.00%, 2/1/09 1,600 1,753
5.75%, 10/1/09 1,520 1,736
California Dept. of Water Resources
5.50%, 5/1/10 3,000 3,421
5.50%, 5/1/11 675 774
California Public Works Board,
Dept. of Corrections, 5.00%, 6/1/07 3,000 3,252
California Statewide CDA, Kaiser Permanente
3.70%, 11/1/29 (Tender 6/1/05) 2,000 2,050
San Francisco City & County, GO,
5.00%, 6/15/06 (MBIA Insured) 1,125 1,220
Total California (Cost $19,289) 19,720
COLORADO 0.9%
Colorado DOT, 5.75%, 6/15/07
(AMBAC Insured) 4,950 5,594
Total Colorado (Cost $5,463) 5,594
CONNECTICUT 1.0%
Connecticut, 5.375%, 10/1/12 (FSA Insured) 2,500 2,899
Connecticut, GO, 5.25%, 6/15/09 1,800 2,060
Mohegan Tribe Indians, 5.50%, 1/1/06 870 913
Total Connecticut (Cost $5,573) 5,872
DELAWARE 0.2%
Delaware, GO, 5.25%, 4/1/05 1,120 1,172
Total Delaware (Cost $1,125) 1,172
DISTRICT OF COLUMBIA 3.6%
District of Columbia, GO
5.00%, 6/1/06 (AMBAC Insured) 5,430 5,862
5.00%, 6/1/07 (AMBAC Insured) 5,000 5,514
5.50%, 6/1/08 (FSA Insured) 2,235 2,542
Metropolitan Washington D.C. Airports Auth.
5.50%, 10/1/05 # 1,750 1,858
5.50%, 10/1/07 (FGIC Insured) # 4,000 4,470
5.50%, 10/1/12 (FGIC Insured) # 965 1,100
Total District of Columbia (Cost $20,755) 21,346
FLORIDA 9.5%
Broward County Airport Systems
5.00%, 10/1/05 (FGIC Insured) 2,630 2,785
5.00%, 10/1/07 (FGIC Insured) 1,900 2,106
Broward County Resource Recovery,
5.00%, 12/1/05 4,650 4,941
Broward County School Dist., GO,
5.00%, 2/15/06 2,500 2,678
Collier County, 5.00%, 6/1/09
(AMBAC Insured) 2,000 2,262
Florida
Ed. Lottery
5.25%, 7/1/05 (FGIC Insured) 1,940 2,048
5.50%, 7/1/08 (FGIC Insured) 5,185 5,927
Florida Board of Ed., GO
5.00%, 6/1/07 2,425 2,678
Public Ed., 5.00%, 6/1/06 1,000 1,080
Florida Dept. of Environmental Protection
5.00%, 7/1/06 (FGIC Insured) 3,000 3,248
Florida Dept. of Natural Resources
5.00%, 7/1/12 (AMBAC Insured) 4,000 4,424
6.00%, 7/1/09 (AMBAC Insured) 5,000 5,900
Florida DOT, Florida Turnpike,
5.25%, 7/1/08 (FSA Insured) 3,000 3,398
Hillsborough County Aviation Auth.
5.50%, 10/1/09 (MBIA Insured) # 1,985 2,268
Jacksonville Electric Auth., 5.00%, 10/1/09
(AMBAC Insured) 8,000 9,092
Kissimmee Utility Auth., 5.25%, 10/1/09
(FSA Insured) 870 1,000
Volusia County School Dist., 5.00%, 8/1/06
(FGIC Insured) 1,400 1,519
Total Florida (Cost $55,579) 57,354
GEORGIA 1.8%
Athens-Clarke County Unified Gov't. Dev.
Auth., Univ. of Georgia Athletic Assoc.,
VRDN (Currently 1.00%) 1,300 1,300
Atlanta Airport Fac., 6.50%, 1/1/06
(AMBAC Insured) 500 546
Atlanta Water & Sewer, 5.25%, 1/1/27
(Prerefunded 1/1/07!) (FGIC Insured) 5,300 5,891
Fulton-DeKalb Private Hosp. Auth.,
Egleston Childrens Hosp.
VRDN (Currently 0.94%) 1,000 1,000
Georgia, GO, 7.20%, 3/1/05 2,000 2,124
Total Georgia (Cost $10,725) 10,861
HAWAII 1.9%
Hawaii, GO, 5.25%, 9/1/09 (FSA Insured) 3,400 3,904
Hawaii Airports, 6.125%, 7/1/05
(FGIC Insured) # 4,000 4,255
Honolulu, 5.60%, 4/1/07
(Escrowed to Maturity) 2,995 3,358
Total Hawaii (Cost $11,138) 11,517
ILLINOIS 2.2%
Chicago, GO, Neighborhoods Alive
5.00%, 1/1/09 (MBIA Insured) ++ 1,350 1,513
Illinois
5.00%, 6/15/07 3,500 3,872
5.50%, 6/15/05 4,195 4,434
Illinois, GO, 5.50%, 8/1/16 (MBIA Insured) 1,650 1,899
Southwestern Dev. Auth.
Anderson Hosp.
5.25%, 8/15/05 485 505
5.25%, 8/15/06 510 540
5.50%, 8/15/07 535 577
Total Illinois (Cost $12,890) 13,340
INDIANA 0.5%
Indianapolis Airport Auth., IDRB
Federal Express, 7.10%, 1/15/17 # 3,000 3,127
Total Indiana (Cost $3,083) 3,127
KANSAS 2.3%
Kansas DOT
5.40%, 3/1/08 1,835 2,075
5.40%, 3/1/08 (Escrowed to Maturity) 3,015 3,417
5.50%, 9/1/08 4,000 4,594
7.25%, 3/1/05 (Escrowed to Maturity) 3,500 3,719
Total Kansas (Cost $13,313) 13,805
KENTUCKY 2.2%
Kenton County Airport
5.00%, 3/1/08 (MBIA Insured) # 1,785 1,965
5.00%, 3/1/09 (MBIA Insured) # 1,250 1,382
Kentucky Property & Building Commission,
5.00%, 8/1/04 7,170 7,291
Louisville & Jefferson County Regional Airport,
United Parcel Service of America,
VRDN (Currently 1.00%) # 2,450 2,450
Total Kentucky (Cost $12,926) 13,088
LOUISIANA 2.4%
Louisiana, GO
5.50%, 4/15/05 (AMBAC Insured) 3,000 3,150
5.50%, 4/15/07 (AMBAC Insured) 7,000 7,819
Plaquemines Parish, BP Amoco,
VRDN (Currently 1.03%) # 2,050 2,050
West Feliciana Parish PCR, Entergy,
5.65%, 9/1/28 (Tender 9/1/04) 1,225 1,248
Total Louisiana (Cost $13,669) 14,267
MARYLAND 7.5%
Anne Arundel County, GO, 5.00%, 3/1/12 4,750 5,425
Maryland, GO, State & Local Fac.
5.00%, 7/15/06 1,500 1,631
5.25%, 7/15/06 8,000 8,745
Maryland DOT
5.50%, 9/1/06 1,265 1,394
5.50%, 2/1/09 7,370 8,478
Maryland Economic Dev. Corp.,
Maryland Aviation Admin.
5.00%, 6/1/09 (FSA Insured) # 3,250 3,628
Maryland Stadium Auth., Sports Fac. Leasing
VRDN (Currently 0.99%) # 640 640
Northeast Maryland Waste Disposal Auth.,
Waste Management Resco Retrofit,
5.50%, 4/1/11 (AMBAC Insured) # 6,000 6,861
Northeast Maryland Waste Disposal Auth., IDRB
Solid Waste Disposal, 4.75%, 1/1/12 # 1,000 1,040
Prince Georges County, GO, Public Improvement,
5.00%, 10/1/07 1,500 1,675
Univ. of Maryland, Auxiliary Fac. & Tuition,
5.00%, 4/1/06 5,000 5,383
Total Maryland (Cost $43,021) 44,900
MASSACHUSETTS 2.0%
Massachusetts
5.25%, 1/1/13 (Prerefunded 1/1/06!)
(MBIA Insured) 3,290 3,561
5.75%, 6/1/20 (Prerefunded 6/1/10!) 2,545 3,032
Massachusetts, GO, 5.00%, 8/1/07 4,425 4,892
Massachusetts Dev. Fin. Agency,
Massachusetts General Hosp. Biomedical Research,
5.75%, 8/1/04 500 510
Total Massachusetts (Cost $11,741) 11,995
MICHIGAN 3.1%
Michigan
Comprehensive Transportation Fund
5.25%, 5/15/07 (FSA Insured) 1,240 1,379
5.25%, 5/15/09 (FSA Insured) 4,800 5,487
Michigan Building Auth., 5.00%, 10/15/06
(MBIA Insured) 1,000 1,093
Michigan Municipal Bond Auth.,
Clean Water, 5.50%, 10/1/04 1,310 1,346
Michigan Public Power Agency, Belle River
5.25%, 1/1/08 (MBIA Insured) 5,130 5,750
Wayne Charter County Airport,
5.25%, 12/1/11 (MBIA Insured) # 3,000 3,358
Total Michigan (Cost $17,916) 18,413
MINNESOTA 1.6%
Minneapolis-St. Paul Metropolitan Airport
Commission 5.50%, 1/1/10 (Tender 4/1/05)
(FGIC Insured) # 3,305 3,758
Minneapolis-St. Paul Metropolitan Airport
Commission IDRB Northwest Airlines,
6.50%, 4/1/25 # 1,000 953
Minnesota, GO
5.25%, 8/1/09 2,575 2,964
5.75%, 8/1/05 2,000 2,134
Total Minnesota (Cost $9,392) 9,809
MISSISSIPPI 0.3%
Mississippi Hosp. Equipment Fac. Auth.,
North Mississippi Health Services,
VRDN (Currently 0.94%) 1,600 1,600
Total Mississippi (Cost $1,600) 1,600
MISSOURI 0.7%
Missouri Highway & Transportation Commission,
5.00%, 2/1/08 3,550 3,958
Total Missouri (Cost $3,893) 3,958
NEBRASKA 0.8%
Omaha Public Power Dist., 5.40%, 2/1/06 800 862
Univ. of Nebraska Fac. Corp.,
5.25%, 7/15/06 3,720 4,058
Total Nebraska (Cost $4,587) 4,920
NEVADA 1.2%
Clark County Airport
5.00%, 7/1/06 (AMBAC Insured) # 200 215
5.00%, 7/1/07 (AMBAC Insured) # 1,200 1,313
Clark County IDRB, PCR, Southwest Gas
5.80%, 3/1/38 (Tender 3/1/13) # 2,300 2,517
Reno, GO, Capital Improvement, 5.00%, 4/1/05
(FGIC Insured) 2,825 2,946
Total Nevada (Cost $6,724) 6,991
NEW JERSEY 2.7%
New Jersey, GO, 5.25%, 3/1/08 1,040 1,168
New Jersey Transit Corp.
5.50%, 2/1/06 (AMBAC Insured) 5,000 5,393
COP, 5.00%, 9/15/04 (AMBAC Insured) 2,025 2,069
New Jersey Transportation Trust Fund Auth.
5.75%, 6/15/11 (Escrowed to Maturity) 2,350 2,814
6.00%, 6/15/07 (Escrowed to Maturity) 4,000 4,560
Total New Jersey (Cost $14,903) 16,004
NEW MEXICO 1.7%
Bernalillo County, 5.75%, 4/1/26
(Prerefunded 4/1/06!) 5,000 5,460
Farmington PCR, Public Service
Company of New Mexico
2.75%, 4/1/33 (Tender 4/1/04) 2,650 2,653
New Mexico Ed. Assistance Foundation,
5.50%, 11/1/10 # 1,750 1,839
Total New Mexico (Cost $9,397) 9,952
NEW YORK 9.9%
Long Island Power Auth., Solid Waste Disposal,
5.00%, 12/1/06 4,000 4,349
Metropolitan Transportation Auth.,
5.375%, 7/1/27 (Tender 7/1/09) 5,000 5,802
Nassau County, GO, 7.00%, 3/1/04 2,810 2,812
New York City, GO
5.00%, 8/1/06 4,000 4,324
5.25%, 8/1/10 3,820 4,323
5.25%, 8/1/11 1,200 1,354
6.75%, 8/1/04 6,900 7,066
New York City Transitional Fin. Auth.,
5.00%, 2/1/10 4,850 5,478
New York State Thruway Auth.
Highway & Bridge, 5.25%, 4/1/10
(MBIA Insured) 5,000 5,753
Transportation, 5.50%, 3/15/13 3,500 4,055
New York State Urban Dev. Corp.,
Corrections & Youth Fac.
5.25%, 1/1/21 (Tender 1/1/09) 5,000 5,611
Tobacco Settlement Fin. Corp.
5.00%, 6/1/06 5,210 5,576
5.25%, 6/1/13 2,500 2,718
Total New York (Cost $57,467) 59,221
NORTH CAROLINA 0.4%
North Carolina Eastern Municipal Power Agency,
7.00%, 1/1/08 2,210 2,547
Total North Carolina (Cost $2,409) 2,547
OHIO 2.9%
Cuyahoga County, GO, 5.50%, 11/15/05 1,400 1,504
Ohio, GO, 5.25%, 5/1/05 2,495 2,618
Ohio, New Infrastructure, 5.00%, 6/15/07 3,485 3,855
Ohio Air Quality Dev. Auth., PCR, FirstEnergy,
Air Quality Pollution Control,
5.80%, 6/1/16 (Tender 12/1/04) 2,000 2,052
Ohio Turnpike Commission, 5.50%, 2/15/26
(Prerefunded 2/15/06!) (MBIA Insured) 4,650 5,122
Steubenville Hosp. Fac.
Trinity Health
5.50%, 10/1/04 585 600
5.55%, 10/1/05 630 667
5.60%, 10/1/06 730 793
Total Ohio (Cost $16,718) 17,211
OKLAHOMA 0.5%
Oklahoma Capital Improvement Auth.,
State Highway Improvement,
5.00%, 6/1/10 (MBIA Insured) 1,060 1,210
Oklahoma Transportation Auth.,
5.25%, 1/1/07 (AMBAC Insured) 1,780 1,961
Total Oklahoma (Cost $3,065) 3,171
PENNSYLVANIA 3.9%
Beaver County IDA, PCR, FirstEnergy
4.85%, 6/1/30 (Tender 6/1/04) 4,000 4,021
Montgomery County IDA, PCR, Peco Energy
5.20%, 10/1/30 (Tender 10/1/04) 2,000 2,037
Pennsylvania, GO
5.00%, 9/15/06 6,000 6,542
5.00%, 2/1/07 5,250 5,753
6.00%, 7/1/09 4,375 5,175
Total Pennsylvania (Cost $22,521) 23,528
PUERTO RICO 0.5%
Puerto Rico Electric Power Auth.,
5.00%, 7/1/06 2,870 3,103
Total Puerto Rico (Cost $3,040) 3,103
SOUTH CAROLINA 1.7%
South Carolina, GO, 5.00%, 7/1/10 3,525 4,039
South Carolina Public Service Auth.
5.00%, 1/1/09 (FSA Insured) 4,000 4,500
6.50%, 1/1/06 (FGIC Insured) 1,800 1,970
Total South Carolina (Cost $10,188) 10,509
TEXAS 10.7%
Brazos River Auth., PCR, TXU Energy
5.75%, 5/1/36 (Tender 11/1/11) # 3,165 3,437
Brazos River Harbor Navigation Dist., IDRB
Dow Chemical, 4.95%, 5/15/33
(Tender 5/15/07) # 1,500 1,590
Dallas, GO, 4.00%, 2/15/06 4,850 5,105
Dallas-Fort Worth Int'l Airport Fac.
5.625%, 11/1/12 (FGIC Insured) # 5,000 5,673
Fort Worth, GO
5.00%, 3/1/05 1,000 1,040
5.00%, 3/1/06 1,000 1,072
Gulf Coast IDA, BP Amoco,
VRDN (Currently 1.03%) # 2,600 2,600
Harris County Health Fac. Dev. Corp.
St. Lukes Episcopal Hosp.
VRDN (Currently 1.00%) 1,700 1,700
5.50%, 2/15/11 2,140 2,428
5.50%, 2/15/12 2,000 2,258
Houston, GO, Public Improvement
5.00%, 3/1/11 (MBIA Insured) 4,710 5,351
5.25%, 3/1/05 6,750 7,035
Lower Colorado River Auth.,
6.00%, 5/15/07 (FSA Insured) 5,000 5,670
San Antonio, GO, General Improvement,
5.00%, 8/1/10 5,850 6,647
San Antonio Electric & Gas, 5.00%, 2/1/07 1,535 1,681
Texas State Univ., 4.00%, 3/15/06
(FSA Insured) 2,790 2,940
Tomball Hosp. Auth.
5.50%, 7/1/04 800 810
5.50%, 7/1/05 1,300 1,353
Univ. of Texas, Board of Regents,
5.25%, 8/15/04 2,375 2,422
West Side Calhoun County Dev. Corp.,
VRDN (Currently 1.03%) # 2,200 2,200
West Side Calhoun County Navigation Dist.
BP Chemicals, VRDN (Currently 1.03%) # 1,500 1,500
Total Texas (Cost $61,651) 64,512
VIRGINIA 4.2%
Arlington County IDA
Virginia Hosp. Center
5.50%, 7/1/09 3,200 3,641
5.50%, 7/1/12 3,760 4,272
Bedford County IDA, PCR, Georgia-Pacific,
4.60%, 8/1/04 780 779
Charles County IDA, IDRB
Waste Management
4.875%, 2/1/09 # 750 805
6.25%, 4/1/27 (Tender 4/1/12) # 750 862
Fairfax County, GO, 5.50%, 12/1/05 2,100 2,261
Louisa IDA, Virginia Electric & Power
3.40%, 3/1/31 (Tender 3/1/04) # 3,000 3,000
Virginia Public School Auth., GO,
5.25%, 8/1/05 1,500 1,589
Virginia Beach, GO, Public Improvement,
5.25%, 3/1/09 1,870 2,133
Virginia Port Auth., 5.50%, 7/1/07 # 4,500 5,022
Virginia Transportation Board,
U.S. Route 58 Corridor
5.00%, 5/15/05 1,000 1,048
Total Virginia (Cost $24,110) 25,412
WASHINGTON 0.9%
King County, GO, 5.25%, 12/1/07 3,195 3,596
Washington, GO, 5.00%, 12/1/06
(MBIA Insured) 1,500 1,644
Total Washington (Cost $4,878) 5,240
WEST VIRGINIA 0.4%
West Virginia Hosp. Fin. Auth.
Charleston Medical Center
5.90%, 9/1/06 225 246
5.90%, 9/1/06 (Escrowed to Maturity) 930 1,030
6.50%, 9/1/05 160 171
6.50%, 9/1/05 (Escrowed to Maturity) 655 706
Total West Virginia (Cost $1,974) 2,153
WISCONSIN 1.0%
Milwaukee Metropolitan Sewage Dist., GO,
6.25%, 10/1/05 3,000 3,240
Wisconsin HEFA
Froedert & Community Health Obligation
5.50%, 10/1/07 1,000 1,106
5.50%, 10/1/08 1,250 1,395
Total Wisconsin (Cost $5,399) 5,741
Total Investments in Securities
97.4% of Net Assets (Cost $562,711) $584,577
--------
Futures Contracts
($ 000s)
Contract Unrealized
Expiration Value Gain (Loss)
---------- -------- ----------
Short, 60 U.S. Treasury
5 Year contracts,
$155 par of 5% Chicago,
General Obligation Bond
pledged as initial margin 3/04 $ (6,826) $ (202)
Net payments (receipts)
of variation
margin to date 183
Variation margin receivable (payable)
on open futures contracts $ (19)
-------
(ss.) Denominated in U.S. dollar unless otherwise noted
# Interest subject to alternative minimum tax
++ All or a portion of this security is pledged to cover margin requirements
on futures contracts at February 29, 2004.
! 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 Annual Report February 29, 2004
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
($ 000s)
Assets
Investments in securities, at value (cost $562,711) $ 584,577
Other assets 28,175
Total assets 612,752
Liabilities
Total liabilities 12,599
NET ASSETS $ 600,153
-----------
Net Assets Consist of:
Undistributed net investment income (loss) $ 112
Undistributed net realized gain (loss) (966)
Net unrealized gain (loss) 21,664
Paid-in-capital applicable to 108,288,666 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 579,343
NET ASSETS $ 600,153
-----------
NET ASSET VALUE PER SHARE $ 5.54
-----------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Statement of Operations
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
2/29/04
Investment Income (Loss)
Interest Income $ 20,871
Expenses
Investment management 2,462
Shareholder servicing 294
Custody and accounting 137
Registration 61
Prospectus and shareholder reports 31
Legal and audit 16
Directors 7
Miscellaneous 6
Total expenses 3,014
Net investment income (loss) 17,857
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 1,165
Futures (176)
Net realized gain (loss) 989
Change in net unrealized gain (loss)
Securities 814
Futures (187)
Change in net unrealized gain (loss) 627
Net realized and unrealized gain (loss) 1,616
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 19,473
----------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
2/29/04 2/28/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 17,857 $ 18,301
Net realized gain (loss) 989 1,963
Change in net unrealized gain (loss) 627 4,859
Increase (decrease) in net assets from operations 19,473 25,123
Distributions to shareholders
Net investment income (17,829) (18,276)
Net realized gain (1,058) (1,859)
Decrease in net assets from distributions (18,887) (20,135)
Capital share transactions *
Shares sold 207,970 214,442
Distributions reinvested 14,765 15,732
Shares redeemed (204,177) (125,933)
Increase (decrease) in net assets from capital
share transactions 18,558 104,241
Net Assets
Increase (decrease) during period 19,144 109,229
Beginning of period 581,009 471,780
End of period $ 600,153 $ 581,009
---------- ----------
*Share information
Shares sold 37,757 39,080
Distributions reinvested 2,685 2,871
Shares redeemed (37,146) (23,014)
Increase (decrease) in shares outstanding 3,296 18,937
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Annual Report February 29, 2004
Notes to Financial Statements
- --------------------------------------------------------------------------------
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
The fund values its investments and computes its net asset value per share 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 the T. Rowe Price Valuation Committee,
established by the fund's Board of Directors.
Credits
The fund earns credits on temporarily uninvested cash balances at the custodian
that reduce the fund's custody charges. Custody expense in the accompanying
financial statements is presented before reduction for credits.
Investment Transactions, Investment Income, and Distributions
Income and expenses are recorded on the accrual basis. Premiums and discounts on
debt securities are amortized for financial reporting purposes. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Payments ("variation margin") made or
received 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 other assets
and other liabilities,
respectively, and in the change in net unrealized gain or loss in the
accompanying financial statements. Distributions to shareholders are recorded on
the ex-dividend date. Income distributions are declared on a daily basis and
paid monthly. Capital gain distributions, if any, are declared and paid by the
fund, typically on an annual basis.
Other
In the normal course of business, the fund enters into contracts that provide
general indemnifications. The fund's maximum exposure under these arrangements
is dependent on claims that may be made against the fund in the future and,
therefore, cannot be estimated; however, based on experience, the risk of
material loss from such claims is considered remote.
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 year ended February 29, 2004, 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 interest rates.
Other
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $259,326,000 and $235,525,000, respectively, for the year
ended February 29, 2004.
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 under Subchapter M of the
Internal Revenue Code 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 significantly 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. Financial records are not adjusted for temporary differences.
Distributions during the year ended February 29, 2004 were characterized as
follows for tax purposes:
- --------------------------------------------------------------------------------
Tax-exempt income $ 17,829,000
Long-term capital gain 1,058,000
Total distributions $ 18,887,000
--------------
At February 29, 2004, the tax-basis components of net assets were as follows:
- --------------------------------------------------------------------------------
Unrealized appreciation $ 22,006,000
Unrealized depreciation (1,218,000)
Net unrealized appreciation (depreciation) 20,788,000
Undistributed tax-exempt income 22,000
Paid-in capital 579,343,000
Net assets $ 600,153,000
--------------
Federal income tax regulations require the fund to defer recognition of capital
losses realized on certain futures contract transactions; accordingly,
$1,168,000 of realized losses reflected in the accompanying financial statements
have not been recognized for tax purposes as of February 29, 2004.
For the year ended February 29, 2004, the fund recorded the following permanent
reclassifications to reflect tax character. Reclassifications to paid-in capital
relate primarily to a tax practice that treats a portion of the proceeds from
each redemption of capital shares as a distribution of taxable net investment
income and/or realized capital gain. Results of operations and net assets were
not affected by these reclassifications.
- --------------------------------------------------------------------------------
Undistributed net investment income $ (1,000)
Undistributed net realized gain (465,000)
Paid-in capital 466,000
At February 29, 2004, the cost of investments for federal income tax purposes
was $563,587,000.
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 average daily net assets to those of the group. At February 29,
2004, the effective annual group fee rate was 0.32%, and investment management
fee payable totaled $195,000.
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 $257,000 for the
year ended February 29, 2004, of which $22,000 was payable at period-end.
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Report of Independent Auditors
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, 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 T. Rowe Price Tax-Free
Short-Intermediate Fund, Inc. (the "Fund") at February 29, 2004, and the results
of its operations, the changes in its net assets and the financial highlights
for each of the fiscal periods presented, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's 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 auditing
standards generally accepted in the United States of America, 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 February 29, 2004 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
March 22, 2004
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Tax Information (Unaudited) for the Tax Year Ended 2/29/04
- --------------------------------------------------------------------------------
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 fund's distributions to shareholders included:
o $1,525,000 from long-term capital gains, of which $466,000 was subject to
the 15% rate gains category, and $1,059,000 to the 20% rate gains
category.
o $17,953,000 which qualified as exempt-interest dividends.
Information on Proxy Voting
- --------------------------------------------------------------------------------
A description of the policies and procedures that the T. Rowe Price Tax-Free
Short-Intermediate Fund uses to determine how to vote proxies relating to
portfolio securities is available, without charge, upon request by calling
1-800-225-5132. It also appears in the fund's Statement of Additional
Information (Form 485B), which can be found on the SEC's Web site, www.sec.gov.
T. Rowe Price Tax-Free Short-Intermediate Fund
- --------------------------------------------------------------------------------
Certified Annual Report
About the Fund's Directors and Officers
- --------------------------------------------------------------------------------
Your fund is governed by a Board of Directors that meets regularly to review
investments, performance, expenses, and other business matters, and is
responsible for protecting the interests of shareholders. The majority of the
fund's directors are independent of T. Rowe Price Associates, Inc. (T. Rowe
Price); "inside" directors are officers of T. Rowe Price. The Board of Directors
elects the fund's officers, who are listed in the final table. The business
address of each director and officer is 100 East Pratt Street, Baltimore, MD
21202. The Statement of Additional Information includes additional information
about the fund directors and is available without charge by calling a T. Rowe
Price representative at 1-800-225-5132.
- --------------------------------------------------------------------------------
Independent Directors
Name
(Year of Birth) Principal Occupation(s) During Past 5 Years and
Year Elected* Directorships of Other Public Companies
Anthony W. Deering Director, Chairman of the Board, President, and
(1945) Chief Executive Officer, The Rouse Company,
1983 (Tax-Exempt real estate developers; Director, Mercantile
Money, Tax-Free Bank (4/03 to present)
Short-Intermediate,
Tax-Free Income)
1984 (Tax-Free High Yield)
1992 (Tax-Free
Intermediate Bond)
Donald W. Dick, Jr. Principal, EuroCapital Advisors, LLC, an
(1943) acquisition and management advisory firm
2001 (all tax-free funds)
David K. Fagin Director, Golden Star Resources Ltd., Canyon
(1938) Resources Corp. (5/00 to present), and
2001 (all tax-free funds) Pacific Rim Mining Corp. (2/02 to present);
Chairman and President, Nye Corp.
Karen N. Horn Managing Director and President, Global Private
(1943) Client Services, Marsh Inc.; Managing Director
2003 (all tax-free funds) and Head of International Private Banking,
Bankers Trust; Director, Eli Lilly and Company
F. Pierce Linaweaver President, F. Pierce Linaweaver & Associates,
(1934) Inc., consulting environmental and civil engineers
1979 (Tax-Free Income)
1983 (Tax-Exempt Money,
Tax-Free Short-Intermediate)
1984 (Tax-Free High Yield)
1992 (Tax-Free
Intermediate Bond)
* Each independent director oversees 111 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
- --------------------------------------------------------------------------------
Independent Directors (continued)
Name
(Year of Birth) Principal Occupation(s) During Past 5 Years and
Year Elected* Directorships of Other Public Companies
John G. Schreiber Owner/President, Centaur Capital Partners, Inc., a
(1946) real estate investment company; Senior Advisor
1992 (all tax-free funds) and Partner, Blackstone Real Estate Advisors,
L.P.; Director, AMLI Residential Properties Trust,
Host Marriott Corp., and The Rouse Company
* Each independent director oversees 111 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
Inside Directors
Name
(Year of Birth)
Year Elected**
[Number of T. Rowe Price Principal Occupation(s) During Past 5 Years and
Portfolios Overseen] Directorships of Other Public Companies
William T. Reynolds,CFA, Director and Vice President, T. Rowe Price
CIC and T. Rowe Price Group, Inc.; Director,
(1948) T. Rowe Price Global Asset Management Limited
1989 (Tax-Free High Yield)
1990 (Tax-Free Income)
1991 (Tax-Exempt Money)
1994 (Tax-Free Short-
Intermediate, Tax-Free
Intermediate Bond)
[37]
James S. Riepe Director and Vice President, T. Rowe Price;
(1943) Vice Chairman of the Board, Director, and
1983 (Tax-Exempt Money, Vice President, T. Rowe Price Group, Inc.;
Tax-Free Short- Chairman of the Board and Director, T. Rowe
Intermediate, Tax-Free Price Global Asset Management Limited, T. Rowe
Income) Price Global Investment Services, Inc., T. Rowe
1984 (Tax-Free High Yield) Price Retirement Plan Services, Inc., and
1992 (Tax-Free T. Rowe Price Services, Inc.; Chairman of the
Intermediate Bond) Board, Director, President, and Trust Officer,
[111] T. Rowe Price Trust Company; Director, T. Rowe
Price International, Inc.; Chairman of the Board
(all tax-free funds)
** Each inside director serves until retirement, resignation, or election of a
successor.
- --------------------------------------------------------------------------------
Inside Directors (continued)
Name
(Year of Birth)
Year Elected**
[Number of T. Rowe Price Principal Occupation(s) During Past 5 Years and
Portfolios Overseen] Directorships of Other Public Companies
M. David Testa, CFA, CIC Director and Vice President, T. Rowe Price and
(1944) T. Rowe Price Trust Company; Vice Chairman of
1997 (all tax-free funds) the Board, Director, and Vice President, T. Rowe
[111] Price Group, Inc.; Chairman of the Board and
Director, T. Rowe Price International, Inc.;
Director, T. Rowe Price Global Asset Management
Limited and T. Rowe Price Global Investment
Services Limited
** Each inside director serves until retirement, resignation, or election of a
successor.
Officers
Name (Year of Birth)
Title and Fund(s) Served Principal Occupation(s)
Stephen V. Booth, CPA (1961) Vice President, T. Rowe Price, T. Rowe
Vice President, all tax-free funds Price Group, Inc., and T. Rowe Price
Trust Company
Steven G. Brooks, CFA (1954) Vice President, T. Rowe Price and
Vice President, Tax-Exempt Money Fund T. Rowe Price Group, Inc.
Joseph A. Carrier, CPA (1960) Vice President, T. Rowe Price, T. Rowe
Treasurer, all tax-free funds Price Group, Inc., and T. Rowe Price
Investment Services, Inc.
Maria H. Condez (1962) Employee, T. Rowe Price
Assistant Vice President,
Tax-Exempt Money Fund
G. Richard Dent (1960) Vice President, T. Rowe Price and
Vice President, Tax-Exempt Money, T. Rowe Price Group, Inc.
Tax-Free High Yield, and
Tax-Free Income Funds
Roger L. Fiery III, CPA (1959) Vice President, T. Rowe Price, T. Rowe
Vice President, all tax-free funds Price Group, Inc., T. Rowe Price Trust
Company, and T. Rowe Price
International, Inc.
Gregory S. Golczewski (1966) Vice President, T. Rowe Price and
Vice President, Tax-Exempt Money, T. Rowe Price Trust Company
Tax-Free High Yield, Tax-Free Income,
Tax-Free Intermediate Bond, and
Tax-Free Short-Intermediate Funds
Unless otherwise noted, officers have been employees of T. Rowe Price or T.
Rowe Price International for at least five years.
- --------------------------------------------------------------------------------
Officers (continued)
Name (Year of Birth)
Title and Fund(s) Served Principal Occupation(s)
Charles B. Hill (1961) Vice President, T. Rowe Price and
President, Tax-Free Intermediate Bond T. Rowe Price Group, Inc.
and Tax-Free Short-Intermediate Funds;
Vice President, Tax-Free High Yield
and Tax-Free Income Funds
Henry H. Hopkins (1942) Director and Vice President, T. Rowe
Vice President, all tax-free funds Price Group, Inc., T. Rowe Price
Investment Services, Inc., T. Rowe
Price Services, Inc., and T. Rowe Price
Trust Company; Vice President, T. Rowe
Price, T. Rowe Price International,
Inc., and T. Rowe Price Retirement
Plan Services, Inc.
T. Dylan Jones (1971) Assistant Vice President, T. Rowe Price
Assistant Vice President,
Tax-Exempt Money Fund
Marcy M. Lash (1963) Vice President, T. Rowe Price and
Vice President, Tax-Exempt Money, T. Rowe Price Group, Inc.
Tax-Free High Yield, Tax-Free Income,
and Tax-Free Short-Intermediate Funds
Alan D. Levenson (1958) Vice President, T. Rowe Price and
Vice President, Tax-Exempt Money Fund T. Rowe Price Group, Inc.
Patricia B. Lippert (1953) Assistant Vice President, T. Rowe
Secretary, all tax-free funds Price and T. Rowe Price Investment
Services, Inc.
Joseph K. Lynagh, CFA (1958) Vice President, T. Rowe Price and
President, Tax-Exempt Money Fund T. Rowe Price Group, Inc.
Konstantine B. Mallas (1963) Vice President, T. Rowe Price and
Vice President, Tax-Free High Yield, T. Rowe Price Group, Inc.
Tax-Free Income, Tax-Free
Intermediate Bond, and Tax-Free
Short-Intermediate Funds
James M. McDonald (1949) Vice President, T. Rowe Price,
Vice President, Tax-Exempt Money Fund T. Rowe Price Group, Inc., and
T. Rowe Price Trust Company
Hugh D. McGuirk, CFA (1960) Vice President, T. Rowe Price and
Vice President, Tax-Free High Yield, T. Rowe Price Group, Inc.
Tax-Free Income, Tax-Free
Intermediate Bond, and Tax-Free
Short-Intermediate Funds
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
- --------------------------------------------------------------------------------
Officers (continued)
Name (Year of Birth)
Title and Fund(s) Served Principal Occupation(s)
Mary J. Miller, CFA (1955) Vice President, T. Rowe Price and
President, Tax-Free High Yield and T. Rowe Price Group, Inc.
Tax-Free Income Funds; Executive Vice
President, Tax-Free Intermediate Bond
Fund; Vice President, Tax-Exempt Money
and Tax-Free Short-Intermediate Funds
James M. Murphy, CFA (1967) Vice President, T. Rowe Price and
Executive Vice President, T. Rowe Price Group, Inc.; formerly
Tax-Free High Yield Fund Portfolio Manager, Prudential
Investments (to 2000)
Stephen P. Richter, CFA (1969) Vice President, T. Rowe Price; formerly
Vice President, Tax-Free High Yield Vice President, Euler ACI (to 2000)
and Tax-Free Income Funds
Timothy G. Taylor (1975) Employee, T. Rowe Price
Assistant Vice President, Tax-Free
Intermediate Bond and Tax-Free
Short-Intermediate Funds
Edward A. Wiese, CFA (1959) Vice President, T. Rowe Price, T. Rowe
Vice President, Tax-Exempt Money, Price Group, Inc., and T. Rowe Price
Tax-Free Intermediate Bond, and Trust Company; Director, Vice President,
Tax-Free Short-Intermediate Funds and Chief Investment Officer,
T. Rowe Price Savings Bank
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Item 2. Code of Ethics.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of this code of
ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were
approved or waivers were granted to this code of ethics during the period
covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors/Trustees has determined that Mr. David K.
Fagin qualifies as an audit committee financial expert, as defined in Item 3 of
Form N-CSR. Mr. Fagin is considered independent for purposes of Item 3 of Form
N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) - (d) Aggregate fees billed to the registrant for the last two fiscal years
for professional services rendered by the registrant's principal accountant
were as follows:
2004 2003
Audit Fees $8,934 $8,618
Audit-Related Fees 769 --
Tax Fees 2,490 2,179
All Other Fees 124 129
Audit fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the accountant in
connection with statutory and regulatory filings. Audit-related fees include
amounts reasonably related to the performance of the audit of the registrant's
financial statements, specifically the issuance of a report on internal
controls. Tax fees include amounts related to tax compliance, tax planning, and
tax advice. Other fees include the registrant's pro-rata share of amounts for
agreed-upon procedures in conjunction with service contract approvals by the
registrant's Board of Directors/Trustees.
(e)(1) The registrant's audit committee has adopted a policy whereby audit and
non-audit services performed by the registrant's principal accountant for the
registrant, its investment adviser, and any entity controlling, controlled by,
or under common control with the investment adviser that provides ongoing
services to the registrant require pre-approval in advance at regularly
scheduled audit committee meetings. If such a service is required between
regularly scheduled audit committee meetings, pre-approval may be authorized by
one audit committee member with ratification at the next scheduled audit
committee meeting. Waiver of pre-approval for audit or non-audit services
requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by the registrant's principal accountant for non-audit services
rendered to the registrant, its investment adviser, and any entity controlling,
controlled by, or under common control with the investment adviser that provides
ongoing services to the registrant were $719,000 and $671,000, respectively, and
were less than the aggregate fees billed for those same periods by the
registrant's principal accountant for audit services rendered to the T. Rowe
Price Funds.
(h) All non-audit services rendered in (g) above were pre-approved by the
registrant's audit committee. Accordingly, these services were considered by the
registrant's audit committee in maintaining the principal accountant's
independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 10. 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 11. Exhibits.
(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is
attached.
(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.
(3) Not applicable.
(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 April 16, 2004
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 April 16, 2004
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date April 16, 2004