Item 1. Report to Shareholders
T. Rowe Price Florida Intermediate Tax-Free 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 Florida Intermediate Tax-Free 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]
FLORIDA INTERMEDIATE TAX-FREE FUND
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As of 2/29/04
Florida Intermediate Tax-Free Fund $16,921
Lipper Florida Intermediate Municipal Debt Funds Average $15,902
Lipper Florida
Intermediate Municipal Florida Intermediate
Debt Funds Average Tax-Free Fund
2/94 10,000 10,000
2/95 10,201 10,301
2/96 11,071 11,271
2/97 11,443 11,700
2/98 12,198 12,485
2/99 12,757 13,155
2/00 12,520 12,981
2/01 13,644 14,261
2/02 14,381 15,105
2/03 15,216 16,160
2/04 15,902 16,921
Average Annual Compound Total Return
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Periods Ended 2/29/04 1 Year 5 Years 10 Years
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Florida Intermediate
Tax-Free Fund 4.71% 5.16% 5.40%
Lipper Florida Intermediate
Municipal Debt Funds Average 4.24 4.70 4.74
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 Florida Intermediate Tax-Free Fund
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Certified Annual Report
Dear Shareholders,
We are pleased to report that your fund returned 4.71% for the 12-month period
ended February 29, 2004. The fund outperformed its Lipper benchmark, as shown in
the table on the previous page, because of successful duration management and
relatively low fund expenses.
As you know, the fund seeks to provide a high level of income exempt from
federal income taxes, consistent with moderate price fluctuation, by investing
at least 80% of its net assets in securities that are exempt from the Florida
intangibles tax. At least 95% of the bonds purchased by the fund will be rated
AAA or AA by at least one national rating organization. Up to 5% may be rated A
at the time of purchase. The fund may purchase unrated bonds if T. Rowe Price
believes they are of comparable quality. The fund's weighted average maturity is
expected to vary between five and 10 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 bond market sectors performed
during our fiscal year. As you can see, municipal bonds, especially high-yield
issues, outperformed taxable bonds, as measured by the Lehman Brothers indexes
in the table.
Portfolio Characteristics
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Periods Ended 2/28/03 2/29/04
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Price Per Share $ 11.23 $ 11.32
Dividends Per Share for 12 Months 0.45 0.43
30-Day Standardized Yield to Maturity 2.48% 2.00%
Weighted Average Maturity (years) 7.8 7.3
Weighted Average Effective Duration (years) 4.6 4.3
Weighted Average Quality * AA AA+
* Based on T. Rowe Price research.
Note: Yield will vary and is not guaranteed.
As shown in the Portfolio Characteristics table, the fund's weighted average
maturity slipped from 7.8 years to 7.3 years during its fiscal year. Its 30-day
standardized yield to maturity declined from 2.48% to 2.00%, reflecting the
decline in intermediate-term interest rates during that period. The fund's
weighted average quality remained very high, as dictated by the guidelines
described on page 11.
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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Dedicated Tax Revenue 24.2% 24.7%
General Obligation - Local 20.1 15.7
Electric Revenue 9.5 11.0
General Obligation - State 15.2 9.5
Water and Sewer Revenue 8.0 8.5
The Top 5 Sectors table shows how our largest sector allocations have changed
over the last 12 months. Our exposure to dedicated tax, electric, and water and
sewer revenue bonds increased during our fiscal year, while our allocations to
general obligation bonds issued by Florida's state and local governments
decreased.
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.
Thank you for your continued support.
Respectfully submitted,
James S. Riepe
Chairman
March 30, 2004
T. Rowe Price Florida Intermediate Tax-Free 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 $ 11.23 $ 10.93 $ 10.76 $ 10.24 $ 10.86
Investment activities
Net investment
income (loss) 0.43 0.45 0.45 0.47 0.46
Net realized
and unrealized
gain (loss) 0.09 0.30 0.17 0.52 (0.60)
Total from
investment
activities 0.52 0.75 0.62 0.99 (0.14)
Distributions
Net investment
income (0.43) (0.45) (0.45) (0.47) (0.46)
Net realized
gain -- -- -- -- (0.02)
Total distributions (0.43) (0.45) (0.45) (0.47) (0.48)
NET ASSET VALUE
End of period $ 11.32 $ 11.23 $ 10.93 $ 10.76 $ 10.24
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Ratios/Supplemental Data
Total return^ 4.71% 6.98% 5.92% 9.86% (1.32)%
Ratio of total
expenses to
average net
assets 0.55% 0.54% 0.56% 0.59% 0.60%
Ratio of net
investment
income (loss)
to average
net assets 3.82% 4.03% 4.19% 4.46% 4.35%
Portfolio
turnover rate 17.3% 12.8% 15.3% 19.5% 30.9%
Net assets,
end of period
(in thousands) $ 118,259 $ 112,202 $ 105,433 $ 92,003 $ 84,116
^ 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.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report February 29, 2004
Portfolio of Investments ss. Par Value
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($ 000s)
FLORIDA 94.8%
Brevard County, 5.25%, 3/1/10
(FGIC Insured) 1,000 1,150
Broward County, GO
5.25%, 1/1/15 2,000 2,232
5.25%, 1/1/18 2,000 2,223
Broward County
5.00%, 12/1/06 1,800 1,956
5.00%, 10/1/15 (AMBAC Insured) 1,425 1,601
Broward County Airport, 5.25%, 10/1/10
(MBIA Insured) # 2,000 2,235
Collier County, 5.25%, 6/1/14
(AMBAC Insured) 1,500 1,724
Delray Beach, GO, 5.00%, 2/1/13
(FSA Insured) 1,000 1,137
Duval County School Dist., GO, COP,
5.75%, 7/1/16 (FSA Insured) 2,000 2,297
Florida Board of Ed.
5.25%, 7/1/06 (FGIC Insured) 1,550 1,686
5.375%, 7/1/14 (FGIC Insured) 2,000 2,299
5.50%, 7/1/12 (FGIC Insured) 2,500 2,918
5.50%, 7/1/13 (FGIC Insured) 1,000 1,162
5.50%, 7/1/16 (FGIC Insured) 1,000 1,147
Florida Board of Ed., GO
5.00%, 6/1/07 1,000 1,104
5.00%, 6/1/08 1,750 1,960
5.00%, 6/1/12 (FGIC Insured) 1,250 1,418
5.125%, 6/1/13 2,500 2,816
5.25%, 1/1/13 2,360 2,635
5.25%, 1/1/14 1,170 1,306
Florida Dept. of Environmental Protection
5.25%, 7/1/14 (FGIC Insured) 2,000 2,287
5.25%, 7/1/17 (FGIC Insured) 500 563
Florida Dept. of Natural Resources
5.50%, 7/1/07 (Prerefunded 7/1/05!)
(AMBAC Insured) 2,000 2,138
Documentary Stamp Tax
5.50%, 7/1/09 (FSA Insured) 3,000 3,467
5.75%, 7/1/07 (AMBAC Insured) 1,000 1,130
6.00%, 7/1/05 (MBIA Insured) 500 532
6.00%, 7/1/06 (MBIA Insured) 1,850 2,043
6.00%, 7/1/08 (AMBAC Insured) 2,645 3,074
Florida DOT
5.25%, 7/1/08 (FSA Insured) 3,000 3,398
5.25%, 7/1/11 (MBIA Insured) 1,950 2,203
Florida HFC
5.80%, 2/1/08 (Prerefunded 2/1/08!)
(FNMA Guaranteed) 1,000 1,126
5.80%, 8/1/08 (Prerefunded 8/1/08!)
(FNMA Guaranteed) 1,000 1,126
Hillsborough County School Dist., GO
7.00%, 8/15/05 (MBIA Insured) 3,700 4,008
Hillsborough County School Dist.
5.375%, 10/1/14 (AMBAC Insured) 1,500 1,728
Indian Trace Community Dev. Dist.
5.50%, 5/1/06 (MBIA Insured) 1,215 1,300
5.50%, 5/1/07 (MBIA Insured) 550 588
Jacksonville
5.25%, 10/1/19 (MBIA Insured) # 1,000 1,106
5.375%, 10/1/17 (FGIC Insured) 1,000 1,134
Jacksonville Electric Auth.
5.00%, 10/1/09 (AMBAC Insured) 2,100 2,387
5.25%, 10/1/12 1,930 2,163
Jacksonville HFA, Baptist Health,
5.00%, 8/15/11 (MBIA Insured) 750 826
Kissimmee Water & Sewer Systems, 5.50%, 10/1/11
(Escrowed to Maturity) (FGIC Insured) 1,500 1,758
Lakeland Electric & Water
6.55%, 10/1/04 (FSA Insured) 2,755 2,844
6.55%, 10/1/07 (FSA Insured) 1,095 1,273
Lee County IDA, 5.80%, 11/1/11
(MBIA Insured) # 1,325 1,460
Manatee County, Public Utilities,
6.75%, 10/1/05 (MBIA Insured) 2,000 2,172
Martin County, Utility Systems,
5.50%, 10/1/16 (FGIC Insured) 1,260 1,439
Miami-Dade County, GO, 5.25%, 11/1/16
(MBIA Insured) 660 745
Miami-Dade County Aviation, 6.20%, 10/1/24
(MBIA Insured) # 50 52
Orange County
5.125%, 1/1/16 (FGIC Insured) 2,580 2,884
5.60%, 10/1/07 (Prerefunded 10/1/07!)
(FGIC Insured) 500 545
Orange County School Board, VRDN
(Currently 0.98%) (AMBAC Insured) 500 500
Orlando & Orange County Expressway Auth.,
6.50%, 7/1/10 (FGIC Insured) 1,000 1,226
Osceola County, GO, 5.50%, 10/1/16
(FGIC Insured) 1,000 1,150
Osceola County HFA
Evangelical Lutheran Good Samaritan Society
5.50%, 5/1/04 (AMBAC Insured) 700 705
5.50%, 5/1/05 (AMBAC Insured) 735 772
Palm Beach County, GO, 5.00%, 6/1/17 1,000 1,101
Palm Beach County
5.25%, 7/1/19 (FGIC Insured) 1,000 1,120
5.75%, 6/1/13 (FGIC Insured) 3,300 3,958
Pasco County, 5.75%, 4/1/05
(AMBAC Insured) # 1,130 1,184
Pinellas County, 5.00%, 10/1/10
(FSA Insured) 1,910 2,185
Polk County Transportation Improvement,
5.625%, 12/1/15 (FSA Insured) 500 584
Reedy Creek Improvement Dist.
5.125%, 10/1/14 (MBIA Insured) 1,500 1,696
GO, 5.00%, 6/1/17 (AMBAC Insured) 1,775 1,946
Santa Rosa HFA, Baptist Health Care, Pensacola
VRDN (Currently 0.95%) 800 800
St. Lucie County, PCR, Florida Power & Light
VRDN (Currently 1.00%) 400 400
Venice Health Care, Bon Secours Health System,
5.40%, 8/15/08 (MBIA Insured) 1,290 1,425
West Orange Healthcare Dist., 5.50%, 2/1/10 750 847
Total Florida (Cost $103,717) 112,104
PUERTO RICO 4.2%
Puerto Rico Electric Power Auth.,
5.25%, 7/1/14 (MBIA Insured) 2,000 2,273
Puerto Rico Ind. Tourist, Ed.,
Medical & Environmental Fac.,
Ascention Health, 6.375%, 11/15/15 750 871
Puerto Rico Municipal Fin. Agency, GO,
5.875%, 8/1/14 (FSA Insured) 1,500 1,774
Total Puerto Rico (Cost $4,352) 4,918
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report
Value
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($ 000s)
Total Investments in Securities
99.0% of Net Assets (Cost $108,069) $117,022
--------
(ss.) Denominated in U.S. dollar unless otherwise noted
# Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Assurance Corp.
COP Certificates of Participation
DOT Department of Transportation
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Inc.
GO General Obligation
HFA Health Facility Authority
HFC Housing Finance Corp.
IDA Industrial Development Authority/Agency
MBIA MBIA Insurance Corp.
PCR Pollution Control Revenue
VRDN Variable-Rate Demand Note
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report February 29, 2004
Statement of Assets and Liabilities
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($ 000s)
Assets
Investments in securities, at value (cost $108,069) $ 117,022
Other assets 1,436
Total assets 118,458
Liabilities
Total liabilities 199
NET ASSETS $ 118,259
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Net Assets Consist of:
Undistributed net investment income (loss) $ 1
Undistributed net realized gain (loss) (516)
Net unrealized gain (loss) 8,953
Paid-in-capital applicable to 10,443,501
no par value shares of beneficial interest
outstanding; unlimited number of shares authorized 109,821
NET ASSETS $ 118,259
--------------------
NET ASSET VALUE PER SHARE $ 11.32
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The accompanying notes are an integral part of these financial statements.
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report
Statement of Operations
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($ 000s)
Year
Ended
2/29/04
Investment Income (Loss)
Interest income $ 4,922
Expenses
Investment management 415
Custody and accounting 99
Shareholder servicing 59
Legal and audit 15
Prospectus and shareholder reports 12
Registration 8
Trustees 5
Miscellaneous 5
Total expenses 618
Expenses paid indirectly (1)
Net expenses 617
Net investment income (loss) 4,305
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 93
Futures (124)
Net realized gain (loss) (31)
Change in net unrealized gain (loss) on securities 868
Net realized and unrealized gain (loss) 837
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 5,142
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The accompanying notes are an integral part of these financial statements.
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report
Statement of Changes in Net Assets
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($ 000s)
Year
Ended
2/29/04 2/28/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 4,305 $ 4,253
Net realized gain (loss) (31) (90)
Change in net unrealized gain (loss) 868 2,887
Increase (decrease) in net assets
from operations 5,142 7,050
Distributions to shareholders
Net investment income (4,305) (4,253)
Capital share transactions *
Shares sold 37,390 40,748
Distributions reinvested 2,811 2,786
Shares redeemed (34,981) (39,562)
Increase (decrease) in net assets from
capital share transactions 5,220 3,972
Net Assets
Increase (decrease) during period 6,057 6,769
Beginning of period 112,202 105,433
End of period $ 118,259 $ 112,202
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*Share information
Shares sold 3,336 3,677
Distributions reinvested 251 252
Shares redeemed (3,133) (3,582)
Increase (decrease) in shares outstanding 454 347
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report February 29, 2004
Notes to Financial Statements
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NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price State Tax-Free Income Trust (the trust) is registered under the
Investment Company Act of 1940 (the 1940 Act). The Florida Intermediate Tax-Free
Fund (the fund), a nondiversified, open-end management investment company, is
one portfolio established by the trust and commenced operations on March 31,
1993. The fund seeks to provide a high level of income exempt from federal
income taxes, consistent with moderate price fluctuation, by investing primarily
in Florida municipal bonds.
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.
Purchased and written options on futures contracts are valued at the last sale
price. 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 Trustees.
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, which are
reflected as expenses paid indirectly.
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.
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.
Options
Call and put options on futures contracts give the holder the right to purchase
or sell, respectively, a particular futures contract at a specified price on or
until a certain date. Risks arise from possible illiquidity of the options
market and from movements in underlying futures prices.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $23,885,000 and $18,807,000, 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 totaled $4,305,000 and
were characterized as tax-exempt income for tax purposes. At February 29, 2004,
the tax-basis components of net assets were as follows:
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Unrealized appreciation $ 8,955,000
Unrealized depreciation (500,000)
Net unrealized appreciation (depreciation) 8,455,000
Capital loss carryforwards (17,000)
Paid-in capital 109,821,000
Net assets $ 118,259,000
--------------------
Federal income tax regulations require the fund to defer recognition of capital
losses realized on certain futures transactions; accordingly, $500,000 of
realized losses reflected in the accompanying financial statements have not been
recognized for tax purposes as of February 29, 2004. The fund intends to retain
realized gains to the extent of available capital loss carryforwards for federal
income tax purposes. During the fiscal year ended February 29, 2004, the fund
utilized $132,000 of capital loss carryforwards. As of February 29, 2004, the
fund had $17,000 of capital loss carryforwards that expire in fiscal 2009.
At February 29, 2004, the cost of investments for federal income tax purposes
was $108,567,000.
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 0.05% 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 $34,000.
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 $106,000 for the
year ended February 29, 2004, of which $9,000 was payable at period-end.
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report
Report of Independent Auditors
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To the Board of Trustees of T. Rowe Price State Tax-Free Income Trust and
Shareholders of Florida Intermediate Tax-Free Fund
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 Florida Intermediate Tax-Free Fund
(one of the portfolios comprising T. Rowe Price State Tax-Free Income Trust,
hereafter referred to as 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, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
March 22, 2004
T. Rowe Price Florida Intermediate Tax-Free Fund
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Certified Annual Report
Tax Information for the Tax Year Ended 2/29/04
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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 $4,301,000 which qualified as
exempt-interest dividends.
Information on Proxy Voting
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A description of the policies and procedures that the T. Rowe Price Florida
Intermediate Tax-Free 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 Florida Intermediate Tax-Free Fund
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Certified Annual Report
About the Fund's Trustees and Officers
- --------------------------------------------------------------------------------
Your fund is governed by a Board of Trustees 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 trustees are independent of T. Rowe Price Associates, Inc. (T. Rowe
Price); "inside" trustees are officers of T. Rowe Price. The Board of Trustees
elects the fund's officers, who are listed in the final table. The business
address of each trustee and officer is 100 East Pratt Street, Baltimore, MD
21202. The Statement of Additional Information includes additional information
about the fund trustees and is available without charge by calling a T. Rowe
Price representative at 1-800-225-5132.
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Independent Trustees
Name
(Year of Birth)
Year Elected*
Principal Occupation(s) During Past 5 Years and Directorships of Other Public
Companies
Anthony W. Deering
(1945)
1986
Director, Chairman of the Board, President, and Chief Executive Officer, The
Rouse Company, real estate developers; Director, Mercantile Bank (4/03 to
present)
Donald W. Dick, Jr.
(1943)
2001
Principal, EuroCapital Advisors, LLC, an acquisition and management advisory
firm
David K. Fagin
(1938)
2001
Director, Golden Star Resources Ltd., Canyon Resources Corp.
(5/00 to present), and Pacific Rim Mining Corp. (2/02 to present); Chairman
and President, Nye Corp.
Karen N. Horn
(1943)
2003
Managing Director and President, Global Private Client Services, Marsh Inc.;
Managing Director and Head of International Private Banking, Bankers Trust;
Director, Eli Lilly and Company
F. Pierce Linaweaver
(1934)
1986
President, F. Pierce Linaweaver & Associates, Inc., consulting environmental
and civil engineers
John G. Schreiber
(1946)
1992
Owner/President, Centaur Capital Partners, Inc., a real estate investment
company; Senior Advisor and Partner, Blackstone Real Estate Advisors, L.P.;
Director, AMLI Residential Properties Trust, Host Marriott Corp., and The
Rouse Company
* Each independent trustee oversees 111 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
- --------------------------------------------------------------------------------
Inside Trustees
Name
(Year of Birth)
Year Elected*
[Number of T. Rowe Price Portfolios Overseen]
Principal Occupation(s) During Past 5 Years and Directorships of Other Public
Companies
William T. Reynolds, CFA, CIC
(1948)
1991
[37]
Director and Vice President, T. Rowe Price and T. Rowe Price Group, Inc.;
Director, T. Rowe Price Global Asset Management Limited
James S. Riepe
(1943)
1986
[111]
Director and Vice President, T. Rowe Price; Vice Chairman of the Board,
Director, and Vice President, T. Rowe Price Group, Inc.; Chairman of the Board
and Director, T. Rowe Price Global Asset Management Limited, T. Rowe Price
Global Investment Services Limited, T. Rowe Price Investment Services, Inc.,
T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Services,
Inc.; Chairman of the Board, Director, President, and Trust Officer, T. Rowe
Price Trust Company; Director, T. Rowe Price International, Inc.; Chairman of
the Board, State Tax-Free Income Trust
M. David Testa, CFA, CIC
(1944)
1997
[111]
Director and Vice President, T. Rowe Price and T. Rowe Price Trust Company; Vice
Chairman of the Board, Director, and Vice President, T. Rowe 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 trustee 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, State Tax-Free Income Trust
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Trust Company
Linda A. Brisson (1959)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Steven G. Brooks, CFA (1954)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Joseph A. Carrier, CPA (1960)
Treasurer, State Tax-Free Income Trust
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Investment Services, Inc.
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)
Jonathan M. Chirunga (1966)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price
Maria H. Condez (1962)
Assistant Vice President, State Tax-Free Income Trust
Employee, T. Rowe Price
G. Richard Dent (1960)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Roger L. Fiery III, CPA (1959)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Trust
Company, and T. Rowe Price International, Inc.
Gregory S. Golczewski (1966)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Trust Company
Charles B. Hill (1961)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Henry H. Hopkins (1942)
Vice President, State Tax-Free Income Trust
Director and Vice President, T. Rowe 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, State Tax-Free Income Trust
Assistant Vice President, T. Rowe Price
Marcy M. Lash (1963)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Alan D. Levenson (1958)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Patricia B. Lippert (1953)
Secretary, State Tax-Free Income Trust
Assistant Vice President, T. Rowe Price and T. Rowe Price Investment Services,
Inc.
Joseph K. Lynagh, CFA (1958)
Executive Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Konstantine B. Mallas (1963)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
James M. McDonald (1949)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Trust Company
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)
Hugh D. McGuirk, CFA (1960)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Mary J. Miller, CFA (1955)
President, State Tax-Free Income Trust
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Timothy G. Taylor (1975)
Assistant Vice President, State Tax-Free Income Trust
Employee, T. Rowe Price
Edward A. Wiese, CFA (1959)
Vice President, State Tax-Free Income Trust
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Trust Company; Director, Vice President, 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 $8,009 $7,892
Audit-Related Fees 683 --
Tax Fees 2,233 1,996
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 State Tax-Free Income Trust
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