Notes to Financial Statements
Legg Mason Tax-Free Income Fund
(Amounts in Thousands) (Unaudited)
1. Significant Accounting Policies:
The Legg Mason Tax-Free Income Fund ("Trust"), consisting of the Maryland Tax-Free Income Trust
("Maryland Tax-Free"), the Pennsylvania Tax-Free Income Trust ("Pennsylvania Tax-Free") and the Tax-Free
Intermediate-Term Income Trust ("Tax-Free Intermediate") (each a "Fund"), is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company. All series of the Trust
Pennsylvania Tax-Free consists of two classes of shares: Primary Class, offered since August 1, 1991, and
Navigator Class, offered to certain institutional investors since March 10, 1998.The Navigator Class of Maryland
Tax-Free and Tax-Free Intermediate has not commenced operations. The income and expenses of a Fund are
allocated proportionately to the two classes of shares except for Rule 12b-1 distribution fees, which are charged
only on Primary Class shares, and transfer agent and shareholder servicing expenses, which are determined
separately for each class.
Portfolio securities are valued based upon market quotations obtained from an independent pricing service. When
market quotations are not readily available, securities are valued based on prices received from recognized
broker-dealers in the same or similar securities. Fixed income securities with 60 days or less remaining to maturity
are valued using the amortized cost method, which approximates current market value.
Maryland Tax-Free and Pennsylvania Tax-Free each follow an investment policy of investing primarily in
municipal obligations of one state. Economic changes affecting either of those states and certain of its public
bodies and municipalities may affect the ability of issuers within that state to pay interest, or repay principal of,
municipal obligations held by either of those Funds.
Investment Income and Distributions to Shareholders