<PAGE>
Annual Report
December 31, 1999
Legg Mason
Investment
Trust, Inc.
Opportunity Trust
LEGG
MASON
FUNDS
LOGO
The Art of Investing/SM/
Investment Adviser
LMM, LLC
Baltimore, MD
Board of Directors
John F. Curley, Jr., Chairman
Jennifer W. Murphy, President
Richard G. Gilmore
Arnold L. Lehman
Dr. Jill E. McGovern
G. Peter O'Brien
T. A. Rodgers
Transfer and Shareholder Servicing Agent
Boston Financial Data Services
Boston, MA
Custodian
State Street Bank & Trust Company
Boston, MA
Counsel
Kirkpatrick & Lockhart LLP
Washington, DC
Independent Auditors
Ernst & Young LLP
Philadelphia, PA
This report is not to be distributed unless preceded or
accompanied by a prospectus.
Legg Mason Wood Walker, Incorporated
-----------------------------------------
100 Light Street
P.O. Box 1476, Baltimore, MD 21203-1476
410 o 539 o 0000
LMF-088
2/00
<PAGE>
To Our Shareholders,
Welcome to Legg Mason Investment Trust, Inc. The Trust's first fund, Legg
Mason Opportunity Trust, was launched on December 30, 1999, and at this writing
has more than $300 million in net assets. At December 31, 1999, the net asset
value of the Fund was unchanged at $10.00.
Securities and Exchange Commission regulations require that mutual fund
shareholders be provided with audited financial statements following a fund's
fiscal year end. The Opportunity Trust has adopted a December 31 year end and
is therefore required to be audited by independent auditors and to report the
results of that audit to its shareholders. Ernst & Young LLP, the Fund's
independent auditors, has concluded its annual examination and audited financial
statements for the fiscal period ended December 31, 1999, are included in this
report.
We are very excited to offer this Fund, the most recent addition to the Legg
Mason Family of Funds. The Fund seeks long-term growth of capital. Bill Miller,
portfolio manager for the Fund, brings more than 17 years of investment
experience to this new effort. Beginning with our next letter to you, Bill will
offer his thoughts on the Fund's portfolio strategy and outlook. You may be
interested to know that Bill has been the subject of recent articles in a number
of leading financial publications, including the December 31, 1999 edition of
the Wall Street Journal and the October 1999 issue of Money magazine. Both
articles can be viewed on our Website at www.leggmason.com.
Many of our shareholders regularly add to their Fund holdings by authorizing
automatic monthly transfers from their bank checking or Legg Mason brokerage
accounts. We will be happy to help you make these arrangements if you would like
to purchase shares in this convenient way.
We look forward to a long-term and rewarding relationship with you. As always,
we appreciate your support and welcome your comments.
Sincerely,
/s/ Jennifer W. Murphy
-----------------------
Jennifer W. Murphy
President
January 20, 2000
<PAGE>
Portfolio of Investments
Legg Mason Investment Trust, Inc.
December 31, 1999
Opportunity Trust
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement
Bank of America
3.10%, dated 12/31/99, to be repurchased at $1,944,141 on 1/3/00
(Collateral: $2,170,250 Freddie Mac mortgage-backed securities,
6%, due 9/1/28, value $1,997,309)
(Identified Cost -- $1,943,639)* $1,943,639 $ 1,943,639
------------
Total Investments $ 1,943,639
============
-----------------------------------------------------------------------------------------------------
</TABLE>
*Also represents cost for federal income tax purposes.
-----------------------------
Statement of Assets and Liabilities
Legg Mason Investment Trust, Inc.
December 31, 1999
Opportunity Trust
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
<S> <C>
Assets:
Investments at value $ 1,943,639
Receivable for:
Fund shares sold 144,129,216
Accrued interest 167
Other assets 27,040
------------
Total assets 146,100,062
------------
Liabilities:
Due to manager and distributor 5,806
Accrued expense 1,415
------------
Total liabilities 7,221
------------------------------------------------------------------------------------------------
Net assets $146,092,841
============
Analysis of Net Assets:
Accumulated paid-in capital applicable to
14,609,989 shares outstanding $146,099,895
Accumulated net investment income/(loss) (7,054)
------------------------------------------------------------------------------------------------
Net assets $146,092,841
============
Net asset value per share $10.00
======
-----------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
2
<PAGE>
Statement of Operations
Legg Mason Investment Trust, Inc.
For the Period Ended December 31, 1999*
Opportunity Trust
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Interest $ 167
-------
Total Income 167
Expenses:
Management fee $ 3,629
Distribution and service fees 3,628
Other expenses 1,415
-------
8,672
Less fees waived (1,451)
-------
Total expenses, net of waivers 7,221
-------
Net Investment Income/(Loss) (7,054)
-----------------------------------------------------------------------------------------------------
Change in Net Assets Resulting From Operations $(7,054)
-----------------------------------------------------------------------------------------------------
</TABLE>
*December 30, 1999 (commencement of operations)to December 31, 1999.
-----------------------------
Statement of Changes in Net Assets
Legg Mason Investment Trust, Inc.
Opportunity Trust
<TABLE>
<CAPTION>
For the Period Ended
December 31, 1999*
-----------------------------------------------------------------------------------------------------
<S> <C>
Change in Net Assets:
Net investment income/(loss) $ (7,054)
Change in net assets from Fund share transactions 145,999,895
-----------------------------------------------------------------------------------------------------
Change in net assets 145,992,841
Net Assets:
Beginning of period 100,000
-----------------------------------------------------------------------------------------------------
End of period $146,092,841
-----------------------------------------------------------------------------------------------------
</TABLE>
*December 30, 1999 (commencement of operations) to December 31, 1999.
See notes to financial statements.
3
<PAGE>
Financial Highlights
Legg Mason Investment Trust, Inc.
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data. This information has been derived from information
provided in the financial statements.
<TABLE>
<CAPTION>
Investment Operations Distributions
------------------------------------------- ----------------------------------------
From
Net Asset Net Net Realized Total From Net
Value, Investment and Unrealized From Net Realized
Beginning Income Gain (Loss) on Investment Investment Gain on Total
of Period (Loss) Investments Operations Income Investments Distributions
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Dec. 31,
1999/A/ $10.00 $-- $-- $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------------------
Net
Net Asset Investment
Expenses Expenses Income (Loss) Portfolio Net Assets,
End of Total to Average to Average Turnover End of
Period Return Net Assets Net Assets Rate Period
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Period Ended Dec. 31,
1999/A/ $10.00 N.M. 1.99%/B,C/ N.M. --% $146,092,841
-------------------------------------------------------------------------------------------------------
</TABLE>
/A/ For the period December 30, 1999 (commencement of operations) to
December 31, 1999.
/B/ Net of fees waived pursuant to an expense limitation of 1.99% of average
daily net assets through December 31, 2000. If no fees had been waived by
LMM, the annualized ratio of expenses to average daily net assets for the
period would have been 2.39%.
/C/ Annualized.
N.M. - Not meaningful.
See notes to financial statements.
-----------------------------
Notes to Financial Statements
Legg Mason Investment Trust, Inc.
-----------------------------------------------------------------------------
1. Significant Accounting Policies:
The Legg Mason Investment Trust, Inc. ("Corporation"), consisting of the
Legg Mason Opportunity Trust ("Fund"), was organized on October 8, 1999, and
is registered under the Investment Company Act of 1940, as amended, as an
open-end, non-diversified investment company. The Fund currently offers only
Primary Class shares, which commenced selling shares on December 30, 1999.
The Fund had no substantive operations prior to December 30, 1999, other than
those matters related to its organization and initial registration. The Fund
has an investment management agreement with LMM, LLC ("LMM"). Organization
costs of approximately $100,000 were expensed by the Fund and reimbursed by
LMM prior to December 30, 1999. These costs are subject to reimbursement to
LMM by the Fund through December 2002, subject to the expense limitation as
discussed in Note 4.
Security Valuation
Securities owned by the Fund for which market quotations are readily
available are valued at current market value. In the absence of readily
available market quotations, securities are valued at fair value as
determined by the Fund's Board of Directors. Where a security is traded on
more than one market, which may include foreign markets, the securities are
generally valued on the market considered by the Fund's adviser to be the
primary market. Securities with remaining maturities of 60 days or less are
valued at amortized cost. The Fund will value its foreign securities in U.S.
dollars on the basis of the then-prevailing exchange rates.
4
<PAGE>
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Investment Income and Distributions to Shareholders
Interest income and expenses are recorded on the accrual basis. Bond
premiums are amortized for financial reporting and federal income tax
purposes. Bond discounts, other than original issue and zero-coupon bonds,
are not amortized. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Dividends from net investment income, if
available, will be paid annually. Net capital gain distributions are declared
and paid after the end of the tax year in which the gain is realized.
Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles; accordingly,
periodic reclassifications are made within the Fund's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
Security Transactions
Security transactions are recorded on the trade date. Realized gains and
losses from security transactions are reported on an identified cost basis
for both financial reporting and federal income tax purposes.
Deferred Offering Costs
Offering costs have been deferred and are being expensed over a twelve-
month period beginning the day operations commenced.
Federal Income Taxes
No provision for federal income or excise taxes is required since the Fund
intends to qualify as a regulated investment company and distribute all of
its taxable income to its shareholders.
Use of Estimates
Preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
2. Investment Transactions:
There were no investment transactions (excluding short-term investments)
for the period ended December 31, 1999.
3. Repurchase Agreements:
All repurchase agreements are fully collateralized by obligations issued
by the U.S. Government or its agencies and such collateral is in the
possession of the Fund's custodian. The value of such collateral includes
accrued interest. Risks arise from the possible delay in recovery or
potential loss of rights in the collateral should the issuer of the
repurchase agreement fail financially. The Fund's investment adviser reviews
the value of the collateral and the creditworthiness of those banks and
dealers with which the Fund enters into repurchase agreements to evaluate
potential risks.
4. Transactions With Affiliates:
For its services to the Fund, LMM receives a management fee, calculated
daily and payable monthly, at an annual rate of 1.00% of the average daily
net assets of the Fund up to $100 million and 0.75% of its average daily net
assets in excess of $100 million. Under the terms of the agreement, LMMhas
agreed to waive
5
<PAGE>
Notes to Financial Statements--Continued
-----------------------------------------------------------------------------
its fees to the extent the Fund's expenses (exclusive of taxes, interest,
brokerage and extraordinary expenses) exceed 1.99% of average daily net
assets through December 31, 2000. Thereafter, through December 31, 2003, the
Fund is required to reimburse LMMfor these expenses, provided that average
net assets have grown or expenses have declined sufficiently to allow
reimbursement without causing the Fund's ratio of expenses to average daily
net assets to exceed 1.99%.
As of December 31, 1999, $2,178 was payable and $101,451 (including
organization costs) is subject to reimbursement by the Fund to LMM.
Legg Mason Fund Adviser, Inc. ("LMFA") serves as sub-manager to the Fund
under a sub-management agreement with LMM. For LMFA's services to the Fund,
LMM(not the Fund)pays LMFA a fee, calculated daily and payable monthly, of
0.10% of the average daily net assets of the Fund up to $100 million and
0.05% of the average daily net assets of the Fund in excess of $100 million.
Legg Mason Wood Walker, Incorporated ("Legg Mason"), a member of the New
York Stock Exchange, serves as distributor of the Fund. Legg Mason receives
an annual distribution fee and an annual service fee, based on the Fund's
Primary Class's average daily net assets, computed daily and payable monthly
as follows:
<TABLE>
<CAPTION>
At December 31, 1999
----------------------------
Distribution Service Distribution and Service
Fee Fee Fees Payable
-----------------------------------------------------------------------------
<S> <C> <C>
0.75% 0.25% $3,628
</TABLE>
The Fund paid no brokerage commissions to Legg Mason for the period ended
December 31, 1999.
Legg Mason also has an agreement with the Fund's transfer agent to assist
it with some of its duties. For this assistance, the transfer agent paid
Legg Mason no fees for the period ended December 31, 1999.
LMM,LMFA and Legg Mason are corporate affiliates of Legg Mason, Inc.
5. Fund Share Transactions:
At December 31, 1999, there were 400,000,000 shares authorized at $0.001
par value for the Fund. Share transactions were as follows:
<TABLE>
<CAPTION>
Reinvestment
Sold of Distributions Repurchased Net Change
-------------------------- ------------------- --------------- --------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Period Ended Dec. 31, 1999* 14,599,989 $145,999,895 -- $-- -- $-- $14,599,989 $145,999,895
</TABLE>
- ---------
December 30, 1999 (commencement of operations) to December 31, 1999.
6
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
To the Shareholders and Directors of Legg Mason Investment Trust, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Legg Mason Investment Trust, Inc.,
comprised of the Legg Mason Opportunity Trust (the "Fund"), as of December
31, 1999, and the related statement of operations, statement of changes in
net assets, and financial highlights for the period December 30, 1999
(commencement of operations) through December 31, 1999. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence
with the Fund's custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Legg Mason Opportunity Trust at December 31, 1999, and the results of its
operations, the changes in its net assets and its financial highlights for
the period December 30, 1999 (commencement of operations) through December
31, 1999, in conformity with accounting principles generally accepted in the
United States.
/s/ Ernst & Young LLP
-------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
February 2, 2000
7
