<PAGE>
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------
April 30, 1997
NEUBERGER&BERMAN
MUNICIPAL FUNDS-REGISTERED TRADEMARK-
Neuberger&Berman
MUNICIPAL MONEY FUND
Neuberger&Berman
MUNICIPAL SECURITIES TRUST
Neuberger&Berman
NEW YORK INSURED INTERMEDIATE FUND
<PAGE>
TABLE OF CONTENTS
THE FUNDS
PRESIDENT'S LETTER 4
PERFORMANCE HIGHLIGHTS 9
FINANCIAL STATEMENTS 10
FINANCIAL HIGHLIGHTS
PER SHARE DATA
Municipal Money Fund 18
Municipal Securities Trust 19
New York Insured Intermediate Fund 20
THE PORTFOLIOS
SCHEDULE OF INVESTMENTS
Municipal Money Portfolio 22
Municipal Securities Portfolio 30
New York Insured Intermediate Portfolio 33
FINANCIAL STATEMENTS 38
FINANCIAL HIGHLIGHTS 45
DIRECTORY 47
OFFICERS AND TRUSTEES 48
3
<PAGE>
PRESIDENT'S LETTER June 20, 1997
Dear Shareholder,
Let me begin with a brief "state of the bond market" address. Fixed income
market performance continues to reflect inflationary concerns. I will say,
however, that on an absolute and "real rate of return" basis (the spread between
bond yields and inflation), we believe bonds are more fundamentally attractive
today than in recent years. For example,
with virtually no change in the rate of inflation, taxable bond yields in the
one through 10-year maturity range as of April 30, 1997, are now 140-290 basis
points (1.4%-2.9%) higher than their 1993 lows. In addition, we currently enjoy
a favorable political and economic backdrop for bonds. We have a diligent
inflation-fighting Federal Reserve, and Congress and the Clinton Administration
appear committed to a balanced budget deal. Thanks to a healthy economy and
improved corporate balance sheets, credit quality is excellent. In recent years,
bond returns have been overshadowed by the strong performance of the stock
market. This may or may not continue. The relevant issue for us is that based on
their own fundamental merits, we find that bonds currently provide an appealing
investment opportunity.
Also, permit me a few words on our investment discipline. There are three
basic ways we attempt to add value to the fixed income investment process. The
first is by active trend following maturity/duration management. We monitor
weighted average portfolio maturity in money market funds, and the weighted
average portfolio duration -- a measure of interest rate sensitivity -- in our
other income funds. This is a long handle for a simple and straightforward
strategy. When interest rates decline, we lengthen maturity/duration to enhance
the portfolios' yield. When interest rates rise, we shorten maturity/duration to
minimize price erosion (longer maturity/duration bonds generally decline more
than shorter maturity/duration bonds as interest rates move higher). We use a
number of quantitative models to determine changes in interest rate trends and
adjust our portfolios' average maturity/ durations accordingly.
Secondly, we identify those sectors within the municipal bond market that we
believe offer the best risk adjusted return potential. Our
4
<PAGE>
allocation to sectors like revenue bonds, general obligation bonds and
government agency housing authority bonds will change as we continually evaluate
the relative attractiveness of each of these sectors.
Finally, it bears noting that the bond market is not homogeneous. We analyze
issuers' management quality, products and product cycles, balance sheets and
income statements in much the same way an equity analyst would. Our goal is to
find bonds with realistic prospects for credit upgrades and perhaps more
importantly, identify and avoid those that may not deserve their current credit
quality rankings.
Now, let's review what transpired in the credit markets since we last wrote to
you at the end of October 1996. After a bumpy ride, bond yields of most
maturities finished the six-month period ended April 30, 1997, slightly higher
than where they started at the beginning of that period. The bond rally, which
began in mid-summer 1996, extended through mid-December when Federal Reserve
Chairman Alan Greenspan issued his now famous warning about the potential
consequences of the "irrational exuberance" of the financial markets. Equity
investors shrugged off this warning, waiting for Greenspan to raise the Federal
Funds Rate 25 basis points in March before a modest and short-lived stock market
retreat. Fixed income investors took it quite seriously and bonds trended lower
in price until early April, when new economic data calmed inflationary fears.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
3-MONTH T-BILL 30-YR. TREASURY 12-22 YR. MUNICIPAL BOND INDEX
<S> <C> <C> <C>
11/1/96 5.16 6.68 5.189
11/8/96 5.18 6.51 5.136
11/15/96 5.14 6.46 5.132
11/22/96 5.16 6.44 5.087
11/29/96 5.13 6.35 5.024
12/6/96 5.02 6.51 5.149
12/13/96 4.92 6.57 5.181
12/20/96 5.02 6.61 5.177
12/27/96 5.09 6.56 5.136
1/3/97 5.16 6.73 5.55
1/10/97 5.16 6.84 5.639
1/17/97 5.15 6.82 5.611
1/24/97 5.16 6.89 5.622
1/31/97 5.15 6.79 5.576
2/7/97 5.12 6.7 5.482
2/14/97 5.08 6.52 5.363
2/21/97 5.08 6.64 5.425
2/28/97 5.22 6.8 5.543
3/7/97 5.21 6.81 5.586
3/14/97 5.23 6.94 5.641
3/21/97 5.4 6.97 5.673
3/28/97 5.36 7.09 5.772
4/4/97 5.27 7.12 5.839
4/11/97 5.28 7.17 5.873
4/18/97 5.28 7.05 5.815
4/26/97 5.3 7.14 5.829
(Total Returns in Percent-
age)
</TABLE>
SOURCE: BLOOMBERG FINANCIAL MARKETS FOR 30-YEAR TREASURY BOND AND 3-MONTH
TREASURY BILLS; MERRILL LYNCH 12-22 YEAR MUNICIPAL BOND INDEX.
5
<PAGE>
We kept average portfolio maturities/durations relatively long to take
advantage of declining interest rates through mid-December. As a defensive
measure, we then shortened durations as rates trended higher through March. In
early April, we modestly extended durations as rates declined from their peaks.
To summarize, our experience tells us market timers end up with speculators'
results or worse. So, we won't forecast where the bond market is heading over
the next six months. We do believe bonds are fundamentally attractive at current
levels. In general, the strategies we have employed over the last six months
have been productive. The following commentary provides greater detail on how
these strategies have been implemented in each of our funds.
MUNICIPAL MONEY FUND Short term tax-free instruments are generally affected
less by Federal Reserve actions and interest rate swings than commercial paper
or Treasury securities. However, we attempt to maximize opportunity by extending
weighted average portfolio maturity when rates are trending down and neutralize
interest rate risk by shortening average maturity when rates are rising. During
the six months ended April 30, 1997, the average maturity peaked at 82.4 days in
mid-February, declined to 56.6 days in early January, and closed the reporting
period at 68.7 days.
During the six months ended April 30, 1997, municipal issuance remained
moderate and demand remained stable. The current and effective (compounded)
yields for the Fund as of April 30, 1997, were 3.26% and 3.31%, respectively.
For an investor in the highest federal income tax bracket, this translates into
tax-equivalent current and effective yields of 5.40% and 5.55%.+
MUNICIPAL SECURITIES TRUST In response to changes in interest rate trends,
we lengthened weighted average portfolio duration through mid-December,
shortened durations through March, and modestly extended durations again in
April. At the beginning of this reporting period, the weighted average portfolio
duration was 4.7 years. It peaked at 6.2 years and as of April 30, 1997, it was
6.1 years.
We have continued to enjoy a favorable environment for municipal securities.
Credit upgrades have exceeded downgrades by a 3-1 margin. With the political
enthusiasm for a low flat rate federal income tax
6
<PAGE>
waning (campaign 96's flirtation with flat rate taxes temporarily unsettled the
municipal bond market), current municipal securities prices, in our opinion,
more accurately reflect economic value.
We continue to be over-weighted in high coupon, high-quality revenue bonds
(securities backed by dedicated income streams), which at April 30, 1997,
accounted for 62.8% of the portfolio. We favor essential service sectors like
water, sewer, and transportation bonds and are being increasingly selective in
the public power arena, where prospective deregulation has increased credit
risk. We also like Government Agency housing authority bonds. These bonds do
have extraordinary call risk. Consequently, we are very careful to choose those
securities in which, we believe, call risk is adequately reflected in pricing.
General obligation bonds (backed by the full faith and credit of the
government issuer), comprise 32.1% of the portfolio. Looking ahead, we are
concerned that Medicare and welfare reform will increase the financial burden on
county and local governments. For this reason, we will be carefully monitoring
the impact of new regulations on issuers in this sector. The remaining 3.5% of
the portfolio's investments are invested in pre-refunded bonds (high coupon
long-term bonds that have been refinanced at lower rates). Because these
securities are backed by U.S. Treasury securities held in escrow, they are
lower-yielding but involve minimal credit risks.
The 30-day SEC yield for the Fund as of April 30, 1997, was 4.42%. This can be
translated into a tax-equivalent yield of 7.32%, for an investor in the highest
federal income tax bracket.+
NEW YORK INSURED INTERMEDIATE FUND At the start of this reporting period,
the weighted average portfolio duration was 5.7 years. It peaked at 6.1 years,
and closed the six-month period ended April 30, 1997, at 5.9 years. Sector
allocation was somewhat similar to Municipal Securities Trust, with 53.2% of the
portfolio in revenue bonds, 42.2% in general obligation bonds, and 5.6% in
pre-refunded bonds.
The big news in the New York municipal bond market is Long Island Lighting's
(LILCO) impending issue of $59 billion in additional debt. The fear is that with
all this supply being dumped on the market in such a short time, New York
municipal bond prices across the board will suffer. We don't think that will be
the case. Crowding out in the market will most likely have a negative impact on
lower rated general
7
<PAGE>
obligation bonds like some New York City and New York State issues. However, we
expect that the high credit quality sector of the market where we invest should
be unscathed.
The Fund's 30-day SEC yield as of April 30, 1997, was 4.28%. For an investor
in the highest Federal, New York State, and New York City income tax brackets
(currently 46.7%), this can be translated into a tax-equivalent yield of 8.03%.+
Sincerely,
/s/ Theodore P. Giuliano
Theodore P. Giuliano
President and Trustee
Neuberger&Berman Income Funds
+Tax equivalent yield is the taxable effective yield that an investor would have
had to receive in order to realize the same level of yield after Federal taxes
at 39.6%, assuming that all of the fund's income is exempt from Federal income
taxes (in the case of New York Insured Intermediate Fund, exempt from Federal,
New York State, and New York City taxes in the highest bracket totalling a
combined 46.7%). The income may be subject to the alternative tax minimum for
some investors.
An investment in Municipal Money Fund, like all other mutual funds, is neither
insured nor guaranteed by the U.S. Government and there can be no assurance
that the Fund will be able to maintain a stable net asset value of $1.00 per
share. The return on an investment in Municipal Money Fund will fluctuate.
"Current yield" refers to the income generated by an investment in the Fund
over a seven day period. The income is then "annualized." The "effective yield"
will be slightly higher than the "current yield" because of the compounding
effect of this assumed reinvestment. Results represent past performance and do
not indicate future results.
Neuberger&Berman Management Inc. currently absorbs certain operating expenses
of Municipal Securities Trust and New York Intermediate Fund. Absent these
arrangements, which are subject to change, the 30-day SEC yield for Municipal
Securities Trust and New York Intermediate Fund would have been 3.96% and
2.92%, respectively.
8
<PAGE>
PERFORMANCE HIGHLIGHTS
TOTAL RETURN ILLUSTRATION
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL
SIX MONTH RETURNS(1)
PERIOD ---------------------
NEUBERGER&BERMAN INCEPTION ENDED SINCE
INCOME FUNDS DATE 4/30/97(1) 1 YR(1) 5 YR INCEPTION
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL SECURITIES TRUST(3) 7/9/87 +1.23% +4.23% +5.46% +6.19%
NEW YORK INSURED INTERMEDIATE FUND(3) 2/1/94 +0.93% +4.14% N/A +3.70%
</TABLE>
YIELD ILLUSTRATION
FOR THE 7 DAYS ENDED 4/30/97
<TABLE>
<CAPTION>
TAX-EQUIVALENT
CURRENT EFFECTIVE EFFECTIVE
YIELD(2) YIELD(2) YIELD(5)
- --------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL MONEY FUND(4) 3.26% 3.31% 5.55%
</TABLE>
1) One-year and average annual total returns are for periods ended April 30,
1997. Includes reinvestment of all dividends and other distributions. Results
represent past performance and do not guarantee future results. Investment
returns and principal may fluctuate and shares when redeemed may be worth
more or less than original cost.
2) "Current yield" refers to the income generated by an investment in the Fund
over a 7-day period. This income is then "annualized." The "effective yield"
is calculated similarly but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The "effective yield"
will be slightly higher than the "current yield" because of the compounding
effect of this assumed reinvestment. Yields of a money market fund will
fluctuate and past performance is no guarantee of future results.
3) Neuberger&Berman Management Inc.-Registered Trademark- voluntarily bears
certain operating expenses in excess of .65% of the average daily net assets
per annum of Neuberger&Berman Municipal Securities
Trust-Registered Trademark- ("Municipal Securities Trust") and
Neuberger&Berman New York Insured Intermediate Fund-Registered Trademark-
("New York Insured Intermediate"). These arrangements can be terminated upon
60 days' prior written notice to the appropriate Fund. Absent such
reimbursements, the total returns for the above stated periods would have
been +1.00%, +3.80%, +5.10%, and +5.16%, respectively, for Municipal
Securities Trust and +0.23%, +2.75%, and +2.54%, respectively, for New York
Insured Intermediate.
4) An investment in a money market fund, like all other mutual funds, is neither
insured nor guaranteed by the U.S. Government. There can be no assurance that
a money market fund will be able to maintain a stable net asset value of
$1.00 per share. The return on an investment in Neuberger&Berman Municipal
Money Fund-Registered Trademark- ("Municipal Money") will fluctuate.
5) Tax-equivalent effective yield is the taxable effective yield that an
investor would have had to receive in order to realize the same level of
yield after Federal taxes at the highest Federal tax rate, 39.6%, assuming
that all of the Fund's income is exempt from Federal income taxes.
A portion of the income of Municipal Money, Municipal Securities Trust, and
New York Insured Intermediate may be subject to the Federal alternative
minimum tax for certain investors.
9
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
Neuberger&Berman April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) FUND TRUST FUND
------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 137,965 $ 30,731 $ 9,516
Deferred organization costs (Note A) -- -- 14
Receivable for Trust shares sold 1 -- --
Receivable from administrator -- net (Note
B) -- 2 10
------------------------------------------------
137,966 30,733 9,540
------------------------------------------------
LIABILITIES
Dividends payable 6 42 12
Payable for Trust shares redeemed 119 26 --
Payable to administrator (Note B) 33 -- --
Accrued expenses 39 32 24
------------------------------------------------
197 100 36
------------------------------------------------
NET ASSETS at value $ 137,769 $ 30,633 $ 9,504
------------------------------------------------
NET ASSETS consist of:
Par value $ 138 $ 3 $ 1
Paid-in capital in excess of par value 137,730 31,393 9,974
Accumulated net realized losses on
investment (99) (762) (362)
Net unrealized depreciation in value of
investment -- (1) (109)
------------------------------------------------
NET ASSETS at value $ 137,769 $ 30,633 $ 9,504
------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 137,868 2,868 965
------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $1.00 $10.68 $9.85
------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
STATEMENTS OF OPERATIONS
Neuberger&Berman For the Six Months Ended April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED) FUND TRUST FUND
------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 2,480 $ 859 $ 229
------------------------------------------
Expenses:
Administration fee (Note B) 184 46 13
Amortization of deferred organization and
initial offering expenses (Note A) -- -- 4
Auditing fees 4 4 4
Custodian fees 5 5 5
Legal fees 12 11 11
Registration and filing fees 23 20 --
Shareholder reports 9 6 5
Shareholder servicing agent fees (Note B) 13 10 7
Trustees' fees and expenses 6 3 3
Miscellaneous 2 1 1
Expenses from corresponding Portfolio (Notes
A & B) 253 85 46
------------------------------------------
Total expenses 511 191 99
Deduct -- expenses reimbursed by
administrator (Note B) -- (78) (67)
------------------------------------------
Total net expenses 511 113 32
------------------------------------------
Net investment income 1,969 746 197
------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM CORRESPONDING PORTFOLIO (NOTE A)
Net realized gain on investment securities -- 170 11
Net realized loss on financial futures
contracts -- (49) --
Change in net unrealized appreciation
(depreciation) of investment securities -- (502) (117)
Change in net unrealized depreciation of
financial futures contracts -- 75 --
------------------------------------------
Net loss on investments from corresponding
Portfolio (Note A) -- (306) (106)
------------------------------------------
Net increase in net assets resulting from
operations $ 1,969 $ 440 $ 91
------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
MUNICIPAL
MONEY
FUND
Six Months
Ended Year
April 30, Ended
1997 October 31,
(000'S OMITTED) (UNAUDITED) 1996
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 1,969 $ 4,569
Net realized gain (loss) on
investments from corresponding
Portfolio (Note A) -- 2
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) -- --
-----------------------------
Net increase in net assets resulting
from operations 1,969 4,571
-----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,969) (4,569)
-----------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 111,204 240,030
Proceeds from reinvestment of
dividends 1,936 4,508
Payments for shares redeemed (107,970) (272,748)
-----------------------------
Net increase (decrease) from Trust
share transactions 5,170 (28,210)
-----------------------------
NET INCREASE (DECREASE) IN NET ASSETS 5,170 (28,208)
NET ASSETS:
Beginning of period 132,599 160,807
-----------------------------
End of period $ 137,769 $ 132,599
-----------------------------
NUMBER OF TRUST SHARES:
Sold 111,204 240,030
Issued on reinvestment of dividends 1,936 4,508
Redeemed (107,970) (272,748)
-----------------------------
Net increase (decrease) in shares
outstanding 5,170 (28,210)
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL INSURED
SECURITIES INTERMEDIATE
TRUST FUND
Six Months Six Months
Ended Year Ended Year
April 30, Ended April 30, Ended
1997 October 31, 1997 October 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 746 $ 1,785 $ 197 $ 408
Net realized gain (loss) on
investments from corresponding
Portfolio (Note A) 121 227 11 (27)
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) (427) (432) (117) (40)
-------------------------------------------------------------
Net increase in net assets resulting
from operations 440 1,580 91 341
-------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (746) (1,785) (197) (408)
-------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 2,268 6,414 565 2,594
Proceeds from reinvestment of
dividends 489 1,202 123 236
Payments for shares redeemed (10,739) (12,810) (713) (4,623)
-------------------------------------------------------------
Net increase (decrease) from Trust
share transactions (7,982) (5,194) (25) (1,793)
-------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (8,288) (5,399) (131) (1,860)
NET ASSETS:
Beginning of period 38,921 44,320 9,635 11,495
-------------------------------------------------------------
End of period $ 30,633 $ 38,921 $ 9,504 $ 9,635
-------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 210 595 57 261
Issued on reinvestment of dividends 45 111 12 24
Redeemed (996) (1,189) (71) (467)
-------------------------------------------------------------
Net increase (decrease) in shares
outstanding (741) (483) (2) (182)
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Funds
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Municipal Money Fund ("Municipal Money"),
Neuberger&Berman Municipal Securities Trust ("Municipal Securities Trust"),
and Neuberger&Berman New York Insured Intermediate Fund ("New York Insured
Intermediate") (collectively, the "Funds") are separate operating series of
Neuberger&Berman Income Funds (the "Trust"), a Delaware business trust
organized pursuant to a Trust Instrument dated December 23, 1992. The Trust
is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended, and its shares are registered
under the Securities Act of 1933, as amended. The trustees of the Trust may
establish additional series or classes of shares without the approval of
shareholders.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
Each Fund seeks to achieve its investment objective by investing all of
its net investable assets in its corresponding Portfolio of Income Managers
Trust (each a "Portfolio") having the same investment objective and policies
as the Fund. The value of each Fund's investment in its corresponding
Portfolio reflects that Fund's proportionate interest in the net assets of
that Portfolio (100% for each Fund at April 30, 1997). The performance of
each Fund is directly affected by the performance of its corresponding
Portfolio. The financial statements of each Portfolio, including the Schedule
of Investments, are included elsewhere in this report and should be read in
conjunction with the corresponding Fund's financial statements.
It is the policy of Municipal Money to maintain a continuous net asset
value per share of $1.00; the Fund has adopted certain investment, valuation,
and dividend and distribution policies, which conform to general industry
practice, to enable it to do so. However, there is no assurance the Fund will
be able to maintain a stable net asset value per share.
2) PORTFOLIO VALUATION: Each Fund records its investment in its corresponding
Portfolio at value. Investment securities held by each Portfolio are valued
by Income Managers Trust as indicated in the notes following the Portfolios'
Schedule of Investments.
3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate
entity for Federal income tax purposes. It is the policy of each Fund to
continue to qualify as a regulated investment company by complying with the
provisions available to certain investment companies, as defined in
applicable sections of the Internal
14
<PAGE>
Revenue Code, and to make distributions of investment company taxable income
and net capital gains (after reduction for any amounts available for Federal
income tax purposes as capital loss carryforwards) sufficient to relieve it
from all, or substantially all, Federal income taxes. Accordingly, each Fund
paid no Federal income taxes and no provision for Federal income taxes was
required.
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income, net of
Portfolio expenses, daily on its investment in its corresponding Portfolio.
It is the policy of each Fund to declare dividends from net investment income
on each business day; such dividends are paid monthly. Distributions from net
realized capital gains, if any, are normally distributed in December. To the
extent each Fund's net realized capital gains, if any, can be offset by
capital loss carryforwards ($73,760 and $25,578 expiring in 1997 and 2003,
respectively, for Municipal Money, $281,419 and $676,750 expiring in 2002 and
2003, respectively, for Municipal Securities Trust, and $240,090, $94,248,
and $38,402 expiring in 2002, 2003, and 2004, respectively, for New York
Insured Intermediate, determined as of October 31, 1996), it is the policy of
each Fund not to distribute such gains.
Each Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) ORGANIZATION EXPENSES: Expenses incurred by New York Insured Intermediate in
connection with its organization are being amortized on a straight-line basis
over a five-year period. At April 30, 1997, the unamortized balance of such
expenses amounted to $13,965.
6) EXPENSE ALLOCATION: Each Fund bears all costs of its operations. Expenses
incurred by the Trust with respect to any two or more Funds are allocated in
proportion to the net assets of such Funds, except where a more appropriate
allocation of expenses to each Fund can otherwise be made fairly. Expenses
directly attributable to a Fund are charged to that Fund.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of each Portfolio are allocated pro rata among its respective
Funds and any other investors in the Portfolio.
NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS, AND OTHER TRANSACTIONS
WITH AFFILIATES:
Each Fund retains Neuberger&Berman Management Incorporated ("Management") as
its administrator under an Administration Agreement ("Agreement") dated as of
May 1, 1995. Pursuant to this Agreement each Fund pays Management an
15
<PAGE>
administration fee at the annual rate of .27% of that Fund's average daily net
assets. Each Fund indirectly pays for investment management services through its
investment in its corresponding Portfolio (see Note B of Notes to Financial
Statements of the Portfolios). The Agreement provides that, if with respect to
any fiscal year of each Fund, its total operating expenses plus its pro rata
portion of its corresponding Portfolio's operating expenses (including the fees
payable to Management but excluding interest, taxes, brokerage commissions, and
extraordinary expenses) ("Operating Expenses") exceed the most restrictive of
the expense limitations imposed by securities laws of the states in which such
Fund's shares are qualified for sale, the administration fees for that fiscal
year will be reduced by the amount of such excess, provided that Management has
no obligation to reimburse the Fund for any such expenses that exceed the
administration fee. The most restrictive expense limitation applicable during
the fiscal year ended October 31, 1996, to which Municipal Money and Municipal
Securities Trust were subject, was 2 1/2% of the first $30 million of average
daily net assets, 2% of the next $70 million of average daily net assets, and
1 1/2% of any additional average daily net assets. As of October 1996, the
expense limitations imposed by state securities laws no longer apply.
Management has voluntarily undertaken to reimburse Municipal Securities Trust
and New York Insured Intermediate for their respective Operating Expenses which
exceed, in the aggregate, .65% per annum of their respective average daily net
assets (the "Expense Limitation"). Each undertaking is subject to termination by
Management upon at least 60 days' prior written notice to the appropriate Fund.
For the six months ended April 30, 1997, such excess expenses amounted to
$78,493 and $66,866 for Municipal Securities Trust and New York Insured
Intermediate, respectively. New York Insured Intermediate has agreed to repay
Management through October 31, 1998, for its excess Operating Expenses
previously reimbursed by Management, so long as its annual Operating Expenses
during that period do not exceed the Expense Limitation. For the six months
ended April 30, 1997, there were no reimbursed expenses repaid to Management.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger&Berman, LLC ("Neuberger"), a member firm of The New York
Stock Exchange and sub-adviser to each Portfolio. Several individuals who are
officers and/or trustees of the Trust are also principals of Neuberger and/or
officers and/or directors of Management.
Each Fund also has a distribution agreement with Management. Management
receives no compensation therefor and no commissions for sales or redemptions of
shares of beneficial interest of each Fund.
Each Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statements
of Operations under the caption Expenses from corresponding Portfolio, was a
reduction of $4,298,
16
<PAGE>
$1,385, and $837 for Municipal Money, Municipal Securities Trust, and New York
Insured Intermediate, respectively, which is less than .01% of each Fund's
average daily net assets.
Each Fund has an expense offset arrangement in connection with its
shareholder servicing agent contract. The impact of this arrangement, reflected
in the Statements of Operations under the caption Shareholder servicing agent
fees, was a reduction of $702, $541, and $139 for Municipal Money, Municipal
Securities Trust, and New York Insured Intermediate, respectively, which is less
than .01% of each Fund's average daily net assets.
NOTE C -- INVESTMENT TRANSACTIONS:
During the six months ended April 30, 1997, additions and reductions in each
Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
- ------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL MONEY $ 98,889,153 $95,873,651
MUNICIPAL SECURITIES TRUST 1,230,799 9,929,218
NEW YORK INSURED INTERMEDIATE 470,541 679,464
</TABLE>
NOTE D -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of each Fund without audit by independent auditors. Annual reports
contain audited financial statements.
17
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Fund
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Six Months Ended
April 30,
1997 Year Ended October 31,
(UNAUDITED)(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $.9993 $.9994 $.9995 $.9996 $.9995 $.9989
-----------------------------------------------------------------
Income From Investment Operations
Net Investment Income .0142 .0285 .0324 .0204 .0184 .0263
Net Gains or Losses on Securities -- (.0001) (.0001) (.0001) .0001 .0006
-----------------------------------------------------------------
Total From Investment Operations .0142 .0284 .0323 .0203 .0185 .0269
-----------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.0142) (.0285) (.0324) (.0204) (.0184) (.0263)
-----------------------------------------------------------------
Net Asset Value, End of Period $.9993 $.9993 $.9994 $.9995 $.9996 $.9995
-----------------------------------------------------------------
Total Return(2) +1.42%(3) +2.89% +3.29% +2.06% +1.86% +2.66%
-----------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $137.8 $132.6 $160.9 $150.3 $181.6 $195.6
-----------------------------------------------------------------
Ratio of Expenses to Average Net Assets .74%(4) .72% .71% .73% .74% .67%
-----------------------------------------------------------------
Ratio of Net Investment Income to Average
Net Assets 2.87%(4) 2.86% 3.24% 2.02% 1.85% 2.63%
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
18
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Securities Trust
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Six Months Ended
April 30,
1997 Year Ended October 31,
(UNAUDITED)(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.78 $10.83 $10.26 $11.12 $10.53 $10.39
-----------------------------------------------------------------
Income From Investment Operations
Net Investment Income .23 .47 .47 .46 .48 .54
Net Gains or Losses on Securities (both
realized and unrealized) (.10) (.05) .57 (.73) .68 .14
-----------------------------------------------------------------
Total From Investment Operations .13 .42 1.04 (.27) 1.16 .68
-----------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.23) (.47) (.47) (.46) (.48) (.54)
Distributions (from capital gains) -- -- -- (.12) (.09) --
Distributions (in excess of capital
gains) -- -- -- (.01) -- --
-----------------------------------------------------------------
Total Distributions (.23) (.47) (.47) (.59) (.57) (.54)
-----------------------------------------------------------------
Net Asset Value, End of Period $10.68 $10.78 $10.83 $10.26 $11.12 $10.53
-----------------------------------------------------------------
Total Return(2) +1.23%(3) +3.92% +10.35% -2.57% +11.30% +6.72%
-----------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 30.6 $ 38.9 $ 44.3 $ 51.1 $105.2 $ 37.0
-----------------------------------------------------------------
Ratio of Expenses to Average Net
Assets(5) .65%(4) .65% .65% .65% .62% .50%
-----------------------------------------------------------------
Ratio of Net Investment Income to Average
Net Assets(5) 4.34%(4) 4.32% 4.45% 4.24% 4.33% 5.16%
-----------------------------------------------------------------
Portfolio Turnover Rate(6) -- -- -- -- 35% 46%
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
19
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
New York Insured Intermediate Fund
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with its
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Six Months Ended Period from
April 30, Year Ended February 1, 1994(7)
1997 October 31, to October 31,
(UNAUDITED) 1996 1995 1994
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.96 $10.01 $ 9.25 $10.00
-------------------------------------------------------
Income From Investment Operations
Net Investment Income .20 .40 .41 .29
Net Gains or Losses on Securities (both
realized and unrealized) (.11) (.05) .76 (.75)
-------------------------------------------------------
Total From Investment Operations .09 .35 1.17 (.46)
-------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.20) (.40) (.41) (.29)
-------------------------------------------------------
Net Asset Value, End of Period $9.85 $ 9.96 $10.01 $ 9.25
-------------------------------------------------------
Total Return(2) +0.93%(3) +3.58% +12.88% -4.63%(3)
-------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 9.5 $ 9.6 $ 11.5 $ 14.7
-------------------------------------------------------
Ratio of Expenses to Average Net
Assets(5) .66%(4) .66% .66% .65%(4)
-------------------------------------------------------
Ratio of Net Investment Income to Average
Net Assets(5) 4.10%(4) 4.03% 4.24% 4.10%(4)
-------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
20
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Funds
1) The per share amounts and ratios which are shown reflect income and expenses,
including each Fund's proportionate share of its corresponding Portfolio's
income and expenses.
2) Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of each Fund during each fiscal
period and assumes dividends and other distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. For Municipal
Securities Trust and New York Insured Intermediate, total return would have
been lower if Management had not reimbursed certain expenses.
3) Not annualized.
4) Annualized.
5) After reimbursement of expenses by Management as described in Note B of Notes
to Financial Statements. Had Management not undertaken such action the
annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended October 31,
MUNICIPAL SECURITIES TRUST 1997 1996 1995 1994 1993 1992
--- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Expenses 1.11% 1.04% .98% .82% 1.04% 1.16%
--- ----- ----- ----- ----- -----
Net Investment Income 3.88% 3.93% 4.12% 4.07% 3.91% 4.50%
--- ----- ----- ----- ----- -----
</TABLE>
<TABLE>
<CAPTION>
Period from
Six Months February 1,
Ended Year Ended 1994 to
April 30, October 31, October 31,
NEW YORK INSURED INTERMEDIATE 1997 1996 1995 1994
--- ----- ----- ---
<S> <C> <C> <C> <C>
Expenses 2.06% 1.97% 1.83% 1.53%
--- ----- ----- ---
Net Investment Income 2.70% 2.72% 3.07% 3.22%
--- ----- ----- ---
</TABLE>
6) The Fund transferred all of its investment securities into Neuberger&Berman
Municipal Securities Portfolio on July 2, 1993. After that date the Fund
invested only in Neuberger&Berman Municipal Securities Portfolio, and that
Portfolio, rather than the Fund, engaged in securities transactions.
Therefore, after that date the Fund had no portfolio turnover rate. Portfolio
turnover rates for periods ending after July 2, 1993, are included elsewhere
in Neuberger&Berman Municipal Securities Portfolio's Financial Highlights.
7) The date investment operations commenced.
21
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- PRE-REFUNDED
BACKED BY U.S. GOVERNMENT
SECURITIES (4.5%)
$2,000 Chicago (IL) Pub. Bldg. Comm. Rev. (Comm. College
Dist. No. 508-A), 7.70%, due 1/1/08 P/R 1/1/98 Aaa AAA $ 2,093
1,000 Minnesota G.O., 7.10%, due 8/1/00 P/R 8/1/97 Aaa 1,009
2,000 New York Metro. Trans. Au. Transit Fac. Svc.
Contract Rev., Ser. 1987-1, 8.50%, due 7/1/17 P/R
7/1/97 Aaa AAA 2,056
1,000 Texas Muni. Pwr. Agcy. Ref. Rev., Ser. 1987,
7.25%, due 9/1/11 P/R 9/1/97 1,032
---------------
6,190
---------------
TAX-EXEMPT SECURITIES -- ESCROWED IN
U.S. GOVERNMENT SECURITIES (0.7%)
1,040 New York Dorm. Au. Spec. Oblig. Rev. (St. Univ.
Dorm. Fac.), Ser. 1995 A, 3.90%, due 7/1/97 Aaa AAA 1,040
---------------
MUNICIPAL NOTES (8.4%)
2,000 Broward Co. (FL) Sch. Dist. RANS, Ser. 1997 C,
4.50%, due 4/22/98 MIG 1 SP-1+ 2,011
3,550 Orange Co. (FL) Sch. Dist. TANS, Ser. 1996, 4.00%,
due 9/15/97 MIG 1 3,555
3,000 Tennessee Local Dev. Au. St. Loan Prog. BANS, Ser.
1996 A, 4.00%, due 5/29/97 MIG 1 SP-1+ 3,001
3,000 Texas TRANS, 4.75%, due 8/29/97 MIG 1 SP-1+ 3,008
---------------
11,575
---------------
TAX-EXEMPT SECURITIES -- BACKED
BY LETTERS OF CREDIT (2.9%)
MORGAN GUARANTY TRUST CO.
3,000 Chicago (IL) G.O. Notes, Ser. 1997, 3.65%, due
1/31/99 Putable 2/5/98 MIG 1 SP-1+ 3,000
STUDENT LOAN MARKETING ASSOC.
1,000 Greater East Texas Higher Ed. Au., Inc. Std. Loan
Ref. Rev., Ser. 1995 A, 4.10%, due 5/1/11 Putable
5/1/98 VMIG 1 A-1+ 1,000
---------------
4,000
---------------
</TABLE>
22
<PAGE>
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- BACKED
BY INSURANCE (2.9%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
$1,000 Houston (TX) Wtr. & Swr. Sys. Prior Lien Rev.,
Ser. 1989 A, 6.75%, due 12/1/97 Aaa AAA $ 1,018
FINANCIAL GUARANTY INSURANCE CO.
1,000 Chicago (IL) Proj. & Ref. G.O., Ser. 1995 B,
5.50%, due 1/1/98 Aaa AAA 1,012
2,000 Connecticut Spec. Assessment Unemployment Comp.
Adv. Fund Rev., Ser. 1993 C, 3.90%, due 11/15/01
Putable 7/1/97 VMIG 1 A-1+ 2,000
---------------
4,030
---------------
TAX-EXEMPT SECURITIES -- OTHER (11.6%)
1,000 Chester Co. (PA) Solid Waste Au. Gtd. Rev., Ser.
1990 B, 6.65%, due 1/1/98 Aa AA 1,019
2,000 Chicago (IL) Park Dist. Corp. Purp. Tax
Anticipation Warrants, Ser. 1996, 4.70%, due
9/30/97 MIG 1 SP-1+ 2,009
1,000 Houston (TX) Ind. Sch. Dist. Pub. Prop. Fin.
Contractual Oblig., Ser. 1993, 3.80%, due 7/15/97 Aa3 AA+ 1,001
1,000 Maricopa Co. (AZ) Phoenix Union High Sch. Dist.
No. 210 Sch. Imp. G.O., Ser. 1995 A, 5.75%, due
7/1/97 Aa AA 1,003
1,500 Memphis (TN) Gen. Imp. Ref. G.O., Ser. 1992,
5.10%, due 9/1/97 Aa AA 1,507
2,000 Montgomery Co. (MD) Hsg. Opportunities Comm.
Single Family Mtge. Rev., Ser. 1996 G, 3.625%, due
7/1/17 Putable 12/11/97 VMIG 1 2,000
1,500 Nashville & Davidson Co. (TN) Metro. Gov't. Elec.
Sys. Rev., Ser. 1992 B, 4.60%, due 5/15/97 Aa AA 1,500
1,000 Oregon Hsg. & Comm. Svc. Dept. Mtge. Rev.
(Single-Family Mtge. Prog.), Ser. 1996 K, 3.65%,
due 12/11/97 VMIG 1 1,000
2,000 Richardson (TX) Ind. Sch. Dist., Ser. A, 3.62%,
due 8/15/22 Putable 9/4/97 Aaa AAA 2,000
1,000 Tennessee Hsg. Dev. Agcy. Homeownership Prog.,
Ser. 1997-1, 3.75%, due 11/1/28 Putable 2/19/98 A-1+ 1,000
2,000 Washington Var. Purp. Ref. G.O., Ser. R-94 A,
3.90%, due 8/1/97 Aa AA 2,001
---------------
16,040
---------------
</TABLE>
23
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
TAX-EXEMPT CASH EQUIVALENT
SECURITIES (5.2%)
$1,200 Becker (MN) PCR (No. States Pwr. Co.-Sherburne Co.
Generating Sta. Unit 3 Proj.), Ser. 1993 B, 3.50%,
TECP due 6/13/97 VMIG 1 A-1+ $ 1,200
1,500 Carlton (WI) PCR (Wisconsin Pwr. & Lt. Co. Proj.),
Ser. 1988, 4.60%, VRDN due 8/1/15 VMIG 1 1,500
300 Gulf Coast (TX) IDA Marine Term. Rev. (Amoco Oil
Co. Proj.), Ser. 1993, 4.10%, VRDN due 4/1/28 VMIG 1 A-1+ 300
800 Minneapolis (MN) Comm. Dev. Agcy. Ref. PCR (No.
States Pwr. Co. Proj.), Ser. 1985, 4.60%, VRDN due
3/1/11 P-1 A-1+ 800
3,000 Montgomery (AL) IDB Poll. Ctrl. & Solid Waste
Disp. Ref. Rev. (Gen. Elec. Co. Proj.), Ser. 1990,
3.45%, TECP due 5/15/97 P-1 A-1+ 3,000
400 Parish of St. Charles (LA) PCR (Shell Oil Co.
Norco Proj.), Ser. 1991 & 1993, 4.10%, VRDN due
11/1/21 & 9/1/23 VMIG 1 A-1+ 400
---------------
7,200
---------------
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED
BY LETTERS OF CREDIT (60.0%)
ABN AMRO BANK NV
4,000 Phenix City (AL) IDB Env. Imp. Rev. (Mead Coated
Board Proj.), Ser. 1988, 3.55%, TECP due 6/10/97 P-1 4,000
BANK OF AMERICA
500 California Hlth. Fac. Au. Hosp. Rev. (N.T. Enloe
Mem. Hosp.), Ser. 1985 A, 4.10%, VRDN due 1/1/16 A-1+ 500
BANK OF NOVA SCOTIA
100 Port of Portland (OR) Ref. PCR (Reynolds Metals
Co. Proj.), Ser. 1985, 3.95%, VRDN due 12/1/09 P-1 100
BARCLAYS BANK INT'L., LTD.
3,970 Beaver Co. (PA) Ind. Dev. Au. PCR (Duquesne Lt.
Co. Proj.), 3.70%, TECP due 8/6/97 P-1 A-1+ 3,970
CANADIAN IMPERIAL BANK OF COMMERCE
2,000 North Carolina Eastern Muni. Pwr. Agcy., 3.35%,
TECP due 5/6/97 VMIG 1 A-1+ 2,000
1,000 St. Louis (MO) Ind. Dev. Au. IDR (Svc. Merchandise
Co., Inc. Proj.), 3.65%, VRDN due 9/15/98 A-1+ 1,000
</TABLE>
24
<PAGE>
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
CHASE MANHATTAN BANK, N.A.
$2,000 King Co. (WA) Ltd. Tax G.O. (Baseball Stadium),
Ser. 1997 B, 4.65%, VRDN due 12/1/11 VMIG 1 A-1+ $ 2,000
CITIBANK, N.A.
1,100 Austin Co. (TX) Ind. Dev. Corp. IDR (Justin Ind.,
Inc. Proj.), Ser. 1984, 4.50%, VRDN due 12/1/14 P-1 1,100
COMMERZBANK AG
4,700 Houston (TX) Arpt. Sys. Rev., Ser. A, 3.50% -
3.75%, TECP due 6/10/97-8/7/97 P-1 A-1+ 4,700(3)
COMMONWEALTH BANK OF AUSTRALIA
4,400 Pendleton Co. (KY) Multi-County Lease Rev.
(Kentucky Assoc. of Cos. Leasing Trust Prog.),
Ser. 1989, 3.40% & 3.45%, TECP due 5/7/97 &
6/12/97 A-1+ 4,400
CREDIT COMMERCIAL DE FRANCE
350 Elkhart Co. (IN) Econ. Dev. Rev. (Pace Amer. Inc.
Proj.), 4.80%, VRDN due 1/1/13 VMIG 1 350
150 Indiana Emp. Dev. Comm. Econ. Dev. Rev. (Metal
Svc. & Supply Inc.), 4.80%, VRDN due 1/1/13 VMIG 1 150
135 Indiana Emp. Dev. Comm. Econ. Dev. Rev. (Triangle
Ventures Proj.), Ser. 1988, 4.80%, VRDN due 1/1/14 VMIG 1 135
150 South Carolina Jobs Econ. Dev. Au. Rev. (Brown
Packing Co., Inc.), Ser. 1988 B, 4.90%, VRDN due
4/1/99 VMIG 1 150
150 South Carolina Jobs Econ. Dev. Au. Rev. (Kent Mfg.
Co. Proj.), Ser. 1988 A, 4.80%, VRDN due 4/7/99 VMIG 1 150
50 South Carolina Jobs Econ. Dev. Au. Rev. (Mar-Mac
Mfg. Co., Inc. Proj.), Ser. 1988 A, 4.90%, VRDN
due 4/7/99 VMIG 1 50
250 South Carolina Jobs Econ. Dev. Au. Rev. (Regal-
Beloit Corp. Proj.), Ser. 1987 A, 4.90%, VRDN due
5/7/01 P-1 250
100 South Carolina Jobs Econ. Dev. Au. Rev. (Sudan &
Delta Prop.), Ser. A, 4.90%, VRDN due 1/1/04 VMIG 1 100
350 South Carolina Jobs Econ. Dev. Au. Rev. (Phoenix
Finishing Co.), Ser. B, 4.90%, VRDN due 4/1/04 VMIG 1 350
600 South Carolina Jobs Econ. Dev. Au. Rev. (Osmose
Wood Preserving), Ser. B, 4.80%, VRDN due 12/1/04 P-1 600
</TABLE>
25
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
$ 350 South Carolina Jobs Econ. Dev. Au. Rev. (Edens 321
Partnership Proj.), Ser. 1987 A, 4.90%, VRDN due
11/7/07 P-1 $ 350
600 South Carolina Jobs Econ. Dev. Au. Rev. (Florence
RHF Hsg., Inc. Proj.), Ser. 1987 A, 4.75%, VRDN
due 11/7/07 P-1 600
CREDIT SUISSE
1,200 Hubbard Co. (MN) Solid Waste Disp. Rev. (Potlatch
Corp. Proj.), Ser. 1990, 4.60%, VRDN due 8/1/14 A-1+ 1,200
1,000 Jacksonville (FL) Elec. Au., Ser. D-1, 3.60%, TECP
due 5/7/97 P-1 A-1+ 1,000
100 Kansas City (KS) Ind. Ref. Rev. (PQ Corp.-Kansas
City Proj.), Ser. 1985, 4.15%, VRDN due 8/1/15 VMIG 1 100
400 Montgomery Co. (TX) Ind. Dev. Corp. IDR (Dal-Tile
Corp.), Ser. 1986 B, 4.15%, VRDN due 12/1/03 A-1+ 400
100 Nashville (TN) Metro. Arpt. Au. Spec. Fac. Ref.
Rev. (Amer. Airlines Inc., Proj.), Ser. 1985 A,
3.95%, VRDN due 10/1/12 A-1+ 100
500 Salt Lake City (UT) Sub. Arpt. Rev., Ser. 1994 A,
4.50%, VRDN due 6/1/98 VMIG 1 A-1+ 500
1,000 Texas Capital Hlth. Fac. Dev. Corp. (Island on
Lake Travis Ltd. Proj.), 4.50%, VRDN due 12/1/16 A-1+ 1,000
1,000 Wake Co. (NC) Ind. Fac. & Poll. Ctrl. Fin. Au. PCR
(Carolina Pwr. & Lt. Co. Proj.), Ser. 1985 A,
4.50%, VRDN due 5/1/15 A-1+ 1,000
600 Warren (AR) Solid Waste Disp. Rev. (Potlatch Corp.
Proj.), Ser. 1993, 4.60%, VRDN due 4/1/12 A-1+ 600
DEUTSCHE BANK AG
2,000 Burlington (KS) Ref. & Imp. PCR (Kansas City Pwr.
& Lt. Co. Proj.), Ser. 1987 B, 3.65%, TECP due
5/6/97 P-1 A-1+ 2,000
1,000 New Hampshire Ind. Dev. Au. PCR (Connecticut Lt. &
Pwr. Co. Proj.), Ser. 1986, 4.65%, VRDN due
11/1/16 VMIG 1 1,000
DRESDNER BANK AG
4,700 Allegheny (PA) Ind. Dev. Au. PCR, 3.40%, TECP due
5/7/97 & 5/8/97 P-1 A-1+ 4,700
</TABLE>
26
<PAGE>
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
HARRIS TRUST & SAVINGS BANK
$ 800 Illinois Dev. Fin. Au. IDR (Grayhill, Inc. Proj.),
Ser. 1995 C, 4.80%, VRDN due 2/1/05 A-1+ $ 800
1,000 Illinois Dev. Fin. Au. IDR (Overton Gear & Tool
Corp. Proj.), Ser. 1994, 4.80%, VRDN due 10/1/08 A-1+ 1,000
MORGAN GUARANTY TRUST CO.
2,000 North Carolina Muni. Pwr. Agcy. No. 1 Catawba
Elec. Rev., Ser. A, 3.45%, TECP due 5/16/97 P-1 A-1+ 2,000(4)
1,000 Seattle (WA) Muni. Lt. & Pwr. Rev., Ser. 1991 B,
3.60%, TECP due 11/26/97 A-1+ 1,000
NATIONAL WESTMINSTER BANK PLC
2,000 Carbon Co. (PA) IDA Res. Rec. Rev. (Panther Creek
Partners Proj.), Ser. 1990 B, 3.55%, TECP due
5/5/97 P-1 A-1+ 2,000
1,200 Hillsborough (FL) Aviation Au. Rev. (Tampa Int'l.
Arpt.), 3.70%, TECP due 8/12/97 P-1 A-1+ 1,200
2,000 Marion Co. (WV) Comm. Solid Waste Disp. Fac. Rev.
(Grant Town Cogeneration Proj.), Ser. 1990 A, B, &
D, 4.60%, VRDN due 10/1/17 VMIG 1 A-1+ 2,000
1,000 Rhode Island Std. Loan Au. Prog. Rev., 1st Ser.
1995, 4.50%, VRDN due 7/1/19 A-1+ 1,000
NATIONSBANK OF FLORIDA, N.A.
2,500 Orange Co. (FL) G.O., Ser. A, 3.65%, TECP due
7/24/97 P-1 A-1+ 2,500
NORTHERN TRUST CO.
5,100 Illinois Hlth. Fac. Au. Rev.
(Rush-Presbyterian-St. Luke's Med. Ctr. Oblig.
Group), Ser. 1989 A, 3.45%, due 5/15/97-6/17/97 VMIG 1 A-1+ 5,100
NORWEST BANK
800 New Ulm (MN) Hosp. Ref. Rev. (Hlth. Central Sys.
Proj.), Ser. 1985, 4.40%, VRDN due 8/1/14 A-1+ 800
PNC BANK N.A.
400 Florida HFA Multi-Family Hsg. Rev. (Falls of
Venice Proj.), Ser. 1987 E, 4.70%, VRDN due
12/1/11 P-1 A-1 400
ROYAL BANK OF CANADA
200 Lone Star (TX) Arpt. Imp. Rev. (Amer. Airlines,
Inc. Proj.), Ser. 1984 A-3, 3.95%, VRDN due
12/1/14 VMIG 1 200
</TABLE>
27
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
SOCIETE GENERALE
$1,900 Chicago (IL) O'Hare Int'l. Arpt. Spec. Fac. Rev.
(Compagnie Nationale Air France Proj.), Ser. 1990,
4.60%, VRDN due 5/1/18 A-1+ $ 1,900
1,000 Harris Co. (TX) Hlth. Fac. Dev. Corp. Hosp. Rev.
(Mem. Hosp. Sys. Proj.), Ser. 1994 B, 3.45%, TECP
due 6/2/97 VMIG 1 1,000
1,000 Illinois Toll Hwy. Au. Ref. Rev., Ser. 1993 B,
4.40%, VRDN due 1/1/10 VMIG 1 A-1+ 1,000
100 Indianapolis (IN) Multi-Family Hsg. Ref. Rev.
(Canal Square Proj.), Ser. 1989, 4.50%, VRDN due
12/1/15 VMIG 1 100
STUDENT LOAN MARKETING ASSOC.
200 Colorado Std. Oblig. Bond Au. Std. Loan Rev., Ser.
1993 A, 4.40%, VRDN due 7/1/99 VMIG 1 A-1+ 200
300 Nebraska Higher Ed. Loan Prog., Inc. Std. Loan
Prog. Rev., Ser. 1986 A, 4.60%, VRDN due 12/1/16 A-1+ 300
1,600 Panhandle-Plains (TX) Higher Ed. Au., Inc. Std.
Loan Rev., Ser. 1995 A, 4.50%, VRDN due 6/1/25 VMIG 1 1,600
SWISS BANK CORP.
200 Hapeville (GA) Dev. Au. IDR (Hapeville Hotel Ltd.
Partnership Proj.), Ser. 1985, 4.10%, VRDN due
11/1/15 P-1 200
1,150 Pennsylvania Energy Dev. Au. Rev. (B & W Ebensburg
Proj.), Ser. 1986, 4.50%, VRDN due 12/1/11 VMIG 1 1,150
3,800 Port of Port Arthur (TX) Navigation Dist. of
Jefferson Co. PCR (Star Enterprise Proj.), Ser.
1994, 4.55%, VRDN due 4/1/14 A-1+ 3,800
1,000 West Virginia Pub. Energy Au. Rev. (Morgantown
Energy Assoc. Proj.), Ser. 1989 A, 3.60%, TECP due
5/21/97 A-1+ 1,000
TORONTO DOMINION BANK
1,000 Brownsville (TX) Util. Sys., Ser. A, 3.55%, TECP
due 5/14/97 P-1 A-1+ 1,000
1,000 Burlington (KS) Ref. & Imp. PCR (Kansas City Pwr.
& Lt. Co. Proj.), Ser. 1985 A, 3.35%, TECP due
5/13/97 P-1 A-1+ 1,000
1,000 Crossett (AR) PCR (Georgia-Pacific Corp. Proj.),
Ser. 1984, 4.60%, VRDN due 10/1/07 P-1 1,000
</TABLE>
28
<PAGE>
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(2)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
$2,000 Ohio Air Quality Dev. Au. PCR (Duquesne Lt. Co.
Proj.), Ser. 1988, 3.50%, TECP due 6/6/97 A-1+ $ 2,000
1,000 Ohio Wtr. Dev. Au. PCR (Duquesne Lt. Co. Proj.),
Ser. 1988, 3.50%, TECP due 6/6/97 A-1+ 1,000
100 Phenix City (AL) IDB Env. Imp. Rev. (Mead Coated
Board Proj.), Ser. 1993 A, 4.00%, VRDN due 6/1/28 A-1+ 100
120 Wisconsin Hlth. Fac. Au. Rev. (Franciscan Hlth.
Care, Inc. - Sys. Fin.), Ser. 1985 A-2, 4.50%,
VRDN due 1/1/16 VMIG 1 A-1+ 120
UNION BANK OF SWITZERLAND
1,705 Des Moines (IA) Commercial Dev. Rev. (Capitol Ctr.
III Proj.), Ser. 1985, 4.00%, VRDN due 12/1/15 VMIG 1 1,705
150 Indiana Emp. Dev. Comm. Econ. Dev. Rev. (K & F
Ind., Inc. Proj.), 4.80%, VRDN due 1/1/14 VMIG 1 150
100 Sabine (TX) River Au. Ref. PCR (Texas Util. Elec.
Co.), Ser. B, 4.00%, VRDN due 6/1/30 VMIG 1 A-1+ 100
WESTDEUTSCHE LANDESBANK GIROZENTRALE
1,700 Mesa (AZ) Muni. Dev. Corp. Spec. Tax Rev., Ser.
1985, 3.40%, TECP due 6/11/97 P-1 A-1+ 1,700
---------------
82,730
---------------
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED
BY INSURANCE (0.3%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
400 Sayre (PA) Hlth. Care Fac. Au. Hosp. Rev. (VHA of
PA, Inc. Cap. Asset Fin. Prog.), Ser. 1985 A,
4.55%, VRDN due 12/1/20 Aaa A-1 400
---------------
TOTAL INVESTMENTS (96.5%) 133,205
Cash, receivables and other assets, less
liabilities (3.5%) 4,760
---------------
TOTAL NET ASSETS (100.0%) $137,965
---------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
29
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Securities Portfolio
<TABLE>
<CAPTION>
Principal
Amount Rating Value(5)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- PRE-REFUNDED
BACKED BY U.S. GOVERNMENT
SECURITIES (3.6%)
$1,000 Massachusetts Wtr. Res. Au. Gen. Rev., Ser. 1992
A, 6.50%, due 7/15/21 P/R 7/15/02 Aaa AAA $ 1,091
-------
TAX-EXEMPT SECURITIES -- BACKED
BY INSURANCE (43.6%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
1,175 Anchorage (AK) Sr. Lien Elec. Rev. (Muni. Lt. &
Pwr.), Ser. 1996 C, 6.00%, due 12/1/04 Aaa AAA 1,239
1,000 Atlanta (GA) Arpt. Fac. Ref. Rev., Ser. 1996,
6.50%, due 1/1/06 Aaa AAA 1,095
1,000 Florida Dept. of Env. Protection Preservation 2000
Rev., Ser. 1995 A, 5.50%, due 7/1/07 Aaa AAA 1,025
1,000 New York City (NY) Muni. Assist. Corp. Rev., Ser.
D, 5.25%, due 7/1/02 Aaa AAA 1,016
FINANCIAL GUARANTY INSURANCE CO.
1,000 Dade Co. (FL) Wtr. & Swr. Sys. Rev., Ser. 1995,
6.25%, due 10/1/06 Aaa AAA 1,090
750 New York Dorm. Au. Rev. (State Univ. Ed. Fac.),
Ser. 1993 B, 5.20%, due 5/15/03 Aaa AAA 760
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
1,000 Clark Co. (NV) Sch. Dist. Imp. G.O., Ser. 1995 A,
5.60%, due 6/15/08 Aaa AAA 1,019
1,000 Commonwealth of Pennsylvania G.O. (Ref. & Proj.),
2nd Ser. 1994, 5.20%, due 6/15/04 Aaa AAA 1,011
1,000 Connecticut Spec. Tax Oblig. Ref. Rev. (Trans.
Infrastructure Purp.), Ser. 1993 A, 5.40%, due
9/1/09 Aaa AAA 1,001
1,000 Cuyahoga Co. (OH) Var. Purp. Ref. G.O. (Ltd. Tax
Oblig.), Ser. 1993 B, 5.00%, due 10/1/08 Aaa AAA 986
1,000 Harris Co. (TX) Hlth. Fac. Dev. Corp. Hosp. Rev.
(Mem. Hosp. Sys. Proj.), Ser. A, 5.00%, due 6/1/06 Aaa AAA 980
1,000 Nebraska Inv. Fin. Au. Hosp. Rev. (Nebraska
Methodist Hlth. Sys., Inc.), Ser. 1991, 7.00%, due
3/1/06 Aaa AAA 1,089
1,000 Puerto Rico Elec. Pwr. Au. Ref. Rev., Ser. W,
6.50%, due 7/1/05 Aaa AAA 1,101
-------
13,412
-------
</TABLE>
30
<PAGE>
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Municipal Securities Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(5)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- OTHER (50.9%)
$1,060 Brownwood (TX) Independent Sch. Dist. Unlimited
Tax Sch. Bldg. & Ref. G.O. (Brown Co., Texas),
Ser. 1994, Zero Coupon, Yielding 5.90% & 6.10%,
due 2/15/02 & 2/15/04 Aaa $ 792
1,000 California Ed. Fac. Au. Rev. (Univ. of So. Cal.
Proj.), Ser. 1989 B, 6.80%, due 10/1/99 Aa3 AA 1,056
750 Cincinnati (OH) Std. Loan Funding Corp. Ref. Rev.,
Ser. 1992 C, 6.10%, due 7/1/02 Aaa 784
1,000 Commonwealth of Massachusetts Ref. G.O., Ser. 1995
A, 6.25%, due 7/1/04 A1 A+ 1,071
1,000 Georgia G.O., Ser. 1995 C, 7.25%, due 7/1/04 Aaa AA+ 1,137
1,970 Honolulu (HI) City & Co. G.O., Ser. 74, Zero
Coupon, Yielding 5.95%, due 1/1/13 Aa 814
1,500 Maryland Comm. Dev. Admin. Dept. of Hsg. & Comm.
Dev. Rev. (Single Family Prog.), 3rd Ser. 1993,
5.15%, due 4/1/08 Aa 1,489
1,100 Maryland Wtr. Quality Fin. Admin. Ref. Rev.
(Revolving Loan Fund), Ser. 1995 A, 5.50%, due
9/1/11 Aa2 AA 1,100
1,000 Mecklenburg Co. (NC) Pub. Imp. G.O., Ser. 1994,
5.50%, due 4/1/12 Aaa AAA 1,001
205 Mississippi Higher Ed. Assist. Corp. Std. Loan
Sub. Rev., Ser. 1993 C, 6.05%, due 9/1/07 A 209
500 New Jersey Bldg. Au. St. Bldg. Rev., Ser. 1994,
5.00%, due 6/15/11 Aa AA- 469
750 New York City (NY) IDA Spec. Fac. Rev. (Term. One
Group Assoc., L.P. Proj.), Ser. 1994, 6.00%, due
1/1/15 A A 743
1,000 New York Dorm. Au. Rev. (Columbia Univ.), Ser.
1994 A, 4.00%, due 7/1/00 Aaa AA+ 978
1,000 Omaha (NE) Pub. Pwr. Dist. Elec. Sys. Rev., Ser.
1993 E, 4.60%, due 2/1/06 Aa3 AA 955
1,000 Platte River (CO) Pwr. Au. Rev., Ser. AA, 6.60%,
due 6/1/02 Aa3 A+ 1,022
1,000 Port of Portland (OR) Ref. G.O., Ser. 1993 A,
4.50%, due 3/1/05 Aa AA+ 956
1,000 Washington Motor Vehicle Fuel Tax G.O., Ser. 1995
D, 6.50%, due 9/1/01 Aa AA 1,066
-------
15,642
-------
</TABLE>
31
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Municipal Securities Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(5)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED
BY LETTERS OF CREDIT (0.3%)
TORONTO DOMINION BANK
$ 100 Phenix City (AL) IDB Env. Imp. Rev. (Mead Coated
Board Proj.), Ser. 1993 A, 4.00%, VRDN due 6/1/28 A-1+ $ 100
-------
TOTAL INVESTMENTS (98.4%) (COST $30,246) 30,245(6)
Cash, receivables and other assets, less
liabilities (1.6%) 486
-------
TOTAL NET ASSETS (100.0%) $30,731
-------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
32
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
New York Insured Intermediate Portfolio
<TABLE>
<CAPTION>
Principal
Amount Rating Value(5)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- PRE-REFUNDED
BACKED BY U.S. GOVERNMENT
SECURITIES (5.6%)
$300 New York City (NY) G.O., Ser. 1992 C-1, 6.375%,
due 8/1/08 P/R 8/1/02 Aaa AAA $ 325
185 New York Local Gov't. Assist. Corp., Ser. 1991 A,
7.00%, due 4/1/16 P/R 4/1/01 Aaa AAA 204
------
529
------
TAX-EXEMPT SECURITIES -- BACKED
BY INSURANCE (76.3%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
200 Battery Park City Au. (NY) Jr. Rev., Ser. 1996 A,
5.20%, due 11/1/06 Aaa AAA 200
300 Canandaigua (NY) Sch. Dist. Ref. G.O., 5.125%, due
6/1/06 Aaa AAA 301
200 New York City (NY) Jr. Sub. Rev. (Ed. Construction
Fund), Ser. 1996, 5.10%, due 4/1/06 Aaa AAA 198
275 William Floyd (NY) Union Free Sch. Dist. (The
Mastics-Moriches-Shirley), Ser. 1993, 4.80%, due
12/1/03 Aaa AAA 272
FINANCIAL GUARANTY INSURANCE CO.
455 Babylon (NY) Waste Fac. G.O., Ser. 1993, 4.40%,
due 8/1/03 Aaa AAA 439
150 Buffalo (NY) Swr. Au. Swr. Sys. Rev., Ser. G,
5.00%, due 7/1/03 Aaa AAA 150
200 Chautauqua Co. (NY) Var. Purp. G.O., Ser. 1991,
6.40%, due 9/15/04 Aaa AAA 217
100 Cheektowaga (NY) Central Sch. Dist. G.O., 5.60%,
due 6/1/03 Aaa AAA 103
250 Nassau Co. (NY) Gen. Imp. G.O., Ser. R, 5.125%,
due 11/1/05 Aaa AAA 251
450 North Hempstead (NY) Ref. G.O., Ser. 1992 B,
5.90%, due 4/1/04 Aaa AAA 474
470 Triborough Bridge & Tunnel Au. (NY) Spec. Oblig.
Rev., Ser. 1992, 5.80%, due 1/1/02 Aaa AAA 489
FINANCIAL SECURITY ASSURANCE INC.
300 Albany Co. (NY) Arpt. Au. Rev., Ser. 1997, 5.50%,
due 12/15/06 Aaa AAA 303
250 Puerto Rico Muni. Fin. Agcy., Ser. 1997 A, 6.00%,
due 7/1/07 Aaa AAA 268
</TABLE>
33
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
New York Insured Intermediate Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(5)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
$100 Broome Co. (NY) Cert. of Participation (Pub.
Safety Fac.), Ser. 1994, 4.50%, due 4/1/01 Aaa AAA $ 99
200 Broome Co. (NY) Pub. Imp. G.O., 5.40%, due 4/15/05 Aaa AA 204
485 Buffalo (NY) Sch. G.O., Ser. 1994 B, 5.05%, due
2/1/04 & 2/1/05 Aaa AAA 485
390 Eldred (NY) Central Sch. Dist. G.O., Ser. 1994,
4.50%, due 12/15/05 Aaa AAA 373
250 New York Cert. of Participation (City Univ. of NY,
John Jay College of Criminal Justice Ref. Proj.),
4.90%, due 8/15/07 Aaa AAA 242
200 New York City (NY) Cultural Res. Rev. (New York
Botanical Garden), Ser. 1996, 6.00%, due 7/1/05 Aaa AAA 212
300 New York Dorm. Au. Rev. (Leake & Watts Svcs.,
Inc.), Ser. 1994, 5.10%, due 7/1/02 Aaa AAA 303
200 New York Metro. Trans. Au. Dedicated Tax Fund
Rev., Ser. A, 6.00%, due 4/1/05 Aaa AAA 212
300 New York Thruway Au. (Local Hwy. & Bridge Svc.
Contract), Ser. 1995 A, 5.125%, due 1/1/06 Aaa AAA 298
415 Oyster Bay (NY) Pub. Imp. Ref. G.O., Ser. 1993,
5.40%, due 2/15/03 Aaa AAA 425
270 Puerto Rico Elec. Pwr. Au. Pwr. Ref. Rev., Ser. W,
5.00%, due 7/1/04 Aaa AAA 271
190 Syracuse (NY) G.O., Ser. A, 6.10%, due 6/15/99 Aaa AAA 196
300 Warren Co. (NY) Pub. Imp. G.O., Ser. 1993 A,
4.40%, due 11/15/07 Aaa AAA 277
------
7,262
------
TAX-EXEMPT SECURITIES -- OTHER (19.1%)
200 New York Dorm. Au. Rev. (Vassar College), Ser.
1995, 4.875%, due 7/1/07 Aa3 AA 196
300 New York Pwr. Au. Gen. Purp. Ref. Rev., Ser. W,
6.70%, due 1/1/04 Aa AA- 328
500 New York Thruway Au. (Local Hwy. & Bridge Svc.
Contract), Ser. 1991, 7.00%, due 1/1/03 Baa1 BBB 534
</TABLE>
34
<PAGE>
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
New York Insured Intermediate Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(5)
(000's omitted) Security(1) Moody's S&P (000's omitted)
- --------------- -------------------------------------------------- ------- --------- ---------------
<C> <S> <C> <C> <C>
$500 New York Urban Dev. Corp. Proj. Rev. (Columbia
Univ. Ctr. for Computers, Microelectronics &
Telecommunications Grant), Ser. 1994, 4.75% &
4.875%, due 1/1/02 & 1/1/03 Baa1 BBB $ 489
250 Puerto Rico Pub. Bldg. Au. Ref. Rev., Ser. J,
6.50%, due 7/1/03 Baa1 A 270
------
1,817
------
TOTAL INVESTMENTS (101.0%) (COST $9,717) 9,608(6)
Liabilities, less cash, receivables and other
assets [(1.0%)] (92)
------
TOTAL NET ASSETS (100.0%) $9,516
------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
35
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
1) Municipal securities held by Neuberger&Berman Municipal Money Portfolio
("Municipal Money"), Neuberger&Berman Municipal Securities Portfolio
("Municipal Securities"), and Neuberger&Berman New York Insured Intermediate
Portfolio ("New York Insured Intermediate") are within the two highest rating
categories for Municipal Money and four highest rating categories for
Municipal Securities and New York Insured Intermediate assigned by a
nationally recognized statistical rating organization ("NRSRO") such as
Moody's Investors Service, Inc. or Standard & Poor's or, where not rated, are
determined by the Portfolio's investment manager to be of comparable quality
within guidelines approved by the trustees of Income Managers Trust.
Approximately 75%, 51%, and 81% of the municipal securities held by Municipal
Money, Municipal Securities, and New York Insured Intermediate, respectively,
have credit enhancement features backing them, which the Portfolios may rely
on, such as letters of credit, insurance, or guarantees. Without these credit
enhancement features the securities may or may not meet the quality standards
of the Portfolios. Pre-refunded bonds are supported by securities in escrow
issued or guaranteed by the U.S. Government, its agencies, or
instrumentalities. The amount escrowed is sufficient to pay the periodic
interest due and the principal of these bonds. Putable bonds give the
Portfolios the right to sell back the issue on the date specified.
2) Investment securities of the Portfolio are valued at amortized cost, which
approximates Federal income tax cost.
3) Canadian Imperial Bank of Commerce has also issued a letter of credit for
this security.
4) Union Bank of Switzerland has also issued a letter of credit for this
security.
5) Investment securities of the Portfolio are valued daily by obtaining bid
price quotations from an independent pricing service on all securities
available in the service's data base. For all other securities requiring
daily quotations, bid prices are obtained from principal market makers in
those securities or, if quotations are not available, by a method the
trustees of Income Managers Trust believe accurately reflects fair value.
36
<PAGE>
6) At April 30, 1997, selected Portfolio information on a Federal income tax
basis was as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
NEUBERGER&BERMAN COST APPRECIATION DEPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL SECURITIES PORTFOLIO $ 30,246,000 $ 232,000 $ 233,000 $ 1,000
NEW YORK INSURED INTERMEDIATE PORTFOLIO 9,717,000 27,000 136,000 109,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value* (Note
A) -- see Schedule of Investments $ 133,205 $ 30,245 $ 9,608
Cash 63 95 44
Deferred organization costs (Note A) 3 1 6
Interest receivable 1,210 414 146
Prepaid expenses and other assets 3 1 --
Receivable for securities sold 4,550 -- --
Receivable for variation margin (Note A) -- 4 --
------------------------------------------------
139,034 30,760 9,804
------------------------------------------------
LIABILITIES
Payable for securities purchased 1,000 -- 266
Payable to investment manager (Note B) 30 6 2
Accrued expenses 39 23 20
------------------------------------------------
1,069 29 288
------------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 137,965 $ 30,731 $ 9,516
------------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 137,965 $ 30,732 $ 9,625
Net unrealized depreciation in value of
investment securities -- (1) (109)
------------------------------------------------
NET ASSETS $ 137,965 $ 30,731 $ 9,516
------------------------------------------------
*Cost of investments $ 133,205 $ 30,246 $ 9,717
------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 2,480 $ 859 $ 229
------------------------------------------
Expenses:
Investment management fee (Note B) 171 43 12
Accounting fees 5 5 5
Amortization of deferred organization and
initial offering expenses (Note A) 2 1 2
Auditing fees 15 11 11
Custodian fees (Note B) 47 15 8
Insurance expense 1 -- --
Legal fees 6 6 6
Trustees' fees and expenses 6 4 2
------------------------------------------
Total expenses 253 85 46
------------------------------------------
Net investment income 2,227 774 183
------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment securities
sold -- 170 11
Net realized loss on financial futures
contracts (Note A) -- (49) --
Change in net unrealized appreciation
(depreciation) of investment securities -- (502) (117)
Change in net unrealized depreciation of
financial futures contracts (Note A) -- 75 --
------------------------------------------
Net loss on investments -- (306) (106)
------------------------------------------
Net increase in net assets resulting from
operations $ 2,227 $ 468 $ 77
------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
39
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
MUNICIPAL
MONEY
PORTFOLIO
Six Months
Ended Year
April 30, Ended
1997 October 31,
(000'S OMITTED) (UNAUDITED) 1996
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 2,227 $ 5,139
Net realized gain (loss) on
investments -- 2
Change in net unrealized
appreciation (depreciation) of
investments -- --
-----------------------------
Net increase in net assets resulting
from operations 2,227 5,141
-----------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 98,889 213,754
Reductions (95,874) (247,266)
-----------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 3,015 (33,512)
-----------------------------
NET INCREASE (DECREASE) IN NET ASSETS 5,242 (28,371)
NET ASSETS:
Beginning of period 132,723 161,094
-----------------------------
End of period $ 137,965 $ 132,723
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL INSURED
SECURITIES INTERMEDIATE
PORTFOLIO PORTFOLIO
Six Months Six Months
Ended Year Ended Year
April 30, Ended April 30, Ended
1997 October 31, 1997 October 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 774 $ 1,860 $ 183 $ 381
Net realized gain (loss) on
investments 121 227 11 (27)
Change in net unrealized
appreciation (depreciation) of
investments (427) (432) (117) (40)
-------------------------------------------------------------
Net increase in net assets resulting
from operations 468 1,655 77 314
-------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 1,231 3,715 471 2,148
Reductions (9,930) (10,828) (680) (4,331)
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (8,699) (7,113) (209) (2,183)
-------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (8,231) (5,458) (132) (1,869)
NET ASSETS:
Beginning of period 38,962 44,420 9,648 11,517
-------------------------------------------------------------
End of period $ 30,731 $ 38,962 $ 9,516 $ 9,648
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Municipal Money Portfolio ("Municipal Money"),
Neuberger&Berman Municipal Securities Portfolio ("Municipal Securities"), and
Neuberger&Berman New York Insured Intermediate Portfolio ("New York Insured
Intermediate") (collectively, the "Portfolios") are separate operating series
of Income Managers Trust ("Managers Trust"), a New York common law trust
organized as of December 1, 1992. Managers Trust is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended. Other regulated investment companies sponsored by Neuberger&Berman
Management Incorporated ("Management"), whose financial statements are not
presented herein, also invest in Managers Trust.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
2) PORTFOLIO VALUATION: Investment securities are valued as indicated in the
notes following the Portfolios' Schedule of Investments.
3) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Interest income, including accretion of
discount (adjusted for original issue discount, where applicable) and
amortization of premium, is recorded on the accrual basis. Realized gains and
losses from securities transactions are recorded on the basis of identified
cost.
4) FEDERAL INCOME TAXES: Managers Trust intends to comply with the requirements
of the Internal Revenue Code of 1986, as amended. Each Portfolio of Managers
Trust also intends to conduct its operations so that each of its investors
will be able to qualify as a regulated investment company. Each Portfolio
will be treated as a partnership for Federal income tax purposes and is
therefore not subject to Federal income tax.
5) ORGANIZATION EXPENSES: Expenses incurred by each Portfolio in connection with
its organization are being amortized by each Portfolio on a straight-line
basis over a five-year period. At April 30, 1997, the unamortized balance of
such expenses amounted to $3,459, $1,220, and $5,951 for Municipal Money,
Municipal Securities, and New York Insured Intermediate, respectively.
6) EXPENSE ALLOCATION: Each Portfolio bears all costs of its operations.
Expenses incurred by Managers Trust with respect to any two or more
Portfolios are allocated in proportion to the net assets of such Portfolios,
except where a more appropriate allocation of expenses to each Portfolio can
otherwise be made fairly. Expenses directly attributable to a Portfolio are
charged to that Portfolio.
42
<PAGE>
7) FINANCIAL FUTURES CONTRACTS: Municipal Securities and New York Insured
Intermediate may buy and sell financial futures contracts to hedge against
the effects of fluctuations in interest rates. At the time a Portfolio enters
into a financial futures contract, it is required to deposit with its
custodian a specified amount of cash or liquid debt obligations, known as
"initial margin," ranging upward from 1.1% of the value of the financial
futures contract being traded. Each day, the futures contract is valued at
the official settlement price of the board of trade or U.S. commodity
exchange on which such futures contract is traded. Subsequent payments, known
as "variation margin," to and from the broker are made on a daily basis as
the market price of the financial futures contract fluctuates. Daily
variation margin adjustments, arising from this "mark to market," are
recorded by the Portfolio as unrealized gains or losses.
Although some financial futures contracts by their terms call for actual
delivery or acceptance of financial instruments, in most cases the contracts
are closed out prior to delivery by offsetting purchases or sales of matching
financial futures contracts. When the contracts are closed, a Portfolio
recognizes a gain or loss. Risks of entering into futures contracts include
the possibility there may be an illiquid market and/or a change in the value
of the contract may not correlate with changes in the value of the underlying
securities.
For Federal income tax purposes, the futures transactions undertaken by a
Portfolio may cause that Portfolio to recognize gains or losses from marking
to market even though its positions have not been sold or terminated, may
affect the character of the gains or losses recognized as long-term or
short-term, and may affect the timing of some capital gains and losses
realized by the Portfolio. Also, a Portfolio's losses on transactions
involving futures contracts may be deferred rather than being taken into
account currently in calculating such Portfolio's taxable income. During the
six months ended April 30, 1997, Municipal Securities entered into financial
futures contracts. There were no open positions in financial futures
contracts at April 30, 1997. During the six months ended April 30, 1997, New
York Insured Intermediate did not enter into financial futures contracts.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
Each Portfolio retains Management as its investment manager under a
Management Agreement. For such investment management services, each Portfolio
pays Management a fee at the annual rate of .25% of the first $500 million of
that Portfolio's average daily net assets, .225% of the next $500 million, .20%
of the next $500 million, .175% of the next $500 million, and .15% of average
daily net assets in excess of $2 billion.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger&Berman, LLC ("Neuberger"), a member firm of The New York
Stock Exchange and sub-adviser to each Portfolio. Neuberger is retained by
43
<PAGE>
Management to furnish it with investment recommendations and research
information without added cost to each Portfolio. Several individuals who are
officers and/or trustees of Managers Trust are also principals of Neuberger
and/or officers and/or directors of Management.
Each Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statements
of Operations under the caption Custodian fees, was a reduction of $4,298,
$1,385, and $837, for Municipal Money, Municipal Securities, and New York
Insured Intermediate, respectively, which is less than .01% of each Portfolio's
average daily net assets.
NOTE C -- SECURITIES TRANSACTIONS:
During the six months ended April 30, 1997, there were purchase and sale
transactions (excluding short-term securities and financial futures contracts)
as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- -----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL SECURITIES $4,293,882 $ 10,748,192
NEW YORK INSURED INTERMEDIATE 1,108,695 584,923
</TABLE>
All securities transactions for Municipal Money were short-term.
NOTE D -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of each Portfolio without audit by independent auditors. Annual reports
contain audited financial statements.
44
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
MUNICIPAL
MONEY
PORTFOLIO
Six Months Period from
Ended July 2,
April 30, 1993(1)
1997 Year Ended October 31, to October 31,
(UNAUDITED) 1996 1995 1994 1993
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .37%(2) .36% .36% .36% .36%(2)
----------------------------------------------------
Net Investment Income 3.24%(2) 3.21% 3.57% 2.38% 2.20%(2)
----------------------------------------------------
Portfolio Turnover Rate -- -- -- -- --
----------------------------------------------------
Net Assets, End of Period (in
millions) $138.0 $132.7 $161.1 $150.5 $181.8
----------------------------------------------------
</TABLE>
1) The date investment operations commenced.
2) Annualized.
45
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL INSURED
SECURITIES INTERMEDIATE
PORTFOLIO PORTFOLIO
Six Months Period from Six Months
Ended July 2, Ended Period from
April 30, Year Ended October 1993(1) April 30, Year Ended February 1, 1994(1)
1997 31, to October 31, 1997 October 31, to October 31,
(UNAUDITED) 1996 1995 1994 1993 (UNAUDITED) 1996 1995 1994
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .49%(2) .47% .46% .40% .42%(2) .96%(2) .93% .85% .82%(2)
---------------------------------------------------------------------------------------------------
Net Investment Income 4.49%(2) 4.49% 4.63% 4.47% 4.21%(2) 3.80%(2) 3.75% 4.05% 3.92%(2)
---------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 13% 3% 66% 127% 25% 6% 45% 17% 96%
---------------------------------------------------------------------------------------------------
Net Assets, End of Period (in
millions) $30.7 $39.0 $44.4 $51.4 $104.3 $9.5 $9.6 $11.5 $14.8
---------------------------------------------------------------------------------------------------
</TABLE>
1) The date investment operations commenced.
2) Annualized.
46
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR
AND DISTRIBUTOR
Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800-877-9700
Institutional Services 800-366-6264
SUB-ADVISER
Neuberger&Berman, LLC
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ADDRESS CORRESPONDENCE TO:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
2nd Floor
Washington, DC 20036-1800
Neuberger&Berman Management Inc., Neuberger&Berman Municipal Money Fund,
Neuberger&Berman Municipal Securities Trust, and Neuberger&Berman New York
Insured Intermediate Fund are registered service marks of Neuberger&Berman
Management Inc.
- -C- 1997 Neuberger&Berman Management Inc.
47
<PAGE>
OFFICERS AND TRUSTEES
Stanley Egener
CHAIRMAN OF THE BOARD AND TRUSTEE
Theodore P. Giuliano
PRESIDENT AND TRUSTEE
John Cannon
TRUSTEE
Barry Hirsch
TRUSTEE
Robert A. Kavesh
TRUSTEE
William E. Rulon
TRUSTEE
Candace L. Straight
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Michael J. Weiner
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Barbara DiGiorgio
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
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NEUBERGER&BERMAN MANAGEMENT INC.-REGISTERED TRADEMARK-
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
WWW.NBFUNDS.COM
Statistics and projections in this report are derived from sources
deemed to be reliable but cannot be regarded as a representation of
future results of the Funds. This report is prepared for the general infor-
mation of shareholders and is not an offer of shares of the Funds.
Shares are sold only through the currently effective prospectus, which
must precede or accompany this report.
(recycle logo) PRINTED ON RECYCLED PAPER NBMFSAR00497
