<PAGE>
SEMI-ANNUAL REPORT
------------------------------------------------------
April 30, 1998
NEUBERGER&BERMAN
INCOME TRUST-Registered Trademark-
Neuberger&Berman
LIMITED MATURITY BOND TRUST
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE TRUST
PRESIDENT'S LETTER A-4
PERFORMANCE HIGHLIGHTS B-1
FINANCIAL STATEMENTS B-2
FINANCIAL HIGHLIGHTS B-8
PER SHARE DATA
THE PORTFOLIO
SCHEDULE OF INVESTMENTS B-10
FINANCIAL STATEMENTS B-20
FINANCIAL HIGHLIGHTS B-27
DIRECTORY C-1
OFFICERS AND TRUSTEES C-2
</TABLE>
A-3
<PAGE>
PRESIDENT'S LETTER June 16, 1998
Dear Shareholder,
As you may remember, we turned very positive on the intermediate-term
prospects for the bond market in late 1996. Our bullish posture was rewarded by
excellent 1997 returns. We still believe the political and economic backdrop for
bonds is quite favorable. However, we think current investor expectations are so
high that even modest disappointments may unsettle the market.
In our opinion, there are some short-term economic crosscurrents that may take
investors by surprise. The economy is surprisingly strong and may remain so over
the next several quarters. We have seen rather rapid money supply growth and the
dollar may suffer as it competes with the Euro (the currency of soon-to-be
economically unified Europe). These three factors along with Federal Reserve
Chairman Alan Greenspan's stated concern about inflation in financial
assets -- the runaway stock market -- may prompt the Fed to bump up short-term
interest rates. With yields of longer-term bonds only marginally higher than
short-term securities, an increase in the Fed Funds Rate would probably result
in an uptick in rates along the yield curve (yields along the maturity
spectrum). Consequently, we have become somewhat more cautious and have been
shortening weighted average maturities/ durations in most of our portfolios. As
always, we are favoring those sectors of the bond market that in our opinion
offer the best value, and individual securities we believe have the best
risk-adjusted return potential.
I want to emphasize that despite our short-term concerns, we believe the
longer-term outlook for bonds remains quite positive. The government appears
finally to have its fiscal house in order and we are likely to have a federal
budget surplus this year. Corporate cash flows are strong and balance sheets
have improved as debt has been refinanced at lower rates. Also, bonds may begin
to get a "tailwind" from investors concerned by high equity valuations. Some of
our institutional clients have been re-balancing their portfolios -- taking some
profits in the equity market and buying more bonds. They understand and
appreciate
A-4
<PAGE>
that boosting bond allocations is a good way to reduce overall portfolio risk.
We think mutual fund investors may come to the same conclusion in the year
ahead.
While we may see a somewhat more choppy bond market over the next several
months, we believe bonds still offer value. Irrespective of what the bond market
holds in store for us, bonds provide yield and relative safety of
principal -- two timeless and priceless elements in a prudent investment
program.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
12-22 YR.
3-MONTH 30-YR. MUNICIPAL
T-BILL TREASURY BOND INDEX
<S> <C> <C> <C>
11/28/97 5.23% 6.04% 5.13%
12/5/97 5.25% 6.08% 5.11%
12/12/97 5.19% 5.93% 5.01%
12/19/97 5.44% 5.91% 4.97%
12/26/97 5.34% 5.91% 4.97%
1/2/98 5.32% 5.85% 5.02%
1/9/98 5.05% 5.71% 4.88%
1/16/98 5.13% 5.82% 4.84%
1/23/98 5.16% 5.96% 4.96%
1/30/98 5.17% 5.81% 4.91%
2/6/98 5.15% 5.91% 4.93%
2/13/98 5.25% 5.85% 4.90%
2/20/98 5.26% 5.86% 4.90%
2/27/98 5.35% 5.92% 4.97%
3/6/98 5.20% 6.02% 5.09%
3/13/98 5.18% 5.89% 5.04%
3/20/98 5.21% 5.89% 5.00%
3/27/98 5.20% 5.95% 5.01%
4/3/98 5.08% 5.78% 4.98%
4/9/98 5.05% 5.88% 5.04%
4/17/98 5.09% 5.88% 5.07%
4/24/98 5.04% 5.94% 5.14%
5/1/98 5.01% 5.94% 5.17%
</TABLE>
SOURCE: BLOOMBERG FINANCIAL MARKETS 30-YEAR TREASURY BOND &
TREASURY BILLS
MERRILL LYNCH 12-22 YEAR MUNICIPAL BOND INDEX
ULTRA SHORT BOND TRUST On February 27, 1998, Ultra Short Bond Trust was
dissolved. Shareholders were given the opportunity to exchange their shares for
an equal value of shares in the Limited Maturity Bond Trust on a tax-free basis.
We took this step believing the Limited Maturity Bond Trust offers shareholders
a chance to pursue similar investment goals with greater diversification,
expanded opportunities in fixed-income securities and sectors, and more
flexibility in maturity and duration.
LIMITED MATURITY BOND TRUST Consistent with our trend-following duration
management discipline (shortening durations when interest rates are rising and
extending durations when interest rates are declining), we have modestly reduced
the portfolio's weighted average duration. At 1.6 years, it is currently in the
low end of our traditional duration range.
A-5
<PAGE>
We have also modestly reduced our allocation to corporate securities. We began
increasing our exposure to corporates in mid-October 1997, as Asian economic
turmoil sent prices lower and yields higher. In early 1998, when investors began
to recognize that Asian economic problems were not likely to have as negative an
impact on corporate earnings and balance sheets as first feared, corporate
securities rallied -- producing some strong gains for our portfolio. As yields
came down, we began taking some profits in corporates, and finished this
reporting period with a 62.9% allocation. Despite their good relative
performance, corporates still enjoy a meaningful yield advantage over Treasuries
and we are still able to uncover a good number of high-quality bonds trading at
what we view as reasonable prices.
At the end of fiscal first-half 1998, 16.9% of the portfolio was invested in
asset-backed securities. These are mostly triple A rated securities backed by
either credit card or auto loan receivables. Asset-backed bonds have given us
material incremental yield over Treasuries, which we think has come at very low
risk.
We have reduced our allocation in mortgage-backed securities from 7.7% at the
beginning of this reporting period to 5.7% at its close. This was in response to
declining interest rates and increasing prepayment risk. We are concentrated in
low and current coupon mortgage bonds, where we believe pre-payment risk is
minimal.
As of April 30, 1998, we had 8.4% in Agencies and Treasuries. We are favoring
Agencies, because relatively strong new issuance has bumped up yields providing
a modest, but material yield advantage over Treasuries.
Recently, we have been taking a closer look at debt securities of Real Estate
Investment Trusts (REITS). Although commercial real estate prices have recovered
substantially from their lows, we don't believe we are near the top of the
cycle. REIT bonds offer a material yield advantage over comparable credit
quality industrial bonds. We believe as bond investors become more familiar and
comfortable with an industry group that is relatively new to the bond market,
this spread will narrow.
A-6
<PAGE>
In closing, I want to emphasize that we believe bonds will continue to benefit
from favorable long-term political and economic trends. There are some
short-term economic crosscurrents that might cause a somewhat bumpy ride over
the next several months. The most important thing for all investors to remember
is bonds provide yield and relative safety of principal -- two critical elements
for preserving and enhancing financial assets.
Sincerely,
/s/ Theodore P. Giuliano
Theodore P. Giuliano
President and Trustee
Neuberger&Berman Income Trust
A-7
<PAGE>
(This page has been left blank intentionally.)
A-8
<PAGE>
PERFORMANCE HIGHLIGHTS
TOTAL RETURN ILLUSTRATION
<TABLE>
<CAPTION>
SIX-MONTH AVERAGE ANNUAL
PERIOD TOTAL RETURNS(1)
NEUBERGER&BERMAN ENDED --------------------
INCOME TRUST 4/30/98(1) 1 YR(1) 5 YR 10 YR
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIMITED MATURITY BOND TRUST(2) +2.63% +7.10% +5.19% +6.98%
</TABLE>
1) One-year and average annual total returns are for periods ended April 30,
1998. Results are shown on a "total return" basis and include reinvestment of
all dividends and capital gain distributions. Performance data quoted
represents past performance, which is no guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
the shares, when redeemed, may be worth more or less than their original
cost.
2) Neuberger&Berman Limited Maturity Bond Trust-Registered Trademark- ("Limited
Maturity") started operating on August 30, 1993. The Fund has identical
investment objectives and policies, and invests in the same Portfolio as the
other fund ("Sister Fund") of a similar name, which is also administered by
Neuberger& Berman Management Inc.-Registered Trademark- The performance
information for the Fund prior to its commencement of operations is for the
Sister Fund. Neuberger&Berman Management Inc. voluntarily bears certain
operating expenses in excess of 0.80% of the average daily net assets per
annum of Limited Maturity. This arrangement can be terminated upon 60 days'
prior written notice. Absent such arrangement, the total returns for the
above stated periods would have been less. The total returns for periods
prior to the Fund's commencement of operations would have been lower had they
reflected the higher expense ratio of the Fund as compared to the expense
ratio of its Sister Fund.
B-1
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Trust
<TABLE>
<CAPTION>
April 30,
1998
(000'S OMITTED EXCEPT PER SHARE AMOUNT) (UNAUDITED)
--------------
<S> <C>
ASSETS
Investment in Portfolio, at value (Note A) $ 51,113
Receivable for Trust shares sold 92
Deferred organization costs (Note A) 7
-------
51,212
-------
LIABILITIES
Accrued expenses 92
Payable for Trust shares redeemed 33
Payable to administrator -- net (Note B) 15
-------
140
-------
NET ASSETS at value $ 51,072
-------
NET ASSETS consist of:
Par value $ 5
Paid-in capital in excess of par value 51,151
Accumulated net realized losses on
investment (212)
Net unrealized appreciation in value of
investment 128
-------
NET ASSETS at value $ 51,072
-------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 5,359
-------
NET ASSET VALUE, offering and redemption price per
share $9.53
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-2
<PAGE>
STATEMENT OF OPERATIONS
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Trust
<TABLE>
<CAPTION>
For the
Six Months
Ended
April 30,
1998
(000'S OMITTED) (UNAUDITED)
------------
<S> <C>
INVESTMENT INCOME
Investment income from Portfolio (Note A) $ 1,536
------
Expenses:
Administration fee (Note B) 112
Shareholder reports 57
Registration and filing fees 26
Shareholder servicing agent fees 15
Legal fees 8
Amortization of deferred organization and
initial offering expenses (Note A) 7
Custodian fees 5
Auditing fees 2
Trustees' fees and expenses 2
Miscellaneous 1
Expenses from Portfolio (Notes A & B) 78
------
Total expenses 313
Expenses reimbursed by administrator and
reduced by custodian fee expense offset
arrangement (Note B) (133)
------
Total net expenses 180
------
Net investment income 1,356
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM PORTFOLIO (NOTE A)
Net realized gain on investment securities 67
Net realized loss on financial futures
contracts (141)
Change in net unrealized appreciation of
investment securities, financial futures
contracts, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts (133)
------
Net loss on investments from Portfolio
(Note A) (207)
------
Net increase in net assets resulting from
operations $ 1,149
------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Trust
<TABLE>
<CAPTION>
Six Months
Ended Year
April 30, Ended
1998 October 31,
(000'S OMITTED) (UNAUDITED) 1997
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 1,356 $ 2,051
Net realized loss on investments
from Portfolio (Note A) (74) (40)
Change in net unrealized
appreciation of investments from
Portfolio (Note A) (133) 163
-----------------------------
Net increase in net assets resulting
from operations 1,149 2,174
-----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,356) (2,053)
-----------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 13,769 29,132
Proceeds received in connection with
merger (Note D) 7,929 --
Proceeds from reinvestment of
dividends 1,354 2,050
Payments for shares redeemed (9,169) (15,135)
-----------------------------
Net increase from Trust share
transactions 13,883 16,047
-----------------------------
NET INCREASE IN NET ASSETS 13,676 16,168
NET ASSETS:
Beginning of period 37,396 21,228
-----------------------------
End of period $ 51,072 $ 37,396
-----------------------------
NUMBER OF TRUST SHARES:
Sold 1,440 3,052
Issued in connection with merger
(Note D) 830 --
Issued on reinvestment of dividends 142 215
Redeemed (960) (1,587)
-----------------------------
Net increase in shares outstanding 1,452 1,680
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman April 30, 1998 (Unaudited)
- ----------------------------------------------------------------------
Income Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Limited Maturity Bond Trust (the "Fund") is a
separate operating series of Neuberger&Berman Income Trust (the "Trust"), a
Delaware business trust organized pursuant to a Trust Instrument dated May 6,
1993. The Trust is registered as a diversified, 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.
The Fund seeks to achieve its investment objective by investing all of its
net investable assets in Neuberger&Berman Limited Maturity Bond Portfolio of
Income Managers Trust (the "Portfolio") having the same investment objective
and policies as the Fund. The value of the Fund's investment in the Portfolio
reflects the Fund's proportionate interest in the net assets of the Portfolio
(14.79% at April 30, 1998). The performance of the Fund is directly affected
by the performance of the Portfolio. The financial statements of the
Portfolio, including the Schedule of Investments, are included elsewhere in
this report and should be read in conjunction with the Fund's financial
statements.
2) PORTFOLIO VALUATION: The Fund records its investment in the Portfolio at
value. Investment securities held by the Portfolio are valued by Income
Managers Trust as indicated in the notes following the Portfolio's Schedule
of Investments.
3) FEDERAL INCOME TAXES: The series of the Trust is treated as a separate entity
for Federal income tax purposes. It is the policy of the 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 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, the Fund paid no Federal income taxes and no provision
for Federal income taxes was required.
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund earns income, net of
Portfolio expenses, daily on its investment in the Portfolio. It is the
policy of the 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
B-5
<PAGE>
normally distributed in December. To the extent the Fund's net realized
capital gains, if any, can be offset by capital loss carryforwards ($86,
$13,833, $26,255, $110,379, and $48,668 expiring in 2001, 2002, 2003, 2004,
and 2005, respectively, determined as of October 31, 1997), it is the policy
of the Fund not to distribute such gains.
The 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 the Fund in connection with its
organization are being amortized on a straight-line basis over a five-year
period. At April 30, 1998, the unamortized balance of such expenses amounted
to $7,183.
6) EXPENSE ALLOCATION: The 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 the 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:
The Fund retains Neuberger&Berman Management Incorporated ("N&B Management")
as its administrator under an Administration Agreement ("Agreement"). Pursuant
to this Agreement the Fund pays N&B Management an administration fee at the
annual rate of 0.50% of the Fund's average daily net assets. The Fund indirectly
pays for investment management services through its investment in the Portfolio
(see Note B of Notes to Financial Statements of the Portfolio).
N&B Management has voluntarily undertaken to reimburse the Fund for its
operating expenses plus its pro rata portion of the Portfolio's operating
expenses (including the fees payable to N&B Management but excluding interest,
taxes, brokerage commissions, and extraordinary expenses) which exceed, in the
aggregate, 0.80% per annum of the Fund's average daily net assets. This
undertaking is subject to termination by N&B Management upon at least 60 days'
prior written notice to the Fund. For the six months ended April 30, 1998, such
excess expenses amounted to $133,042.
B-6
<PAGE>
All of the capital stock of N&B 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 the Portfolio. Several individuals who
are officers and/or trustees of the Trust are also principals of Neuberger
and/or officers and/or directors of N&B Management.
The Fund also has a distribution agreement with N&B Management. N&B
Management receives no compensation therefor and no commissions for sales or
redemptions of shares of beneficial interest of the Fund.
The Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statement
of Operations under the caption Expenses from Portfolio, was a reduction of $56.
NOTE C -- INVESTMENT TRANSACTIONS:
During the six months ended April 30, 1998, additions and reductions in the
Fund's investment in the Portfolio amounted to $11,544,534 and $8,148,993,
respectively.
NOTE D -- MERGER:
On February 27, 1998, the Fund acquired all of the net assets of Neuberger&
Berman Ultra Short Bond Trust-Registered Trademark- ("Ultra Short") pursuant to
a plan of reorganization approved by the Board of Trustees on September 24,
1997. The merger was accomplished by a tax-free exchange of 830,305 shares of
the Fund (valued at $7,929,412) for the 804,681 shares of Ultra Short
outstanding on February 27, 1998. Ultra Short's net assets at that date
($7,929,412), including $49,314 of unrealized appreciation, were combined with
those of the Fund. The aggregate net assets of the Fund and Ultra Short
immediately before the merger were $44,233,863 and $7,929,412, respectively,
resulting in aggregate net assets of $52,163,275 immediately after the merger.
NOTE E -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of the Fund without audit by independent auditors. Annual reports
contain audited financial statements.
B-7
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Trust
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 the Portfolio's income and
expenses. It should be read in conjunction with the Portfolio's Financial
Statements and notes thereto.
<TABLE>
<CAPTION>
Six Months Ended Period from
April 30, August 30, 1993(1)
1998 Year Ended October 31, to October 31,
(UNAUDITED) 1997 1996 1995 1994 1993
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.57 $9.53 $9.61 $9.43 $9.97 $10.00
-----------------------------------------------------------------
Income From Investment Operations
Net Investment Income .29 .60 .57 .58 .54 .08
Net Gains or Losses on Securities (both realized and
unrealized) (.04) .04 (.08) .18 (.54) (.03)
-----------------------------------------------------------------
Total From Investment Operations .25 .64 .49 .76 -- .05
-----------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.29) (.60) (.57) (.58) (.54) (.08)
-----------------------------------------------------------------
Net Asset Value, End of Period $9.53 $9.57 $9.53 $9.61 $9.43 $ 9.97
-----------------------------------------------------------------
Total Return(2) +2.63%(3) +6.88% +5.29% +8.36% -0.01% +0.55%(3)
-----------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $51.1 $37.4 $21.2 $11.9 $ 6.7 $ 0.1
-----------------------------------------------------------------
Ratio of Gross Expenses to Average Net Assets(4) .81%(5) .80% .81% .77% -- --
-----------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets(6) .81%(5) .80% .80% .77% .70% .65%(5)
-----------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets(6) 6.09%(5) 6.25% 6.06% 6.16% 5.72% 4.99%(5)
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-8
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman April 30, 1998 (Unaudited)
- ----------------------------------------------------------------------
Limited Maturity Bond Trust
1) The date investment operations commenced.
2) Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the 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. Total return would
have been lower if N&B Management had not reimbursed certain expenses.
3) Not annualized.
4) For fiscal periods ending after September 1, 1995, the Fund is required to
calculate an expense ratio without taking into consideration any expense
reductions related to expense offset arrangements.
5) Annualized.
6) After reimbursement of expenses by N&B Management as described in Note B of
Notes to Financial Statements. Had N&B Management not undertaken such action
the annualized ratios of net expenses and net investment income to average
daily net assets would have been:
<TABLE>
<CAPTION>
Period from
Six Months Ended August 30, 1993
April 30, Year Ended October 31, to October 31,
1998 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Expenses 1.40% 1.24% 1.91% 2.18% 2.50% 2.50%
----------------------------------------------------------------------------------
Net Investment Income 5.50% 5.81% 4.95% 4.75% 3.92% 3.14%
----------------------------------------------------------------------------------
</TABLE>
B-9
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES (3.9%)
$1,785 U.S. Treasury Notes, 5.875%, due 2/15/00 TSY TSY $ 1,794
2,220 U.S. Treasury Notes, 6.75%, due 4/30/00 TSY TSY 2,268
7,980 U.S. Treasury Notes, 5.75%, due 11/15/00 TSY TSY 8,006
1,625 U.S. Treasury Inflation-Indexed Notes, 3.375%, due 1/15/07 TSY TSY 1,573
---------------
TOTAL U.S. TREASURY SECURITIES (COST $13,658) 13,641
---------------
U.S. GOVERNMENT AGENCY SECURITIES (4.5%)
7,430 Federal Home Loan Bank, Discount Notes, 5.43%, due 5/1/98 AGY AGY 7,429
2,000 Federal Home Loan Bank, Discount Notes, 5.40%, due 5/8/98 AGY AGY 1,998
6,180 SLM Holding Co., Medium-Term Notes, 6.38%, due 12/11/01 AGY AGY 6,181
---------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES
(COST $15,618) 15,608
---------------
MORTGAGE-BACKED SECURITIES (5.7%)
FANNIE MAE
1 Balloon Pass-Through Certificates, 9.00%, due 8/1/98 AGY AGY 1
187 Balloon Pass-Through Certificates, 8.50%, due 10/1/98-11/1/98 AGY AGY 193
1,756 Balloon Pass-Through Certificates, 7.00%, due 8/1/03 AGY AGY 1,780
272 REMIC Floating Rate CMO, Ser. 1992-59F, 6.0875%, due 8/25/06 AGY AGY 272
6,914 Pass-Through Certificates, 7.00%, due 9/1/03 & 6/1/11 AGY AGY 7,084
6,220 Pass-Through Certificates, 6.50%, due 4/1/13 AGY AGY 6,241
</TABLE>
B-10
<PAGE>
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
FREDDIE MAC
$ 380 Gold Balloon Mortgage Participation Certificates, 6.50%, due 9/1/98 &
9/1/99 AGY AGY $ 382
91 Mortgage Participation Certificates, 10.50%, due 10/1/00 & 12/1/00 AGY AGY 95
331 Mortgage Participation Certificates, 8.50%, due 10/1/01 AGY AGY 340
198 ARM Certificates, 7.00%, due 1/1/17 AGY AGY 201
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
810 Pass-Through Certificates, 7.50%, due 10/15/09-10/15/10 AGY AGY 836
1,996 Pass-Through Certificates, 7.00%, due 4/15/11 AGY AGY 2,041
139 Pass-Through Certificates, 12.00%, due 5/15/12-3/15/15 AGY AGY 160
---------------
TOTAL MORTGAGE-BACKED SECURITIES
(COST $19,305) 19,626
---------------
ASSET-BACKED SECURITIES (16.9%)
871 Chase Manhattan Grantor Trust, Automobile Loan Pass-Through
Certificates, Ser. 1997-A, Class A-2, 5.95%, due 10/15/99 Aaa AAA 871
5,710 PNC Student Loan Trust I, Ser. 1997-2, Class A-2, 6.138%, due 1/25/00 Aaa AAA 5,739
370 Premier Auto Trust, Ser. 1997-1, Class A-2, 5.90%, due 4/6/00 Aaa AAA 370
401 Ford Credit Grantor Trust, Ser. 1995-A, Class A, 5.90%, due 5/15/00 Aaa AAA 402
3,820 Chase Manhattan Auto Owner Trust, Ser. 1996-C, Class A-3, 5.95%, due
11/15/00 Aaa AAA 3,825
4,949 Money Store Auto Grantor Trust, Ser. 1997-2, Class A-1, 6.17%, due
3/20/01 Aaa AAA 4,961
773 Chase Manhattan Grantor Trust, Automobile Loan Pass-Through
Certificates, Ser. 1995-A, 6.00%, due 9/17/01 Aaa AAA 774
</TABLE>
B-11
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
$3,594 Banc One Auto Grantor Trust, Ser. 1996-B, Class A, 6.55%, due 2/15/03 Aaa AAA $ 3,618
6,500 Ford Credit Auto Loan Master Trust, Auto Loan Certificates, Ser.
1996-1, 5.50%, due 2/15/03 Aaa AAA 6,440
348 Honda Auto Receivables Grantor Trust, Ser. 1997-A, Class A, 5.85%, due
2/15/03 Aaa AAA 348
5,600 Chase Credit Card Master Trust, Ser. 1997-2, Class A, 6.30%, due
4/15/03 Aaa AAA 5,663
2,445 Navistar Financial Owner Trust, Ser. 1996-B, Class A-3, 6.33%, due
4/21/03 Aaa AAA 2,463
5,330 World Omni Automobile Lease Securitization Trust, Ser. 1997-A, Class
A-3, 6.85%, due 6/25/03 Aaa AAA 5,402
2,992 Chevy Chase Auto Receivables Trust, Ser. 1996-2, Class A, 5.90%, due
7/15/03 Aaa AAA 2,992
5,000 Standard Credit Card Master Trust I, Credit Card Participation
Certificates, Ser. 1994-4, Class A, 8.25%, due 11/7/03 Aaa AAA 5,329
4,923 ContiMortgage Net Interest Margin Notes, Ser. 1998-A, Class A, 7.92%,
due 3/16/28 BBB+(2) 4,910(3)
4,244 IMC Excess Cashflow Trust, Ser. 1997-A, 7.41%, due 11/26/28 BBB(2) 4,228(3)
---------------
TOTAL ASSET-BACKED SECURITIES (COST $58,338) 58,335
---------------
BANKS & FINANCIAL INSTITUTIONS (25.2%)
2,500 Merrill Lynch & Co., Inc., Medium-Term Notes, Ser. B, 6.64%, due
4/9/99 Aa3 AA- 2,514
5,250 Household Finance Corp., Medium-Term Notes, 6.62%, due 5/28/99 A2 A 5,274
5,240 Merrill Lynch & Co., Inc., Medium-Term Notes, Ser. B, 6.28%, due
6/25/99 Aa3 AA- 5,253
4,850 Chase Manhattan Bank USA, Senior Global Bank Notes, 5.875%, due 8/4/99 Aa2 AA- 4,844
2,500 Associates Corp. of North America, Senior Notes, 6.375%, due 8/15/99 Aa3 AA- 2,515
</TABLE>
B-12
<PAGE>
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
$5,180 CIT Group Holdings, Inc., Medium-Term Notes, 6.25%, due 10/25/99 Aa3 A+ $ 5,192
3,940 First National Bank of Commerce, Senior Bank Notes, 6.50%, due 1/14/00 A2 A- 3,966
3,980 HomeSide Lending, Inc., Notes, 6.875%, due 5/15/00 A1 A+ 4,029
5,000 Salomon Smith Barney Holdings Inc., Notes, 7.00%, due 5/15/00 A2 A 5,093
1,300 Lehman Brothers Holdings Inc., Medium-Term Notes, Ser. E, 7.08%, due
5/22/00 Baa1 A 1,324
1,800 International Lease Finance Corp., Notes, 6.625%, due 6/1/00 A1 A+ 1,822
5,400 Comdisco, Inc., Notes, 6.50%, due 6/15/00 Baa1 BBB+ 5,438
3,150 Countrywide Funding Corp., Medium-Term Notes, Ser. A, 7.31%, due
8/28/00 A3 A 3,226
7,090 Associates Pass-Through Asset Trust, Ser. 1997-1, 6.45%, due 9/15/00 Aa3 AA- 7,146(3)
5,000 Lehman Brothers Holdings Inc., Medium-Term Notes, Ser. E, 6.89%, due
10/10/00 Baa1 A 5,087
1,725 Lehman Brothers Holdings Inc., Medium-Term Notes, Ser. E, 6.65%, due
11/8/00 Baa1 A 1,746
3,000 Aristar, Inc., Senior Notes, 6.125%, due 12/1/00 A3 A- 3,002
2,000 NationsBank Corp., Senior Medium-Term Notes, Ser. E, 5.70%, due 2/9/01 Aa3 A+ 1,979
6,600 Capital One Bank, Bank Notes, 5.95%, due 2/15/01 Baa3 BBB- 6,531
4,430 Morgan Stanley, Dean Witter, Discover & Co., Global Medium-Term Notes,
Ser. C, 6.09%, due 3/9/01 A1 A+ 4,422
</TABLE>
B-13
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
$3,610 Riggs National Corp., Subordinated Notes, 8.50%, due 2/1/06 Ba1(4) BB-(4) $ 3,813
2,400 Riggs National Corp., Subordinated Debentures, 9.65%, due 6/15/09 Ba1(4) BB-(4) 2,859
---------------
TOTAL BANKS & FINANCIAL INSTITUTIONS
(COST $86,706) 87,075
---------------
CORPORATE DEBT SECURITIES (37.7%)
2,000 AT&T Capital Corp., Medium-Term Notes, Ser. 1997-4, 6.92%, due 4/29/99 Baa3 BBB 2,014
1,900 American Standard Inc., Senior Notes, 10.875%, due 5/15/99 Ba3 BB- 1,990
7,000 Lockheed Martin Corp., Notes, 6.55%, due 5/15/99 A3 BBB+ 7,031
5,200 Williams Holdings of Delaware, Inc., Medium-Term Notes, Ser. A, 6.40%,
due 6/17/99 Baa2 BBB- 5,216
2,710 Arkla, Inc., Notes, 8.875%, due 7/15/99 Baa1 BBB 2,791
4,680 Time Warner Pass-Through Asset Trust, Ser. 1997-2, 4.90%, due 7/29/99 Ba1 BBB- 4,607(3)
1,000 General Motors Acceptance Corp., Medium-Term Notes, 6.15%, due 9/20/99 A2 A 1,003
4,800 Norfolk Southern Corp., Notes, 6.70%, due 5/1/00 Baa1 BBB+ 4,854
5,490 Sears Roebuck Acceptance Corp., Medium-Term Notes, Ser. IV, 6.23%, due
7/12/00 A2 A- 5,503
2,000 Ford Motor Credit Co., Medium-Term Notes, 6.84%, due 8/16/00 A1 A 2,034
3,220 MedPartners, Inc., Senior Subordinated Notes, 6.875%, due 9/1/00 Ba3 BB- 3,102
2,000 American General Finance Corp., Senior Notes, 6.125%, due 9/15/00 A2 A+ 2,008
2,510 Chesapeake Corp., Notes, 10.375%, due 10/1/00 Baa3 BBB 2,737
1,730 BHP Finance (USA) Ltd., Guaranteed Notes, 5.625%, due 11/1/00 A2 A 1,706
5,590 IKON Capital, Inc., Medium-Term Notes, Ser. C, 6.33%, due 12/8/00 A3 A- 5,603
</TABLE>
B-14
<PAGE>
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
$2,300 General Electric Capital Corp., Global Medium-Term Notes, Ser. A,
5.52%, due 1/15/01 Aaa AAA $ 2,276
500 Congoleum Corp., Senior Notes, 9.00%, due 2/1/01 B1 BB- 505
2,320 Fort James Corp., Notes, 6.234%, due 3/15/01 Baa3 BBB- 2,313
3,470 Revlon Worldwide Corp., Senior Secured Notes, Ser. B, Zero-Coupon,
Yielding 10.75% & 10.959%, due 3/15/01 B3 B- 2,672
2,290 Colonial Realty Limited Partnership, Senior Notes, 7.50%, due 7/15/01 Baa3 BBB- 2,365
4,160 Tyco International Ltd., Notes, 6.50%, due 11/1/01 A3 A- 4,199
2,965 ICI Wilmington Inc., Guaranteed Notes, 7.50%, due 1/15/02 Baa1 A- 3,094
2,835 Black & Decker Corp., Medium-Term Notes, Ser. A, 8.90%, due 1/21/02 Baa2 BBB- 3,066
900 Ford Motor Credit Co., Global Bonds, 6.50%, due 2/28/02 A1 A 910
2,280 Fort James Corp., Senior Notes, 6.50%, due 9/15/02 Baa3 BBB- 2,266
1,000 Safeway Inc., Medium-Term Notes, 8.57%, due 4/1/03 Baa2 BBB 1,088
3,360 Stewart Enterprises, Inc., Notes, 6.40%, due 5/1/03 Baa3 BBB 3,339
60 Core-Mark International, Inc., Senior Subordinated Notes, 11.375%, due
9/15/03 B3 B 64
705 Loomis Fargo & Co., Senior Subordinated Notes, 10.00%, due 1/15/04 B3 B 712
175 Playtex Products, Inc., Senior Notes, Ser. B, 8.875%, due 7/15/04 B1 B+ 181
660 EOP Operating Limited Partnership, Notes, 6.625%, due 2/15/05 Baa1 BBB 655(3)
495 Earle M. Jorgensen Co., Senior Notes, 9.50%, due 4/1/05 B3 B- 495(3)
190 ICN Pharmaceuticals, Inc., Senior Notes, Ser. B, 9.25%, due 8/15/05 B1 BB 201
</TABLE>
B-15
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
$1,300 Burlington Industries, Inc., Notes, 7.25%, due 9/15/05 Baa3 BBB- $ 1,308
4,200 Heritage Media Corp., Senior Subordinated Notes, 8.75%, due 2/15/06 B1 BB+ 4,489
4,320 Mark IV Industries, Inc., Senior Subordinated Notes, 7.75%, due 4/1/06 Ba2(5) BB+(5) 4,396
460 Premier Parks Inc., Senior Notes, 9.25%, due 4/1/06 B3 B- 466
400 Printpack, Inc., Senior Subordinated Notes, Ser. B, 10.625%, due
8/15/06 B3 B+ 434
2,825 Time Warner Inc., Notes, 8.11%, due 8/15/06 Ba1 BBB- 3,079
400 Commonwealth Aluminum Corp., Senior Subordinated Notes, 10.75%, due
10/1/06 B2 B- 430
2,235 MedPartners, Inc., Senior Notes, 7.375%, due 10/1/06 Baa3 BBB 2,024
500 Motors and Gears, Inc., Senior Notes, Ser. B, 10.75%, due 11/15/06 B3 B 544
680 Newport News Shipbuilding Inc., Senior Subordinated Notes, 9.25%, due
12/1/06 B1 B+ 716
60 Safelite Glass Corp., Senior Subordinated Notes, 9.875%, due 12/15/06 B3 B 64(3)
917 AMTROL Inc., Senior Subordinated Notes, 10.625%, due 12/31/06 B3 B- 947
1,275 Pen-Tab Industries, Inc., Senior Subordinated Notes, Ser. B, 10.875%,
due 2/1/07 B3 B- 1,265
1,050 Fonda Group, Inc., Senior Subordinated Notes, Ser. B, 9.50%, due
3/1/07 B3 B- 1,029
1,250 GFSI Inc., Senior Subordinated Notes, 9.625%, due 3/1/07 B3 B- 1,320
300 French Fragrances, Inc., Senior Notes, Ser. B, 10.375%, due 5/15/07 B2 B+ 321
2,410 Owens-Illinois, Inc., Senior Debentures, 8.10%, due 5/15/07 Ba1(6) BB+(6) 2,546
</TABLE>
B-16
<PAGE>
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
$ 405 AmeriServe Food Distribution, Inc., Senior Subordinated Notes,
10.125%, due 7/15/07 B3 B- $ 437
250 Safety Components International, Inc., Senior Subordinated Notes,
10.125%, due 7/15/07 B3 B- 261
880 HydroChem Industrial Services, Inc., Senior Subordinated Notes, Ser.
B, 10.375%, due 8/1/07 B3 B- 922
4,960 Interpool, Inc., Notes, 7.20%, due 8/1/07 Ba1 BBB- 4,960
190 Insilco Corp., Senior Subordinated Notes, 10.25%, due 8/15/07 B3 B+ 199
520 NBTY, Inc., Senior Subordinated Notes, Ser. B, 8.625%, due 9/15/07 B1 B+ 534
2,360 UPM-Kymmene Corp., Notes, 6.875%, due 11/26/07 Baa1 BBB+ 2,361(3)
2,490 IDEX Corp., Senior Notes, 6.875%, due 2/15/08 Ba1 BBB- 2,451
1,585 Central Maine Power & Co., General and Refunding Mortgage Bonds, Ser.
Q, 7.05%, due 3/1/08 Baa3 BB+ 1,561
1,000 Thiokol Corp., Senior Notes, 6.625%, due 3/1/08 Baa3 BBB 991
4,840 Beckman Coulter, Inc., Senior Notes, 7.45%, due 3/4/08 Ba1(6) BB+(6) 4,851(3)
160 APCOA, Inc., Senior Subordinated Notes, 9.25%, due 3/15/08 Caa1 B- 160(3)
610 IMPAC Group, Inc., Senior Subordinated Notes, 10.125%, due 3/15/08 B3 B- 618(3)
470 Trans-Resources, Inc., Senior Notes, 10.75%, due 3/15/08 B3 B- 482(3)
300 Columbus McKinnon Corp., Senior Subordinated Notes, 8.50%, due 4/1/08 B2 B 299(3)
160 Great Central Mines Ltd., Senior Notes, 8.875%, due 4/1/08 Ba2 BB 161(3)
285 Morris Material Handling, Inc., Senior Notes, 9.50%, due 4/1/08 B2 B 280(3)
</TABLE>
B-17
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating Value(1)
(000's omitted) Moody's S&P (000's omitted)
- --------------- --------- --------- ---------------
<C> <S> <C> <C> <C>
$ 210 PharMerica, Inc., Senior Subordinated Notes, 8.375%, due 4/1/08 B2 B $ 209(3)
520 KinderCare Learning Centers, Inc., Senior Subordinated Notes, Ser. B,
9.50%, due 2/15/09 B3 B- 532
---------------
TOTAL CORPORATE DEBT SECURITIES (COST $129,825) 130,247
---------------
FOREIGN GOVERNMENT SECURITIES(7) (2.8%)
NZD 5,160 New Zealand, 6.50%, due 2/15/00 Aaa AAA 2,806
SEK 53,100 Kingdom of Sweden, 5.50%, due 4/12/02 Aa1 6,969
---------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(COST $9,978) 9,775
---------------
CORPORATE COMMERCIAL PAPER (1.9%)
$ 1,500 Procter & Gamble Co., 5.37%, due 6/8/98 P-1 A-1+ 1,491
5,000 MetLife Funding, Inc., 5.48%, due 6/18/98 P-1 A-1+ 4,964(8)
---------------
TOTAL CORPORATE COMMERCIAL PAPER
(COST $6,455) 6,455
---------------
TOTAL INVESTMENTS (98.6%) (COST $339,883) 340,762(9)
Cash, receivables and other assets, less liabilities (1.4%) 4,781
---------------
TOTAL NET ASSETS (100.0%) $ 345,543
---------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
B-18
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
Neuberger&Berman April 30, 1998 (Unaudited)
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
1) Investment securities of the Portfolio are valued daily by obtaining bid
price quotations from independent pricing services on selected securities
available in each 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.
Foreign security prices are furnished by independent quotation services
expressed in local currency values. Foreign security prices are translated
from the local currency into U.S. dollars using current exchange rates.
Short-term investments with less than 60 days until maturity may be valued at
cost which, when combined with interest earned, approximates market value.
2) Not rated by Moody's; the rating shown is from Fitch Investors Services, Inc.
3) Security exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers under Rule 144A. At April 30, 1998, these
securities amounted to $31,526,000 or 9.1% of net assets.
4) Rated BBB by Thomson Bank Watch, Inc.
5) Rated BBB- by Fitch Investors Services, Inc.
6) Rated BBB- by Duff & Phelps Credit Rating Co.
7) Principal amount is stated in the currency in which the security is
denominated.
NZD -- New Zealand Dollar
SEK -- Swedish Krona
8) At cost, which approximates market value.
9) At April 30, 1998, the cost of investments for Federal income tax purposes
was $339,883,000. Gross unrealized appreciation of investments was $2,448,000
and gross unrealized depreciation of investments was $1,569,000, resulting in
net unrealized appreciation of $879,000, based on cost for Federal income tax
purposes.
SEE NOTES TO FINANCIAL STATEMENTS
B-19
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
April 30,
1998
(000'S OMITTED) (UNAUDITED)
--------------
<S> <C>
ASSETS
Investments in securities, at market value*
(Note A) -- see Schedule of Investments $ 340,762
Cash 1
Interest receivable 4,927
Receivable for securities sold 312
Prepaid expenses and other assets 5
Deferred organization costs (Note A) 1
--------------
346,008
--------------
LIABILITIES
Payable for variation margin (Note A) 355
Payable to investment manager (Note B) 72
Accrued expenses 33
Payable for forward foreign currency
exchange contracts purchased (Note C) 5
--------------
465
--------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 345,543
--------------
NET ASSETS consist of:
Paid-in capital $ 344,784
Net unrealized appreciation in value of
investment securities, financial futures
contracts, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts 759
--------------
NET ASSETS $ 345,543
--------------
*Cost of investments $ 339,883
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-20
<PAGE>
STATEMENT OF OPERATIONS
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
For the
Six Months
Ended
April 30,
1998
(000'S OMITTED) (UNAUDITED)
------------
<S> <C>
INVESTMENT INCOME
Interest income $ 10,720
------------
Expenses:
Investment management fee (Note B) 392
Custodian fees (Note B) 61
Legal fees 61
Trustees' fees and expenses 12
Auditing fees 10
Accounting fees 5
Amortization of deferred organization and
initial offering expenses (Note A) 3
Insurance expense 2
------------
Total expenses 546
Expenses reduced by custodian fee expense
offset arrangement (Note B) --
------------
Total net expenses 546
------------
Net investment income 10,174
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment securities
sold 391
Net realized loss on financial futures
contracts (Note A) (962)
Change in net unrealized appreciation of
investment securities, financial futures
contracts, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts (Note A) (848)
------------
Net loss on investments (1,419)
------------
Net increase in net assets resulting from
operations $ 8,755
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-21
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Six Months
Ended Year
April 30, Ended
1998 October 31,
(000'S OMITTED) (UNAUDITED) 1997
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 10,174 $ 18,661
Net realized loss on investments (571) (990)
Change in net unrealized
appreciation (depreciation) of
investments (848) 2,266
-----------------------------
Net increase in net assets resulting
from operations 8,755 19,937
-----------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 31,639 61,720
Additions related to reorganization
(Note D) 54,073 --
Reductions (41,890) (56,000)
-----------------------------
Net increase in net assets resulting
from transactions in investors'
beneficial interests 43,822 5,720
-----------------------------
NET INCREASE IN NET ASSETS 52,577 25,657
NET ASSETS:
Beginning of period 292,966 267,309
-----------------------------
End of period $ 345,543 $ 292,966
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Limited Maturity Bond Portfolio (the "Portfolio")
is a 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 a diversified, open-end management investment company under the
Investment Company Act of 1940, as amended. Other regulated investment
companies sponsored by Neuberger&Berman Management Incorporated ("N&B
Management"), whose financial statements are not presented herein, also
invest in the Portfolio and other portfolios of 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 Portfolio's Schedule of Investments.
3) FOREIGN CURRENCY TRANSLATION: The accounting records of the Portfolio are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange of such currency against the U.S.
dollar to determine the value of investments, other assets and liabilities.
Purchase and sale prices of securities, and income and expenses are
translated into U.S. dollars at the prevailing rate of exchange on the
respective dates of such transactions.
4) FORWARD FOREIGN CURRENCY CONTRACTS: The Portfolio may enter into forward
foreign currency contracts ("contracts") in connection with planned purchases
or sales of securities to hedge the U.S. dollar value of portfolio securities
denominated in a foreign currency. The gain or loss arising from the
difference between the original contract price and the closing price of such
contract is included in net realized gains or losses on foreign currency
transactions. Fluctuations in the value of forward foreign currency contracts
are recorded for financial reporting purposes as unrealized gains or losses
by the Portfolio. The Portfolio has no specific limitation on the percentage
of assets which may be committed to these types of contracts. The Portfolio
could be exposed to risks if a counterparty to a contract were unable to meet
the terms of its contract or if the value of the foreign currency changes
unfavorably. The U.S. dollar value of foreign currency underlying all
contractual commitments held by the Portfolio is determined using forward
foreign currency exchange rates supplied by an independent pricing service.
5) FINANCIAL FUTURES CONTRACTS: The Portfolio may buy and sell financial futures
contracts to hedge against changes in securities prices resulting from
changes in prevailing interest rates. At the time the Portfolio enters into a
financial futures
B-23
<PAGE>
contract, it is required to deposit with its custodian a specified amount of
cash or liquid securities, 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, the 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
the Portfolio may cause the 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, the Portfolio's losses on transactions
involving futures contracts may be deferred rather than being taken into
account currently in calculating the Portfolio's taxable income.
At April 30, 1998, open positions in financial futures contracts were as
follows:
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
EXPIRATION OPEN CONTRACTS POSITION (DEPRECIATION)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
June 1998 185 U.S. Treasury Notes, 2 Year Long $ (79,031)
June 1998 160 U.S. Treasury Notes, 5 Year Short 15,114
June 1998 447 U.S. Treasury Notes, 10 Year Short (50,881)
</TABLE>
At April 30, 1998, the Portfolio had the following securities deposited in
a segregated account to cover margin requirements on open financial futures
contracts:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SECURITY
- --------------------------------------------------------------------------------
<C> <S>
$ 410,000 Fort James Corp., Senior Notes, 6.50%, due 9/15/02
Chase Credit Card Master Trust, Ser. 1997-2, Class A, 6.30%, due
1,480,000 4/15/03
</TABLE>
B-24
<PAGE>
6) 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), is
recorded on the accrual basis. Realized gains and losses from securities
transactions and foreign currency transactions are recorded on the basis of
identified cost.
7) FEDERAL INCOME TAXES: Managers Trust intends to comply with the requirements
of the Internal Revenue Code. 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.
8) ORGANIZATION EXPENSES: Expenses incurred by the Portfolio in connection with
its organization are being amortized by the Portfolio on a straight-line
basis over a five-year period. At April 30, 1998, the unamortized balance of
such expenses amounted to $1,242.
9) EXPENSE ALLOCATION: The 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.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
The Portfolio retains N&B Management as its investment manager under a
Management Agreement. For such investment management services, the Portfolio
pays N&B Management a fee at the annual rate of 0.25% of the first $500 million
of the Portfolio's average daily net assets, 0.225% of the next $500 million,
0.20% of the next $500 million, 0.175% of the next $500 million, and 0.15% of
average daily net assets in excess of $2 billion.
All of the capital stock of N&B 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 the Portfolio. Neuberger is retained by
N&B Management to furnish it with investment recommendations and research
information without added cost to the Portfolio. Several individuals who are
officers and/or trustees of Managers Trust are also principals of Neuberger
and/or officers and/or directors of N&B Management.
The Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statement
of Operations under the caption Custodian fees, was a reduction of $395.
B-25
<PAGE>
NOTE C -- SECURITIES TRANSACTIONS:
During the six months ended April 30, 1998, there were purchase and sale
transactions (excluding short-term securities, financial futures contracts, and
forward foreign currency contracts) of $92,881,280 and $101,240,627,
respectively.
At April 30, 1998, the Portfolio had entered into various contracts to
deliver currencies at specified future dates. Open contracts were as follows:
<TABLE>
<CAPTION>
NET
CONTRACTS TO IN EXCHANGE SETTLEMENT UNREALIZED
SALES DELIVER FOR DATE VALUE DEPRECIATION
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Swedish Krona 54,600,000 $ 7,051,530 5/20/98 $ 7,056,646 $ 5,116
</TABLE>
NOTE D -- REORGANIZATION:
On February 27, 1998, the Portfolio acquired all of the net assets of
Neuberger& Berman Ultra Short Bond Portfolio ("Ultra Short") pursuant to a plan
of reorganization approved by the Board of Trustees on September 24, 1997. This
was accomplished by Neuberger&Berman Ultra Short Bond Fund-Registered Trademark-
and Neuberger&Berman Ultra Short Bond Trust withdrawing their assets from Ultra
Short and reinvesting those assets in the Portfolio. The reorganization was
tax-free to investors. Ultra Short's net assets as of February 27, 1998
($54,072,964), including $338,550 of unrealized appreciation, were combined with
those of the Portfolio. The aggregate net assets of the Portfolio and Ultra
Short immediately before the reorganization were $297,668,015 and $54,072,964,
respectively, resulting in aggregate net assets of $351,740,979 immediately
after the reorganization.
NOTE E -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of the Portfolio without audit by independent auditors. Annual reports
contain audited financial statements.
B-26
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Six Months
Ended Period from
April 30, July 2, 1993(1)
1998 Year Ended October 31, to October 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(2) .35%(3) .33% .33% .33% -- --
--------------------------------------------------------------------------------------
Net Expenses .35%(3) .33% .33% .33% .34% .33%(3)
--------------------------------------------------------------------------------------
Net Investment Income 6.50%(3) 6.70% 6.45% 6.55% 5.86% 5.53%(3)
--------------------------------------------------------------------------------------
Portfolio Turnover Rate 32% 89% 169% 88% 102% 71%
--------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $ 345.5 $ 293.0 $ 267.3 $ 319.6 $ 316.1 $ 357.9
--------------------------------------------------------------------------------------
</TABLE>
1) The date investment operations commenced.
2) For fiscal periods ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without taking into consideration any expense
reductions related to expense offset arrangements.
3) Annualized.
B-27
<PAGE>
(This page has been left blank intentionally.)
B-28
<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
Institutional Services
605 Third Avenue 2nd Floor
New York, NY 10158-0180
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
2nd Floor
Washington, DC 20036-1800
Neuberger&Berman Management Inc. and Neuberger&Berman Limited Maturity Bond
Trust are registered service marks of Neuberger&Berman Management Inc.
- -C- 1998 Neuberger&Berman Management Inc.
C-1
<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
C-2
<PAGE>
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 information 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.
[LOGO] PRINTED ON RECYCLED PAPER NBITSAR00498
