<PAGE>
NEUBERGER BERMAN [logo]
Neuberger Berman
INCOME TRUST-R-
- ---------------------------------------------
Limited Maturity Bond Trust
SEMI-ANNUAL REPORT
APRIL 30, 1999
<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
PER SHARE DATA B-8
THE PORTFOLIO
SCHEDULE OF INVESTMENTS C-1
FINANCIAL STATEMENTS C-9
FINANCIAL HIGHLIGHTS C-16
DIRECTORY D-1
OFFICERS AND TRUSTEES D-2
</TABLE>
The "Neuberger Berman" name and logo are service marks of Neuberger
Berman, LLC. "Neuberger Berman Management Inc." and the individual fund
name in this report are either service marks or registered trademarks of
Neuberger Berman Management Inc. -C-1999 Neuberger Berman Management
Inc.
A-3
<PAGE>
PRESIDENT'S LETTER June 16, 1999
Dear Shareholder,
After the extreme volatility of late summer 1998, bonds entered a period of
relative peace and quiet in first half fiscal year 1999 (ending April 30). Our
portfolios performed to our expectations -- helping to preserve principal in a
moderately rising interest rate environment. Our sector weighting decisions,
security selection, and trend following duration discipline, all worked in our
favor.
We adjust sector weightings based on where we see the best value. This led us
to increase Limited Maturity Bond Portfolio's allocation to mortgage securities
and U.S. Agency obligations, and to gravitate to more attractively priced
securities within the corporate sector. Concurrently, we reduced our exposure to
Treasuries, which we believed had become overvalued during investors' "flight to
quality" in third quarter 1998. This strategic decision paid off, with all major
sectors outperforming Treasuries over this reporting period. Security selection
also contributed to results, most notably in the high yield market where we
earned generous returns from our investments in telecommunications industry
leaders.
We adjust portfolio duration (a traditional barometer of interest rate risk)
in response to changing interest rate trends, rather than interest rate
forecasts. Following the global economic turmoil of third quarter 1998, the
strong consensus was that the U.S. economy would decelerate and interest rates
would decline. Investors swayed by this consensus viewpoint extended portfolio
duration in an attempt to maximize returns. When the economy continued to grow
much faster than anticipated and interest rates drifted higher, this strategy
was counter-productive. Our trend following duration management -- adjusting
duration according to what is happening in the market rather than speculating on
what will happen -- once again helped us reduce risk to shareholder assets
during a period in which interest rates defied consensus forecasts.
In closing, bonds have been catching their breath following last year's robust
rally. This gave us the opportunity to demonstrate how our philosophy and
portfolio management strategies add value to the fixed income investment
process. Looking ahead, we will continue to remain
A-4
<PAGE>
focused on relative value in different sectors of the market, work hard to
identify individual securities with the best risk/reward characteristics, and
monitor interest rate trends and adjust portfolio durations accordingly. We are
confident that we can continue to invest the assets you have entrusted to us
using a low-risk approach, while also providing the opportunity to enhance those
assets.
LIMITED MATURITY BOND TRUST At the beginning of this reporting period, the
"flight to quality" had propelled U.S. Treasury securities prices to what we
believed were unsustainable levels. This prompted us to begin reducing our
exposure to Treasuries and to start gravitating to U.S. Agency issues and
mortgage pass-through securities with comparable credit quality and higher
yields. Treasuries were cut from 10.4% of the portfolio's assets at year-end
1998 to just 3.4% at the close of the first half of fiscal 1999. Our mortgage
commitment rose from 7.6% to 23% of assets, and the Agency position increased
modestly. This strategy worked to our advantage, with mortgage securities, U.S.
Agencies, and corporates all outperforming Treasuries in first half fiscal 1999.
We also took advantage of value-oriented opportunities in lower rated
corporates and mortgage-backed securities. When it became clear that the global
economic crisis was not as severe as first anticipated, higher credit quality
securities were the first to recover. This led us to selective BB and B rated
credits with materially higher yields. Due to our increased allocation to AAA
rated government agency mortgages, we were able to be opportunistic in lower
rated securities and still maintain the portfolio's high credit quality rating.
Security selection also helped buoy returns. Our financial service investments
did well, with good earnings gains and consolidation in the industry leading to
good relative performance. Our media, cable television, and telecommunications
investments also contributed to returns, reflecting strong cash flow and
earnings growth in these industries. Most recently, our cyclical holdings in the
oil and gas, chemical, and paper groups have come to life as commodities prices
firmed.
Looking ahead to the balance of 1999, we will likely maintain the portfolio's
defensive posture as long as rates continue to drift higher. Although we have
yet to see any convincing statistical evidence of renewed inflation, the
surprising strength of the economy has our, and perhaps the Federal Reserve's,
attention. If the Fed does raise rates and
A-5
<PAGE>
the market over-reacts, we may become more aggressive. In the interim, we will
continue to maintain our current positioning, focusing on yield more than
capital appreciation potential. Going forward, we believe this will continue to
serve our shareholders well.
Sincerely,
/s/ Theodore P. Giuliano
Theodore P. Giuliano
President and Trustee
Neuberger Berman Income Trust
The composition and holdings of the portfolio are subject to change. Past
performance is no guarantee of future results.
A-6
<PAGE>
PERFORMANCE HIGHLIGHTS
TOTAL RETURN ILLUSTRATION
<TABLE>
<CAPTION>
SIX MONTH AVERAGE ANNUAL
PERIOD TOTAL RETURNS(1)
NEUBERGER BERMAN ENDED --------------------
INCOME TRUST 4/30/99(1) 1 YR(1) 5 YR 10 YR
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIMITED MATURITY BOND TRUST(2) +1.39% +3.52% +5.63% +6.70%
</TABLE>
1) One-year and average annual total returns are for the periods ended April 30,
1999. 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 ("Limited Maturity") commenced
operations 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. ("Management"). The performance information for the Fund
prior to its commencement of operations is for the Sister Fund. Management
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 reimbursement,
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,
1999
(000'S OMITTED EXCEPT PER SHARE AMOUNT) (UNAUDITED)
--------------
<S> <C>
ASSETS
Investment in Portfolio, at value (Note A) $ 61,087
Receivable for Trust shares sold 353
Receivable from administrator -- net (Note
B) 6
-------
61,446
-------
LIABILITIES
Dividends payable 298
Payable for Trust shares redeemed 290
Accrued expenses 94
-------
682
-------
NET ASSETS at value $ 60,764
-------
NET ASSETS consist of:
Par value $ 7
Paid-in capital in excess of par value 62,244
Accumulated net realized losses on
investment (1,135)
Net unrealized depreciation in value of
investment (352)
-------
NET ASSETS at value $ 60,764
-------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 6,526
-------
NET ASSET VALUE, offering and redemption price per
share $9.31
-------
</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,
1999
(000'S OMITTED) (UNAUDITED)
------------
<S> <C>
INVESTMENT INCOME
Investment income from Portfolio (Note A) $ 2,026
------
Expenses:
Administration fee (Note B) 155
Shareholder reports 58
Registration and filing fees 30
Shareholder servicing agent fees 10
Legal fees 10
Custodian fees 5
Auditing fees 2
Trustees' fees and expenses 2
Miscellaneous 2
Expenses from Portfolio (Notes A & B) 97
------
Total expenses 371
Expenses reimbursed by administrator and
reduced by custodian fee expense offset
arrangement (Note B) (122)
------
Total net expenses 249
------
Net investment income 1,777
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM PORTFOLIO (NOTE A)
Net realized loss on investment securities (328)
Net realized loss on financial futures
contracts (65)
Net realized gain on foreign currency
transactions 86
Change in net unrealized appreciation
(depreciation) of investment securities,
financial futures contracts, translation of
assets and liabilities in foreign
currencies, and foreign currency contracts (607)
------
Net loss on investments from Portfolio
(Note A) (914)
------
Net increase in net assets resulting from
operations $ 863
------
</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
1999 October 31,
(000'S OMITTED) (UNAUDITED) 1998
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 1,777 $ 2,938
Net realized loss on investments
from Portfolio (Note A) (307) (679)
Change in net unrealized
appreciation (depreciation) of
investments from Portfolio (Note
A) (607) (6)
-----------------------------
Net increase in net assets resulting
from operations 863 2,253
-----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,777) (2,948)
-----------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 12,368 32,828
Proceeds received in connection with
merger (Note D) -- 7,929
Proceeds from reinvestment of
dividends 1,772 2,944
Payments for shares redeemed (12,883) (19,981)
-----------------------------
Net increase from Trust share
transactions 1,257 23,720
-----------------------------
NET INCREASE IN NET ASSETS 343 23,025
NET ASSETS:
Beginning of period 60,421 37,396
-----------------------------
End of period $ 60,764 $ 60,421
-----------------------------
NUMBER OF TRUST SHARES:
Sold 1,318 3,447
Issued in connection with merger
(Note D) -- 830
Issued on reinvestment of dividends 189 309
Redeemed (1,376) (2,098)
-----------------------------
Net increase in shares outstanding 131 2,488
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger Berman April 30, 1999 (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.
If additional series of the Trust are established, the assets of each Fund
would belong only to that Fund, and the liabilities of each Fund would be
borne solely by that Fund 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
(19.11% at April 30, 1999). 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 as indicated in
the notes following the Portfolio's Schedule of Investments.
3) TAXES: The Fund is treated as a separate entity for U.S. 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 U.S.
Federal income tax purposes as capital loss carryforwards) sufficient to
relieve it from all, or substantially all, U.S. Federal income taxes.
Accordingly, the Fund paid no U.S. Federal income taxes and no provision for
U.S. 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
B-5
<PAGE>
dividends are paid monthly. Distributions from net realized capital gains, if
any, are normally distributed in December. To the extent the Fund's net
realized capital gains, if any, can be offset by capital loss carryforwards
($86, $11,896, $24,346, $97,541, $48,668, and $580,400 expiring in 2001,
2002, 2003, 2004, 2005, and 2006, respectively, determined as of October 31,
1998), it is the policy of the Fund not to distribute such gains. The capital
loss carryforwards shown above for the Fund include $26,716 expiring in 2004,
which was acquired on February 27, 1998, in the merger with Neuberger Berman
Ultra Short Bond Trust ("Ultra Short"). The use of these losses to offset
future gains may be limited in a given year.
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) 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.
6) 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 Inc. ("Management") as its
administrator under an Administration Agreement ("Agreement"). Pursuant to this
Agreement the Fund pays 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).
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 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 Management upon at least 60 days' prior
written notice to the Fund. For the six months ended April 30, 1999, such excess
expenses amounted to $122,392.
B-6
<PAGE>
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 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 Management.
The 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 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
$133.
NOTE C -- INVESTMENT TRANSACTIONS:
During the six months ended April 30, 1999, additions and reductions in the
Fund's investment in the Portfolio amounted to $7,307,000 and $7,994,000,
respectively.
NOTE D -- MERGER:
On February 27, 1998, the Fund acquired all of the net assets of 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(1)
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 the Portfolio's Financial
Statements and notes thereto.
<TABLE>
<CAPTION>
Six
Months
Ended
April
30,
1999 Year Ended October 31,
(UNAUDITED) 1998 1997 1996 1995 1994
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.45 $ 9.57 $ 9.53 $ 9.61 $ 9.43 $ 9.97
-------------------------------------------------------------
Income From Investment Operations
Net Investment Income .27 .57 .60 .57 .58 .54
Net Gains or Losses on Securities
(both realized and unrealized) (.14) (.12) .04 (.08) .18 (.54)
-------------------------------------------------------------
Total From Investment Operations .13 .45 .64 .49 .76 --
-------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.27) (.57) (.60) (.57) (.58) (.54)
-------------------------------------------------------------
Net Asset Value, End of Period $9.31 $ 9.45 $ 9.57 $ 9.53 $ 9.61 $ 9.43
-------------------------------------------------------------
Total Return(2) +1.39%(3) +4.79% +6.88% +5.29% +8.36% -0.01%
-------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $60.8 $ 60.4 $ 37.4 $ 21.2 $ 11.9 $ 6.7
-------------------------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(4) .81%(5) .80% .80% .81% .77% --
-------------------------------------------------------------
Ratio of Net Expenses to Average Net
Assets(6) .81%(5) .80% .80% .80% .77% .70%
-------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets 5.77%(5) 5.94% 6.25% 6.06% 6.16% 5.72%
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-8
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger Berman April 30, 1999 (Unaudited)
- ----------------------------------------------------------------------
Limited Maturity Bond Trust
1) 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.
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 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 Management as described in Note B of Notes
to Financial Statements. Had Management not undertaken such action the
annualized ratios of net expenses to average daily net assets would have
been:
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended October 31,
1999 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Expenses 1.20% 1.22% 1.24% 1.91% 2.18% 2.50%
------------------------------------------------------------------
</TABLE>
B-9
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Principal
Amount Value(1)
(000's Rating (000's
omitted) Moody's S&P omitted)
- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES
(3.4%)
$ 1,000 U.S. Treasury Notes, 5.25%,
due 1/31/01 TSY TSY $ 1,003
10,112 U.S. Treasury
Inflation-Indexed Notes,
3.375%, due 1/15/07 TSY TSY 9,746
-------------
TOTAL U.S. TREASURY SECURITIES
(COST $10,886) 10,749
-------------
U.S. GOVERNMENT AGENCY
SECURITIES (3.7%)
4,802 Federal Home Loan Bank,
Discount Notes, 4.90%, due
5/3/99 AGY AGY 4,802
7,100 Fannie Mae, Notes, 5.25%, due
1/15/03 AGY AGY 7,029
-------------
TOTAL U.S. GOVERNMENT AGENCY
SECURITIES (COST $11,970) 11,831
-------------
MORTGAGE-BACKED SECURITIES
(23.3%)
1,489 GE Capital Mortgage Services,
Inc., REMIC Pass-Through
Certificates, Ser. 1998-25,
Class B3, 6.25%, due 12/25/28 BB(2) 1,083(3)
1,597 PNC Mortgage Securities Corp.,
Pass-Through Certificates,
Ser. 1999-1, Class 1B4, 6.25%,
due 2/25/29 BB(4) 1,142 (3)
965 Morgan Stanley Capital I Inc.,
Commercial Mortgage
Pass-Through Certificates,
Ser. 1998-HF2, 6.01%, due
11/15/30 BB(2) 661 (3)
FANNIE MAE
24 REMIC Floating Rate CMO, Ser.
1992-59F, 5.337%, due 8/25/06 AGY AGY 24
4,993 Pass-Through Certificates,
7.00%, due 9/1/03 & 6/1/11 AGY AGY 5,126
5,554 Pass-Through Certificates,
6.50%, due 4/1/13 AGY AGY 5,601
FREDDIE MAC
83 Gold Balloon Mortgage
Participation Certificates,
6.50%, due 9/1/99 AGY AGY 83
44 Mortgage Participation
Certificates, 10.50%, due
10/1/00 & 12/1/00 AGY AGY 46
</TABLE>
C-1
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Value(1)
(000's Rating (000's
omitted) Moody's S&P omitted)
- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 192 Mortgage Participation
Certificates, 8.50%, due
10/1/01 AGY AGY $ 197
137 ARM Certificates, 6.00%, due
1/1/17 AGY AGY 138
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
84 Pass-Through Certificates,
7.50%, due 10/15/09-9/15/10 AGY AGY 87
115 Pass-Through Certificates,
12.00%, due 5/15/12-3/15/15 AGY AGY 131
22,850 Pass-Through Certificates,
6.50%, due 12/15/28 AGY AGY 22,708
36,770 Pass-Through Certificates,
7.00%, due 4/15/11-1/15/29 AGY AGY 37,345
-------------
TOTAL MORTGAGE-BACKED
SECURITIES (COST $74,809) 74,372
-------------
ASSET-BACKED SECURITIES
(11.0%)
1,238 Money Store Auto Grantor
Trust, Ser. 1997-2, Class A-1,
6.17%, due 3/20/01 Aaa AAA 1,248
239 Chase Manhattan Grantor Trust,
Automobile Loan Pass-Through
Certificates, Ser. 1995-A,
6.00%, due 9/17/01 Aaa AAA 239
6,500 Ford Credit Auto Loan Master
Trust, Auto Loan Certificates,
Ser. 1996-1, 5.50%, due
2/15/03 Aaa AAA 6,476
174 Honda Auto Receivables Grantor
Trust, Ser. 1997-A, Class A,
5.85%, due 2/15/03 Aaa AAA 175
5,600 Chase Credit Card Master
Trust, Ser. 1997-2, Class A,
6.30%, due 4/15/03 Aaa AAA 5,566
1,226 Navistar Financial Owner
Trust, Ser. 1996-B, Class A-3,
6.33%, due 4/21/03 Aaa AAA 1,236
4,720 Chemical Master Credit Card
Trust 1, Ser. 1995-2, Class A,
6.23%, due 6/15/03 Aaa AAA 4,774
5,289 World Omni Automobile Lease
Securitization Trust, Ser.
1997-A, Class A-3, 6.85%, due
6/25/03 Aaa AAA 5,379
1,626 Chevy Chase Auto Receivables
Trust, Ser. 1996-2, Class A,
5.90%, due 7/15/03 Aaa AAA 1,631
</TABLE>
C-2
<PAGE>
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Value(1)
(000's Rating (000's
omitted) Moody's S&P omitted)
- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 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 $ 5,304
3,320 American Express Master Trust,
Accounts Receivable Trust
Certificates, Ser. 1998-1,
Class A, 5.90%, due 4/15/04 Aaa AAA 3,330
-------------
TOTAL ASSET-BACKED SECURITIES
(COST $35,522) 35,358
-------------
BANKS & FINANCIAL INSTITUTIONS
(18.3%)
2,500 Associates Corp. of North
America, Senior Notes, 6.375%,
due 8/15/99 Aa3 AA- 2,510
1,300 Lehman Brothers Holdings Inc.,
Medium-Term Notes, Ser. E,
7.08%, due 5/22/00 Baa1 A 1,312
1,800 International Lease Finance
Corp., Notes, 6.625%, due
6/1/00 A1 A+ 1,820
3,150 Countrywide Funding Corp.,
Medium-Term Notes, Ser. A,
7.31%, due 8/28/00 A3 A 3,216
7,090 Associates Pass-Through Asset
Trust, Ser. 1997-1, 6.45%, due
9/15/00 Aa3 AA- 7,175(3)
5,000 Lehman Brothers Holdings Inc.,
Medium-Term Notes, Ser. E,
6.89%, due 10/10/00 Baa1 A 5,045
3,600 Countrywide Home Loans, Inc.,
Notes, 5.62%, due 10/16/00 A3 A 3,597
1,725 Lehman Brothers Holdings Inc.,
Medium-Term Notes, Ser. E,
6.65%, due 11/8/00 Baa1 A 1,735
2,000 NationsBank Corp., Senior
Medium-Term Notes, Ser. E,
5.70%, due 2/9/01 Aa2 A+ 1,993
6,600 Capital One Bank, Bank Notes,
5.95%, due 2/15/01 Baa3 BBB- 6,548
4,430 Morgan Stanley, Dean Witter, &
Co., Global Medium-Term Notes,
Ser. C, 6.09%, due 3/9/01 Aa3 A+ 4,450
6,660 Household Finance Corp.,
Senior Medium-Term Notes,
6.06%, due 5/14/01 A2 A 6,692
3,550 BankAmerica Corp.,
Subordinated Notes, 6.85%, due
3/1/03 Aa3 A 3,639
</TABLE>
C-3
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Value(1)
(000's Rating (000's
omitted) Moody's S&P omitted)
- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 4,000 CIT Group, Inc., Notes, 5.50%,
due 2/15/04 Aa3 A+ $ 3,895
3,610 Riggs National Corp.,
Subordinated Notes, 8.50%, due
2/1/06 Ba1(5) BB+(5) 3,754
1,000 Bank United, Subordinated
Medium-Term Notes, 8.00%, due
3/15/09 Ba2 BBB- 1,001
-------------
TOTAL BANKS & FINANCIAL
INSTITUTIONS (COST $58,389) 58,382
-------------
CORPORATE DEBT SECURITIES
(35.3%)
7,000 Lockheed Martin Corp., Notes,
6.55%, due 5/15/99 Baa1 BBB+ 7,002
2,710 Arkla, Inc., Notes, 8.875%,
due 7/15/99 Baa1 BBB 2,726
4,680 Time Warner Pass-Through Asset
Trust, Ser. 1997-2, 4.90%, due
7/29/99 Baa3 BBB 4,670 (3)
1,000 General Motors Acceptance
Corp., Medium-Term Notes,
6.15%, due 9/20/99 A2 A 1,004
3,655 Commonwealth Edison Co., First
Mortgage Bonds, Ser. 90,
6.50%, due 4/15/00 Baa2 BBB 3,685
4,800 Norfolk Southern Corp., Notes,
6.70%, due 5/1/00 Baa1 BBB+ 4,854
2,000 Ford Motor Credit Co.,
Medium-Term Notes, 6.84%, due
8/16/00 A1 A 2,031
2,000 American General Finance
Corp., Senior Notes, 6.125%,
due 9/15/00 A2 A+ 2,014
2,510 Chesapeake Corp., Notes,
10.375%, due 10/1/00 Baa3 BBB 2,659
1,730 BHP Finance (USA) Ltd.,
Guaranteed Notes, 5.625%, due
11/1/00 A3 A- 1,712
2,577 Safeway Inc., Notes, 5.75%,
due 11/15/00 Baa2 BBB 2,564
2,300 General Electric Capital
Corp., Global Medium-Term
Notes, Ser. A, 5.52%, due
1/15/01 Aaa AAA 2,302
3,325 AT&T Capital Corp., Notes,
6.875%, due 1/16/01 Baa3 BBB 3,379
2,320 Fort James Corp., Notes,
6.234%, due 3/15/01 Baa2 BBB- 2,300
2,290 Colonial Realty Limited
Partnership, Senior Notes,
7.50%, due 7/15/01 Baa3 BBB- 2,279
1,220 USA Waste Services, Inc.,
Senior Notes, 6.125%, due
7/15/01 Baa2 BBB+ 1,225
</TABLE>
C-4
<PAGE>
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Value(1)
(000's Rating (000's
omitted) Moody's S&P omitted)
- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 3,300 Texas Utilities Co., Notes,
5.94%, due 10/15/01 Baa3 BBB $ 3,301
4,160 Tyco International Ltd.,
Notes, 6.50%, due 11/1/01 A3 A- 4,211
2,380 Marlin Water Trust, Senior
Secured Notes, 7.09%, due
12/15/01 Baa2 BBB 2,383(3)
2,965 ICI Wilmington Inc.,
Guaranteed Notes, 7.50%, due
1/15/02 Baa1 A- 3,058
2,835 Black & Decker Corp.,
Medium-Term Notes, Ser. A,
8.90%, due 1/21/02 Baa2 BBB 3,030
900 Ford Motor Credit Co., Global
Bonds, 6.50%, due 2/28/02 A1 A 915
2,280 Fort James Corp., Senior
Notes, 6.50%, due 9/15/02 Baa2 BBB- 2,277
1,000 Safeway Inc., Medium-Term
Notes, 8.57%, due 4/1/03 Baa2 BBB 1,075
3,360 Stewart Enterprises, Inc.,
Notes, 6.40%, due 5/1/03 Baa3 BBB 3,377
6,600 WorldCom, Inc., Notes, 6.25%,
due 8/15/03 Baa2 BBB+ 6,622
60 Core-Mark International, Inc.,
Senior Subordinated Notes,
11.375%, due 9/15/03 B3 B 60
2,555 Akzo Nobel Inc., Guaranteed
Notes, 6.00%, due 11/15/03 A2 A 2,529(3)
705 Loomis Fargo & Co., Senior
Subordinated Notes, 10.00%,
due 1/15/04 B3 B 717
1,740 PDVSA Finance Ltd., Notes,
8.75%, due 2/15/04 A3 BBB+ 1,756(3)
660 EOP Operating Limited
Partnership, Notes, 6.625%,
due 2/15/05 Baa1 BBB 654
975 WestPoint Stevens Inc., Senior
Notes, 7.875%, due 6/15/05 Ba3 BB 1,002
1,750 Protection One, Inc., Senior
Notes, 7.375%, due 8/15/05 Ba1 BBB- 1,667
4,200 Heritage Media Corp., Senior
Subordinated Notes, 8.75%, due
2/15/06 B1 BB+ 4,510
855 Mark IV Industries, Inc.,
Senior Subordinated Notes,
7.75%, due 4/1/06 Ba2(6) BB-(6) 844
735 Calpine Corp., Senior Notes,
7.625%, due 4/15/06 Ba2 BB 739
</TABLE>
C-5
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Value(1)
(000's Rating (000's
omitted) Moody's S&P omitted)
- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 400 Printpack, Inc., Senior
Subordinated Notes, Ser. B,
10.625%, due 8/15/06 B3 B+ $ 382
2,825 Time Warner Inc., Notes,
8.11%, due 8/15/06 Baa3 BBB 3,099
680 Newport News Shipbuilding
Inc., Senior Subordinated
Notes, 9.25%, due 12/1/06 B1 B+ 729
1,250 GFSI Inc., Senior Subordinated
Notes, 9.625%, due 3/1/07 B3 B- 1,172
300 French Fragrances, Inc.,
Senior Notes, Ser. B, 10.375%,
due 5/15/07 B2 B+ 305
1,685 Owens-Illinois, Inc., Senior
Debentures, 8.10%, due 5/15/07 Ba1(7) BB+(7) 1,751
250 Safety Components
International, Inc., Senior
Subordinated Notes, 10.125%,
due 7/15/07 B3 B- 249
880 HydroChem Industrial Services,
Inc., Senior Subordinated
Notes, Ser. B, 10.375%, due
8/1/07 Caa1 B- 779
2,210 Interpool, Inc., Notes, 7.20%,
due 8/1/07 Ba1 BB+ 1,934
1,500 Mirage Resorts, Inc., Notes,
6.75%, due 8/1/07 Baa2 BBB+ 1,452
520 NBTY, Inc., Senior
Subordinated Notes, Ser. B,
8.625%, due 9/15/07 B1 B+ 494
1,000 Thiokol Corp., Senior Notes,
6.625%, due 3/1/08 Baa3 BBB 967
1,700 Beckman Coulter, Inc., Senior
Notes, 7.45%, due 3/4/08 Ba1(7) BB+(7) 1,653
160 APCOA, Inc., Senior
Subordinated Notes, 9.25%, due
3/15/08 Caa1 B- 149
610 IMPAC Group, Inc., Senior
Subordinated Notes, 10.125%,
due 3/15/08 B3 B- 602
470 Trans-Resources, Inc., Senior
Notes, Ser. B, 10.75%, due
3/15/08 B3 B- 461
300 Columbus McKinnon Corp.,
Senior Subordinated Notes,
8.50%, due 4/1/08 B2 B 298
160 Great Central Mines Ltd.,
Senior Notes, 8.875%, due
4/1/08 Ba2 BB 158
1,000 Global Crossing Holdings Ltd.,
Senior Notes, 9.625%, due
5/15/08 B1 B 1,117
</TABLE>
C-6
<PAGE>
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Value(1)
(000's Rating (000's
omitted) Moody's S&P omitted)
- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 450 Home Products International,
Inc., Senior Subordinated
Notes, 9.625%, due 5/15/08 B3 B $ 439
1,500 CSC Holdings, Inc., Senior
Notes, 7.25%, due 7/15/08 Ba2 BB+ 1,518
1,085 Tenet Healthcare Corp., Senior
Subordinated Notes, 8.125%,
due 12/1/08 Ba3 BB- 1,052(3)
520 KinderCare Learning Centers,
Inc., Senior Subordinated
Notes, Ser. B, 9.50%, due
2/15/09 B3 B- 523
500 Garden State Newspapers, Inc.,
Senior Subordinated Notes,
8.625%, due 7/1/11 B1 B+ 506(3)
-------------
TOTAL CORPORATE DEBT
SECURITIES (COST $113,714) 112,922
-------------
FOREIGN GOVERNMENT
SECURITIES(8) (3.0%)
CAD 5,700 Canadian Government, 5.00%,
due 12/1/00 Aa2 AA+ 3,922
SEK 41,100 Kingdom of Sweden, 13.00%, due
6/15/01 Aa1 AAA 5,845
-------------
TOTAL FOREIGN GOVERNMENT
SECURITIES (COST $9,763) 9,767
-------------
TOTAL INVESTMENTS (98.0%)
(COST $315,053) 313,381 (9)
Cash, receivables and other
assets, less liabilities
(2.0%) 6,337
-------------
TOTAL NET ASSETS (100.0%) $ 319,718
-------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-7
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
April 30, 1999 (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 debt securities 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, 1999, these
securities amounted to $22,957,000 or 7.2% of net assets.
4) Not rated by Moody's; the rating shown is from Duff & Phelps Credit Rating
Co.
5) Rated BBB by Thomson BankWatch, Inc.
6) Rated BBB- by Fitch Investors Services, Inc.
7) Rated BBB- by Duff & Phelps Credit Rating Co.
8) Principal amount is stated in the currency in which the security is
denominated.
CAD -- Canadian Dollar
SEK -- Swedish Krona
9) At April 30, 1999, the cost of investments for U.S. Federal income tax
purposes was $315,053,000. Gross unrealized appreciation of investments was
$1,446,000 and gross unrealized depreciation of investments was $3,118,000,
resulting in net unrealized depreciation of $1,672,000, based on cost for
U.S. Federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
C-8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
April 30,
1999
(000'S OMITTED) (UNAUDITED)
--------------
<S> <C>
ASSETS
Investments in securities, at market value*
(Note A) -- see Schedule of Investments $ 313,381
Cash 2
Interest receivable 4,630
Receivable for securities sold 1,623
Receivable for variation margin (Note A) 58
Prepaid expenses and other assets 4
Receivable for forward foreign currency
exchange contracts sold (Note C) 135
--------------
319,833
--------------
LIABILITIES
Payable to investment manager (Note B) 67
Accrued expenses 48
--------------
115
--------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 319,718
--------------
NET ASSETS consist of:
Paid-in capital $ 321,210
Net unrealized depreciation in value of
investment securities, financial futures
contracts, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts (1,492)
--------------
NET ASSETS $ 319,718
--------------
*Cost of investments $ 315,053
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-9
<PAGE>
STATEMENT OF OPERATIONS
Neuberger Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
For the
Six Months
Ended
April 30,
1999
(000'S OMITTED) (UNAUDITED)
------------
<S> <C>
INVESTMENT INCOME
Interest income $ 11,152
------------
Expenses:
Investment management fee (Note B) 427
Custodian fees (Note B) 65
Auditing fees 13
Trustees' fees and expenses 11
Legal fees 9
Accounting fees 5
Insurance expense 2
------------
Total expenses 532
Expenses reduced by custodian fee expense
offset arrangement (Note B) (1)
------------
Total net expenses 531
------------
Net investment income 10,621
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment securities
sold (1,765)
Net realized loss on financial futures
contracts (Note A) (353)
Net realized gain on foreign currency
transactions (Note A) 407
Change in net unrealized appreciation
(depreciation) of investment securities,
financial futures contracts, translation of
assets and liabilities in foreign
currencies, and foreign currency contracts
(Note A) (3,279)
------------
Net loss on investments (4,990)
------------
Net increase in net assets resulting from
operations $ 5,631
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-10
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Six Months
Ended Year
April 30, Ended
1999 October 31,
(000'S OMITTED) (UNAUDITED) 1998
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 10,621 $ 21,213
Net realized loss on investments (1,711) (4,564)
Change in net unrealized
appreciation (depreciation) of
investments (3,279) 180
-----------------------------
Net increase in net assets resulting
from operations 5,631 16,829
-----------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 27,131 71,026
Additions related to reorganization
(Note D) -- 54,073
Reductions (69,700) (78,238)
-----------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (42,569) 46,861
-----------------------------
NET INCREASE (DECREASE) IN NET ASSETS (36,938) 63,690
NET ASSETS:
Beginning of period 356,656 292,966
-----------------------------
End of period $ 319,718 $ 356,656
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1999 (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 Inc. ("Management"), whose
financial statements are not presented herein, also invest in the Portfolio
and other portfolios of Managers Trust.
The assets of each Portfolio belong only to that Portfolio, and the
liabilities of each Portfolio are borne solely by that Portfolio 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) 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.
5) 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
C-12
<PAGE>
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.
6) 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 U.S. Federal income tax purposes and is therefore not subject to U.S.
Federal income tax.
7) 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.
8) 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 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 U.S. 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
C-13
<PAGE>
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, 1999, open positions in financial futures contracts were as
follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION OPEN CONTRACTS POSITION APPRECIATION
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
June 1999 75 U.S. Treasury Notes, 5 Year Short $46,000
June 1999 40 U.S. Treasury Notes, 10 Year Short 3,000
</TABLE>
At April 30, 1999, 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>
$ 1,600,000 Standard Credit Card Master Trust I, Credit
Card Participation Certificates,
Ser. 1994-4, Class A, 8.25%, due 11/7/03
</TABLE>
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
The Portfolio retains Management as its investment manager under a Management
Agreement. For such investment management services, the Portfolio pays
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 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
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 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 $732.
NOTE C -- SECURITIES TRANSACTIONS:
During the six months ended April 30, 1999, there were purchase and sale
transactions (excluding short-term securities, financial futures contracts, and
forward foreign currency contracts) of $155,539,000 and $143,903,000,
respectively.
C-14
<PAGE>
During the six months ended April 30, 1999, the Portfolio had entered into
various contracts to deliver currencies at specified future dates. At April 30,
1999, open contracts were as follows:
<TABLE>
<CAPTION>
IN NET
CONTRACTS EXCHANGE SETTLEMENT UNREALIZED
SALES TO DELIVER FOR DATE VALUE APPRECIATION
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Euro 6,034,000 $6,517,000 5/17/99 $6,381,000 $ 136,000
</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 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.
C-15
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Six Months
Ended
April 30,
1999 Year Ended October 31,
(UNAUDITED) 1998 1997 1996 1995 1994
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .31%(2) .33% .33% .33% .33% --
-----------------------------------------------------------------------
Net Expenses .31%(2) .33% .33% .33% .33% .34%
-----------------------------------------------------------------------
Net Investment Income 6.23%(2) 6.38% 6.70% 6.45% 6.55% 5.86%
-----------------------------------------------------------------------
Portfolio Turnover Rate 45% 44% 89% 169% 88% 102%
-----------------------------------------------------------------------
Net Assets, End of Period (in millions) $319.7 $356.7 $293.0 $267.3 $319.6 $316.1
-----------------------------------------------------------------------
</TABLE>
1) 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.
2) Annualized.
C-16
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR
AND DISTRIBUTOR
Neuberger Berman Management Inc.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800.877.9700 or 212.476.8800
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, NW
2nd Floor
Washington, DC 20036-1800
D-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
D-2
<PAGE>
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 Fund. This report is prepared for the general information of shareholders
and is not an offer of shares of the Fund. Shares are sold only through the
currently effective prospectus, which must precede or accompany this report.
NEUBERGER BERMAN [logo]
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
www.nbfunds.com
[recycled logo] NMATR6880699
KIRKPATRICK & LOCKHART LLP
1800 MASSACHUSETTS AVENUE, N.W.
2ND FLOOR
WASHINGTON, D.C. 20036-1800
TELEPHONE (202) 778-9000
FACSIMILE (202) 778-9100
FATIMA SULAIMAN
(202) 778-9223
[email protected]
June 24, 1999
VIA EDGAR
- ---------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Neuberger Berman Income Trust:
Neuberger Berman Limited Maturity Bond Trust
1933 Act File No. 33-62872
1940 Act File No. 811-7724
-----------------------------------------------
Dear Sir or Madam:
Transmitted herewith for filing is the Semi-Annual Report to Shareholders
of the above-referenced series of Neuberger Berman Income Trust for the period
ended April 30, 1999. This filing is being made pursuant to Section 30(b)(2) of
the Investment Company Act of 1940, as amended, and Rule 30b2-1 thereunder.
If you should have any questions regarding this filing, please contact the
undersigned.
Sincerely,
/s/ Fatima Sulaiman
Fatima Sulaiman
Enclosure
