<PAGE>
[NEUBERGER BERMAN LOGO]
Neuberger Berman
INCOME TRUST-REGISTRATION TRADEMARK-
Limited Maturity Bond Trust ANNUAL REPORT
OCTOBER 31, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE TRUST
CHAIRMAN'S LETTER A-4
GROWTH OF A DOLLAR CHART
COMPARISON OF A $10,000 INVESTMENT A-7
FINANCIAL STATEMENTS B-1
FINANCIAL HIGHLIGHTS
PER SHARE DATA B-7
REPORT OF INDEPENDENT AUDITORS B-9
THE PORTFOLIO
SCHEDULE OF INVESTMENTS C-1
FINANCIAL STATEMENTS C-8
FINANCIAL HIGHLIGHTS C-14
REPORT OF INDEPENDENT AUDITORS C-15
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-2000 Neuberger Berman Management Inc.
A-3
<PAGE>
CHAIRMAN'S LETTER December 20, 2000
Dear Shareholder,
In fiscal 2000, fixed-income markets constituted something of a tale of two
cities. For the first six months, the great majority of investors continued to
sell bonds and buy equities. Investors seemed to view fixed income of all
classes as an afterthought, as they chased the high returns of equities, and
more specifically the stocks of the so-called new economy. But by the end of the
period, investors were beginning to see the benefits of cash and bond funds, as
they looked for vehicles offering relative safety in a storm. While investors in
taxable cash products did extremely well, results for most of our other taxable
fixed-income funds were muted but positive nonetheless.
The fixed-income markets for the year were dominated by the U.S. Government
buyback of Treasury securities. These gigantic purchases created a relative
scarcity of Treasuries, causing their prices to soar while the rest of the bond
market languished. The yield difference between Treasuries and most other
sectors of the market widened to 10-year highs. Other trends exacerbated this
dichotomy: The U.S. Government Agency bond market was fraught with concern that
proposed legislation would end government guarantees. The corporate market was
affected by high oil prices, a weak Euro and increasing earnings and credit
problems that caused more credit downgrades than upgrades -- and much market
volatility.
At Neuberger Berman, we have taken pride in our contrarian approach. During
this fiscal year, we saw negative investor sentiment as an opportunity to buy
weaker sectors with higher yields, while selling into the strength of U.S.
Treasury bonds. High-quality bonds in many sectors now yield between 6.0% and
7.5%. From our perspective as long-term investors, we believe that the scheduled
return of principal that comes with yields now available from high-quality bonds
make the bond market overall a wonderful investment opportunity.
In the year ahead, we will continue to add value to the fixed-income
investment process. We still consider many market sectors to be attractive as
Treasury supplies shrink. As always, we focus first on high credit quality and
the return of principal. We continue to adhere to our traditional strategy:
looking for undervalued securities in the most
A-4
<PAGE>
fundamentally attractive sectors, while carefully managing risk. We are
confident that these remain the best tools to enhance the income from the
capital you have entrusted to us.
LIMITED MATURITY BOND TRUST Although the Federal Reserve Board raised
short-term interest rates four times during fiscal 2000, the federal buyback of
U.S. Treasury bonds dominated the markets. Investors flocked to Treasury bonds
at the expense of other sectors. U.S. Treasuries emerged as the clear winner
over non-Treasury sectors, especially corporate bonds.
The Limited Maturity Bond Trust returned 4.50%, compared to the Merrill Lynch
1-3 Year Treasury Index, which returned 6.07%. Although our diversified strategy
fell short of expectations, we believe we are positioned well to reap future
rewards. Investment-grade corporate bonds, which performed poorly as a class in
fiscal 2000, reached their widest spreads relative to Treasury securities in the
last decade.* While no one can predict the future, this range of spreads has
historically signaled a good buying opportunity. Our portfolio also has
substantial weightings in mortgage-backed and U.S. agency bonds, which feature
attractive yields as well.
In keeping with traditional Neuberger Berman strategy, we have maintained an
extremely high credit profile in the portfolio, finishing the fiscal year with a
portfolio average quality of AA-. Although we were subject to the volatility of
credit spreads that affected even highly rated issuers, we believe the portfolio
is solid from a credit standpoint.
Periods of volatility are painful, but they do create opportunities. During
the fiscal year, we made several changes in sector allocation to boost returns.
We substantially increased our weighting in U.S. agencies from 1.5% to over 9.8%
of portfolio net assets to take advantage of very wide spreads. We increased our
corporate weighting from 32.6% of the portfolio at the end of fiscal 1999 to
37.5% at the end of this year. We temporarily cut the corporate sector weighting
in the spring of 2000, but increased corporate bond holdings afterwards to take
advantage of wider spreads. We raised our holdings of asset-backed securities to
8.7% of the portfolio, from 7.0%. On the other hand, we decreased holdings of
mortgage-backed securities to 21.0% of the portfolio, from 30.1% a year ago.
Similarly, we cut exposure to bank and financial debt to 13.8%
A-5
<PAGE>
of the portfolio, from 16.9%; Treasury securities fell to 5.4% of the portfolio
from 7.6%. And foreign government securities fell to 1.0% of the portfolio from
5.8%.
The portfolio's average weighted duration at the close of the period was 2.3
years. Recent changes in the yield curve provide good returns with
shorter-duration bonds.
Looking ahead to fiscal 2001, we expect to continue to benefit from our
conservative management. The earnings environment may continue to be difficult
for much of fiscal 2001, but we believe our careful positioning with
high-quality credits should help insulate shareholders. Furthermore, we believe
that yields remain quite attractive, falling in a range that has historically
signaled good opportunities. We also believe that limited maturity bonds
continue to be a good opportunity for long-term investors who wish to offset
some of the risks of equity investing.
Sincerely,
/s/ Peter Sundman
Peter Sundman
Chairman of the Board,
Chief Executive Officer and Trustee
Neuberger Berman Income Trust
*Merrill Lynch Corporate Master Index
A-6
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman October 31, 2000
----------------------------------------------------------------------
Limited Maturity Bond Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN(1)
MERRILL LYNCH
LIMITED MATURITY 1-3 YEAR
BOND TRUST TREASURY INDEX(2)
<S> <C> <C>
1 YEAR +4.50% +6.07%
5 YEAR +4.65% +5.82%
10 YEAR +5.72% +6.42%
</TABLE>
<TABLE>
<CAPTION>
Merrill Lynch
Limited Maturity 1-3 Year
Bond Trust Treasury Index
<S> <C> <C>
1990 $10,000 $10,000
1991 $11,089 $11,128
1992 $11,962 $12,039
1993 $12,826 $12,740
1994 $12,827 $12,892
1995 $13,899 $14,045
1996 $14,635 $14,875
1997 $15,642 $15,840
1998 $16,392 $17,060
1999 $16,698 $17,570
2000 $17,448 $18,638
</TABLE>
The performance information for Neuberger Berman Limited Maturity Bond Trust
("Limited Maturity Bond Trust") is as of October 31, 2000. Limited Maturity Bond
Trust commenced operations on August 30, 1993. It has identical investment
objectives and policies, and invests in the same Portfolio as Neuberger Berman
Limited Maturity Bond Fund ("Sister Fund"), which is also managed by Neuberger
Berman Management Inc. ("Management"). The performance information shown in the
above chart for the period before August 30, 1993, is for the Sister Fund.
Management has voluntarily undertaken to reimburse Limited Maturity Bond Trust
for its operating expenses and its pro rata share of its Portfolio's operating
expenses (excluding taxes, interest, brokerage commissions and extraordinary
expenses) which, in the aggregate, exceed .80% per annum of Limited Maturity
Bond Trust's average daily net assets. This arrangement can be terminated upon
60 days' prior written notice. Absent such arrangement, the average annual total
returns of the Trust would have been less. The total returns for periods prior
to the Trust's commencement of operations would have been lower had they
reflected the higher expense ratios of the Trust as compared to those of its
Sister Fund.
1. "Total Return" includes reinvestment of all dividends and distributions.
Results represent past performance and do not indicate future results. The value
of an investment in the Trust and the return on the investment both will
fluctuate, and redemption proceeds may be higher or lower than an investor's
original cost.
2. The Merrill Lynch 1-3 Year Treasury Index is an unmanaged total return market
value index consisting of all coupon-bearing U.S. Treasury publicly placed debt
securities with maturities between 1 to 3 years. Please note that indices do not
take into account any fees and expenses of investing in the individual
securities that they track, and that individuals cannot invest directly in any
index. Data about the performance of this index are prepared or obtained by
Management and include reinvestment of all dividends and capital gain
distributions. The Portfolio may invest in many securities not included in the
above-described index.
A-7
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman
----------------------------------------------------------------------
Limited Maturity Bond Trust
<TABLE>
<CAPTION>
October 31,
(000'S OMITTED EXCEPT PER SHARE AMOUNT) 2000
<S> <C>
-------------
ASSETS
Investment in Portfolio, at value (Note A) $ 26,968
Receivable for Trust shares sold 4
-------------
26,972
-------------
LIABILITIES
Accrued expenses 68
Payable for Trust shares redeemed 9
Payable to administrator -- net (Note B) 6
-------------
83
-------------
NET ASSETS at value $ 26,889
-------------
NET ASSETS consist of:
Par value $ 3
Paid-in capital in excess of par value 30,456
Accumulated net realized losses on
investment (3,020)
Net unrealized depreciation in value of
investment (550)
-------------
NET ASSETS at value $ 26,889
-------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 3,030
-------------
NET ASSET VALUE, offering and redemption price per
share $8.88
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-1
<PAGE>
STATEMENT OF OPERATIONS
Neuberger Berman
----------------------------------------------------------------------
Limited Maturity Bond Trust
<TABLE>
<CAPTION>
For the
Year
Ended
October 31,
(000'S OMITTED) 2000
<S> <C>
-----------
INVESTMENT INCOME
Investment income from Portfolio (Note A) $ 2,576
-----------
Expenses:
Administration fee (Note B) 179
Shareholder reports 55
Registration and filing fees 40
Legal fees 25
Shareholder servicing agent fees 18
Custodian fees 10
Auditing fees 5
Trustees' fees and expenses 2
Miscellaneous 2
Expenses from Portfolio (Notes A & B) 120
-----------
Total expenses 456
Expenses reimbursed by administrator and
reduced by custodian fee expense offset
arrangement (Note B) (169)
-----------
Total net expenses 287
-----------
Net investment income 2,289
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM PORTFOLIO (NOTE A)
Net realized loss on investment securities (1,435)
Net realized loss on foreign currency
transactions (110)
Change in net unrealized depreciation of
investment securities, financial futures
contracts, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts 729
-----------
Net loss on investments from Portfolio
(Note A) (816)
-----------
Net increase in net assets resulting from
operations $ 1,473
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-2
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman
----------------------------------------------------------------------
Limited Maturity Bond Trust
<TABLE>
<CAPTION>
Year
Ended
October 31,
(000'S OMITTED) 2000 1999
<S> <C> <C>
--------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 2,289 $ 3,241
Net realized loss on investments
from Portfolio (Note A) (1,545) (710)
Change in net unrealized
appreciation (depreciation) of
investments from Portfolio
(Note A) 729 (1,534)
--------------------------
Net increase in net assets resulting
from operations 1,473 997
--------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (2,174) (3,241)
Excess of net investment income -- (73)
Tax return of capital (115) --
--------------------------
Total distributions to shareholders (2,289) (3,314)
--------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 10,839 20,223
Proceeds from reinvestment of
dividends 2,279 3,226
Payments for shares redeemed (26,962) (40,004)
--------------------------
Net decrease from Trust share
transactions (13,844) (16,555)
--------------------------
NET DECREASE IN NET ASSETS (14,660) (18,872)
NET ASSETS:
Beginning of year 41,549 60,421
--------------------------
End of year $ 26,889 $ 41,549
--------------------------
NUMBER OF TRUST SHARES:
Sold 1,214 2,175
Issued on reinvestment of dividends 256 349
Redeemed (3,024) (4,335)
--------------------------
Net decrease in shares outstanding (1,554) (1,811)
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger Berman October 31, 2000
----------------------------------------------------------------------
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 Fund belong only to that Fund, and the liabilities of
each Fund are 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
(13.82% at October 31, 2000). 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 dividends are paid monthly. Distributions from net
realized capital gains, if any, are
B-4
<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,
$11,896, $51,062, $70,825, $48,668, $580,400, $806,750, and $1,447,894
expiring in 2001, 2002, 2003, 2004, 2005, 2006, 2007, and 2008, respectively,
determined as of October 31, 2000), 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 2003, which was acquired on February 27,
1998, in the merger with Neuberger Berman Ultra Short Bond Trust. 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 year ended October 31, 2000, such excess
expenses amounted to $167,032.
Management and Neuberger Berman, LLC ("Neuberger"), a member firm of The New
York Stock Exchange and sub-adviser to the Portfolio, are wholly owned
B-5
<PAGE>
subsidiaries of Neuberger Berman Inc., a publicly held company. Several
individuals who are officers and/or trustees of the Trust are also employees of
Neuberger and/or 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
$2,390.
NOTE C -- INVESTMENT TRANSACTIONS:
During the year ended October 31, 2000, additions and reductions in the
Fund's investment in the Portfolio amounted to $6,772,000 and $23,152,000,
respectively.
B-6
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Limited Maturity Bond Trust(1)
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended October 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-----------------------------------------
Net Asset Value, Beginning of Year $9.06 $9.45 $9.57 $9.53 $9.61
-----------------------------------------
Income From Investment Operations
Net Investment Income .57 .56 .57 .60 .57
Net Gains or Losses on Securities
(both realized and unrealized) (.18) (.39) (.12) .04 (.08)
-----------------------------------------
Total From Investment Operations .39 .17 .45 .64 .49
-----------------------------------------
Less Distributions
Dividends (from net investment
income) (.54) (.55) (.57) (.60) (.57)
Distributions (in excess of net
investment income) -- (.01) -- -- --
Tax return of capital (.03) -- -- -- --
-----------------------------------------
Total Distributions (.57) (.56) (.57) (.60) (.57)
-----------------------------------------
Net Asset Value, End of Year $8.88 $9.06 $9.45 $9.57 $9.53
-----------------------------------------
Total Return(2) +4.50% +1.86% +4.79% +6.88% +5.29%
-----------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $26.9 $41.5 $60.4 $37.4 $21.2
-----------------------------------------
Ratio of Gross Expenses to Average
Net Assets(3) .80% .81% .80% .80% .81%
-----------------------------------------
Ratio of Net Expenses to Average Net
Assets(4) .80% .80% .80% .80% .80%
-----------------------------------------
Ratio of Net Investment Income to
Average Net Assets 6.34% 5.87% 5.94% 6.25% 6.06%
-----------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-7
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger Berman October 31, 2000
----------------------------------------------------------------------
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) The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
4) 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>
Year Ended October 31,
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Expenses 1.26% 1.12% 1.22% 1.24% 1.91%
-----------------------------------------
</TABLE>
B-8
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees
Neuberger Berman Income Trust and Shareholders of:
Neuberger Berman Limited Maturity Bond Trust
We have audited the accompanying statement of assets and liabilities of the
Neuberger Berman Limited Maturity Bond Trust, one of the series constituting
Neuberger Berman Income Trust (the "Trust"), as of October 31, 2000, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
above mentioned series of Neuberger Berman Income Trust at October 31, 2000, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended, in conformity with
accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
December 4, 2000
B-9
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman October 31, 2000
--------------------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Principal
Amount Rating(1) Value(2)
(000's omitted) Moody's S&P (000's omitted)
--------------------- -------- --------- ---------------
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES
(5.4%)
$ 1,790 U.S. Treasury Notes, 6.50%,
due 3/31/02 TSY TSY $ 1,798
5,355 U.S. Treasury Notes, 6.25%,
due 6/30/02 TSY TSY 5,372
2,890 U.S. Treasury Notes, 6.00%,
due 8/15/04 TSY TSY 2,902
485 U.S. Treasury
Inflation-Indexed Notes,
3.375%, due 1/15/07 TSY TSY 472
--------
TOTAL U.S. TREASURY SECURITIES
(COST $10,443) 10,544
--------
U.S. GOVERNMENT AGENCY
SECURITIES (9.8%)
8,830 Fannie Mae, Notes, 4.625%,
due 10/15/01 AGY AGY 8,674
10,000 Fannie Mae, Notes, 6.25%,
due 11/15/02 AGY AGY 9,962
510 Freddie Mac, Notes, 5.75%,
due 7/15/03 AGY AGY 502
--------
TOTAL U.S. GOVERNMENT AGENCY
SECURITIES
(COST $19,117) 19,138
--------
MORTGAGE-BACKED SECURITIES
(21.0%)
1,464 GE Capital Mortgage Services,
Inc., REMIC Pass-Through
Certificates, Ser. 1998-25,
Class B3, 6.25%, due 12/25/28 BB(3) 1,023(4)
936 Norwest Asset Securities
Corp., Mortgage Pass-Through
Certificates, Ser. 1999-13,
6.75%, due 5/25/29 BB(3) 691(4)
1,098 GE Capital Mortgage Services,
Inc., REMIC Pass-Through
Certificates, Ser. 1999-11,
Class B3, 6.50%, due 7/25/29 BB(3) 798(4)
965 Morgan Stanley Capital I Inc.,
Commercial Mortgage
Pass-Through Certificates,
Ser. 1998-HF2, 6.01%,
due 11/15/30 BB(3) 688(4)
FANNIE MAE
3,430 Pass-Through Certificates,
7.00%,
due 9/1/03 & 6/1/11 AGY AGY 3,435
8,678 Pass-Through Certificates,
6.50%,
due 5/1/13 & 5/1/14 AGY AGY 8,529
</TABLE>
C-1
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating(1) Value(2)
(000's omitted) Moody's S&P (000's omitted)
--------------------- -------- --------- ---------------
<C> <S> <C> <C> <C>
FREDDIE MAC
$ -- Mortgage Participation
Certificates, 10.50%,
due 12/1/00 AGY AGY $ --
52 Mortgage Participation
Certificates, 8.50%,
due 10/1/01 AGY AGY 52
98 ARM Certificates, 7.00%,
due 1/1/17 AGY AGY 98
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
55 Pass-Through Certificates,
7.50%, due 10/15/09-9/15/10 AGY AGY 56
109 Pass-Through Certificates,
12.00%, due 5/15/12-3/15/15 AGY AGY 121
2,923 Pass-Through Certificates,
7.00%, due 4/15/11 & 12/15/28 AGY AGY 2,900
22,156 Pass-Through Certificates,
8.00%, due 5/15/30-8/15/30 AGY AGY 22,516
--------
TOTAL MORTGAGE-BACKED
SECURITIES (COST $40,917) 40,907
--------
ASSET-BACKED SECURITIES (8.7%)
2,180 Honda Auto Lease Trust,
Ser. 1999-A, Class A4, 6.45%,
due 9/16/02 Aaa AAA 2,174
237 Navistar Financial Owner
Trust, Ser. 1996-B,
Class A-3, 6.33%, due 4/21/03 Aaa AAA 237
405 Chevy Chase Auto Receivables
Trust, Ser. 1996-2, Class A,
5.90%, due 7/15/03 Aaa AAA 403
600 Daimler Chrysler Auto Trust,
Ser. 2000-A, Class A3, 7.09%,
due 12/6/03 Aaa AAA 603
6,500 Ford Credit Auto Owner Trust,
Ser. 2000-C, Class A4, 7.24%,
due 2/15/04 Aaa AAA 6,532
4,120 Nissan Auto Receivables Owner
Trust, Ser. 2000-B,
Class A3, 7.25%, due 4/15/04 Aaa AAA 4,158
</TABLE>
C-2
<PAGE>
October 31, 2000
--------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating(1) Value(2)
(000's omitted) Moody's S&P (000's omitted)
--------------------- -------- --------- ---------------
<C> <S> <C> <C> <C>
$ 1,250 Ford Credit Auto Owner Trust,
Ser. 2000-E, Class A4, 6.74%,
due 6/15/04 Aaa AAA $ 1,252
1,500 Daimler Chrysler Auto Trust,
Ser. 2000-C, Class A3, 6.82%,
due 9/6/04 Aaa AAA 1,504
--------
TOTAL ASSET-BACKED SECURITIES
(COST $16,773) 16,863
--------
BANKS & FINANCIAL INSTITUTIONS
(13.8%)
1,470 Dime Bancorp, Inc., Notes,
6.375%, due 1/30/01 Ba1 BBB- 1,465
1,500 Dime Bancorp, Inc., Notes,
7.00%, due 7/25/01 Ba1 BBB- 1,494
2,185 Donaldson, Lufkin & Jenrette,
Inc., Senior Notes, 5.875%,
due 4/1/02 A3 A- 2,153
1,000 MBNA America Bank N.A.,
Subordinated Notes, 7.25%,
due 9/15/02 Baa2 BBB 999
3,350 Banc One Corp., Medium-Term
Notes, 6.375%, due 10/1/02 Aa3 A 3,312
1,400 Merrill Lynch & Co., Inc.,
Notes, 6.00%, due 2/12/03 Aa3 AA- 1,373
2,250 Bank of America Corp.,
Subordinated Notes, 6.85%,
due 3/1/03 Aa3 A 2,245
2,040 Bear Stearns Co., Inc., Notes,
6.20%, due 3/30/03 A2 A 1,991
3,025 Lehman Brothers Holdings Inc.,
Medium-Term Notes, Ser. E,
7.00%, due 5/15/03 A3 A 3,002
3,050 Household Finance Corp.,
Notes, 7.00%, due 8/1/03 A2 A 3,037
2,900 Paine Webber Group Inc.,
Notes, 6.45%, due 12/1/03 Baa1 BBB+ 2,859
2,200 Morgan Stanley Dean Witter &
Co., Notes, 5.625%,
due 1/20/04 Aa3 AA- 2,107
1,000 Bank United Corp., Medium-Term
Notes, Ser. A, 8.00%,
due 3/15/09 Ba2 BBB- 964
--------
TOTAL BANKS & FINANCIAL
INSTITUTIONS
(COST $26,877) 27,001
--------
</TABLE>
C-3
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating(1) Value(2)
(000's omitted) Moody's S&P (000's omitted)
--------------------- -------- --------- ---------------
<C> <S> <C> <C> <C>
CORPORATE DEBT SECURITIES
(37.5%)
$3,325 AT&T Capital Corp., Notes,
6.875%, due 1/16/01 A1 A+ $3,325
1,125 Tyco International Group S.A.,
Notes, 6.125%, due 6/15/01 Baa1 A- 1,116
1,000 WMX Technologies, Inc., Notes,
7.125%, due 6/15/01 Ba1 BBB 993
1,780 CMS Energy Corp., Senior
Notes, 8.00%, due 7/1/01 Ba3 BB 1,761
3,300 Telecom Argentina Stet-France
SA, Medium-Term Notes, 9.75%,
due 7/12/01 B1 BBB- 3,321(4)
2,290 Colonial Realty Limited
Partnership, Senior Notes,
7.50%, due 7/15/01 Baa3 BBB- 2,281
1,220 USA Waste Services, Inc.,
Senior Notes, 6.125%,
due 7/15/01 Ba1 BBB 1,196
1,325 Cox Communications, Inc.,
Notes, 7.00%, due 8/15/01 Baa2 BBB 1,318
3,300 Texas Utilities Co., Notes,
5.94%, due 10/15/01 Baa3 BBB 3,258
2,080 Tyco International Ltd.,
Notes, 6.50%, due 11/1/01 A3 A- 2,069
1,923 Marlin Water Trust, Senior
Secured Notes, 7.09%,
due 12/15/01 Baa1 BBB 1,911(4)
2,965 ICI Wilmington Inc.,
Guaranteed Notes, 7.50%,
due 1/15/02 Baa2 BBB+ 2,948
2,835 Black & Decker Corp.,
Medium-Term Notes, Ser. A,
8.90%, due 1/21/02 Baa2 BBB 2,891
945 Century Communications Corp.,
Senior Notes, 9.75%,
due 2/15/02 B2 B+ 933
900 Ford Motor Credit Co., Global
Bonds, 6.50%, due 2/28/02 A2 A 896
1,500 Xerox Capital (Europe) PLC,
Notes, 5.75%, due 5/15/02 Baa2 BBB- 1,110
2,290 Sprint Capital Corp.,
Medium-Term Notes, 7.625%,
due 6/10/02 Baa1 BBB+ 2,306
2,170 General Motors Acceptance
Corp., Medium-Term Notes,
6.30%, due 7/8/02 A2 A 2,149
</TABLE>
C-4
<PAGE>
October 31, 2000
--------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating(1) Value(2)
(000's omitted) Moody's S&P (000's omitted)
--------------------- -------- --------- ---------------
<C> <S> <C> <C> <C>
$ 900 Comdisco, Senior Notes, 7.25%,
due 9/1/02 Baa2 BBB $ 675
1,775 Commercial Credit Co., Notes,
6.375%, due 9/15/02 Aa3 AA- 1,763
1,825 Fort James Corp., Senior
Notes, 6.50%, due 9/15/02 Baa2 BBB 1,790
2,460 Conseco Inc., Notes, 8.50%,
due 10/15/02 B1 BB- 1,931
800 Reliant Energy Finance Co.,
Notes, 7.40%, due 11/15/02 Baa1 BBB 798(4)
1,400 Valero Energy, Notes, 6.75%,
due 12/15/02 Baa3 BBB- 1,364(4)
1,375 American Standard Inc., Senior
Notes, 7.125%, due 2/15/03 Ba2 BB+ 1,334
1,000 Safeway Inc., Medium-Term
Notes, 8.57%, due 4/1/03 Baa2 BBB 1,026
1,615 Cox Radio, Inc., Notes, 6.25%,
due 5/15/03 Baa2 BBB 1,572
1,000 Comdisco, Senior Notes, 9.50%,
due 8/15/03 Baa2 BBB 740
60 Core-Mark International, Inc.,
Senior Subordinated Notes,
11.375%, due 9/15/03 B3 B 57
1,140 Associates Corp., Senior
Notes, 5.75%, due 11/1/03 A1 A+ 1,106
1,300 Unilever Capital Corp., Senior
Notes, 6.75%, due 11/1/03 A1 A+ 1,294
2,555 Akzo Nobel Inc., Guaranteed
Notes, 6.00%, due 11/15/03 A2 A- 2,473(4)
705 Loomis Fargo & Co., Senior
Subordinated Notes, 10.00%,
due 1/15/04 B3 B 675
1,524 PDVSA Finance Ltd., Notes,
8.75%, due 2/15/04 Baa1(5) 1,509
2,000 Heller Financial, Inc., Notes,
6.00%, due 3/19/04 A3 A- 1,908
1,285 Wells Fargo & Co., Notes,
6.625%, due 7/15/04 Aa2 A+ 1,267
2,400 Caterpillar Financial Services
Corp., Notes, 6.875%,
due 8/1/04 A2 A+ 2,379
660 EOP Operating Limited
Partnership, Notes, 6.625%,
due 2/15/05 Baa1 BBB+ 638
4,200 Heritage Media Corp., Senior
Subordinated Notes, 8.75%,
due 2/15/06 Ba3 BB+ 4,100
735 Calpine Corp., Senior Notes,
7.625%, due 4/15/06 Ba1(6) BB+(6) 709
325 Jones Apparel Group, Senior
Notes, 7.875%, due 6/15/06 Baa2 BBB- 303
</TABLE>
C-5
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman October 31, 2000
--------------------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
Principal
Amount Rating(1) Value(2)
(000's omitted) Moody's S&P (000's omitted)
--------------------- -------- --------- ---------------
<C> <S> <C> <C> <C>
$ 2,825 Time Warner Inc., Notes,
8.11%, due 8/15/06 Baa3 BBB $ 2,927
680 Newport News Shipbuilding
Inc., Senior Subordinated
Notes, 9.25%, due 12/1/06 Ba3 B+ 689
2,000 Interpool, Inc., Notes, 7.20%,
due 8/1/07 B1(7) BB+(7) 1,444
1,000 Thiokol Corp., Senior Notes,
6.625%, due 3/1/08 A3 A+ 957
--------
TOTAL CORPORATE DEBT
SECURITIES (COST $76,217) 73,210
--------
FOREIGN GOVERNMENT SECURITIES
(1.0%)
2,160 Republic of Argentina,
Floating Rate Notes, 7.625%,
due 3/31/05 (COST $1,998) B1 BB 1,890
--------
REPURCHASE AGREEMENTS (1.5%)
2,990 State Street Bank and Trust
Co. Repurchase Agreement,
6.55%, due 11/1/00, dated
10/31/00, Maturity Value
$2,990,544, Collateralized by
$3,050,000 Fannie Mae,
Medium-Term Notes, Ser. B,
6.23%, due 8/20/01 (Collateral
Value $3,079,945) (COST
$2,990) 2,990(8)
--------
TOTAL INVESTMENTS (98.7%)
(COST $195,332) 192,543(9)
Cash, receivables and other
assets, less liabilities
(1.3%) 2,605
--------
TOTAL NET ASSETS (100.0%) $195,148
--------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-6
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
October 31, 2000
----------------------------------------------------------------------
Limited Maturity Bond Portfolio
1) Credit ratings are unaudited.
2) 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.
3) Not rated by Moody's; the rating shown is from Fitch Investors Services, Inc.
4) 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 October 31, 2000, these
securities amounted to $13,067,000 or 6.7% of net assets.
5) Rated A by Fitch Investors Services, Inc.
6) Rated BBB- by Fitch Investors Services, Inc.
7) Rated BBB by Fitch Investors Services, Inc.
8) At cost, which approximates market value.
9) At October 31, 2000, the cost of investments for U.S. Federal income tax
purposes was $195,332,000. Gross unrealized appreciation of investments was
$769,000 and gross unrealized depreciation of investments was $3,558,000,
resulting in net unrealized depreciation of $2,789,000, based on cost for
U.S. Federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
C-7
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman
----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
October 31,
(000'S OMITTED) 2000
<S> <C>
-------------
ASSETS
Investments in securities, at market value*
(Note A) -- see Schedule of Investments $ 192,543
Cash 6
Interest receivable 2,670
Receivable for securities sold 9
Prepaid expenses and other assets 6
-------------
195,234
-------------
LIABILITIES
Accrued expenses 44
Payable to investment manager (Note B) 42
-------------
86
-------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 195,148
-------------
NET ASSETS consist of:
Paid-in capital $ 197,937
Net unrealized depreciation in value of
investment securities (2,789)
-------------
NET ASSETS $ 195,148
-------------
*Cost of investments $ 195,332
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-8
<PAGE>
STATEMENT OF OPERATIONS
Neuberger Berman
----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
For the
Year
Ended
October 31,
(000'S OMITTED) 2000
<S> <C>
-----------
INVESTMENT INCOME
Interest income $ 16,585
-----------
Expenses:
Investment management fee (Note B) 579
Custodian fees (Note B) 113
Auditing fees 26
Legal fees 22
Trustees' fees and expenses 16
Accounting fees 10
Insurance expense 4
Miscellaneous 1
-----------
Total expenses 771
Expenses reduced by custodian fee expense
offset arrangement (Note B) (15)
-----------
Total net expenses 756
-----------
Net investment income 15,829
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment securities
sold (8,545)
Net realized loss on financial futures
contracts (Note A) (4)
Net realized loss on foreign currency
transactions (Note A) (685)
Change in net unrealized depreciation of
investment securities, financial futures
contracts, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts (Note A) 3,924
-----------
Net loss on investments (5,310)
-----------
Net increase in net assets resulting from
operations $ 10,519
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-9
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman
----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Year
Ended
October 31,
(000'S OMITTED) 2000 1999
<S> <C> <C>
--------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 15,829 $ 20,055
Net realized loss on investments (9,234) (4,032)
Change in net unrealized
appreciation (depreciation) of
investments 3,924 (8,500)
--------------------------
Net increase in net assets resulting
from operations 10,519 7,523
--------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 92,710 44,610
Reductions (178,208) (138,662)
--------------------------
Net decrease in net assets resulting
from transactions in investors'
beneficial interests (85,498) (94,052)
--------------------------
NET DECREASE IN NET ASSETS (74,979) (86,529)
NET ASSETS:
Beginning of year 270,127 356,656
--------------------------
End of year $ 195,148 $ 270,127
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
----------------------------------------------------------------------
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-11
<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-12
<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.
During the year ended October 31, 2000, the Portfolio had entered into
various financial futures contracts. At October 31, 2000, there were no open
positions.
9) REPURCHASE AGREEMENTS: The Portfolio may enter into repurchase agreements
with institutions that the Portfolio's investment manager has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Portfolio
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Portfolio
to obtain those securities in the event of a default under the repurchase
agreement. The Portfolio monitors, on a daily basis, the value of the
securities transferred to ensure that their value, including accrued
interest, is greater than amounts owed to the Portfolio under each such
repurchase agreement.
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.
Management and Neuberger Berman, LLC ("Neuberger"), a member firm of The New
York Stock Exchange and sub-adviser to the Portfolio, are wholly owned
subsidiaries of Neuberger Berman Inc., a publicly held company. 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 employees of
Neuberger and/or 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 $15,393.
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended October 31, 2000, there were purchase and sale
transactions (excluding short-term securities, financial futures contracts, and
forward foreign currency contracts) of $233,220,000 and $311,551,000,
respectively.
During the year ended October 31, 2000, the Portfolio had entered into
various contracts to deliver currencies at specified future dates. At
October 31, 2000, there were no open contracts.
C-13
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
Year Ended October 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .33% .31% .33% .33% .33%
----------------------------------------------
Net Expenses .32% .31% .33% .33% .33%
----------------------------------------------
Net Investment Income 6.78% 6.35% 6.38% 6.70% 6.45%
----------------------------------------------
Portfolio Turnover Rate 105% 102% 44% 89% 169%
----------------------------------------------
Net Assets, End of Year (in millions) $195.1 $270.1 $356.7 $293.0 $267.3
----------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
C-14
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees
Income Managers Trust and
Owners of Beneficial Interest of
Neuberger Berman Limited Maturity Bond Portfolio
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of the Neuberger Berman Limited Maturity
Bond Portfolio, a series of Income Managers Trust (the "Trust"), as of
October 31, 2000, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Trust's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 2000, by correspondence with
the custodian and brokers or other appropriate auditing procedures where replies
from brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
above mentioned series of Income Managers Trust at October 31, 2000, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
December 4, 2000
C-15
<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
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
-C-2000 Neuberger Berman Management Inc.
D-1
<PAGE>
OFFICERS AND TRUSTEES
John Cannon
TRUSTEE
Faith Colish
TRUSTEE
Walter G. Ehlers
TRUSTEE
C. Anne Harvey
TRUSTEE
Barry Hirsch
TRUSTEE
Michael M. Kassen
TRUSTEE
Robert A. Kavesh
TRUSTEE
Howard A. Mileaf
TRUSTEE
Edward I. O'Brien
TRUSTEE
John P. Rosenthal
TRUSTEE
William E. Rulon
TRUSTEE
Cornelius T. Ryan
TRUSTEE
Tom D. Seip
TRUSTEE
Gustave H. Shubert
TRUSTEE
Candace L. Straight
TRUSTEE
Peter P. Trapp
TRUSTEE
Peter E. Sundman
PRESIDENT AND TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Barbara DiGiorgio
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
D-2
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Notice to Shareholders (Unaudited)
Under most state tax laws, mutual fund dividends which are derived from
direct investments in U.S. Government obligations are not taxable, as long as a
Fund meets certain requirements. Some states require that a Fund must provide
shareholders with a written notice, within 60 days of the close of a Fund's
taxable year, designating the portion of the dividends which represents interest
which those states consider to have been earned on U.S. Government obligations.
The chart below shows the percentage of income derived from such investments for
the twelve months ended October 31, 2000. This information should not be used to
complete your tax returns.
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<CAPTION>
CALIFORNIA,
CONNECTICUT, AND ALL OTHER
NEUBERGER BERMAN NEW YORK MAINE STATES
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<S> <C> <C> <C>
LIMITED MATURITY BOND TRUST 0.0% 7.9% 8.1%
</TABLE>
In January 2001 you will receive information to be used in filing your 2000
tax returns, which will include a notice of the exact tax status of all
dividends paid to you by the Fund during calendar 2000. Please consult your own
tax advisor for details as to how this information should be reflected on your
tax returns.
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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
[RECYCLE SYMBOL] A0106 12/00
KIRKPATRICK & LOCKHART LLP 1800 Massachusetts Avenue, NW
Second Floor
Washington, DC 20036-1800
202.778.9000
www.kl.com
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December 28, 2000
EDGAR FILING
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U.S. 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
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Dear Sir or Madam:
Transmitted herewith for filing is the Annual Report to Shareholders
of the above-referenced series Neuberger Berman Income Trust for the fiscal year
ended October 31, 2000. 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
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Fatima Sulaiman
Enclosures
