UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-07692
Name of Fund: Legg Mason Investors Trust, Inc.
Fund Address: 100 Light Street
Baltimore, MD 21202
Name and address of agent for service:
Mark R. Fetting, President, Legg Mason Investors Trust, Inc.
100 Light Street
Baltimore, MD 21202.
Registrant's telephone number, including area code: (410) 539-0000
Date of fiscal year end: March 31, 2004
Date of reporting period: September 30, 2003
Item 1 - Report to Shareholders
------------------------------------------------------
LEGG MASON
INVESTORS TRUST, INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
SEPTEMBER 30, 2003
INSTITUTIONAL CLASS
AND FINANCIAL INTERMEDIARY CLASS
------------------------------------------------------
[LEGG MASON FUNDS LOGO]
To Our Shareholders,
We are pleased to provide you with Legg Mason Investors Trust's semi-annual
report for the Institutional Class of American Leading Companies Trust and U.S.
Small-Capitalization Value Trust, and for the Institutional Class and Financial
Intermediary Class of Balanced Trust.
The following table summarizes key statistics for the respective classes of
each Fund, as of September 30, 2003:
Total Returns(A)
------------------------
3 Months 9 Months
-------- ---------
American Leading Companies Trust
Institutional Class +0.06% +14.90%
S&P 500 Stock Composite Index(B) +2.65% +14.72%
Lipper Large-Cap Value Funds Index(C) +1.93% +12.98%
Balanced Trust
Institutional Class +1.30% +7.45%
Financial Intermediary Class +1.32% +7.33%
Lehman Intermediate Government/Credit
Bond Index(D) -0.02% +4.25%
Lipper Balanced Fund Index(E) +2.05% +11.11%
U.S. Small-Capitalization Value Trust
Institutional Class +6.08% +21.13%
Russell 2000 Index(F) +9.08% +28.58%
- ---------------
(A) Total return measures investment performance in terms of appreciation or
depreciation in net asset value per share plus dividends and capital gain
distributions. It assumes that dividends and distributions were reinvested
at the time they were paid. No adjustment has been made for any income taxes
payable by shareholders. Past performance does not predict future
performance.
(B) An unmanaged index of widely held common stocks, generally considered
representative of the U.S. stock market.
(C) An index comprised of the 30 largest funds in the Lipper universe of 416
large-cap value funds.
(D) An index based on all publicly issued intermediate government and corporate
debt securities with an average maturity of 4 to 5 years.
(E) An index comprised of the 30 largest funds in the Lipper universe of 547
balanced funds.
(F) Measures the performance of the 2,000 smallest companies in the Russell 3000
Index, which represents approximately 8% of the total market capitalization
of the Russell 3000 Index.
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Long-term investment results for each of the Funds are shown in the
Performance Information section of this report.
Like numerous other mutual fund firms, Legg Mason has received and responded
to a subpoena from the New York State Attorney General and to inquiries from the
Securities and Exchange Commission regarding late trading and market timing in
mutual funds. Consistent with our longstanding policy, Legg Mason will cooperate
with all applicable regulatory authorities and will make no public comment on
these pending matters. Nevertheless, because we are sensitive to our
shareholders' interests and concerns about these issues, we have summarized the
Legg Mason Funds' policies on order processing, market timing and fair value
pricing. They may be viewed on our website at:
http://www.leggmason.com/funds/ourfunds/fundspolicies/ann.htm.
We report with deep sorrow the recent death of our longtime Director Richard
G. Gilmore. Dick was an exceptionally bright and talented person who made a
significant contribution to the Trust over many years.
Sincerely,
/s/ MARK R. FETTING
Mark R. Fetting
President
October 30, 2003
2
Performance Information
Legg Mason Investors Trust, Inc.
Total Returns for One Year, Five and Ten Years and Life of Class, as of
September 30, 2003
Total return measures investment performance in terms of appreciation or
depreciation in a fund's net asset value per share, plus dividends and any
capital gain distributions. It assumes that dividends and distributions were
reinvested at the time they were paid. The investment return and principal value
of an investment in each of these Funds will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Average annual returns tend to smooth out variations in a fund's return, so that
they differ from actual year-to-year results. Performance would have been lower
if fees had not been waived in various periods.
Each Fund offers Primary Class and Institutional Class shares. American
Leading Companies and Balanced Trust also offer Financial Intermediary Class
shares. The Financial Intermediary Class of American Leading Companies is not
currently active. Information about the Primary Class shares offered to retail
investors, is contained in a separate report to the shareholders of that class.
The following table does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
Past performance does not predict future performance.
3
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Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
The Funds' total returns(A) as of September 30, 2003, were:
American U.S.
Leading Small-Cap
Companies Balanced Value
Trust Trust Trust
- -----------------------------------------------------------------
Average Annual Total Return
Institutional Class:
One Year +28.92% +12.26% +28.16%
Five Years N/A N/A +10.16%
Life of Class(B) -3.12% -0.77% +5.00%
Financial Intermediary Class:
One Year N/A +12.05% N/A
Life of Class(C) N/A -1.00% N/A
Cumulative Total Return
Institutional Class:
One Year +28.92% +12.26% +28.16%
Five Years N/A N/A +62.25%
Life of Class(B) -7.02% -1.94% +29.38%
Financial Intermediary Class:
One Year N/A +12.05% N/A
Life of Class(C) N/A -2.53% N/A
- -----------------------------------------------------------------
- ---------------
(A) Returns do not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund Shares. Past performance
does not predict future performance.
(B) Institutional Class inception dates:
American Leading Companies Trust -- June 14, 2001
Balanced Trust -- March 16, 2001
U.S. Small-Cap Value Trust -- June 19, 1998
(C) Financial Intermediary Class inception date:
Balanced Trust -- March 16, 2001
N/A -- Not applicable.
4
American Leading Companies Trust
SELECTED PORTFOLIO PERFORMANCE(D)
Strongest performers for the 3rd quarter 2003(E)
- ------------------------------------------------
1. Koninklijke (Royal) Philips
Electronics N.V. - ADR +19.9%
2. MGIC Investment Corporation +11.7%
3. The May Department Stores
Company +11.6%
4. Nextel Communications, Inc. +9.1%
5. Microsoft Corporation +8.4%
6. Albertson's, Inc. +8.2%
7. General Dynamics Corporation +8.1%
8. Tyco International Ltd. +7.7%
9. International Business Machines
Corporation +7.3%
10. Citigroup Inc. +7.2%
Weakest performers for the 3rd quarter 2003(E)
- ------------------------------------------------
1. Eastman Kodak Company -23.4%
2. Liberty Media Corporation -13.8%
3. Merck & Co., Inc. -11.0%
4. Lexmark International, Inc. -11.0%
5. Pfizer Inc. -10.6%
6. Devon Energy Corporation -9.7%
7. Duke Energy Corporation -9.3%
8. Wellpoint Health Networks Inc. -8.6%
9. AOL Time Warner Inc. -6.1%
10. Anadarko Petroleum Corporation -5.9%
PORTFOLIO CHANGES
Securities added during the 3rd quarter 2003
- ----------------------------------------------
Comcast Corporation - Class A
The Pepsi Bottling Group, Inc.
Transocean Inc.
Securities sold during the 3rd quarter 2003
- ----------------------------------------------
SBC Communications Inc.
Verizon Communications Inc.
- ---------------
(D) Individual security performance is measured by the change in the security's
price; for stocks, dividends are assumed to be reinvested at the time they
were paid.
(E) Securities held for the entire quarter.
5
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Balanced Trust
SELECTED PORTFOLIO PERFORMANCE(F)
Strongest performers for the 3rd quarter 2003(G)
- -------------------------------------------------
1. Intel Corporation +32.4%
2. Texas Instruments Incorporated +29.7%
3. The PMI Group, Inc +25.9%
4. Dover Corporation +18.5%
5. Biomet, Inc. +17.3%
6. Rio Tinto plc - ADR +16.3%
7. Applied Materials, Inc. +14.5%
8. Vornado Realty Trust +11.8%
9. IVAX Corporation +9.8%
10. SYSCO Corporation +9.3%
Weakest performers for the 3rd quarter 2003(G)
- ----------------------------------------------
1. SBC Communications Inc. -11.6%
2. Pfizer Inc. -10.6%
3. Cardinal Health, Inc. -9.1%
4. Kansas City Southern -8.0%
5. Oracle Corporation -6.3%
6. Wells Fargo & Company, 5.0%,
due 11/15/14 -4.2%
7. Principal Financial Group,
Inc. -3.9%
8. Bank of America Corporation,
5.125%, due 11/15/14 -3.9%
9. Johnson & Johnson -3.8%
10. The Home Depot, Inc. -3.6%
PORTFOLIO CHANGES
Securities added during the 3rd quarter 2003
- ----------------------------------------------
EnCana Corp.
Fannie Mae, 5.0%, due 7/1/18
Freddie Mac, 2.75%, due 8/15/06
Newell Financial Trust I,
Cv., 5.25%, due 12/1/27
Newell Rubbermaid Inc.
Safeway Inc., 4.8%, due 7/16/07
United States Treasury Notes,
3.25%, due 8/15/07
United States Treasury Notes,
2.375%, due 8/15/06
Securities sold during the 3rd quarter 2003
- ----------------------------------------------
Conoco Inc., 5.9%, due 4/15/04
Merck & Co., Inc.
The Walt Disney Company,
5.125%, due 12/15/03
Tribune Company, 6.5%, due 7/30/04
United States Treasury Notes,
5.25%, due 5/15/04
United States Treasury STRIPS,
0.0%, due 2/15/14
- ---------------
(F) Individual security performance is measured by the change in the security's
price; for stocks, dividends are assumed to be reinvested at the time they
were paid.
(G) Securities held for the entire quarter.
6
U.S. Small-Capitalization Value Trust(H)
SELECTED PORTFOLIO PERFORMANCE(I)
Strongest performers for the 3rd quarter 2003(J)
- -------------------------------------------------
1. The Bon-Ton Stores, Inc. +101.7%
2. Fedders Corporation +90.4%
3. Garden Fresh Restaurant Corp. +76.8%
4. Res-Care, Inc. +70.4%
5. Beverly Enterprises, Inc. +69.1%
6. Compex Technologies, Inc. +64.5%
7. InterCept, Inc. +61.9%
8. AMCOL International
Corporation +55.1%
9. Deckers Outdoor Corporation +54.1%
10. Insight Enterprises, Inc. +52.2%
Weakest performers for the 3rd quarter 2003(J)
- ----------------------------------------------
1. Atlantic Coast Airlines
Holdings, Inc. -36.3%
2. Tropical Sportswear Int'l
Corporation -36.1%
3. Metro One Telecommunications,
Inc. -32.2%
4. Veritas DGC Inc. -30.6%
5. Too Inc. -27.3%
6. Radiologix, Inc. -27.1%
7. Dan River Inc. -26.4%
8. Wolverine Tube, Inc. -26.1%
9. Alliance Imaging, Inc. -21.8%
10. Correctional Services
Corporation -21.7%
- ---------------
(H) Portfolio changes are not reported for U.S. Small-Cap due to the Fund's
high volume of trading.
(I) Individual security performance is measured by the change in the security's
price; for stocks, dividends are assumed to be reinvested at the time they
were paid.
(J) Securities held for the entire quarter.
7
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 2003 (Unaudited)
(Amounts in Thousands)
American Leading Companies Trust
Shares/Par Value
- ----------------------------------------------------------------------------------------
Common Stock and Equity Interests -- 98.1%
Consumer Discretionary -- 12.0%
Household Durables -- 0.4%
Koninklijke (Royal) Philips Electronics N.V. - ADR 93 $ 2,131
--------
Leisure Equipment and Products -- 0.5%
Eastman Kodak Company 120 2,513
--------
Media -- 5.8%
AOL Time Warner Inc. 530 8,008(A)
Comcast Corporation - Class A 70 2,162(A)
Liberty Media Corporation 1,850 18,444(A)
--------
28,614
--------
Multi-Line Retail -- 0.9%
The May Department Stores Company 184 4,537
--------
Specialty Retail -- 4.0%
The Home Depot, Inc. 135 4,300
The TJX Companies, Inc. 810 15,730
--------
20,030
--------
Consumer Staples -- 9.1%
Beverages -- 0.9%
The Pepsi Bottling Group, Inc. 225 4,630
--------
Food and Staples Retailing -- 4.2%
Albertson's, Inc. 475 9,771
The Kroger Co. 520 9,287(A)
Wal-Mart Stores, Inc. 35 1,955
--------
21,013
--------
Household Products -- 0.3%
Kimberly-Clark Corporation 25 1,283
--------
8
Shares/Par Value
- ----------------------------------------------------------------------------------------
Consumer Staples -- Continued
Personal Products -- 0.4%
Avon Products, Inc. 30 $ 1,937
--------
Tobacco -- 3.7%
Altria Group, Inc. 420 18,396
--------
Energy -- 4.0%
Energy Equipment and Services -- 0.7%
Transocean Inc. 175 3,500(A)
--------
Oil and Gas -- 3.3%
Anadarko Petroleum Corporation 96 4,009
Apache Corporation 77 5,339
Devon Energy Corporation 145 6,988
--------
16,336
--------
Financials -- 27.7%
Capital Markets -- 2.6%
J.P. Morgan Chase & Co. 387 13,286
--------
Commercial Banks -- 10.2%
Bank of America Corporation 172 13,399
Bank One Corporation 406 15,692
Lloyds TSB Group plc 3,176 21,845
--------
50,936
--------
Diversified Financial Services -- 3.9%
Citigroup Inc. 426 19,396
--------
Thrifts and Mortgage Finance -- 11.0%
Fannie Mae 100 7,020
MGIC Investment Corporation 410 21,349
Washington Mutual, Inc. 670 26,378
--------
54,747
--------
9
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets -- Continued
American Leading Companies Trust -- Continued
Shares/Par Value
- ----------------------------------------------------------------------------------------
Health Care -- 18.9%
Health Care Providers and Services -- 12.7%
Health Net Inc. 818 $ 25,906(A)
UnitedHealth Group Incorporated 435 21,889
Wellpoint Health Networks Inc. 205 15,763(A)
--------
63,558
--------
Pharmaceuticals -- 6.2%
Bristol-Myers Squibb Company 540 13,856
Johnson & Johnson 118 5,843
Merck & Co., Inc. 123 6,226
Pfizer Inc. 118 3,585
Wyeth 25 1,153
--------
30,663
--------
Industrials -- 8.0%
Aerospace/Defense -- 1.7%
General Dynamics Corporation 108 8,431
--------
Industrial Conglomerates -- 6.3%
General Electric Company 340 10,135
Tyco International Ltd. 1,060 21,656
--------
31,791
--------
Information Technology -- 10.4%
Communications Equipment -- 0.7%
Nokia Oyj - ADR 240 3,744
--------
Computers and Peripherals -- 5.8%
Dell Inc. 250 8,348(A)
International Business Machines Corporation 152 13,426
Lexmark International, Inc. 115 7,265(A)
--------
29,039
--------
IT Services -- 1.6%
Electronic Data Systems Corporation 400 8,080
--------
10
Shares/Par Value
- ----------------------------------------------------------------------------------------
Information Technology -- Continued
Software -- 2.3%
Microsoft Corporation 405 $ 11,255
--------
Telecommunication Services -- 7.3%
Diversified Telecommunication Services -- 1.8%
ALLTEL Corporation 190 8,804
--------
Wireless Telecommunication Services -- 5.5%
Nextel Communications, Inc. 1,400 27,566(A)
--------
Utilities -- 0.7%
Multi-Utilities and Unregulated Power -- 0.7%
Duke Energy Corporation 190 3,384
--------
Total Common Stock and Equity Interests (Identified Cost -- $360,378) 489,600
- ----------------------------------------------------------------------------------------
Repurchase Agreements -- 2.0%
Goldman, Sachs & Company
1.07%, dated 9/30/03, to be repurchased at $4,932 on
10/1/03
(Collateral: $4,876 Fannie Mae mortgage-backed securities,
6.00%, due 11/1/32, value $5,057) $ 4,932 4,932
11
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets -- Continued
American Leading Companies Trust -- Continued
Par Value
- ----------------------------------------------------------------------------------------
Repurchase Agreements -- Continued
State Street Bank & Trust Company
1.00%, dated 9/30/03, to be repurchased at $4,932 on
10/1/03 (Collateral: $5,015 Fannie Mae notes,
1.55%, due 7/7/05, value $5,033) 4,931 $ 4,931
--------
Total Repurchase Agreements (Identified Cost -- $9,863) 9,863
- ----------------------------------------------------------------------------------------
Total Investments -- 100.1% (Identified Cost -- $370,241) 499,463
Other Assets Less Liabilities -- (0.1)% (382)
--------
NET ASSETS CONSIST OF:
Accumulated paid-in-capital applicable to:
28,177 Primary Class shares outstanding $406,529
652 Institutional Class shares outstanding 10,779
Undistributed net investment income/(loss) 67
Accumulated net realized gain/(loss) on investments and
foreign currency transactions (47,535)
Unrealized appreciation/(depreciation) of investments and
foreign currency transactions 129,241
--------
NET ASSETS -- 100.0% $499,081
========
NET ASSET VALUE PER SHARE:
PRIMARY CLASS $17.30
========
INSTITUTIONAL CLASS $17.74
========
- ----------------------------------------------------------------------------------------
(A) Non-income producing.
See notes to financial statements.
12
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 2003 (Unaudited)
(Amounts in Thousands)
Balanced Trust
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
Common Stocks and Equity Interests -- 64.0%
Consumer Discretionary -- 6.0%
Household Durables -- 1.2%
Newell Rubbermaid Inc. 33 $ 724
-------
Multi-Line Retail -- 3.4%
Target Corporation 34 1,279
Wal-Mart Stores, Inc. 13 726
-------
2,005
-------
Specialty Retail -- 1.4%
The Home Depot, Inc. 25 809
-------
Consumer Staples -- 7.0%
Beverages -- 2.4%
Anheuser-Busch Companies, Inc. 13 642
PepsiCo, Inc. 16 747
-------
1,389
-------
Food and Drug Retailing -- 3.2%
McCormick & Company, Incorporated 40 1,097
SYSCO Corporation 24 791
-------
1,888
-------
Household Products -- 1.4%
Kimberly-Clark Corporation 17 847
-------
Energy -- 5.0%
Oil and Gas -- 3.7%
BP Plc - ADR 28 1,179
Exxon Mobil Corporation 28 1,025
-------
2,204
-------
Oil and Gas (Exploration and Production) -- 1.3%
EnCana Corp. 21 764
-------
Financials -- 14.3%
Banks -- 2.2%
Charter One Financial, Inc. 41 1,263
-------
13
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statement of Net Assets -- Continued
Balanced Trust -- Continued
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
Diversified Financials -- 5.1%
Citigroup Inc. 30 $ 1,365
Fannie Mae 13 892
J.P. Morgan Chase & Co. 22 759
-------
3,016
-------
Insurance -- 5.6%
Jefferson-Pilot Corporation 11 466
Lincoln National Corporation 26 920
Principal Financial Group, Inc. 30 929
The PMI Group, Inc. 29 962
-------
3,277
-------
Real Estate Investment Trusts -- 1.4%
Vornado Realty Trust 18 850
-------
Health Care -- 11.7%
Health Care (Medical Products and Supplies) -- 3.8%
Biomet, Inc. 28 941
Medtronic, Inc. 28 1,323
-------
2,264
-------
Health Care Providers and Services -- 1.6%
Cardinal Health, Inc. 16 934
-------
Pharmaceuticals -- 6.3%
Abbott Laboratories 20 851
IVAX Corporation 37 725(A)
Johnson & Johnson 20 991
Pfizer Inc. 37 1,131
-------
3,698
-------
Industrials -- 9.1%
Commercial Services and Supplies -- 1.6%
Automatic Data Processing, Inc. 19 670
Cintas Corporation 7 258
-------
928
-------
14
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
Electrical Equipment -- 1.2%
Emerson Electric Company 14 $ 716
-------
Industrial Conglomerates -- 1.6%
General Electric Company 32 954
-------
Machinery -- 2.1%
Dover Corporation 22 778
Illinois Tool Works Inc. 7 464
-------
1,242
-------
Road and Rail -- 2.6%
Kansas City Southern 62 686(A)
Union Pacific Corporation 14 815
-------
1,501
-------
Information Technology -- 8.3%
Computers and Peripherals -- 2.5%
Dell Inc. 23 768(A)
International Business Machines Corporation 8 671
-------
1,439
-------
Semiconductor Equipment and Production -- 3.1%
Applied Materials, Inc. 36 649(A)
Intel Corporation 27 743
Texas Instruments Incorporated 20 445
-------
1,837
-------
Software -- 2.7%
Microsoft Corporation 29 812
Oracle Corporation 70 785(A)
-------
1,597
-------
15
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statement of Net Assets -- Continued
Balanced Trust -- Continued
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
Materials -- 1.6%
Metals and Mining -- 1.6%
Rio Tinto plc - ADR 11 $ 921
-------
Telecommunication Services -- 1.0%
Diversified Telecommunication Services -- 1.0%
SBC Communications Inc. 28 623
-------
Total Common Stocks and Equity Interests (Identified Cost -- $35,247) 37,690
- ----------------------------------------------------------------------------------------------------
Preferred Stocks -- 2.6%
Newell Financial Trust I, Cv., 5.25% 5shs 193
State Street Corporation, Cv., 6.75% 2 493
International Paper Capital Trust, Cv., 5.25% 17 821
-------
Total Preferred Stocks (Identified Cost -- $1,440) 1,507
- ----------------------------------------------------------------------------------------------------
Rate Maturity Date Par Value
- ----------------------------------------------------------------------------------------------
Corporate Bonds and Notes -- 15.1%
Banking and Finance -- 2.4%
Bank of America Corporation 5.125% 11/15/14 $ 330 $ 338
Caterpillar Financial Services
Corporation 4.875% 6/15/07 200 215
Merrill Lynch & Co., Inc. 6.000% 11/15/04 500 525
Wells Fargo & Company 5.000% 11/15/14 330 335
-------
1,413
-------
Consumer Services -- 1.1%
Procter & Gamble Company 6.600% 12/15/04 600 637
-------
Electronics (Semiconductors) -- 1.6%
Analog Devices Incorporated 4.750% 10/1/05 900 916
-------
Finance -- 1.8%
General Motors Acceptance Corporation 3.030% 5/19/05 525 532
Morgan Stanley & Company, Inc. 4.250% 5/15/10 550 555
-------
1,087
-------
16
Rate Maturity Date Par Value
- ----------------------------------------------------------------------------------------------
Food -- 3.7%
Kroger Company 6.750% 4/15/12 $ 700 $ 791
Safeway Inc. 4.800% 7/16/07 525 553
Unilever Capital Corporation 6.875% 11/1/05 750 825
-------
2,169
-------
Investment Banking/Brokerage -- 1.1%
Goldman Sachs Group Incorporated 5.700% 9/1/12 625 669
-------
Multi-Line Retail -- 0.8%
Wal-Mart Stores, Inc. 4.550% 5/1/13 475 480
-------
Railroads -- 1.4%
Union Pacific Corporation 6.625% 2/1/08 750 846
-------
Telecommunications (Cellular/Wireless) -- 1.2%
Verizon Global Funding Corp. 6.875% 6/15/12 600 684
-------
Total Corporate Bonds and Notes
(Identified Cost -- $8,459) 8,901
- ----------------------------------------------------------------------------------------------
U.S. Government and Agency Obligations -- 14.1%
Fixed Rate Securities -- 12.2%
Fannie Mae 5.000% 7/1/18 918 942
Federal Farm Credit Bank 3.750% 4/9/10 475 476
Federal Farm Credit Bank 5.000% 5/10/04 400 409
Freddie Mac 2.750% 8/15/06 850 864
Freddie Mac 3.160% 5/7/07 675 683
United States Treasury Notes 2.375% 8/15/06 700 710
United States Treasury Notes 3.250% 8/15/07 850 878
United States Treasury Notes 5.000% 8/15/11 550 601
United States Treasury Notes 6.500% 5/15/05 430 466
United States Treasury Notes 6.500% 10/15/06 1,000 1,133
-------
7,162
-------
17
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statement of Net Assets -- Continued
Balanced Trust -- Continued
Rate Maturity Date Par Value
- ----------------------------------------------------------------------------------------------
Stripped Securities -- 1.9%
United States Treasury STRIPS 0.000% 11/15/04 $ 600 $ 592(B)
United States Treasury STRIPS 0.000% 8/15/05 550 536(B)
-------
1,128
-------
Total U.S. Government and Agency
Obligations (Identified Cost -- $8,032) 8,290
- ----------------------------------------------------------------------------------------------
U.S. Government Agency Mortgage-Backed Securities -- 5.1%
Fixed Rate Securities -- 5.1%
Government National Mortgage
Association 6.000% 8/15/28 to 9/15/32 2,289 2,383
Government National Mortgage
Association 7.000% 2/15/28 to 12/15/31 583 620
-------
3,003
-------
Total U.S. Government Agency
Mortgage-Backed Securities (Identified
Cost -- $2,908) 3,003
- ----------------------------------------------------------------------------------------------
Total Investments -- 100.9% (Identified Cost -- $56,086) 59,391
Other Assets Less Liabilities -- (0.9)% (504)
-------
NET ASSETS -- 100.0% $58,887
=======
18
- ----------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Accumulated paid-in-capital applicable to:
3,653 Primary Class shares outstanding $40,624
2,107 Financial Intermediary Class shares outstanding 15,342
46 Institutional Class shares outstanding 1,039
Undistributed net investment income/(loss) 262
Accumulated net realized gain/(loss) on investments and foreign currency
transactions (1,685)
Unrealized appreciation/(depreciation) of investments and foreign
currency transactions 3,305
-------
NET ASSETS $58,887
=======
NET ASSET VALUE PER SHARE:
PRIMARY CLASS $10.15
=======
FINANCIAL INTERMEDIARY CLASS $10.14
=======
INSTITUTIONAL CLASS $10.14
=======
- ----------------------------------------------------------------------------------------------
(A) Non-income producing.
(B) STRIPS -- Separate Trading of Registered Interest and Principal of
Securities. This is a pre-stripped zero coupon bond that is a direct
obligation of the U.S. Treasury.
See notes to financial statements.
19
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets
Legg Mason Investors Trust
September 30, 2003 (Unaudited)
(Amounts in Thousands)
U.S. Small-Capitalization Value Trust
Shares/Par Value
- -----------------------------------------------------------------------------------------
Common Stock and Equity Interests -- 95.7%
Auto and Transportation -- 4.9%
Aftermarket Technology Corp. 31 $ 350(A)
AirNet Systems, Inc. 12 49(A)
American Axle & Manufacturing Holdings, Inc. 35 1,041(A)
Arctic Cat, Inc. 4 84
ArvinMeritor, Inc. 97 1,719
Asbury Automotive Group Inc. 21 353(A)
Atlantic Coast Airlines Holdings, Inc. 60 513(A)
Aviall, Inc. 29 354(A)
Bandag, Incorporated - Class A 12 354
BorgWarner, Inc. 1 41
Cooper Tire & Rubber Company 83 1,322
Dana Corporation 4 54
Dura Automotive Systems, Inc. 23 219(A)
Genesee & Wyoming Inc. 7 155(A)
Monro Muffler Brake, Inc. 5 157(A)
Offshore Logistics, Inc. 30 613(A)
Polaris Industries Inc. 4 326
R & B, Inc. 6 73(A)
SkyWest, Inc. 43 746
Spartan Motors, Inc. 11 98
Stoneridge, Inc. 3 44(A)
TBC Corporation 8 190(A)
Tower Automotive, Inc. 103 464(A)
--------
9,319
--------
Consumer Discretionary -- 26.1%
Ambassadors Group, Inc. 3 46(A)
American Greetings Corporation 45 874(A)
APAC Customer Services Inc. 24 61(A)
Aztar Corporation 33 583(A)
Bally Total Fitness Holding Corporation 60 519(A)
Barnes & Noble, Inc. 56 1,426(A)
Benihana Inc. 8 88(A)
BJ's Wholesale Club, Inc. 87 1,677(A)
Blair Corporation 9 187
Bob Evans Farms, Inc. 37 993
20
Shares/Par Value
- -----------------------------------------------------------------------------------------
Consumer Discretionary -- Continued
Borders Group, Inc. 53 $ 1,003(A)
Brass Eagle Inc. 12 101(A)
Brown Shoe Company, Inc. 25 777
Buca, Inc. 13 70(A)
Burlington Coat Factory Warehouse Corporation 57 1,072
Callaway Golf Company 23 321
Carriage Services, Inc. 28 93(A)
CEC Entertainment Inc. 20 784(A)
Central Garden & Pet Company 23 596(A)
Chromcraft Revington, Inc. 11 136(A)
Coinstar, Inc. 17 227(A)
Correctional Services Corporation 13 30(A)
CPI Corporation 2 33
Deckers Outdoor Corporation 5 46(A)
Department 56, Inc. 18 229(A)
Dillard's, Inc. 27 370
Dover Downs Gaming & Entertainment, Inc. 20 163
Duckwall-ALCO Stores, Inc. 4 50(A)
Duratek, Inc. 2 21(A)
Electronics Boutique Holdings Corp. 3 97(A)
Exponent, Inc. 8 132(A)
Fedders Corporation 16 93
Finlay Enterprises, Inc. 15 218(A)
First Cash, Inc. 7 148(A)
Fresh Brands, Inc. 8 108
Friedman's, Inc. 25 345
Friendly Ice Cream Corporation 9 69(A)
Frisch's Restaurants, Inc. 6 143
Furniture Brands International, Inc. 68 1,634(A)
Garden Fresh Restaurant Corp. 7 113(A)
Genesco Inc. 36 581(A)
Global Imaging Systems, Inc. 1 15(A)
Handleman Company 46 771
IKON Office Solutions, Inc. 186 1,357
Insight Enterprises, Inc. 20 309(A)
Isle of Capri Casinos, Inc. 36 707(A)
Jack in the Box Inc. 64 1,145(A)
21
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets -- Continued
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------
Consumer Discretionary -- Continued
JAKKS Pacific, Inc. 34 $ 416(A)
Johnson Outdoors Inc. 10 123(A)
Koss Corporation 5 83
La-Z-Boy Incorporated 40 886
Libbey Inc. 23 648
Lithia Motors, Inc. 20 397
Lone Star Steakhouse & Saloon, Inc. 5 109
MarineMax, Inc. 20 286(A)
Maxwell Shoe Company Inc. 19 267(A)
Mity Enterprises, Inc. 5 63(A)
Monarch Casino & Resort, Inc. 15 167(A)
Movado Group, Inc. 13 291
Navarre Corporation 11 30(A)
Navigant International, Inc. 23 325(A)
NCO Portfolio Management, Inc. 23 140(A)
Nu Skin Enterprises, Inc. 11 143
O'Charley's Inc. 17 252(A)
OshKosh B'Gosh, Inc. 7 180
Papa John's International, Inc. 30 739(A)
Parlux Fragrances, Inc. 4 13(A)
Payless ShoeSource, Inc. 97 1,259(A)
Phillips-Van Heusen Corporation 38 576
Playtex Products, Inc. 60 356(A)
Point.360 3 11(A)
Pre-Paid Legal Services, Inc. 15 342(A)
Q.E.P. Co., Inc. 3 26(A)
R.H. Donnelley Corporation 27 1,087(A)
Radiologix, Inc. 26 78(A)
REX Stores Corporation 16 212(A)
Rush Enterprises, Inc. - Class A 5 30(A)
Rush Enterprises, Inc. - Class B 5 30(A)
Russell Corporation 41 672
Ryan's Family Steak Houses, Inc. 53 682(A)
S&K Famous Brands, Inc. 1 20(A)
Salton, Inc. 22 219(A)
School Specialty, Inc. 26 725(A)
Service Corporation International 142 648(A)
22
Shares/Par Value
- -----------------------------------------------------------------------------------------
Consumer Discretionary -- Continued
Shoe Carnival, Inc. 4 $ 59(A)
ShopKo Stores, Inc. 40 606(A)
SOURCECORP, Incorporated 18 423(A)
Stage Stores, Inc. 23 586(A)
Stanley Furniture Company, Inc. 8 250
Steinway Musical Instruments, Inc. 11 193(A)
Steven Madden, Ltd. 16 298(A)
Stewart Enterprises, Inc. 173 657(A)
Strattec Security Corporation 6 267(A)
Sunrise Assisted Living, Inc. 36 944(A)
Tandy Brands Accessories, Inc. 8 117
Tech Data Corporation 9 265(A)
The Bon-Ton Stores, Inc. 18 174
The Boyds Collection, Ltd. 100 451(A)
The Brink's Company 3 50
The Buckle, Inc. 35 676(A)
The Cato Corporation 22 450
The Nautilus Group, Inc. 46 574
The Reader's Digest Association, Inc. 126 1,756
The Toro Company 31 1,377
Too Inc. 43 632(A)
Tropical Sportswear Int'l Corporation 20 89(A)
Tupperware Corporation 50 664
United Auto Group, Inc. 54 1,247(A)
Valassis Communications, Inc. 65 1,713(A)
Waste Holdings, Inc. 21 184(A)
Water Pik Technologies, Inc. 19 190(A)
Workflow Management, Inc. 22 108(A)
Zale Corporation 29 1,266(A)
--------
49,358
--------
Consumer Staples -- 3.4%
Alliance Imaging, Inc. 61 209(A)
D & K Healthcare Resources, Inc. 13 180
DIMON Incorporated 77 528
Interstate Bakeries Corporation 53 801
John B. Sanfilippo & Son, Inc. 9 183(A)
23
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets -- Continued
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------
Consumer Staples -- Continued
Ruddick Corporation 59 $ 911
Sanderson Farms, Inc. 7 227
Schweitzer-Mauduit International, Inc. 20 513
7-Eleven, Inc. 18 243(A)
Standard Commercial Corporation 17 316
Sylvan, Inc. 3 29(A)
Universal Corporation 27 1,150
Winn-Dixie Stores, Inc. 105 1,010
--------
6,300
--------
Energy -- 3.7%
AZZ Incorporated 11 118(A)
Berry Petroleum Company 27 484
Cimarex Energy Co. 4 84
DQE, Inc. 95 1,465
Encore Aquisition Company 6 119(A)
Global Power Equipment Group Inc. 74 392(A)
Maine & Maritimes Corporation 1 43
Nuevo Energy Company 24 443(A)
Oil States International, Inc. 32 404(A)
Petroleum Development Corporation 26 310(A)
Range Resources Corporation 73 501(A)
Stone Energy Corporation 30 1,073(A)
The Houston Exploration Company 38 1,330(A)
Veritas DGC Inc. 5 42(A)
World Fuel Services Corporation 9 239
--------
7,047
--------
Financials -- 28.1%
ABC Bancorp 13 203
ACE Cash Express, Inc. 17 255(A)
Advanta Corp. 12 133
Alfa Corporation 1 18
Allegiant Bancorp, Inc. 12 251
American Financial Group, Inc. 19 415
American Home Mortgage Holdings, Inc. 14 241
AmericanWest Bancorporation 4 66(A)
AmerUs Group Co. 49 $ 1,659
24
Shares/Par Value
- -----------------------------------------------------------------------------------------
Financials -- Continued
Anchor BanCorp Wisconsin, Inc. 30 $ 700
Arrow Financial Corporation 4 107
California First National Bancorp 10 111
Camco Financial Corporation 11 184
Camden National Corporation 9 257
Capital Crossing Bank 7 231(A)
Capitol Bancorp Ltd. 14 375
Ceres Group, Inc. 69 276(A)
Chemical Financial Corporation 39 1,193
Cherokee Inc. 11 227(A)
Clark, Inc. 10 129(A)
Coastal Bancorp, Inc. 8 254
Columbia Banking System, Inc. 23 400
Commercial Federal Corporation 77 1,863
Community Bank System, Inc. 15 672
Community First Bankshares, Inc. 9 235
Community Trust Bancorp, Inc. 20 595
Corrus Bankshares, Inc. 20 1,049
Cotton States Life Insurance Company 8 83
Crawford & Company 11 78
Credit Acceptance Corporation 8 95(A)
Donegal Group Inc. -- Class A 4 62
Donegal Group Inc. -- Class B 2 30
Downey Financial Corp. 40 1,860
FBL Financial Group, Inc. 44 1,072
Financial Federal Corporation 5 143(A)
Financial Institutions, Inc. 5 105
First Citizens Bancshares Inc. 15 1,533
First Federal Capital Corp. 32 662
First Indiana Corporation 25 468
First Mutual Bancshares, Inc. 5 106
First Place Financial Corp. 5 87
First Republic Bank 19 598
Firstbank Corporation 3 82
FIRSTFED AMERICA BANCORP, INC. 17 380
FirstFed Financial Corp. 26 1,031(A)
Flagstar Bancorp, Inc. 42 971
25
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statement of Net Assets -- Continued
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------
Financials -- Continued
Flushing Financial Corporation 22 $ 450
FNB Financial Services Corporation 7 162
Fremont General Corporation 107 1,359
Friedman, Billings, Ramsey Group, Inc. 3 50
Gold Banc Corporation, Inc. 24 292
Greater Bay Bancorp 79 1,643
Hawthorne Financial Corporation 4 145(A)
HMN Financial, Inc. 6 129
IBERIABANK Corporation 5 247
IndyMac Bancorp, Inc. 97 2,245
InterCept, Inc. 1 13(A)
International Bancshares Corporation 13 527
Interpool, Inc. 26 412
Investment Technology Group, Inc. 42 807(A)
Irwin Financial Corporation 46 1,128
ITLA Capital Corporation 7 311(A)
Jacksonville Bancorp, Inc. 2 60
John H. Harland Company 36 940
LandAmerica Financial Group, Inc. 31 1,439
Local Financial Corporation 28 506(A)
MAF Bancorp, Inc. 6 218
MainSource Financial Group, Inc. 2 47
Matrix Bancorp, Inc. 8 68(A)
MBT Financial Corp. 10 163
McGrath Rentcorp 1 17
Merchants Bancshares, Inc. 4 119
National Western Life Insurance Company 4 536(A)
NCO Group, Inc. 28 650(A)
NetBank, Inc. 12 151
New Century Financial Corporation 42 1,202
North Central Bancshares, Inc. 3 89
North Valley Bancorp 11 174
Northrim BanCorp Inc. 8 149
Onyx Acceptance Corporation 8 80(A)
Oriental Financial Group Inc. 8 194
Pacific Crest Capital, Inc. 4 85
Parkvale Financial Corporation 9 220
26
Shares/Par Value
- -----------------------------------------------------------------------------------------
Financials -- Continued
Pegasystems Inc. 18 $ 135(A)
PennFed Financial Services, Inc. 3 81
Peoples Bancorp Inc. 4 111
PFF Bancorp, Inc. 18 571
PRG Shultz International, Inc. 55 315(A)
Provident Financial Group, Inc. 5 145
Republic Bancorp, Inc. 83 1,108
Republic First Bancorp, Inc. 10 116(A)
Second Bancorp Incorporated 8 221
Simmons First National Corporation 8 198
Southwest Bancorp, Inc. 11 179
St. Francis Capital Corporation 15 442
Sterling Financial Corporation 14 390(A)
Stewart Information Services Corporation 29 805(A)
The BISYS Group, Inc. 36 468(A)
The Commerce Group, Inc. 57 2,149
Timberland Bancorp, Inc. 6 153
Triad Guaranty Inc. 17 840(A)
TriCo Bancshares 9 243
Trover Solutions, Inc. 16 112(A)
U.S.B. Holding Co., Inc. 11 201
UICI 59 737(A)
United Rentals, Inc. 102 1,633(A)
Universal American Financial Corp. 30 263(A)
Unizan Financial Corp. 27 537
Vail Banks, Inc. 9 132
Washington Banking Company 3 49
West Coast Bancorp 13 254
Westcorp 35 1,228
World Acceptance Corporation 23 305(A)
WSFS Financial Corporation 4 169
Yardville National Bancorp 10 201
--------
53,063
--------
Health Care -- 4.0%
Albany Molecular Research, Inc. 30 437(A)
AMN Healthcare Services, Inc. 47 757(A)
27
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets -- Continued
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------
Health Care -- Continued
Beverly Enterprises, Inc. 39 $ 230(A)
Compex Technologies, Inc. 15 116(A)
CONMED Corporation 1 19(A)
Cross Country Healthcare, Inc. 6 87(A)
Curative Health Services, Inc. 16 288(A)
Embrex, Inc. 5 53(A)
Enzon Pharmaceuticals, Inc. 55 643(A)
Genesis Health Ventures, Inc. 23 556(A)
Horizon Health Corporation 5 102(A)
IntegraMed America, Inc. 2 11(A)
MIM Corporation 27 201(A)
National Dentex Corporation 5 101(A)
National Home Health Care Corp. 6 50(A)
Nutraceutical International Corporation 3 35(A)
Orthodontic Centers of America, Inc. 37 293(A)
Owens & Minor, Inc. 12 294
PacifiCare Health Systems, Inc. 34 1,635(A)
Pediatric Services of America, Inc. 5 43(A)
Prime Medical Services, Inc. 30 133(A)
RehabCare Group, Inc. 20 348(A)
Res-Care, Inc. 33 251(A)
Sola International Inc. 41 662(A)
VitalWorks Inc. 52 275(A)
--------
7,620
--------
Industrials -- 0.1%
Noble International, Ltd. 10 104
Rockford Corporation 8 58(A)
--------
162
--------
Information Technology -- 2.2%
Alloy, Inc. 28 155(A)
Black Box Corporation 25 991
CompuCom Systems, Inc. 49 207(A)
CSG Systems International, Inc. 89 1,315(A)
ePlus inc 17 268(A)
ESS Technology, Inc. 3 28(A)
GameTech International, Inc. 3 $ 8(A)
28
Shares/Par Value
- -----------------------------------------------------------------------------------------
Information Technology -- Continued
GTSI Corp. 11 $ 112(A)
Metro One Telecommunications, Inc. 35 121(A)
Sensient Technologies Corporation 34 722
TESSCO Technologies Incorporated 6 59(A)
The Allied Defense Group, Inc. 6 135(A)
TSR, Inc. 7 52
United Industrial Corporation 2 35
--------
4,208
--------
Materials -- 8.6%
Ag Sevices of America, Inc. 9 50(A)
Albany International Corp. 5 154
AMCOL International Corporation 2 22
Ameron International Corporation 10 343
Apogee Enterprises, Inc. 6 63
Astronics Corporation 10 40(A)
Bairnco Corporation 11 79
Bluegreen Corporation 36 211(A)
Building Materials Holding Corporation 22 288
Centex Construction Products, Inc. 3 143
Culp, Inc. 13 118(A)
Dan River Inc. 14 27(A)
Ennis Business Forms, Inc. 23 302
Hughes Supply, Inc. 21 678
IMCO Recycling Inc. 2 14
Intergrated Electrical Services, Inc. 63 436(A)
Knape & Vogt Manufacturing Company 2 19
Lennox International Inc. 35 510
Mobile Mini, Inc. 17 328(A)
NCI Building Systems, Inc. 23 456(A)
New England Business Service, Inc. 18 466
Northwest Pipe Company 5 70(A)
Oregon Steel Mills, Inc. 13 34(A)
Perini Corporation 17 115(A)
Precision Castparts Corp. 57 1,997
Quanex Corporation 20 655
Rock-Tenn Company 6 92
29
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets -- Continued
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------
Materials -- Continued
Silgan Holdings Inc. 15 $ 480(A)
Steel Dynamics, Inc. 60 904(A)
Steel Technologies Inc. 12 148
Stepan Company 15 346
The Anderson's Inc. 7 108
The Eastern Company 4 62
The Keith Companies, Inc. 9 107(A)
The Shaw Group Inc. 56 588(A)
U. S. Concrete, Inc. 22 112(A)
United Defense Industries, Inc. 65 1,843(A)
Universal Forest Products, Inc. 30 733
URS Corporation 42 815(A)
Wolverine Tube, Inc. 9 36(A)
York International Corporation 67 2,304
--------
16,296
--------
Miscellaneous -- 1.8%
CPAC, Inc. 5 30
FMC Corporation 50 1,257(A)
GenCorp Inc. 61 550
Hawkins, Inc. 11 144
Kaman Corporation 36 465
Michael Baker Corporation 3 32(A)
RCM Technologies, Inc. 14 66(A)
The First Years Inc. 5 61
Walter Industries Inc. 72 775
--------
3,380
--------
Producer Durables -- 5.5%
Beazer Homes USA, Inc. 6 464(A)
California Amplifier, Inc. 17 86(A)
Cascade Corporation 19 417
Dominion Homes, Inc. 4 103(A)
Ducommun Incorporated 13 204(A)
Edelbrock Corporation 3 29
Flowserve Corporation 77 1,565(A)
Hector Communications Corporation 6 76(A)
Lincoln Electric Holdings, Inc. 35 $ 766
30
Shares/Par Value
- -----------------------------------------------------------------------------------------
Producer Durables -- Continued
Mesa Laboratories, Inc. 2 $ 15(A)
Mine Safety Appliances Company 15 792
Moog Inc. 15 604(A)
Powell Industries, Inc. 15 257(A)
Rayovac Corporation 46 667(A)
Standard Pacific Corp. 23 857
Summa Industries 7 52(A)
Sypris Solutions, Inc. 2 25
Tecumseh Products Company 16 597
Terex Corporation 35 645(A)
The Genlyte Group, Inc. 15 669(A)
The Lamson & Sessions Co. 18 99(A)
The Manitowoc Company, Inc. 1 26
Thomas Industries Inc. 11 325
Triumph Group, Inc. 22 662(A)
Watts Industries, Inc. 9 157
WESCO International, Inc. 52 272(A)
--------
10,431
--------
Utilities -- 7.3%
AGL Resources Inc. 65 1,831
BayCorp Holdings, Ltd. 1 11(A)
Black Hills Corporation 45 1,389
Central Vermont Public Service Corporation 12 275
Cleco Corporation 77 1,260
Nicor Inc. 40 1,416
Peoples Energy Corporation 60 2,483
PNM Resources Inc. 66 1,851
SEMCO Energy, Inc. 5 22
UIL Holdings Corporation 25 857
Vectren Corporation 16 376
31
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Net Assets -- Continued
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------
Utilities -- Continued
WGL Holdings Inc. 25 $ 678
WPS Resources Corporation 31 1,281
--------
13,730
--------
Total Common Stock and Equity Interests (Identified Cost -- $155,833) 180,914
- -----------------------------------------------------------------------------------------
Warrants -- 0.0%
Financials -- 0.0%
Imperial Credit Industries, Inc. 2wts 0
--------
Total Warrants (Identified Cost -- $0) 0
- -----------------------------------------------------------------------------------------
Repurchase Agreements -- 3.5%
Goldman, Sachs & Company
1.07%, dated 9/30/03, to be repurchased at $3,262 on
10/1/03 (Collateral: $3,226 Fannie Mae mortgage-backed
securities, 6.00%, due 11/1/32, value $3,345) $3,262 3,262
State Street Bank & Trust Company
1.00%, dated 9/30/03, to be repurchased at $3,262 on
10/1/03 (Collateral: $3,345 Fannie Mae discount notes, 0%,
due 2/4/04, value $3,332) 3,262 3,262
--------
Total Repurchase Agreements (Identified Cost -- $6,524) 6,524
- -----------------------------------------------------------------------------------------
Total Investments -- 99.2% (Identified Cost -- $162,357) 187,438
Other Assets Less Liabilities -- 0.8% 1,504
--------
NET ASSETS -- 100.0% $188,942
========
32
- -----------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Accumulated paid-in capital applicable to:
15,466 Primary Class shares outstanding $158,599
582 Institutional Class shares outstanding 6,355
Undistributed net investment income/(loss) (514)
Accumulated net realized gain/(loss) on investments and
foreign currency transactions (579)
Unrealized appreciation/(depreciation) of investments and
foreign currency transactions 25,081
--------
NET ASSETS $188,942
========
NET ASSET VALUE PER SHARE:
PRIMARY CLASS $11.75
========
INSTITUTIONAL CLASS $12.38
========
- -----------------------------------------------------------------------------------------
(A) Non-income producing.
See notes to financial statements.
33
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Statements of Operations
Legg Mason Investors Trust, Inc.
(Amounts in Thousands) (Unaudited)
Six Months Ended 9/30/03
------------------------------------------------
U.S. Small-
American Leading Balanced Capitalization
Companies Trust Trust Value Trust
- ------------------------------------------------------------------------------------------------
Investment Income:
Dividends(A) $ 4,589 $ 363 $ 1,188
Interest 28 501 34
------- ------ -------
Total investment income 4,617 864 1,222
------- ------ -------
Expenses:
Management fee 1,822 217 713
Distribution and service fees:
Primary Class 2,376 136 851
Financial Intermediary Class N/A 27 N/A
Audit and legal fees 19 17 16
Custodian fee 78 44 82
Directors' fees and expenses 13 7 7
Organization expense -- -- 9
Registration fees 11 9 13
Reports to shareholders 46 23 33
Transfer agent and shareholder servicing
expense
Primary Class 181 26 77
Financial Intermediary Class N/A 13 N/A
Institutional Class 1 --(B) 1
Other expenses 3 6 8
------- ------ -------
4,550 525 1,810
Less fees waived -- (44) (74)
------- ------ -------
Total expenses, net of waivers 4,550 481 1,736
------- ------ -------
NET INVESTMENT INCOME/(LOSS) 67 383 (514)
------- ------ -------
Net Realized and Unrealized Gain/(Loss) on
Investments:
Realized gain/(loss) on investments (6,044)(C) (750) 5,703
Change in unrealized
appreciation/(depreciation) of investments 85,415 5,394 41,055
------- ------ -------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS 79,371 4,644 46,758
- ------------------------------------------------------------------------------------------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $79,438 $5,027 $46,244
- ------------------------------------------------------------------------------------------------
(A) Net of foreign taxes withheld of $61, $4, $0 and $0, respectively.
(B) Amounts less than one thousand dollars.
(C) See Note 1 to financial statements -- Reimbursements by Third Parties.
N/A -- Not applicable.
See notes to financial statements.
34
Statements of Changes in Net Assets
Legg Mason Investors Trust, Inc.
(Amounts in Thousands)
American Leading U.S. Small-Capitalization
Companies Trust Balanced Trust Value Trust
-------------------------------------------------------------------------------
For the For the For the
Six Months For the Six Months For the Six Months For the
Ended Year Ended Ended Year Ended Ended Year Ended
9/30/03 3/31/03 9/30/03 3/31/03 9/30/03 3/31/03
- ---------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited)
Change in Net Assets:
Net investment income/(loss) $ 67 $ (139) $ 383 $ 892 $ (514) $ (885)
Net realized gain/(loss) on
investments (6,044) (28,054) (750) (914) 5,703 (4,654)
Change in unrealized
appreciation/(depreciation)
of investments 85,415 (80,550) 5,394 (8,099) 41,055 (46,584)
- ---------------------------------------------------------------------------------------------------------------
Change in net assets resulting
from operations 79,438 (108,743) 5,027 (8,121) 46,244 (52,123)
Distributions to shareholders:
From net investment income:
Primary Class -- -- (321) (348) -- --
Financial Intermediary
Class N/A N/A (279) (318) N/A N/A
Institutional Class -- -- (6) (6) -- --
From net realized gain on
investments:
Primary Class -- -- -- (228) -- --
Financial Intermediary
Class N/A N/A -- (163) N/A N/A
Institutional Class -- -- -- (3) -- --
Change in net assets from Fund
share transactions:
Primary Class (531) (33,912) 1,406 2,015 (7,212) 12,715
Financial Intermediary
Class N/A N/A (475) (2,564) N/A N/A
Institutional Class 1,114 1,005 98 11 (126) 1,714
- ---------------------------------------------------------------------------------------------------------------
Change in net assets 80,021 (141,650) 5,450 (9,725) 38,906 (37,694)
Net Assets:
Beginning of period 419,060 560,710 53,437 63,162 150,036 187,730
- ---------------------------------------------------------------------------------------------------------------
End of period $499,081 $ 419,060 $58,887 $53,437 $188,942 $150,036
- ---------------------------------------------------------------------------------------------------------------
Undistributed net investment
income/(loss) $ 67 $ -- $ 262 $ 485 $ (514) $ --
- ---------------------------------------------------------------------------------------------------------------
N/A -- Not applicable.
See notes to financial statements.
35
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Financial Highlights
Legg Mason Investors Trust, Inc.
Contained below is per share operating performance data for an Institutional
Class share and, with respect to Balance Trust, for a Financial Intermediary
Class share of common stock outstanding, total investment return, ratios to
average net assets and other supplemental data. This information has been
derived from information provided in the financial statements.
Investment Operations
-------------------------------------------------
Net Asset Net
Value, Investment Net Realized and Total From
Beginning Income/ Unrealized Gain/ (Loss) Investment
of Period (Loss) on Investments Operations
- ------------------------------------------------------------------------------------------------------------
American Leading Companies Trust
- -- Institutional Class
Six Months Ended
Sept. 30, 2003(A) $14.83 $ .09 $ 2.82 $ 2.91
Year Ended Mar. 31,
2003 18.27 .15 (3.59) (3.44)
Period Ended Mar. 31,
2002(B) 19.08 .09 (.90) (.81)
Years Ended Mar. 31,
1999(E) 17.95 .08(F) .23 .31
1998 14.71 .10(F) 4.99 5.09
1997(G) 13.30 .07(F) 1.94 2.01
Balanced Trust
- -- Institutional Class
Six Months Ended
Sept. 30, 2003(A) $ 9.38 $ .09(H) $ .82 $ .91
Years Ended Mar. 31,
2003 10.98 .22(H) (1.59) (1.37)
2002 11.64 .19(H,I) .03(I) .22
Period Ended Mar. 31,
2001(J) 11.58 N.M.(H) .06 .06
- -- Financial Intermediary Class
Six Months Ended
Sept. 30, 2003 $ 9.37 $ .08(K) $ .82 $ .90
Years Ended Mar. 31,
2003 10.96 .20(K) (1.58) (1.38)
2002 11.64 .17(K,L) .01(L) .18
Period Ended Mar. 31,
2001(J) 11.58 N.M.(K) .06 .06
- ------------------------------------------------------------------------------------------------------------
(A) Unaudited.
(B) Not annualized.
(C) Annualized.
(D) For the period from June 14, 2001 (commencement of operations) to March 31,
2002.
(E) American Leading Companies Institutional Class (formerly known as Navigator
Class) shares were redeemed on December 3, 1998, and information is for the
period then ended.
(F) Net of fees waived by the adviser pursuant to a voluntary expense limitation
of 0.95% of average daily net assets. If no fees had been waived by the
adviser, the annualized ratio of expenses to average daily net assets would
have been as follows: for the period ended December 3, 1998, 0.95%; for the
year ended March 31, 1998, 0.98%; and for the period ended March 31, 1997,
0.97%.
36
Distributions Ratios/Supplemental Data
------------------------------------------- -----------------------------------------------------------------
From Net Net Net
From Realized Asset Expenses Investment Net Assets,
Net Gain/ Value, to Average Income/(Loss) Portfolio End of
Investment (Loss) on Total End of Total Net to Average Turnover Period
Income/(Loss) Investments Distributions Period Return Assets Net Assets Rate (in thousands)
- ----------------------------------------------------------------------------------------------------------------------------
$ -- $ -- $ -- $17.74 19.62%(B) .85%(C) 1.06%(C) 27.3%(C) $ 11,558
-- -- -- 14.83 (18.83)% .87% 1.02% 19.0% 8,729
-- -- -- 18.27 (4.25)%(B) .87%(C) .62%(C) 22.7%(C) 9,649
-- (.46) (.46) 17.80 1.84%(B) .94%(C,F) .65%(C,F) 47.6%(C) --
-- (1.85) (1.85) 17.95 36.68% .93%(F) .74%(F) 51.4% 82
(.12) (.48) (.60) 14.71 15.16%(B) .86%(C,F) .98%(C,F) 55.7%(C) 55
$(.15) $ -- $(.15) $10.14 9.75%(B) 1.10%(C,H) 1.87%(C,H) 46.3%(C) $ 466
(.16) (.07) (.23) 9.38 (12.58)% 1.10%(H) 2.22%(H) 29.5% 341
(.19) (.69) (.88) 10.98 1.68% 1.10%(H) 1.79%(H,I) 55.4% 391
-- -- -- 11.64 .52%(B) 1.10%(C,H) .52%(C,H) 58.4%(C) 325
$(.13) -- $(.13) $10.14 9.62%(B) 1.35%(C,K) 1.64%(C,K) 46.3%(C) $ 21,355
(.14) (.07) (.21) 9.37 (12.72)% 1.35%(K) 1.96%(K) 29.5% 20,182
(.17) (.69) (.86) 10.96 1.35% 1.35%(K) 1.55%(K,L) 55.4% 26,463
-- -- -- 11.64 .52%(B) 1.35%(C,K) .27%(C,K) 58.4%(C) 30,976
- ----------------------------------------------------------------------------------------------------------------------------
(G) For the period from October 4, 1996 (commencement of operations) to March
31, 1997.
(H) Net of fees waived by the adviser pursuant to a voluntary expense limitation
of 1.10% of average daily net assets. If no fees had been waived by the
adviser, the annualized ratio of expenses to average daily net assets would
have been as follows: for the six months ended September 30, 2003, 1.17%;
and for the years ended March 31, 2003, 1.17%; 2002, 1.21%; and for the
period ended March 31, 2001, 1.16%.
(I) As required, effective April 1, 2001, the Fund adopted the provisions of the
AICPA Audit and Accounting Guide, Audits of Investment Companies, and began
amortizing discount and premium on debt securities. The effect of this
adoption for the year ended March 31, 2002, was an increase in Balanced
Trust's net investment income per share of $.01, a decrease in net realized
and unrealized gain/(loss) per share of $.01, and an increase in the ratio
of net investment income
37
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Financial Highlights -- Continued
Investment Operations
-----------------------------------------
Net Asset Net Net Realized
Value, Investment and Unrealized Total From
Beginning Income/ Gain/ (Loss) on Investment
of Period (Loss) Investments Operations
- -----------------------------------------------------------------------------------
U.S. Small-Capitalization
Value Trust
- -- Institutional Class
Six Months Ended
Sept. 30, 2003(A) $ 9.36 $ .02(M) $ 3.00 $ 3.02
Years Ended Mar. 31,
2003 12.16 .05(M) (2.85) (2.80)
2002 9.30 (.02)(M) 2.88 2.86
2001 7.59 .02(M) 1.69 1.71
2000 7.88 .07(M) (.05) .02
1999(N) 9.92 .05(M) (2.09) (2.04)
- -----------------------------------------------------------------------------------
from 1.71% to 1.79%. Per share data and ratios for periods prior to April 1,
2001, have not been restated to reflect this change in accounting.
(J) For the period March 16, 2001 (commencement of operations) to March 31,
2001.
(K) Net of fees waived by the adviser pursuant to a voluntary expense limitation
of 1.35% of average daily net assets. If no fees had been waived by the
adviser, the annualized ratio of expenses to average daily net assets would
have been as follows: for the six months ended September 30, 2003, 1.49%;
and for the years ended March 31, 2003, 1.46%; 2002, 1.48%; and for the
period ended March 31, 2001, 1.45%.
(L) As required, effective April 1, 2001, the Fund adopted the provisions of the
AICPA Audit and Accounting Guide, Audits of Investment Companies, and began
amortizing discount and premium on debt securities. The effect of this
adoption for the year ended March 31, 2002, was an increase in Balanced
Trust's net investment income per share of $.01, a decrease in net realized
and unrealized gain/(loss) per share of $.01, and an increase in the ratio
of net investment income from 1.47% to 1.55%. Per share data and ratios for
periods prior to April 1, 2001, have not been restated to reflect this
change in accounting.
38
Distributions Ratios/Supplemental Data
- ----------------------------------------------- -----------------------------------------------------------------
From Net Net Net
From Realized Asset Expenses Investment
Net Gain/ Value, to Average Income/(Loss) Portfolio Net Assets,
Investment (Loss) on Total End of Total Net to Average Turnover End of Period
Income/(Loss) Investments Distributions Period Return Assets Net Assets Rate (in thousands)
- ----------------------------------------------------------------------------------------------------------------------------
$ -- $ -- $ -- $12.38 32.27%(B) 1.00%(C,M) .38%(C,M) 39.9%(C) $ 7,204
-- -- -- 9.36 (23.03)% 1.00%(M) .50%(M) 61.0% 5,589
-- -- -- 12.16 30.75% 1.00%(M) .18%(M) 32.1% 5,529
-- -- -- 9.30 22.53% 1.00%(M) .82%(M) 60.7% 711
-- (.31) (.31) 7.59 (.15)% 1.00%(M) .44%(M) 66.2% 31
-- -- -- 7.88 (20.56)%(B) .09%(C,M) .71%(C,M) 29.5%(C) 40
- ----------------------------------------------------------------------------------------------------------------------------
(M) Net of fees waived by the adviser pursuant to a voluntary expense limitation
of 1.00% of average daily net assets. If no fees had been waived by the
adviser, the annualized ratio of expenses to average daily net assets would
have been as follows: for the six months ended September 30, 2003, 1.02%;
and for the years ended March 31, 2003, 1.05%; 2002, 1.20%; 2001, 1.43%; and
2000, 1.36%; and for the period ended March 31, 1999, 1.28%.
(N) For the period June 19, 1998 (commencement of operations) to March 31, 1999.
N.M. -- Not meaningful.
See notes to financial statements.
39
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Notes to Financial Statements
Legg Mason Investors Trust, Inc.
(Amounts in Thousands) (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies:
The Legg Mason Investors Trust, Inc. ("Corporation"), consisting of American
Leading Companies Trust ("American Leading Companies"), Balanced Trust
("Balanced Trust") and U.S. Small-Capitalization Value Trust ("U.S. Small-Cap")
(each a "Fund"), is registered under the Investment Company Act of 1940, as
amended, as an open-end, diversified investment company.
Each Fund offers Primary Class and Institutional Class shares. American
Leading Companies and Balanced Trust also offer Financial Intermediary Class
shares. The Financial Intermediary Class of American Leading Companies is not
currently active. Information about the Primary Class shares offered to retail
investors is contained in a separate report to the shareholders of that class.
The income and expenses of the Funds are allocated proportionately to each class
of shares based on daily net assets, except for Rule 12b-1 distribution fees,
which are charged only on Primary Class and Financial Intermediary Class shares,
and transfer agent and shareholder servicing expenses, which are determined
separately for each class.
Preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Funds in the preparation of their financial statements:
Security Valuation
Equity securities traded on national securities exchanges are valued at the
last quoted sales price, except securities traded on the Nasdaq Stock Market,
Inc. ("NASDAQ") which are valued in accordance with the NASDAQ official closing
price. Over the counter securities are valued at the mean between the latest bid
and asked prices as furnished by dealers who make markets in such securities or
by an independent pricing service. Fixed income securities for which market
quotations are readily available are valued at current market value. Securities
for which market quotations are not readily available are valued at fair value
under procedures established by and under the general supervision of the Board
of Directors.
40
- --------------------------------------------------------------------------------
Security Transactions
Security transactions are recorded on the trade date. Realized gains and
losses from security transactions are reported on an identified cost basis for
both financial reporting and federal income tax purposes. At September 30, 2003,
receivables for securities sold and payables for securities purchased for each
Fund were as follows:
Receivable for Payable for
Securities Sold Securities Purchased
- ---------------------------------------------------------------------------
American Leading Companies $ -- $ 564
Balanced Trust -- --
U.S. Small-Cap 2,353 1,222
For the six months ended September 30, 2003, investment transactions
(excluding short-term investments) were:
Purchases Proceeds From Sales
- ------------------------------------------------------------------------
American Leading Companies $64,791 $68,547
Balanced Trust 15,171 13,107
U.S. Small-Cap 33,727 43,837
Foreign Currency Translation
Assets and liabilities initially expressed in non-U.S. currencies are
translated into U.S. dollars at the closing daily rate of exchange. Purchases
and sales of securities and income and expenses are translated into U.S. dollars
at the prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities and other
assets and liabilities are included with the net realized and unrealized gain or
loss on investment securities.
Deferred Organizational Expenses
Deferred organizational expenses are amortized on a straight line basis over 5
years commencing on the date their respective fund's operations began.
Repurchase Agreements
The Funds may engage in repurchase agreement transactions. Under the terms of
a typical repurchase agreement, a fund takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and a fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield
41
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Notes to Financial Statements -- Continued
- --------------------------------------------------------------------------------
during a fund's holding period. This arrangement results in a fixed rate of
return that is not subject to market fluctuations during the fund's holding
period. The value of the collateral is at all times at least equal to the total
amount of the repurchase obligation, including interest. In the event of
counterparty default, a fund has the right to use the collateral to satisfy the
terms of the repurchase agreement. However, there could be potential loss to the
fund in the event the fund is delayed or prevented from exercising its right to
dispose of the collateral securities, including the risk of a possible decline
in the value of the collateral securities during the period while the fund seeks
to assert its rights. The Funds' investment advisers review the value of the
collateral and the creditworthiness of those banks and dealers with which the
Funds enter into repurchase agreements to evaluate potential risks.
Reimbursements by Third Parties
American Leading Companies has entered into a directed brokerage agreement
with State Street Bank, its custodian, whereby a portion of commissions paid on
investment transactions may be rebated to the Fund. During the six months ended
September 30, 2003, these payments amounted to $1 which were netted with
realized gain/(loss) on security transactions.
Investment Income and Distributions to Shareholders
Interest income and expenses are recorded on the accrual basis. Bond premiums
and discounts are amortized for financial reporting and federal income tax
purposes. Dividend income is recorded on the ex-dividend date. Dividends from
net investment income, if available, are determined at the class level and paid
annually for American Leading Companies and U.S. Small-Cap, and quarterly for
Balanced Trust. Net capital gain distributions, which are calculated at the Fund
level, are declared and paid after the end of the tax year in which the gain is
realized. Distributions are determined in accordance with federal income tax
regulations, which may differ from those determined in accordance with
accounting principles generally accepted in the United States of America;
accordingly, periodic reclassifications are made within the Funds' capital
accounts to reflect income and gains available for distribution under federal
income tax regulations.
2. Federal Income Taxes:
No provision for federal income or excise taxes is required since each Fund
intends to continue to qualify as a regulated investment company and distribute
substantially all of its taxable income and capital gains to its shareholders.
Because federal income tax regulations differ from accounting principles
generally accepted in the United States of America, income and capital gains
distributions
42
- --------------------------------------------------------------------------------
determined in accordance with tax regulations may differ from net investment
income and realized gains recognized for financial reporting purposes.
Accordingly, the character of distributions and composition of net assets for
tax purposes differs from those reflected in the accompanying financial
statements.
The Funds intend to retain realized capital gains that may be offset against
available capital loss carryforwards for federal income tax purposes. As of
September 30, 2003, capital loss carryforwards were:
American
Expiring Leading Balanced U.S.
In Companies Trust Small-Cap
- ---------------------------------------------
2008 $ -- $ -- $ --
2009 1,843 -- 324
2010 1,330 -- --
2011 31,298 167 --
3. Transactions With Affiliates:
American Leading Companies has an investment advisory and management agreement
with Legg Mason Funds Management, Inc. ("LMFM"). Pursuant to the agreement, LMFM
provides American Leading Companies with investment advisory, management and
administrative services for which the Fund pays a fee, computed daily and
payable monthly, at an annual rate of the Fund's average daily net assets.
Balanced Trust and U.S. Small-Cap have management agreements with LMFA.
Pursuant to their respective agreements, LMFA provides these Funds with
management and administrative services for which these Funds pay a fee, computed
daily and payable monthly, at an annual rate of each Fund's average daily net
assets.
LMFM and LMFA have voluntarily agreed to waive their fees in any month to the
extent a Fund's expenses (exclusive of taxes, interest, brokerage and
extraordinary expenses) exceed during that month certain annual rates of that
Fund's
43
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Notes to Financial Statements -- Continued
- --------------------------------------------------------------------------------
average daily net assets until August 1, 2004. The following chart summarizes
the management fees and expense limitations for each of the Funds:
Six Months Ended
September 30, At September
2003 30, 2003
---------------- ------------
Management Management
Expense Management Fees Fees
Fund Limitation Fee Asset Breakpoint Waived Payable
- ------------------------------------------------------------------------------------------------------------
American Leading Companies
Primary Class 1.95% 0.75% $0-$1 billion $ -- $306
0.65% in excess of $1 billion
Institutional Class 0.95% 0.75% $0-$1 billion -- 7
0.65% in excess of $1 billion
Balanced Trust
Primary Class 1.85% 0.75% at all asset levels 13 18
Financial Intermediary
Class 1.35% 0.75% at all asset levels 7 10
Institutional Class 1.10% 0.75% at all asset levels N.M. N.M.
U.S. Small-Cap
Primary Class 2.00% 0.85% $0-$100 million 14 135
0.75% $100 million-$1 billion
0.65% in excess of $1 billion
Institutional Class 1.00% 0.85% $0 - $100 million 1 5
0.75% $100 million-$1 billion
0.65% in excess of $1 billion
- ---------------
N.M. -- Not meaningful.
44
- --------------------------------------------------------------------------------
Bartlett & Co. ("Bartlett") serves as investment adviser to Balanced Trust.
Bartlett is responsible for the actual investment activity of the Fund. LMFA
pays Bartlett a fee for its services, computed daily and payable monthly, at an
annual rate equal to 66 2/3% of the fee received by LMFA.
Brandywine Asset Management, Inc. ("Brandywine") serves as investment adviser
to U.S. Small-Cap. Brandywine is responsible for the actual investment activity
of the Fund. LMFA pays Brandywine a fee for its services, computed daily and
payable monthly, at an annual rate equal to 58.8% of the fee received by LMFA.
Legg Mason Wood Walker, Incorporated ("Legg Mason"), a member of the New York
Stock Exchange, serves as distributor of the Funds. Legg Mason receives an
annual distribution fee and an annual service fee based on each Fund's Primary
Class's (and with respect to Balanced Trust, Financial Intermediary's) average
daily net assets, computed daily and payable monthly as follows:
Six Months Ended At
September 30, 2003 September 30, 2003
------------------ ------------------
Distribution and Distribution and
Distribution Service Service Fees Service
Fund Fee Fee Voluntarily Waived Fees Payable
- ----------------------------------------------------------------------------------------------
American Leading Companies 0.75% 0.25% $ -- $408
Balanced Trust
Primary Class 0.50% 0.25% 16 21
Financial Intermediary
Class N/A 0.25% 8 1
U.S. Small-Cap 0.75% 0.25% 59 142
For the six months ended September 30, 2003, American Leading Companies paid
$2 in brokerage commissions to Legg Mason or its affiliates. No brokerage
commissions were paid to Legg Mason or its affiliates by Balanced Trust or U.S.
Small-Cap during this period.
LMFA serves as administrator to American Leading Companies under an
administrative services agreement with LMFM. For LMFA's services to American
Leading Companies, LMFM (not the Fund) pays LMFA a fee, calculated daily and
payable monthly, of 0.05% of the average daily net assets of the Fund. For the
six months ended September 30, 2003, LMFA received $122.
45
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Notes to Financial Statements -- Continued
- --------------------------------------------------------------------------------
LM Funds Services, Inc. ("LMFS"), a registered transfer agent, has an
agreement with the Funds' transfer agent to assist it with some of its duties.
For this assistance, the transfer agent paid LMFS the following amounts for the
six months ended September 30, 2003: American Leading Companies, $58; Balanced
Trust, $8; and U.S. Small-Cap, $25.
LMFM, LMFA, Bartlett, Brandywine, Legg Mason, and LMFS are wholly owned
subsidiaries and corporate affiliates of Legg Mason, Inc.
4. Line of Credit:
The Funds, along with certain other Legg Mason Funds, participate in a $300
million line of credit ("Credit Agreement") to be used for temporary or
emergency purposes. Pursuant to the Credit Agreement, each participating Fund is
liable only for principal and interest payments related to borrowings made by
that Fund. Borrowings under the Credit Agreement bear interest at a rate equal
to the prevailing federal funds rate plus the federal funds rate margin. For the
six months ended September 30, 2003, the Funds made no borrowings under the
Credit Agreement.
5. Fund Share Transactions:
At September 30, 2003, there were 250,000, 375,000 and 50,000 shares
authorized at $.001 par value for the Primary Classes of American Leading
Companies, Balanced Trust and U.S. Small-Cap, respectively. At September 30,
2003, there were 125,000 shares authorized at $.001 par value for the Financial
Intermediary Class of Balanced Trust. At September 30, 2003, there were 250,000,
125,000, and 50,000 shares authorized at $.001 par value for the Institutional
Classes of
46
- --------------------------------------------------------------------------------
American Leading Companies, Balanced Trust and U.S. Small-Cap, respectively.
Share transactions are detailed below:
Reinvestment
Sold of Dividends
------------------- ---------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------
American Leading Companies Trust
- -- Primary Class
Six Months Ended Sept. 30, 2003 1,831 $31,165 -- $ --
Year Ended Mar. 31, 2003 3,984 62,046 -- --
- -- Institutional Class
Six Months Ended Sept. 30, 2003 134 $ 2,345 -- $ --
Year Ended Mar. 31, 2003 181 2,912 -- --
Balanced Trust
- -- Primary Class
Six Months Ended Sept. 30, 2003 657 $ 6,638 30 $308
Year Ended Mar. 31, 2003 892 8,725 56 556
- -- Financial Intermediary Class
Six Months Ended Sept. 30, 2003 11 $ 110 26 $264
Year Ended Mar. 31, 2003 18 179 46 460
- -- Institutional Class
Six Months Ended Sept. 30, 2003 9 $ 92 1 $ 6
Year Ended Mar. 31, 2003 4 49 1 8
U.S. Small-Cap Value Trust
- -- Primary Class
Six Months Ended Sept. 30, 2003 1,346 $14,807 -- $ --
Year Ended Mar. 31, 2003 6,716 73,192 -- --
- -- Institutional Class
Six Months Ended Sept. 30, 2003 198 $ 2,345 -- $ --
Year Ended Mar. 31, 2003 511 5,737 -- --
- --------------------------------------------------------------------------
47
- --------------------------------------------------------------------------------
Semi-Annual Report to Shareholders
- --------------------------------------------------------------------------------
Notes to Financial Statements -- Continued
- --------------------------------------------------------------------------------
Repurchased Net Change
------------------- -----------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------
American Leading Companies Trust
- -- Primary Class
Six Months Ended Sept. 30, 2003 (1,876) $(31,696) (45) $ (531)
Year Ended Mar. 31, 2003 (6,165) (95,958) (2,181) (33,912)
- -- Institutional Class
Six Months Ended Sept. 30, 2003 (71) $ (1,231) 63 $ 1,114
Year Ended Mar. 31, 2003 (120) (1,907) 61 1,005
Balanced Trust
- -- Primary Class
Six Months Ended Sept. 30, 2003 (549) $ (5,540) 138 $ 1,406
Year Ended Mar. 31, 2003 (741) (7,266) 207 2,015
- -- Financial Intermediary Class
Six Months Ended Sept. 30, 2003 (84) $ (849) (47) $ (475)
Year Ended Mar. 31, 2003 (324) (3,203) (260) (2,564)
- -- Institutional Class
Six Months Ended Sept. 30, 2003 -- $ -- 10 $ 98
Year Ended Mar. 31, 2003 (5) (46) -- 11
U.S. Small-Cap Value Trust
- -- Primary Class
Six Months Ended Sept. 30, 2003 (2,062) $(22,019) (716) $ (7,212)
Year Ended Mar. 31, 2003 (6,068) (60,477) 648 12,715
- -- Institutional Class
Six Months Ended Sept. 30, 2003 (213) $ (2,471) (15) $ (126)
Year Ended Mar. 31, 2003 (368) (4,023) 143 1,714
- ----------------------------------------------------------------------------
48
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Investment Managers
For American Leading Companies Trust:
Legg Mason Funds Management, Inc.
Baltimore, MD
For Balanced Trust and U.S. Small-Cap Value Trust:
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Investment Advisers
For American Leading Companies Trust:
Legg Mason Funds Management, Inc.
Baltimore, MD
For Balanced Trust:
Bartlett & Co.
Cincinnati, OH
For U.S. Small-Cap Value Trust:
Brandywine Asset Management, Inc.
Wilmington, DE
Board of Directors
John F. Curley, Jr., Chairman
Mark R. Fetting, President
Arnold L. Lehman
Robin J.W. Masters
Dr. Jill E. McGovern
Arthur S. Mehlman
G. Peter O'Brien
S. Ford Rowan
Transfer and Shareholder Servicing Agent
Boston Financial Data Services
Braintree, MA
Custodian
State Street Bank & Trust Company
Boston, MA
Counsel
Kirkpatrick & Lockhart LLP
Washington, DC
Independent Auditors
Ernst & Young LLP
Philadelphia, PA
This report is not to be distributed unless preceded or accompanied by a
prospectus.
LEGG MASON WOOD WALKER, INCORPORATED
MEMBER NYSE, INC. - MEMBER SIPC
---------------------------------------
P.O. Box 17635,
Baltimore, MD 21297-1635
888 - 425 - 6432
LMF-013 12/03
Item 2 - Code of Ethics
Did the registrant adopt a code of ethics, as of the end of the period covered
by this report, which applies to the registrant's principal executive officer,
principal financial officer, principle accounting officer or controller, or
persons performing similar functions, regardless of whether these individuals
are employed by the registrant or a third party? If not, why not? Briefly
describe any amendments or waivers that occurred during the period. State if the
code of ethics, including amendments and waivers are on a website and provide
the website address. State if the registrant will send a copy of the code of
ethics to shareholders at no charge upon request.
(NOT REQUIRED UNTIL ANNUAL REPORT AFTER JULY 15, 2003)
Item 3 - Audit Committee Financial Expert
Did the registrant's board of directors determine that the registrant either:
(a) has at least one audit committee financial expert serving on its audit
committee; or (b) does not have an audit committee financial expert serving on
its audit committee? If yes,
disclose the name of the financial expert and whether he/she is "independent."
If no, explain why not.
(NOT REQUIRED UNTIL ANNUAL REPORT AFTER JULY 15, 2003)
Item 4 - Principal Accounting Fees and Services
(a) Audit Fees - Disclose the aggregate fees billed for each of the last two
fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements
or services that are normally provided by the accountant in connection
with statutory and regulatory filings or engagements for those fiscal
years. N/A
(b) Audit-Related Fees - Disclose the aggregate fees billed in each of the
last two fiscal years for assurance and related services by the principal
accountant that are reasonably related to the performance of the audit of
the registrant's financial statements and are not reported under paragraph
(a) of this Item. Describe the nature of the services comprising the fees
disclosed under this category. N/A
(c) Tax Fees - Disclose the aggregate fees billed in each of the last two
fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Describe the
nature of the services comprising the fees disclosed under this category.
N/A
(d) All Other Fees - Disclose the aggregate fees billed in each of the last
two fiscal years for products or services provided by the principal
accountant, other than the services reporting in paragraphs (a) through
(c) of this Item. Describe the nature of the services comprising the fees
disclosed under this category. N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. N/A (2)
Disclose the percentage of services described in each of paragraphs (a)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. N/A
(f) If greater than 50%, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial
statements for the most recent fiscal year that were attributed to work
performed by persons other than the principal accountant's full-time,
permanent employees. N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under
common control with the adviser that provides ongoing services to the
registrant for each of the last two fiscal years of the registrant. N/A
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of non-audit services that
were rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant that were
not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal accountant's
independence.
(NOT REQUIRED UNTIL ANNUAL REPORT AFTER DECEMBER 15, 2003)
Item 5 - Reserved
Item 6 - Reserved
Item 7 - Disclosure of Proxy Voting Policies and Procedures
For closed-end management investment companies, describe the policies and
procedures that it uses to determine how to vote proxies relating to portfolio
securities, including the procedures that the company uses when a vote presents
a conflict between the interests of its shareholders, and those of the company's
investment adviser; principal underwriter; or any affiliated person of the
company, its investment adviser, or its principal underwriter.
(NOT APPLICABLE)
Item 8 - Reserved
Item 9 - Controls and Procedures
(a) Disclose the conclusions of the registrant's principal executive officer
or officers and principal financial officer or officers, or persons
performing similar functions, regarding the effectiveness of the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days
of the filing date of the report that includes the disclosure required by
this paragraph, based on the evaluation of these controls and procedures
required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules
13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240-13a-15(b) or
240.15d-15(b)).
WITHIN 90 DAYS OF THE FILING DATE OF THIS FORM N-CSR, THE REGISTRANT'S
PRESIDENT AND TREASURER REVIEWED THE REGISTRANT'S DISCLOSURE CONTROLS AND
PROCEDURES ("THE PROCEDURES") AND EVALUATED THEIR EFFECTIVENESS. BASED ON
THEIR REVIEW, SUCH OFFICERS DETERMINED THAT THE PROCEDURES ENSURE THAT
INFORMATION REQUIRED TO BE DISCLOSED BY THE REGISTRANT ON FORM N-CSR IS
RECORDED, PROCESSED, SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS
REQUIRED BY THE SECURITIES AND EXCHANGE COMMISSION'S RULES AND
REGULATIONS.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))
that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year
in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL
REPORTING DURING THE REGISTRANT'S LAST HALF-YEAR THAT HAVE MATERIALLY
AFFECTED, OR ARE REASONABLY LIKELY TO MATERIALLY AFFECT, THE INTERNAL
CONTROL OVER FINANCIAL REPORTING.
Item 10 - Exhibits
(a) File the exhibits listed below as part of this Form.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant
intends to satisfy the Item requirements through filing of an exhibit.
(NOT REQUIRED UNTIL ANNUAL REPORT AFTER JULY 15, 2003)
(a)(2) A separate certification for each principal execute officer and
principal financial officer of the registrant as required by Rule
30a-2(a) under the Act (17 CFR 270.30a-2(a)), exactly as set forth
below:
(ATTACHED)
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17
CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A
certification furnished pursuant to this paragraph will not be deemed
"filed" for the purposes of Section 18 of the Exchange Act (15 U.S.C.
78r), or other wise subject to the liability of that section. Such
certification will not be deemed to be incorporated by reference into any
filing under the Securities Act of 1933 or the Exchange Act, except to the
extent that the registrant specifically incorporates it by reference.
(ATTACHED)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Legg Mason Investors Trust, Inc.
By: /s/ Mark R. Fetting
-------------------
Mark R. Fetting
President, Legg Mason Investors Trust, Inc.
Date: 11/19/03
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Mark R. Fetting
-------------------
Mark R. Fetting
President, Legg Mason Investors Trust, Inc.
Date: 11/19/03
By: /s/ Marie K. Karpinski
----------------------
Marie K. Karpinski
Treasurer, Legg Mason Investors Trust, Inc.
Date: 11/19/03